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REPORT ON LDRC

Part 1:
You Can’t Make This Stuff Up: Where Have You Gone, Izzy Alcantara?

We are not huge fans of the "Hearsay” feature of Massachusetts Lawyers Weekly, but the interlocking “NY” on a blue cap caught our eye, in the October 17, 2016 issue.

We learned that one David Alcantara had sought reversal of his conviction for various financial conspiracies, because he suffered jury prejudice, in part, by reason of:

"… a handful of references to his wearing a New York Yankees baseball cap".

We have long been aware of the perils of wearing Yankees gear in Fenway Park, but in federal court?

The First Circuit Court of Appeals wasn’t buying.

Fittingly, the appellant’s counsel happened to be a niece of Jeremy Kapstein. When known as “Jerry”, the elder Kapstein, was last seen spiriting Fred Lynn out of town as a free agent, breaking the hearts of many New Englanders. Ironically, the same Kapstein later worked for the Red Sox, for many years.

To close the irony loop, Jeremy Kapstein now works for Dan Duquette, in Baltimore, who once ordered Jimy Williams of the power-challenged Red Sox to play Pawsox call-up Izzy Alcantara, despite the fact that Izzy’s relationship with on-field hustle proved casual at best.

We have not been able to determine if David and Izzy are related.

Part 2:
A Mediation Confidentiality Precedent: ZVI Construction Company v. Levy, et. al.

The Massachusetts Appeals Court case, ZVI Construction Company v. Levy, et. al., came down last week, honoring the policy intent of statutory and contractual mediation confidentiality, with a touch of ambiguity. It is a commercial matter but the principles apply more broadly to family law mediation. We have blogged about the case (below).

Part 3:
The Fuss over Proposed Rule 2704 Regulations

We have been following the controversy over the proposed Rule 2704 regulations, by which the Internal Revenue Service plans to increase the tax yield on transactions based upon the value of family business transfers, by creating a new minimum value and essentially eradicating marketability discounts.

This proposed change, as we noted in two blog posts featured in today's newsletter, is, coincidentally or not, reminiscent of the Massachusetts case of our own Bernier v. Bernier. In Bernier, the reason for adopting the fair value standard was that a divorcing spouses do not deal at arm's-length, but are more analogous to a company and a withdrawing shareholder, with fiduciary obligations.

For the IRS, whose motivation to explain its reasoning does not meet our Supreme Judicial Court's, one presumes it is all about the tax receipts. Various interest groups, including the business appraisal community, are lined up to fight the proposed regs, and we will be interested to see where it all shakes out.

If you're curious, take a look at the two blog posts, below.

Part 4:
It’s Better Left Unsaid

Unfortunately, the summer of 2016 will always be blemished by our dreadful national election. The only good thing to say is that it is nearly over. No more doggerel from us. We just hope that our national (and the world’s) PTSD is not permanent.

Enjoy the upcoming holidays.

Chouteau & Bill

Proposed IRC §2704: Life Imitating Divorce?

LDRC Blog

We receive newsletters from several CPA firms, and they are often both informative and useful. Recently, they are aflame with comment on proposed IRC §2704, issued by the Internal Revenue Service on August 4th. Section 2704 would limit or eliminate the use of discounts for lack of control and lack of marketability for businesses being valued for estate and gift tax purposes: raising values and taxation on intergenerational transfers; and challenging estate planners in crafting tax avoidance/minimization strategies.

To accomplish this, we understand, the proposed rule includes minimum valuation rules (pro rata share of net worth); mandated disregard of ownership agreement and state law restrictions on stock transfers; and close scrutiny of personal goodwill, size and customer concentration concepts as value reducers. Valuation experts and estate planners promise complexity, uncertainty, litigation and general misery ahead. read more...

MEDIATION CONFIDENTIALITY: IS IT A STEP FORWARD OR BACK?

ZVI Construction Company, LLC v. Franklin Levy & another

LDRC Blog

The Appeals Court recently enforced the important policy of honoring the right of contractual and statutory confidentiality in mediation, as provided by M.G.L., ch. 233, §23C. The statute states that:

    Any communication made in the course of and relating to the subject matter of any mediation and which is made in the presence of such mediator by any participant, mediator or other person shall be a confidential communication and not subject to disclosure in any judicial or administrative proceeding…

Meaning, that what is said in mediation should stay there, freeing parties of the inhibiting worry that their factual or negotiating concessions may come back to haunt them in court, should their mediation fail to achieve complete resolution. read more...


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781.708.4445 | 413.341.1017 | Email: info@levinedisputeresolution.com

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