When business is good, an acquisition lures the prospect of moving your company to the next level. But even veteran dealmakers sometimes overlook critical elements that can derail the best intentions. The following are five elements that should always be considered in an acquisition:

  1. Preparation – Whether the target company is a competitor or a complement, take a step back and ask if it truly fits the strategic direction of your business. Too many deals are made on emotion. Before talking numbers, develop a business plan that details how the new company will merge with yours. Be sure to list the pros and cons. Most importantly, make sure the executive team and your board of directors have a clear strategic acquisition plan in place on an annual basis.
  2. Communications – Seek outside perspectives and lean on advisors for constructive feedback. Good ones can be objective without internal blinders. This can include consultants, attorneys, accountants, IT, operations, sales managers, suppliers and strategic partners. Ensure that your executive team is fully engaged.
  3. Finance planning – Before determining the best way to finance the deal, develop a post-integration forecast and PandL. Cash and equity are not always the preferred method of payments. Debt from a multitude of sources can carry significant tax and cash-flow benefits. Leverage financial, legal and tax advisors for alternative strategies.
  4. Finding synergy – Before the deal closes, develop a six-month integration plan that uncovers as many efficiencies as possible. Too often, newly acquired companies trudge on in a perpetual silo without revealing the many opportunities they present. This includes shared resources, supply chain, operational efficiencies and workforce integration.
  5. Create an audit – A year after the deal, take a critical look at the entire process. This provides a second chance to uncover additional efficiencies that were not initially apparent. It also identifies critical lessons and the ability to improve the process during your next deal. Done well, there will be a next deal.

Ted Motheral is a partner with Walter Haverfield’s Corporate Transactions group. He be reached at tmotheral@完美彩票官方网站下载 or at 216.928.2967.



Walter | Haverfield partner Kevin Patrick Murphy explained in Crain’s Cleveland Business one key reason why the medical marijuana industry has been slow to metamorphize in Ohio.

Emily O'Connor

John Neal


1. Check the city’s zoning code
When you are selecting the location of your new restaurant, make sure to check the local zoning code to ensure that your restaurant will be permitted to operate

in that location. Take a look at that code to not only confirm that your use is allowed, but that there are no other requirements you need to meet. That may include a required number of parking spaces or signage restrictions.

2. Obtain a food service operation license
This will be one of the first steps you take in opening your restaurant. In Ohio, you will first need to submit your application along with your floor plans and equipment list. Make sure to look at the checklist provided in your application to ensure you are meeting all of the requirements. Once your plans have been approved, you can apply for your food service operation license. You will need to schedule an inspection with the local health department inspector before the license can be issued. This can be one of the most time-consuming tasks, so budget significant time.

3. Obtain a liquor permit
If you would like to serve alcohol at your restaurant, then you will need to obtain a liquor permit. Cities and towns have quotas on how many liquor permits can be issued in the area. If there is not one available, you will need to obtain one from another locale and file a transfer application. The process can take time so you will want to look into applying for a liquor permit as soon as you have your lease, and sometimes even before. The liquor permit does not issue until after a final inspection, which will occur right before the restaurant opens. So, the timing can be stressful. It is important to start the process as soon as possible.

4. Are you looking to have an outdoor patio?
If you are looking to provide an outdoor patio for your guests, you will likely need to get a permit from the city or town where your restaurant is located. They may require that you sign a waiver and provide copies of your food service operation license, liquor permit and certificate of liability insurance. Your liquor permit will need to include the patio area. It can take a couple months to obtain approval for the patio so make sure to look into your city or town’s requirements early on and plan accordingly.

5. Are you looking to provide music or some form of entertainment at your restaurant?
If so, you may need another license from the city or town where your restaurant will be located. For instance, in the city of Cleveland, you need to obtain a Consolidated Entertainment and Amusement Device License if you want to have any of the following activities at your restaurant: billiard room, bowling alley, dance hall, music, coin-operated amusement devices or roller rink. While obtaining the license can be fairly straightforward, you will want to budget enough time to obtain the city or town’s approval.

Emily O. Vaisa is an attorney in the liquor control and real estate practice groups. She assists clients in obtaining new liquor permits with the Ohio Division of Liquor Control and represents liquor permit holders in proceedings before the Ohio Liquor Commission. Emily can be reached at evaisa@完美彩票官方网站下载 or at 216-928-2909.

John Neal is head of the liquor control group at Walter | Haverfield. He focuses his practice on state and federal liquor permit licensing as well as the licensing of Ohio’s new medical marijuana industry. He can be reached at jneal@完美彩票官方网站下载 or at 216-619-7866.

Please join Walter | Haverfield and Fairport Asset Management for a dual financial and legal program to help you tackle your business issues and seize opportunities.

Using real-life examples of successful, multi-generational business owners, corporate transactions attorney Ted Motheral and wealth advisor Andrew Connors will offer best practices to help you grow and transition your company and create a meaningful legacy.

You’ll get practical ideas for developing a strategic wealth plan that aligns your business and personal wealth goals, as well as tips for:

  • Maximizing the value of your business
  • Keeping the family in the family business
  • Achieving your philanthropic goals

When: June 6th, 2018
Time: 4:00-5:30 pm (presentation), 5:30-7:30 pm (networking reception)
Where: JumpStart (6701 Carnegie Ave., Cleveland, OH 44103)
Cost: Free
RSVP: rsvp@完美彩票官方网站下载fairportasset.com or call 216-431-3455


A recent federal circuit court decision clarifies that Ohio business owners have the right to protect their private business records from state inspection in the absence of a search warrant. That’s despite statutory provisions purporting to allow warrantless searches.

Liberty Coins LLC, et al., v. David Goodman et. al. (6th Cir. 2018) involved a constitutional challenge to four provisions of the Ohio Precious Metals Dealers Act. The act authorizes warrantless administrative searches of certain records and information kept by precious metals dealers (both licensed and unlicensed). Two precious metal dealers challenged the act on the grounds that it violated their right to be secure from unreasonable searches and seizures as protected by the Fourth Amendment.

The U.S. Court of Appeals for the Sixth Circuit reviewed the act and concluded that the portions of the act that were necessary to deterring criminal activity in the precious metals industry, and which were part of a predictable and guided regulatory presence, were constitutional. However, those provisions that broadly authorized the government to “investigate the businesses” of precious metals dealers violated the Fourth Amendment of the U.S. Constitution and were therefore unconstitutional.

Liberty Coins is instructive to local and state governments as well as private business owners and entities operating in any “closely regulated” industry. Laws authorizing warrantless searches in these industries must meet a three-part test in order to comply with the Fourth Amendment: (1) there must be a substantial government interest that informs the law; (2) inspections must be necessary to further the law; and (3) the law, in terms of certainty and regularity of its application, must provide a constitutionally adequate substitute for a warrant. Laws that fail to meet any part of this test will be subject to constitutional challenge under the Fourth Amendment.

If the government is looking to review your business records without a warrant, or you are a government entity seeking to enhance its regulatory efforts in a particular industry, it is wise to consult with legal counsel to ensure compliance with the Fourth Amendment. If you have any questions about Liberty Coins or any other administrative or regulatory regimes, the public law attorneys at Walter | Haverfield are available to assist you.

Ben Chojnacki is an attorney at Walter | Haverfield who focuses his practice on public law, litigation and sports law. He can be reached at bchojnacki@完美彩票官方网站下载 or at 216-619-7850.



Many potential applicants for medical marijuana dispensary licenses have found it challenging to secure locations for their operations. Walter | Haverfield’s Kevin Murphy was quoted on this topic in an article in Crain’s Cleveland Business.


The decision to legalize medical marijuana in Ohio represents an incredible business opportunity for Ohioans. But not everyone who applies for a medical marijuana processing or retail dispensing license in this highly competitive industry will be successful.

To succeed, one must have a sound business plan and enough lead time to properly execute it. Applicants will also need to be well capitalized with a strong (and patient) investor base. Keep in mind that traditional lenders, such as banks, have still not entered the arena because medical marijuana, while legal in the state of Ohio, is still considered illegal under federal law.

Applicants will also need to have identified and obtained local approval for a location (real estate) from which they will operate the marijuana processing or dispensary operations. This can be a difficult task because no medical marijuana processor or retail dispensary may be located within 500 feet of a 完美彩票官方网站下载, church, public library, public playground, or public park.

The medical marijuana business is not for those who are risk-adverse, nor is it suited for procrastinators. The $10,000 processor application fee and the $5,000 retail dispensary fee are non-refundable. It takes time and a considerable amount of effort to prepare an application that will be seen by the state of Ohio as a viable candidate for a medical marijuana processing or dispensing license. Competition is expected to be fierce based on the number of applications that were received for the medical marijuana cultivation licenses earlier this year.

In addition to the non-refundable application fees, potential applicants can expect to incur legal and other advisory fees. The cost to bring in third-party advisors, however, will likely prove to be a wise investment as most applicants will need to rely on their expertise to help navigate the myriad restrictions and requirements.

With the large number of applicants expected, only the best applications will be considered. The state is looking for applicants who are well-capitalized, responsible and reliable, since license holders will be tasked with the responsibility to provide medicine to what is expected to be a large patient base in Ohio.

In order to assist would-be applicants to optimize their chances for securing a license or to help prospects determine whether it makes sense to pursue this one-of-a-kind business opportunity, Walter | Haverfield has teamed up with other cannabis industry professionals to host a free educational seminar on Thursday, Oct. 5. Among other things, the seminar will cover: important deadlines and requirements for application; zoning restrictions; risk management and insurance options; security requirements; tax consequences; and tips for raising the necessary capital.

This seminar provides an opportunity to connect with a wide array of professionals to get the answers you need before you make the decision to pursue a medical marijuana processing or dispensing license. You can register for the free seminar by visiting www..

Kevin Patrick Murphy is a partner and chair of Walter | Haverfield’s Corporate Transactions practice group.

This article was published in Crain’s Cleveland Business on October 3, 2017.

In a Crain’s Cleveland Business article written by Jeremy Nobile and titled, “Clock is ticking on marijuana investment chances,” Kevin P. Murphy provided advice to medical marijuana businesses looking to locate their operations in northeast Ohio.

In an article in Crain’s Cleveland Business, published on April 22, 2017 and titled, “Tail-end funds can damage a portfolio,” T. Ted Motheral provided advice to investors on how to handle tail-end funds, in order to reduce the negative impacts they may have on a manager’s or investor’s portfolio.

It happens over and over again. Companies get close to making an acquisition but then there are all sorts of costly delays and complications because the company’s board of directors is raising concerns or didn’t have the information it needed, when it needed it, to make an informed decision on the transaction. Too often company leadership and members of the board do not have good communications when it comes to effectively consummating a merger or an acquisition.

Ensuring good communications and expedited decision-making happens long before a deal is brought to the table. Companies that have identified mergers and acquisitions as part of their overall growth initiatives need to develop strategies before the first deal is ever evaluated to make sure goals are aligned and expectations are managed. Otherwise, boards are often forced to make very reactive decisions without having the information they ultimately need. Too much or too little information can delay decisions or even terminate what could have been a very profitable transaction.

The following are tips to keep in mind to effectively involve your board of directors in the MandA process:

  • Develop written policies for identifying and evaluating potential deals to ensure that management and the board agree on how deals will be sourced, what factors will be weighed, what questions to ask of prospects, and how prospective acquisitions will fit into the overall corporate structure and strategy.
  • Recruit board members with pertinent MandA experience so they can guide the board in asking the right questions and making timely decisions.
  • Develop a list of questions that will be consistently asked when evaluating all prospects relative to projected income streams, potential risks and liabilities, breakdown of responsibilities and liabilities between the parties, and potential issues arising from the integration of the new facility or assets.
  • Create a formal process for learning from previous acquisitions and attempted acquisitions so that mistakes are not repeated.
  • Clearly define responsibilities of management vs. the board during the MandA process. Some boards are too involved, restricting management from doing its job. Others are too removed and only brought into the process shortly before the close of the transaction.

Board members today have more fiduciary responsibilities and are exposed to the potential for heightened scrutiny in terms of liability. It is in the best personal interests of the board members, as well as the best interests of the company, that boards have the right information at the right time to make the most fiscally responsible decisions.

Ted Motheral is a partner in the Corporate Transactions Group of the Cleveland-based law firm of Walter | Haverfield LLP.

In an article in a special “Corporate Growth and M and A” section in the January 18, 2016 issue of Crain’s Cleveland Business, titled “Mitigate M and A risk through due diligence, deal structure and favorable terms,” Jacob B. Derenthal explained how participants in mergers and acquisitions can limit the risk arising out of their transactions.

October 2014 – “Construction
Defects: How Long Are You At Risk?” Properties
(Legal Perspectives).andnbsp;

In its October 6, 2014 issue, Crain’s Cleveland Business named Kevin Patrick Murphy as a member of its 2014 “Forty Under 40” class. Along with the other young professionals in this class, Kevin was recognized for his achievements and leadership in the Northeast Ohio business community.

The federal Credit Card Accountability, Responsibility and Disclosure Act of 2009 (“CARD Act”) imposes new regulations on gift certificates, store gift cards and general use pre-paid cards (“gift cards”) with respect to expiration dates, fees, and disclosures both on the gift card and prior to purchase. The CARD Act’s provisions, along with the related administrative rules enacted by the Federal Reserve, are scheduled to go into effect onandnbsp;August 22, 2010. However, with the recent passage of House Bill 5502, gift cards produced prior to April 1, 2010 will not have to comply with the “on-card” disclosures untilandnbsp;January 31, 2011, with some restrictions.

Merchants and other issuers of gift cards must be sure they are complying with all regulations for all gift cards offered after the August 22nd effective date. A general overview of the new regulations is provided below:

  • Expiration Dates.andnbsp;The underlying funds associated with a gift card may not expire sooner than five years after date of purchase or after date of last load, if it is a reloadable gift card. If the gift card’s underlying funds expire at any time, an expiration date must be placed on the gift card.
  • Dormancy, Inactivity, or Service Fees.andnbsp;Dormancy, inactivity and service fees mayandnbsp;onlyandnbsp;be charged once per month and only after there has been no use of the card for one year.
  • Disclosures. The Act requires disclosures both: (a) prior to the gift card purchase and (b) on the gift card itself, when there are expiration dates or fees associated with the gift card. The disclosures must provide specific information regarding the expiration dates and fees and must include a toll-free telephone number where consumers can obtain additional information. The disclosures must be “clear and conspicuous,” but there is no specific font requirement.
  • Loyalty, Award, and Promotional Cards. Gift cards issued through loyalty, award and promotional programs are exempt from the expiration date and other restrictions of the CARD Act. Nonetheless, disclosures must still be made on or with the gift card, including the fact that the gift card is for promotional or loyalty purposes, whether there is an expiration date or fees associated with the underlying funds, and a toll-free telephone number for information related to any fee.
    Loyalty, award and promotional programs are not specifically defined by the CARD Act. However, they can generally be thought of as a merchant “reward” to a customer, potential customer, or employee for purposes of marketing, such as:
    • Reward programs for purchases made from the merchant
    • Rebate programs
    • Sweepstakes or contests
    • Referral programs
  • General Exemptions. Gift cards that are issued only in paper form are exempt from the Act. However, this exemption does not apply to gift cards that are initially issued to the purchaser electronically (for example, by e-mail) and then printed on paper. Rather, the gift card mustandnbsp;originatein paper form. Also, gift cards that are not issued for a specific dollar amount are not subject to the Act, such as cards for a percentage discount (i.e., 10% off) or cards for a type of service (i.e., a one-night hotel stay). Likewise, gift cards that are redeemable for an admission to an event are not subject to the Act.

Note that the CARD Act preempts only those state laws which are less restrictive than and/or in conflict with the Act’s regulations. State laws which provide greater consumer protection than the Act remain effective. Thus, Ohio’s law prohibiting gift cards with less than a two-year expiration date is preempted by the Act’s five-year expiration date requirement. However, Ohio’s prohibition against dormancy fees within two years following issuance of a gift card remains effective and must be applied in conjunction with the Act’s prohibition against dormancy fees during periods of inactivity of less than one year.

This Client Alert is merely a general overview of the CARD Act’s complex regulations. We recommend that all current and contemplated gift card and promotional programs be reviewed in light of the specific provisions of the Act in order to avoid running afoul of these detailed federal regulations. Violations of the Act may result in criminal and civil liability.

The information in this Client Alert is a summary of often complex legal issues and may not cover all of the “fine points” of a specific situation. Accordingly, it is not intended to be legal advice, which should always be obtained in consultation with an attorney.andnbsp;William R. Hanna,andnbsp;Geoffrey S. Gossandnbsp;or Heather R. Baldwin Vlasuk ofandnbsp;Walter | Haverfield will be pleased to assist with any questions or concernsandnbsp;about this new development in the law.

Ohioans may soon be able to place bets on their favorite sports teams in bars and casinos throughout the state. This past spring, the U.S. Supreme Court struck down a 1992 federal law in Murphy v. National Collegiate Athletic Association that had effectively banned sports betting in most states. This decision has opened the door for states to legalize sports betting across the country完美彩票官方网站下载.

The change comes more than two decades after sports betting was outlawed at the national level. In 1992, Congress enacted the Professional Sports Protection Act in response to concerns over state-sponsored sports gambling. Delaware, Montana, Nevada and Oregon were exempt from the new law as they had already established a sports betting system.

The law went unchallenged until 2014, when, in an effort to make sports betting legal in New Jersey, lawmakers there repealed provisions of its state law that prohibited sports gambling. The major professional sports leagues and the NCAA brought an action in federal court against the state. The case made its way up to the Supreme Court, which held PASPA to be unconstitutional because it requires states to maintain their existing laws against sports gambling without alteration.

The result of Murphy is that each state can now decide whether to legalize sports betting and how to do it. While many states have quickly moved to make this a reality, Ohio is taking a more deliberate approach. In July 2018, placeholder bills were introduced in both the Ohio Senate and House of Representatives to begin the process of drafting sports betting legislation.

Since the proposed bills are only placeholders, we do not yet have any actionable details on what guidelines Ohio plans to put in place, how it plans to regulate betting practices, or what businesses will be permitted to participate. Supportive legislators are hopeful that a sports betting bill will reach the Ohio Senate and House floors soon after the November election, although it is unlikely Ohio will pass any legislation until 2019 or 完美彩票官方网站下载.

With the exception of the Ohio Lottery, casinos and charitable bingo, the Ohio Revised Code currently prohibits any organization or individual from operating a gambling house or allowing public gaming to occur on premises. And the Ohio Constitution has certain prohibitions as well. Ohio legislators will need to determine whether authority exists in Ohio to allow sports betting through legislation and possibly even a constitutional amendment.

If legislators can find a way, sports fans will legally be able to collect their winnings on placing an Ohio-based wager for the Cleveland Indians to win the World Series or the Browns to win the Super Bowl. Until then, fans can only dream.

Emily O. Vaisa is an attorney at Walter | Haverfield who focuses her practice on liquor control and business law. She can be reached at eoconnor@完美彩票官方网站下载 or at 216-928-2909.

John Neal is an attorney at Walter | Haverfield who focuses his practice on liquor control and business law. He can be reached at jneal@完美彩票官方网站下载 or at 216-619-7866.

Kevin Murphy
Walter | Haverfield’s Kevin Murphy says it’s likely that individual states will clarify the difference between hemp and other varieties of cannabis because federal law is “murky at best.” This article appeared in both The Canton Repository and The Independent.

Greg WatkinsOn November 2nd, 2018, an Ohio law goes into effect allowing records and contracts secured by blockchain data. This comes after Governor John Kasich signed Senate Bill 220 (SB220) in August, which amends Ohio’s Uniform Electronic Transactions Act (UETA).

UETA ensures electronic transactions are enforced to the same effect as written transactions. SB220 amends the definition of “electronic record” in UETA to add that “a record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record.” SB220 also amends the definition of “electronic signature” to expressly provide that signatures secured through blockchain technology are considered to be in electronic form and be an electronic signature.

SB220 was born out of Senate Bill 300 (SB300), which was introduced in May 2018. SB300 sought to implement blockchain and its associated technologies into Ohio legislation even further than SB220 as it also defined “blockchain technology” and “smart contract.” SB300 died in the Senate, however, and only a few of its provisions were implemented via SB220.

Ohio joins Arizona, Delaware, Illinois, Nevada, Tennessee, Vermont and Wyoming as states enacting or adopting laws that reference blockchain. Meanwhile, California legislatures continue to work on their blockchain legislation. Legislatures in Florida and Nebraska have also proposed blockchain legislation, but the pursuit of passing the legislation has been abandoned indefinitely.

Greg Watkins is an attorney at Walter | Haverfield who focuses his practice on business services and blockchain technology. He can be reached at 216-928-2917 or at gwatkins@完美彩票官方网站下载.

Greg WatkinsSmart contracts are becoming a very viable option today as blockchain technology emerges in the marketplace.

In simple terms, a smart contract is a computer program with conditions encoded into its language. Once agreed upon, it is placed on blockchain – a digital ledger that records transactions in cryptography. Each transaction is recorded chronologically and publicly. Blockchain is highly resistant to modification, so smart contracts allow trackable, irreversible transactions without third-party intermediaries.

In a stock sale, for example, the parties typically hire an escrow agent, an objective third-party who is in place to foster trust between the buyer and seller. In a traditional transaction, the seller delivers share certificates to the agent, and the buyer pays money to the agent. When both parties have satisfied all the conditions, which were previously made in writing, the escrow agent releases the shares to the buyer and the money to the seller. The transaction is complete. The process requires redundant communications, a paper contract and a lot of back and forth.

A smart contract eliminates redundancies. Terms are still negotiated in contract form, but once they are complete, they are coded into a block and placed on blockchain. For instance, a blockchain transaction might read: “When the buyer pays $100, the buyer receives ownership of the shares.” Then, when the buyer pays, he or she automatically receives the certificates without third-party interaction and signed contracts.

Smart contracts are encrypted and decentralized. They are distributed among many computers, making them indisputable. The process increases trust among all parties because no single party is in control. The transactions are trackable and public, making them more secure than paper tucked away in a file cabinet.

However, such contracts do have their disadvantages. Because they are fairly new, the legalities remain uncertain. There is no guarantee that eliminating intermediaries will lower costs. Parties still need to hire qualified coders to enter contracts on the blockchain. And, human error can present problems from coding mistakes.

Smart contracts combine the security of blockchain technology with the efficiency of online transactions. There are various benefits, but it is unclear how willing people will be to adopt the new technology.

Greg WatkinsThe California Consumer Privacy Act of 2018, which goes into effect in 完美彩票官方网站下载, affects businesses doing business in California that satisfy one of the following thresholds: (a) has annual gross revenues in excess of $25 million; (b) annually buys, receives, sells or shares the personal information of 50,000 or more consumers; or (c) derives 50% or more of its annual revenues from selling consumers’ personal information. However, businesses are exempt from the act if every aspect of their commercial conduct takes place outside of California.

The act requires businesses to inform consumers of the personal information being collected and the purposes for which that information will be used. “Consumers” are defined under the act as California residents. The act’s definition of “personal information” is broad and includes information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked to a particular consumer or household.

The act gives consumers the right to request the following from a business:

  • The categories of personal information that the business collected about the consumer
  • The categories of personal information that the business sold about the consumer
  • The categories of third parties to whom the personal information was sold
  • The categories of personal information that the business disclosed about the consumer for a business purpose

The act also contains an “opt-out” mechanism where a consumer may direct a business not to sell the consumer’s personal information. Business must inform consumers of this opt-out right. The consent mechanisms of the act vary greatly from those in the European Union’s General Data Protection Regulation (GDPR). The GDPR prohibits the collecting, processing or transferring of personal information without a legal basis, one of which is a consumer’s informed and unambiguous consent. In other words, consumers are required to “opt-in.”

Businesses located in and out of California should consult with counsel to determine if they will be subject to the act.

Greg Watkins is an attorney at Walter | Haverfield who focuses his practice on corporate transactions and blockchain technology. He can be reached at 216-928-2917 or at gwatkins@完美彩票官方网站下载.

Greg WatkinsOhio businesses are now able to pay their tax bills with bitcoin. It’s a noteworthy move for the state as it leads the country完美彩票官方网站下载 in accepting cryptocurrency as a form of payment and positions itself as crypto-friendly.

Businesses can take advantage of the new payment method by visiting Ohiocrypto.com. They are not required to be headquartered in Ohio to use the website. Once on the website, registration, tax payment information, and one’s compatible cryptocurrency wallet are necessary. The process utilizes blockchain technology, allowing businesses to reap the benefits of secure and trackable transactions.

Ohiocrypto.com uses BitPay, a third-party cryptocurrency processor to facilitate the receipt of payments. Through BitPay, the payments are received from the taxpayer, converted to dollars, then deposited into the state account. As such, the Ohio Treasurer’s office will not mine or hold cryptocurrency.

23 taxes are eligible for payment including commercial activity, sales tax and use tax. Although the website only currently accepts bitcoin, the treasurer’s office hopes to add more cryptocurrencies in the future. Ohio leads the way as other states with similar initiatives, such as Arizona and Georgia, failed to receive approval from their respective state legislatures. Ohio plans to expand the bitcoin initiative to individual filers in the future.

Greg Watkins is an attorney at Walter | Haverfield who focuses his practice on corporate transactions and blockchain technology. He can be reached at 216-928-2917 or at gwatkins@完美彩票官方网站下载.

Greg WatkinsThe Securities and Exchange Commission (SEC) recently issued a statement making it clear that federal securities laws apply to securities issued using new technologies, such as blockchain. The SEC’s Statement on Digital Asset Securities Issuance and Trading highlighted recent enforcement actions falling into three categories: initial offers and sales of digital asset securities (DAS), investment vehicles investing in DAS and those advising on the investment in such securities, and secondary market trading of DAS.

In an initial offering scenario, the SEC focuses on whether the digital assets constitute securities and, if so, what registration requirements apply. The SEC will not treat digital assets differently based on their technological nature. In fact, the SEC has already issued enforcement actions to companies for their unregistered offerings of tokens. The SEC also required the companies to compensate investors who purchased tokens in the illegal offerings.

With respect to investment vehicles investing in DAS and those advising on the investment of such securities, such vehicles are subject to registration requirements under the Investment 完美彩票官方网站下载 Act of 1940. Also, managers of such investment vehicles are subject to registration requirements under the Investment Advisers Act of 1940.

Finally, exchanges that facilitate the electronic trading in DAS are required to register as a national securities exchange or operate pursuant to an exemption from registration. The SEC will apply a “functional approach” to assess whether a trading system constitutes an exchange. Additionally, entities that facilitate the issuance of DAS in initial coin offerings and secondary trading in DAS may also be a “broker” or “dealer.” Accordingly, such entities would be subject to register with the SEC and become a member of a self-regulatory organization. Again, the SEC will use a functional approach to determine whether an entity qualifies as a broker or dealer. The broker-dealer registration requirements are applicable, even if the entity does not qualify as an exchange.

Greg Watkins is an attorney at Walter | Haverfield who focuses his practice on corporate transactions and blockchain technology. He can be reached at 216-928-2917 or at gwatkins@完美彩票官方网站下载.

Kevin MurphyIn the Columbus Jewish News, Walter | Haverfield attorney Kevin Murphy explains how Canadian dispensaries may play a role in Ohio’s medical marijuana program and how the current pace of the program is a telling sign for what’s to come.

A growing number of business owners are discovering the financial and performance benefits of employee stock ownership plans (ESOPs). As of 2015, the most recent year for which data is available from the National Center for Employee Ownership, there were nearly 6,700 ESOPs in the United States, holding total assets of nearly $1.3 trillion.

With an average of nearly 230 new ESOPs formed each year, ESOPs are a proven, effective tool for recruiting and retaining talent and developing corporate succession plans for family-owned and closely-held businesses in the United States. Industry experts anticipate ESOP formations will increase over the next 10 to 15 years as “baby boomer” business owners transfer ownership and management of their companies to employees.

As a result of the growing trend of ESOP formation, many banking and financial institutions now have finance teams in place to manage specialized and complex financing of ESOP transactions. Banks are eager to provide financing for ESOPs due to ample lending reserves. Many ESOP-owned companies are also exempt from federal income taxes which in turn increases the cash available to repay bank loans.

on April 25th in Akron, Ohio. Jochim will be joined by panelists from Fifth Third Bank and accounting firm, . The panel will also discuss multiple bank financing instruments with different levels of seniority, security and return.

Kevin Murphy
Walter | Haverfield partner Kevin Murphy discusses investors’ growing interest in Ohio’s cannabis industry, in an article in Crain’s Cleveland Business.

The state agency overseeing the implementation of Ohio’s medical marijuana program recently clarified where cannabidiol (CBD) products can be sold in the state. And that is causing confusion to the corner stores and gas stations, which often sell the products. Walter | Haverfield’s Kevin Murphy clarifies what’s legal in Crain’s Cleveland Business.

Rick AmburgyCommercial real estate and construction professionals take note: The adoption of blockchain technology in the design and construction industry presents a great opportunity.

Projects come in all sizes and complexities, and involve multiple levels of participants, in multiple phases. Delays and disputes often occur when communications break down among the project parties. Issues can include change orders being performed without full agreement of the parties; the application of different definitions to contract terms; and delays incurred, but not communicated until the project is behind schedule.

The list is endless, but in almost every instance the left hand is unaware of what the right hand is doing. No other industry is in such dire need of a process upgrade. From acquisition to financing to design to construction, a successful project requires open communication and collaboration at all levels.

can provide this new level of project transparency.

In layperson’s terms, blockchain is a secure database that is date-stamped and shared among a network of participants. The parties in the network initially agree to the rules of the blockchain, and the blockchain acts as an electronic record of the project. The operative documents, agreements and records are stored in a series of blocks that can be updated by any party within the network. The blockchain records the time and sequence of each amendment or update and instantly notifies all participants.

Each amended block becomes a new block that is linked to the preceding block. This forms a successive chain, which becomes the permanent record of the project. The agreements in the blockchain, or smart contracts as they are called, are designed to be self-enforcing, with the terms and conditions of the agreements connected to the flow of funds and sequencing of events during construction.

So, how can blockchain enhance communications and streamline the process? Imagine a commercial development where the progress of construction and flow of payments are completely automated and transparent. Project milestones can be verified by all parties in real time, and payments are automatically released upon completion of such milestones. Owners can track the flow of payments downstream to ensure subcontractors and suppliers are being paid. General contractors can track the approval process for payment applications, as well as funding from lenders upstream.

This transparency would reduce the likelihood of payment disputes and enable parties to identify potential issues in advance of work stoppage, allowing projects to proceed on time.

The applications for blockchain technology in the design and construction industry are endless. Project information would be universally available to every level of the project team, leaving no more excuses for breakdowns in communication. Lenders, owners, design consultants, engineers, architects, general contractors, subcontractors and suppliers would all have the ability to update the project database in real time.

The lines of communication would be wide open. Shipments could be tracked, inspections shared, workflow schedules updated, change orders processed and submittals reviewed, all in real time, and all with a complete historical record of the contractual obligations and timelines surrounding such items.

Blockchain technology is here. The industry must now educate itself and push for mainstream adoption.

Rick Amburgey is an associate with Walter | Haverfield who focuses his practice on construction law, financial services and commercial real estate. He can be reached at 216-619-7843 or at ramburgey@完美彩票官方网站下载.

*This article also appeared in .

The SECURE Act became law on December 20, 2019. Retirement plan sponsors, fiduciaries, and third party administrators must understand and implement several changes in pension law that affect employee stock ownership plans (ESOPs), 401(k) plans, and simplified employee pension plans (SEPs). Walter | Haverfield is providing this summary of key provisions to our valued clients and business partners. We are ready to help you understand and implement these changes.

Common Plan Changes.

The SECURE Act makes several changes that apply to all retirement plans as set forth, below.

  1. Increases the credit for small start-up costs incurred by employer pension plans.
  2. Creates a new credit to defray the start-up costs of plans with automatic enrollment.
  3. Prohibits plans from making loans through credit cards and other similar arrangements.
  4. Permits penalty-free withdrawals from retirement plans for birth or adoption.
  5. Increases the age at which required minimum distributions (RMDs) must start from 70 1/2 to 72 (for individuals who have not reached age 70 1/2 as of December 31, 2019).
  6. Changes the permitted distribution periods for beneficiaries.
  7. Requires annual “lifetime income disclosures,” which must illustrate the monthly payments if a participant used his or her account balance to provide lifetime income as an annuity.


How Does the SECURE Act Affect 401(k) Plans?

The Act permits long-term part-time workers to participate in 401(k) plans. Previously, employers could exclude part-time workers with fewer than 1,000 hours of service per year. Now, plans must include a dual eligibility requirement: 1,000 hours of service in any one year (or other 12-month period specified in the plan) or 500 hours of service for each of three consecutive years. Service in years before 2021 need not be taken into account.

The Act changes the automatic enrollment safe harbor cap and the safe harbor plan notice requirements. The Act increases the automatic enrollment safe harbor cap on elective deferrals from 10% of employee compensation to 15%. Automatic enrollment permits employers to automatically deduct elective deferrals from an employee’s wages. The Act also eliminates the safe harbor notice requirement for plans that satisfy the safe harbor by providing non-elective contributions. The requirement that employees be entitled to make or change an election at least once per year continues to apply.

The Act also requires that inherited pension benefits generally must be distributed within 10 years of the participant’s death. This does not apply to surviving spouse beneficiaries, chronically ill beneficiaries, beneficiaries who are not more than ten years younger than the participant, or beneficiaries who are children of the participant and have not reached the age of majority. Such beneficiaries generally may receive distributions over the life or life expectancy of the participant, except that the 10-year distribution rule will apply to minor children when they reach the age of majority for any undistributed amounts.

Penalty-free withdrawals on birth or adoption, the prohibition on plan loans through credit cards, the new age for beginning required minimum distributions, and the lifetime income disclosure requirements all apply to 401(k) plans.


How Does the SECURE Act Affect ESOPs?

The Act’s new hours of service requirements do not apply to ESOPs. Plan sponsors may still exclude part-time workers who do not work 1,000 hours of service in a year from participation in their ESOPs.

The Act also requires that inherited pension benefits generally must be distributed within 10 years of the participant’s death. This does not apply to surviving spouse beneficiaries, chronically ill beneficiaries, beneficiaries who are not more than ten years younger than the participant, or beneficiaries who are children of the participant and have not reached the age of majority. Such beneficiaries generally may receive distributions over the life or life expectancy of the participant, except that the 10-year distribution rule will apply to minor children when they reach the age of majority for any undistributed amounts.

Penalty-free withdrawals on birth or adoption, the prohibition on plan loans through credit cards, the new age for beginning required minimum distributions, and the lifetime income disclosure requirements all apply to ESOPs.


How Does the SECURE Act Affect SEPs?

SEPs, otherwise known as SEP IRAs, are essentially traditional IRAs that permit employer contributions. Therefore, the SECURE Act’s IRA provisions apply. The Act repeals the maximum age for IRA contributions. Previously, individuals could not contribute to their IRA once they reached age 70 1/2 .

The Act’s new hours of service requirements do not apply to SEPs, so plan sponsors may still exclude part-time workers who do not work 1,000 hours of service in a year from participation in their SEPs.

The Act also requires that inherited pension benefits generally must be distributed within 10 years of the participant’s death. This does not apply to surviving spouse beneficiaries, chronically ill beneficiaries, beneficiaries who are not more than ten years younger than the employee, or beneficiaries who are children of the employee and have not reached the age of majority. Such beneficiaries generally may receive distributions over the life or life expectancy of the employee, except that the 10-year distribution rule will apply to minor children when they reach the age of majority for any undistributed amounts.

Penalty-free withdrawals on birth or adoption, the prohibition on plan loans through credit cards, the new age for beginning required minimum distributions, and the lifetime income disclosure requirements all apply to SEPs.


Effective Dates.

The effective dates for SECURE Act provisions vary by tax, calendar and plan years, with some modifications taking effect in 完美彩票官方网站下载, and others in 2021. The effective dates for major provisions are listed below.

  1. Effective December 20, 2019, the date the Act became law.
  • Prohibition on making loans through credit cards and similar arrangements
  1. Effective for plan years beginning after December 31, 2019.
  • 401(k) automatic enrollment safe harbor cap increase
  • Elimination of safe harbor notice requirement
  • Distribution on birth of child or adoption
  1. Effective for tax years beginning after December 31, 2019.
  • Increase in credit limit for small employer plan startup costs
  • Small employer auto-enrollment credit
  • Repeal of maximum age for IRA contributions
  • Penalty-free withdrawals for birth or adoption
  • Increase in age for required minimum distributions
  1. Effective for plan years beginning after December 31, 完美彩票官方网站下载.
  • New hours of service requirements for 401(k) plans
  1. Effective for benefit statements furnished more than one year after the DOL issues guidance.
  • Lifetime income disclosures

Plan Amendments.

Retirement plans must comply in operation with SECURE Act provisions by the effective dates specified above, however, plans will not be considered out of compliance, provided that the plan documents are amended, consistent with operation of the plan, to incorporate these provisions by the last day of the first plan year beginning on or after January 1, 2022.

Other Provisions.

The SECURE Act has a number of other provisions, including annuity forms of payment and distribution, a safe harbor for selection of an annuity provider, changes to multiple employer plans, relief for certain frozen or closed defined benefit plans, funding relief for certain “community newspaper plans,” the ability to adopt a plan effective for the preceding taxable year, and increased penalties for certain failures with respect to Form 5500 filings.

Additional Information.

As to ESOPs:

Tim Jochim, Partner

175 S. Third Street, Suite 290

Columbus, OH 43215



As to all Plans:

Russell C. Shaw, Partner

1301 E. Ninth Street, Suite 3500

Cleveland, OH 44114



Petra J. Bradbury, Associate

1301 E. Ninth Street, Suite 3500

Cleveland, OH 44114