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MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
January 18, 2006

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on January 18, 2006, at the Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: David Vander Haar, Chair; Lloyd Kepple, Secretary and Co-Chair, Partnership and LLC Committee; Pat Shriver, Treasurer and Chair, Technology Committee; Katie Engler, Past Chair; and Mary Bierkamp. Also in attendance were: Rob Beattie, Co-Chair of the UCC Committee; Jackie McGlamery, Practice Development Coordinator of the MSBA; Jonathan Toronto, Vice Chair, Franchising and Distribution Committee; Karen Grandstrand, Co-Chair, Banking Law Committee; Bruce MacKenzie, as proxy for Tim Hearn, Chair, Securities Committee; William Klein, Co-Chair, Partnerships and LLC Committee; Dennis Knoer, Legislative Coordinator for the Section; Bert Black, Secretary of State Liaison to the Section; Donna Watz, Secretary of Commerce Laison to the Section; and David Dean, Newsletter Editor.

Approval of Minutes
The minutes of the November 16, 2005 regular meeting of the Executive Council were approved.

Treasurer's Report
Mr. Shriver reported that the finances of the Section were in sound financial condition and indicated that dues revenues for the fiscal year were expected to be $22,500.00. The Chair inquired as to 2006 membership and was advised that Section membership was 1,242 as of December 31, 2005. While that is a slight decrease from 1,337 as of August, 2004, it is within the historical range of 1,200-1,350.

Chair's Report
The Chair addressed a request for Hurricane Katrina relief. The request was in the amount of $5,000.00. The Chair indicated that the Section recommendation was for a $3,000.00 contribution, in view of an anticipated additional $3,000.00 contribution request from Legal Services Corp.
The Chair commented as to the procedure for seeking assistance of Lloyd Grooms (the MSBA lobbyist) for Section sponsored bills. With respect to the current combined business bill sponsored by the Section, the Chair was required to go before the General Assembly in order to obtain approval for the allocation of MSBA lobbyist time. The Chair noted that this procedure is not significantly different from the requirements with respect to obtaining full MSBA sponsorship of legislation (as opposed to Section sponsorship alone). This may be something to consider in the future with respect to certain legislation if we feel we will have greater legislative clout with full MSBA sponsorship.

Business/Professional Corporations
No report.

Nonprofit Corporations Committee
No report.

Banking Law Committee
Ms. Grandstrand reported that a luncheon seminar sponsored by the Banking Law Committee pertaining to bank secrecy and the Patriot Act had achieved high interest and attendance. In addition, Ms. Grandstrand reported that the Banking Law Institute is scheduled for March 6 with basic courses as well as a keynote address by Gary Stern on the topic of "The Fed After Greenspan."

Securities Law Committee
Mr. McKenzie reported that the Uniform Securities Act is being reviewed by the Committee following the request of NCCUSL Commissioner Robert Tennessen for Committee input. The Committee has made a number of amendments and is in the process of completing its review. Commissioner Tennessen introduced the Uniform Securities Act last session (i.e., the 2005 legislative session) on a preliminary basis. In the 2006 session, it is anticipated that final amendments to the Uniform Securities Act will be promulgated, although such amendments were not finalized at the date of the meeting. When finalized, it is anticipated the Section will "support" the bill, which will again be introduced by NCCUSL in the 2006 Session. Lloyd Grooms' time will not be required, since the bill will not be introduced by the Section.

Partnership and LLC Committee
Mr. Kepple reported that the amendments to Chapter 322B (Minnesota Limited Liability Company Act) have been included in the business bill together with the corresponding Chapter 302A amendments. Mr. Kepple confirmed that Mr. Klein has agreed to co-chair the Committee, and that the Committee will meet in late February or early March. Mr. Black reported that LLC registration continues to trend up in Minnesota.

UCC Committee
Mr. Beattie reported that there was no new information on discussions between the business lawyers and NCCUSL with respect to the Article 2 amendments. He will continue to monitor the situation.

Mr. Beattie reported that a luncheon CLE sponsored by the Committee on "Co-Borrower Implications" would be held in early February of 2006. A later program to be presented by Kevin Busch is also planned.

Franchising and Distribution Committee
Mr. Toronto reported that the Committee is still awaiting final rules from the Federal Trade Commission ("FTC") pertaining to franchise licensing and approval. Mr. Toronto also reported that the Committee is watching a new development pertaining to moratoria being passed by local government entities pertaining to franchise opportunities. These moratoria are often passed in anticipation of the adoption of restrictions of chain franchises moving into certain commercial districts and neighborhoods.

Technology
Mr. Shriver indicated that the Chapter 302 proposed amendments are on the Section website and that the Chapter 322B proposed amendments would be placed on the website in the near future.

Secretary of State Report
Mr. Black reported that 2005 House File 2240 (to be renumbered in the 2006 Session), which contains proposed language for protecting the rights of secured parties from wrongful and bogus UCC filings. The language permits expungement of such bogus filing following ten (10) days notice in the event of a judicial determination supporting expungement or suppression.
Mr. Black also reported on developments with respect to the central notification system in Chapter 336A.
Finally, Mr. Black reported, to the delight of all present, that funding issues in the Secretary of State's Office should not be an issue this year with respect to the passage of the Section sponsored business bill.

Department of Commerce Report
Mr. Watz reported significant activity in the insurance and securities sectors. Any legislative initiatives from the Department of Commerce will be technical in nature in the coming 2006 legislative session.

Legislative Coordinator Report
Mr. Knoer acknowledged the significant legislative activity previously reported at the meeting. Mr. Knoer's efforts in regard to the legislation were duly noted and the Council acknowledged its appreciation of Mr. Knoer's efforts.

Business Pro Bono
No report.

Newsletter
Mr. Dean was welcomed as the new Chair of the Newsletter Committee. The forthcoming newsletter will contain the proposed revised Section bylaws and contain a discussion of Article 9 transition issues under an article authored by Mr. Beattie.

Greater Minnesota Business Lawyers
No report.

New Lawyers Section
No report.

Vice Chair
No report.

MSBA Report
Ms. McGlamery reported that the annual Law Student Networking Session would be held February 7th. She requested participation by the Section Committees at the event.

Other Business
Ms. Bierkamp indicated that Ms. Teri Johnson of the Association of Corporate Counsel of America ("ACCA") had been invited to attend the March 15 meeting. ACCA is an active group of inside corporate counsel, with a mission similar to the mission of the Section. We will continue to seek collaborative interactions with organizations with missions consistent complementary to the Section.
Ms. Engler reported that the amendment to the Section bylaws was proceeding. Ms. Engler urged all present at the meeting to review the bylaws and give comments so that the same might be published in the Section Newsletter (serving as notice) and considered for approval at the Business Law Institute in early May.

Adjournment
On motion and second, the meeting was adjourned.

Respectfully submitted,

_________________________________
Lloyd G. Kepple, Secretary

ATTEST:

_________________________________
David M. Vander Haar, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
November 16, 2005

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on November 16, 2005, at the Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: David Vander Haar, Chair; Phil Kunkel, Vice Chair and Co-Chair, UCC Committee; Lloyd Kepple, Secretary and Co-Chair, Partnership and LLC Committee; Pat Shriver, Treasurer and Chair, Technology Committee; Katie Engler, Past Chair; Daniel Kleinberger; Thomas Lovett, Vice Chair, Securities Committee; Gaylen Knack, Co-Chair of the Franchising and Product Distribution Committee; and Mary Bierkamp. Also in attendance were: Mike Stanchfield, Chair of the Business/Professional Corporations Committee; Rob Beattie, Co-Chair of the UCC Committee; Jackie McGlamery, Practice Development Coordinator of the MSBA; Jennifer Reedstrom Bishop, Chair, Nonprofit Corporations Committee; Timothy Hearn, Chair, Securities Committee; William Klein, Co-Chair, Partnerships and LLC Committee; Dennis Knoer, Legislative Coordinator for the Section; Bert Black, Secretary of State Liaison to the Section; and David Dean, Newsletter Editor. Also in attendance was Dick Ericson, webmaster for the MSBA website.

Approval of Minutes
The minutes of the September 21, 2005 regular meeting of the Executive Council were approved.

Treasurer's Report
Mr. Shriver circulated financial statements for the Section for the quarter ending September 30, 2005, and reported that the finances of the Section were in sound condition. The Chair inquired of Ms. McGlamery as to the status of renewals (the primary source of Section revenues). Ms. McGlamery responded that renewals for Section membership were proceeding at a normal and expected pace.

Chair's Report
The Chair introduced Dick Ericson, webmaster of the MSBA website. The Chair also introduced David Dean, who has agreed to act as a Newsletter Editor.

Business/Professional Corporations
Mr. Stanchfield presented to the Committee the proposed amendments to Chapter 302A. The proposed amendments were the result of the report of the Chapter 302A Standing Committee and were accompanied by Reporter's Notes. Mr. Stanchfield summarized the proposed amendments and requested approval by the Executive Council. There was limited discussion among Mr. Black, Mr. Kleinberger and others pertaining to the amendments which permit provisions in the articles of incorporation to be dependent upon facts ascertainable outside of the articles of incorporation or by incorporation by reference of other agreements or arrangements. Following such discussion, approval of the amendments was moved and seconded, and the Council unanimously approved the amendments. Upon such approval, the amendments were to be submitted to Lloyd Grooms, MSBA Lobbyist, to proceed with obtaining sponsoring authors in introduction at the 2006 Legislative Session.

Nonprofit Corporations Committee
Ms. Bishop reported that the proposed amendments to Chapter 322B to permit nonprofit LLCs to be organized in Minnesota (and to permit foreign nonprofit LLCs to be registered in Minnesota) had been circulated to the Office of the Minnesota Attorney General ("AG Office"). The AG Office indicated that it desired input, but did not offer specific comments due to time constraints. The AG Office indicated it did desire to further review the proposal and reserved the right to propose revisions. Ms. Bishop indicated that the Nonprofit Corporations Committee would continue to encourage prompt AG Office input and work with the AG Office in order to come up with a bill supported by both the Committee and the AG Office. Mr. Kleinberger commented that while full AG Office review and input was certainly appropriate as to nonprofit LLCs, it was important to be sure that imposition of the principles of Chapter 317A be limited to nonprofit LLCs and not applied to all LLCs. Ms. Bishop once again acknowledged that the proposed amendment to Chapter 322B, previously approved by the Executive Council, would not likely be introduced until the 2007 Legislative Session given the continuing discussions with the AG Office.

Banking Law Committee
No report.

Securities Law Committee
Mr. Hearn and Mr. Lovett gave the report. Mr. Lovett indicated that the committee agenda for 2006 includes continued consideration of the Uniform Securities Act and two (2) continuing education luncheons sponsored by the Committee, probably in February and October of 2006.

As for the Uniform Securities Act, Committee review was continuing and it was anticipated that the Committee report could be available for consideration by the Council at the January, 2006 meeting. Mr. Lovett indicated that the time of Mr. Grooms would not be required for this matter, and that the Committee would continue to advise the MSBA Legislative Committee as to Committee consideration and recommendation. Mr. Lovett also indicated that the Committee would communicate with other relevant MSBA Sections as appropriate.

Partnership and LLC Committee
Mr. Kepple and Mr. Klein gave the report. Mr. Kepple advised the Council as to the status of proposed 2006 amendments to Chapter 322B (the Minnesota Limited Liability Act). The proposed amendments, prepared by Mr. Klein with input by Mr. Kepple and Mr. Kleinberger, included parallel revisions to the Chapter 302A amendments as well as several other matters raised by practitioners requiring technical correction or attention. Following the motion of Mr. Kepple, seconded by Mr. Beattie, the proposed amendments to Chapter 322B were approved by the Council. The Chair reiterated that the plan was to proceed with a "business bill" which would include proposed amendments to both Chapter 302A and Chapter 322B. Mr. Kepple further indicated that the Committee would continue to work with the Nonprofit Corporation Committee in connection with the proposed amendments to Chapter 322B pertaining to nonprofit LLCs.

UCC Committee
Mr. Beattie reported that there had been communication with NCCUSL Commissioner Harry Hawynesworth regarding business objections to certain of the Article 2 amendments to the UCC (as proposed by NCCUSL). The Committee has encouraged NCCUSL to meet with business representatives to discuss business concerns pertaining to the amendments. Accordingly, there continues to be no Bar sponsored consensus as to the proposed amendments to Article 2. It is anticipated that NCCUSL may introduce the bill in 2006 for Legislative discussion, with an eye toward passage later on, once further input has been received from the relevant business groups.

The Committee contemplates two continuing education luncheons in 2006: a January luncheon on co-borrowers and an additional luncheon in the spring.

Franchising and Product Distribution Committee
Mr. Knack reported that the Committee is still awaiting final rules from the Federal Trade Commission ("FTC") pertaining to franchise licensing and approval. The period for public comment has passed. Mr. Knack indicated it may be late 2006 before the FTC issues such rules, given the time constraints currently facing the FTC. Such rules are important in Minnesota, which is among the minority of states that require preliminary registration of franchise offerings.

Technology
Mr. Shriver indicated that the Section website is being reviewed and updated through Committee efforts. Mr. Shriver reintroduced Dick Ericson, MSBA webmaster. Mr. Ericson reported that two websites are actually maintained on behalf of the Business Law Section: the Section website, which is primarily informational, and the "practicelaw" website, which contains background materials for practitioners. The "practicelaw" website is maintained by Ms. McGlamery. Primary users of the "practicelaw" website are small firms and solo practitioners who are not fulltime business lawyers. Mr. Shriver indicated it was his intention to post the proposed amendments to Chapter 302A and Chapter 322B on the Section informational website.

Secretary of State Report
Mr. Black indicated that there were no new matters to report.

Department of Commerce Report
No report.

Legislative Coordinator Report
Mr. Knoer once again encouraged Section members to transmit information as to their place of residence and local legislators to Mr. Grooms. Such information is of significant assistance to Mr. Grooms and to the Section as Section approved legislation is introduced at the Legislature.

Business Pro Bono
Mr. Lovett indicated there was nothing new to report.

Newsletter
Mr. Dean indicated that a report would be forthcoming at the January meeting.

Greater Minnesota Business Lawyers
Mr. Kunkel indicated that there was no new information to report.

New Lawyers Section
No report.

Vice Chair
Mr. Kunkel gave a report on the activities of the MSBA Legislative Committee. As Vice Chair, Mr. Kunkel sits on the Committee. Mr. Kunkel urged continued strong participation by the Section on the Legislative Committee and urged continuing communication between Sections with respect to legislative efforts. Mr. Kunkel indicated that the Legislative Committee respects and is inclined to approve well considered action by Sections so long as comments and proposed legislation are received early and input is obtained by the sponsoring Section from other Sections which would have an interest in such legislation. Participation on the Legislative Committee also gives the Business Law Section the opportunity to monitor legislative activity in other Sections. In that regard, Mr. Kunkel indicated the revised Uniform Arbitration Act would not be sponsored by any Section this year, although NUCCSL might still introduce the Act in the 2006 session.

Mr. Kunkel also addressed the 2006 Business Law Institute, seeking recommendations on plenary session and breakout session topics. The Chair encouraged law firms to "encourage" participation by associates, in order to promote the attendance of young lawyers at the Institute.

MSBA Report
Ms. McGlamery updated the Council on Katrina relief efforts by the Section. Ms. McGlamery also indicated that Mr. Kunkel and Ms. Engler were proceeding with proposed amendments to the Section Bylaws. Mr. Kunkel indicated that the Bylaws would be considered at the January meeting.

Other Business
Ms. Bierkamp indicated that she had met with Theresa Johnson, Vice President of the Minnesota Chapter of the Association of Corporate Counsel of America ("ACCA"). In order to maintain contacts with associations of business lawyers which could have common interests with the activities of the Section, Ms. Bierkamp indicated that an invitation may be extended to an ACCA representative to attend a future Council breakfast.

Mr. Black indicated that the United States General Accounting Office ("GAO") was conducting a survey of states to gauge the willingness of states to review corporate documents against certain "watch lists."

Adjournment

On motion and second, the meeting was adjourned.

Respectfully submitted,

_________________________________
Lloyd G. Kepple, Secretary

ATTEST:
_________________________________
David M. Vander Haar, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
September 21, 2005

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on September 21, 2005, at the Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: David Vander Haar, Chair; Phil Kunkel, Vice Chair and Co-Chair, UCC Committee; Lloyd Kepple, Secretary and Co-Chair, Partnership and LLC Committee; Pat Shriver, Treasurer and Chair, Technology Committee; Katie Engler, Past Chair; Daniel Kleinberger; Thomas Lovett, Vice Chair, Securities Committee; Gaylen Knack, Co-Chair of the Franchising and Product Distribution Committee; and Lori Sommerfield, Co-Chair, Banking Law Committee. Also in attendance were: Mike Stanchfield, Chair of the Business/Professional Corporations Committee; Stephen Quinlivan, Vice Chair, Business/Professional Corporations Committee; Rob Beattie, Co-Chair of the UCC Committee; Jonathan Toronto, Co-Chair of the Franchising and Product Distribution Committee; Jackie McGlamery, Practice Development Coordinator of the MSBA; Jennifer Reedstrom Bishop, Chair, Nonprofit Corporations Committee; Timothy Hearn, Chair, Securities Committee; William Klein, Co-Chair, Partnerships and LLC Committee; and Dennis Knoer, Legislative Coordinator for the Section. Also in attendance was Lloyd Grooms, Chief Lobbyist for the MSBA.

Approval of Minutes
The minutes of the July 20, 2005 regular meeting of the Executive Council were approved.

Treasurer's Report
Mr. Kepple reported that for the 2004-2005 fiscal year ending June 30, 2005, the Section had had an annual positive operating balance of approximately $6000, resulting in the elimination of the prior $4000 cumulative negative balance and a current positive ending balance as of June 30 of $2027.40. In addition, the balance in the investment account as of June 30, 2004 was $34,219.66.

Chair's Report
The Chair, on behalf of the Council and the Committee Chairs, recognized and thanked Katie Engler for her work as Chair of the Business Law Section during the 2004-2005 period. The Chair particularly acknowledged Katie's follow-through on Council initiatives, and expressed appreciation for her years of service in the Council and her continuing anticipated service as Past Chair and beyond. Katie's efforts were acknowledged by a strong round of applause from the meeting attendees.

Mr. Vander Haar then introduced Lloyd Grooms, the Chief Lobbyist of the MSBA and guest at the meeting. Mr. Grooms indicated that the goal of the MSBA Legislative Committee was to continue to focus on more and improved communication between the Section Legislative Committees and the MSBA Legislative Committee. In regard to the 2006 Legislative Session, it was acknowledged that the schedule for legislative approval and submittal remains the same notwithstanding the March 1, 2006 Session commencement date. Committee Chairs were encouraged to get legislation to the Executive Council in late October in order to have the same approved at the November Executive Council meeting. The MSBA Legislative Committee meets in late November to review and make recommendations to the MSBA General Assembly as to those items of legislation to be approved at the General Assembly level. Mr. Grooms also requested that Business Law Section members sign up for the Grass Roots Action Network, which gives the MSBA Legislative Committee the opportunity to contact individual Section members when contacting key legislators as appropriate to assist in the legislative process. Mr. Grooms also congratulated the Council for its prior legislative work, including the work on Chapter 300 in the 2005 Legislative session. Mr. Grooms indicated that Uniform Acts reported out by NCCUSL will continue to prompt the need for Section review of pending legislation on a regular basis.

Mr. Vander Haar raised with the Council and Committee Chairs the possibility of a business law certification program to be administered by the Section, similar to the Certified Real Property Specialist and Certified Trial Specialist programs enacted through other MSBA sections. The consensus at the meeting was that, for the current time, there was not a current need to pursue such a certification program. Mr. Vander Haar also encouraged Council Chairs to consider other committees that might be formed in the coming year to meet the needs of the Section members and to address current and anticipated practice issues.

Business/Professional Corporations
Mr. Stanchfield indicated that the Committee had been meeting and had nearly completed the draft of amendments to Chapter 302A for the 2006 Session. The Committee appointed a reporter, John Matheson, and Mr. Stanchfield indicated that he anticipated the reporter's notes would be included in the West Annotated Version of Chapter 302A. The plan is to circulate the proposed amendments for Executive Council consideration at the November meeting, following input from the Nonprofit Corporations Committee and the Partnership and LLC Committee. Mr. Kleinberger noted that the proposed amendments dealing with successor liability might be of particular interest to members of the Bar. Mr. Vander Haar indicated that it was not anticipated that the amendments would be submitted to the MSBA General Assembly for approval and would be transmitted directly to Mr. Grooms following Executive Council approval (assuming such approval is forthcoming).

Nonprofit Corporations Committee
Ms. Bishop circulated, for Executive Council consideration, proposed amendments to Chapter 322B (Minnesota Limited Liability Company Act) so as to permit nonprofit LLCs to be organized in Minnesota and to permit foreign nonprofit LLCs to be registered in Minnesota. The amendments are identical to those considered by the Partnership and LLC Committee and Nonprofit Corporations Committee several years ago. Following discussion, Mr. Kleinberger moved Executive Council approval of proposed amendments and following the second by Mr. Beattie, the proposed amendments of Chapter 322B were unanimously approved. It was acknowledged that the Attorney General's office will have input as to the proposed legislation, and Ms. Bishop indicated she had had conversations with Ann Bloodheart, Chair of the Charities Division in the Attorney General's office and that such discussions would continue. Ms. Bishop also indicated she would be finalizing coordination with the Partnership and LLC Committee. Mr. Vander Haar suggested that there be a "business bill" which would include proposed amendments to Chapter 302A and Chapter 322B, together with any Section sponsored amendments to other business statute chapters. Ms. Bishop also intends to contact the Real Property Law Section from the standpoint of the impact of the amendments on the ability of nonprofits to obtain real estate tax exemption.

Ms. Bishop indicated that the committee was also reviewing potential amendments to Chapter 317A. Ms. Bishop indicated that discussions were ongoing and it was not anticipated that legislation would be recommended to the Executive Council for the 2006 Legislative Session, but that the 2007 Legislative Session was more likely from a timing standpoint.

Banking Law Committee
Ms. Sommerfield reported that the Committee plans two continuing legal education lunches this fall: a September 29th meeting pertaining to Chapter 300 and a meeting in November pertaining to anti-money laundering matters. Ms. Sommerfield further indicated that the 2006 Banking Law Institute is planned for early March of 2006 and is in the preliminary planning stage. Last year, 150 people attended the 2005 Banking Law Institute.

Securities Law Committee
Mr. Hearn and Mr. Lovett gave the report. Mr. Lovett referenced the Uniform Securities Act, which is being studied by the Committee. It is anticipated that the Committee's review will be completed in October and that a report regarding any recommendation of the Committee will be forwarded to the Executive Council for consideration at the November Executive Council meeting.

Partnership and LLC Committee
Mr. Kepple welcomed William Klein to the meeting as Co-Chair of the Partnership and LLC Committee. Mr. Kepple indicated that the Committee planned to review the proposed revisions to Chapter 302A and to make parallel revisions to Chapter 322B. In addition, the Committee will work with the Nonprofit Corporation Committee in connection with the proposed amendments to 322B referenced above and consider other technical amendments to the Partnership and LLC statutes to be included in the 2006 business bill.

UCC Committee
A Committee-sponsored program was to be held in late September to review amendments to the Bankruptcy Code as they pertain to UCC matters.

Mr. Beattie also discussed the possibility of Legislative action in 2006 with respect to amendments to Article 2 of the UCC. Mr. Beattie reported that there had been no further NCCUSL action to align relevant interest groups, and accordingly, it is uncertain as to what Legislative action will be taken in the 2006 Session with respect to the proposed amendments. Mr. Beattie indicated that NCCUSL might introduce the bill in 2006 for Legislative discussion, with an eye toward passage later on, once further input had been received from relevant business groups. Mr. Beattie did not anticipate a Committee recommendation in time for the 2006 Legislative session unless NCCUSL action to align relevant interest groups occurs in the very near future.

Franchising and Product Distribution Committee
Mr. Knack indicated that the Committee is still waiting final rules from the Federal Trade Commission ("FTC") pertaining to franchise licensing and approval. The period for public comment has passed, and it is anticipated that such rules will be forthcoming in the near future. Such rules are important in Minnesota, which is one of the minority of states that require preliminary registration of franchise offerings.

Technology
Mr. Shriver indicated that there was nothing specific to report.

Secretary of State Report
No report.

Department of Commerce Report
No report.

Legislative Coordinator Report
Mr. Knoer indicated that the discussions of Mr. Grooms earlier in the meeting had covered all relevant Legislative matters to be discussed at the meeting.

Business Pro Bono
Mr. Lovett circulated a letter from Legal Corps acknowledging and thanking the Section for its $3000 contribution in 2005. Legal Corps is an organization that coordinates business legal services from the Bar to deserving start-up entities and to nonprofits. Mr. Lovett indicated that $3000 contributions would again be requested for the current fiscal year and for the following fiscal year, with such requests to come at subsequent meetings.

Newsletter
No report.

Greater Minnesota Business Lawyers
Mr. Kunkel indicated there was no information to report.

New Lawyers Section
No report.

Vice Chair
Mr. Kunkel described his activity as a new member of the MSBA Legislative Committee. Mr. Kunkel also discussed the 2006 Business Law Institute. Timing was discussed, and it was anticipated that the Institute would again be held in April instead of May. Mr. Vander Haar asked the Council and Committee Chairs to be thinking about speakers for the upcoming event.

MSBA Report
Ms. McGlamery requested the members to consider whether there might be Business Law Section input to the practicelaw.org project of which Ms. McGlamery is in charge. Practicelaw.org is a collection of resources online, primarily forms, to assist and improve the practice of business law. The primary users of the service are small firms and solo practitioners who are not full-time business lawyers. Committee members agreed to consider the matter, and no further action was taken at the meeting.

Adjournment
On motion and second, the meeting was adjourned.

Respectfully submitted,

_________________________________
Lloyd G. Kepple, Secretary

ATTEST:
_________________________________
David M. Vander Haar, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
July 21, 2004

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on July 21, 2004 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: Katie Engler, Chair; David Vander Haar, Vice Chair; Lloyd Kepple, Treasurer; John Steffen, Past Chair; Mary Bierkamp, Tom Lovett and Linda Rusch. Also in attendance were: Rob Beattie, Co-Chair, UCC Committee; Laura Carlson, Newsletter Editor; Mark Gleeman, Newsletter Editor; Karen Grandstrand, Co-Chair, Banking Law Committee; Lisa Holter, Legislative Coordinator; Steve Quinlivan, Vice Chair of the Business and Professional Corporations Committee; Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair, Banking Law Committee; Mike Stanchfield, Chair of the Business and Professional Corporations Committee; Bert Black of the Office of the Secretary of State; Donna Watz from the Minnesota Department of Commerce; and Renee Anderson, Section Liaison. In the absence of the Secretary, Mr. Vander Haar acted as secretary for the meeting.

Approval of Minutes

The minutes of the May 19, 2004 regular meeting of the Executive Council were approved.

Treasurer’s Report

Mr. Kepple reported that we have $33,500 in the Section’s accounts and that we ran a negative balance for the year just completed of approximately $2,000.

Chair’s Report

Ms. Engler thanked John Steffen for his leadership of the Section over the past year as Chair and his long service on behalf of the Section and presented him with a gift of appreciation. She also reported on her meeting with the President of the Bar Association and the request that each Section prepare goals for the year. She indicated that we are already a long way toward accomplishing one of our goals which is to bring in new Committee Chairs, Co-Chairs or Vice Chairs for certain committees. She then introduced the new Committee Chairs, Co-Chairs and Vice Chairs present at the meeting. She also reported that the officers of the Section would meet prior to the next Executive Council meeting to strategize about other goals for the year. Upon motion made and seconded, the expenses associated with this meeting and other periodic meetings of the officers were approved. She also reported on the Business Law Institute where we had attendance this year of 404 lawyers. The highest attendance we have had is 485 lawyers.

Business and Professional Corporations

Mr. Stanchfield and Mr. Quinlivan were introduced as the new Chair and Co-Chair of the Business and Professional Corporations Committee. Each of them has worked extensively on Chapter 302A legislation and they are looking forward to leading the committee.

Banking Law Committee

Ms. Sommerfield thanked Mary Bierkamp for her leadership and contributions over the last ten years and introduced Karen Grandstrand who will be stepping in as the new Co-Chair. Their agenda for the year includes luncheon CLEs in the Fall, the Banking Law Institute in the Winter and participation in the Business Law Institute in the Spring.

Securities Committee

Mr. Lovett reported that the task force on changes to the Uniform Securities Act has completed its work and that they are meeting with the Commissioner’s office concerning their recommendations.

Partnership and LLC Committee

Mr. Kepple reported that they anticipate that there will be substantial work involved over the next year with the Model Entity Transaction Act which is expected to be completed soon.

Chapter 300

Mr. Black reported that mutual insurance companies are reviewing proposed changes and making recommendations to address their concerns with the proposed amendments to Chapter 300. It is possible that legislation will be introduced in the next session.

UCC Committee

Mr. Beattie was introduced as the new Co-Chair of the UCC Committee and reported on upcoming review of Articles 2 and 2A.

Technology Committee

Mr. Shriver reported that he has reviewed our website as compared to the websites of several other state business law sections. He noted that our site compares favorably, although some sites are including more links on their website which might be useful to explore. We may also want to look at whether we can arrange for easier access to the Section’s site.

Secretary of State

Mr. Black reported that temporary increases for limited partnership filing fees became effective July 1, 2004. He also indicated that there had been some questions raised as to the effective date for amendments to the Business Corporation Act, the Limited Liability Company Act and the Non-Profit Corporation Act, and confirmed that these amendments became effective on July 1, 2004.

Department of Commerce

Ms. Watz reported on the new fraud unit and efforts by industry groups to take retail policies outside of insurance regulations. She also indicated that as of July 1, notary commissions will be administered by the Secretary of State.

Business Pro Bono

Mr. Lovett reported that LegalCorps had received a $140,000 grant from the Bush Foundation payable over three years, that the first couple of cases had been accepted and that it was in the process of quietly launching services.

Newsletter

Mark Gleeman was introduced as an additional newsletter editor and Mr. Gleeman and Ms. Carlson reported that they were working on the next edition, with a number of articles in the pipeline.

Vice Chair

Mr. Vander Haar discussed scheduling of the next Business Law Institute and the desire to either have the Institute after May 23 when the legislature is scheduled to adjourn or before the final weeks. Vince O’Brien is aware of this concern, but has not yet committed to timing for the Institute. Mr. Vander Haar expressed his view that the Institute continues to be a very important part of the Section’s activities, indicated that the initial planning session will be in the Fall and encouraged suggestions for programs and improvements to the seminar in anticipation of the planning session.

Section Liaison

Ms. Anderson indicated she was excited about the coming year and that the President of the State Bar was placing more emphasis on the Sections as the backbone of the Bar. She anticipates more communications with and sharing between Sections, the development of measurable goals for the Sections and more publicizing of Section activities.

Adjournment

On motion and second, the meeting was adjourned.

Respectfully submitted,


__________________________________
David M. Vander Haar, acting secretary


ATTEST:


__________________________________
Katherine A. Engler, Chair
M1:1129786.01


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
May 19, 2004


A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on May 19, 2004 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Steffen, Chair; Katie Engler, Vice Chair; David Vander Haar, Secretary; Phil Kunkel, Treasurer; John Yilek, Past Chair; and Gaylen Knack. Also in attendance were: Jennifer Reedstrom Bishop, Vice Chair of the Nonprofit Corporations Committee; Laura Carlson, Newsletter Editor; Lisa Holter, Legislative Coordinator; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Steve Rubin, Vice Chair of the Business and Professional Corporations Committee; Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair, Banking Law Committee; Bert Black of the Office of the Secretary of State; Donna Watz from the Minnesota Department of Commerce; and Renee Anderson, Section Liaison.

Approval of Minutes

The minutes of the March 17, 2004 regular meeting of the Executive Council were approved.

Treasurer's Report

Mr. Kunkel reported that we have $32,000 on hand and that if we annualize expenses we are running at about a break even point in terms of revenues and expenses. With the dues increase, we should be more than holding our own.

Chair's Report

Mr. Steffen thanked everyone who participated in the annual meeting at the Business Law Institute. Mary Biercamp, Gaylen Knack and David Vander Haar were elected to second four- year terms on the Executive Council and Lloyd Kepple was elected for the first time. Mr. Steffen also commented that the Institute continues to be an important forum for the Section and thanked those who had worked on putting together another successful Institute.

Mr. Steffen indicated that the Executive Council needs to elect officers for the coming year; current officers have agreed to move up one slot and Lloyd Keppel has agreed to be nominated and serve as Treasurer. The following officers were duly elected, with a term beginning July 1: Katie Engler - Chair; David Vander Haar - Vice Chair; Phil Kunkel - Secretary; and Lloyd Keppel - Treasurer.

Mr. Steffen also indicated that Mary Biercamp would be stepping down as Co-Chair of the Banking Committee and that Lisa Holter had decided to step down as legislative coordinator, effective July 1. Ms. Biercamp and Ms. Somerfield are recommending that Karen Grandstrand of the Fredrikson & Byron firm be appointed to serve as Co-Chair of the Banking Committee. The Section is looking for a replacement for Lisa Holter. Mr. Steffen noted that we should be thinking about other possible openings that may result from committee heads becoming officers of the Section and address this at a future meeting. Mr. Steffen thanked Lisa and Mary for their dedicated service to the Section.

Business and Professional Corporations

Mr. Vander Haar reported on the conference he attended in April for leaders of State Business Law Sections put on by the ABA in Chicago. It was a good opportunity to learn what other states are doing and to discuss areas of common concern and initiatives that have been successful in other states. The Conference addressed a variety of topics, including a presentation by the general counsel for NCCUSL, suggestions on managing media relations and corporate governance updates. A number of states seem to be having less success and are placing less emphasis on CLE offerings given the other opportunities their members have for CLE. A number of states have been quite successful in involving business litigators in their section. It was suggested that the business law section may be the most natural fit for many commercial litigators. Mr. Vander Haar suggested that we might consider whether we should have a Business Litigation Committee of the Section.

The ABA reimbursed expenses associated with the conference. It is not clear whether they will continue to offer the conference or reimburse expenses. Mr. Vander Haar indicated that as long as the ABA is willing to cover most of the costs, this is a conference we should try to have someone attend. He also indicated that it may be worth expending some of our own funds for the conference if the ABA determines to hold the conference, but not to reimburse expenses, so long as this doesn't adversely affect participation from other states.

Nonprofit Corporations

Ms. Reedstrom Bishop reported on meetings their committee has been having with LegalCorps, the State Bar Association's newly formed business pro bono organization, to discuss concerns about the issues associated with providing pro bono advice to nonprofits and the burdens that this may place on a small nonprofit bar with respect to training and support for LegalCorps. Discussions are ongoing. The committee is also starting an overall review of Chapter 317A.

Partnership and LLC Committee

Mr. Kepple updated the council on passage of the Uniform Limited Partnership Act (2001).

Technology

Mr. Shriver reported that the Section's pamphlets are now available on the website. He also reported that we need to consider further whether we want to make hard copies available and the costs associated with printing. He is going to investigate this and report back to the council.

Newsletter

Ms. Carlson reported that the newsletter has gone to print. They are continuing to look for articles and topics. Any suggestions should be forwarded to one of the editors.

Secretary of State

Mr. Black updated the counsel on the Secretary of State's bill which has passed both houses and will permit reinstatement without limitation of business corporations that have been administratively dissolved. If signed by the Governor, the Secretary of State's bill will have an effective date of January 1, 2004.

Department of Commerce

Ms. Watz reported that the Department had received authorization for an insurance fraud unit by the state legislature with funding provided through assessments of insurance companies.

Section Liaison

Ms. Anderson reported that the State Bar does not currently have the capability to track committee members. Most other sections do not appear to have a need for this. After discussion, it was recommended that the Section consider going back to including in the Newsletter a tear off section that could be filled in by members of the Section who have an interest in serving on a committee. This would need to be directed to the Secretary of the Section and not the Bar, and we would also have to get commitments from committee chairs to respond to inquiries and maintain lists of committee members. After discussion, it was concluded to consider this further at a future meeting.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,
David M. Vander Haar, Secretary


ATTEST:
John K. Steffen, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
March 17, 2004

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on March 17, 2004 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Steffen, Chair; Katie Engler, Vice Chair; David Vander Haar, Secretary; John Yilek, Past Chair; Mary Bierkamp, Dan Kleinberger, Gaylen Knack and Tom Lovett. Also in attendance were: Jennifer Reedstrom Bishop, Vice Chair of the Nonprofit Corporations Committee; Laura Carlson, Newsletter Editor; Timothy Hearn, Chair of the Securities Committee; Lisa Holter, Legislative Coordinator; Steve Rubin, Vice Chair of the Business and Professional Corporations Committee; Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair, Banking Law Committee; Bert Black of the Office of the Secretary of State; Donna Watz from the Minnesota Department of Commerce; and Renee Anderson, Section Liaison.

Approval of Minutes
The minutes of the January 21, 2004 regular meeting of the Executive Council were approved.

Chair’s Report
The Chair recommended that committee reports be deferred until the May 2004 meeting and that the meeting focus on legislative developments, the level of section dues for 2005 and a request by the Minnesota State Bar Association for financial support from the Section for LegalCorps, the business pro bono organization being organized by the State Bar.

Legislative Developments
Mr. Kleinberger reported on the progress of Section legislation in the 2004 legislative session. He reported that costs associated with programming required by the Secretary of State’s office to permit the conversion of Minnesota limited liability companies and corporations in a single step transaction would likely be funded through a one year increase in filing fees under the Uniform Limited Partnership Act. This compromise solution to funding issues, while not the preferred approach by some, was available because of the greater costs associated with implementing changes to the Uniform Limited Partnership Act sought by the Uniform Law Commissioners.

Mr. Kleinberger also reported that a proposal had been advanced to change Chapter 322B, Minnesota’s Limited Liability Company Act, with respect to less than unanimous action by members without a meeting to mirror the changes being recommended to Chapter 302A, Minnesota’s Business Corporation Act, relating to less than unanimous action by shareholders without a meeting. Mr. Kleinberger indicated that in the interest of moving the Section’s proposed changes to Chapter 302A and Chapter 322B forward without controversy, he and Lloyd Keppel, Chair of the Partnerships/LLCs Committee, thought the proposal should be accommodated. Upon motion duly made and seconded, the Executive Council approved changes to the Section’s 322B legislation to accommodate this proposal.

Mr. Black reported that the Section needs to be sensitive to the fact that in the current fiscal environment anything that is proposed by the Section, regardless of its merit, will have difficulty passing if its implementation will have any financial cost. He also reviewed with the Executive Council the impact of proposed budget cuts on the Secretary of State’s office. He further indicated that these cuts of necessity impact non-mandated services important to the Section more than other areas where the Secretary of State does not have the option to reduce services. He emphasized that there needs to be a long-term solution to the funding issue and that if the Section is interested in this issue it needs to be working on it well in advance of the next legislative session.

Mr. Black also reported on a proposal that had been made to eliminate annual reports for business organizations. After discussion, upon motion duly made and seconded, the Executive Council adopted the following motion:

The Executive Council of the Business Law Section of the Minnesota State Bar Association:

1. strongly supports the bill that would permit corporations to be reinstated following administrative dissolution;

2. accepts as appropriate, in a time of severe budgetary constraints, the Secretary of State’s proposal to require that annual registrations be submitted on line;

3. vehemently opposes any effort to eliminate annual registration requirements, because those requirements are (a) essential to keeping an important public data base up-to-date; and (b) the most efficient and inexpensive method of clearing away “dead wood” from that data base and for making available for re-use business names associated with defunct entities.

There was also a consensus that the Section’s role in updating and monitoring business law developments is one of its key activities and that the Section should look for ways to be more proactive and raise its visibility at the legislature, both during session and out-of-session.

Section Dues
Mr. Steffen indicated that he needed to advise the Minnesota State Bar Association as to whether the Section desired to increase dues for the membership year beginning July 1, 2004. After discussion, upon motion duly made and seconded, the Executive Council determined to raise Section dues by $5.00 for the membership year beginning July 1, 2004.

Business Pro Bono
Mr. Lovett reviewed with the Executive Council materials that had been distributed relating to the organization and funding of LegalCorps, the newly formed business pro bono organization of the Minnesota State Bar Association. In connection with proposals being made to the Bush Foundation and to other sections of the State Bar Association, Mr. Lovett indicated that the State Bar Association was requesting that the Section make a three year, $15,000 commitment to funding LegalCorps. After discussion, upon motion duly made and seconded, $3,000 in funding for the period from July 1, 2004 through June 30, 2005 was approved.

Banking Law Committee
Ms. Bierkamp and Ms. Sommerfield reported on the recently completed first annual Banking Law Institute, which was held on March 2. While experience has shown that Section members interested in banking law are not interested in attending an annual meeting, the seminar was well received, attended by 160 lawyers. It was an excellent program and the format worked out well.

Department of Commerce
Ms. Watz reported that the Commissioner of Commerce, Glen Wilson, had been confirmed.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,

__________________________________
David M. Vander Haar, Secretary

ATTEST:

__________________________________
John K. Steffen, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
January 21, 2004

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on January 21, 2004 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Steffen, Chair; Katie Engler, Vice Chair; David Vander Haar, Secretary; John Yilek, Past Chair; Mary Bierkamp, Dan Kleinberger, Gaylen Knack and Tom Lovett. Also in attendance were: Ed Drenttel, Chair, Chapter 300 Committee; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair, Banking Law Committee; Claire Topp, Chair of the Nonprofit Corporations Committee; Bert Black of the Office of the Secretary of State; Steve Johnson, member of the Chapter 300 Committee; and Renee Anderson, Section Liaison.

Approval of Minutes

The minutes of the November 19, 2003 regular meeting of the Executive Council were approved.

Business and Professional Corporations

Mr. Vander Haar reviewed with the council the status of the proposed 302A legislation. Mr. Black indicated that the Secretary of State’s office had determined not to take a position on the substance of the proposed legislation.

Banking Law Committee

Ms. Bierkamp and Ms. Sommerfield reported on the upcoming first annual Banking Law Institute, which will be held on March 2. Ms. Bierkamp indicated that she was planning to resign as co-chair and that they were looking for another chair.

Securities Committee

Mr. Lovett reported that several subcommittees are reviewing the Uniform Securities Act. They have scheduled a meeting with the chair of the House Commerce Committee and are recommending that the Section not take a position at this time.

Partnership and LLC Committee

Mr. Kepple updated the council on his committee’s review of the Uniform Limited Partnership Act (2001). The committee anticipates that the Uniform Limited Partnership Act (2001) will be introduced in the 2004 Minnesota legislative session, together with the revisions recommended by the Partnership and LLC Committee.
Chapter 300

Mr. Drenttel and Mr. Johnson reported that the bill drafted by the committee repealing Chapter 300 in its entirety has been presented to the Department of Commerce and circulated among the insurance and utilities industries. The insurance industry has expressed concern about the impact of repeal on mutual companies. Minnesota Life is leading a group to address these concerns. They anticipate that the bill will be introduced next year.

Franchising

Mr. Knack reported that there have been few developments at the state level and they are awaiting new FTC rules.

Technology

Mr. Shriver reported that the pamphlet project is moving forward. The Section should be able to distribute these pamphlets through our Web site and make them available to law firms that want to send them out under their name. He is also working on cross links to the Corporate Counsel site.

Nonprofit Corporations

Ms. Topp updated the council on the status of their legislative proposal and reported that they are now focusing on the educational work of the committee and in particular outreach to rural practitioners.

Chair’s Report

Mr. Steffen indicated that he had received a communication from the State Bar concerning whether we wanted to participate in the CLE presentations at the annual meeting of the State Bar. After discussion of our past experience and attendance, the council determined not to actively pursue making a presentation at the annual meeting. However, Mr. Steffen indicated that if any of the committee chairs was interested in presenting a program at the annual meeting, he or she should follow up with him.

Vice Chair’s Report

Ms. Engler reported on planning for the Business Law Institute and indicated that they were working on finalizing speakers for the upcoming institute.

Secretary of State

Mr. Black indicated that the Secretary of State’s office will be introducing some housekeeping amendments in the 2004 legislative session that are intended to be noncontroversial.

Business Pro Bono

Mr. Lovett updated the committee on the work of the special task force on business pro bono. They anticipate agreeing on organizational structure by March 1.

Section Liaison

Ms. Anderson reported that the Bar Association is gearing up for the legislative session and the upcoming convention and is also starting to work on budgets for 2005.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,


__________________________________
David M. Vander Haar, Secretary


ATTEST:


__________________________________
John K. Steffen, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
November 19, 2003

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on November 19, 2003 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Steffen, Chair; Katie Engler, Vice Chair; David Vander Haar, Secretary; Phil Kunkel, Treasurer; John Yilek, Past Chair; Mary Bierkamp, Dan Kleinberger, Gaylen Knack and Tom Lovett. Also in attendance were: Jennifer Reed Bishop, Vice Chair of the Nonprofit Corporations Committee; Laura Carlson, Newsletter Editor; Ed Drenttel, Chair, Chapter 300 Committee; Timothy Hearn, Chair of the Securities Committee; Lisa Holter, Legislative Coordinator; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Steven M. Rubin, Vice Chair, Business and Professional Corporations Committee; Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair, Banking Committee; Bert Black of the Office of the Secretary of State; Donna Watz of the Department of Commerce; and Renee Anderson, Section Liaison.

Approval of Minutes

The minutes of the September 17, 2003 regular meeting of the Executive Council were approved.

Treasurer’s Report

Mr. Kunkel reported on the most recent available financial reports.

Chair’s Report

Mr. Steffen indicated that given the number of legislative proposals that needed to be discussed at the meeting, he was going to use the chair’s prerogative to start with those proposals and then request committee reports as time permitted.

Business and Professional Corporations

Mr. Vander Haar reviewed with the council proposed changes to Chapter 302A that were being recommended by the Chapter 302A standing committee. After extensive discussion, the council approved the proposed Chapter 302A amendments. Mr. Yilek dissented, expressing concern with provisions that limit dissenters rights for certain transactions involving publicly traded companies and permit non-public corporations to act by less than unanimous consent in certain circumstances. Mr. Black indicated that the Secretary of State’s office had not yet taken a position on the proposed legislation.

Nonprofit Corporations

Ms. Reedstrom Bishop reviewed with the council proposed changes to Chapter 317A clarifying that member ballots could be effected by electronic communication. She indicated that the Attorney General’s office approved of the changes. The council unanimously approved the proposed amendments.

Partnership and LLC Committee

Mr. Kepple reported on his committee’s review of the Uniform Limited Partnership Act (2001) and the council unanimously approved supporting efforts of the NCCUSL Commissioners to obtain enactment of the Uniform Limited Partnership Act (2001) in the 2004 Minnesota legislative session, together with the revisions recommended by the Partnership and LLC Committee.

UCC

Mr. Kunkel updated the council on various legislative initiatives being considered by his committee, including amendments to Article 1 and revisions to the central filing system for agricultural liens. He indicated that the agricultural lien committee may be pursuing amendments to the central filing system this session and that he may be back to the council for support, although it would not be a business law section initiative.

Chapter 300

Mr. Drenttel reported that the committee has drafted a bill repealing Chapter 300 in its entirety. The bill has been presented to the Department of Commerce and circulated among the insurance and utilities industries. At this point, he isn’t aware of any opposition, but he anticipates a few more meetings before finalizing their proposal.

Banking Law Committee

Ms. Bierkamp and Ms. Sommerfield reported on the upcoming first annual Banking Law Institute, which will be held on March 2. The one-day seminar will feature national speakers and prominent local attorneys and representatives from major banks.

NCCUSL

Mr. Kleinberger reported on efforts by the ABA and NCCUSL to set aside their turf wars and develop a Model Entity Transaction Act. If an Act is developed, it will require a tremendous amount of study by the states. Issues include whether it will inadvertently undercut state antitakeover provisions, the question of protecting nonprofits in connection with entity transactions and the concept of a “division” which would permit the original entity to disappear.

Secretary of State

Mr. Black indicated that the Secretary of State’s office does not have the capacity to process paper filings of annual reports and urged everyone to have their clients file on line.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,


__________________________________
David M. Vander Haar, Secretary


ATTEST:


__________________________________
John K. Steffen, Chair



Business Law Pro Bono Task Force 9-24-03

Meeting Chaired by Joe Genereux and Jim Baillie

Agenda Handed Out

Attendees included: Candee Goodman , Tom Lovett, Galen Robinson, Eve Borenstein, Roy Ginsburg, Yvonne Ho, Dick Lareau, Denise Roy, Karen Canon, Sue Pontinen, Smith, Sondra Reis, Charley Ravine, Neil Meyer.

Staff: Nancy Wallrich, MSBA

1. Preliminary Discussion

Jim Baillie shared with the task force that the Minnesota State Board of Governors approved the creation of the BLV at the Bar Leader Conference Board of Governors meeting. Pro Bono was discussed at length at the bar leaders meeting. Joe’s presentation to the bar explained the business law pro bono process well and there was no dissent at the board of governors meeting.

Jim continued that we have more money than we thought we would have. In looking forward, he reiterated that the report called for continuing the Business Law Pro Bono Task Force as necessary. A “hand off” will be made soon to the new advisory board but board meetings will be open and all who have interest will be able to attend. The Board will be appointed by the bar president and will be comprised of an equal number of community side representatives and volunteer side representatives.

Jim continued by noting that a formal corporation, may or may be set up given the arguments both ways.

Jim suggested Joe would be an appropriate chair and he (Jim) will move on. Jim will show up when necessary.

2. Board make up:

A. What is VLN's role on the board?

One consideration is to have a VLN board member on the BLV board and have staff participate as necessary. A question of conflict arises, however.

If the representative from VLN comes in as Executive Director then he/she ought not to be on the board. If he/she is not in that role, the board representation is appropriate.

B. Other board seats:

General discussion was held of what groups should be represented on the board: (1) Need non-profit and micro enterprise representatives. Charley Ravine and Yvonne Ho both expressed interest in sitting on the board. (2) lawyers; (3) corporate counsel (4) business law section members; (5) outstate representatives (Mary Mathews discussed); (6)solo small firm lawyers.

C. Will substitution be allowed or is one person required to sit on the board?

Discussion was held and comments from the floor were taken:

* In the immediate term it will be helpful if one person holds the board seat since the person will be informed as to the process.

* Need to avoid slotting for a particular organization so that the board will be able to change.

* This is an argument for not having a separate 501(c)(3) organization. We need to look at the interest (e.g. MEDA, Women Venture) versus the organization itself.

* Do not want to slot on a one-to one ratio.


D. How to Reach Outstate

Jim found a list of outstate micro enterprises but has not had much contact with them. Phil Goldman talked to a number of them preliminarily. They would be a good source of volunteers. It is
helpful to obtain input from outstate providers into what the task force is doing.


E. General Comments about the Makeup of the Board

* Law schools need to play a role on the task force. Need to have a link to the students. May be a potential resource for lawyers. It provides mentor opportunities for lawyers and reinforces pro bono.

* Legal Aid can help move this project forward. Micro enterprise helps current clients. Whether a representative from Legal Aid is necessary is up to group. Given that businesses are not Legal Aid clients, Legal Aid can be on the mailing list, but not sure if Legal Aid is needed at this time.


* The board needs to use CLE as a way to work with the legal community. There is a nuts and bolts training component present that will facilitate pro bono work.

* Community representation needs to include one or two ethnic chambers on the board and the rest should be on the mailing list.

* The board needs one law firm pro bono coordinator.

* Baillie asked for other suggestions. Call and e-mail him with names, by October 1.

3. Fundraising- General Comments

* Fundraising is high on the list. Preliminary discussions with Susan Curry indicate she will develop a template and provide research for $4,000.

* Eve said we can go directly to the lawyer community for funds and say that there is an immediate need because the project is immediate. The lawyers are still out of pocket, so the tax break is irrelevant.

* Law firms can do it as marketing and take a business deduction.

* This program will help firms meet goals.

* Lawyer side large firms will contribute small amounts and will only contribute so much. Jim does not want to be competitive with VLN etc. for the same dollars.

* Make money available from IOLTA and other state funded organizations. Be aware of foundations interested in community development.

* Grant making is more competitive. It is tough for a new organization to raise money, it will be a longer process of 6-9 months.

* Need to locate and apply to small family foundations, or other small foundations looking for places to put 5-10 thousand. These foundations have less strict requirements.

A. Working with Susan Curry.

Temporary committee will be appointed to devise a fundraising plan.

The committee will ask Susan to tell us what we need to fundraise.

4. Structure of the New Organization Post Task Force

Jim’s General Comments: We have been assuming VLN will be the administrator. We need a rough idea that actual case placement will be done at VLN and will use VLN staff. The task/force board needs to know what kind of reimbursement it needs.

Karen Canon offered: VLN has the staff because initially the business law pro bono project will be small. VLN currently has a small data base of lawyers who are willing to volunteer in the business law pro bono area. VLN will not initially recruit because there are more lawyers available than cases at this point.

Other Comments:

* It is critical that we get back to people who call looking for cases. The mechanism must be in place to case match.

* The program will need to be publicized.

* VLN needs to know about how to structure the mechanics.

* Greater Minnesota is currently pretty well served.

* A group of volunteers needs to be assembled to work with VLN on the issue of reimbursement and how to start off the project at a low level.

* Need to be running a pilot because we are on a learning curve now. We should get going with some cases and have a definite goal of obtaining a certain number of cases.

* Need to coordinate client needs with the pilot need.

* Design a pilot and design a relationship with VLN for the short term. Structure will be discussed.

* Brad Thorsen asked whether he should be sent to national conference. Joe should be sent too.

A. Outreach to Clients/Community Organizations

Do not go to clients directly. Organizations will bring clients to the program. It was suggested that various organizations meet and talk about joining efforts and discuss how to work with clients.

Charley said needs to know how MAP fits in and coordinate services with VLN.

Sondra wondered how the existence of the program changes the procedure of how MCN should work with clients.

VLN will do data management and matching and carve out Map etc. The nuts and bolts of working with VLN needs to be discussed at the subcommittee level.

Need for community organizations to meet to separately. Non-profits meet every month an MAP and MCN will add the business law pro bono program, including micro enterprise, to the agenda at the next meeting.

Yvonne said that other than MEDA, other micro enterprises do not do a lot of referring to private lawyers. It will be helpful to learn from the non-profits. Micro enterprise organizations do not meet on a regular basis. She will confer with the micro enterprise people.

Jim suggested the program start with a limited number of micro enterprise organizations. Many of the micro enterprise organizations are mostly served by existing relationships. They may be able to use the program for overflow work.

There are many lists of non-profits but not micro enterprises.

5. Eligibility Guidelines:

Jim recapped that many factors will impact eligibility and the task force decided it was not able to make a decision at this time and left it to the advisory board to decide. He expressed the need to have a separate group to determine eligibility. He suggested a separate subcommittee on eligibility.

The subcommittee should look at non-profits and determine if the board members are eligible or are their clients people who are low income.

Galen will participate in development of guidelines.

Some non-profits have other sources of funding. That needs to be considered.

6. Outreach to Lawyers

Eve reminded the task force that if one is giving advice on tax, a new exemption will be rolled out this January. Can do a great community service by walking people through the new form. Eve would like to be on the board and she will train on the non-profit side.

VLN does lots of training and works a lot with the Coalition. They can offer CLE at lower price than profit making entity.

Do not need to solve problems just identify needs.

7. Launching the program:

Joe cautioned that the program is not ready for birth yet. Minnesota Lawyer featured the business law pro bono program. Joe was also interviewed for Business Report.

Joe stressed the importance of matching. He suggested a solution that the program start off with five cases and as we are starting we will handle the first five volunteers and make others wait while we get funding. Doing a few cases and managing the process well will help with fundraising.

Other comments:

* The structure committee needs to look at budget and get an idea of how many cases the program can handle.

* A generally accepted idea is to complete matching on some cases to get an idea of how to handle many more cases.

* The name of the business law pro bono project should be given to a public relations person to review. Nancy W. will contact the public relations pro bono person.

8. Next Steps:

* Let Jim or Joe know if you are interested in serving on the board.

* Separate structure, fundraising and eligibility subcommittees will be appointed.

* The subcommittees will need to meet before the full board meets.


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
July 16, 2003

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on July 16, 2003 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Steffen, Chair; Katie Engler, Vice Chair; David Vander Haar, Secretary; Phil Kunkel, Treasurer; John Yilek, Past Chair, Mary Bierkamp, Dan Kleinberger, Tom Lovett and Linda Rusch. Also in attendance were: Tim Hearn, Chair of the Securities Committee; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Jennifer Reedstrom Bishop, Vice Chair of the Nonprofit Corporations Committee; Steve Rubin, Vice Chair of the Business and Professional Corporations Committee; Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-chair of the Banking Committee; Sean Kearney, Newsletter Editor; Bert Black of the Office of the Secretary of State; and Donna Watz from the Minnesota Department of Commerce.

Approval of Minutes

The minutes of the May 21, 2003 regular meeting of the Executive Council were approved.

Treasurer's Report

Mr. Kunkel requested that Mr. Vander Haar report on the year end results. Mr. Vander Haar reported that while final reports for the year were not in, based on preliminary reports the Section has run a $6,600 deficit for the year. Mr. Vander Haar reported that due to a variety of initiatives, the Section has been successfully reducing its fund balance and the Section may want to monitor the impact of the dues increase and consider whether additional increases may be warranted to assure that the Section is breaking even.

Chair's Report

Mr. Steffen welcomed the newly elected and returning Executive Council Members and the chairs, vice chairs and liaisons and encouraged everyone to think about before our next meeting whether there are changes, new areas of law or new specialties that we should be addressing through the committee structure of the Section.

Business and Professional Corporations

Mr. Vander Haar indicated that the standing committee on changes to 302A would be reconvened in September and requested that if anyone has persons within their firm that may have an interest in participating that they contact him directly. In addition, if any one who is not interested in participating on the committee has suggested changes to 302A they should contact Mr. Vander Haar.

Nonprofit Corporations

Ms. Reedstrom Bishop reported that her committee was working on clean up to certain aspects of the nonprofit corporations statute, in particular provisions relating to member voting that were deferred in the 2002 legislative session.

Banking

Ms. Bierkamp and Ms. Sommerfield reported that the concept of an annual dinner meeting of the Banking Committee was not well received and that they were looking at trying to establish a banking institute and were continuing to work on lunch time CLEs of interest to banking lawyers.

Securities

Mr. Hearn and Mr. Lovett reported that they were beginning the process of reviewing changes to the Uniform Securities Act and would be seeking participants in that process.

Partnerships/LLC's

Mr. Kepple indicated that their primary focus has been on the 2001 Limited Partner Act and that they expect a report and recommendation by the end of the summer.

Chapter 300

Mr. Black reported that the committee was close to the end of their analysis, was making good progress and that there was a good chance that the committee would have proposed legislation for the next session.

UCC

Mr. Kunkel reported that they had completed the Article 9 brochure and that they were beginning to consider whether Minnesota should adopt an omnibus receivership statute. Mr. Kunkel indicated that he suspects that it will take some time to complete their review. He reported that they will also be looking at amendments to the Central Notification System.

Technology

Mr. Shriver reported that subscriptions to the Section's list serve are pretty encouraging, but reminded people that it is only available to those who have subscribed to it. It is intended to be more interactive, a practice chat room and people may want to consider using it for their committees.

Business Pro Bono Task Force

Mr. Lovett indicated that the final meeting of the task is scheduled, that they will be voting on the report and that he suspects that it will be adopted. The report focuses on two areas: nonprofits and micro-entrepreneurs. The task force is recommending that a new organization similar to VLN be formed, the Minnesota Business Lawyers Volunteer Assistance Program. Mr. Lovett will distribute a final report once adopted.

Newsletter

Mr. Kearns reported that the most recent issue has gone to press.

Secretary of State

Mr. Black reviewed the state budget reductions and how they are impacting the services provided by the Secretary of State. He reported that counter service ends at 3:00 p.m., only one person is staffing the counter and services may need to be further curtailed depending on what happens. He also reminded the Council that domestic annual registrations can now be done on line and that the Secretary of State's office cannot guaranty that annual registrations will get into the database if you don't do it on line. They are strongly recommending that registrations be done on line as processing the paper filings is their lowest priority.

Department of Commerce

Ms. Watz indicated that the Department would be interested in participating in the review of the Uniform Securities Act and that the Department was putting an emphasis on working with business, especially insurance and e-commerce. She also indicated that the uniform conveyancing forms will no longer be in the Department's rules, but will be available on the Department's web site.

Greater Minnesota

Mr. Kunkel reported that the program in St. Cloud has been scheduled for September 25. Professors Kleinberger and Rusch, among others, are participating. They are hoping to have 20 to 25 participants and the Stearns-Benton County Bar Association will be a co-sponsor.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,


__________________________________
David M. Vander Haar, Secretary


ATTEST:


__________________________________
John K. Steffen, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
May 21, 2003

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on May 21, 2003 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Yilek, Chair; John Steffen, Vice Chair; Katie Engler, Secretary; David Vander Haar, Treasurer; Dan Kleinberger, Gaylen Knack, Tom Lovett and Phil Kunkel. Also in attendance were: Linda Rusch, newly-elected member of the Executive Council, Pat Shriver, Chair of the Technology Committee; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Tim Hearn, Chair of the Securities Committee; Steve Rubin, vice chair of the Business Corporations Committee; Jennifer Reedstrom Bishop, vice chair of the Nonprofit Corporations Committee; Lisa Holter, Legislative Coordinator; Laura Carlson, Newsletter Editor, and Meaghan Harper of the MSBA.

Approval of Minutes

The minutes of the March 19 regular meeting of the Executive Council and the April 1 special meeting were approved without changes.

Treasurer's Report

David Vander Haar reported that we currently have a $4,400 deficit in the operating account. We have authorized a dues increase and that will help to cover the ongoing expenses.

Chair's Report

John Yilek reported that the nominating committee, comprised of the current officers, had met and had presented two individuals to the annual meeting for election to the Executive Council. Tom Lovett was elected to a second term and Professor Linda Rusch of Hamline Law School was elected for the first time. The Executive Council needs to elect officers for the coming year; the current officers have agreed to move up one slot and Phil Kunkel has agreed to be nominated to serve as treasurer. Mr. Kunkel was then duly elected to the position of treasurer beginning July 1st.

Mr. Yilek also thanked all the speakers and planners who participated in the Business Law Institute. The event was very successful with the second highest attendance ever.

Vice Chair's Report

John Steffen had traveled to Chicago on May 6, 2003 for a meeting of the incoming chairs of the Business Law Sections in state bar associations across the country. The event was hosted and paid for by the ABA Business Law Section who wants to build relationships with state bar sections.

One of the presenters at the meeting was Minnesota's Jim Baillie talked about the business pro bono initiative. Changes to the ethics rules were also discussed. These proposed changes are rooted in the corporate fraud cases; Minnesota has a committee looking at these changes. Mr. Steffen did not know if the meetings will continue or if the ABA will continue to fund the travel.

Nonprofit Corporations

Jennifer Reedstrom Bishop reported that a meeting had been held in April and a survey of the members was conducted. Tax topics are of particular interest and so they will reach out to the Tax Section to see if there is interest in working together. Sub-groups were formed to work in three areas: (1) the LLC issue in conjunction with the LLC committee; (2) complete the development of form articles of incorporation, bylaws and other foundation documents; and (3) develop technical amendments to chapter 317A.

Business and Professional Corporations

Mr. Vander Haar and Steve Rubin reported that they will be reconvening the chapter 302A group with the goal of introducing changes for consideration in the 2004 session.

Franchising

Gaylen Knack said that lawyers in this area are waiting for the FTC to update the rules and separate product distribution from franchising. They are not certain of the content of the rules but don't expect big changes in Minnesota.

Technology

Pat Shriver said that the Section listserv will be launched in the next week with a message from Mr. Yilek. The Business Organizations pamphlet is done once Lloyd Kepple's comments on behalf of the LLC committee are received. Mr. Shriver invited other committees to produce pamphlets that can be posted on the Section's web page.

UCC

Mr. Kunkel reported that the changes to Articles 3 and 4 have passed the Legislature. The revisions to Article 1 are not moving in any state. He expects the 2004 session to be busy with Articles 1, 2 and 2A for consideration. Article 7 changes are in process and may be ready for 2004. The revisions to the Central Notification System for Farm Product Liens (chapter 336A) are on hold. One of the outstanding issues is whether there is money available for the Office of the Secretary of State to implement the changes.

Work begins on May 21 on the receivership laws that are found throughout Minnesota Statutes. The proposal may be to create one omnibus statute and the Real Estate Section will be involved in the work.

Professor Dan Kleinberger noted that the remedy provision in Article 2 allows the parties to agree to specific performance and the term "may" be enforced by the courts. The drafters consider this a "gentle prod" to courts not to reject this type of term.

Partnerships and LLCs

Mr. Kepple said that the primary focus of the committee is to finish the review of the 2001 Uniform Partnership Act. Meetings will be held in June and July and a report produced.

Report from Professor Kleinberger

Professor Kleinberger reported that the corporate bill went nowhere in the 2003 session and the cooperative bill did pass. We will have a new chapter 308B and this cooperative will be a parallel entity to the cooperative governed by chapter 308A. The new entity will be permitted to "check the box" at the IRS and will have non-patron members. The Section had objected to the cross-entity merger provisions, as had the NCCUSL Commissioners. After discussions, the 308B coops will be allowed to merge into an LLC but the reverse transaction is not authorized.

The cross-entity merger projects sponsored by NCCUSL and the ABA will include all entity types. There will be a drafting session in Chicago before the reading in August. Peace has not been achieved between the two efforts and so Minnesota will want to review both proposals. Professor Kleinberger expects lots of work because Minnesota hasn't used the model business corporations and LLC acts.

NCCUSL has implemented a new project - to develop a new uniform LLC Act. This will be a three-year process and Professor Kleinberger will be co-reporter with Carter Bishop. Dean Harry Haynsworth and Judge Harriet Lansing are on the committee.

Securities

Tim Hearn and Tom Lovett will hold a planning meeting June 26th. They will begin discussing the Uniform Securities Act so that recommendations can be made to the Legislature.

Legislation

Lisa Holter indicated that reports had been received on all the legislative initiatives we had been following.

Business Pro Bono Task Force

Mr. Lovett indicated that the group wants to work with existing entities to coordinate activities. There will be a report to the state convention in June. The key question is funding.

Newsletter

Laura Carlson said there is an extreme need for topics for articles. "Topics" does not include authorship so members were encouraged to send ideas to an editor.

Greater Minnesota

The Business Law Institute panel on agriculture enterprise integration was well received according to Mr. Kunkel. There will be a program in St. Cloud in October with the specific date dependent on the availability of Professors Rusch and Kleinberger. The Stearns-Benton County Bar Association will be a co-sponsor.

Bar Association

Meaghan Harper had nothing to report.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,


__________________________________
Katherine A. Engler, Secretary


ATTEST:


__________________________________
John A. Yilek, Chair




MINUTES OF SPECIAL EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
April 1, 2003

A special meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on April 1, 2003 via telephone conference call. The following members of the Executive Council were present: John Yilek, Chair; John Steffen, Vice Chair; Katie Engler, Secretary; Dan Kleinberger and Tom Lovett. Also in attendance were Lloyd Kepple, chair of the Partnerships/LLC Committee; Steve Rubin, vice chair of the Business and Professional Corporations Committee; Lisa Holter, Legislative Liaison and Bert Black of the Office of the Secretary of State.

A quorum of the Executive Council was present.

The purpose of the meeting was to discuss two bills currently in process at the Legislature. One bill involves cooperatives and the other corporations. Lisa Holter talked to Lloyd Grooms, lobbyist for the Bar Association, and learned that there was more urgency around the cooperative bill because of a hearing on April 1, 2003 in the House Commerce Committee. The bill will go to the Civil Law Committee and Mr. Grooms recommended testifying at Civil Law because the issues the Section would present are within that committee's jurisdiction.

Dan Kleinberger presented some background information about the corporations bill. The bill, SF 1093 and HF 1188, would impose new duties towards outside groups on directors when making decisions. The proposed change would have directors serve multiple masters and does not address the issues presented by Enron, World Comm and similar situations. The proposed changes would have a disparate impact on "Mom & Pop" corporations.

Mr. Kleinberger indicated that there were both policy and strategic issues to be addressed. Mr. Grooms had indicated to Ms. Holter that it was his impression that the bill was not moving. If the Section was opposed, Mr. Grooms could communicate that position and that would result in the bill not being heard.

Mr. Kleinberger proposed the following motion:

That the Business Law Section of the Minnesota State Bar Association oppose SF 1093/HF 1188 for the following reasons: (1) passage would take Minnesota law out of the mainstream of corporate law; (2) by establishing a provision that is unlike the laws found in the other states, Minnesota's uniqueness would cause uncertainty; and (3) the uncertainty about the impact of the provision would cause harm to existing Minnesota corporations and would lead to massive re-incorporation in other states. The Business Law Section urges further study of the language that has been proposed.

The motion was seconded. After discussion, a vote was taken and the motion passed.

Mr. Kleinberger then presented background on the cooperative bill. This is HF 984/SF 679 and it creates a new cooperative statute that fits the IRS "check the box" regulations. The bill includes provisions on cross-entity mergers, domestications and similar transactions. The drafters of the bill used language from an old National Conference of Commissioners on State Laws (NCCUSL) draft from the work being done on cross-entity mergers. Unfortunately, the NCCUSL drafting committee found many problems with the language the drafters chose including such thing as there are no transition provisions, creditor's rights are not handled; there are no dissenter's rights and the language does not say whether other Minnesota entities could use the provisions.

Mr. Kleinberger recommended that the Section take no position regarding the cooperative provisions and focus on the cross-entity provisions. His proposal was that this language should be delayed until the problems are solved and that the provisions could be used by all Minnesota entities.

Bert Black indicated that he had communicated the costs of implementation to Mark Hanson, an attorney who is responsible for the initiative. The Office of the Secretary of State estimates that it will cost between $50,000 and $90,000 to implement the bill, whether the cross-entity provisions are included.

Tom Lovett, one of Mark Hanson's partners, had talked to Mr. Hanson about the initiative. The lack of "check the box" availability is the driving force behind the legislation. Another issue is that it is difficult for cooperatives to convert to another type of entity - several steps including using an entity formed in another state, is required. With only 600 cooperatives in Minnesota, the cross-entity provisions would affect a small number of entities.

Mr. Kleinberger indicated that the multi-step conversion process is why NCCUSL and the American Bar Association are working on drafting legislation to deal with this issue. The NCCUSL committee had its last drafting meeting March 28-30, 2003 and there will be a full vote on language this summer. Draft language should be available for consideration in the 2004 legislative session.

Ron McFall, an attorney at Lindquist and Vennum and a supporter of the legislation, joined the call. He explained that the goal is maximum flexibility and protection for cooperative members. There was discussion of the issue of cross-entity transactions and it was ultimately agreed that Mr. Kleinberger would discuss the Section's concerns with Mr. McFall and Mr. Hanson. Mr. McFall then left the call.

Mr. Kleinberger offered the following motion:

that the Business Law Section of the Minnesota State Bar Association express concern about those portions of SF 679/HF 984 that allow for merger, division, exchange, conversion or domestication across entity types (cross entity provisions). These provisions (they begin at section 69 of the first engrossment of SF 679) have unintended effects on cooperatives and other entity types in Minnesota. The National Conference of Commissioners on Uniform State Laws has been working in the area of cross entity provisions and will vote on proposed uniform laws later this year. The National Conference's language will be available for introduction in the 2004 session of the Minnesota Legislature and so the Business Law Section urges further study on the cross entity provisions contained in SF 679/HF 984.

The motion was seconded and the members of the Executive Council approved the motion.

Katie Engler was directed, as secretary, to forward the text of the motions to Ms. Holter and to the members of the Executive Council.

The meeting was adjourned.

Respectfully submitted,


__________________________________
Katherine A. Engler, Secretary


ATTEST:


__________________________________
John A. Yilek, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
March 19, 2003

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on March 19, 2003 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Yilek, Chair; John Steffen, Vice Chair; Katie Engler, Secretary; David Vander Haar, Treasurer; Mary Bierkamp, Dan Kleinberger, Gaylen Knack, Tom Lovett and Phil Kunkel. Also in attendance were: Pat Shriver, Chair of the Technology Committee; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Tim Hearn, Chair of the Securities Committee; Steve Rubin, vice chair of the Business Corporations Committee; Ed Drenttel, Chair of the Chapter 300 Committee; Lisa Holter, Legislative Coordinator; Bert Black of the Office of the Secretary of State; Donna Watz of the Department of Commerce; and Meaghan Harper of the MSBA.

Approval of Minutes

Katie Engler presented the minutes for the January meeting and for the special meeting held in February. For the January meeting, two corrections are needed: the spelling of Meaghan Harper's name and to fix a percentage in the report from the Office of the Secretary of State. With these corrections, the minutes for both the regular meeting and the special meeting were approved.

Treasurer's Report

David Vander Haar presented the financial report. Through January 31, 2003, the Section has a small deficit. Mr. Vander Haar noted that there were some large expenditures last year (for lobbying and Habitat for Humanity) that have contributed to the small deficit.

Chair's Report

John Yilek began his report with a request that we consider whether Section dues should be raised. Annual dues are $12, one of the lowest amounts in the Bar. We have about 1200 members and a large positive balance. The discussion revolved around whether the dues cover our annual expenses and whether there are new expenses, such as for information technology services that would warrant an increase. One of the larger expenses is for lobbying services during the legislative session and we will be asked to cover a percentage of that amount. After considering that an increase to $20 was too much at one time, Mary Bierkamp offered the following motion:

The Business Law Section dues will increase to $15 per year effective July 1, 2003 and that the Executive Council will consider whether an increase or decrease is appropriate each year.

The motion was seconded by Mr. Vander Haar and was approved.

The second item in Mr. Yilek's report is that the annual meeting will be held during the Business Law Institute from 9:00 to 9:30 am on May 13, 2003. Mr. Yilek would like to do substantive reports, as was done last year. Lloyd Kepple, Phil Kunkel, Lori Sommerfield or Ms. Bierkamp and Claire Topp or Jennifer Reedstrom Bishop volunteered to make reports on behalf of their committees. Mr. Yilek also encouraged all to attend the Institute.

The third item was that the officers of the Section will meet as the nominating committee before the May Executive Council meeting. A Treasurer will be nominated for approval at that meeting. One or two members are needed for the Council; Tom Lovett's term is about to expire and one other will be presented for election at the annual meeting.

Vice Chair's Report

John Steffen asked that members of the Executive Council attend the annual meeting.

Business and Professional Corporations

Mr. Vander Haar and Steve Rubin reported that the legislative proposals had been discussed with Representative Anderson. He indicated that the proposals were a reaction to Enron and he was told that the proposed changes to section 302A.251 are controversial as is the proposed standard for director responsibilities. Passage of either change would cause corporations to leave Minnesota and it is not known if the proposals will move forward.

The 302A committee will be convened shortly to begin work on legislative proposals for 2004.

Nonprofit Corporations

Ms. Reedstrom Bishop said that a special meeting of the committee would be convened on April 17, 2003 to review the proposed LLC changes to remove "business purpose." The Office of the Attorney General had been contacted on the issue and they are busy with audits of nonprofits.

Banking

Ms. Bierkamp said that the annual meeting of the committee had been postponed to April 8, 2003. Kevin Murphy, deputy commissioner at the Commerce Department, is the speaker.

Preliminary work has begun on a full day banking seminar to be held in the next year or two. It will probably be a combination of refresher and "hot topics."

Securities

Mr. Lovett and Tim Hearn reported that Bob Tennessen has forwarded the uniform securities amendments from the National Conference of Commissioners on Uniform State Laws (NCCUSL). They will form a committee to do a review and would appreciate assistance from those who have already done a review of a uniform laws proposal.

Pro Bono Business Task Force

Mr. Lovett stated that a full report on the topic of business pro bono work is being prepared. One of the findings is that large law firms are doing a good job delivering services to small businesses. Where the firm is smaller, or has no pro bono coordinator, services are not as prevalent. The report will focus on the smaller firms and in-house counsel and how they can provide services. There also may be a request for funds to support a coordinator.

Partnerships and Limited Liability Companies

Mr. Kepple said that completion of the review of the 2001 Uniform Limited Partnership Act is expected in April or May and a report will be made to the Council. He is also coordinating with NCCUSL's commissioners on the effort.

The committee is also available to work with the Nonprofit Committee on the issue of changing the business purpose requirement in the LLC statute.

Chapter 300

Monthly meetings have taken place, according to Ed Drenttel. A review of each part of the chapter is underway and they are looking for representatives of the insurance sector. The work on the utilities part of the chapter is complete.

Uniform Commercial Code

Mr. Kunkel said there will be luncheon program later in the day that will feature Rob Beattie talking about the revisions to Article 2. The materials for the program are already posted on the Section's website.

Revisions to the Article 9 brochure are in process and should be available shortly. The work on Chapter 336A of Minnesota Statutes, the Central Notification System for Farm Product Liens, has become controversial and so has slowed.

The bill to make the NCCUSL revisions to Articles 3 and 4 have now been combined with the Article 1 revisions. The choice of law provision in Article 1 has slowed the legislative process and the bill will probably not pass in 2003 as legislators wait to see what happens in other states.

Greater Minnesota

Mr. Kunkel has approached the Stearns-Benton County Bar Association about hosting an outstate meeting and they are interested. Dan Kleinberger and Linda Rusch of Hamline are the likely faculty members.

Franchising

Gaylen Knack indicated that there was nothing to report.

Technology
Pat Shriver said that the Section would go live with the listserv during the week. He asked Mr. Yilek for an introduction that can be sent to Section members explaining the listserv. He will also place a notice about the listserv in the newsletter.

Mr. Yilek indicated he would also promote the listserv at the annual meeting and asked that Mr. Shriver follow up on the business entity pamphlet.

Office of the Secretary of State

Bert Black asked for the Council's support on the "revenue enhancement" proposal being offered by the Secretary. The reason for the proposal is that the Governor's budget cuts the Office's budget by 15% or $1 million. This cut will fall largely on the business part of the operations, rather than the voting systems. The Secretary is looking for additional revenues to lessen the impact on start-ups. The Secretary is asking for a resolution of support for her proposal to raise filing fees and dedicate the additional revenues to the operation of the Office.

The impact of the cut, if no new revenues are found, will be the closing of the front counter, no annual registration filings with the accompanying loss of revenues; reducing the availability of the call center or its elimination; and a degradation of records.

Mr. Yilek reported that Secretary Kiffmeyer had contacted him about the proposal. She told him that many states are presenting drastic fee increases to users of business services.

Mr. Vander Haar expressed his desire to keep the level of service that is available now. He is concerned that filing fees paid by businesses would be used for voting technology and wants business fee increases dedicated to providing business services.

Mr. Black said that the fee increase would keep service at the January 2003 level, assuming a continued rate of filings. The revolving fund would be described in Chapter 5 and would include a cap on the amount of money deposited in the general fund. The revolving fund dollars would be used to support both voting and business systems with the support for voting systems limited to two years.

Mr. Yilek asked Mr. Kunkel for impressions of how the fee increase would impact outstate practice. Mr. Kunkel indicated that the proposal is not a major problem and could be a positive if web-based filing and searching will be funded by the increases.

Mr. Vander Haar moved:

that the Business Law Section of the Minnesota State Bar Association support the proposed fee increases at the Office of the Secretary of State described at the March 19, 2003 meeting of the Executive Council. This support is given to maintain services for businesses at the Office. The Section is in support of the increases only if the additional funds generated by the increases are dedicated to the Office for its operation.

The motion was seconded. Ms. Engler indicated that she would abstain from voting as her salary is funded by the general fund and could be affected by the proposal.

The motion was approved and will be forwarded to Lisa Holter for use during the legislative session.

Mr. Black indicated that web-filing capability can be expected before June 30, 2003 and will begin with the UCC-1.

Commerce Department

Donna Watz indicated that 25 people are scheduled to receive lay-off notices on March 19, 2003.

The Governor's bill for the Department has three issues:

1) eliminating the Commissioner's duties under the Unfair Cigarette Sales Act;
2) changing processes involving large workers compensation insurers with more than $250,000 in premiums; and
3) Modifying the prior review and prior approval process for certain insurance policies to be offered for sale in Minnesota.

Newsletter

There was no report.

New Lawyers

There was no report.

MSBA

Meaghan Harper reported that one goal is enhanced publicity for seminars and so we should look for notices in the weekly web-based News Digest and through a link on the home page. To have a Section seminar included, the notice should be sent to Tina Jalivay.

Legislation

Ms. Holter said that we will continue to monitor the cooperative bill. There is a bill to amend the farm law, section 500.24. Mr. Black indicated he would send the bill number to the Executive Council listserv.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,


__________________________________
Katherine A. Engler, Secretary


ATTEST:


__________________________________
John A. Yilek, Chair


MINUTES OF SPECIAL EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
February 21, 2003

A special meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on February 21, 2003 via telephone conference call. The following members of the Executive Council were present: John Yilek, Chair; Katie Engler, Secretary; David Vander Haar, Treasurer; Phil Kunkel and Tom Lovett. Also in attendance were Lloyd Kepple, chair of the LLC/Partnerships Committee; Claire Topp, chair of the Nonprofit Corporations Committee; and Lisa Holter, Legislative Liaison.

The meeting was called to discuss proposed legislative changes to the Limited Liability Company Act (LLC) to change the definition of a foreign LLC to permit qualification of foreign nonprofit LLCs and to change the permitted purpose from a "business purpose" to a "lawful purpose." The changes would be made in Minnesota Statutes, sections 322B.03(20) and 322B.10.

After Lloyd Kepple had presented the proposed changes, John Yilek asked if there was anything that exists in the Nonprofit Corporation Act, Minnesota Statutes, chapter 317A, that needs to be incorporated into chapter 322B. The example Mr. Yilek gave was whether the Attorney General needs to have oversight of nonprofit LLCs.

The specific changes to the statutory sections were discussed and there was some consideration for making it possible to form a Minnesota nonprofit LLC but not to qualify a non-Minnesota nonprofit LLC.

The final agreement of the group was that Claire Topp would conduct a review by members of the nonprofit bar to consider the best way to proceed. She will bring a proposal back to the Executive Council.

Respectfully submitted,


Katherine A. Engler, Secretary

ATTEST:


John Yilek, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
January 15, 2003

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on January 15, 2003 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Yilek, Chair; John Steffen, Vice Chair; Katie Engler, Secretary; David Vander Haar, Treasurer; Mary Bierkamp, Dan Kleinberger, Gaylen Knack, Tom Lovett and Phil Kunkel. Also in attendance were: Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair of the Banking Committee; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Tim Hearn, Chair of the Securities Committee; Steve Rubin, vice chair of the Business Corporations Committee; Laura Carlson, co-editor of the newsletter; Lisa Holter, Legislative Coordinator; Bert Black of the Office of the Secretary of State; Donna Watz of the Department of Commerce; Cam Hoang, New Lawyers Section Liaison; and Michael Trittipo and Meaghan Harper of the MSBA.

Welcome and Approval of Minutes

Only one change (the date) is needed for the November, 2002 minutes. With that correction, the minutes were approved after a motion and second.

Treasurer's Report

Mr. Vander Haar distributed a report covering the five months ending November 30, 2002. We have a positive balance in our accounts. A question was asked whether each committee has a separate allocation and the answer is "no." Mr. Vander Haar was also asked the approximate cost of the Executive Council breakfast meetings and the response was $500-$600.

Nonprofit Committee

There was no report.

UCC Committee

Phil Kunkel reported that there would be luncheon meeting later in the day. Linda Rusch, a professor at Hamline Law School, will make a presentation on the revisions to Article 1. The committee is working on revisions to the brochure about Article 9 filings and hopes to have the draft in circulation soon.

The committee is also working on revisions to Minnesota Statutes, chapter 336A, the Central Notification System for Farm Product Liens. The plan is to have a proposal for enactment in the 2003 session. The revisions will encompass changes in Article 9 and federal law.

Mr. Kunkel then re-circulated a memorandum describing the revisions to Articles 3 and 4. Questions that had been raised at the November meeting about these revisions have been addressed and those with questions agree that uniformity with other states is important. Mr. Kunkel wants to include the changes to Articles 3 and 4 as part of SF 28. The bill is to be heard in the Senate Judiciary committee on January 16, 2003 and Mr. Kunkel would like to be able to tell the author and committee that the changes have the Section's support. A motion of endorsement was made, seconded and approved. Lisa Holter will forward the necessary report to MSBA headquarters.

Partnership/LLC Committee

Lloyd Kepple reported that the committee continues to work on the 2001 Limited Partnership Act. He expects the review to be completed in March, 2003 and that a bill will be introduced by the Uniform Law Commissioners. Although he does not have an agreement with the commissioners on when the bill will be heard, he expects cooperation as to its timing.

The committee has also been looking at changing the requirement that an LLC have a business purpose. This change would make it possible for nonprofit LLCs to be formed in Minnesota. Before this becomes a legislative proposal, representatives of the committee need to meet with Rep. Matt Entenza. Rep. Entenza has had concerns in the past about legislation that affects nonprofit entities.

Chapter 300 Committee

Bert Black made the report for the committee. Five people met on December 3, 2002 and reviewed a history of the group's work. Mr. Black has information from those who worked on changes for utilities. Those working on the changes affecting the banking community will be meeting on January 15 to create their list of issues. The full group will meet again on January 29 and will consider what work in the insurance area needs to be done.

The ultimate goal is to repeal chapter 300 and so the group is looking at what substantive provisions can be put in other chapters. The goal is to have something ready for the 2004 session.

Securities Committee

Tim Hearn and Tom Lovett reported that the Sarbannes-Oxley final rules from the SEC are expected January 15, 2003. The committee has a presentation planned for the third week in February. The topics are a 10K and proxy update as well as a business meeting.

Banking Committee

The committee's annual meeting will be held at the end of February according to Mary Bierkamp. This will be the first event of its kind and will be held at the Hyatt Whitney with Kevin Murphy, deputy commissioner for banking, as the speaker. A final date has not been selected.

Ms. Bierkamp asked for approval to spend up to $500 for those costs not covered by the fees paid by attendees. She was told that formal approval was not needed for so small an amount.
Lori Sommerfield reported that a breakout session for the Business Law Institute is planned on the topic of the HUD regulations implementing the Real Estate Settlement Procedures Act.

Ms. Bierkamp is working on increasing the participation of in-house counsel in Section activities.

Business Corporations Committee

David Vander Haar and Steve Rubin reported that they are considering convening the group to work on changes to Chapter 302A. The timing is tricky because of the legislative session and so they are looking at late spring. Anyone with an issue to be considered is asked to forward it to Mr. Vander Haar.

Mr. Rubin stated that the business organizations pamphlet was updated through 2001 and so additional work should be minimal.

Technology Committee

Pat Shriver reported that he had received the business organizations pamphlet from Mr. Rubin and that it had not yet been sent to the printer. He will send it to the Council for a final review. Any comments should be sent to Mr. Shriver. He encouraged other committees to create pamphlets and make them available for posting on the website.

Mr. Shriver will be sending the members of the Council a memorandum about the creation of the Section listserv. He will include a recommendation on how to proceed.

Franchising Committee

Gaylen Knack said there is no progress report on the Federal Trade Commission's rule revisions. A final draft may be available in March 2003. Once the rules are final, some state changes may be needed for conformity.

On the state level, Mr. Knack would like to meet with the new commissioner at the Department of Commerce and raise his awareness of franchising issues.

Chair's Report

Mr. Yilek introduced Meaghan Harper who has been assigned by the MSBA to be our Section liaison. She replaces Mike Trittipo. Mr. Yilek thanked Mr. Trittipo for his assistance to the Section and wished him success as he returns to the technology area within MSBA.

The Section has received a request for a presentation during the convention in late June. We have had mixed success in the past; there were 3 attendees in 2002. The MSBA office needs an answer by January 27 so anyone who wishes to volunteer should contact Mr. Yilek.

For the 2003 new member promotion, the MSBA office is requesting that we either waive section dues for new members or cut the dues in half. In response to a question about the budgetary impact of a reduction, the estimate was a small impact as the goal is 300 new members.

A motion was made and seconded to waive the full amount of section dues. There was a motion to amend the motion to a waiver of half the amount of the dues because of the value received from Section membership. The motion to amend was seconded and approved. The Section has approved a waiver of half the amount of Section dues so dues for new Section members will be $6.

Office of the Secretary of State

Mr. Black reported the Office of the Secretary of State (OSS) has been asked to cut 4+% of its annual budget before June 30, 2003. In reality, this is an l5% cut because of the timing and OSS took a $200,000 cut last year. OSS has lots of fixed costs because of technology and so estimates that it will need to make a 15% cut to make this target.

Mr. Black distributed information about the budget divisions in the House and Senate that are responsible for OSS's budget. He noted that most of the members in the House are new and the only attorney on the committee is Paul Thissen, an attorney at Briggs and Morgan.

Secretary Kiffmeyer says that the reduction in the appropriation will mean a service cut and will also have a revenue impact. OSS will be moving forward with a revolving fund concept but they do not know if they will be successful. A revolving fund would mean that fees collected were kept in the Office to support functions. Now, the Office operates on an appropriation from the general fund.

OSS will be accelerating the implementation of UCC filings via the web as part of their budget reduction efforts. This will be followed by web filing of annual reports.

Commerce Department

Donna Watz said the new commissioner is Glen Wilson of US Bank. He is not known and so there will be few, if any, conflicts with the areas that Commerce regulates. He wants to create a good environment for business.

Kevin Murphy is the only deputy commissioner who is staying. Patrick Nelson has been appointed deputy commissioner for enforcement and policy analysis. Other deputies will be announced in telecommunications and energy.

Legislative Liaison

Lisa Holter stated that nothing is moving forward at this point in the session. She will forward the UCC endorsement to the MSBA office and reminded committee chairs that proposals can be introduced at the end of this session for consideration in 2004.

Business Pro Bono Task Force

Mr. Lovett said that monthly meetings are being held and that there is a large need in the minority community. Because there are lots of relationships between some communities and firms, needs assessment is continuing. Once the need is assessed, the next determination is whether to make a presentation of the concept at the annual meeting.

Professor Dan Kleinberger wants to create an expansive business law clinic for students. The issue he sees is that when a business has some funds, how do you address taking fees away from the practicing bar.

Newsletter

Laura Carlson said that the next issue would have a seasonal name rather than a month designation. An issue can be expected at the end of January or early February.

Greater Minnesota

Mr. Kunkel said that a breakout session was planned on financing integrated agricultural transactions. The materials from the January 15th luncheon CLE will be posted on the website. Mr. Kunkel encouraged posting of luncheon materials; it was one of the ideas identified by his survey of out state members. He also requested that the newsletter mention the availability of materials on the website.

He wants to try a fall CLE out state with topics based on the survey results. Video conferencing was suggested as one way to involve metro and out state members as was doing something in conjunction with a local bar association. Professor Kleinberger volunteered to help with a choice of entity presentation. He suggested structuring the CLE around a complex, but realistic, factual hypothetical.

Mr. Yilek encouraged Mr. Kunkel to continue his planning to support the Section's on-going desire to involve out state lawyers in Section activities.

New Lawyers Liaison

Cam Hoang said that the Business Law Institute would be publicized and offered to help introduce speakers. The New Lawyers Section will have a booth at the Institute. They are also willing to distribute materials such as Section brochures.

Vice Chair's Report

John Steffen said that the Business Law Institute brochure is about ready. There are a few breakout sessions left to fill and he will confirm when the annual meeting will occur.

MSBA Report

There was nothing additional to report.

Other Business

Professor Kleinberger noted that any Section legislative proposal that would require OSS to modify computer programs will cost money and thus will affect the Section's ability to get the law changed.

He also reported that with respect to the cross-entity merger act, peace has been achieved between the National Conference of Commissioners on Uniform State Laws and the American Bar Association. He expects the proposed changes to be ready for consideration in the summer of 2003.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,


__________________________________
Katherine A. Engler, Secretary


ATTEST:


__________________________________
John A. Yilek, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
November 20, 2002

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on November 20, 2002 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Yilek, Chair; John Steffen, Vice Chair; Katie Engler, Secretary; Bert Ranum, Past Chair; Mary Bierkamp, Dan Kleinberger, Gaylen Knack, Tom Lovett and Phil Kunkel. Also in attendance were: Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair of the Banking Committee; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Tim Hearn, Chair of the Securities Committee; Ed Drenttel, Co-Chair of the Chapter 300 Committee; Claire Topp, Chair of the Nonprofit Corporations Committee; Sean Kearney, Newsletter co-editor; Lisa Holter, Legislative Coordinator; Bert Black of the Office of the Secretary of State; Donna Watz of the Department of Commerce; Cam Hoang, New Lawyers Section Liaison; Vince O'Brien of Minnesota CLE and Michael Trittipo, MSBA Section Service Coordinator.

Welcome and Approval of Minutes

Chair John Yilek began the meeting with the review of the September meeting minutes. Corrections to the Banking Committee report were noted and the minutes were approved as corrected. Corrections to the roster were also identified.

Treasurer's Report

There was no Treasurer's Report as Mr. Vander Haar was ill.

Chair's Report

John Yilek welcomed Cam Hoang in her role as representative of the New Lawyers Section. Ms. Hoang is a lawyer at Dorsey and will serve as liaison between the sections.

Mr. Yilek reported that the ABA will hold a meeting of State Bar Business Law Section chairs in Chicago in May, 2003. More details will be available later.

He also reported that the revised Business Law Section brochure is finished and available through Mike Trittipo at the State Bar office. The intended audience of the brochure is section members or potential members.

Business Law Institute

Vince O'Brien of Minnesota CLE provided information about the Business Law Institute. A planning meeting was held during the week of November 11th and a large group of attendees was on hand. Lots of ideas were offered and are appreciated. Good topics have been suggested and initial letters to recruit speakers went out November 19th.

Some of the suggested topics include: troubled business and dealing with the ramifications of problems; employment law; the Sarbannes-Oxley law; the SEC; ethics; homeland security; public stadiums; bankruptcy; entity selection and the relationship between internal and outside counsel. Additional topics can be sent to Mr. O'Brien or John Steffen.

Ideas for national speakers are needed; they need to be invited soon. The annual meeting will be similar to last year's with reports from committee chairs. Mr. Yilek asked chairs to consider what their committees can do at the Institute.

The Institute will be Monday and Tuesday, May 12 and 13 at the Minneapolis Convention Center.

Chapter 300 Committee

Ed Drenttel reported that the committee met after the September Executive Council meeting and recognized a need to confer with Bert Black about the work of the committee. This meeting is scheduled for December 3, 2002. Mr. Drenttel does not plan on having legislation for the 2003 session but may try to determine the mood of legislators on this topic.

Banking Committee

Mary Bierkamp and Lori Sommerfield reported that the committee will have an annual meeting in February and Kevin Murphy, the Deputy Commissioner in charge of banking, will be the speaker. This will be a dinner meeting.

They are looking for topics for a breakout session at the Institute. They do not expect any activity on the legislative front.

More members have signed up for the committee. Many were present at the November 12th luncheon CLE on the USA PATRIOT Act.

Business and Professional Corporations Committee

There was no report from this committee.

Partnerships and LLCs Committee

Lloyd Kepple reported that the committee had met on September 25th and November 7th. An expanded membership has been invited to meetings and they are reviewing RULPA. The committee expects to have recommendations for the legislature in 2004. The next meeting is December 12th.
The committee is considering one legislative initiative for 2003 - the elimination of the business purpose requirement for LLCs. Mr. Kepple will talk to Lloyd Grooms about the legislation.

Securities Committee

Tom Lovett reported that Ralph Strangis gave a governance presentation at an October 29th luncheon CLE. It was well attended. A survey was distributed to gain information for future committee activities.

They are planning sessions in January and February but will stay away from Sarbannes-Oxley as a topic.

Franchising Committee

Gaylen Knack attended the ABA Franchise conference in October in Arizona. He said that the federal disclosure rules have been delayed until 2003 with an effective date in 2004. This means that state action will also be delayed.

UCC Committee

Phil Kunkel stated that a lunch meeting had been held in October. The speakers were 3 National Conference of Commissioners on Uniform State Laws (NCCUSL) commissioners and attendance had not been good.

A January luncheon meeting is planned; Professor Linda Rusch will speak on the revisions to Article 1. The topic for a March program is the proposed changes to Articles 2 and 2A.

A working group has been formed to look at the Central Notification System for Farm Product Liens law (chapter 336A). A bill with changes is planned for 2003 and will make this program conform to the changes to Article 9. A meeting is planned for December and they will be reviewing draft legislation.

Mr. Kunkel then distributed and discussed a memorandum on Article 1. A bill proposing the revisions will be introduced in 2003 and Mr. Kunkel requested endorsement.
NCCUSL's commissioners will carry the legislative load.

The important provisions concern good faith and will apply to all articles. Also, the choice of law provisions are structured so that the governing law does not have to have a connection to the transaction. This provision is controversial. A working group chaired by Professor Rusch reviewed the proposed changes and recommends adoption.

Mr. Yilek stated that he had reviewed the changes and encourages support for the modifications. Ms. Bierkamp gave her endorsement as well. Professor Dan Kleinberger asked questions about the objective standard for good faith and whether this was reasonable. Mr. Kunkel indicated this was the same standard that is currently in Article 9 and that ended the discussion. Professor Kleinberger then asked about the implications for consumers from the choice of law provisions as a large institution gets to pick both the forum and the governing law.

Mr. Kunkel explained that there are already limits on consumer transactions that will provide protections. Mr. Yilek said there were protections in other laws that would benefit consumers.

With these explanations, there was a motion and second to endorse the enactment of Revised Article 1. The motion was adopted.

There followed a discussion of the effect of the motion. The Business Law Section will not push the bill to revise Article 1; the work will be done by NCCUSL. Lloyd Grooms should not spend any time on the bill. The motion is an endorsement and allows Mr. Kunkel to indicate Section action to the legislature. Lisa Holter will forward the motion to the Bar office for informational purposes and will also let Mr. Grooms know of the Section's actions.

A short memorandum on revisions to Articles 3 and 4 was deferred to the January meeting. Mr. Kunkel wants to talk to the Minnesota Bankers Association about suretyship.

Technology Committee

Pat Shriver has found copies of the previous brochures on business organizations and UCC. He would like to put them on the Web but they need to be revised first. He is looking for volunteers for that effort. He also suggested that the Section add brochures on nonprofit corporations and franchising.

Mr. Kunkel has already talked to Bert Black and the county recorders about updates to the UCC brochure. Mr. Shriver will scan the brochures into a computer file and distribute them for review.

Mr. Vander Haar and Mr. Kepple will review the business organizations brochure. Content is requested, the Bar office will handle the design.

Mr. Shriver asked for direction on creating a listserv for the Section. Mr. Yilek asked for Mr. Shriver's thoughts to be presented in a memorandum to the Executive Council and it will be discussed at the January meeting.

Nonprofit Corporations

Claire Topp is tailoring the member survey to the work of the committee and is also planning luncheon meetings.

A future legislative initiative will concern electronic transactions. This was previously put on hold. Trade groups are looking for flexibility but she does not expect action in the 2003 session.

The committee is looking for a breakout topic for the Institute and is trying to find something that will be of general interest to business lawyers. Ms. Topp was encouraged to offer a presentation on the differences between nonprofit and for-profit corporation law as many lawyers are asked to provide pro bono services to nonprofits; serve as board members or form nonprofits to address children's sports activities.

Office of the Secretary of State

Bert Black announced that UCC filings will be possible via the Internet in the spring of 2003. Payment will be made by automated clearing house (ACH) with credit card payment to be added later. The service cannot be offered sooner because the State is changing ACH vendors as of January 1st.

Mr. Black reminded everyone that annual registrations are due by December 31st. He also presented an issue that the Office will pursue in the 2003 session - self-funding for the Office operations. Mr. Black asked for Section support. Mr. Yilek wanted the opportunity to meet with Mr. Vander Haar and Mr. Black before action is taken.

Mr. Black asked for early consideration stating that waiting until January may be too late as Governor-elect Pawlenty's budget proposal may already be set by that time. Mr. Yilek indicated that he needed to consult with Mr. Vander Haar and that a special meeting via telephone was possible in the next 2 to 3 weeks. Mr. Yilek also wanted a chance to talk to Mr. Grooms.

A question was asked about the political ramifications of removing $7 million in contributions to the general fund (this is the amount the Office collects in excess of its appropriation). Mr. Black indicated that self-funding could permit fee reductions while allowing technology needs to be met. Mr. Yilek asked for more discussion following an informational memorandum from Mr. Black.

Commerce Department

Donna Watz indicated that they don't know what 2003 will bring. They will have a new commissioner and may experience a significant budget cut.

The "do not call" list is very successful; 650,000 telephone numbers were registered the first week. The list is effective January 1, 2003.

Another new functionality that is coming soon to the Department's website is the ability to check licenses of various professions.

Newsletter

Sean Kearney reported that the fall newsletter should be out shortly and the December issue will be sent to the printer the first week of that month. They are still looking for another co-editor.

Greater Minnesota

Mr. Kunkel did a survey of members who are located outside the metro area. He got a good response (70 out of 189 sent) and found that there is great interest in the corporate and business organizations areas. The newsletter is also relied on heavily by these members. Mr. Kunkel suggested that chairs use the newsletter as a vehicle to communicate with these Section members.

The survey included a question about interest in Section committees and Mr. Yilek asked that committee chairs contact those that had expressed interest in the work of their committees.

Mr. Kunkel will look for a breakout session at the Institute to meet the needs of these members. He is also considering working with the county bar associations to provide business programs at their meetings.

Vice Chair's Report

John Steffen has been working on the Institute and again encouraged members to suggest speakers and topics.

Other Issues

Mike Trittipo did not have any topics that had not been covered by previous reports.

Professor Kleinberger reported on a meeting of the group developing a Uniform Entity Transactions Act. The meeting was held November 15-17 and discussed merger and conversion issues. This Act is targeted primarily at small, privately held companies.

The subject is part of a "turf war" between NCCUSL and the ABA Business Law Committee. The main disagreement between the two groups is whether both incorporated and any law that is developed should cover unincorporated organizations. Professor Kleinberger indicated that the process may be very slow as this division of interests is addressed.

One of the topics the group discussed is the concept of "division." Only Pennsylvania and Texas have laws that allow this transaction, which is the opposite of a merger. The transaction allows for the allocation of assets and liabilities, including state and local taxes. The current proposal looks like a dissolution with a springing continuing interest with a 3 to 5 year life. While the proposal does not make a lot of sense, work on it continues as that sentiment is not being expressed to group members. Professor Kleinberger believes that other work will not be delayed because of the division issue.

The group meets again in March, 2003.

Tom Lovett reported on the Business Pro Bono Task Force. As part of a commitment to donate 3% of hours to pro bono activities, the Bar is looking to deliver services to the business community. The task force is working on a recommendation that will be presented at the annual meeting in June.

The December 4th meeting will consider who needs services, how to deliver services and how the services will be funded. The group is also looking for ways to involve in-house counsel in the project. There will be sub-committees working on various topics and Mr. Lovett will forward reports through the listserv.

Lisa Holter suggested that there be a telephone meeting in December to discuss the proposal to remove the business purpose from the LLC statute. Mr. Kepple will put a memorandum together regarding the proposal.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,


__________________________________
Katherine A. Engler, Secretary


ATTEST:


__________________________________
John A. Yilek, Chair



MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
September 18, 2002

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on September 18, 2002 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Yilek, Chair; John Steffen, Vice Chair; Katie Engler, Secretary; David Vander Haar, Treasurer; Bert Ranum, Past Chair; Mary Bierkamp, Dan Kleinberger, Gaylen Knack, Tom Lovett and Phil Kunkel. Also in attendance were: Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair of the Banking Committee; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Jennifer Reedstrom Bishop, Vice Chair of the Nonprofit Corporations Committee; Tim Hearn, Chair of the Securities Committee; Steve Rubin, Co-Chair of the Business/Professional Corporations Committee; Ed Drenttel, Co-Chair of the Chapter 300 Committee; Laura Carlson and Sean Kearney, Newsletter co-editors; Lisa Holter, Legislative Coordinator; Bert Black of the Office of the Secretary of State; and Michael Trittipo, MSBA Section Service Coordinator.

Welcome and Approval of Minutes

Chair John Yilek began the meeting with the review of the July meeting minutes. Corrections to the spelling of Gaylen Knack's name were noted and the minutes were approved as corrected.

Treasurer's Report

Treasurer David Vander Haar stated that the quarterly statement from Piper Jaffray had not yet been received so the next treasurer's report would be at the November meeting. He did indicate that the funds in the Piper Jaffray account were down because we settled our arrears at the Bar office.

Chair's Report

Mr. Yilek began his report by recognizing Past Chair Bert Ranum. He thanked Mr. Ranum for his service to the Section not only as an officer but also as the Legislative Coordinator for many years. Mr. Ranum was then presented with several tokens of the Section's appreciation for his years of service.

Mr. Yilek indicated that the Section brochure is being updated. This is for new members and it is currently at the printer. It should be ready for distribution in October. The website is also being updated with lots of additional information. Members of the Council were encouraged to check out the content at www.mnbar.org.

Jim Baillie, the Bar's incoming president, wants to set up a pro bono program for business law. To that end, he has created a Business Law Pro Bono Committee that will meet infrequently in support of this effort. Mr. Yilek, Tom Lovett and Dan Kleinberger will participate on behalf of the Section. Mr. Baillie will soon publish an article on pro bono work in the business law area in the William Mitchell Law Review.

Legislation

Lloyd Grooms, Bar Association lobbyist, and Lisa Holter then lead a discussion about both the 2002 and 2003 sessions.

Mr. Grooms thanked Section members for their participation during the 2002 session and particularly recognized the efforts made on short notice. A special legislative session will be held on September 19, 2002 to deal with flood relief for Northwestern Minnesota and alternative minimum tax issue raised by a recent Minnesota Supreme Court decision.

The 2003 session begins January 7, 2003 and there will be lots of new faces as there were 48 retirements in 2002. In addition, there will be new majority leaders in both houses and new committee chairs are also expected. With the continuing news of the budget deficit, Mr. Grooms expects the focus to be on that issue as well as on additional cuts, higher fees and higher taxes. Part of the effort during the 2003 session will be to educate new legislators on both the process and on issues important to the Bar.

Mr. Grooms urged Section committees with legislative initiatives to introduce them early and have them heard early in the session. This follows the Bar's historical pattern of working to avoid the weeks around the committee deadlines to ensure that bills get a hearing. Mr. Grooms stated he would like to see most legislation introduced the first week of the session and he would like to start looking for authors right after Thanksgiving. He encouraged Section committees to get him legislation in November, even if it is in draft form, so that Mr. Grooms can begin those discussions.

Mr. Yilek indicated that the Council's meeting in November would be a good time to review legislative proposals. He also indicated that the Council could do an ad hoc meeting after that date to approve a legislative proposal, if that becomes necessary.

Mr. Grooms indicated that he expects the agenda in the 2003 session to be limited because of the deficit. He also indicated that controversial proposals would most likely be set aside until the 2004 session.

When asked about the alternative minimum tax issue (recent Minnesota Supreme Court decision), Mr. Grooms indicated that the Department of Revenue would not oppose a revenue-neutral proposal but that it was up to the nonprofit community to create the proposal.

Mr. Yilek thanked Mr. Grooms for his efforts in 2002 and said we were all looking forward to working with him in the 2003 session.

Chapter 300 Committee

Mr. Yilek introduced Ed Drenttel, a banking lawyer in the Minneapolis office of Winthrop and Weinstine. Mr. Drenttel has agreed to co-chair the Chapter 300 Committee and to serve as liaison between the Committee and the Council. The other co-chairs are John Kost and Steve Johnson.

Chapter 300 covers banks, insurance companies and utilities. The co-chairs met and discussed the project. Mr. Drenttel proposed that the work of the committee be limited to banks only. He indicated there are about 400-500 banks that would be affected and there are fewer insurance companies and utilities that would be affected by changes to those parts of Chapter 300. One idea is to move the banking provisions into a new chapter.

Bert Black suggested a different approach because Mr. Drenttel's proposal doesn't meet the goal of getting rid of Chapter 300. Mr. Black indicated that the work for the utilities and insurance companies is done and available from Bev Owen. Also, a new chapter creates a fiscal issue because of the computer programming that would need to be done in the Secretary of State's office.

Mr. Black suggested that the banking provisions could be rolled into Chapter 302A and the utilities and insurance provisions can be placed in other chapters. This creates little or no fiscal impact at the Secretary of State's office and allows the Committee to request the repeal of Chapter 300. He also suggested inviting Paul Marinac, Deputy Revisor of Statutes, to begin the process of putting the legislation into the proper form.

Mr. Drenttel indicated that the co-chairs would consider Mr. Black's proposal. He also indicated that he had talked to Kevin Murphy at the Commerce Department. They have no resources to provide and will not have any objections unless there is something controversial. The Department will provide input if asked.

The final point of discussion was that the Committee plans that the bill may be introduced late in the 2003 session with a hearing expected in the 2004 session.

Nonprofit Corporations Committee

Jennifer Bishop, committee co-chair, indicated that they have a list of legislative issues but will be working toward the 2004 session. They are beginning to meet and one of the issues is electronic balloting for large organizations. They are also following the alternative minimum tax issue.

Technology Committee

Pat Shriver, committee chair, reported that his notice in the newsletter resulted in a couple of new members for the committee. He indicated that the Section listserv needs to get started and he has been working on this project. He has also put more content on the Section's web page and asked all members for content.

UCC Committee

Phil Kunkel reported that there are three lunch meetings planned. In October, Professor Linda Rusch will talk about the revisions to Article 1. They have asked Rob Beattie to talk about the Articles 2 and 2A revisions and they want the Minnesota Commissioners from the National Conference of Commissioners on Uniform State Laws (NCCUSL) to talk about the uniform law process.

Professor Rusch is chairing a study committee that is looking at Revised Article 1. The first meeting was September 17, 2002 and they expect the Revised Article to be introduced in the 2003 session.

The committee is also exploring revisions to Minnesota Statutes, chapter 336A, the Central Notification System for Farm Product Liens. That work will be beginning soon.

NCCUSL will have a meeting in Minnesota on October 4, 2002. A group meeting to develop a uniform tribal UCC will meet at the Hotel Sofitel in Bloomington. Mr. Black has the materials, if anyone wants them.

Banking Committee

Mary Bierkamp and Lori Sommerfield reported that the committee had held a CLE luncheon on August 27, and that the attendance had been good. Mr. Yilek spoke about changes in predatory lending laws and Joe Witt, General Counsel of the Minnesota Bankers Association, gave a general legislative update.

Ms. Bierkamp and Ms. Sommerfield distributed their member survey at the August meeting and have been analyzing the information provided. They will re-send the survey to Executive Council members for use with other committees.

There will be luncheon meeting in October and the topic will be the anti-money laundering provisions of the USA Patriot Act and implementing regulations.

Business and Professional Corporations Committee

Dave Vander Haar and Steve Rubin reported that the committee would not have any legislation in 2003. They plan to re-start the committee's legislative work in the winter. They also noted that there has been no groundswell to scrap Chapter 302A following the recent article in the William Mitchell Law Review.

Partnerships and LLCs Committee

Lloyd Kepple reported that the committee had met in August and that there was good attendance. The focus is on the Revised Uniform Limited Partnership Act of 2001 (RULPA) and Mr. Kepple expects the committee to formulate a recommendation for the Legislature. Members of the Tax, Real Estate and Probate Sections are being included in the review. Mr. Kepple expects that the NCCUSL Commissioners will introduce RULPA in the 2003 session but that the committee will probably not be ready to make its recommendations until 2004.

RULPA is on NCCUSL's "target list" and this may change the timing of legislative activity. The Business Law Section may need to respond in 2003 to the bill's introduction.

Another meeting is scheduled for September 25th and Professor Dan Kleinberger will be discussing RULPA.

The committee will also look at mergers and conversions and will consider whether the business purpose requirement should be deleted.

Securities Committee

Tim Hearn and Tom Lovett reported that they are planning some luncheon meetings. They plan to send a questionnaire to committee members the week of September 23rd. Sarbannes-Oxley is one source of issues for discussion. Ralph Strangis wants to do a presentation on audit issues and other possible topics are codes of conduct and insider trading.

Franchising Committee

Gaylen Knack reported that it is quiet in franchising at the state level. Changes to federal guidelines are expected in late 2002 and will take effect one year later. Mr. Knack expects more information on the federal guidelines at the ABA Franchise forum in October.

Once the new federal guidelines have been announced, there will be a need to coordinate with the Commerce Department on needed changes to state franchise laws.

Office of the Secretary of State

Bert Black gave the annual reminder to make year-end filings early and reminded everyone that annual reports are due by December 31st. Mr. Black announced that OSS is hoping to have electronic filing available in 2003.

OSS is also looking at RULPA and expects that reaction will be needed in the 2003 session. Mr. Black expects that 2003 will be a reactive session with quick turn-around required and lots of monitoring.

Mr. Black then described a potential legislative initiative in 2003. Specifically, the proposal is to amend the Administrative Procedure Act (Minnesota Statutes, chapter 14) to allow for interpretive notices or statements by an agency about how the law will be interpreted. Mr. Black and Donna Watz of the Commerce Department felt that business people would like the certainty that would come from interpretive notices. Input on the proposal should be given to David Orren of the Health Department. Mr. Orren can be reached at 651-282-6310.

Mr. Yilek noted that many non-Minnesota clients want an interpretive ruling and are surprised that they are not available in Minnesota.

Newsletter

Laura Carlson and Sean Kearney stated that Frank Bennett has the fall issue in process. They are looking for year-end items. They are also looking for a replacement for India Webb Boulton who has left the state.

Greater Minnesota Outreach

Phil Kunkel indicated that Mike Trittipo of the Bar office had provided him with a listing of the members of the Section who are in Greater Minnesota. He plans to modify the Banking Committee's survey and use it to reach out to these section members. Mr. Kunkel also encouraged all committees to put their luncheon materials on the website.

Report of the Vice Chair

John Steffen has talked to Vince O'Brien of Minnesota CLE and the dates for the Business Law Institute are May 12 and 13, 2003. Any suggested speakers should be provided to Mr. Steffen or Mr. O'Brien. Mr. O'Brien will be invited to the November meeting and all were asked to think about possible breakout sessions.

Other Issues

Dan Kleinberger related a development in employer-employee relations that will have an impact on all businesses. Specifically, there is a Court of Appeals case that says that an employee's intentional tort will bring employer liability without fault if the employee's behavior is foreseeable.

In the case, Perkins was held liable for an employee's sexual touching because Perkins has a sexual harassment policy and this policy makes the behavior foreseeable. This is an unreported case.

In a reported Court of Appeals case, a day care was held liable for an employee's assault of a child. Professor Kleinberger is working on an article for Bench and Bar and also wants to make a legislative change as Minnesota is currently unique in holding employer's responsible in these settings.

Mr. Yilek will soon be meeting with Jon Duckworth, the Bar's new president.

Adjournment

On motion and second, the meeting was adjourned.


Respectfully submitted,


__________________________________
Katherine A. Engler, Secretary


ATTEST:


__________________________________
John A. Yilek, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
July 17, 2002

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on July 17, 2002 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: John Yilek, Chair; John Steffen, Vice Chair; Katie Engler, Secretary; David Vander Haar, Treasurer; Mary Bierkamp, Dan Kleinberger and Phil Kunkel. Also in attendance were: Pat Shriver, Chair of the Technology Committee; Lori Sommerfield, Co-Chair of the Banking Committee; Lloyd Kepple, Chair of the Partnerships/LLCs Committee; Claire Topp and Jennifer Reedstrom Bishop, Chair and Vice Chair of the Nonprofit Corporations Committee; Gaylen Knack, Chair of the Franchising and Product Distribution Committee; Tim Hearn, Chair of the Securities Committee; Lisa Holter, Legislative Coordinator; Bert Black of the Office of the Secretary of State; Donna Watz from the Minnesota Department of Commerce; and Michael Trittipo, MSBA Section Service Coordinator.

Welcome and Approval of Minutes

Mr. Yilek called the meeting to order and asked for corrections to the minutes of the May 15, 2002 meeting. The following changes to the minutes were requested: (1) change the roles of Tim Hearn and Tom Lovett on the Securities Committee; (2) under New Business, indicate that Mr. Yilek was to ask for information from the bar association and to make a one-time contribution if he determines that other sections were making similar contributions. With these changes, the minutes of the May 15th meeting were unanimously approved.

Treasurer’s Report

Ms. Engler presented the January through March, 2002 treasurer’s report. She also indicated that the deficit at the bar association had been resolved by the end of the bar’s fiscal year (June 30, 2002). The treasurer’s report was unanimously approved.

Introductions

As this was the first meeting of the new program year, everyone gave his or her name, firm and role in the Business Law Section.

Chair’s Report

Mr. Yilek indicated that he was a member of the MSBA Task Force to review the proposed amendments to the Rules of Professional Conduct. The 2000 ABA proposal is the basis for the possible Minnesota amendments.

The $5,000 contribution for lobbying that was discussed at the May meeting is expected to be a one-time contribution. The bar is taking steps to address the lobbying issue for the long term. Several other sections made contributions including $5,000 from the Probate Section. Our contribution was authorized after conferring with Mr. Steffen.

Mr. Kunkel and Mr. Yilek made a presentation on Revised Article 9 at the bar convention. Three people, all from out-state, attended and all were interested in the topic. The section needs to find a way to get more participants at future conventions. Mr. Trittipo indicated that total attendance was approximately 400.

As this meeting serves as the annual planning meeting, Mr. Yilek had asked each chair to address what we can do to get more members to join the section and the committees and their plans for the coming year.

Nonprofit Committee

Ms. Topp reported that regular meetings will be a priority for the committee. The committee is looking at issues that need to be addressed in chapter 317A such as electronic communications, electronic balloting and special litigation committees. They will also consider whether a total re-write of the chapter is in order. They will also be working to expand membership and that the 2002 changes to chapter 317A mimicked those made to chapters 302A and 322B and are effective August 1st.

Technology Committee

Mr. Shriver said that increasing membership is a priority. There will be a short article in the newsletter soliciting members. The committee has been working on an increased web presence. Minutes and pamphlets will be posted along with the development of a listserv for section members. Committee chairs were encouraged to send content for the website to Mr. Shriver. He also asked that the address for the email list for the Executive Council be included on the roster. The committee would like to host a noontime CLE.

UCC Committee

Mr. Kunkel reported that the committee is hosting a series of 3 lunch meeting seminars in the coming year. The first will be on revisions to Article 1. The second will be on the language in sections 9-406 and 9-408 and how Delaware has handled these issues. There is no topic for the third seminar at this time.

Mr. Kunkel anticipates that revisions to Article 1 will be introduced in the 2003 session. Article 1 contains general provisions and choice of law rules. Linda Rusch of Hamline Law School has sent out a letter asking for interested persons to review the proposed revisions.

The committee will also consider whether there are revisions to the Central Notification System for Farm Product Lien Statute, Minn. Stat. Ch. 336A, that need to be made. Other work includes revising the UCC pamphlet that was prepared for distribution at the Office of the Secretary of State. Distribution through the satellite offices will need to be considered as part of the revision process.

Banking Committee

Ms. Bierkamp distributed an "activities outline" for the Banking Committee. At the August, 2002 luncheon meeting, Ms. Bierkamp and Ms. Sommerfield plan to survey attendees for input on committee activities. In September, a luncheon meeting with Kevin Murphy of the Department of Commerce is planned. Mr. Murphy is the deputy commissioner for banking and he will be asked for ideas as well as for a description of the Department’s legislative initiatives. A luncheon meeting is planned for October to address USA Patriot Act provisions and other anti-money laundering provisions.

The co-chairs are planning a dinner/annual meeting in February and hope to have Mr. Murphy as the speaker. Participation in breakout sessions at the Business Law Institute is planned for April and there is a possibility of a full day seminar in June or July.

Business/Professional Corporations Committee

Mr. Vander Haar indicated that historically, no amendments are proposed in the odd numbered years. However, there may be a proposal to repeal chapter 302A that will need section reaction.

Other activities include looking at amendments to the Model Business Corporation Act for possible inclusion in chapter 302A, hosting one or more seminars and participating in the Business Law Institute.

The article in the William Mitchell Law Review about chapter 302A engendered a discussion where Mr. Vander Haar indicated he thought the real issues are based in fairness and revolve around section 302A.751. He asked rhetorically if compromise is possible on section 302A.751. One way to address the issues is to continue judicial education in this area.

The pamphlet that was created to compare business entities has been updated. It is at the bar office for printing and the Office of the Secretary of State will make it available through its website.

Partnerships/LLC Committee

Mr. Kepple stated that regular meetings of the committee will be held. A meeting has been set for August 8th to begin discussing issues to be addressed. Topics for consideration include the 2001 RULPA, merger and conversion, the business purpose requirement and cross-entity mergers. The National Conference of Commissioners on Uniform State Laws (NCCUSL) has a work group for cross-entity mergers and there will be a first reading of their work in September, 2002. The committee would also like to increase its membership.

Securities Committee

Mr. Hearn reported that there is a need to revitalize the committee. A mailing is planned to seek input for committee activities. The committee hopes to host lunch meetings and to set a regular meeting schedule. They are also looking for Business Law Institute topics. Mr. Hearn did ask if a speaker from the SEC could be brought in and also asked if Ms. Bierkamp and Ms. Sommerfield would share their member survey. They agreed to share with all members of the Executive Council.

Franchising and Product Distribution Committee

Mr. Knack said that ad hoc committee meetings will continue because they are small in number and the national bar is very active in this area. Few proposals are made because the response of the plaintiff’s bar is to bring forward other changes.

The committee would like to get information to those who do not practice in this area and a newsletter article is forthcoming. In addition, he expects federal activity regarding disclosures. Ms. Watz invited Mr. Knack to meet with the deputy commissioner at Commerce to provide background information on these issues.

Chapter 300 Committee

Mr. Yilek will learn what progress this committee has made. It was reported that the insurance and utilities work has been completed and that what remains are the banking issues.

Office of the Secretary of State

Mr. Black reported that there is not much activity in the business area. The Office’s future focus is on the 25-33% new legislators that will be arriving in January. They expect a large education effort and new initiatives. As a result, time during the session will be very limited.

Funding issues will be important in 2003 and the Office will be seeking authority for an enterprise fund where fees will fund the activities of the Office, rather than an appropriation by the Legislature from the general fund.

Commerce Department

Ms. Watz indicated that the Commerce Department was experiencing another round of budget cuts. Financial examiners may be among those cut in the future.

They are responding to many insurance issues and are working to implement the "do not call" legislation.

Legislative Coordinator

Ms. Holter provided a handout that describes how proposed legislation is approved. January 7, 2003 is the first day of the next session and so the Executive Council needs to approve any legislative initiatives before then. Committees should plan to bring proposals to the November meeting for approval.

Ms. Holter also noted that changes to chapter 308A on cooperatives were described in a recent newspaper article. Cooperatives are driving the proposals and we need to find someone to monitor this work.

Finally, Ms. Holter noted that Rep. Goodno is retiring and may be a resource for us as he has expressed interest in our work in the past.

Greater Minnesota Business Lawyers

Mr. Kunkel reported that the main question was how to increase involvement. One suggestion is to put more materials on the website including lunch meeting materials and the newsletter. He is struggling with how to reach members in Greater Minnesota and is considering a survey.

Cross-Entity Mergers

Mr. Kleinberger reminded the Council that it had approved up to $5,000 for his travel expenses to attend NCCUSL meetings where work on cross-entity mergers is being done. There are parallel tracks occurring: Harry Haynsworth of William Mitchell is chair of the NCCUSL effort and the ABA Corporate Law Committee has adopted an ABA version. There were lots of objections to the ABA version that contained lots of changes to the uniform acts.

Technical issues include defining terms across entity types while the policy issues include whether to include nonprofit entities and how to protect lawyers and clients who planned in the past based on the law in existence at that time.

Work will be reviewed at the NCCUSL annual meeting in August and a draft will be available on the NCCUSL website. The main problem in Minnesota will be to find the funding to make the computer changes needed to accommodate changes in the law.

The ABA group is now working on a model omni-fiduciary rule. The American Law Institute is working on a third restatement of the law of agency. Changes will have an effect on Enron-type litigation.

Report of the Vice Chair

Mr. Steffen indicated that he was expecting lots of new topics for the Business Law Institute.

Adjournment

On motion and second, the meeting was adjourned.

Respectfully submitted,

Katherine A. Engler, Secretary

ATTEST:

__________________________________

John A. Yilek, Chair


MINUTES OF EXECUTIVE COUNCIL MEETING
MSBA BUSINESS LAW SECTION
May 15, 2002

A meeting of the Executive Council of the Minnesota State Bar Association Business Law Section was held on May 15, 2002 at The Marquette Hotel in Minneapolis, Minnesota. The following members of the Executive Council were present: Bert Ranum, Chair; John Yilek, Vice Chair; John Steffen, Secretary; David Vander Haar; and Dan Kleinberger. Also in attendance were Steve Rubin, Vice Chair of the Business and Professional Corporations Committee; Pat Shriver, Chair of the Technology Committee; Phil Kunkel, Chair of the UCC Committee; Lori Sommerfield, Co-Chair of the Banking Committee; Mike Carlson, Chair of the Chapter 300 Committee; Thomas Lovett, Vice Chair of the Securities Law Committee and Tim Hearn, newly-appointed Chair of the Securities Committee; Bert Black of the Office of the Secretary of State; Donna Watz from the Minnesota Department of Commerce; and Michael Trittipo, MSBA Section Service Coordinator.

Welcome and Approval of Minutes

Mr. Ranum called the meeting to order and remarked on the success of the recent Business Law Institute. Upon motion and second the minutes of the March 20, 2002 meeting were unanimously approved.

Technology Committee

Mr. Shriver agreed to add the council’s meeting agendas to our website and to consider the possibility of operating an internet discussion site through the website.

UCC Committee

Mr. Kunkel reported that he and John Yilek would be giving a presentation on revised Article 9 at the Minnesota State Bar Association meeting in Duluth.

Banking Committee

Ms. Sommerfield reported that the committee is planning meetings with members of the committee and a questionnaire to determine the matters the committee will focus on.

Chapter 300 Committee

Mr. Carlson reported that his committee is working on statutory revisions that could be presented to the legislature next session.

Partnerships/LLCs Committee

Mr. Kleinberger reported that the Uniform Law Commissioners will propose a new uniform limited partnership act next year. Mr. Kleinberger will bring this to Mr. Kepple’s attention.

Business/Professional Corporations Committee

Mr. Vander Haar reported that Mr. Rubin and members of his firm have updated the bar association’s brochure on selection of entities. The possibility of putting these materials on the website was discussed.

Securities

Mr. Lovett introduced Timothy Hearn of Dorsey & Whitney, LLP. Tim has agreed to become the Chair of the committee with the objective of reenergizing its membership. Upon motion and second, Tim’s nomination was unanimously approved.

Secretary of State

Mr. Black reported on the budget situation and noted that there is a risk of further cuts in the next budget cycle. A discussion followed about the importance to the business and legal communities of maintaining services at the Secretary of State’s office. David Vander Haar will give some thought to a position paper on the issue that could be used in discussions with legislators.

Department of Commerce

Ms. Watz updated the group on developments in the Department of Commerce.

Election of Officers

The following were unanimously elected as officers for the coming year:

John Yilek Chair

John Steffen Vice Chair

Katie Engler Secretary

David Vander Haar Treasurer

New Business

Mr. Ranum reported that the bar association is seeking contributions from the other large sections (e.g., real estate, trial lawyers) to cover increased costs of lobbying. The Council authorized Mr. Yilek to ask for information from the bar association and to make a one-time contribution of up to $5,000 if Mr. Yilek determines that other large sections were making similar contributions or the contribution was otherwise justified in light of the Section’s substantial use of lobbying resources.

A request for a $5,000 contribution to the bar’s Habitat for Humanity program was not approved. The sense of the Council was that last year’s gift was a one-time gift and that annual gifts of such magnitude were not a proper use of Section funds.

Adjournment

Upon motion and second, the meeting was adjourned.

 

Respectfully submitted,

 

John K. Steffen, Secretary

ATTEST:

Robert K. Ranum, Chair

M1:893889.02

 

 

 



- Last Updated 08/13/2013 -

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