RECENT TRENDS AND DEVELOPMENTS

Transcription

1 RECENT TRENDS AND DEVELOPMENTS Francenia B. Heizer, Esquire McNair Law Firm, P.A. (803) Brandon T. Norris, Esquire McNair Law Firm, P.A. (864) Michael W. Burns, Esquire McNair Law Firm, P.A. (864) Michael J. Seezen, Esquire McNair Law Firm, P.A. (803)

2 FREEDOM OF INFORMATION ACT New Agenda Requirements, Case Law Updates, Pending Legislation and Three Helpful Tips 2

3 Tip No. 1 There is such a thing as too much sharpie... 3

4 ACT 70 Amendments to FOIA Agenda now required for all meetings of public bodies except emergency meetings No more Agenda, if any, for regularly scheduled meetings language Agenda must be posted with notice of meeting at least 24 hours prior to meeting Agenda posted in a publicly accessible place and on public body s website. Must still also notify persons, organizations, local news media or such other media as may request notification, and note efforts to comply in minutes. No items may be added to agenda without an additional 24 hours notice 4

5 ACT 70 Amendments (Cont.) Requirements for adding action item to agenda after meeting begins: 2/3 vote of members of public body present and voting If final action or if action w/no public comment, 2/3 vote AND finding of emergency or an exigent circumstance 5

6 Case Law Update Donohue v. City of North Augusta 2015 SC Supreme Court opinion regarding announcement of specific purpose of executive session Announcement of proposed contractual matter insufficient Quality Towing v. City of Myrtle Beach FOIA is not satisfied merely because citizens have some idea of what a public body might discuss in private. 6

7 Case Law Update (Cont.) Glassmeyer v. City of Columbia 2015 SC Court of Appeals opinion regarding redaction of personal identifying information City redacted home addresses, personal telephone numbers and addresses in FOIA response regarding applicants for position of City Manager Court of Appeals held that home addresses, personal telephone numbers, and addresses of applicants were exempt from disclosure under S.C. Code Section (a)(2) 7

8 Tip No. 2 Avoid inadvertent FOIA poetry...it may get tweeted! #FOIApoetry 8

9 Pending Legislation: H.3191 Has undergone three readings in the House. Currently in Senate Subcommittee. Fees Reasonable fees not to exceed the actual cost of search Not more than hourly salary of lowest paid employee that has the skill and training to perform Fee schedule must be posted online 9

10 Pending Legislation: H.3191 (Cont.) Response time reduced from 15 days to 10 days (or 20 days for records over 2 years old) Records must be furnished or made available w/in 30 days of determination or deposit (35 days for records more than 24 months old) Deposit required for costs not to exceed 25% of total cost 10

11 Pending Legislation: H.3191 (Cont.) FOIA review to occur in Administrative Law Court Hearing Officers appointed by Chief Judge of ALC Chief Judge of ALC to promulgate rules governing practices and procedures Hearing Officer determinations to be appealed to ALC A Hearing Officer determination that records are not subject to disclosure will bar award of attorney s fees or other costs in the event of reversal on appeal. A Hearing Officer determination that a record is subject to disclosure must set forth the information to be disclosed and when disclosure must occur. 11

12 Tip No. 3 Avoid funny s about FOIA requests... 12

13 Municipal Continuing Disclosure Cooperation Initiative (MCDC) MCDC Initiative established in connection with SEC Rule 15(c)2-12 and anti-fraud provisions of Securities Act of 1933 and Securities Exchange Act of 1934 ( Securities Acts ). Rule 15(c)2-12 prohibits underwriters from selling municipal securities unless an issuer has committed to annual financial and operating disclosure under a Continuing Disclosure Agreement ( CDA ). Securities Acts prohibit material misstatements and omissions by an issuer in an Official Statement ( OS ), including material misstatements about prior compliance with disclosure obligations under an existing CDA. 13

14 MCDC Under the initiative, the SEC allowed/encouraged underwriters and issuers to voluntarily self report any time in the past five years ( ) when an issue was sold with offering documents that did not identify recent failures to comply with continuing disclosure requirements or that contained a false or misleading statement about the issuer s compliance with continuing disclosure. 14

15 MCDC Dealers/underwiters had until September 10, 2014 to self-report and issuers had until December 1, While confirmation from the SEC is unavailable, industry sources believe most dealers/underwriters and thousands of issuers submitted MCDC filings. 15

16 MCDC So far, the SEC has focused on underwriters/dealers. 36 underwriters agreed to pay a total of $9.3 million to settle under MCDC. Enforcement actions were taken. Firms did not admit or deny SEC findings. Penalties were based on size of underwritings maximum of $500,000 for 10 firms; smallest $40,000 16

17 MCDC SEC will turn its attention to issuers. - We don t know who - We don t know when - Not limited to MCDC participants 17

18 MCDC Recommended Settlement Terms for Issuers who participated in MCDC Must consent to cease and desist proceeding for violation of Securities Act of Neither admit nor deny SEC s findings. Issuer pays no civil penalty. 18

19 MCDC Recommended Settlement Terms for Issuers (cont.) Establish policies and procedures on continuing disclosure. Comply with existing continuing disclosure undertakings. Cooperate with subsequent investigation by SEC Enforcement Division. Disclose settlement terms in any OS within the next five years. Provide compliance certification to the SEC one year after institution of proceedings. 19

20 MCDC Different Points of View Mary Jo White, SEC Chair, has been quoted saying: The MCDC Initiative has already resulted in significant improvement sto the municipal seucrities market, including heightened awareness of issuers disclosure obligations and enhanced disclosure policies and procedures. 20

21 Forward Agreements 21

22 = 22

23 = 23

24 Forward Agreements Why use Forwards? Current vs. advance refunding Debt capacity Revenue/rate pressure 24

25 Forward Agreements Current vs. Advance Refunding Advance Refunding Current Refunding 90 days Redemption Date 25

26 Forward Agreements Debt Capacity Revenue/Rate Pressure 26

27 Documentation Term Loan Agreement and/or Rate Lock Agreement Typical reps/warranties authorization, execution and delivery, enforceability, no litigation, no further approvals/consents, no proposed/pending legal changes or challenges, accurate information provided to bank, no funding liability for employee benefit or pension plan Material Adverse Effect Attachments - forms of legal documents, legal opinions, continuing disclosure certificates 27

28 Timing Closing Date vs. Funding Date TLA Closing Date 90 days +/- Funding Date / Bonds Issued Redemption Date 28

29 Closing Date Deliverables Authorizing resolution/ordinance Legal opinions Financial information Certificates as to incumbency and confirm representations 29

30 Funding Date Deliverables Executed legal docs/continuing disclosure certificates Legal opinions Bring down on reps/warranties/defaults No adverse ratings change 30

31 When is breakage fee owed? Failure to Launch 31

32 When is breakage fee owed? Failure to Launch Bonds aren t issued on Funding Date Failure of Funding Date deliverables, except: Lender can t legally buy bonds Issuer can t bring down litigation rep 32

33 When is breakage fee owed? TLA is Terminated Following an Event of Default Payment default Reps/warranties Bankruptcy Material litigation Bonds are pre-paid after issuance 33

34 Other Legal Issues Protective language on payments Breakage fee not a debt/doesn t count against 8% debt limit Indemnification/Reimbursement Limit to revenue source? 34

35 Other Legal Issues Competitive vs. Negotiated Sale G.O. debt except as below, must be sold competitively Notice of sale specifies delivery date of bonds; include key provisions that bidders must abide to (breakage, indemnification, terms and conditions, defaults, etc.) May result in one bid, no bids or rejected bids If less than ten years or $1.5 mm principal, can be sold privately 35

36 Other Legal Issues What has to Happen Before/After TLA is Executed? Authorizing resolution/ordinance (specific to TLA) Forms of documents agreed upon Tax diligence/real estate title work Initiative/referendum 36