July 24, 2024 - At its recent 133rd Annual Meeting in Boston, Massachusetts, the Uniform Law Commission (ULC) approved two new acts and amendments to unincorporated organization acts.
Uniform Antitrust Pre-Merger Notification Act
Companies proposing to engage in most significant mergers or acquisitions must comply with the federal Hart-Scott-Rodino Act ("HSR"). This federal law requires filing a notice of the proposed transaction with the Federal Trade Commission and Department of Justice at least 30 days prior to closing. The HSR filing includes both a basic form detailing information like the corporate structure of the parties, and additional documentary material, such as presentations about the merger to the company's board of directors. The HSR filing allows the federal antitrust agencies to scrutinize mergers before they are completed. State Attorneys General also have a legal right to challenge anticompetitive mergers, but AGs do not have access to HSR filings. This puts the AGs at a significant disadvantage in the process of merger review. It also creates additional costs and uncertainties for the merging parties. The Uniform Antitrust Pre-Merger Notification Act is intended to address the concerns of both the AG and business communities by creating a simple, non-burdensome mechanism for AGs to receive access to HSR filings at the same time as the federal agencies, and subject to the same confidentiality obligations. Under the Act, covered entities must provide their HSR filing to the AG contemporaneously with their federal filing. The material filed with the AG is subject to essentially the same confidentiality protections as applicable to the federal agencies, except that an AG that receives HSR materials may share them with any other AG whose state has also adopted this Act. The anticipated effect is to facilitate early information sharing and coordination among state AGs and the federal agencies. The Act will balance the needs of state enforcers for information with the burdens and risks to filers.
Uniform Mortgage Modification Act
The parties to a mortgage often agree to modify the terms of the mortgage loan or other obligation secured by the mortgage after the initial transaction is completed. However, the common law is not clear on the issue of whether the modification of a mortgage loan or other obligation secured by a mortgage affects the priority of the mortgage against junior interest holders. This lack of clarity in the law causes delay and unnecessary expense for borrowers and in some cases may mean that a loan is foreclosed rather than modified. The Uniform Mortgage Modification Act is meant to resolve problems and reduce uncertainty by establishing several categories of safe harbor modifications that can be made to recorded mortgages, and outlines the implications of each type of modification. Permissible modifications under the act include changes to maturity dates, interest rates, capitalization or payment schedules, escrow or reserve requirements, and other changes that do not affect the priority of junior interest holders or are not materially prejudicial. This act aims to reduce costs and create straightforward alternatives to foreclosure when possible.
Updates to Unincorporated Organization Acts
The 2024 updates to the Uniform Unincorporated Organization Acts make comprehensive amendments to various Unincorporated Organization Acts. These corrections address issues raised by the Joint Editorial Board for Uniform Unincorporated Organization Acts, as well as similar issues arising from the consideration of evolving case law and other concerns raised in connection with the various states' consideration of the Unincorporated Organization Acts. Some of the updates include: resolving issues surrounding the definition of "partnership"; distinguishing between domestic and foreign entities in the Uniform Partnership Act and Uniform Limited Liability Company Act; synthesizing differing terms in the fundamental change articles of the various entity acts; clarifying when a partner or LLC member is required to refrain from competition; settling matters surrounding "series entities"; and resolving various issues brought to the Drafting Committee's attention by the ABA's Corporate Laws Committee.
Other drafts which were debated at the ULC annual meeting, but which were not scheduled for final approval, include the Conflict of Laws in Trusts and Estates Act, the Virtual Currency Customer Protection Act, the Judicial Interview of Children Act, and the Assignment for Benefit of Creditors Act.
The ULC, now in its 133rd year, comprises more than 350 practicing lawyers, governmental lawyers, judges, law professors, and lawyer-legislators from every state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Commissioners are appointed by their states to draft and promote enactment of uniform laws that are designed to solve problems common to all the states.
After receiving the ULC's seal of approval, a uniform or model act is officially promulgated for consideration by the states, and legislatures are urged to adopt it. Since its inception in 1892, the ULC has been responsible for more than 200 acts, among them such bulwarks of state statutory law as the Uniform Commercial Code, the Uniform Probate Code, the Uniform Partnership Act, and the Uniform Interstate Family Support Act.
###
Uniform Law Commission / 111 N. Wabash Ave., Suite 1010, Chicago IL 60602
Contact: Katie Robinson, ULC Senior Director, Strategy & Communications, krobinson@...
------------------------------
Katie Robinson
Senior Director for Strategy and Communications
Chicago IL
------------------------------