Articles Posted in Business Law

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Forty years ago, the Supreme Court decided Chevron v. Natural Resources Defense, which gave deference to federal agencies to implement their charging statutes. In its latest term, the Court’s 6-3 decision in Loper Bright Enters. v. Raimondo overturned Chevron and dramatically altered the balance of power between federal agencies and the federal judiciary.  


Chevron implemented a two-step approach for the interpretation of statutes. First, courts determined whether Congress had spoken to the statutory question at issue. If Congress’s intent was clear, that ended the court’s inquiry. But if the statute was ambiguous or silent, Chevron directed courts to defer to the agency’s interpretation of the provision if the agency’s reading was a permissible construction of the statute, regardless of how the court would ultimately interpret it. This two-step approach gave deference to administrative agencies concerning the laws they administer and resulted in the presumption that when Congress left ambiguity in a statute, it would be resolved by the administering agency. 


The Loper majority abandoned this long-standing doctrine based on perceived conflict with the language of the Administrative Procedure Act (“APA”). Section 706 of the APA states that courts will decide questions of law arising on review of agency action and set aside actions inconsistent with the law. The majority found it significant that the APA lacks a command to defer to administrative agencies when addressing legal questions while commands existed in other areas of the APA. In addition to the language in the APA, Chief Justice Roberts justified the holding by empathizing the constitutional principle articulated in Marbury v. Madison, which states that it “is emphatically the province and duty of the judicial department to say what the law is.” 5 U.S. (1 Cranch) 137, 177 (1803).  


The majority found that precedent before Chevron did not require deference to the administrative agency’s reading of an ambiguous statutory provision. This, coupled with the difficulties courts faced in implementing the Chevron doctrine, further justified the Court’s departure from precedent.  


The Court made it clear that the Loper decision, standing alone, is not grounds for revisiting settled judgments that relied on Chevron. Instead, moving forward, courts will rely on the APA and exercise their independent judgment while employing the tools of statutory interpretation. Rather than deferring to the interpretation of administrative agencies when a statute is ambiguous, courts may consider executive branch input to inform their decision. Also, the presumption that ambiguity would be resolved by the agency no longer exists. However, when a statute delegates authority to an agency within constitutional limits, courts should respect such delegation and ensure that agencies act within it. 


The effects of the Loper decision are yet to be seen, but in Justice Kagan’s dissent, she stated that the decision will shock the legal system. Justice Kagan emphasized that agencies (much more so than courts) have the technical expertise to better interpret ambiguous statutory provisions, and the departure from a doctrine that has become an aspect of modern government will have widespread harm to regulatory efforts such as maintaining clean air and water. In response, the Chief Justice states that judges have been responsible for legal interpretation for the last 221 years. Ultimately, the full impact of the Loper will unfold in courts, administrative agencies, and the legislature over the coming years.  


Silverman Thompson regularly handles administrative matters at the federal, state, and local levels across a wide array of fields. To learn more about our administrative practice, please contact Bill Sinclair at 410.385.9116 or 



William Sinclair, Esq. 



Todd Hesel, Esq. 



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After the enactment of the Tax Cuts and Jobs Act in 2017, the limitation on an individual’s ability to itemize tax deductions resulted in higher income tax for many Maryland business owners.  On May 8, 2020, Maryland enacted legislation allowing pass through entities (primarily LLCs, partnerships and S corporations) to elect to pay tax on a member’s distributive share at the entity level.  As a result, the taxable gross income of individuals receiving distributive shares of the entities net income is less.  In addition, the election creates a federal income tax deduction for the business that is not subject to the $10,000 itemized deduction limit established by the Tax Cuts and Jobs Act.

Single member LLCs, partnerships and S corporations are the most likely beneficiaries of the pass-through election and they should carefully consider their options.  C corporations and Schedule C taxpayers that are ineligible for taxation at the entity level should seek counsel to determine if restructuring may be beneficial.

Silverman Thompson regularly counsels Maryland businesses, including corporations, partnerships, and limited liability companies.  If you would like further information about entity formation and structuring option or if you would like to learn more about Silverman Thompson’s business practice, please contact its chair, Bill Sinclair, at or at (410) 385-9116.

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WeWork.  WeLitigate.

We Holdings LLC and We Company (collectively “WeWork”) is a privately held company that leases office space on a short-term basis.  Following a failed IPO in 2019, the company was faced with a liquidity crisis.  In response, the board of directors formed a special committee (the “Special Committee”) to evaluate strategic alternatives to the IPO and to negotiate a potential transaction to save the company.  The Special Committee was comprised of two directors.  Together, the two Special Committee members and entities affiliated with them held over 34 million shares of WeWork.

On October 22, 2019, the Special Committee entered into a Master Transaction Agreement with Softbank Group (“SBG”) which contemplated a tender offer, equity financing, and debt financing.  On November 22, 2019, SBG made a tender offer to purchase shares from WeWork.  Issues arose shortly thereafter and on April 1, 2020, SBG terminated the tender offer.  On April 7, 2020, at the direction of the Special Committee, WeWork filed suit against SBG.  WeWork’s co-founder, Adam Neumann, also filed suit.  The suits were consolidated by the Court of Chancery of the State of Delaware (the “Court”) into In re WeWork Litigation (“WeWork”).

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The Statutory Right to Purchase Shareholder Stock in the Dissolution of a Close Corporation

In Bartenfelder v. Bartenfelder, 248 Md. App. 213 (2020), the Court of Special Appeals considered whether a complaint by a stockholder in a close corporation seeking the appointment of a receiver triggers the right of another stockholder to purchase the complainant’s stock in the company under § 4-603(a) of the Corporations and Associations Article (“CA”) of the Maryland Code.  The Court held that “in the absence of a petition for dissolution, the request for a receiver does not trigger the statutory purchase right.”  Id. at 219.  In other words, the purchase right in CA § 4-603(a) applies only in the context of a dissolution proceeding.

The Facts and Procedural History

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Marketing entrepreneurs’ greatest strengths are their creativity and vision. It is this vision that drives many to take the leap to start their own agency/consultancy or join a start-up venture to market an exciting new product. Unfortunately, most marketers are not well-versed in the intricate legal issues involved with starting a business. This can lead to a variety of problems, especially as the venture begins to become successful.  A common misconception is that good legal advice is often too expensive for the early stages of a business venture. This is not the case – provided the right counsel is selected. To ensure the success of any new venture, marketers should take steps to avoid the following common pitfalls:

  1. Delaying discussion of legal issues until past the start-up phase. It’s all too common (and tempting) to ignore legal issues involved with starting a business. The instinct is to wait until your company receives additional funding or has a problem to hire an attorney. But having legal counsel during the start-up is essential to preventing large and costly problems that could ultimately derail your business.
  2. Initial business formation. Entrepreneurs are often not aware of the different tax filing categories. LLC, S-corporation and C-corporation are the most common, but there are others. Each has a different structure and design, with different tax consequences. As the company founder, you should sit down with an attorney to determine which structure is best for your business. Failure to do so may result in higher taxes and expose you to additional liabilities. Choosing the correct structure can result in significant savings, a more robust investment platform and a more secure future.
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