Private Equity

California legislative activity focused upon private equity group and hedge fund health care transactions continues notwithstanding California Governor Gavin Newsom’s veto last fall of California Assembly Bill 3129 (AB-3129).

Proposed Section 899 of the Internal Revenue Code, incorporated into “The One, Big, Beautiful Bill,” aims to impose retaliatory tax measures against certain “applicable persons” from “discriminatory foreign countries.”

Restrictive covenants are unquestionably a significant deal consideration in M&A transactions. In the private equity context, a buyer is focused on restrictive covenants to protect its investment by binding the sellers and other recipients of material deal proceeds to obligations and restrictions for a certain period of time following the transaction. Restrictive covenants serve several purposes and are highly beneficial for a buyer; accordingly, absent any legal limitations and assuming sufficient consideration, a buyer is incentivized to impose restrictive covenants on as many selling parties as possible. However, and not surprisingly, sellers heavily negotiate their post-transaction restrictive covenant obligations to keep their business options as open as possible on a go-forward basis. The conflicting interests of buyers and sellers when it comes to restrictive covenants result in carefully negotiated covenants spread out over multiple transaction documents and employment agreements. This article discusses the common restrictive covenants used in private equity transactions, the importance of such covenants in the key transaction documents, and related enforcement considerations. 

Read about the key considerations private equity firms should make when doing business in the new Trump tariffs environment.  Read about the key considerations private equity firms should make when doing business in the new Trump tariffs environment.  

Learn more about important trends in 2025 for the private equity landscape, including the expansion of continuation vehicles as a vital liquidity tool, heightened regulatory scrutiny and antitrust pressures introducing both challenges and opportunities, and interest rate cuts and evolving buyer-seller risk tolerance creating a more complex deal environment.

Read about the steps to implement a pre-transaction reorganization under Section 368(a)(1)(F), known as an F reorganization, on a target that is treated as an S corporation for tax purposes, which can offer significant tax benefits to buyers and sellers.

Read about DOJ recent scrutiny of private equity deals, its initiatives aimed at increasing acquirer oversight of M&A transactions, and best practices for private equity sponsors in the current enforcement landscape.

The Federal Trade Commission (FTC)’s new rule to ban most post-employment non-compete agreements could significantly impact M&A and private equity transactions. Assuming it withstands legal challenges, the rule will require buyers and private equity sponsors to rethink many of their asset protection strategies.

Read about proposed Treasury regulations that provide guidance on the application of the stock buyback excise tax to redemptions and M&A transactions.

Read about pending cases docketed in the US Tax Court that are considering the application of the limited partner exclusion from self-employment tax when the limited partners in a state law limited partnership actively participate in the partnership’s business.

Read about an IRS private letter ruling, which held that success-based fees in an M&A transaction were incurred by a private equity sponsor rather than by the target. The decision denied the target’s late request for a Safe Harbor Election, which permits a tax deduction of 70% of the success-based fees.

Read Week 1 of Mintz’s Sell-Side Series, Pre-Planning: Developing Your Goals and Defining Your Game Plan, for tips on setting goals for an eventual sale, building an external and internal team, managing employee relationships, and getting organized.

This alert discusses the Delaware Supreme Court’s decision in Manti Holdings v. Authentix Acquisition Co. that upheld the enforceability of an advance waiver of statutory appraisal rights by common stockholders.

This advisory discusses how courts could interpret common terms in merger agreements, including material adverse change (MAC), material adverse event (MAE), and force majeure clauses and ordinary course of business covenants, in light of the COVID-19 pandemic.

Read about the Corporation Transparency Act, which will require many businesses and companies to disclose their beneficial ownership information to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

Read about IRS and Treasury Department proposed regulations addressing the application of Section 1061 of the U.S. Internal Revenue Code of 1986, as amended.

This article discusses updated documentation and timing for the Federal Reserve Main Street Lending Program and certain considerations for companies considering borrowing under the program.