On Friday, October 19, 2018, the Treasury Department and the Internal Revenue Service issued highly-anticipated proposed regulations regarding “Qualified Opportunity Zones.” The Qualified Opportunity Zone regime was introduced as part of the Tax Cuts and Jobs Act of 2017 to encourage private investment in distressed communities.  Under the regime, investors that wish to defer capital gains recognized upon a sale or exchange of an asset to an unrelated party (and to derive other tax benefits) can invest that gain in a Qualified Opportunity Fund, which in turn invests in so-called “Qualified Opportunity Zone Property.”  Since its enactment, industry participants have been awaiting the release of additional guidance to address many of the uncertainties regarding the application and implementation of the regime, particularly regarding how an entity will qualify as a Qualified Opportunity Fund and timing for investing capital gains into such funds. This note provides a detailed analysis of the most important clarifications and changes made by the proposed regulations and identifies certain key issues which still require guidance.

Partner Daniel Reich (New York-International Arbitration) and senior associate David Earnest (Washington, DC-International Arbitration) participated in the panel “Smart Contracts and Blockchain: Where Will Disputes Arise and How Should They Be Resolved” at the International Law Weekend in New York City on October 20.

The Treasury Department and the IRS issued today highly anticipated proposed regulations regarding “Qualified Opportunity Zones.” The Qualified Opportunity Zone regime was introduced as part of the Tax Cuts and Jobs Act of 2017 to encourage private investment in distressed communities.

Partner Jeremy Sharpe (Paris-International Arbitration) authored an article titled “The Agent’s Indispensable Role in International Investment Arbitration,” published in the September 2018 issue of the ICSID Review - Foreign Investment Law Journal.

In its recent decision in Arthur Flood v. Synutra International, Inc., et al., No. 101, 2018 opinion (Del. Oct. 9, 2018), the Delaware Supreme Court clarified when an acquisition of a company by a controlling stockholder will be subject to business judgment rule review, as opposed to the more stringent entire fairness standard.  Business judgment rule review applies if, prior to the start of substantive economic negotiations, the controlling stockholder conditions its buyout offer on both approval by an independent special committee and the vote of a majority of the minority stockholders.

In this week's newsletter, we provide a snapshot of the principal U.S., European and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructure providers, asset managers and corporates.

In this newsletter, we provide a snapshot of the principal European, US and selected international governance and securities law developments of interest to European corporates.

Shearman & Sterling was honored by The Legal Aid Society as one of the recipients of the Society’s 2018 Pro Bono Publico Awards for outstanding service to The Legal Aid Society and its clients.

Partner Peter Hayes (London-Finance) spoke on the panel "An Outlook on European Leveraged Finance" and partner Philip Stopford (London-Finance) moderated the panel "Direct Lending" at the Debtwire Week 2018 Leveraged Finance Day on October 18, 2018.

Partners Li Chen (Beijing/Hong Kong-Mergers & Acquisitions) and Matthias Weissinger (Frankfurt-Finance) spoke at the 3rd Annual China M&A Forum organized by AVCJ and Mergermarket in Shanghai on October 18, 2018.