New Statute of Limitations Law a Welcomed Change for Design Professionals
By: Benjamin H. Hammond
Design professionals in Michigan can now breathe a collective sigh of relief – the six year statute of limitations has been returned to the historic two year limitation time period.
On October 4, 2011, Governor Rick Snyder signed Senate Bill 77, which is now known as Public Act 162. This bill addressed a significant change in the law that occurred in 2006 when the Michigan Supreme Court decided Ostroth v Warren Regency. In that case the Court looked at two statutes which appeared to be in conflict with one another. While MCL 600.5805 provided that a party only has two years to bring a lawsuit against a design professional, MCL 600.5839 indicated that a party had up to six years to file a suit arising from a defective or unsafe condition on a construction project. The courts in Michigan had routinely read these statutes together and held that the two year statute of limitation applied. The court in Ostroth, however, concluded that the six year period applied and effectively made Michigan the only state in the country with a six year statute of limitation for design professionals.
Public Act 162 now specifically clarifies that an action against a design professional arising from the rendering of professional services is subject to the two year statute of limitations. The new law takes effect January 1, 2012, and will apply to causes of action that accrue after that time.
The limitations defense is one of the most powerful weapons design professionals have at their disposal when defending lawsuits. With the passage of this new law, design professionals now have more certainty as to when claims must be filed and should be pleased by the reduction from a six year statute of limitations to a two year statute of limitations.
An Overview of Private Placements
By: Mark Rysberg
Many business owners and venture capitalists rely on private placements to raise capital. In simplest terms, a private placement is a non-public offering of securities such as stock, partnership interests, or membership interests. These offerings are subject to the Securities Act of 1933 (“Act”), but do not require registration with the Securities and Exchange Commission (“SEC”) if certain exemptions are satisfied.
A private placement may be exempt from registration with the SEC if the conditions under Regulation D of the Act are followed. Whether a private placement qualifies for Regulation D exemption is generally determined by the monetary value of the offering and whether the investors are accredited or non-accredited. Investor accreditation is determined on an investor by investor basis by considering each investors net worth and investing sophistication. The specific criteria for investor accreditation are identified in Rules 501-503 of the Act. (Here).
The first limitation for exemption under Rules 504-506 of Regulation D is the value of the offering. Rule 504 applies to offerings valued at less than $1,000,000, Rule 505 applies to offerings less than $5,000,000, and no limit exists for Rule 506 offerings. The second limitation is whether an investor is accredited. Under Rule 504, an unlimited number of accredited and non-accredited investors may participate. Rules 505-506 limit the number of non-accredited investors to 35, but allow an unlimited number of accredited investors.
Private placements can be a valuable tool for raising capital for investments or existing businesses, but need to be tailored to each venture. This article is intended to provide a background of private placements. How private placements can act as a valuable tool for business owners will be discussed in Part II of this Article.