Strafford`s live webinars offer you a high-quality, economical and convenient CLE option, without wasting time or travel expenses. See state map CLE >> The passage of tax reform last December gave investors greater security when it comes to corporate tax rates in the near future. One consequence is the increased interest of some investors in acquiring payment rights under existing tax receivable agreements (TRAs). In short, ACCORDS are agreements made by a company (a “pubco”) as part of an IPO to monetize Pubco`s tax attributes after the IPO for the benefit of owners prior to the IPO and investors who acquire payment rights under TRAs to such pre-IPO owners. Our previous article on ARTs focused on some ways in which tax reform could affect the value of TRA payment rights. Since the introduction of tax reform, we have seen a marked increase in investor interest in the acquisition of TRA payment rights, including through hedge funds, family offices and private trust funds. This article describes some of the functions of an AED that an investor should analyze before acquiring rights under an AER. It is also expected that the provisions of the tax treaties will result in the payment of 85% of the total net tax benefit and the amount accumulated to those to whom the payments are due under the tax treaties. I liked that the Strafford program covers real situations and claims. ARTs generally contain full divestitures that allow TRA holders to sell future rights to outside investors. In the short term, tax reform has increased security with respect to corporate tax rates, which has increased the interest of hedge funds and other private investment vehicles in purchasing payment rights under corporate tax.
Legal counsel should review each of these investments in light of the specific provisions of the TRA and the due diligence of the company that is required to make the TRA payments. The recording of a 90-minute high-end CLE/CPE webinar with Q-A downloads is available 48 hours after the live program and is available 24 hours a day, 7 days a week. Webinar recordings include the entire presentation, including Q-A. Presentation materials can be displayed on your screen. PDF presentations are also available on each program`s website. For more information on investments in TRAs, please contact one of the following members of the Ropes-Gray team: Penalford Webbinaires are supported by our 100% unconditional refund guarantee: If you are not satisfied with any of our products, let us know and receive a full refund. Contact us at 1-800-926-7926. . The simplest is a TRA is a contract between the parties to monetize certain tax attributes in different situations. TRAs have become an integral part of the IPO market, where the limited company concerned (Pubco) agrees to pay pre-IPO owners for Pubco`s tax attributes.
