The changing financial times and regulatory regime have made many companies reconsider the way they operate, how they are structured, and even where they are domiciled.

Reasons for Corporate Reorganizations.

Operational Efficiency. Over the past few months, many companies have downsized to reduce payroll costs, or discontinued unprofitable lines or divisions. In these circumstances, it may be appropriate now to eliminate certain subsidiaries and affiliates to streamline operations and rationalize the corporate structure.

Tax and Regulations. With the burden of taxes and regulations expected to increase, it may be appropriate to restructure business operations to minimize tax or regulatory reporting requirements. Some companies operating in other states have found Texas an attractive place to do business and are considering redomiciling operations to this state. Meanwhile certain multinational corporations have redomiciled administrative functions out of the United States entirely to reduce their tax and regulatory burden. Our tax attorneys regularly help devise strategies to minimize their global tax and regulatory burden.

Limitation of Liability.  Media reports have speculated that corporate litigation and intellectual property litigation will be on the rise again in 2010. To limit liability, and protect a company's crown jewel assets, it may be appropriate to restructure operations in order to segregate risks and assets. Our attorneys regularly devise and implement corporate structures to minimize risks, segregate liabilities, and shield valuable assets from the aggressive claims of plaintiffs.

Mergers, Acquisitions & Divestitures. Corporate reorganizations may be executed in anticipation of a sale of a company or a division. Companies often divest themselves of less profitable divisions or subsidiaries prior to the sale of the corporate group, or the acquisition of a competitor or other business. In other instances, the merger or corporate consolidation may itself be in the form of a tax free reorganization that qualifies under Internal Revenue Code Section 368. Our attorneys can structure the tax aspects of taxable stock or asset acquisitions, or tax-free mergers. In addition to advising on the tax issues, our attorneys can carry out the merger or acquisition transaction.

Recapitalizations.  The recent credit crunch is making it necessary for many companies to reorganize in the form of a recapitalization. A recapitalization may come in the form of raising additional capital from existing shareholders or capital infusions from outside investors or bondholders, and may involve  working out existing debt obligations. Our attorneys can negotiation and execute recapitalization transactions, and structure the recapitalization as a tax free reorganization when appropriate.