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Michigan Business Law Journal Summer 2010

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Michigan Business Law Journal Summer 2010 The Michigan Business Law JOURNAL CONTENTS Volume 30 Section Matters Issue 2 From the Desk of the Chairperson 1 Officers and Council Members 3 Summer 2010 Committees and Directorships 4 Columns Did You Know? G. Ann Baker 6 Tax Matters Paul L.B. McKenney 9 Technology Corner: Supreme Court Clarifies Privacy in the Workplace Michael S. Khoury and Michelle L. Coakley 11 Articles What Does That Operating Agreement Mean? Donald H. Baker, Jr. 13 Treatment of Single Member LLCs Under SBT and MBT after the Kmart and Alliance Decisions Donald A. DeLong 20 Property and Transfer Tax Considerations for Business Entitites Mark E. Mueller 27 Using Retirement Plan Assets to Fund a Start-up Company Adam Zuwerink 34 Protecting Competitive Business Interests Through Non-Compete Clauses Ryan S. Bewersdorf and Nicholas J. Ellis 40 Social Networking: Your Business Clients and Their Employees Are Doing It …Are You Advising Your Clients on How to Manage the Legal Risks? P. Haans Mulder and Nicholas R. Dekker 44 Secondary Liability and “Selling Away” in Securities Cases Raymond W. Henney and Andrew J. Lievense 49 The History and Future of Michigan Debtor Exemptions Thomas R. Morris 57 ICE Steps Up Its Aggressive Employer Audit Campaign James G. Aldrich 63 Case Digests 68 Index of Articles 70 ICLE Resources for Business Lawyers 77 Published by THE BUSINESS LAW SECTION, State Bar of Michigan The editorial staff of the Michigan Business Law Journal welcomes suggested top- ics of general interest to the Section members, which may be the subject of future articles. Proposed topics may be submitted through the Publications Director, D. Richard McDonald, The Michigan Business Law Journal, 39577 Woodward Ave., Ste. 300, Bloomfield Hills, Michigan 48304, (248) 203-0859, drmcdonald@dykema. com, or through Daniel D. Kopka, Senior Publications Attorney, the Institute of Continuing Legal Education, 1020 Greene Street, Ann Arbor, Michigan, 48109- 1444, (734) 936-3432, [email protected]. MISSION STATEMENT The mission of the Business Law Section is to foster the highest quality of professionalism and practice in business law and enhance the legislative and regulatory environment for conducting business in Michigan. To fulfill this mission, the Section (a) provides a forum to facilitate service and commitment and to promote ethical conduct and collegiality within the practice; (b) expands the resources of business lawyers by providing educational, networking, and mentoring opportunities; and (c) reviews and promotes improvements to business legislation and regulations. The Michigan Business Law Journal (ISSN 0899-9651), is published three times per year by the Business Law Section, State Bar of Michigan, 306 Townsend St., Lansing, Michigan. Volume XXII, Issue 1, and subsequent issues of the Journal are also available online by accessing http://www.michbar.org/business/bizlawjournal.cfm Postmaster: Send address changes to Membership Services Department, State Bar of Michigan, 306 Townsend Street, Lansing, Michigan 48933-2012. From the Desk of the Chairperson By Tania E. (Dee Dee) Fuller You know the old saying, time flies active, more of the Section members will glean greater when you are having a good time. value from the Section. With me, that statement is true in so The Michigan Business Law Journal may be the most many ways! My term as the Business valuable product the Section produces, so we expect to Law Section chair is winding down, continue to provide this high quality publication. We and this is my last Michigan Business are also expecting to include some advertisements in the Law Journal chairperson article. The Journal to help defray its costs. Member feedback has last year really has been a lot of fun told us, however, that some prefer to have the Journal for me and, in that time, I think we have accomplished in paper form while others would prefer to receive it quite a bit. In this final article, I would like to summa- digitally. Until we have the technology to segregate and rize where we stand on many of our initiatives from last provide the Journal to each member only in the method September, and I would also like to update you on some they prefer, we now provide it to everyone in both me- Business Law Section plans and some upcoming Section diums. We are working with the State Bar to find a way activities. to obtain e-mail address information for those Business After many months of work, the Strategic Plan Com- Law Section members seeking their journal only via e- mittee submitted the proposed 2010 Strategic Plan and mail, but until that information is available, we will send Directives to the Business Law Council in April. The it to all Section members in paper form and provide it on Committee received feedback from Council members the Section Web site digitally. that resulted in some final tweaks to the document, The Strategic Plan touches on virtually every aspect and the final version was submitted to the Council in of the Business Law Section’s services and products, mid-May. Finally, the 2010 Strategic Plan and Directives and I urge you to become familiar with it. was approved at the May Business Law Section Council Over time we have learned that the lawyers in our meeting. The final document can be found on the Busi- Business Law Section have very diverse practice areas. ness Law Section Web page by clicking on Strategic Plan Some Section members, normally from the very large under Council Information. Alternatively, you can get firms, practice in very specific areas only, such as bank- to the Business Law Section Strategic Plan and Direc- ruptcy, banking, or mergers and acquisitions. These tives (June 2010 Update) by typing the following URL lawyers have a tremendous amount of technical ex- address into your browser: http://www.michbar.org/ pertise in those specialized areas. Other lawyers in our business/pdfs/Strategic_Plan.pdf. Section have much more varied practices, representing I would like to extend a sincere thank you to all of a variety of clients on a variety of matters every day. the Section members who served on this important Normally these are lawyers from smaller firms. With Committee. Admittedly, the document required a lot of that said, there are times when all of us come across is- time and energy, but it was a worthwhile endeavor. I sues that are outside of our comfort zone. It’s at times am pleased with the final product and hope you will be like these when we would like to ask a question and get too. some feedback from another lawyer. The Business Law As the Strategic Plan Committee worked through the Section wants to provide a resource for its members to results of our Business Law Section survey and crafted help when they have a practice question. As a result, the the provisions of the Strategic Plan, it became evident Section is establishing a LinkedIn page for members to that the most valuable services the Section offers to post practice questions, and hopefully others will pro- its members are through the various substantive law vide thoughtful responses and assistance. Please look committees. Section members not only appreciate but for this page in future months. also require information from our Section committees Over the last ten years or so, I have held various posi- regarding law changes and caselaw updates. They are tions and been active in the Business Law Council. Over also seeking practice tips and educational sessions. As a that period, Section members have approached me ask- result, we have established more formalized committee ing how they can get more involved in the Section. Un- responsibilities in the Strategic Plan, with hopes that the fortunately, I never really had a good answer. Finally, committee members will come to expect a continuum of we are putting together a process that will enable Busi- information from each of the Section’s substantive law ness Law Section members to get involved in the Section committees. Each committee is now expected to hold electronically. In a future E-Newsletter, you will notice one or more educational seminars each year. Those sem- a format change with a link that members can click on inars may be in the form of webinars that can be viewed to get involved. We are hoping that through this new online at the member’s convenience, or they may be full system, members can select areas of interest, join com- day or partial day seminars. Committees are also ex- mittees, and generally…get involved in the Section. I am pected to hold at least one regular committee meeting aware that we will need to work through some bugs as each year. Hopefully, as our committees become more we get this membership involvement technology work- 1 2 THE MICHIGAN BUSINESS LAW JOURNAL — SUMMER 2010 ing the way we want, but I am delighted that we are mov- ing in that direction. The Section is involved in so many interesting and ex- citing projects these days. If you are interested in learning more, please join me at the Business Law Section Annual Meeting on September 23 in Novi. Like last year, we will hold an educational program as well as the Annual Meet- ing and elections. Look for more details in an upcoming E-Newsletter. At the same meeting, we will also recognize the 2010 Section Schulman Award winner, who I am de- lighted to announce is Alex DeYonker. Alex has provided significant contributions to the Business Law Section over the years and we are thrilled to recognize him with this prestigious award. Finally, I wanted to remind everyone that the Business Law Section is again providing Business Law Boot Camp in Grand Rapids and southeast Michigan in the 2010/2011 year.
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