As we reported in June 2014, the U.S. Department of Commerce (the “Department”) announced that certain crystalline silicon photovoltaic (“CSPV”) products from the People’s Republic of China (“PRC” or “China”) had been produced by taking advantage of subsidies, and that such products could therefore be subjected to countervailing duties when imported into the United States (http://www.globalpowerlawandpolicy.com/2014/06/department-of-commerce-issues-preliminary-countervailing-duty-determination-on-crystalline-solar-pv-products-from-china/). Read More
New York – A cross-border team of lawyers from global law firm K&L Gates LLP has advised Québec-based Boralex Inc. (TSX: BLX) on its acquisition of French wind farm owner and operator Enel Green Power France SAS for a total net consideration of approximately €280 million in cash. The transaction makes Boralex the largest independent wind power producer in France, and the third largest onshore wind player, behind only the two incumbent French utilities.
The K&L Gates team advising Boralex on the acquisition and on the related approximately €175 million project financing was led by New York corporate partners Sandy Feldman and Holly Hatfield. Other members of the team include New York tax partner Adam Tejeda and corporate associate Justin Purtle; Paris corporate partners Olivia Lê Horovitz and Caroline Ledoux, tax partner Bertrand Dussert, real estate counsel Joanna Klat, corporate associates François Lan, Nawal Sabsibo, and Alexandre Brossier, and labor and employment associate Julie Bouchard; and Frankfurt finance partners Matthias Grund and Bastian Bongertz and finance associate Dominik Pauly.
K&L Gates regularly represents Boralex in both the U.S. and Europe, including in previous transactions in France such as the 2012 acquisitions of French wind company interests from both U.S.-based AES Corporation and French company InnoVent SAS.
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On January 13, 2015,, the Internal Revenue Service (IRS) released Notice 2015-4, which provides new guidance on the small wind energy project credit under Section 48 of the Internal Revenue Code (IRC). In particular, the guidance provides that small wind energy projects must meet certain performance and quality standards to qualify for the credit. The official notice is scheduled to be published on January 26 in Internal Revenue Bulletin 2015-4.
Notice 2015-4 provides that Section 48-eligible property must use a wind turbine that has a nameplate capacity of not more than 100 kW and meets the performance and quality standards as set forth in either:
(1) American Wind Energy Association (AWEA) Small Wind Turbine Performance and Safety Standard 9.1-2009; or
(2) International Electrotechnical Commission (IEC) 61400-1, 61400-12, and 61400-11.
Small wind turbines must meet the AWEA or IEC standards that are in effect at the time of acquisition of the turbine.
The manufacturer of the turbine may provide a taxpayer with a certification that the manufacturer’s turbine meets one of the standards listed above, and taxpayers may rely on such certifications when claiming the credit under Section 48. However, manufacturers should be aware that issuing erroneous certifications or failing to satisfy certain documentation requirements could trigger penalties under IRC Section 7206 (fraud and making false statements) or IRC Section 6701 (aiding and abetting an understatement of tax liability).
Notice 2015-4 is effective for small wind energy property acquired or placed in service after January 26, 2015.
In private company acquisitions, it is common for the buyer to require that a portion of the merger consideration be set aside in escrow as an accessible source of funds to cover the buyer’s post-closing indemnification claims relating to breaches of the target company’s representations and warranties and other specified contingencies. However, the buyer might demand additional protection if its losses under such claims exceed the escrow amount by insisting upon collection of the full loss from the target company’s stockholders. If the losses are significant and the indemnification obligations are uncapped or have a sufficiently high cap, this could require the target company’s stockholders to return their full pro rata share of the merger consideration to the buyer.
To read the full alert, click here.
New Requirement to Report Foreign Direct investment in the U.S.
The Bureau of Economic Analysis of the U.S. Department of Commerce announced in September 2014 that it was reinstating a mandatory requirement that U.S. companies report new foreign investment through the filing of one of a family of survey forms designated as BE-13. BE-13 forms are filed electronically here.
Authority for the Survey
The authority for the survey is based on the International Investment and Trade in Services Survey Act, 90 Stat. 2059, 22 U.S.C. § 3101. The Act grants broad authority to the President “to collect information on international investment and United States foreign trade in services, whether directly or by affiliates, including related information necessary for assessing the impact of such investment and trade, to authorize the collection and use of information on direct investments owned or controlled directly or indirectly by foreign governments or persons, and to provide analyses of such information to the Congress, the executive agencies, and the general public.” 22 U.S.C. § 3101(b).