On March 7, 2016, the Supreme Court of the United States held that the citizenship of an unincorporated Maryland real estate investment trust (“REIT”), for diversity jurisdiction purposes, is based on the citizenship of all its members, including its equity owners. In Americold Realty Trust v. ConAgra Foods, Inc., the Court affirmed a Tenth Circuit Court of Appeals holding that, in determining federal court diversity jurisdiction, the citizenship of an unincorporated REIT hinges upon the citizenship of each trust beneficiary. Although the issue in this case can be stated simply – Where is an unincorporated REIT a citizen for purposes of diversity jurisdiction? – the implications of this decision may be far from simple.
Historically, decisions about entity formation were based primarily on state, local and property tax implication and other considerations that might bear reexamination. The Supreme Court’s ruling in Americold Realty Trust v. ConAgra Foods, Inc. obviously will affect how courts determine the citizenship of REITs, and will create challenges to unincorporated REITs’ and other business entities’ ability to litigate in federal court. Whether and in what contexts this decision may merit reconsideration of the pros and cons of an unincorporated structure will be considered in this presentation.
Rebecca Lamberth, co-chair of Duane Morris’ Commercial, Securities and Antitrust Litigation Group, and Richard Silfen, formerly the general counsel of a publicly-traded REIT and currently a corporate partner at Duane Morris who regularly advises REITs and clients considering their formation, will discuss both the litigation and the non-litigation implications of the Americold Realty Trust v. ConAgra Foods, Inc. decision. Those issues encompass choice of entity, entity formation, business negotiation and agreement drafting considerations.
Engaging speakers. I enjoyed this programs even though I knew little about the subject matter before staring the course.
Excellent presentation by effective and interesting panelists.