Welcome to Greenberg Traurig’s Health Care & FDA Practice Bulletin, a collection of timely articles written by our attorneys that are focused on significant developments in health and FDA law. The topics in this issue include the Affordable Care Act, health care fraud and abuse, regulatory updates, FDA news, other health care topics, and upcoming events.
The opportunity to acquire a 49 percent stake in New York commercial real estate is particularly suited to Israeli insurance companies and pension funds. Under Israeli regulations, these institutional investors are not permitted to acquire a majority interest in real estate that is subject to a mortgage loan. While U.S. real estate developers are often more attracted to investors who will fund 80 percent or more of the equity in an investment, the tax incentives in New York that motivate owners to sell a 49 percent stake in a transaction helps Israeli capital compete for investment opportunities.
For more information and background on this topic, please see the Law360 article, “JVs For Partial NYC Tower Stakes Pose Control, Tax Puzzles.”
Greenberg Traurig is proud to sponsor the upcoming MeetUp Digital Health at Cleveland Clinic Innovations to take place May 21 from 4:30-6:30 p.m. at the Maccabi Healthcare Training Center 4 Yeיhezkel Koifman St., Tel Aviv-Yafo.
The MeetUp, focused on new company formation and biomedical technology commercialization at Cleveland Clinic, will feature Greenberg Traurig’s Bob Grossman, co-chair of the Israel Practice, and Barry Schindler, co-chair of the Global Patent Prosecution group, who will speak on trends and partnering in e-health.
The event is free of charge. Click here to RSVP.
Historically, German insolvencies have been perceived as extremely unattractive, particularly because they were dominated by court-appointed bankruptcy administrators, with limited to no influence for creditors. This has, however, significantly changed over the last years. In that respect, it was the clearly expressed intention of the German legislature to make insolvencies more attractive for all parties involved. However, the available powerful features are often still unknown and hence not used, in particular by foreign investors. Outlined below are a few key features that may be utilized in German insolvencies.
- Debtor-in-possession (DIP) proceedings: German insolvency law allows distressed companies to restructure themselves without losing control over their business and the restructuring process. It is no longer necessary that an insolvency administrator in the traditional German style takes over the operation of the business and exercises complete control at the expense of existing management and shareholders. Instead, the distressed company can remain in charge and operate its business, in almost all practical cases with the support of an insolvency professional as chief restructuring officer, who is trusted by the existing management. The court only appoints an insolvency professional to supervise the company (so-called Sachwalter, often translated as trustee). If planned in advance and well prepared, debtor-in-possession proceedings can allow for a complete restructuring process in less than eight months.
- Insolvency plan: Another feature of German insolvency law is the so-called Insolvenzplan (often translated as insolvency plan). It is basically a proposal to the company’s creditors of how the restructured business should look and what actions need to be taken to implement the restructuring. Such proposal may even involve a total squeeze-out of existing shareholders. Only the company (or, seldomly, the trustee upon instruction of the creditors) can present such a plan. If the plan is approved by the creditors, the legal steps proposed therein take immediate effect without further documents or additional process. Creditors must approve in groups, which are set out in the plan presented by the company. There may be any number of groups, as long as creditors with a comparable economic interest are put in the same group and treated equally. The plan is approved if in each group the approving creditors have the majority in terms of headcount and volume of claims. The plan can be forced upon opposing groups, if a majority of the groups vote for the plan. The only test for a cram-down is that the opposing group must not be worse off with the plan than without, the latter normally being a liquidation scenario. A creditor cannot argue that it would be better off with a different plan.
- Financing of restructuring measures: Unlike in Chapter 11 proceedings, German insolvencies do not use DIP financing because German financial institutions do not accept a reduction in the value of their collateral. Instead, German insolvencies take advantage of an element under the social security system by which employees are insured against the loss of their wages in an insolvency for up to three months. Under this concept, the payroll of the distressed company is paid for up to three months while operations continue and revenue is generated. The resulting claim of the social security agency is an unsecured claim in the insolvency, only receiving a dividend like any other unsecured creditor.
- Reduction of headcount and other restructuring measures: In insolvency, labor law rules are considerably weakened making it easier for the distressed company to reduce its headcount. Long term contracts can be terminated and unprofitable leases can be returned, with any resulting claim for damages becoming an unsecured claim in the insolvency.
These instruments allow strategic investors to straighten out a venture that has proven to be more tricky than anticipated. They can be used by financial investors as an M&A tool for investments in companies that can be bought for a low price and then turned around. However, a key element for success is a coordinated and structured approach as early as possible in the process.
This evening marks the beginning of Yom HaZikaron, a day dedicated to those who have fallen in battle whilst defending the state of Israel; as well as to those whose lives have been taken in terrorist attacks. This national day of mourning is followed thereafter by Yom HaAtzmaut – Israel’s Independence Day. The contiguity of these two days carries special significance.
Join us this evening and tomorrow (May 1-2, 2017), as we say the prayer of Yizkor for those who have made the ultimate sacrifice.
Learn more about Yom HaZikaron: http://www.myjewishlearning.com/article/yom-hazikaron-israels-memorial-day/
Greenberg Traurig Shareholder Kate Kalmykov was recently quoted in The Jerusalem Post’s article, “Trumps Visa Policy May Harm Israeli Hi-Tech Innovators.” In the article, Kalmykov addresses Israeli hi-tech companies options for visas when looking to relocate employees to the United States. To read the full article, click here.
Greenberg Traurig was proud to be a platinum sponsor of the 5th Annual Best Practices in IP Management Event which took place last month in Tel Aviv.
Barry Schindler, co-chair of GT’s Global Patent Prosecution Group and an active member of the firm’s Israel Practice, co-chaired the event. Schindler moderated the panel “THE BIG DEBATE: Patent or WHAT ELSE?” which kept the audience on its toes in an interactive session and ended with the audience awarding him a standing ovation.
Schindler also hosted a “lunch & learn” on “Using the Dale Carnegie Approach (‘How to Win Friends and Influence People’) with Responses at the USPTO,” and a master class focused on Inter Partes Review Proceedings and Patent Eligibility: The Impact on U.S. Patent Prosecution.
Dr. Weisun Rao, an Intellectual Property & Technology shareholder at Greenberg Traurig, also participated in the event. Dr. Rao spoke on the “Methods of Attacking Patents at the Patent Offices: Comparing Procedures in Europe, U.S., and China” panel, the “Design Patents in the World of IP Globalization: A Comparison” panel, as well as on the “Trade Secrets by Jurisdiction – U.S. Europe and China” panel, together with Barry.
The event hosted some 200 leaders of Israeli and international IP communities.
About Greenberg Traurig’s Intellectual Property Litigation Practice
Greenberg Traurig provides multidisciplinary intellectual property and technology enforcement, protection, and strategic counseling with more than 180 intellectual property attorneys and agents in the United States, Asia, and Europe. The team is well-positioned to handle the most complex trademark, trade dress, trade secret, domain name, patent, copyright, computer software, and Internet-related litigations, including the defense of data privacy class action suits, due to the firm’s wide-ranging experience in federal and state courts. Greenberg Traurig enforces clients’ IP rights by drawing on the firm’s strengths – national trial team, state-of-the-art technology resources, and the national and international reach to implement dispute resolution strategies swiftly and effectively. Greenberg Traurig was named a “National Tier 1” Law Firm for IP Litigation by U.S. News and Best Lawyers®, “Best Law Firms Rankings.”
May 22-23, 2017, Greenberg Traurig’s Atlanta office will host the second Atlanta-Israel FinTech Innovation Conference.
With over 100 guests expected, the conference brings together both U.S. and Israeli companies seeking synergy and collaboration opportunities. U.S. companies attend in search of “cutting edge” Israeli technologies and Israelis leverage the event to showcase their technologies and make important contacts. The conference allows for many networking opportunities including one-on-one meetings.
The conference will be led for the second consecutive year by Greenberg Traurig’s David Schulman, Intellectual Property & Technology shareholder at the Atlanta office and an active member of the firm’s Israel Practice.
For more information please visit: http://www.usisraelexchange.com/
2017 Atlanta-Israel FinTech Innovation Conference in the news: http://www.globes.co.il/en/article-israel-to-aid-us-payment-security-task-force-1001137036