Quick Facts – Business Law Developments – “Hidden Fees” Legislation – New “Business Courts”

Posted by Mack W. Borgen May 22nd, 2023

Blog No. 166
May 23, 2023
Reading Time: 8 Minutes

By Mack W. Borgen

2024 Listee – Who’s Who in America; University of California at Berkeley (Honors, Economics); Harvard Law School; National Award-Winning Author.

Call Me Anytime –

General Business Planning

or Corporate, Business or Real Property Law Matters


Quick Facts

California – One of the Largest Economies in the World

California is now the fourth (or, according to the Cato Institute, the fifth) largest economy in the world. The countries with the largest economies are as follows:

Ranking         Nation                                     Size of Economy in US Dollars

1.                Unites States                                       23.3 Trillion

2.                People’s Republic of China              17.7 Trillion

3.              Japan                                                      4.9 Trillion

4.             Germany                                                 4.3 Trillion

(5.             California                                                3.7 Trillion)

5.              India                                                        3.2 Trillion

6.              United Kingdom                                   3.1 Trillion

7.              France                                                     3.0 Trillion

8.              Italy                                                         2.1  Trillion

9.             Canada                                                     2.0  Trillion

10.             South Korea                                            1.8 Trillion

11.             Russia                                                      1.78 Trillion (About 1/3 the Size of California!!)

More and More Bank Branch Closures

Physical bank branches are continuing to close at an alarming rate. In the four (4) years between 2017 and 2021, 7,425 bank branches were closed in the US. – about 9% of all locations. As almost might be expected, Wells Fargo led the pack with nearly 1,000 bank branch closures.

The specific reasons vary from branch to branch, but overall, the closures (a) reflect cost cutting deemed necessary by the banks due to decades of low interest rates which have squeezed banks’ profits, and (b) the increased promotion and use of digital banking.

Huge Rise in SEC Whistleblower Tips

Since the beginning of the COVID pandemic and the beginning of the” great resignation,” there has been a substantial rise both in the number of whistleblower complaints filed with e SEC and the number of whistleblower awards given out. For example, in FY 2021-2022, the SEC received 12,300 whistleblower tips – the highest number since the inception of the program. In addition, the award amounts and the number of award recipients were the second highest ever.

Various forms of whistleblower programs are expanding throughout the world including in the EU, India, Japan, and Australia.

Social-Cultural News

Rising Number of Americans Switching Religions

Nearly 25% of Americans say that they now follow a different religion or tradition than they did previously. Other data reports that more Americans are turning away from Christianity or, more precisely, are seeing themselves as unaffiliated with any particular religion.

The most commonly cited reasons are as follows:

1 – 56% – Stopped believing in the religion’s teachings;

2 – 30% – Negative religious teachings about or treatment of LGBTQ+ people;

3 – 29% – Family was never religious growing up;

4 – 27% – Scandals involving leaders of form er religion;

5 – 18% – Traumatic personal event; and

6 – 17% – Church or congregation became too political.

Interesting Legal Developments

California Proposes Statutory Ban on Hidden Fees

As all consumers know, more and more companies use artificially low headline prices to attract customers – and then add on one or a series of hidden or “junk” fees in order to reach the final price. Such additional fees, charges, or costs are normally disclosed only in smaller print or revealed later in the buying process.

In an attempt to finally put an end to this de facto deceptive pricing California is now considering a new law (Senate Bill 478) which would enhance pricing transparency and would prohibit the use of hidden fees and charges.

Creation of New “Business Court” in Texas

In order to keep up with other specialized business-centered legal systems such as those in Delaware and New York, Texas recently passed legislation to create a new specialized court for the resolution of high-stakes business disputes.

The new Texas business court will be created effective in January 2025 to adjudicate derivative actions and business disputes involving $10.0MM or more. Unlike other entry-level courts in Texas, the business court judges will be required to issue written opinions which may, collectively, help give parties more certainty with respect to both documentation drafting and in the litigation process.

New York City Adopts Groundbreaking Climate Change Regulation

Recognizing that an estimated 70% of the greenhouse gas emissions in NYC come from buildings, NYC enacted a first-of-its-kind regulation. The new law will affect nearly all commercial and residential buildings which are more than 25,000 square feet in size — about 40,000 NYC buildings. Under the new law and starting in 2024, strict emissions caps will be imposed, and property owners will be required to either retrofit their buildings or face a financial penalty.

Apart from novelty of this legislation and the fact that this lease only affects NYC properties, the new law serves as a prescient reminder that all such leases – and especially long-term leases of or in larger buildings – should pro-actively address the respective landlord and tenant liabilities in the event similar legislation is enacted in the governing jurisdiction during the term of the lease. Otherwise, either the landlord or the tenant may incur substantial retrofitting costs or, alternatively, one or both of the parties may have a right to terminate the lease.

Florida Restricts Some Foreign Ownership of Real Estate

A new Florida law prohibits persons or entities from certain countries (e.g., China, Russia, Iran, North Korea, Ciba, Venezuela, or the Syria) from owning agricultural land and certain asset classes (e.g., real property near a military installation or critical infrastructure) and prohibits governmental entities from contracting with such named foreign countries or from entering into any contract granting any economic incentives to any of the named countries.

Reasons For Retaining Counsel in Context of a New Business Start-Up

Determining if and when to retain counsel is, at best, challenging. This is especially true in the context of starting a new business since the party or parties are normally overwhelmed with product design or definition, employment and staffing, marketing and advertising, space leasing, and many other aspects of any new business. Relatedly, usually there are many cost and budget pressures associated with the formation and starting of a new enterprise.

Nevertheless, there are at least six (6) “new business” categories of tasks that the business owners may advisedly want to have the attorney do—or at least review. Those categories are as follows: (1) Choosing the Entity Structure (C or S Corporation, limited liability company, general or limited partnership, sole proprietorship, etc.) and related formation documentation and filings, (2) Drafting Standard Customer Contracts (including product representations or warranties), (3) Review of Office or Store Leases and Major Vendor Contracts, (4) Protecting Intellectual Property including, for example, the product or company name, (5) Strategic Business Advice including, for example, alternative deal structures or marketing approaches, knowledge of industry standards for pricing or payment terms, and a multitude of compliance matters relating to applicability of employment laws)m, and (6) Supervising the Writing of Websites Designs, Postings. and Policies.

Force Majeure Clauses in Commercial or Retail Space Leases

Especially as the result of the COVID-19 pandemic and associated ordinances passed in its wake, both landlords and tenants have been required to closely examine what is traditionally an important, but relatively obscure part of their leases – the force majeure provisions. Force majeure provisions basically provide a permitted exemption to lease compliance (e.g. the payment of rent) in the event of any occurrence of those matters carefully enumerated within the force majeure provision.

Underscoring the importance of precise contract drafting, the California courts have consistently held that whether a party is permitted, for example, to terminate the lease or suspend or defer the payment of rents under a force majeure clause is dependent solely upon the precise terms of the clause itself. Therefore, for example, the mere existence and the substantial and obvious consequences resulting from the Covid-19 pandemic do not in and of themselves allow a tenant to terminate a lease or defer the payment of rent thereunder. However, under a well-drafted force majeure provision, the COVID-19 pandemic could qualify as a force majeure trigger if the clause defines this term to include, for example, an event “due to fire, act of God, governmental act or failure to act … or any cause outside the reasonable control of the Party.”

An Obscure Real Estate Issue – But When It Applies!!!

The Treasury Department’s Committee on Foreign Investment in the United States (“CFIUS”) restricts foreign investments in real estate within 99 miles of designated jurisdictions such as military bases. While this affects only a tiny portion of the land in the U.S., when it applies and if the purchaser (directly or indirectly) is owned by certain foreign nationals, then CFIUS can and oftentimes will assert approval jurisdiction. For example, one of its recent proposed rules adds military ranges in six new states including Air Force Plant 42 in Palmdale, CA and Luke Air Force Base in Glendale, AZ.

In an abundance of caution and if any prospective buyer is or may be owned by a foreign national, then it would now be prudent to include certain confirming representations and warranties in standard purchase and sale agreements since CFIUS has been continually expanding its land jurisdiction since the regulations took effect in February 2020.

Thoughts for the Day

“Whatever the problem, be part of the solution.”

“One person can make a difference and every person should try.” 

Copyright 2023 by Mack W. Borgen. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, except in the case of brief quotations embedded in critical articles or reviews, without prior written permission by the author.



My Induction into Who’s Who in America – Next Year’s Edition

Posted by Mack W. Borgen May 1st, 2023

Blog No. 165
May 2, 2023

 By Mack W. Borgen

University of California at Berkeley (Honors, Economics); Harvard Law School; Attorney, and National Award-Winning Author.

It is my honor to announce that I have been selected for inclusion in 

Who’s Who in America

First published in 1898, Who’s Who in America has been published for 125 years, and with deeply appreciated thanks, I will be included in next year’s edition. 

This invitation came as a complete surprise to me.

The final selection process, how they selected me, or the identities of the person or persons who nominated me are not disclosed. In a lengthy multi-hour interview about everything in my life — UC Berkeley, Harvard Law, my teaching at Rutgers University and the University of Virginia, the Army years and the year I spent writing in a small village in Spain, my legal career and the years in Montana, my writings and my wife and son, and on and on. Then, after their multiple verifications, I received notification last week that I have been selected for inclusion starting with next year’s 125th Commemorative Edition.

To whomever nominated me, thank you. I am humbled, honored, and very appreciative — and, as always, thanks to my friends and readers.   

On a deeply personal note, it appears that my books, newsletters, and 160+ blog articles may be starting to make some small constructive contribution to America’s conversation.

(Sample, Who’s Who in America (2019 Edition))


Note: Although Who’s Who is most famous for its annual print publication such as the sample above, it also, of course, now offers extensive online resources as well.

Quick Facts – 7 Recent Business and Real Property Law Developments

Posted by Mack W. Borgen April 3rd, 2023

Blog No. 164 
April 4, 2023
 Reading Time: 8 Minutes

By Mack W. Borgen

University of California at Berkeley (Honors, Economics); Harvard Law School; National Award-Winning Author.

Call Me Anytime

General Business Planning

or Corporate, Business or Real Property Law Matters


Quick Facts

U.S. Gift Taxation

Amount of Money You Can Give in Any Year to Any Donee without having any gift tax or gift reporting: $17,000 (or if you are married, you and your spouse may transfer 34,000 per done.)

Gift Tax Reporting: Amounts in excess of this amount may trigger gift tax reporting.

Gift Tax Liability and Maximum Rate: The liability for payment of the gift tax remains with the donor, not the done, and the amount of the gift tax is unified with estate taxes with a maximum rate of 40%.

Gift Giving Creativity – Money for College or To Cover Medical Expenses.  There are a number of methodologies by which money can be “given” to assist a child or grandchild) with their college expenses or to assist another person with their medical expenses.

American Families and Single Parenting

In the 1950s, less than 10% of families with children were single-parent families. As of 2022, that percentage had increased to 31% of all U.S. families.

While children living with their mothers remains predominant (appr. 70% of all cases as compared with 85% as of 1950s), it is becoming more and more common (appr 28%) for the children to live with the father.

Percentage of U.S. Workers in Unions

The percentage of U.S. workers who are members of unions is now at an all-time low – just 10.1% — compared with 20.1% just 40 years ago in 1983. The four industries with the highest unionization are utilities (20%), transportation and warehousing (15%), education (13%), and construction (15%).

Cancel Those Trips to the Cayman Islands!!

The Emergence of State Tax Havens

The Institute of Policy Studies recently identified 13 states as de facto tax havens. All but two have no estate or inheritance tax. Eight have no capital gains tax, five have no corporate income tax, and seven have to state individual income tax. Three states – South Dakota, Nevada, and Wyoming have none of these taxes.

The impacts of these types of tax structures – and their construction of de facto tax havens for the wealthy — can be evidenced in many ways. For example, Texas has no income tax, and thus it was “forced” to raise 61.8% of its tax revenue from the (extremely regressive) sales taxes in 2021. In contrast, only 16.9% of California’s taxes came from sales taxes while the biggest source of California’s tax revenues – indeed 59%, was from the state’s individual income taxes.

There are many other devices which are used to create “tax havens” as well. The lack of regulation regarding trusts, for example, works in tandem with low taxes as a means of creating perfect conditions for the very wealthy to avoid taxes. There is little evidence that the creation of a tax havens environment helps states to attract businesses or create jobs, it is notable that even a state like South Dakota now has more than Mt Rushmore, Wall Drug, and the Corn Palace to brag about – it also hosts an estimated $512 billion in trusts. Some of these states do not even have a designated life span for trusts – and several states have set the trust life limit between 300 and 1,000 years. Yes, 1,000 years. This can allow the wealthy to create de facto dynasty trusts to last for tens of generations without the payment of any inheritance or estate taxes. Sometimes, worse yet, it can greatly obfuscate who even really owns the assets.

No matter how viewed, the labyrinth of generation-skipping and tax avoidance trusts are all a long way from the W-2 and 1099 lives of most (nearly 99%) of all Americans workers and their families. And certainly, the long-term and wide-ranging social, political, and financial implications of these estate-planning “tools” are hard to articulate, let alone calculate.

Recent Business and Real Estate Cases 

General Sources: Daily or Periodic Judicial and Legislative Reports from various sources including the California Lawyers Association Daily Reports, the CLA’s Monthly Business Law News, and Announcements and Press Releases from the (California) State Attorney General Office. 

  1. Real Estate Construction – Implied Warranty of Workmanship and Habitability. The Arizona Supreme Court joined a long list of states which have now held that an implied warranty of workmanship and habitability between homebuyers and builder/vender cannot, under any circumstances, be disclaimed or waived. The court dismissed provisions in the contract limiting such warranties and did so largely based upon “public policy considerations in the analysis of the subject contract terms. 
  1. The Use of Representation and Warranties Insurance (“RWI”) in the Context of Commercial Real Estate Transactions. Investors in real estate have at their disposal many structuring options when acquiring real estate assets – buying the property directly, buying interests in entities which own the subject property, investing in REITs or private equity funds, etc. Each structure involves varying degrees of complexity, and to address some of the risks, the use of RWI is becoming more common. There are various kinds of RWI. Typically, the RWI falls into one of four (4) categories: (1) RWI regarding the seller’s right to transfer the property (e.g. good standing, due authorization, ownership), (2) RWI relating to the condition and status of the property (e.g. environmental compliance, “no violations or liens,: contracts, and litigation (or the absence thereof), (3)RWI regarding the revenue relating the property (e.g. financial statements, rent rolls), and (4) RWI regarding the potential liabilities that may arise in connection with ownership of (or ownership interests in) the property (e.g., no undisclosed liabilities, tax, and compliance with laws). It is recommended that the use (i.e., the purchase) of RWI should be at least considered in the context of most large commercial real estate transactions. 
  1. Real Estate Housing Projects – The (Mis-)Use of California’s CEQA. Most California Environmental Quality Act (CEQA) lawsuits against construction projects in California involve housing. As of 2018, the percentage was more than 60%. Basically, CEQA is the litigation of choice by land use and environmental attorneys opposing housing construction, and arguably CEQA is itself (and especially the lengthy and costly environmental review process required under CEQA). While there are many aspects of this issue, some believe that CEQA (and the mandates thereof) must be revised in order to accelerate the resolution of the state’s housing crisis. It is beyond the scope of this article, but more and more considerations are (or at least possibly should be given to) evaluating the advisability of expediting the conversion of office space to residential use – this is in light of the fact that office vacancy rate is the highest it has been in nearly three decades and due to the growth of remote work, this vacancy rate may continue for many years.   
  1. Landlord-Tenant Law – Caution for Landlords Regarding Security Deposits. Historically, letters of credit received from the Tenant have been one of the referred forms of security deposits assuring the Tenant’s performance under the lease. The main reason for this use of LCs was because the LCs would continue to be available to the Landlord even in the context of a tenant’s bankruptcy. More technically, this is because courts have generally held that the presentation of an LC to a third-party issue (e.g., a bank) would not violate the automatic stay of a tenant’s bankruptcy case – and thus, the landlord would remain at least partially protected. On the other hand, and in light of the 2008 and the more recent financial crisis, it should be remembered that LCs are not FDIC insured and could become worthless. Some clever real estate attorneys provide that a landlord can draw upon an LC based upon the circumstances of the lender – regardless of the status or financial condition of the tenant itself. It is recommended that both security deposits (whether currently in cash or LC form) should be periodically reviewed by prudent landlords – just as should these landlords conduct a periodic review of all of its insurance policies and programs. Note also that exactly parallel concerns exist in the context of representing a tenant since any security deposit funds delivered to the landlord would be at risk in the event of the landlord’s bankruptcy. In such instance and with respect to the security deposit, the tenant would be deemed a general creditor – and would likely only receive a pro rata portion of any security deposit portion. 
  1. COVID-19 Business Income Losses Are Generally NOT Covered under Commercial Property Policies. More and more states are confirming, judicially or legislatively, that COVID-19 business income losses are not covered under property insurance policies. Although some of the reasonings vary, basically the courts have held, as did the Louisiana Supreme Court recently, that the “plain, ordinary and generally prevailing meaning” if the “phrase (direct physical loss of or damage to property” as used in such policies “requires the insured property sustain a physical … loss or damage.
  1. Caution Regarding Use or Sale of Customer Data – Increasing Enactment of Privacy Legislation. More and more states are adopting varying forms of comprehensive privacy laws which severely restrict the businesses’ right to use or sell personal data of its customers. This is a quickly evolving area of the law and beyond the scope of this author’s area of practice, but caution is advised, and businesses should retain intellectual property or other counsel to review any plans for such use or sale of customer data.
  1. Alter Ego Piercing – Ten (10) Specific Triggers. Too often, individuals believe that the mere use of a corporate entity shields them from direct, personal liability. However, this “corporate shield” can be pierced by the use of alter ego litigation in which the claimant seeks to impose direct, personal liability upon corporate or other entity officers. These types of claims continue to be prevalent in many court cases, and in California, such alter ego claims are (a) largely sought as an equitable remedy and (b) usually are combined with substantive causes of action. Courts are free to review many types of evidence in determining the validity of alter ego claims, but the following is a list of ten of the most frequent factors by which the courts determine in propriety of imposing personal liability despite some corporate structure: (1) disregard of legal formalities (and failure to maintain an arm’s length relationship among related entities, (2) failure to maintain minutes or other corporate records, (3) poor or inter-related recordkeeping and especially the failure to segregate funds amongst separate entities, (4) commingling of funds or assets between different entities or between one or of the owners and the subject entity (5) an absence of corporate assets or even a material under-capitalization, (6) failure to issue stock certificates or other evidences of ownership interests, (7) overlapping officers and directors, (8) the use of the same office or business location, (9) employment of the same employees or even attorneys, and (10) the unauthorized diversion of corporate funds or assets for other than corporate use. In the push and shove and struggles of especially new or rapidly expanding businesses, it is tempting (and easy) to dismiss these matters – but the avoidance of direct and personal liability for “corporate” actions (and, simultaneously) the protection of one’s personal assets is critical. To that extent and because alter ego claims can rather easily be asserted, it is recommended that “corporate formalities” be followed.

The White Binder

Sorry — My Nagging Personal Note

Some of us – I know – not you!! Are getting older.

In the context of arranging and organization my own personal affairs,

I recently completed my own personal copy of my The White Binder.

The White Binder organizes all the information necessary for my heirs, relatives, and friends.

It is detailed. It took me three (3) days to complete.

It is entirely up to you, and I know that as the author of this book, I am biased, but I highly recommended that you (and your spouse or living partner)

get and complete your copy(ies) today.

It will be incredibly helpful to you and for your loved ones.

In organizing your life, in compiling information about your assets, liabilities, contacts, and on and on.

And – In presenting your desires!!

I have the highest regard for estate planning attorneys and the services they provide,

But with respect to many aspects associated with one’s passing,


Each copy is personalized and is shipped to you in an easy-to-use binder format.

Get Your Copy Today

The White Binder

(3rd Edition) (2022)

Order Today

Just email me at mwborgen@live.com (or call me at 805-450-2602)

  • Give me your mailing addresses and the number of copies you wish.

Binder format $49.95 plus $6.95 Shipping

Pay After Delivery and Please Allow 10-12 Business Days.

So far, I have prepared more than 200 copies of this book for my friends and their loved ones.

The feedback has been wonderful and appreciated.

Copyright 2023 by Mack W. Borgen. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, except in the case of brief quotations embedded in critical articles or reviews, without prior written permission by the author.


Fixing America – Idea 28 – Solving the Western States’ Water Shortage Problems

Posted by Mack W. Borgen March 13th, 2023

Blog No. 163 
March 14, 2023

Fixing America – Idea 28 

By Mack W. Borgen
University of California at Berkeley (Honors, Economics); Harvard Law School; National Award-Winning Author. 

Call Me Anytime

General Business Planning

or Corporate, Business or Real Property Law Matters


“Fixing America” Series of Articles

Over the last three years, I have presented a wide range of ideas for “resetting” and “fixing” America. This blog presents Idea 28 in this “Fixing America” series of articles.

Two Solutions

to the Western States’ Drought and Water Shortage Problem

Special Preamble 

In the sense of weird timing, it is strange that as I write this article about the severe drought and water shortage problem in the Western and Southwestern states, most of the reservoirs of California are once again, for now, full.  In fact, there are – of all things – “atmospheric rivers” of water flooding Central California, and there is a massive snowpack in the Sierra Nevada Mountains. However, while this “Pineapple Express” temporarily will relieve some of the drought conditions, nothing has changed the forecast of long-term drought. Nothing has changed the anticipated and long-term effects of climate change. To think otherwise is to ignore the reality of the slow-moving hurricane of global warming in which we find ourselves. Obviously and except for the inevitable flooding which will occur this week, I am pleased that California has received its brief reprieve. But the drought is coming back. Unavoidably and inevitably. The real impact of this year’s wet winter is that we may now have time to implement what is described in this article.   


I do not have a PhD in hydrology, and I have never been that good at understanding “engineering” matters. But I do have a B.A. in Logic. And we are all pretty good at basic math – you know, the 2+2 = 4 type. So why can’t America take the two steps described in this article to greatly help, if not totally solve, its water shortage problem?

Some Historical Background and Perspective

In 1973, work began on the Alaska Pipeline. When it was mostly completed four years later, in 1977, it was 48” in diameter and 800 miles long. It had 11 pump stations and several hundred more miles of feeder pipelines. When fully operational, it transported 2.1MM barrels of oil a day across some of the roughest, most severe, and isolated terrain in America – from Prudhoe Bay on Alaska’s North Slope to Valdez on the shores of Prince William Sound. As of 2015, 17BB barrels of oil had flowed through the Alaska Pipeline for America’s and the world’s use.

Personal Note: As a young man, I had several friends who thought about heading north to work on the pipeline. Their plan was to work hard for a couple of years; make some big wages; and then come home, retire, and relax for the rest of their lives. It never worked out that way though. Beer and brothels got in the way of their money, and the endlessly severe cold froze a lot of their dreams. But those are another set of stories.

About 35 years later, the Keystone Pipeline now crosses parts of Canada and the lower 48 states. The 36” pipeline was commissioned in 2010 to transport oil from Alberta, Canada to refineries in Illinois and Texas and to oil tank farms in Oklahoma. It is 2,687 miles long, and although it has been the subject of many environmental and pollical disputes, it is slowly getting done.

There are two common themes of both pipelines – the Alaska Pipeline and the Keystone Pipeline. First, they both carry oil – which can be toxic and harmful in the event of a spill. Second, they both cross many miles of hostile and mountainous terrains.

But some parts of America – especially Southwest America – has other non-oil needs. You know, water! Most of the water used in Southwest America comes from the Colorado Watershed which flows 1,450 miles. The Colorado River and Watershed provide water to seven (7) states including California and Arizona. California, by itself, gets 4.4MM acre feet of water every year from the Colorado River which provides enough water for about 13.0MM Southern California households. But, for years, the Colorado River water table has been getting lower while the need for water has continued to rise. In fact, it is now projected that Lake Mead will be entirely out of water in 10-15 years. The same is true of many reservoirs n California – think Lake Shasta and the Oroville Dam.

Worse yet, the demand for water continues to grow as the populations of, for example, Los Angeles, Las Vegas, and Phoenix, continue to increase.

One other critical item should be noted. Although there is a powerful tendency to think of growing water demands in terms of population growth, 80% of all of California’s water is used in agriculture. Thus, only a relatively “small” amount goes to household usage.

So, are there solutions? Yes. Why are they not being discussed?

Two Solutions – Challenging, But Obvious

Solution No. 1.

A Water Pipeline.

There are seven (7) components to this water pipeline solution.

First, if we can build the 800-mile Alaska Pipeline and the 2,687 Keystone Pipelines for oil, then why can’t we build a pipeline for water from the “rain and snow” states of the Pacific Northwest and the Northern Rockies.

Second, most years (though admittedly every year) the Pacific Northern and Northern Rocky Mountain states have an abundance of water some of which could (easily) be diverted. Rather than allowing the water to flow into the Pacific Ocean, the excess water could be re-routed through a water pipeline to the American Southwest. In those years – and there will be some – when the rain or snowfall is less, then less water will be sent through the pipeline. In those years – and there will be some – when it has been a wet spring or a heavy winter, then the water can road its way down to the Colorado Watershed and Lake Mead (and through water feeder pipelines to Lake Shasta and Oroville Dam and on and on).

Third, because it is “friendly” water rather than “toxic” oil, many of the environmental and other spillage concerns are almost definitionally minimized.

Fourth, because the water could be piped directly into the Colorado Watershed or established water reservoirs, no new filtration and water purification stations do not need to be built.

Fifth, compared to the terrain and severe weather challenges of building the Alaska Pipeline, building a water pipeline across, for example, Nevada, would be relatively easy.

Sixth, much of the water pipeline could be built across “federal land” states. 63% of Nevada, for example, is already federal land. Similarly, 53% of Oregon is federal land. As a result, the number of land or easement acquisitions will be far less.

Seventh, to the extent it is necessary to transverse private land and because it is water (not oil), many farms and farming communities would welcome easement or inverse condemnation payments – not a lot of land buyer prospects 14 miles outside of Ely, Nevada or past the Resume Speed sign in John Day, Oregon. Personal Note: My family has lived in many parts of Montana, and I know that there are, for example, a lot of farmers and communities (especially up on the Hi-Line of Highway 2 or in the Big Open of Central Montana) that might welcome the easement or inverse condemnation payments of $X – say, $10,000 or maybe some formula — say $Y per linear foot of pipeline. Have at it!

Solution 2.

More Regulation of Permitted Crops and Livestock.

However, even if we get the water through the new pipeline, it is important to focus more upon how we use the water. This leads to Solution 2.

Because (a) there is a continuing water shortage, and (b) because 80% of California’s water is used for agriculture, it is necessary for there to be enhanced regulations relating both to livestock and to the types of crops which can be planted in California.

Almonds, for example, have historically (and somewhat erroneously) taken the biggest water-usage critique (1-3 gallons for every almond plus shell and hue), but regardless of the accuracy of the almonds story, there is no doubt that livestock and some crops use substantially more water than other items. The per unit water usage needs to be closely examined. As necessary, enhanced regulations must be adopted to control the types of crops which are grown or the number of livestock which are allowed to graze in California’s Central Valley.

At first blush, this may seem highly intrusive. And it is. However, every day more and more households in America’s Southwest are being restricted on their watering and water usage. Some (needed) housing developments have been shelved due to water concerns, and the cost of water itself is soaring everywhere. Furthermore, if crop and livestock regulations are not enhanced (along with the water pipeline discussed above), then the severity of residential water usage will get (much) worse.


Could I humbly suggest that America “get on this.” I do not under-estimate the many Herculean engineering and construction challenges — pipeline design, pumping stations, water temperature issues, and on and on. Indeed, there are many technical, engineering, and logistical issues which will need to be addressed. But with patience and effort, they can be resolved. We went to the moon. We split the atom. We can build a water pipeline….especially when the long-term habitability of Southwestern States and the very fertility of California’s Central Valley are at stake.

Regrettably, there also will be a lot of political pushing and shoving. A lot of these details will have to be worked out as well, but (a) many construction and pipeline maintenance jobs will be created, and (b) the pipeline could assure the continued safety and growth of our Western states.

Done thoughtfully, many Americans could “win.” Marginal regulations and praying for another “wet winter” will not solve the problem. So, let us start the planning and construction now.

For Your Heirs and Loved Ones – Order and Complete Your White Binder Now 

The White Binder (2022)

A Million Critical Details – Contact Information, Personal Bequests, Estate-Related Reminders, and Data

This Book Allows You to Get Your Personal and Estate Planning in Order

For Your Detailed Personal Asset and Liability Management,

Merely Setting Up an Estate Plan Is NOT Enough

–Order Today–

Just email me at mwborgen@live.com (Mailing Address and Number of Copies)

(Binder Format, $49.95 plus $6.95 Shipping, Pay After Delivery)   

More Than 125 Copies Have Already Been Ordered by My Friends and Clients 

Copyright 2023 by Mack W. Borgen. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, except in the case of brief quotations embedded in critical articles or reviews, without prior written permission by the author.




Recent Business and Real Estate Law Developments – Organizing Your Estate Plan NOW

Posted by Mack W. Borgen February 27th, 2023

Blog No. 162 
February 28, 2023

 Recent and Major Business / Real Estate Law Developments

By Mack W. Borgen
University of California at Berkeley (Honors, Economics); Harvard Law School; National Award-Winning Author.

Call Me Anytime

General Business Planning

or Corporate, Business or Real Property Law Matters


Please See My Personal Note at End of This Writing 


Recent Business, Contract, and Real Estate Cases and Developments

General Sources: Daily or Periodic Judicial and Legislative Reports from various sources including the California Lawyers Association Daily Reports, the CLA’s Monthly Business Law News, and Announcements and Press Releases from the (California) State Attorney General Office.

1.   Businesses – Changes in California Employment Law. Effective January 1, 2023, there were a number of important changes in California employment law. The following is a (very) brief summary of some of those major changes: 

A.  Minimum Wage increased to $15.50 for all employees (Effective Jan. 1, 2023).

B.  Expanded Definition of “Family Member” allowed to take unpaid, job-protected leave to care for such family member. The definition is limited to one designated person per 12-month period.

C.  Bereavement Leave. With respect to all businesses with five or more employees, then persons who have been employees for at least 30 days have the right to take up to five (5) days of bereavement leave (days need not be compensated). Employers have the right to confirmation evidence (e.g., death certificate, obituary).

D. Reproductive Rights Protection. Employers are prohibited from discriminating against any employee or job applicant based upon their reproductive health care decisions.

E. Off-the-Job Protections for Cannabis Users. Effective next year, employers are prohibited from discriminating against any employee or job applicant based upon such person’s use of cannabis off the job and away from the workplace.

F. Workplace Safety. Employees cannot be retaliated against for refusal to report to work during emergency conditions or if they have a “reasonable belief that the workplace is unsafe.” NOTE: The statute specifically provides that a health pandemic does not constitute an emergency condition.

 G. Pay Scale Transparency and Disclosure Requirements. Employers are now required to make pay scale information available to job applicants, and there has been a considerable expansion of California’s pay data reporting requirements.

2. Corporations – Manufacturing – Minimization of Plastic and Recyclability Litigation. There is a growing trend of citizen advocates and environmental groups to file litigation asserting a wide range of novel theories with respect to companies that use or rely upon plastic – even if the companies do not produce a plastic product or are not involved in the disposal of plastic products. Basically, this trend is another dimension of ESG-based litigation, and it is poised to soon affect companies in virtually all industries. Senior management and the Board of Directors need to be aware of these types of litigation risks because the steep increase in such lawsuits is expected to continue and, in the opinion of some, could reach the litigation level previously associated with asbestos, tobacco, and opioids.

3. Corporations – Online Business Websites Not Deemed “Public Accommodations” for Purposes of the ADA. A California appellate court has ruled that online-only businesses are not “public accommodations” for purposes of the Americans with Disabilities Act. This finding was in response to a number of ADA-based lawsuits which alleged that such website-based businesses discriminated against the visually impaired.

4. Real Property Law – Purchase of Property Does Not Transfer a “Takings Claims.” A buyer of real property may conduct relatively thorough due diligence but may still only become aware of a cause of action based upon a taking or inverse condemnation after the property is acquired. Based upon a new California ruling, the transfer of real property normally does not include an assignment of inverse condemnation cause(s) of action. The court held that the cause of action shall not be deemed to have been automatically transferee unless there is “clear manifestation” of the intention to so assign such intended claim. The ruling is unclear as to whether the claim must be specifically identified at the time of such transfer. I believe that in light of this decision, real estate attorneys should adjust our documentation so as to expressly provide that any inverse condemnation rights or actions are included within the definition of the assets being conveyed.

5. Corporations and Other Businesses – Rights of Passive Owners to Review Corporate Records. Whether or not a passive owner of corporate shares or LLC interests can have access to the books and records of the business depends upon multiple factors. Such factors include the following: (a) type of business, (b) whether the business is a corporation or LLC, (c) what types of records are being sought, (d) whether the business formation documents address such access matters, (e) the petitioner’s percentage ownership interest in the business and how long the owner has held such ownership interest, and (f) even the purpose of the request. To avoid what can be combative litigation about such access, the rights and limits of the owners to access business records (and the procedures therefor) should prudently be set forth in the organizational documents.

6. Stocks and Investments – Requested Clarification and Disclosure of an Investment Adviser’s Criteria with respect to a Company’s Proposed ESG Investments. Many investment companies now offer funds that purport to prioritize ESG factors. However, it has been determined that, in reality, these funds sometimes only give little consideration to these factors. Instead, the funds are touted as ESG investments merely as a way to lure investors who or which may want to invest according to certain ESG criteria. For this reason, the California AG has expressed support for a recent SEC proposal to increase transparency and accountability of funds claiming to prioritize ESG factors.

7. Delaware Corporation – Even More Liability Protection for Corporate Officers. Some businesses elect to incorporate in Delaware because of the state’s general corporate-friendly environment and, more specifically, because of the considerable level of protection offered to such corporations and their directors under Delaware law. For example, since 1986, Delaware has allowed a corporation to eliminate or limit a director’s personal liability to the corporation and its shareholders for monetary damages – even for breaches of fiduciary duty (!) so long as liability limitation provisions are set forth in their certificate of incorporation. Effective August 2022, Delaware (absurdly) went even further. It will now also extend liability exculpation rights to certain officers of a corporation including, without limitation, the corporation’s President, CEO, COO, CFO, Chief legal officer, controller, treasurer, and chief accounting officer.

The White Binder

A Personal Note

Some of us – I know – not you!! Are getting older.

I recently completed my own personal copy of my The White Binder.

It is unique. It organizes the information which will be necessary for heirs, relatives, and friends.

It is detailed. It took me three (3) days to insert my information in my own copy.

As the author of this book, I am biased, but I highly recommend that you (and your spouse or life partner) get and complete your copy(ies) today.

I have the highest regard for estate planning attorneys and the critical services they provide,



Each copy of The White Binder is personalized for you. It uses a fill-in-the-blanks format and is shipped in an easy-to-use binder.

I already have shipped more than 135 copies to friends and associates.

Get Your Copy Today

The White Binder

(3rd Edition) (2022) (124 pages of questions, fill-in blanks, and reminders)

(Questions, reminders, fill-in blanks, contacts, weapons, cash stashes, passwords, personal bequests, and on and on)

Just email me at mwborgen@live.com (or call me at 805-450-2602)

  • Give me your mailing addresses and the number of copies you want. Please allow me 10-15 business days to print your copy.

Binder format $49.95 plus $6.95 Shipping

You Can Pay After Delivery.

Get a copy for yourself, your spouse or life partner, and even for your brothers and sisters!! We all will need it.

Copyright 2023 by Mack W. Borgen. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, except in the case of brief quotations embedded in critical articles or reviews, without prior written permission by the author.





Fixing America – Idea 27 – It’s Time to Start Using the Right Numbers!

Posted by Mack W. Borgen February 8th, 2023

    Blog No. 161
February 9, 2023

Fixing America – Idea 27

Reading Time: 10 Minutes
By Mack W. Borgen
University of California at Berkeley (Honors, Economics); Harvard Law School; National Award-Winning Author, The Relevance of Reason (Volumes I and II) (2013) and Dead Serious and Lighthearted – The Memorable Words of Modern America (Volumes I, II, and III) (2018-2019); and The Writings of a Lifetime (2021).
My Continuing Resolution for the Year: To write shorter blogs.
See all my articles, essays, blogs, and book synopses at  https://www.mackwborgen.com/ .

Call Me Anytime

General Business Planning

or Corporate, Business or Real Property Law Matters


Using the Right Numbers

To Track Americans’ True Tax Burden


Over the last two and a half years, I have presented a wide range of ideas for “resetting” and “fixing” America. This blog presents Idea 27 in this his “Fixing America” series of articles. 

The Background Issues and

America’s Incorrect Focus upon Income Taxation 

Every month and every year; in every election and every new Congress, debates arise about taxation – higher taxes for the rich; “fair-share” and “flat taxes” for everyone; closing loopholes; reviews of “special tax treatments” and “tax incentives” for some people or industries; elimination of the capital gains or the estate tax, and on and on. The debates are tedious, circular, and endless.

However, what is far more frustrating is that these debates usually miss the point. They can be terribly misleading because, to a large degree, they are based upon inaccurate data – or, more precisely, both incomplete and dangerously wrong data about Americans’ tax burden per individual, per family, per annual income category.

To understand the true tax burden upon Americans, the far more “correct” data to use is that which reflects the total money spent on all “taxes” — i.e., the composite average tax rates paid by Americans. Since the debates are almost always about income taxes — as opposed to all of the taxes each of us pay, the debates are, in truth, almost de facto misdirected.

The good news is that there is a much better way to understand the relative tax burdens which we all share. However, before I present my recommendation for the development and use of “composite tax burden,” allow me to make some preliminary observations. Allow me to identify some aspects of America’s tax policies which are over-looked in the hustle and bustle of partisan screeching.

Tax Burdens Come from Many Sources.

First, the tax burden faced by Americans comes from many sources – local taxes, state taxes, and federal taxes. Only by an aggregation of such taxes — for each individual or family or for each income or wealth category — can we track the true “tax burden” of our governments (federal, state, and local) upon our citizens.

Many of America’s Taxes Are Already Flat Taxes.

Second, Americans should not be misled by political forces into focusing upon income taxation in their analysis of the progressive or regressive nature of America’s tax system. To a huge extent, for example, most American taxation is already based upon “flat taxes” such as sales taxes and property taxes. It is true that the wealthy may pay more each year in sales taxes, but sales taxes are a flat tax. The only reason they may be paying more is because they get their food at Gelson’s and their clothes at Nordstroms. That is their right and privilege, but it is also their choice. In the context of their tax burden, WinCo is open and Costco is always looking for more members. Similarly, the wealthy may pay each year in property taxes, but property taxes are also flat rate taxes. The only reason they are paying more is, once again, their choice – and their right — to live the good life … you know, the one with the pool and the guest house … which is fine, but don’t complain!

Little Distinction Made by Americans Between Various Taxes and the Need for Calculating a Composite Tax Burden.

Third, although most tax debates focus upon income taxation, taxes are taxes. Americans don’t care if it is a sales tax or an income tax; a property tax or a payroll tax; an inheritance tax or an estate tax. No, taxes are taxes, and the money is gone. Admittedly, because we are required to file annual income tax returns, income taxes get more focus. Every spring we are faced with how much we owe in “taxes.” However, we talk about income taxes only because we do not track the thousands of dollars we pay in other taxes. Americans are nickel and dimed by sales taxes and gas taxes. Property taxes are paid twice a year or are buried in our monthly mortgage impound accounts. Payroll taxes make a big difference between our “pay” and our “take-home pay.” For this reason, the only true measure of Americans’ tax burden is to track our composite tax burden – the aggregate tax burden on Americans from all of our taxes. And that is now possible. We can now understand who really pays what and what the real tax burden percentages are by income or wealth level. We can finally come to realize that we are basically a flat tax nation. We can finally understand, for sure, whether or not each income and wealth category of Americans is truly paying their “fair share” of taxes.    

Income Tax Rates Are (Very) Misleading.

Fourth, it is necessary to focus — one more time on income taxes because w need to change our way of thinking. We need to stop focusing so obsessively upon income tax rates. Why? Because (a) there is a substantial distinction between 37% “ordinary income” taxation and 20% “capital gains income” taxation, and (b) the far more favorable capital gains taxation rates are used far more frequently by the wealthy than the rest of America. (See Note 1 below) It can be obnoxiously complicated, but discussing income tax burden by reference to the 37% maximum rate “of the wealthy” is terribly misleading for many reasons, For example, disproportionately, the wealthy either (a) gain their wealth by holding and selling of capital assets (then paying the lower 20% capital gain taxes thereon) or (b) transfer their assets tax-free through the use of tax minimization planning (See Note 2 below). One of the most common – and absurd – tax avoidance tools involves transfers upon death whereby the recipient heirs get the assets with what is called a “stepped up basis.” As a result, all capital assets, which would have otherwise been subject to even the lower 20% capital gain rate, are transferred tax free. No ordinary income taxation, and even the capital gain tax liabilities evaporate. It is cruel, but it is also common knowledge that to the wealthy, rich, and famous, W-2s are for losers. For confirmation, just talk with their accountants who meticulously prepare their tax returns each year. Again, this is not their “fault” — it is our miswriting of the tax laws.

Note 1: Even the common reference to the 37% income tax rate is highly misleading since it rarely applies. First, it applies only to taxpayers with more than $693,750 in annual income. Second, the average income tax rate for the Top 1% Americans is only about 26.8% — not 37%!

Note 2: Some argue that most “tax minimization planning” is synonymous with “tax avoidance planning” since such planning is largely available only to the wealthy and is implemented by the use of sophisticated accounting measures with the advice of tax attorneys and accountants. On this, however, I disagree. It is only prudent for these individuals to plan. Also, they certainly have the right to such counseling because, in the opinion of this author, it is wrong to ask the wealthy – or any person — to voluntarily pay more in taxes than they are required to pay. It is the tax laws which are wrong, and true tax law changes can best be made by our slow understanding and use of correct data — the composite tax burden of Americans.      

Any Tier-3 Techie Can Put This Together – Americans Aggregate Tax Burden Can Now Be Measured

Fifth — and possibly most important of all — is that the calculation of American’s composite tax burden can now be measured. The computer age has created many social and political complications, but it has also brought new wonders. One of those new “wonders” is that we now have the capacity to calculate the true composite tax burden imposed by our governments upon its citizens. The relative progressivity of the income tax can finally be juxtaposed with the regressivity of America’s many, many flat taxes. Because of sheer number of taxing jurisdictions – the federal government, 50 states, 3,033 counties and parishes, over 108,000 cities and towns, and an endless number of special mandate jurisdictions, it was previously impossible to track the composite tax burden. Now, we can. There would be a lot of initial data entry, but any tier-3 techie can develop the necessary tracking program. Admittedly, (a) it will be necessary to define “tax” in order to determine whether Item A or Item B should be included as a “tax, (b) certain assumptions will have to be made about projected per capita annual purchases subject to, for example, sales taxation, and (c) data will have to be regularly updated to reflect new taxes or tax law modifications. But all of this can be done. And the end result will be invaluable.


Why Is This Important – Why Is This So Critical! 

Calculating, tracking, and basing our tax policies upon the composite tax burden on Americans is critical because otherwise the discussion about (income tax) progressiveness are terribly misleading. Only by using a composite tax burden calculation can we finally know who really pays for what; who really pays for the goods and services of our federal government; who may or may not need tax relief.    

It is the hope of this author that everyone pays his or her “fair share.” But it is also, very bluntly, my concern that the wealthy are not currently doing so. As noted above, in many instances this is not their “fault.” They should not be criticized for “only” paying that which is owed under the law. They should not be expected to make “donations” or to pay more than is “due.” However, (i) the inordinate obsession with merely focusing upon income tax brackets, and (ii) the reality that the wealthy rarely pay anything near their full 37% “share” highlights the need for using a composite tax burden analysis.

In closing, it should also be noted that some lower income families receive more in terms of “government benefits” such as welfare (and, personally, I am entirely committed to major welfare reforms), but most government services from the DOD to the FAA and our judicial system; from interstate highways to local parks departments; from street cleaners to local planning offices are intended to benefit of all Americans. 

I have written before that to address our country’s problems, the “place to begin is everywhere.” This is true, but the place to begin in the context of taxation is accurately understand who is really paying; who is really paying what percentage of their income in taxes? Idea 27 – start basing our tax legislation after taking into account the true composite tax burden of our citizens by income or wealth level.

It is time.

It is needed.

It can now be done.

Six Book Series

My Most Recent Publication

The White Binder (2022)

A Million Little Details – Tons of Important Names and Address — 

This Book Allows You to Get Your Personal and Estate Planning in Order

For Your Detailed Personal Asset and Liability Management,

Estate Organization, and (Detailed) Disposition Planning 

–Order Today–

Just email me at mwborgen@live.com (Mailing Address and Number of Copies)

(Binder Format, $49.95 plus $6.95 Shipping, Pay After Delivery)   

Copyright 2023 by Mack W. Borgen. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, except in the case of brief quotations embedded in critical articles or reviews, without prior written permission by the author.




New(er) Business Law Words and Phrases – Definitions of Critical Business Law/Finance Terms

Posted by Mack W. Borgen January 30th, 2023

Blog No 160

January 31, 2023
By Mack W. Borgen

Call Me Anytime

General Business Planning

or Corporate, Business or Real Property Law Matters


New(er) Business Law Words and Phrases


Most of us have long ago given up trying to keep up with the alphabet soup names of our many federal and state agencies and other economic terms or references, but here is a quick list of some terms and phrases which should be noted. 

“Ban the Box” and “Fair Chance Acts:” State or local legislation which limits employers access to a job applicant’s criminal history pre-offer. 

Clawback Rules: SEC or other laws or regulations requiring corporations to recover incentive-based compensation wrongly received by a current or former executive officer during a defined prior period of time (usually the three (3) years prior to the triggering event or finding of liability). 

DEI:    Diversity, equity, and inclusion. Many major US companies are seeking to enhance their “DEI” through various methodologies and strategies relating to, for example, recruiting and through the use of ERGs.

ERGs: Employee resource groups. ERGs are networks of employees formed around common interests. It is argued by some that such ERGs have been effectively used by corporations to improve morale and performance of employees. 

ESG:   Environmental, Social, and Governance (e.g., corporation’s ESG criteria now sometimes required to be disclosed by investment companies and advisors). A short-phrased reference to this increasingly important set of criteria used by investors in their evaluation of the prospective investments in various corporations or industries.

Greenwashing: When an organization or corporation makes false, unsubstantiated, or misleading statements or claims about the ESG sustainability of a product or service (e.g. “sustainable” practices or low carbon emissions or “ethically sourced” products) or even about its business operations which such statements or claims may give rise to the initiation of false advertising or fraud actions by a class of consumers or, for example, environmental or some other ESG organization. 

PAGA: California’s “Private Attorneys General Act.” Enacted in 2004, PAGA authorizes aggrieved employees to file lawsuits against their employers to recover penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. The statute was originally seen as a way to “deputize” citizens to act as private attorneys general, and it arguably has been a useful tool especially for low wage workers to enforce their labor rights. In recent years, there has been a significant increase in the number of PAGA lawsuits – 6,502 PAGA notices in 2021 alone. However, this increase is largely the work of a select small group of law firms which specialize in PAGA lawsuits and which receive 33% of the workers’ total recovery. To date, small and mid-size businesses and hospitals have faced the brunt of these cases.

Pay Scale: The salary or hourly range that an employer reasonably expects to pay for an advertised employment position. This range would normally not include bonuses, tips, or other benefits. If the hourly or salary range is based upon a piece rate or commission, then the piece rate or commission range which the employer reasonably expects to pay must be included in the subject job posting.

Transparency Laws: Laws requiring a corporation (or other business entity) to disclose information either to its shareholders or other owners or, in certain cases, to the public. 

WARN Act: (Federal) Workers Adjustment and Retraining Notification Act. Enacted in 1988, the WARN Act protects workers, their families, and communities by requiring most employers with 100 or more employees to provide notification 60 calendar days in advance of any plant closing or mass layoff. 

Zombie Foreclosure. A horrific situation whereby a bank initiates a normal foreclosure by the delivery of a notice of default to the homeowner, but then the bank knowingly and intentionally does not complete the foreclosure. As a result, the homeowner (sometimes unknowingly) remains the title owner and can be later pursued by cities and counties, homeowner associations, and even utilities for property taxes, property insurance, past due utility bills, and property maintenance obligations. This horrendous practice by banks became a major issue after the 2008 mortgage crisis in which it was estimated that more than 300,000 homes became, de facto, (a) abandoned via zombie foreclosures and, (b) the problems of local communities and the mortgagee-defaulting property owners. During the tricky housing market in which the U.S. is in, it is feared that banks will again sometimes use this practice to avoid the responsibility attendant to owning a piece of property via its own foreclosure.

Recommended Article of the Month: Wood, Robert W., “Tax Myths about IRS Statute of Limitations, Business Law News (December 2022), p. 34.

 Quick-Reference List

  • Business and Financial Accounting Terms and Phrases – 

Most business owners and their attorneys routinely use, review, or incorporate data from a businesses’ income statement and from other associated accounting statements. Set forth below is a quick-reference list of some of the primary financial accounting terms used in or in association with such financial statements and reports. 

COGS: Cost of Goods Sold (Direct costs that can be easily matched to revenue such as cost of raw materials and production costs). 

Earning Before Tax: Operating Income less interest expense.

EBIT: Earnings before Interest and Taxes (i.e., Operating Income).

EBITDA: Earnings before interest, taxes, depreciation, and amortization.

EPS: Earnings Per Share (i.e., Net Income divided by number of common shares).

Basic EPS: Denominator is the company’s total number of common shares outstanding.

Fully Diluted EPS: The denominator is both (a) the company’s total number of common shares outstanding plus (b) the additional shares that could be available from the conversion of stock options, warrants, and other convertible securities). 

Financial Statements: Basically, there are three (3) types: income statement, balance sheet, and statement of cash flow. 

Gross Profit: Revenue less COGS. 

Net Income: Operating Income less Net Interest and Income Tax Expense

Net Income Margin: A percentage (%) – Net Income/Revenue.

Net Interest Expense: Interest Expense less Interest Income.

Net Revenue: Gross revenue less adjustments such as sales discounts, returns, delayed payments, and expected uncollectible amounts. 

Operating Income: Gross Profit less SG&A (Measure of company’s profits from normal operations).

Operating Margin: A percentage (%) – Operating / Revenue. 

SG&A: Selling, General and Administrative Costs (Costs which cannot easily or directly matched to revenue and can include costs such as marketing and advertising, professional services, R&D, and office expenses). 

Tax Expense: Income taxes required to be paid to various tax authorities.

My Most Recent Publication 

Personal Note:

Some of us – I know — not you!!, are getting older.

I recently completed my own personal copy of The White Binder.

It helped to organize and present all information necessary for my heirs, relatives, and friends.

It took me three (3) days to complete.

It is entirely up to you, and I know that as the author of this book,

I am biased, but I recommend that you get your copy today.

It may be incredibly helpful to you and for your loved ones in organizing your life,

In compiling information and data about your assets and liabilities,

and in presenting your desires.

Get Your Personalized Copy Today

 The White Binder (2022)

For Your Detailed Personal Asset and Liability Management,

Estate Organization, and (Detailed) Disposition Planning

 Just email me at mwborgen@live.com (Mailing Address and Number of Copies)

(Binder Format, $49.95 plus $6.95 Shipping, Pay After Delivery)  

 All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, without the prior written permission of the author.











7 Major New Business / Real Estate Law Developments – The Year 2022 in Numbers

Posted by Mack W. Borgen January 16th, 2023

Blog No 159
January 17, 2023
By Mack W. Borgen
Author (7 Books): The White Binder – Your Personal Data and Information Book (2022); The Writings of a Lifetime (2021); Dead Serious and Lighthearted – The Memorable Words of Modern America (Three Volumes) (2018-2019); and The Relevance of Reason – The Hard Facts and Real Data about the State of Current America (2 Volumes) (2013). As advertised in The New York Review of Books. Recipient of Eight National Book Awards.

Call Me Anytime

General Business Planning

or Corporate, Business or Real Property Law Matters


 Looking Back at the Year 2022

A Few of the Important, or at least Curious, Numbers

    2      Job Openings. Number of job openings per job seeker for the first time in two decades.

  8    Federal Student Loans. Number of times federal student loan payments has been extended.

  25      Gun Carry Rights. Number of U.S. states where it is now legal to carry a gun without a license. In 2010, there were only two such states – Vermont and Alaska. However, in the last three years, 11 more states have joined the list of states which no longer require a license, a permit, or even any gun safety knowledge or training.

  29th    US Life Expectancy. U.S. life expectancy ranking amongst all 44 OECD developed nations. The U.S. life expectancies are, respectively, 76.1 years for men (at birth) and 81.1 years for women (at birth). Compare the U.S. life expectancy with, for example, Monaco (89.4 years!), Japan (86.1 years), and Singapore (85.4 years).

129th   “Safest Nation” Ranking.  U.S.’ sadly low “safest nations” ranking. The U.S. ranks just below Azerbaijan and just above Brazil. Iceland, New Zealand, Ireland(!), Denmark, and Austria are the five safest nations in which to live.

11.9MM   Poverty Line. Estimated number of U.S. children living in households below the poverty line.

$       0 Change in Real Wages. Despite the highest pay raises for workers in seven (7) years, $0 is the average amount of inflation-adjusted dollars that workers received in 2022.

$3.5BB    Financial Institutions Reform. Aggregate amount consumers will start “saving” every year from their banks as the result of regulators pressuring or requiring financial institutions to curtail overdraft fees and certain other fees and charges. 

14 Months  Family “Excess Savings.” Average length of time that a family’s “excess savings” from the pandemic were likely to last before inflation and the cessation of pandemic-related payments forced people to dip into their cash reserves.

Overall, 2022 was another confusing year with the following:

Record High Corporate Profits

Unprecedented Levels of Corporate Concentration

Highest-Ever Levels of CEO Compensation

Steadily Increasing Levels of Wealth Disparity in the U.S.

Maybe even more long-term troublesome for our country and our children, since 2010 the median pay for U.S. teachers has decreasedDown 4.4% for high school teachers and down 8.4% for elementary and middle school teachers!

Recent Business, Contract,

and Real Estate Cases and Developments

General Sources: Daily or Periodic Judicial and Legislative Reports from various sources including the California Lawyers Association Daily Reports, the CLA’s Monthly Business Law News, and Announcements and Press Releases from the (California) State Attorney General’s Office. 

  1. Contracts – More States Block Non-Compete Agreements. For many years, employers have used non-compete and non-solicitation agreements to stop former employees from competing with a company or from soliciting the company’s customers for a specific period of time after their departure from the company. Increasingly, state legislatures and court rulings have limited or wholly invalidated such agreements. Some states, like California, have entirely banned such agreements (with narrow exceptions). Nine (9) states prohibit such agreements unless the worker earns above a designated income level. Other states have restricted their enforceability if they do not, for example, have tightly defined geographical/territorial restrictions. Because of these growing restrictions and because companies have valid reasons for assuring that a former employee does not inappropriately compete with his former employee, it may be prudent to use other types of post-employment protection agreements by using, for example, carefully drafted trade secrets or confidentiality agreements. Note: According to a 2021 article in the Journal of Law and Economics, about 18% of American workers have noncompete agreements (as compared with an earlier study showing 38%).

             Update Alert: On January 5, 2023, the FTC announced a sweeping new proposed rule banning nearly all non-compete agreements between employers and workers in the U.S. The rule, if finally adopted, would supersede all state laws and prohibit the use of nearly all forms of non-compete agreements in the U.S. The proposed rule is based upon the FTC determination that such agreements inherently constitute an “unfair method of competition.” The rule would also prohibit such agreements with respect to both employees and all other associated workers of a corporation including, for example, even independent contractors. Lastly, the proposed rule (a) would apply to both new and existing employees and (b) would require corporations to provide notices of rescission with respect to all existing non-compete agreements. The only narrow exception relates to sale-of-business situations where the party is a “substantial owner” (i.e., holding at least 25% interest) of the business being sold.

  1. Employment Law – California’s New Transparency and Disclosure Requirements. Effective January 2023, all California employers with 15 or more employees* are now required to include a pay scale in every open job posting. The California Labor Commissioner has clarified that these requirements would also be applied to postings for remote workers if the position may “ever” be filled in California. Persons claiming violation of any such required pay transparency have one year to either file a complaint with the Labor Commissioner or initiate a civil action for retaliation. In addition, all employers must maintain (and keep for three years after such employees’ dismissal or retirement) records of job title and salary history for all employees, and all private employers with 100 or more employees must submit pay data reports to the CA Civil Rights Department.

* Caution: Even smaller companies are required to provide pay scale information upon the reasonable request from any job applicant. 

  1. Corporations – New California Warranty Law. Although seemingly a minor and “technical” change in California’s warranty law (effective July 1, 2023), the new warranty law should be noted by California corporations which sell products with written warranties. Normally, warranties measure their duration from the date of the sale of the product. However, due to recent changes in the Song-Beverly Warranty Act, warranties may now only commence upon the delivery date of the product. Almost more importantly – failure to make this warranty duration clear in the written warranty documents can give rise to penalties, damages, fees, and costs. 
  1. Corporations – SEC Adopts Final Clawback Rule. The SEC is now effectively requiring publicly-traded corporations (i) to adopt a written clawback policy and (b) to file such clawback policy as an exhibit to their annual report. Under the Clawback Rule, the policy must provide for recovery of incentive-based compensation erroneously received by current and former executive officers during the three (3) fiscal years preceding a required accounting restatement. Basically, the amount subject to such clawback is the excess of the compensation received over the amount which would have been received based upon the restated corporate income amounts. 
  1. Real Estate – Landlord-Tenant Law – Landlord Obligation to Conduct Specific Background Checks for Their Apartment Employees. Florida recently enacted legislation requiring landlords of “non-transient” apartments to conduct specific background checks for all employees hired to work in such apartment buildings. While the legislation obviously applies only to Florida properties, it serves as a good reminder for prudent California-based landlords to consider using articulated procedures and conducting document background checks for all employees of such properties. 
  1. Contracts – The Exercise of “Sole Discretion.” A recent Delaware Supreme Court decision held that even when a contractual provision vests in a person the absolute right to make a contractual determination, such person is still required to exercise such right “in good faith.” In this LLC case, the Court held that even though an Operating Agreement granted full designated rights to the “holders of the majority of the outstanding (LLC) units,” such majority must exercise those rights subject to an implied covenant of good faith and fair dealing.” 
  1. Commercial Leases – Renewal of Lease May Be Implied by Parties’ Conduct. If a lease contains renewal provisions, there is normally a required time for delivery of written notice by the tenant to the landlord of the tenant’s election to renew the lease. However, despite even express renewal requirements in the lease, the landlord may be later estopped from denying the renewal if, as occurred in several recent cases, (a) the tenant remains in possession and pays rent, and (b) the landlord continues to accept such rent. In these types of instances, the court may find that regardless of express renewal requirements set forth in the lease, the landlord may be estopped from terminating the lease due to the parties acting as if the renewal had occurred.

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