As many in California already know, the State does not conform automatically to new Federal tax legislation, including the Tax Cuts and Jobs Act enacted on December 22, 2017 (“TCJA”). Instead, any conforming changes must be enacted by the California legislature. On July 1, 2019, California Governor Gavin Newsom (D) signed Assembly Bill 91 “Loophole Closure and Small Business and Working Families Tax Relief Act of 2019” (“AB 91”). That legislation selectively conforms to some of the provisions of the TCJA.

One of those provisions, which California has modified significantly, limits deductions by individual taxpayers for excess business losses.[1]

On the Federal level, IRC §461(l), enacted as part of the TCJA,  provides that from 2018 and until 2026, individual taxpayers’ business losses can offset up to only a certain amount of non-business income. Those limits initially were set at $500,000 for married taxpayers filing jointly and $250,000 for single filers and adjusted for inflation annually. Any business losses that are disallowed in a given year are recharacterized as net operating losses (“NOLs”) which can be carried forward to future tax years and offset at that time up to 80% of any type of income, business or non-business. For instance, if a taxpayer has enough business or non-business income in the immediately following tax year, the main effect of IRC 461(l) will be to shift the deduction for business losses in excess of the applicable amounts ($500,000/$250,000, as adjusted for inflation) to the next tax year but capped at 80% of the taxpayer’s income in that year.

Example: In 2019, a married taxpayer has $2,000,000 of business losses from a business activity in which the taxpayer materially participates and $2,000,000 of non-business income. Prior to the TCJA, the business losses generally would have fully offset the non-business income, leaving the taxpayer with zero income and no tax liability for the year. However, under IRC §461(l), the taxpayer can use up to only $500,000 (as adjusted for inflation) of his business losses to offset the non-business income. The disallowed portion of the business losses (ignoring the inflation adjustment for 2019, that portion would be: $2,000,000 – $500,000 = $1,500,000) will be carried forward to the next tax year as NOLs, and could offset up to 80% of the taxpayer’s business and non-business income in 2020 and in future tax years. For instance, if the taxpayer has $1,500,000 of income (business or non-business) in 2020, $1,200,00 (80% x $1,500,000) of that income could be offset by these NOLs, and the taxpayer’s Federal taxable income for 2020 would be reduced to $300,000.

California’s version of the deduction limitation on excess business losses operates in a more unforgiving way than IRC §461(l).[2] First, unlike the Federal provisions that will expire in 2026, California’s amendments are permanent. Second, unlike the Federal tax treatment, in California, the disallowed portion of the business losses will not become NOLs which could offset business and non-business income in future tax years. Instead, that disallowed portion will retain its character as an excess business loss and again will be treated as such in those future tax years. In other words, if in future tax years the taxpayer does not have enough business income, the disallowed portion will again be subject to the limits ($500,000/$250,000, as adjusted for inflation) when offsetting the taxpayer’s non-business income.  Thus, in the example above, if in 2020 all of the taxpayer’s $1,500,000 is non-business income, the taxpayer would only be able to offset $500,000 (as adjusted for inflation in 2020) against that non-business income, leaving the taxpayer with $1,500,000 – $500,00 = $1,000,000 (again, ignoring the inflation adjustments) of income which will be taxed in California, whereas the taxpayer’s Federal taxable income for the same year would be only $300,000. Therefore, the main effect of California’s modifications is a longer deferral period for the utilization of large business losses for taxpayers with non-business income, as compared to the Federal approach.

Two additional points merit attention. Currently, it is not clear whether wages are business or non-business income under IRC §461(l). If they constitute business income, they can be freely offset by business losses, and if not, they would fall under the applicable limitations for non-business income, as described above.  Without any further guidance, a more cautious view consistent with the declared intent of this statute would be that wages are non-business income under IRC §461(l). It is also unclear under that section whether gains on the sale of interests in pass-through entities (e.g., S corporation stock) that are engaged in an active trade or business and in which the seller has actively participated constitute business or non-business income. A better view is that such gains should constitute business income under IRC §461(l). However, given California’s narrower, not taxpayer-friendly approach to modifying this Federal law, it would not be surprising if California at some point in time concludes that wages and gains from the sale of interests in pass-through entities are all non-business income under California’s new version of the business loss limitation rules.

Individuals and other non-corporate taxpayers, who in the same tax year have both business losses and income that could be characterized as non-businesses, may not be able to fully offset their losses against that income, especially for California tax purposes. That could result in higher taxes. In that case, proactive tax planning would be advisable prior to a taxpayer’s recognizing non-business income or a business loss. Our Tax Group can always help with practical and creative tax planning that takes into account our clients’ specific circumstances. For further information, contact Coblentz Tax attorney Jeff Bernstein (jbernstein@coblentzlaw.com).

 

[1] This limitation applies not just to individual taxpayers but also to other non-corporate taxpayers (e.g., non-grantor trusts, estates, and tax-exempt organizations).

[2] See Section 17560.5(b) of the CA Revenue and Taxation Code, as amended by Section 13 of AB 91.

Coblentz Family Wealth partners James Mitchell, Philip Feldman, and Jaime Mannon are again listed as Leading Lawyers in the Private Wealth Law category of the 2019 Chambers HNW (High Net Worth) guide for Northern California, published by Chambers & Partners.

Jim Mitchell is again ranked as a Leading Lawyer in Band 2. One source says “He is practical but also personable. He is a smart and experienced estate planning and can deal with personalities of all sorts.” Another reports “He is technically really strong and knows his stuff,” and a peer adds “Jim is thoughtful, he is very good. I would have no hesitation referring a client to him.”

Phil Feldman is again ranked as a Leading Lawyer in Band 2, where one client or colleague praised Phil as a “great team player” and “a wonderful gentleman.” Another source notes “He is a very calm, reasonable, affable guy who will do negotiation in his client’s best interest that will result in a positive solution. He is very impressive.” Another client describes him as “very personable and engaging. He is very capable and smart – really gets to the heart of the matter.”

Jaime Mannon is ranked as a Leading Lawyer in Band 3, with one source noting “She is super smart and engaged,” and another adds that she “is in it for the long term, she understands that clients need to work through issues that are not directly related to the law before they can resolve legal issues. She is a wonderful person.”

The Coblentz Family Wealth practice is also listed by Chambers HNW in Band 2 for Private Wealth Law, Northern California. Chambers writes that the group “has an impressive family wealth department.” Colleagues and clients mention that “They have a great reputation in San Francisco,” while another adds that “The folks are highly respected.”

Independent and objective, Chambers USA and Chambers HNW are carefully researched and widely considered to be the most reputable law firm directories in the world. Ranking criteria include technical legal ability, professional conduct, client service, commercial astuteness, diligence, commitment and other qualities most valued by legal clients.

Originally Published in the Daily Journal, May 21, 2019.

Click here to download a PDF of this article.

Recent indictments of well-known financial, legal and business persons accused of paying bribes to get their children into college raise significant corporate governance and fiduciary questions. Many of the individuals involved in the college admissions, aka “Varsity Blues,” scandal served on corporate boards of directors or held high-level executive positions at the time that those bribes occurred. Some, according to press reports, have resigned from their positions, some have been terminated (with or without cause, it is unclear) and others apparently remain in limbo pending the outcome of the proceedings. Even at an early stage when charges of dishonesty and fraud have simply been levied, governance and fiduciary questions arise that demand immediate consideration, whether or not the alleged dishonest or fraudulent conduct had anything directly to do with the organization with which the accused was associated. Indeed, had the alleged inappropriate actions directly implicated the organization or its assets, a proper response would, one assumes (with all due respect to the world of politics), have been readily apparent, uncontroversial and prompt.

When allegedly unethical behavior is unrelated in any obvious way to an organization, what constitutes an appropriate response? Does general awareness of seemingly unrelated unethical, or illegal, behavior by a director, senior advisor or manager require a board to evaluate and investigate the accused’s integrity, to assess the accused’s candor, to consider the potential reputational effect that the alleged behavior may have on the company or even to initiate a formal, documented process (and go on the record) for determining whether to terminate, or not to terminate, the accused’s association with the company? Can a board turn a blind eye if a senior executive has been indicted for financial fraud simply because that conduct doesn’t have a direct connection to the corporation? Should a board have confidence, or just assume (at its own peril), that fraudulent or inappropriate personal conduct by a director or officer hasn’t also infected that person’s interactions with, or at, the company?

In a world drowning in social media, where brand, image, reputation, gossip, and identity are amplified exponentially by Facebook, Twitter, and Snapchat, how, if at all, can personal conduct remain disconnected from any organization with which a person is even tangentially linked? If connections, affiliations, and associations among people and organizations are today readily known, easily traced and quickly exposed, a prudent and effective board must promptly assess the potentially broad implications arising from an awareness that an affiliated person’s integrity and ethics are (justifiably or not) in doubt.

Where to begin when confronted with allegations of unethical or illegal behavior by a director or senior executive that are apparently unrelated to the company? Are there contracts, like an employment letter, stock option agreement or confidentiality agreement that apply? Do quasi-contractual arrangements exist, such as corporate codes of conduct and governance policies, that establish an evaluative framework within which to judge the personal behavior? What, if any, fiduciary duties are implicated by the events? Is there a regulatory overlay that needs to be considered, which might affect the accused’s ability to continue to serve or might create a fact pattern that potentially affects the company’s regulatory status or disqualifies it from industry associations? Does the alleged behavior raise issues under directors and officers insurance policies? If these questions reflect legitimate concerns, waiting for the outcome of proceedings, or sitting idly by as others pursue the facts, cannot suffice. Proactive engagement with the matter is essential, whether or not the exercise results in removal of the affected individual from the company.

Contracts and Quasi-Contracts. What do corporate agreements and policies say about the personal conduct of employees or advisors? Any review must begin with the basics. Offer letters, employment agreements, stock option agreements and other agreements that legislate employment terms must be carefully considered. Corporate codes of conduct, governance, and conflict of interest policies, which may be integrated into those offer letters and employment agreements, must be analyzed. Do any of these agreements and policies permit termination for misconduct, for conviction of a crime, or for no particular reason at all? Perhaps the individual is terminable at will, and maybe the real implication of termination is the nature and extent of severance compensation, including equity vesting, that may be owed. Is there a right of termination based on behavior prejudicial to the company’s reputation? Does the “commission” of a wrongful act suffice? Or must the individual actually have been “convicted” of a crime? Words matter, and, unfortunately, there is no particular consistency to the specific contractual or quasi-contractual definitions, terms, and phrases typically used in any of these agreements or policies. Each agreement may produce a different result even though based on the same facts.

Morals clauses have existed in the entertainment, media and sports industries for many years. They permit companies to terminate contracted talent if the talent acts in a reprehensible manner or engages in conduct that could adversely affect the employer’s reputation, brand or image. The National Football League has a player misconduct policy. Player contracts may include provisions that permit player termination for any “form of conduct reasonably judged by the League Commissioner to be detrimental to the League or professional football” (Arian Foster, NFL Player Contract). While use of these clauses is understandable in the entertainment, media and sports industries, they are difficult to negotiate, difficult to interpret and subject to evolving cultural norms; for these reasons, they are somewhat rare in other sectors. And yet, with the pervasiveness of social media and the permanence of news content, instances of poor judgment and improper behavior exhibited in one’s personal life, even when that conduct has nothing directly to do with an organization, are more likely than ever to affect the reputation, brand, image and internal morale of organizations. So, beyond just checking the agreements and policies to determine whether there is a basis for termination, and beyond simply assessing the compensatory consequences that may result from that inquiry, boards must anticipate, and pre-emptively think about, the broader questions and policy implications that will arise from the seemingly unrelated, unethical personal conduct of an officer, director or employee. A reconsideration of morals clauses, or some derivation of the concepts underlying those clauses, may be necessary in today’s hyper-connected world.

Fiduciary Considerations. Under Delaware law, corporate directors owe fiduciary duties to the corporation and its stockholders. These duties consist mainly of the duty of care and the duty of loyalty. There is no fiduciary duty to act ethically and morally in one’s personal life. Due care requires a fiduciary to make informed decisions and to act as an ordinarily careful and prudent person would act in similar circumstances. The duty is focused on decisions affecting the company — the obligation to make informed decisions about company-related matters. It is difficult to perceive a breach by an accused of his duty of care predicated on unrelated personal conduct. The duty of loyalty seeks fundamentally to prevent self-dealing, requiring that directors act in good faith and in a manner they reasonably believe to be in the best interests of the corporation and its stockholders. Absent evidence that the unethical personal decision was intended to extract value for the accused from the corporate relationship, it may be difficult to establish a link between the duty to act loyally and unrelated unethical behavior. But, again, perhaps the swift reputational damage that social media can cause an organization demands reassessment. Indeed, in the extensive litigation that arose after Michael Ovitz was terminated by The Walt Disney Company, the Delaware Court noted that “the duty of loyalty … imposes an affirmative obligation to protect and advance the interests of the corporation and mandates that [a director] absolutely refrain from any conduct that would harm the corporation. This duty has been consistently defined as broad and encompassing, demanding of a director the most scrupulous observance. To that end, a director may not allow his self-interest to jeopardize his unyielding obligations to the corporation and its shareholders.” In re Walt Disney Co., 2004 WL 2050138, at *5 n.49 (Del. Ch. Sept. 10, 2004). That was 2004, and there can be little doubt today that personal misconduct, even if unrelated, can harm a corporation — that harm may be reputational or, in the era of the #MeToo Movement, it may undercut employee morale, adversely affect hiring, limit sponsorship opportunities and impose other negative externalities on the corporation. While claims of fiduciary breach may not appear self-evident, the underlying duty that a director or officer do no harm to corporate interests requires an informed board to undertake a critical evaluation. Whether that assessment should result, as a fiduciary matter, in termination of the accused individual or maybe just a reprimand or other form of rebuke, or no action at all, remains for consideration. Or, perhaps, it will require further elucidation of these duties under Delaware law. But one thing should be clear — failing to engage with the issue cannot, under any circumstances, represent an adequate attempt by a board itself to discharge its own fiduciary obligations.

Regulatory; Compliance and Risk Management. Does the individual serve a regulated company? Does the company sell insurance? Is it a bank or broker-dealer? Does it provide health care services? Is the company’s Directors’ & Officers’ insurance policy up for renewal? If the organization with which the accused is affiliated operates in a heavily regulated sector, it may be necessary to evaluate whether an indictment, conviction or plea of nolo contendere could affect the company’s status. The extent of the inquiry and the timing of any action taken by the board may depend on the industry and the specific nature of the allegations. If the felony conviction of a board member or senior executive will jeopardize a company’s regulatory status or compliance posture, an effective board will need to have had a plan in place to address those possibilities before a conviction occurs. An informed board should presumably understand whether an indictment itself might have those effects and should have developed protocols and policies to manage those kinds of potential crises before, not after, they occur. Effective board governance requires proper planning and forethought; the regulatory, compliance and risk management implications of unrelated improper personal conduct by a director or officer should be addressed prophylactically by the board. It serves neither the corporation nor its stockholders well if a board is entirely reactive to these not unexpected possibilities.

Although the organizational response to unethical or fraudulent behavior by an officer or director involving corporate assets is fairly obvious, it is less clear when the inappropriate conduct is personal and does not directly implicate an individual’s corporate role or function. With non-stop news cycles and far-reaching social media platforms, the potential adverse effects on an organization resulting from its association with a person accused of improper personal conduct are more significant and immediate than ever. Because of these realities, companies and boards must reconsider their practices and responses to these reasonably foreseeable situations, including the appropriateness of carefully crafted morals-like clauses in corporate agreements and governance policies. When a board becomes aware of allegations of unethical or illegal personal conduct by a director or officer, even if there is no obvious connection to the company, the board must undertake an expeditious, yet thorough, review of the matter to determine whether the improper behavior was indeed isolated from the company. If a parent has paid a bribe to obtain admission for their child to a college, is it unreasonable to question whether that parent may have also acquiesced to improper or questionable payments within the context of his corporate function or role? The board must also consider the implications, compensatory or otherwise, of that personal misconduct under employment-related agreements, corporate governance policies and practices, and regulatory and risk management standards. Is termination appropriate or permissible? Is a reprimand required? Should compensation be forfeited or prospectively adjusted? Is the company’s regulatory status at risk? Will employee morale suffer significantly from ongoing corporate association with the accused? All of these questions should be raised. And, in light of those questions, there can be little doubt that an effective board must actively assess, carefully consider and dutifully address the implications of personal misconduct by a director or officer on a corporation and its stakeholders, even when that misconduct is unrelated to the company.

Coblentz Co-Managing Partner Sara Finigan was named among the Most Influential Women in Bay Area Business for 2019 by the San Francisco Business Times. The annual Most Influential Women in Business list celebrates over 100 women business leaders in their organizations and their communities in law, real estate, tech, finance, health care, and many other industries.

Sara specializes in serving clients in the negotiation and funding of joint ventures for the development of real property and helps both corporate and individual clients develop and implement strategies to navigate complex business matters. Sara is the former Co-Chair of the Corporate practice group and joined Real Estate partner Danna Kozerski as Co-Managing Partner of the firm in 2018.

Danna Kozerski also joins Partner Pamela Duffy on the San Francisco Business Times “Forever Influential” Honor Roll, which recognizes past Most Influential Women honorees for their continued leadership in business and the community.

Five Coblentz partners have been recognized as Leading Lawyers by Chambers & Partners in the Chambers USA 2019 Guide. Real Estate partners Pamela Duffy, Harry O’Brien, and Alan Gennis are listed as leading lawyers in the Real Estate: Zoning/Land Use – California category, Litigation partner Timothy Crudo is listed in the Litigation: White-Collar Crime & Government Investigations – California category, and Employment partner Fred Alvarez is listed in the Labor & Employment – California category.

Independent and objective, Chambers USA is carefully researched and widely considered to be the most reputable law firm directory in the world. Ranking criteria include technical legal ability, professional conduct, client service, commercial astuteness, diligence, commitment and other qualities most valued by legal clients.

Real Estate & Land Use
Pamela Duffy is again ranked as a Leading Lawyer in the top tier, Band 1, in the Real Estate: Zoning/Land Use – California category. Pam is noted for her highly esteemed practice and skilled handling of entitlements across the healthcare, entertainment and sports sectors. Clients say she’s “exceptional and cuts to the heart of issues.” She has been recognized by Chambers since 2003.

Harry O’Brien is also again ranked as a Leading Lawyer in Band 2 in the Real Estate: Zoning/Land Use – California category. Clients describe Harry as “very smart and really knows the law as well as our business.” He has been recognized by Chambers since 2003.

Alan Gennis is ranked as a Leading Lawyer in Band 3, in the Real Estate – California category, and noted for his experience handling commercial leasing issues for household names. Clients noted, “He’s excellent – commercially reasonable and effective.” Alan has been recognized by Chambers since 2018.

The Real Estate and Land Use practice at Coblentz Patch Duffy & Bass has again been awarded the highest ranking by Chambers & Partners USA 2019 Guide – Band 1 in the Real Estate: Zoning/Land Use category for California. Chambers notes that the Firm is a “prominent real estate practice offering particular strength in obtaining land use, zoning and environmental approvals for development projects” with an especially strong presence in the Bay Area. Clients describe the team as “outstanding,” adding that the lawyers “provide excellent advice promptly.”

Litigation
Litigation partner Timothy Crudo is again ranked as a Leading Lawyer, Band 4, in the Litigation: White Collar Crime & Government Investigations category for California. Clients noted that they appreciate that he is “well versed in the law, thorough, and detail-oriented,” and that “he knows how to interact with the folks in government to get to a resolution.” Tim has been recognized by Chambers since 2016.

Employment
Employment partner Fred Alvarez is recognized as one of six Senior Statespeople in California in the Labor & Employment category. Chambers notes that Fred “possesses decades of employment law experience and has a strong knowledge of wage and hour disputes.” Fred joined Coblentz in 2018 and provides strategic and compliance advice, conducts sensitive internal investigations, and serves as a jointly-appointed Monitor or Special Master of class action decrees.

Coblentz partners Fred Alvarez and Miles Imwalle have been appointed to editorial positions with Law360.

Fred Alvarez, a partner in the firm’s Employment practice, has been appointed to the 2019 Employment Editorial Advisory Board of Law360, and Miles Imwalle, a partner in the Real Estate practice, has been appointed to the 2019 Real Estate Editorial Advisory Board of Law360.

Coblentz’s international legal alliance, TAGLaw®, has again been recognized by Chambers & Partners as “Elite” for 2019—the highest ranking awarded to legal networks and alliances. This is the sixth time TAGLaw has received the distinguished “Elite” designation since Chambers & Partners began ranking legal networks and alliances in 2013.

In selecting networks and alliances for their “Elite” status, Chambers & Partners pays particular attention to the quality of the member firms, their global reach, and the value that the alliance provides to its member firms. Member firms have exceptional reputations for quality of service and client satisfaction, and strive to cooperate to provide resources and expertise as if they were right down the hall from one another.

As the Northern California law firm representative to TAGLaw, Coblentz is able to access a network of exemplary regional, national and international legal resources to help us better serve our clients. TAGLaw, with a global footprint in over 90 countries, has leading firms in over 160 jurisdictions providing legal services to companies ranging from the Fortune 5000 and leading SMEs to high net worth individuals. With expertise in dozens of practice areas and countless industry sectors, TAGLaw offers a substantial capability to its members’ clients. This capability is expanded by TAGLaw’s unique relationship with its sister alliance of accounting firms, TIAG, providing members and clients with the multidisciplinary expertise needed in today’s business world.

Coblentz partner, Paul Tauber, is a member of the Advisory Board of TAGLaw, assisting in reviewing prospective new members, offering feedback for the planning of international conferences and providing valuable guidance on future plans and initiatives.

U.S. Government Accountability Office Report: DOD Should Assess the Tradeoffs Associated With Expanding Public Access to and Information About Terrorism Trials

Coblentz Patch Duffy & Bass LLP partner Paul Tauber is a member of the Pacific Council on International Policy Guantánamo Bay (GTMO) Task Force. Building on recommendations made by the GTMO Task Force’s 2016 report, Up to Speed, and legislation passed in response to the report, on February 12, 2019, the U.S. Government Accountability Office (GAO) released a report concerning increased public access to pre-trial hearings of alleged terrorists held at Guantánamo Bay, Cuba (GTMO).

The GAO’s report recommends that the Department of Defense (DOD) analyze the tradeoffs associated with expanding public access to and information about the military commissions’ proceedings and develop a strategy for meeting its public access goals, as public interest is expected to increase when the commissions enter into their trial phases. The DOD agreed with the GAO’s recommendation.

Read the GAO’s report here.

In 2013, the Pacific Council was granted official NGO observer status at Guantánamo Bay, Cuba (GTMO) by the Office of Military Commissions, joining a group of organizations, including the American Bar Association and the New York City Bar Association, that have the privilege of sending a representative to observe proceedings at GTMO.

Paul traveled to GTMO in February 2015 and again in 2016 and 2018 as a civilian observer on behalf of the Pacific Council to observe a week of hearings in the matter of US v. Khalid Shaikh Mohammed. Khalid Shaikh Mohammed is the alleged mastermind of the September 11th attacks on the World Trade Center and stands trial along with four others.

Since 2013, 50 members of the nonpartisan Pacific Council have spent a collective 255 days at Camp Justice as observers of the Guantánamo proceedings.

Paul’s GTMO assignment follows the lead of the late William (Bill) Coblentz, who was also appointed as an observer by the American Bar Association in 1989 when he traveled to Singapore on behalf of the ABA to observe the trials of four Singaporean lawyers accused of conspiring to undermine the government.

 

About Coblentz Patch Duffy & Bass LLP

Coblentz Patch Duffy & Bass LLP is a premier provider of innovative, results-oriented legal services, specializing in real estate, litigation, corporate, intellectual property, employment, tax, and family wealth. U.S. News & World Report recognizes Coblentz as one of the nation’s top law firms in the Best Law Firm list, with national and local rankings in 16 practice areas and six prestigious “Tier 1” rankings in the highly competitive San Francisco law firm category. Law360 named Coblentz a California Powerhouse firm. The National Law Journal named Coblentz to its prestigious, nationwide Midsize Hot List four times.  For more information: www.coblentzlaw.com.

San Francisco-based law firm Coblentz Patch Duffy & Bass LLP welcomes Fred W. Alvarez to the firm’s partnership. Fred joins Coblentz from Jones Day.

One of the preeminent employment lawyers in the United States, Fred Alvarez combines a distinct blend of employment law experience, public service, and legal profession leadership. He has an active individual and class action litigation practice devoted to defending employers in trial and on appeal in claims brought by private and governmental parties and by former senior executives. He has led the employment practice of two major American law firms. Fred represents clients in a range of industries, including energy, retail, communications, financial services, and technology.

He currently focuses substantial attention on providing strategic and compliance advice, conducting sensitive internal investigations and serving as a jointly-appointed Monitor or Special Master of class action decrees. He has testified before Congress on several occasions.

“Fred is a titan in the employment world and in the San Francisco and Silicon Valley communities,” said Clifford E. Yin, partner and chair of the litigation practice of Coblentz. “He is a fabulous addition to the firm, and we’re proud to have him as our partner.”

Appointed by the President and confirmed by the Senate, Fred served in two federal government sub-cabinet positions. As Assistant Secretary of Labor, he managed the Wage and Hour Division and the Office of Federal Contract Compliance Programs. He also served as a Commissioner of the U.S. Equal Employment Opportunity Commission. He began his career as a trial attorney with the National Labor Relations Board (NLRB) and was a law clerk to Chief Justice LaFel E. Oman of the New Mexico Supreme Court.

Fred returns to San Francisco, where he served as President of the Bar Association of San Francisco, after practicing employment law in the Silicon Valley for 20 years and brings a unique perspective on Bay Area and national employment law issues to the growing employment practice at Coblentz.

“When I decided to come back to San Francisco, I wanted to come to a first-rate, well-respected San Francisco law firm. Coblentz is quintessentially San Francisco and has demonstrated over the years that independent, high-end, high-integrity, national quality law practice is available right here,” said Fred Alvarez. “For the kinds of employment work I am doing now, those qualities are key.”

 

About Coblentz Patch Duffy & Bass LLP

Coblentz Patch Duffy & Bass LLP is a premier provider of innovative, results-oriented legal services, specializing in real estate, litigation, corporate, intellectual property, employment, tax, and family wealth. U.S. News & World Report recognizes Coblentz as one of the nation’s top law firms in the Best Law Firm list, with national and local rankings in 16 practice areas and six prestigious “Tier 1” rankings in the highly competitive San Francisco law firm category. Law360 named Coblentz a California Powerhouse firm. The National Law Journal named Coblentz to its prestigious, nationwide Midsize Hot List four times.  For more information: www.coblentzlaw.com.

San Francisco, CA December 20, 2018 – Coblentz Patch Duffy & Bass LLP is pleased to announce the election of Sean P.J. Coyle, Mitchell Edwards, Daniel Gershwin, Seth Pardee, and Kyle J. Recker to the firm’s partnership. These promotions are effective January 1, 2019.

“Our new partners show a strong commitment to their clients, practice, and communities, and we look forward to their future contributions,” said Sara Finigan, Co-Managing Partner of the firm. “The partnership is proud to welcome five immensely talented lawyers to our ranks,” said Maggie Callicrate, Chief Operating Officer. “In each of their different practice areas, these new partners deliver exceptional client service and build on the firm’s reputation for excellence.”

The 2019 new partners are:

Sean P.J. Coyle, Litigation.

Sean Coyle is an experienced trial lawyer, assisting clients in navigating white collar criminal and enforcement matters, and the related lawsuits and regulatory proceedings that often come with them. Sean defends clients in major criminal cases and sensitive investigations involving publicly traded companies, corporate officers, and public agencies and officials. He has substantial experience defending clients in regulatory investigations, including before the Securities and Exchange Commission and the California Public Utilities Commission. Sean has also handled a wide range of civil litigation matters in state and federal courts, including securities litigation, commercial disputes, government tort claims, and real property and tax controversies. Prior to joining Coblentz, Sean served as an Assistant United States Attorney in the Major Frauds and Special Prosecutions Section of the United States Attorney’s Office in San Diego. He investigated and prosecuted cases involving virtually every kind of fraud, including securities and insider trading, defense procurement, health care, and tax and bank fraud, as well as cases involving public corruption, obstruction of justice, and money laundering crimes. Sean earned his J.D. from the Maurer School of Law at Indiana University – Bloomington in 2004, where he graduated magna cum laude with election to the Order of the Coif, and where he served as a Managing Editor of the Indiana Law Journal. Sean received his B.A. in history from Arizona State University in 2001.

 

Mitchell Edwards, Estate Planning.

Mitch Edwards focuses his practice on estate planning for high net worth individuals and trust and estate litigation and administration. Mitch prepares foundational documents for his estate planning clients, including revocable living trusts, wills, and powers of attorney. He regularly incorporates advanced estate planning techniques and vehicles which can both minimize taxes (including gift, estate, income, and California real property taxes) and help clients achieve their individual wealth transfer objectives, including grantor retained annuity trusts (GRATs), intentionally defective grantor trusts, generation-skipping trusts, charitable trusts, and LLCs. Mitch also represents trustees and beneficiaries in disputes involving trusts and wills. By drawing on both his estate planning knowledge and civil litigation experience, Mitch is able to effectively advocate for his clients in courts throughout California. He earned his J.D. from Georgetown University Law Center in 2011, and his B.A.in psychology from the University of California, Los Angeles in 2007.

 

Daniel Gershwin, Real Estate.

Dan Gershwin helps clients navigate the complex local, state, and federal approval and entitlement processes required to develop real property. He has extensive experience in the California Environmental Quality Act (CEQA), public-private partnership projects involving multiple public agencies, historic resources, waterfront and coastal development, transportation, municipal and state legislation, special-status species and related laws and regulations, and local planning and zoning laws throughout California. In addition to representing clients as they pursue land use approvals and entitlements, Dan has litigated land use and environmental cases in California’s federal and state courts, with a focus on CEQA and the Endangered Species Act. Since coming to Coblentz, Dan has worked on a range of mixed-use infill development projects, a major student housing project, and sports and entertainment facilities throughout California. Prior to joining the firm, Dan served as a law clerk to the Honorable Ruggero J. Aldisert of the United States Court of Appeals for the Third Circuit. Dan earned his J.D., summa cum laude, from the University of Pennsylvania Law School in 2012, where he was an editor on the Law Review and a member of Order of the Coif. He earned his B.A. in economics, with distinction, from the University of Virginia in 2003.

 

Seth Pardee, Tax.

Seth Pardee is a tax and corporate attorney with significant experience advising clients on business transactions and representing clients in federal and California tax controversies. His practice focuses on business formation planning, company restructurings, mergers, acquisitions, tax issues involved in equity compensation, tax issues arising in connection with virtual currencies and the use of blockchain technology, international tax planning, the application of special tax incentives, such as those for qualified small business stock and qualified opportunity zone funds, real estate joint ventures, property tax issues, transfer tax, and representing clients in disputes with the IRS and California tax authorities. Seth earned his J.D., magna cum laude, and his Master of Laws in Taxation from Georgetown University Law Center in 2011, where he received the Thomas Bradbury Chetwood, S.J. prize for ranking first in his LL.M. program. He earned B.A. degrees with comprehensive honors in political science and Hispanic linguistics and literature from the University of Wisconsin – Madison in 2007.

 

Kyle J. Recker, Real Estate.

Kyle Recker focuses his practice on transactional matters, with an emphasis on finance, real estate, and general corporate matters. Kyle has represented institutional lenders, loan servicers, owners, developers, and investors in connection with a broad array of finance and real estate transactions. His finance and real estate experience includes mortgage and mezzanine loan origination, secured and unsecured financing, CMBS loan servicing, construction lending, bond financing, federally insured loan products, transactions with state and federal subsidy components, joint ventures, leasing, and acquisitions and dispositions. Kyle’s corporate experience includes structuring and negotiating a variety of contractual matters, including distribution, manufacturing, licensing, consulting and other service agreements. He earned his J.D., magna cum laude, from the University of Michigan Law School in 2010, and received his B.S. in business administration from Franklin University in 2005.

 

About Coblentz Patch Duffy & Bass LLP

Coblentz Patch Duffy & Bass LLP, headquartered in San Francisco, is a premier provider of innovative, results-oriented legal services, specializing in real estate, litigation, corporate, intellectual property, employment, tax and family wealth. Law360 named Coblentz a California Powerhouse firm in 2017. The National Law Journal named Coblentz to its Midsize Hot List four times. Coblentz is nationally ranked as a Best Law Firm in seven practice areas, and holds San Francisco Metropolitan rankings in 14 practice areas on U.S. News & World Report’s Best Law Firms list. Best Lawyers® has named four Coblentz partners “Lawyer of the Year” in 2019, and 18 Coblentz partners are honored in 14 practice areas. For more information visit www.coblentzlaw.com.