Controlled Foreign Corporations: The Deemed Dividend Dilemma

(156 Ratings)

Produced on: October 20, 2017

Course Format On Demand Audio

Taught by

Categories:

Course Description

Time 62 minutes
Difficulty Intermediate

When advising a borrower incorporated or formed in the United States, one of the many characteristics of the borrower that a finance lawyer needs to consider is its client’s foreign subsidiaries. In particular, there are tax considerations to be aware of if a borrower has any foreign subsidiaries that are so-called controlled foreign corporations (CFCs).

The potential consequences of any missteps in advising corporate borrowers with CFCs can be significant. This was recently put into stark relief when a borrower sued its law firm for legal malpractice as a result of an unanticipated $463 million tax bill the client incurred as a result of the way the firm had drafted the credit agreement.

This course will explain the significance of CFCs, set out the purpose of Section 956 of the Internal Revenue Code and describe how this section impacts foreign subsidiaries of a US borrower in cross-border finance transactions. The aim of the course is to provide the legal practitioner with tools when drafting credit documentation to protect borrowers with foreign subsidiaries.

The session will be led by Gabriel Yomi Dabiri, an attorney in the Finance & Projects group of Morrison & Foerster LLP. Mr. Dabiri is admitted to the New York State bar and qualified as a solicitor of the Supreme Court of England and Wales.

Learning Objectives

  1. Discuss the recent case of Overseas Shipholding Group, Inc., 130 A.D.3d 415 (2015)

  2. Recognize how to identify a CFC

  3. Understand how CFCs are impacted by Section 956 of the Internal Revenue Code

  4. Consider suggestions for dealing with deemed dividends in finance documentation when CFCs are involved

  5. Examine recent developments as they pertain to Section 956 of the Internal Revenue Code

Faculty

Gabriel Yomi Dabiri

Morrison & Foerster LLP

Gabriel Yomi Dabiri is an associate in the firm’s Finance & Projects group in New York. Mr. Dabiri has worked in North America, Europe and Asia on a variety of complex U.S. domestic and cross-border finance transactions, debt restructurings and insolvencies.

Mr. Dabiri represents commercial banks, investment banks, hedge funds, business development companies, private equity sponsors, borrowers and guarantors on senior, mezzanine and subordinated, secured and unsecured, syndicated, bilateral and direct lending, leveraged, acquisition, project, asset and real estate finance transactions. Mr. Dabiri also advises on capital markets and securities transactions, including the issue of equity and public, private and sovereign debt.

Mr. Dabiri is a member of the Executive Board of the American Heart Association Young Professionals and an Associate Member of the Foreign Policy Association. Prior to joining Morrison & Foerster, Mr. Dabiri worked in the New York office of another leading international law firm and for a Magic Circle firm in London, Singapore and New York. Mr. Dabiri was recognized as a Rising Star by Super Lawyers magazine in 2015 and 2016 for his work in Banking, Securities and Corporate Finance.

Mr. Dabiri earned his law degree from Cardiff Law School in the United Kingdom, where he graduated with honors, and received his B.A. in political science with a minor in economics from the University of Pennsylvania. He is qualified under New York law and the laws of England and Wales.


Reviews

MW
Mary F W.

Excellent organization for presentation and materials; I appreciated the manner in which he walked us through the analysis.

WG
Wayne G.

For a topic with which I was only vaguely familiar but which impacts me, this was extremely beneficial.

HJ
Hilary J.

Good effort by the speaker.

IH
Ian H.

One of the better presenters I've seen on LawLine.

LC
Larry Wayne C.

Very effective speaker

MA
Megan A.

Excellent job

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