Related Company Transfers: Debt Or Equity? Capitalized Or Expensed?

Farrell Fritz, P.C.
Contact

It is often difficult to determine the proper tax treatment for the transfer of funds among related companies, especially when they are closely held, in which case obedience to corporate formalities may be found wanting.

At times, the nature of the transfer is clear, but the “correct” value of the property or service provided in exchange for the transfer is subject to challenge by the government.

In other situations, the amount of the transfer is accepted, but the tax consequences reported by the companies as arising therefrom – i.e., the nature of the transfer – may be disputed by the IRS, depending upon the facts and circumstances, including the steps taken by the related companies to effectuate the transfer and the documentation prepared to evidence the transfer.

One U.S. District Court recently considered the tax treatment of a transfer of funds by a U.S. corporation to a second-tier foreign subsidiary corporation that was made in response to a threat by a foreign government.

Parent’s Dilemma

U.S. Parent Corp (“Parent”) engaged in business in Foreign Country (“Country”) through a subsidiary corporation (“Sub”) formed under Country’s laws. Parent held Sub through an upper-tier foreign subsidiary corporation (“UTFS”).

Sub contracted with an unrelated Joint Venture (“JV”) to provide services to JV in Country. The contract required Parent to extend a “performance guarantee:” if Sub was unable to perform all of its obligations under the contract, Parent would, upon demand by JV, be responsible to perform or to take whatever steps necessary to perform, as well as be liable for any losses, damages, or expenses caused by Sub’s failure to complete the contract.

The contract was not as profitable as Sub had forecast, and it sustained net losses. Sub informed JV that it would not renew the contract and would exit the Country market at the conclusion of the contract.

Between a Rock and . . .

Shortly after Sub’s communication to JV, the Country Ministry of Finance (“Ministry”) advised Sub that the company it was in violation of Country’s Code and, thus, in danger of forced liquidation. Specifically, Sub was informed that it was in violation of a requirement that it maintain “net assets” in an amount at least equal to its chartered capital; it was given one month to increase its net assets, failing which, Country’s tax authority had the right to liquidate Sub through judicial process.

Parent analyzed the ramifications if Sub was liquidated. It believed that if Sub was liquidated, JV would force Parent to finish the contract pursuant to the performance guarantee, and Parent would have to pay a third party to complete the work, which Parent determined would be very costly. It also worried about the potential damage to its reputation if Sub defaulted.

Sub assured the Ministry that it was taking steps to improve its financial condition. Parent decided to transfer funds to UTFS, which then signed an agreement with Parent pursuant to which funds would be transferred by Parent to Sub, “on behalf of” UTFS. It was agreed that the funds would be used by Sub to carry on its activities, and UTFS confirmed that its financial assistance was “free” and that it did not expect Sub return the funds. Parent then made a series of fund transfers to Sub.

Parent claimed a deduction on its tax return for the amount transferred to Sub, but the deduction was disallowed by the IRS.

Parent paid the resulting tax deficiency, and then sought a refund of the taxes paid, contending that the payment to Sub was deductible as a bad debt, or as an ordinary and necessary trade or business expense.

The IRS rejected the refund claim, and Parent commenced a suit in District Court.

Bad Debt?

Parent contended the payment to Sub was deductible as a bad debt. It argued that courts have defined the term “debt” broadly, and have allowed payments that were made to discharge a guarantee to be deducted as bad debt losses. Parent insisted that a payment by the taxpayer in discharge of part or all of the taxpayer’s obligation as a guarantor should be treated as a business debt that become worthless in the year in which the payment was made.

Parent argued that it made the payment to discharge its obligation to guarantee performance on Sub’s contract with JV. Specifically:

  1. Ministry was threatening to liquidate Sub because it did not have sufficient capital;
  2. Liquidation of Sub would have caused it to default on the contract with JV;
  3. That default would have made JV a judgment-creditor and Sub a judgment-debtor;
  4. Sub would have been obligated to pay JV a fixed and determinable sum of money;
  5. Parent guaranteed Sub’s performance, creating a creditor-debtor relationship between them and making Parent liable for Sub’s debts; and
  6. The payment to Sub satisfied the debt created by Parent’s performance guarantee, and Sub’s inability to repay rendered it a bad debt.

The Court Saw it Differently

According to the Court, Parent’s arguments conflated two questions:

  1. Did Parent pay a debt owed by Sub to JV because it guaranteed that obligation? or
  2. Did the transfer of money by Parent (through UTFS) to Sub create a debt owed by Sub to Parent?

The Court answered both these questions in the negative.

The Court explained that a taxpayer is entitled to take as a deduction any debt which becomes worthless in that taxable year. A contribution to capital cannot be considered a debt for purposes of this rule. The question of whether the payment from Parent to Sub was deductible in the year made “depends on whether the advances are debt (loans) or equity (contributions to capital).”

“Articulating the essential difference,” the Court continued, “between the two types of arrangement that Congress treated so differently is no easy task. Generally, shareholders place their money ‘at the risk of the business’ while lenders seek a more reliable return.” In order for an advance of funds to be considered a debt rather than equity, the courts have stressed that a reasonable expectation of repayment must exist which does not depend solely on the success of the borrower’s business.[i]

It was clear, the Court stated, that the advances to Sub were not debts, but were more in the nature of equity. There was no note evidencing a loan, no provision for or expectation of repayment of principal or interest, and no way to enforce repayment. Instead, the operative agreement stated clearly that it was “free financial aid” and would not be paid back to Parent or to UTFS.

The intent of the parties was clear: it was not a loan and did not create an indebtedness. The Court observed that, in fact, it could not be a loan because further indebtedness for Sub would not have solved the net assets and capitalization problems identified by the Ministry. Sub’s undercapitalization also supported the conclusion that this was an infusion of capital, and not a loan that created a debt.

Performance Guarantee?

Parent next argued that the payment was made pursuant to a guarantee to perform because if Sub was liquidated, Parent would be liable for the damages caused by the breach.

The Court agreed that a guaranty payment qualifies for a bad debt deduction if “[t]here was an enforceable legal duty upon the taxpayer to make the payment.” However, voluntary payments do not qualify, it stated.

It was true that Parent executed a performance obligation with JV to guarantee the work would be done. However, Sub never failed to perform its obligations, and JV never looked to Parent to satisfy any requirements under the performance guarantee. The event that triggered the payment was not a demand by JV to perform; instead it was the notice from the Ministry that Sub was undercapitalized and at risk of being liquidated. No money was paid to JV, and no guaranteed debt or obligation was discharged by the payment. Nothing in the performance guarantee legally obligated Parent to provide funds to Sub; it was only required to perform on the contract if Sub could not. After the money was transferred to Sub, both Parent and Sub had the same obligations under the performance guarantee that existed before the transfer. The payment neither extinguished, in whole or in part, Parent’s obligation to guarantee performance, nor reduced the damages it would pay in the event of a default. It also did not impact Sub’s obligations to perform; it merely reduced the risk that Sub would be unable to perform due to liquidation for violation of Country’s legal capitalization requirements. In short, this was not a payment by a taxpayer in discharge of part or all of the taxpayer’s obligation as a guarantor, because there was no discharge of any obligation.

Parent also argued that an advance of money, pursuant to a performance guarantee, that allowed the receiving company to complete a construction project, was a debt that was deductible as a business expense.

Again, the Court pointed out that there was no contractual agreement between Parent and Sub requiring such a payment to Sub or a repayment by Sub. The payment was made to avoid being called to perform on the performance guarantee between Parent and Sub.

The terms of the payments stressed that no debtor-creditor relationship was being created because it was “free financial aid.” Because this was “free financial aid,” Sub owed no such debt to Parent, and Parent had no right to expect repayment of the funds paid. When the payer had no right to be repaid, the Court explained, the transfer of funds was a capital contribution.

Thus, the advance to Sub did not create a debt, did not pay a debt, and was not a payment of a debt pursuant to a guarantee. Therefore, it was not deductible as a bad debt.

Ordinary and Necessary Expense?

Parent next argued that the payment was deductible as an “ordinary and necessary business expense” that was paid or incurred in carrying on its trade or business.

Parent contended that the financial aid was an ordinary business expense to Parent, because it fulfilled its legal obligations under the performance guarantee and avoided serious business consequences if Sub had defaulted on the JV contract. Among those consequences were Parent’s exposure to substantial financial damages, including the loss of Sub’s assets and equipment, as well as severe damage to Parent’s reputation as a reliable service provider in the global market.

The IRS contended that Parent’s contribution of free financial aid to its subsidiary was neither an “expense,” nor was it “ordinary.” The Court agreed.

As a general rule, voluntary payments by a shareholder to his corporation in order “to bolster its financial position” are not deductible as a business expense or loss.

According to the Court, “It is settled that a shareholder’s voluntary contribution to the capital of the corporation . . . is a capital investment and the shareholder is entitled to increase the basis of his shares by the amount of his basis in the property transferred to the corporation.” This rule applies not only to transfers of cash or tangible property, but also to a shareholder’s forgiveness of a debt owed to him by the corporation.

In determining whether the appropriate tax treatment of an expenditure is immediate deduction or capitalization, “a taxpayer’s realization of benefits beyond the year in which the expenditure is incurred is undeniably important.”

Moreover, to qualify for deduction, the expense involved must be ordinary and necessary for the taxpayer’s own business. As a general rule, a taxpayer may not deduct the expenses of another.

The circumstances giving rise to Parent’s “free financial aid” to Sub, the Court continued, bore none of the hallmarks of an “expense.” Parent was under no obligation to make a payment to Sub, but chose to do so to avoid potential future losses. In response to a letter from the Ministry threatening liquidation because of undercapitalization, Parent decided to transfer (through UTFS) cash to Sub. There was no obligation to return the funds, and Sub was not restricted in how it could use them. As a result, Sub recapitalized its balance sheet, reducing its liabilities and increasing its net equity, thereby eliminating the net asset problem identified by the Ministry. Sub was thereby enabled to continue operations and complete the JV contract. Under these circumstances, the transfer of funds by Parent fit squarely within the capitalization principle.

To be sure, Parent did receive other benefits as a result of the recapitalization. By helping Sub avoid liquidation and finish the JV contract, Parent assured not only that Sub’s valuable equipment and technology would be recovered, but also that Parent’s own reputation and future business operations would not be damaged. But these expected benefits were not realized solely, or even primarily, in the tax years at issue. Instead, like any normal capital expenditure, the benefits to Parent were expected to continue into the future, well beyond the year in which the payments were made.

Reputation and Goodwill

Parent argued that the future benefits to its reputation and business operations did not preclude a current expense deduction. It relied upon a line of cases holding that, when one taxpayer pays the expenses of another, the payment may be deductible if the taxpayer’s purpose is to protect or promote its own business interests such as reputation and goodwill.

The Court conceded that there is such an exception to the general rule that a taxpayer may not deduct the expenses of another, that permits a taxpayer to claim a deduction when the expenditures were made by a taxpayer to protect or promote his own business, even though the transaction giving rise to the expenditures originated with another person and would have been deductible by that person if payment had been made by them.[ii]

The Court, however, found that the exception was inapplicable because the “free financial aid” provided by Parent was not tied to any actual expense of Sub, whether deductible or not.

The Court concluded that the fund transfer from Parent to Sub was not deductible as a bad debt, nor was it deductible as an ordinary and necessary expense of the taxpayer’s business. When distinguishing capital expenditures from current expenses, it explained, the Code makes clear that “deductions are exceptions to the norm of capitalization,” and so the burden of clearly showing entitlement to the deduction is on the taxpayer. Parent did not carry that burden.

“Why Don’t They Do What They Say, Say What They Mean?”

The Fixx may have been onto something. If a business plans to engage in a transaction in order to achieve a specific purpose, its tax treatment of the transaction – how it reports it – should be consistent with its intended purpose. Of course, this presupposes that the business has, in fact, considered the tax consequences of the transaction, as any rational actor would have done in order to understand its true economic cost.

Unfortunately, quite a few business taxpayers act irrationally, forgetting the next phrase in the song, that “one thing leads to another.” It is not enough to report a transaction in a way that yields the best economic result – for example, that most reduces the cost of the transaction – and then hope it is not challenged by the government.

Rather, the optimum economic result under a set of circumstances may only be attained by a critical analysis of the transaction and its likely tax outcome. With this information, the business may then consider, if necessary, how to adjust the transaction steps, or to otherwise offset the expected cost thereof.


[i] The Courts have identified a number of factors relevant to deciding whether an advance is debt or equity:

(1) the names given to the certificates evidencing the indebtedness;

(2) the presence or absence of a fixed maturity date;

(3) the source of payments;

(4) the right to enforce payment of principal and interest;

(5) participation in management flowing as a result;

(6) the status of the contribution in relation to regular corporate creditors;

(7) the intent of the parties;

(8) ‘thin’ or adequate capitalization;

(9) identity of interest between creditor and stockholder;

(10) source of interest payments;

(11) the ability of the corporation to obtain loans from outside lending institutions;

(12) the extent to which the advance was used to acquire capital assets; and

(13) the failure of the debtor to repay on the due date or to seek a postponement.

[ii] The IRS argued that, even under this exception, the taxpayer’s expenditure must be linked to an underlying current expense of the other business; the expenditure at issue had to be earmarked to pay an obligation or extinguish a liability owed to a third party.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Farrell Fritz, P.C. | Attorney Advertising

Written by:

Farrell Fritz, P.C.
Contact
more
less

Farrell Fritz, P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.