The Kelley Drye Brief - Fall 2021
Message From Kelley Drye’s Chair “,” A Look Ahead “,” New Additions to Kelley Drye “,” Celebrating Pro Bono Week “,” Upcoming Events “,” Can’t Miss Content “,” Stay Connected,
November marks the beginning of a season of reflection and gratitude. At Kelley Drye we are thankful for the depth and longevity of our client relationships and for the privilege to serve as trusted partners and advisors. Working alongside you to tackle business challenges and seeing your organization thrive is incredibly rewarding and motivating.
We are thankful for the Kelley Drye attorneys and staff who consistently demonstrate their commitment to providing exceptional service and delivering outstanding results for our clients. Our dedicated professionals are our greatest asset and have been the catalyst for the Firm’s success over the last 185 years.
In this issue of The Kelley Drye Brief, you’ll get to know the talented lawyers who have recently joined the firm – former senior FTC officials Jessica L. Rich and Laura VanDruff, and Paul Singer of the Office of the Texas Attorney General. Their additions bolster our Advertising Law, Privacy, and State AG practices and their unique and unmatched expertise benefit clients preparing for the future of consumer protection law, and those facing State Attorneys General investigations, as well as investigations brought by the FTC, Consumer Financial Protection Bureau, and local and county District Attorneys’ offices.
During this season we also look ahead to the coming year. We asked our practice group leaders what legal issues and industry trends they predict for the next few months. Their predictions follow, along with upcoming Kelley Drye events including a timely webinar on the recently passed $1.2 Trillion Infrastructure and Jobs Act, and more.
Thank you again for your confidence in us. We are honored to work with you and are grateful for the relationships we’ve built through our collaboration. On behalf of my partners and the entire Kelley Drye community, I hope you and your families have a wonderful Thanksgiving and holiday season.
Jim Carr, Chair of Kelley Drye
The year started with extreme optimism as SPAC IPO activity reached dizzying heights. Unfortunately, nearly as quickly as it started, it fell precipitously at the beginning of the second quarter and has continued at this slower pace through September. There were 317 SPAC IPOs completed in the first quarter of 2021, followed by a steep decline in the second quarter with only 106 SPAC IPOs that raised $20.9 billion, representing a 66.5% decline on count and 81.3% decline in capital raised relative to the record-shattering first quarter. A recent PitchBook report notes that, ‘even with 766 SPAC IPOs since the third quarter of 2020, only 210 de-SPAC events have closed,’ and, ‘[we’ve] still not seen a single quarter with more than 100 closed business combinations.’ Meanwhile, many SPACs face a crisis of financing as upwards of 90% of their investors often decline to approve an acquisition and elect to take a return of cash. The recent lackluster aftermarket performance for SPACs, both pre- and post-acquisition, may further intensify the downward pressure on new SPAC IPO issuance and general enthusiasm for the product.
While the ‘SPAC bubble’ may have finally burst, or at the very least, significantly reduced in size, we have noticed that investors have not been keeping cash sidelined (as some did in the early days of COVID). In the third quarter of 2021 and continuing through the fourth quarter of 2021, we have seen a new resurgence in more traditional ‘alternative investment structures,’ which include convertible notes (both secured and unsecured), convertible preferred stock, common stock and warrant offerings. These transactions have occurred in both private placements and traditional public offerings. In fact, as of mid-year 2021, 97 U.S.-listed companies had issued $54.3 billion worth of convertible bonds, according to Dealogic, a data provider. That is the highest year-to-date volume ever—and 11% more than the amount raised at this point in 2020, which was a record-setting year for convertible-debt issuance. Furthermore, we have also seen an increasing appetite from SPACs to incorporate alternate investment structures in conjunction with their de-SPAC events to provide critical financing to solve the aforementioned de-SPACing financing failure crisis. In short, we expect the trend toward alternative investment structures to continue in 2022.” - Michael Adelstein, Chair, PIPES and Alternative Investments Practice GroupAlysa Hutnik, Chair, Privacy and Information Security Practice Group“The COVID-19 pandemic caused major shifts in real estate markets, which will be felt for years to come. The pandemic, coupled with enormous amounts of institutional capital and low interest rates, have propelled the industrial, warehouse and multi-family markets. The mainstream retail market will continue to struggle with competition from on-line sellers as well as increased consumer demand for high-end product. Similarly, the middle office market will struggle with the long-term implications of a remote workforce, but the demand for top office space with amenities will grow as companies try to lure employees back to the office. Barring any resurgence of COVID, the hospitality market will continue to improve. One wildcard for 2022 will be the transition away from LIBOR, which is being largely ignored by many in the real estate industry. Additionally, we anticipate that the 1031 exchange market will remain strong and, should the recently proposed tax reforms pass (namely those related to a new tax surcharge on ordinary income and long-term capital gains), see a significant increase in 1031 deal activity. The industry will be keeping an eye on this.” – Paul Keenan and Dean Loventhal, Co-Chairs, Real Estate Practice Group“With the recent creation of a DOJ cryptocurrency task force and the SEC’s repeated comments on the need for greater regulation around cryptocurrency, we can expect heightened scrutiny on all who transact in this space. A closer look at fraud detection systems, AML programs, and sanctions screening is already underway.” - White Collar Investigations and Compliance Practice Group
Former Senior FTC Officials Jessica L. Rich and Laura VanDruff and Paul Singer of the Office of the Texas Attorney General Join Kelley Drye, Bolstering Advertising Law and State AG PracticesThis month we announced that Texas Associate Deputy Attorney General Paul Singer joined Kelley Drye & Warren LLP as a partner in the firm’s growing State Attorneys General practice group. Paul’s addition further strengthens Kelley Drye’s ability to help clients prepare for the future of consumer protection law, and to advise clients facing State Attorneys General investigations, as well as investigations brought by the FTC, Consumer Financial Protection Bureau, and local and county District Attorneys’ offices
Paul’s addition comes on the heels of Jessica L. Rich and Laura Riposo VanDruff joining the firm’s Privacy and Advertising practice groups. Both attorneys are former top officials at the Federal Trade Commission (FTC), with Jessica having served as Director of the Bureau of Consumer Protection (BCP) and Laura as an Assistant Director in BCP’s Division of Privacy and Identity Protection (DPIP). Jessica and Laura are revered privacy law and policy trailblazers, and their addition further bolsters the firm’s capabilities, especially with respect to their specialized expertise in digital advertising and data analytics, information security, consumer financial services, data governance and data breach preparedness. Their experience and insight is extremely valuable in helping our clients prepare for the future of privacy and evolving consumer protection law.Week, a national celebration of pro bono was held the last week of October. The initiative was launched by The American Bar Association (ABA) to increase awareness of the growing need for pro bono services, and to highlight the positive impact that lawyers make in their communities across the United States and in the lives of the clients they serve.
Kelley Drye joined in the ABA’s efforts to draw attention to the need for pro bono participation, and to thank those who give their time year round. We are proud to report that 30 Kelley Drye attorneys were honored this year for committing more than 50 hours of their professional time to pro bono work.
In addition, Kelley Drye’s D.C. office and 64 other law firms in the Washington, D.C. area stepped up to help neighbors in need of legal assistance by providing a record 1,049,139 hours of pro bono work in 2020. Of those hours, 52 percent were devoted to assisting D.C. residents of limited means or the organizations that serve them, according to the D.C. Bar Pro Bono Center’s latest Pro Bono Initiative Report.
Each year the Pro Bono Center surveys participants of the Pro Bono Initiative, where signatory firms pledge to meet minimum benchmarks for pro bono legal services. In 2020, 9,328 attorneys engaged in pro bono work, with each attorney contributing an average of 91 pro bono hours.
November 19, 2021, 1:30 - 2:30 pm
After months of deliberation, on November 5th the U.S. Congress passed the $1.2T Infrastructure Investment and Jobs Act, which will deliver $550 billion of new federal investments in America’s infrastructure over five years. The bipartisan bill contains $260 billion for transportation and transit investment; $90 billion for investment in clean technologies; $84 billion for water infrastructure and $100 billion for digital infrastructure.
We hope you can join us as we explore the details of this historic spending bill, including:
- Overview of the Infrastructure Investment and Jobs Act
- Transportation Provisions
- Energy Provisions
- Water Infrastructure
- Buy America and Buy American Domestic Content Requirements
Check our website for upcoming programs in 2022.
Kelley Drye lawyers are speaking at a number of events in the coming months, including the following:
Basics of Advertising: A New Take on Substantiation, Disclosures & Social Media
November 15, 2021, 9:15 - 10:00 am
Partner Gonzalo Mon will speak at the upcoming BAA Marketing Law Conference. This session will cover important principles of advertising law, including prerequisites to prove your claims, the type of proof required, how to make disclosures, and application of these principles to social media. In addition, it will cover options for challenging competitors. Whether new or experienced to advertising, this session will give you down-to-earth information you need to put later sessions into context. This presentation will put a great new spin on important topics. Register here.
Technology Roundtable: Private 5G Networks
November 16, 2021, 11:50 am – 12:20 pm
Private 5G Networks roundtable at Telecom Council’s virtual TC3 Conference. Private 5G networks are laboratories for 5G innovation with as many opportunities as unanswered questions. This discussion will delve into the choices of unlicensed or licensed spectrum, MVNOs, privacy, control, and federal concerns about security in this new category of local cellular networks. Register here.
Banking Acts & Responding to Government Inquiries
November 18, 2021, 12:00 – 1:00 pm
Partner Matt Luzadder will present “Banking Acts & Responding to Government Inquiries” at NACHA’s ACH Legal & Compliance Summit. The alphabet soup of compliance regulations and laws – BSA, AML, OFAC, USPATRIOT ACT, CARES, CARDS, etc. ranges from A-Z, but having a clear understanding of what the regulation and laws protect, and how to implement processes for ensuring compliance, can often be overwhelming. This session will provide a look at how the laws, rules and regulations harmonize to make internal processes work. Register here.
Updates in Litigation Risks: Product Liability, Private Litigation, and Consumer Class Actions
December 10, 2021
Join partner Donnelly McDowell as he provides an update on current food related litigation risks during FDLI’s Enforcement, Litigation, and Compliance Conference. Register here.
- NYC’s Biometric Identifier Information Law: Are You Covered?
- OFAC Puts Virtual Currency Industry on Notice, Highlights Best Practices for Digital Commerce
- Top 10 Takeaways from Federal Contractor and Subcontractor Vaccine Mandate
- Minding the Gaps: SEC’s Sample Letter Provides Valuable Guidance Into Relevant Climate Change Disclosures
- Kelley Drye Legal Download: 2021 House Ways And Means Tax Proposals
- Kelley Drye Legal Download: What Does The SEC Approved NASDAQ Diversity Proposal Mean For Boards?
- Ad Law Access: A New Era for the FTC and U.S. Privacy? House Reconciliation Bill Would Give the FTC $500 Million to Build a New Privacy Bureau
- Cannabis Law Update: CBD and Hemp Legal and Regulatory Roundup – November 1, 2021
- CommLaw Monitor: FTC Staff Report Puts Spotlight Back on ISP Data Collection and Use Practices; FCC Re-Regulation Suggested
- Kelley Green Law: EPA Proposes Extension Until 2024 for Compliance with Problematic PBT Rule
- Labor Days: The Accommodation Process Requires More Than Lip Service
- Trade and Manufacturing Monitor: United States Reaches Deal with Austria, France, Italy, Spain, and the United Kingdom to Avoid Section 301 Duties