Supreme Court Strikes Down “Equity Theft”
Manfred Sternberg and Alexander Hood • January 13, 2024
Supreme Court Strikes Down “Equity Theft”
on Tax Liens in Landmark Case
Tyler v. Hennepin County, 143 S. Ct. 1369 (May 25, 2023)
Getting behind on your mortgage or taxes is stressful and frightening, particularly when your home is seized for a tax sale. Some assume that in the end, they’ll get anything over what they owe in a forced sale. The local government can’t keep that money, can they? But that’s often the case and exactly what happened to a 94-year-old grandmother, Miss Geraldine Tyler of Hennepin County, Minnesota.
The Property Seizure
Ms. Tyler owned a condo in Hennepin County and owed about $15,000 in back taxes plus interest and fees. The county seized her condo and sold it for $40,000. However, instead of allowing Ms. Tyler to recover the excess proceeds from the sale, about $25,000, the county kept the proceeds, citing Minnesota law that allowed local governments to keep excess proceeds from tax sales. Ms. Tyler filed suit alleging that the county kept the excess proceeds of her property in violation of the Takings Clause of the Fifth Amendment and the Excess Fines Clause of the Eight Amendment. The district court dismissed the case, and the Eighth Circuit affirmed the dismissal.
"The taxpayer must render unto Caesar what is Caesar’s, but no more.”
Ms. Hennepin took her case all the way to the Supreme Court of the United States, and the Court agreed with her, holding that “Hennepin County’s retention of the excess value of her home above her tax debt violated the Takings Clause.” The “Takings Clause” of the Fifth Amendment states, “private property [shall not] be taken for public use, without just compensation.” According to the Supreme Court, this is based on the principle that the government can’t take more than a taxpayer owes and stretches back to the Magna Carta in the 13th century.
What does the Tyler v. Hennepin County decision mean for Texans? Until now, Minnesota and 14 other states allowed local governments to keep excess funds from tax sales. But the Supreme Court has struck down “equity theft” no matter where you live on the basis of centuries of common law and the federal constitution.
For now, it may be better to leave the champagne on ice. Common law, principals of equity, and due process are just part of the equation. Tyler v. Hennepin’s Takings Clause analysis also looks at the internal consistency of state property laws to determine if there is any legislative gamesmanship at hand. Since states define the property laws in their respective jurisdictions, a tax authority’s ability to keep surplus funds after foreclosure also depends on the treatment of excess funds in other post-foreclosure situations.
In a nutshell, the Supreme Court is more likely to cry foul when a state manipulates and distorts property law to promote the confiscation, or escheat, of surplus funds after foreclosure sale. Conversely, when state law does not guarantee the right to surplus funds in other, non-tax contexts, then the Supreme Court is inclined to see escheat as constitutional as long as former homeowners have at least some chance, at some point, to claim the excess funds. In Texas, the rightful former property owner must establish a claim for excess tax sale proceeds within two years of foreclosure.
You Need an Experienced Texas Surplus Funds Recovery Attorney
If you’ve lost your home in a tax sale in Texas, there are several issues that could impact your rights. This is not a process you should try to navigate alone. Understanding potential hiccups can save valuable time since most former homeowners do not even learn about their right to submit a claim until it's too late. Seeing the potential for red flags is not always a straight-forward process, but our experts can help you get your money as quickly as possible. Call the experienced surplus funds recovery attorneys at Manfred Law today at (713) 547-5460, or contact us online to request a consultation.
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Mergers and acquisitions (M&A) are key strategies for business growth, expansion, and market dominance. These transactions, however, involve complex legal, financial, and regulatory processes. At Manfred Sternberg & Associates in Texas, we specialize in guiding businesses through the intricate details of M&A deals, ensuring smooth transitions and protecting our clients’ interests. What Are Mergers and Acquisitions? Mergers and acquisitions involve the consolidation of companies or assets. While the terms are often used interchangeably, they have distinct meanings: Merger: In a merger, two companies combine to form a new entity. The companies involved typically join forces to achieve greater market share, efficiency, or diversification. In a true merger, the two original companies cease to exist, and a new company is formed. Acquisition: An acquisition occurs when one company purchases another, either by buying its assets or acquiring its shares. The acquired company may continue to operate as a subsidiary of the purchasing company, or it may be fully integrated into the parent company. M&A transactions can take many forms, including horizontal mergers (between companies in the same industry), vertical mergers (between companies in the same supply chain), and conglomerate mergers (between companies in unrelated industries). Key Stages of Mergers and Acquisitions M&A transactions typically involve several key stages, each requiring careful planning, negotiation, and legal scrutiny. These stages include: Strategy Development: Before pursuing a merger or acquisition, companies must first develop a strategic plan that outlines their goals, the type of company they wish to merge with or acquire, and the value they expect to gain from the transaction. Target Identification: In an acquisition, the buyer must identify potential target companies that align with their strategic goals. Due diligence is critical during this phase to evaluate the target’s financial health, market position, and potential liabilities. Valuation and Offer: Once a target company is identified, the acquiring company will conduct a valuation to determine the fair market value of the target’s assets or shares. Based on this valuation, the buyer will make an offer to purchase the company. Negotiation: M&A transactions often involve complex negotiations over the terms of the deal. Key issues to be negotiated include the purchase price, the structure of the deal (stock purchase, asset purchase, or merger), and any conditions or contingencies. Due Diligence: During this phase, both parties conduct thorough investigations into each other’s financials, operations, contracts, and legal obligations. Due diligence ensures that there are no hidden liabilities or risks that could affect the success of the transaction. Drafting the Agreement: After negotiations and due diligence are complete, the terms of the transaction are formalized in a definitive agreement. This agreement will outline the structure of the deal, the rights and obligations of each party, and any conditions that must be met before closing. Regulatory Approval: In some cases, M&A transactions must be approved by regulatory authorities, particularly if the deal could affect competition in the marketplace. Antitrust laws, such as those enforced by the Federal Trade Commission (FTC) or the Department of Justice (DOJ), may apply. Closing the Deal: Once all terms are agreed upon and regulatory approvals are obtained, the deal is finalized, and ownership or control of the acquired company is transferred to the buyer. Post-Merger Integration: After the deal closes, the companies must integrate their operations, personnel, and cultures to achieve the desired synergies and benefits. Successful integration is key to realizing the full value of the transaction. Legal Considerations in M&A Transactions M&A transactions involve a wide range of legal issues that must be carefully addressed to ensure a successful outcome. At Manfred Sternberg & Associates, we work closely with our clients to navigate the following legal considerations: Deal Structure: The structure of the deal—whether it is a stock purchase, asset purchase, or merger—has significant tax, liability, and financial implications. We help clients choose the structure that best aligns with their goals while minimizing risks. Contract Review: Both parties must review and negotiate existing contracts, including employment agreements, vendor contracts, and leases. These contracts may contain change-of-control provisions that could affect the deal. Regulatory Compliance: M&A transactions are subject to various federal and state laws, including antitrust regulations, securities laws, and industry-specific regulations. We ensure that all regulatory requirements are met, helping clients avoid costly delays or penalties. Employment and Labor Law: Mergers and acquisitions often result in changes to employment contracts, benefits, and labor relations. It’s important to address how employees will be affected and to ensure compliance with employment laws. Intellectual Property: Intellectual property (IP) assets, such as patents, trademarks, and copyrights, are often critical components of an M&A transaction. We conduct thorough IP due diligence to ensure that these valuable assets are properly transferred and protected. Tax Implications: M&A transactions can have significant tax consequences for both buyers and sellers. We work with tax advisors to structure the deal in a way that minimizes tax liabilities and ensures compliance with tax laws. Why You Need an Experienced M&A Attorney Mergers and acquisitions are complex transactions that involve significant financial, operational, and legal risks. Having an experienced M&A attorney by your side is crucial to protecting your interests and ensuring a smooth transaction. At Manfred Sternberg & Associates, we provide comprehensive legal support throughout the entire M&A process, including: Strategic Planning: We help clients develop a clear strategy for their M&A transactions, whether they are looking to grow through acquisition or sell their business to maximize value. Negotiation and Drafting: Our team negotiates and drafts all necessary agreements, including letters of intent, purchase agreements, and non-disclosure agreements, ensuring that our clients’ interests are protected. Due Diligence: We conduct thorough due diligence to uncover potential risks and liabilities, helping clients make informed decisions and avoid costly mistakes. Regulatory Guidance: We guide clients through the regulatory approval process, ensuring compliance with antitrust and other relevant laws. Post-Transaction Support: After the deal closes, we assist with the integration process, helping clients navigate employment, contract, and operational challenges. Mergers and acquisitions offer tremendous opportunities for business growth, but they also come with significant legal and financial complexities. At Manfred Sternberg & Associates, we are committed to providing the legal expertise and strategic guidance that Texas businesses need to navigate M&A transactions successfully. Whether you are looking to acquire a new company or merge with a partner, our team is here to help you achieve your goals. Contact Manfred Sternberg & Associates today for a consultation and let us help you navigate your next merger or acquisition.
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Their role is to help businesses structure deals in a way that aligns with their goals while protecting their legal rights and minimizing liabilities. In Texas, commercial transactions attorneys are well-versed in state and federal regulations that govern business operations, as well as the specific needs of various industries such as real estate, energy, and technology. Types of Commercial Transactions Handled by Attorneys in Texas Commercial transactions encompass a broad range of business activities and agreements. Some of the most common types of commercial transactions that a Texas attorney can assist with include: Business Formation and Structuring Choosing the right business structure is critical to your success. Whether you’re forming a corporation, limited liability company (LLC), partnership, or sole proprietorship, a commercial transactions attorney can advise you on the best structure based on your business goals, tax considerations, and potential liabilities. Contract Drafting and Negotiation Contracts are the backbone of every business transaction. Attorneys assist in drafting, reviewing, and negotiating a wide range of contracts, including: Purchase and Sale Agreements Service Agreements Non-Disclosure Agreements (NDAs) Employment Contracts Supplier and Vendor Agreements Franchise Agreements Lease Agreements An experienced attorney ensures that these contracts are clear, enforceable, and favorable to your interests. Mergers and Acquisitions (M&A) Buying or selling a business is a complex process that involves multiple legal considerations, from due diligence to compliance with state and federal regulations. An M&A attorney helps guide you through the process, draft the necessary documents, and ensure a smooth transaction. Real Estate Transactions Commercial real estate transactions involve significant financial investments and legal intricacies. A commercial transactions attorney can assist with buying, selling, leasing, and financing commercial properties, ensuring that the transaction complies with Texas real estate laws. Financing and Secured Transactions Whether you’re seeking funding for expansion or structuring a loan agreement, attorneys can draft and negotiate financing agreements, promissory notes, and security agreements to protect your interests. Partnership and Shareholder Agreements Setting clear expectations and terms in partnership or shareholder agreements is crucial for maintaining healthy business relationships and preventing disputes down the road. Licensing and Intellectual Property Transactions Businesses often need to protect their intellectual property through licensing agreements or other contracts. Attorneys help ensure that IP rights are adequately safeguarded and that licensing terms are beneficial. Joint Ventures and Strategic Alliances If you’re collaborating with another business, it’s essential to structure joint ventures or strategic alliances correctly. A commercial transactions attorney can help outline the terms of the partnership, define each party’s roles, and establish mechanisms for resolving disputes. The Role of a Commercial Transactions Attorney in Texas The role of a commercial transactions attorney goes beyond drafting and negotiating contracts. They serve as trusted advisors, helping businesses navigate complex legal issues and avoid pitfalls that could hinder their operations. Some of the key roles they play include: Risk Mitigation One of the primary functions of a commercial transactions attorney is to identify potential risks associated with a transaction and implement strategies to mitigate them. This could include incorporating specific clauses into a contract, recommending insurance coverage, or advising against certain business practices. Compliance Businesses in Texas must comply with a variety of state and federal regulations. Whether you’re dealing with employment laws, industry-specific regulations, or consumer protection rules, an attorney ensures that your business practices and transactions are legally compliant. Dispute Resolution Even with the best planning, disputes can arise in business transactions. An experienced commercial transactions attorney can represent your interests in negotiations, mediation, arbitration, or litigation to resolve conflicts quickly and effectively. Business Strategy and Growth A commercial transactions attorney is not just a legal advisor—they are also a strategic partner. They provide guidance on structuring deals that align with your long-term business goals, whether that involves expansion, restructuring, or exploring new markets. Protection of Confidential Information In many business transactions, confidential information is shared between parties. An attorney ensures that non-disclosure agreements and other protective measures are in place to safeguard sensitive information. Why You Need a Commercial Transactions Attorney in Texas Given the complexities of commercial transactions and the potential for costly mistakes, having an experienced attorney on your side is invaluable. Here’s why: Tailored Legal Guidance A commercial transactions attorney provides tailored legal advice based on your business’s unique needs and goals. They can help you avoid generic contracts and boilerplate agreements that may not fully protect your interests. Efficient Negotiation Effective negotiation is key to securing favorable terms. An attorney can negotiate on your behalf to achieve the best possible outcomes, ensuring that you enter agreements from a position of strength. Avoiding Costly Mistakes Poorly drafted contracts or overlooked legal issues can lead to significant financial losses and legal liabilities. An experienced attorney can spot and address these issues before they become problems. Saving Time and Resources Handling complex transactions without legal expertise can be time-consuming and stressful. An attorney can streamline the process, allowing you to focus on running your business. How Manfred Sternberg & Associates Can Help At Manfred Sternberg & Associates, we understand that every business transaction carries the potential for both opportunity and risk. Our team of experienced commercial transactions attorneys in Texas is dedicated to helping clients navigate the legal complexities of business deals, from drafting and negotiating contracts to closing complex transactions. We work closely with you to understand your objectives and develop customized solutions that meet your needs. If you need assistance with a commercial transaction in Texas or have questions about your legal options, contact us today to schedule a consultation. Let us help you protect your business and achieve your goals with confidence.
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