Structuring Waterfall Provisions in LLC and Partnership Agreements
Navigating Complex Distribution Structures, Minimizing Negative Tax Consequences
Recording of a 90-minute CLE/CPE webinar with Q&A
This CLE/CPE webinar will provide guidance to corporate and tax counsel on the various methods of structuring waterfall distribution provisions in LLC and partnership agreements. The panel will examine a variety of economic and tax considerations in the provisions, such as approaches to drafting priority returns (internal rate of return vs. preferred return, compounding, time value of money and the use of Excel references), relationships between distribution and allocation provisions, tax distributions, profits interests, and liquidation provisions.
- Waterfall provisions, generally
- Determining/drafting waterfall provisions
- Understanding economic arrangement of parties
- Addressing tax considerations
- Specific waterfall considerations
- Priority returns
- Different waterfalls for different events (cash-flow vs. capital proceeds)
- Tax distributions
- Liquidation provisions
- Effects of capital contributions
- Profits interests
- Capital shifts
- Tailoring tax provisions to waterfalls
- Economic importance of allocations
- Addressing initial capital accounts
- “Layer-cake” allocations
- “Target” allocations
- Gross vs. net allocations
The panel will review these and other key issues:
- What are the different types of waterfall provisions and when should each be used?
- What are the key considerations and best practices for counsel drafting and negotiating waterfall provisions in LLC or partnership agreements?
- What are some pitfalls to avoid when tailoring partnership allocation provisions to waterfall provisions?
Mr. Beyzaee heads his firm's tax practice and is also a member of the firm's corporate department.... | Read More
Mr. Beyzaee heads his firm's tax practice and is also a member of the firm's corporate department. He provides clients tax advice in a variety of planning matters, including structuring taxable and tax-free mergers and acquisitions, business reorganizations, real estate transactions, and issuances of debt, equity, hybrid, and derivative securities. His clients include publicly traded and privately held corporations, partnerships, business trusts, S corporations, private equity and real estate funds, financial institutions, and trade associations.Close
Michael J. Kiely
Mr. Kiely's legal practice spans all areas of real estate, including finance, development, and land... | Read More
Mr. Kiely's legal practice spans all areas of real estate, including finance, development, and land use. He has extensive experience representing developers, sellers and buyers, investors and promoters, lenders, and real estate joint ventures, with a particular emphasis on projects involving the intersection of private real estate development and government. His practice includes a substantial public/private partnership, or P3, emphasis, including governmental facilities development projects, mixed-use and transit-oriented development projects, and public finance.Close