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Business Law Mira Mdivani, Nathan A. Orr, Pascale L. Henn Annette P. Heller Mark F. Mueller

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Business Law

J

Mira Mdivani, Nathan A. Orr,

and

Pascale L. Henn

(Independence)

Annette P. Heller

and

Mark F. Mueller

(St. Louis)

Bryan C. Bacon

(Columbia)

Kevin B. Spaeth

(Cape Girardeau)

Jonathan D. Cope

(Springfield)

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Missouri Bar CLE

2014 Annual Business Law Update Presenters:

Mira Mdivani, Mdivani Corporate Immigration Law Firm

Nate Orr, Spencer Fane Britte & Browne

Pascale Henn, Pascale Henn Business Law Advisors

Mira Mdivani, MDIVANI CORPORATE IMMIGRATION LAW FIRM

Mira Mdivani is a business immigration lawyer with Mdivani Corporate Immigration Law Firm. Her areas of expertize are corporate immigration compliance, I-9 audit defense, and visas for international personnel. She is the founding member of the Corporate Immigration Compliance Institute. Ms. Mdivani has served as President of the Missouri Bar Association's Immigration Law Committee and Chair of the Kansas Bar Association's Immigration Law Section. Ms. Mdivani serves on the Board of Governors of the Missouri Bar Association and of the Kansas City Metropolitan Bar

Association, where she is Co-Chair of the International Law Committee. Ms. Mdivani’s professional work and leadership have been recognized by the Missouri Bar Association’s President Award, Association for Women Lawyers of Greater Kansas City President’s Award, Outstanding Service Award by the Kansas Bar Association, Business Practitioner of the Year by Missouri Lawyers Media, Best of the Bar by the Kansas City Business Journal, Super Lawyer in Corporate Immigration Law, Robert Gernon Award for Excellence in

Continuous Legal Education, and pro bono recognition from the University of Missouri - Kansas City Law Foundation, the Kansas Bar Association and the American Immigration Lawyers Association.

Nate Orr SPENCER FANE BRITTE & BROWNE

Mr. Orr a partner in Spencer Fane's Litigation, Financial Services and Labor & Employment Practice Groups. His practice focuses on financial services counseling and litigation, commercial litigation, and employment litigation. Nate uses his litigation experience to counsel dozens of financial institutions and businesses during an unsettled economic climate. He serves as

coordinating counsel for several banks, litigating and providing strategy to restructure credits, protect assets and create new business relationships. His practice also includes extensive employment litigation defending

management against all types of discrimination and wage and hour claims, including class action and multiple employee cases. In addition to being named a Super Lawyer, Nate is a past recipient of Missouri Lawyers Weekly Magazine’s 40 Up & Coming Attorneys. He was awarded the Kansas City Metropolitan Bar Association's 2005 Young Lawyer of the Year Award, is a 2007 graduate of the Greater Kansas City Chamber of Commerce's

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city's rising leaders. He currently serves on the Board of the Kansas City Metropolitan Bar Association, as Vice Chairman of the Salvation Army’s Board for Western Missouri and Kansas, as well as on the Executive Committee for Kansas City’s Downtown Council. He frequently speaks on issues such as litigation avoidance and is a published author.

Pascale Henn PASCALE HENN BUSINESS ADVISORS

Pascale Henn practices in the area of commercial law, with an emphasis in business contracting, procurement and supply contracting, distributor and dealer sales, government contracting, business formation, commercial real estate, corporate compliance, and corporate policy drafting and

implementation. She has over twenty years of experience as legal counsel to Fortune 100 multi-national corporations as well as to small start-up sole proprietorships. Pascale has practiced as in-house counsel with Sprint, CenturyLink and General Electric’s Employers Reinsurance Corporation. She has acted as outside legal counsel to business clients of all sizes while practicing with both large and small boutique firms. Many of her clients are government contractors, and she’s guided them through the entire process from bidding to contracting to satisfying compliance requirements. Ms. Henn has served on the Board of the Association for Women Lawyers of Greater Kansas City. She has been recognized as Best of the Bar by the Kansas City Business Journal in corporate law.

Issues Nathan Orr

1. Does the U.S. Government want a monopoly on consumer lending? 2. Are there any fair debt collection practices left?

3. Spousal guarantees and the Equal Credit Opportunity Act. Pascale Henn:

1. Use of Holding Companies by small businesses 2. Independent contractor agreement use update 3. Imputed liability exposure

Mira Mdivani

1. Corporate immigration update – nationwide employer immigration enforcement 2. Advantage Framing update – liability for contractor immigration non-compliance 3. Visas for international personnel – H-1B and, Investor and E-2 update

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1. Cyber-liability, including liability for data breaches. Over the past year or so, the

insurance industry has really been pushing coverage for this. It would be helpful to know what sort of liabilities are out there (and how they are or are not covered in standard liability policies).

2. Financial institutions’ (frequently involuntary) increased roles in law enforcement and policy implementation?

 Guardian (choke- hold) of access to the payment system

o (AML/BSA, OFAC, FACTA, know your customer) o Internet payday lending

o Internet gambling o Tax anticipation loans o “legal” marijuana businesses

 CTR/SAR’s

 Federal aiding/abetting, RICO, co-conspiracy

 DOJ statement of enforcement emphasis

 Know your customer (and your customer’s customer, etc.); “nested entities”

 Overdraft monitoring & counseling; tough love

3. Movement toward the use of arbitration in ADR involving bank customers or third parties?

 Commercial transactions remain mixed; the consumer area is where the issue is most important

 ATT / Conception supreme court decision / requirements

 Pros: possibly precludes class action consumer litigation; avoids a sympathetic jury; limited discovery; lower profile

 Cons: removes consumer’s barriers to bring a claim; cutting of baby in half; no appeals; limited discovery; possible development of collective cookie-cutter plaintiff lawsuits & consolidations; likely regulations of CFPB

 Effectiveness of court early assessment process

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http://www.spencerfane.com/

Recent Missouri Loan Modification Reminders Decision May 1, 2014

The Missouri Court of Appeals for the Western District recently issued an opinion that reminds banks in Missouri, and elsewhere, of several important points when modifying loans. In the case of Central Bank of Kansas City v. Perry, the bank’s initial loan to the borrower was secured by a deed of trust granted by the plaintiffs. The loan went through four modifications. Plaintiff first argued that the deed of trust was essentially a guarantee, and as a guarantee it was no longer valid because the plaintiffs had not consented to the various modifications. The Court held that the deed of trust was not a guarantee because a guarantee requires that the guarantor agrees to assume personal liability for the guaranteed debt. Thus, the Court held that while a loan modification will release a guarantor if the guarantor does not consent to the modification, a modification does not release a deed of trust.

Plaintiffs also argued that the loan modifications were new loans that effectively released the deed of trust. The Court held that the modifications were not new loans, and, accordingly, were covered by language in the deed of trust applying to “extensions, renewals, modifications, or substitutions.” In its finding, the Court also relied on the fact that the original loan number was used on the modifications, and the fact that the borrowers also executed documents agreeing that the existing loan was being modified, rather than extinguished. Although the case only applies to Missouri law, the points made by the Court provide good direction for banks in other states. First, the Court recommends that banks obtain the consent of guarantors on all loan modifications. Without consent, the guarantors may be inadvertently released. Although not required, to the extent the deed of trust’s grantors’ consent is readily available, it may be a good idea to obtain their consent on loan modifications. Likewise, if there is any question as to whether the grantor has personally guaranteed the underlying debt in the deed of trust, we also recommend obtaining consent from the grantor. Finally, if your bank intends for a deed of trust to cover modifications, it should include explicit language in the deed of trust covering such modifications, renewals, extensions, and replacements. Based on the Court’s ruling, it is

advisable to use consistent loan numbers and to recite in the modification documents that the modification is a continuation of an existing loan. Keep in mind, however, that all situations are

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different, and there may be some situations where it is also appropriate to modify the applicable mortgage or take other action.

http://www.spencerfane.com/

Do Spousal Waivers Violate Reg B?

January 30, 2014

The reach of the Equal Credit Opportunity Act (“ECOA”) and Regulation B (“Reg B”) has become a popular conversation topic among banking professionals. As part of that conversation, many commentators have questioned whether Regulation B prohibits the use of a spousal waiver. Pursuant to ECOA and Reg B, it is unlawful to discriminate in a credit transaction on the basis of, among other things, sex and marital status.Clearly, a bank cannot require an applicant’s spouse to sign the note if the individual applicant is creditworthy, and while a bank can require a co-signer or guarantor if an individual applicant does not satisfy underwriting criteria, some authorities have concluded that the bank still cannot require that the co-signer or guarantor be the applicant’s spouse, although there is substantial dispute about that conclusion. However, Reg B provides that a creditor may require the signature of an applicant's spouse on any instrument(s) necessary, or reasonably believed to be necessary to reach the property being relied upon in the event of a death or default of the loan applicant. See 12 C.F.R. § 1002.7(d)(2), (3), and (4).

Spousal waivers generally require the non-applicant spouse to waive any and all interest in the property pledged by the applicant spouse as collateral. The legal aspects of property ownership by married couples vary from state to state. In nearly all states, however, both spouses retain some type of ownership interest in property acquired during marriage. This could become problematic in situations where only one spouse is the loan applicant or only one spouse is pledging collateral. In these situations, if the bank were to foreclose on the property, the bank might not be able to

eliminate the non-party spouse’s rights in the property. Thus, there may be many situations where it would be entirely appropriate to require a spousal waiver as a document reasonably believed by the bank to be necessary to reach the collateral in the event of default, among other reasons.

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Although the interplay between Reg B and spousal waivers can be quite complex, your bank should be aware there may be situations where it is entirely appropriate to require a spousal waiver. We recommend that you seek legal advice regarding your state’s laws to determine if and when your bank should utilize spousal waivers.

Mira Mdivani, MDIVANI CORPORATE IMMIGRATION LAW FIRM BUSINESS IMMIGRATION Checklist

I. Does Employer Understand Consequences of Immigration Non-Compliance? Criminal: By DHS, State Enforcement, DOL & DOJ: IRCA & RICO

arrests, jail terms, fines, assets forfeiture: Advantage Framing, Golden Fence, IFCO, Advantage Framing

Civil Sanctions: by DHS under IRCA

Civil [Class] Actions: By Employees: Zirkle Fruit Company; Elite Logistics By Competitors: Commercial Cleaning

Under State Law: Loss of Business License, loss of State Credits, Felony

What Else? Everything else could be triggered: Tax, Child Labor II. Immigration Compliance Officer: Who is In Charge?

III. Written Immigration Compliance Plan: Use ICE Best Employment Practices

Immigration Compliance and Non-Discrimination Policy E-Verify

Annual I-9 Training Procedures and Schedule Designated I-9 Administrators

Annual I-9 Audits Procedures and Schedule

SSN and DHS No-Match Letters Procedures + SSNVS

Contractor Immigration Compliance Procedures

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Government Audit Procedures IV. Mergers & Acquisitions

New Visas for Acquired Employees? Liability for Incoming I-9s?

Mdivani Corporate Immigration Update

How to Prepare for an ICE I-9 Audit / Inspection

Written by Mira Mdivani

Over the past year, ICE (Immigration and Customs Enforcement) has conducted hundreds of I-9 audits of employers. I-9-related violations have been used by the government recently to indict employers and individual people, from CEOs to HR managers to first-line supervisor, on criminal grounds, and to impose civil and criminal monetary liability. What can an employer do to make sure that their I-9 Employment Verification Forms are in proper order and the employer is in top shape as far as immigration compliance goes? ICE Best Employment Practices.

First, make sure that the Employer understands the ICE Best Practices and implements them. The Best Practices are based on ICE’s IMAGE program, a voluntary probation-like program run by ICE. I do not recommend that the employers actually sign up for IMAGE; but I strongly suggest to my clients to write down ICE Best Practices requirements and find a reasonable way to implement them. My sample list of ICE Best Practices is below:

MDIVANI Best Employment Practices Based on ICE Best Employment Practices: 1. Use E-Verify & SSNVS

2. Annual I-9 Administrator Training on I-9s

3. Only Trained I-9 Administrators to Complete I-9s and E-Verify 4. Secondary Review of I-9

5. Annual I-9 Audits

6. Report I-9 Violations to Management - Annual I-9 Audit Report 7. SSN No-Match Procedures

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8. Open Door Policy for Employees to Report IRCA and Other (e.g. Title VII) Violations 9. Establish Policies to Avoid Use of Verification for Unlawful discrimination

10. Contractors and Subcontractors: Communicate ICE Best Practices, Include in Contracts, Assess Compliance through Contractor Certification

Annual I-9 Audits

ICE Best Practices call for ANNUAL I-9 Self-Audits, by an outside auditor or done internally by an employee not normally involved in the I-9 process. The I-9 self-audits serve two purposes: they ensure that the all the errors are caught and corrected before ICE gets involved, and demonstrate to the government that the employer is serious about immigration compliance and is not simply “turning a blind eye.”

Annual I-9 Administrator Training

Annual Administrator training is on the ICE Best Practices list. Again, it serves two purposes: trained administrators will know their I-9s and there will be fewer errors, and the regular annual training of I-9 administrators is a sign of how serious the company is about I-9s, thus, a serious defense against allegations of “turning a blind eye.” I advise clients to hold I-9

Administrator training immediately after the annual I-9 Self-Audit, before they make corrections of errors found during the self-audit, and when significant changes in the law occur.

How to Prepare for ICE I-9 Inspection

If you have not implemented the ICE Best Practices, including an I-9 Self-Audit and I-9 training done within past year, it is time to do so. Once the I-9 Self-Audit and I-9 Administration training are complete, you will be ready to work with ICE during the course of their I-9 audit, and you will be able to defend yourself if necessary once their audit is completed.

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5/19/2014

Mira MDIVANI

Nathan ORR

Pascale HENN

MIRA MDIVANI

MDIVANI

Corporate

Immigration

Law Firm

NATHAN ORR

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5/19/2014

PASCALE HENN

PASCALE

HENN

BUSINESS

ADVISORS

WHAT WE

WILL COVER

:

U.S. Government &

consumer lending

Fair debt collection practices

Spouses & Equal Credit

Opportunity Act

WHAT WE

WILL COVER

:

Holding Companies for

small businesses

Independent contractor

agreements

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5/19/2014

WHAT WE

WILL COVER:

Golf + Advantage Framing

contractor immigration

non-compliance

Visas for International

Personnel & Investors

WHAT WE MAY COVER

IF WE HAVE TIME:

Cyber-liability

Banks as gov. enforcersIncreased use of arbitration

in ADR involving bank customers or third parties Regulatory Compliance

DOES THE U.S.

GOVERNMENT

WANT A

MONOPOLY

ON

CONSUMER

LENDING?

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5/19/2014

ARE THERE ANY FAIR DEBT

COLLECTION PRACTICES LEFT?

SPOUSAL

GUARANTEES &

EQUAL CREDIT

OPPORTUNITY

ACT

USE OF HOLDING COMPANIES

BY SMALL BUSINESSES

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5/19/2014

INDEPENDENT CONTRACTOR

AGREEMENT USE UPDATE

IMPUTED LIABILITY

EXPOSURE

Nationwide

employer

immigration

enforcement

Local

cases

CORPORATE IMMIGRATION

UPDATE

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5/19/2014

EMPLOYER IMMIGRATION

ENFORCEMENT: GOLF IN AZ

Advantage

Framing:

Contractor

Immigration Compliance

IRCA EMPLOYER

OBLIGATIONS

Form

I-9

Verification

System =

PPPs

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5/19/2014

IRCA OBLIGATION #1: FORM I-9

IRCA OBLIGATION # 2: PPP

WRITTEN PPP

INTERNAL I-9 AUDIT

TRAINING

OTHER ITEMS ON ICE

BEST PRACTICES

CORPORATE IMMIGRATION

COMPLIANCE PROCEDURES

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5/19/2014

RECENT IMMIGRATION

ENFORCEMENT PITFALLS

Lack of

documentation

of compliance

IRCA IMMIGRATION

VERIFICATION SYSTEM:

ICE Best Practices

Written

PPPs

Internal

Form I-9 Audits;

Training

of I-9 Administrators

VISAS FOR INTERNATIONAL

PERSONNEL: H-1B CAP

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5/19/2014

VISAS FOR INVESTORS:

EB-5 & E-2

WE HAVE TIME!

Cyber-liability

Banks as gov. enforcersIncreased use of arbitration

in ADR involving bank customers or third parties Regulatory Compliance

WHAT WE

HAVE COVERED

:

U.S. Government &

consumer lending

Fair debt collection practices

Spouses & Equal Credit

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5/19/2014

WHAT WE

HAVE COVERED

:

Holding Companies for

small businesses

Independent contractor

agreements

Imputed liability

WHAT WE HAVE

WILL COVERED:

Advantage Framing

contractor immigration

non-compliance

Visas for International

Personnel

WORDS OF WISDOM

Nathan Orr

Pascale Henn

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5/19/2014

NATHAN ORR

PASCALE HENN

PASCALE

HENN

BUSINESS

ADVISORS

MIRA MDIVANI

MDIVANI

Corporate

Immigration

Law Firm

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