On March 1, 2024, Judge Liles C. Burke of the U.S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act (the “CTA”) is unconstitutional[1], leaving its future uncertain. The CTA requires reporting companies to report to FinCEN information about their beneficial owners and company applicants and is intended to help prevent and combat money laundering, terrorist financing, tax fraud and other illicit activity.  The ruling enjoined U.S. Department of the Treasury, FinCEN and any other federal agency from enforcing the CTA against the plaintiffs but introduces uncertainty as to the applicability to other reporting companies. 

Plaintiffs Isaac Winkles, who owns a number of small businesses in Alabama, and the National Small Business Association filed a lawsuit against the U.S. Department of the Treasury in November 2022 seeking an injunction against the implementation of the CTA as unconstitutional. They argued that the CTA infringes on the rights guaranteed under the First, Fourth and Fifth Amendments to the Constitution. The court ruled in favor of the plaintiffs, finding that the CTA is unconstitutional because it “exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals”. The court stated that its conclusion makes it unnecessary to address whether the CTA violates the plaintiffs’ First, Fourth and Fifth Amendment rights, leaving those questions unanswered.

The injunction granted by the court is limited to the plaintiffs. On March 4, 2024, FinCEN released a statement indicating that FinCEN would comply with the court’s order “for as long as it remains in effect” and that the government would not currently enforce the CTA against the plaintiffs, including all members of the National Small Business Association (as of March 1, 2024, the date of the injunction)[2]

We expect the Department of Treasury will appeal this decision to the U.S. Court of Appeals for the Eleventh Circuit and request a stay of the enforcement of the injunction. If such stay is granted, the CTA would still be in force as to the plaintiffs. It is not known how the Eleventh Circuit or other federal courts will rule on the constitutionality of the CTA or when such cases might be finally resolved.

As the injunction issued by the District Court in Alabama is only applicable to the named plaintiffs, all other reporting companies are advised to continue to comply with the CTA reporting requirements.[3] The ruling by the District Court also does not impact reporting requirements under similar state laws (such as the New York State LLC Transparency Act). As the CTA is a new kind of regulation, there are expected to be additional changes and developments. Proskauer continues to monitor this litigation and other developments and will provide updates as they occur.


[1] Nat’l Small Bus. United v. Yellen, No. 5:22-cv-01448-LCB (N.D. Ala. 2022).

[2] Under principles of judicial review, generally only the U.S. Supreme Court is able to invalidate acts of Congress. Accordingly, any findings by District Courts as to a law’s constitutionality and any injunctive relief granted by those courts generally are only binding upon the parties to that particular lawsuit.

[3] For more information on the Corporate Transparency Act and the information required to be included in the Beneficial Ownership Report, please see our client alert, Shining a Light on the Corporate Transparency Act: FinCEN’s Rules for Beneficial Ownership Reporting.

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Photo of Andrew Bettwy Andrew Bettwy

Andrew Bettwy is a partner in the Corporate Department and co-head of the Finance Group. His principal focus is the representation of financial institutions, private equity sponsors, and public and privately held companies in leveraged finance and other financing transactions. Andrew represents both…

Andrew Bettwy is a partner in the Corporate Department and co-head of the Finance Group. His principal focus is the representation of financial institutions, private equity sponsors, and public and privately held companies in leveraged finance and other financing transactions. Andrew represents both lenders and borrowers in a wide range of transactions involving multiple industries and diverse debt capital structures, including acquisition financings, recapitalizations, multiple lien and subordinated debt financings, debtor-in-possession and exit financings, and private placements.

Andrew has represented several leading financial institutions while at Proskauer, including Bank of America, Citibank, CoBank, Credit Suisse, Imperial Capital, Jefferies Finance and Lazard Capital Markets.

Andrew is co-chair of Proskauer’s CARES Act Team and a part of the Firm’s cross-disciplinary, cross-jurisdictional Coronavirus Taskforce helping to shape the guidance and next steps for clients impacted by the pandemic.

Photo of Stephanie Heilborn Stephanie Heilborn

Stephanie Heilborn is a partner in the Private Client Services Department and leads the International Private Client Services group.

Stephanie counsels some of the world’s wealthiest families and largest financial institutions in the implementation of complex tax-planning strategies, international estate planning and trust…

Stephanie Heilborn is a partner in the Private Client Services Department and leads the International Private Client Services group.

Stephanie counsels some of the world’s wealthiest families and largest financial institutions in the implementation of complex tax-planning strategies, international estate planning and trust administration as well as fiduciary litigation. She assists in the formation and provision of corporate tax advice to private foundations and other tax-exempt organizations. She also has experience in forming and advising domestic and international family offices regarding estate and tax planning.

Stephanie frequently lectures and writes on estate-planning topics and has been quoted by The New York Times and Forbes. She has served as an Adjunct Associate Professor of Law at Brooklyn Law School.

Photo of Jeffrey A. Horwitz Jeffrey A. Horwitz

Jeffrey A. Horwitz is a partner in Proskauer’s Corporate Department where he co-heads our Private Equity Real Estate practice and runs our internationally recognized Hospitality, Gaming & Leisure Group. He also has served as co-head of Mergers & Acquisitions and as a member

Jeffrey A. Horwitz is a partner in Proskauer’s Corporate Department where he co-heads our Private Equity Real Estate practice and runs our internationally recognized Hospitality, Gaming & Leisure Group. He also has served as co-head of Mergers & Acquisitions and as a member of our Executive Committee. Jeff is a general corporate and securities lawyer with broad-based experience in mergers and acquisitions, cross-border transactions, and long-term joint ventures. He is regularly engaged to advise boards, management teams and investors on strategic matters, from litigation to personnel to transactions. Jeff is also the head of the Firm’s cross-disciplinary, cross-jurisdictional Coronavirus Taskforce helping to shape the guidance and next steps for clients impacted by the pandemic.

Jeff counsels clients on the full range of their activities, from seed capital to public offerings, acquisitions and operational matters, often acting as outside general counsel. He represents major financial institutions, sovereign wealth funds, private equity and family offices in sophisticated financial and other transactions. He represented Merrill Lynch Global Private Equity in connection with its equity participation in the $33 billion acquisition of HCA in what was then the largest LBO ever. He has handled deals aggregating nearly $200 billion in value, including tender offers, “going-private” transactions, IPOs, restructuring and structured finance transactions, and mergers and acquisitions in industries as diverse as biotechnology and aerospace, retail and cable television, and education and scrap metal. He regularly handles transactions outside the U.S., including Europe, the Middle East, Asia, Latin America, Australia, South Africa and India.

Leading our Private Equity Real Estate group, he works with a team of 75 lawyers from across the firm advising on complex transactions and disputes relating to real estate, and particularly hotels. Jeff has handled virtually every type of matter, and has worked with virtually every major player in these industries, including transactions for nearly 3,500 hotels comprising more than 275,000 rooms and involving more than $12 billion. His experience, both in and outside the U.S., extends to hotel and casino development and construction; portfolio and single-property acquisitions; sales and restructurings; financings; management; marketing; reservations systems; litigation counseling and strategic planning; and ancillary services. This breadth of work is key to executing complex and sophisticated transactions, such as the $2.9 billion acquisition of Fairmont Raffles by AccorHotels and its investments in Huazhu, Banyan Tree Hotels & Resorts, Brazil Hotel Group, sbe Entertainment and 21c Museum hotels, among others.

As a senior member of our Entertainment Group, Jeff represents The Broadway League (the national trade association for Broadway theatre), the Tony Awards®, and various other joint venture events and producers. In the media industry, Jeff has advised on the acquisition and sale of television, radio, newspaper and magazine properties, and the acquisition and sale of advertising, promotion and marketing agencies, and related joint ventures. He also advises rights holders, including our long-time clients The Leonard Bernstein Office and The Balanchine Trust. He leads our team representing TSG Entertainment in film-slate financing deals.

Jeff also frequently represents start-up and development-stage companies, as well as established “traditional” businesses, in online, Internet-related or technology businesses. He has handled organizational and structuring matters, venture capital and other equity placements, restructurings (from “down” rounds to recapitalizations to M&A solutions). He has both company-side and investor experience.

As a frequent speaker at real estate and hospitality events, Jeff regularly presents about hotel management agreements at The Hotel School at Cornell’s SC Johnson College of Business, NYU’s Jonathan M. Tisch Center of Hospitality, and on M&A and investment matters at lodging investment conferences around the world, including the NYU Hospitality Industry Investment Conference in New York, Americas Lodging Investment Summit in Los Angeles, the International Hotel Investment Forum in Berlin and the Hotel Investment Conference Asia-Pacific in Hong Kong.

Jeff is a member of the American Hotel & Lodging Association (AHLA) Hospitality Investment Roundtable, ULI (and its Hotel Development Council) and the Advisory Board of the Cornell Center for Real Estate and Finance and has served as a member of the Editorial Board of the Cornell Hotel and Restaurant Administration Quarterly and a member of the Advisory Board of the Cornell Center for Hospitality Research. He is a director of The New York Hospitality Council, Inc., a not-for-profit forum for hospitality industry leaders, and is a member of the Real Estate Capital Policy Advisory Committee of The Real Estate Roundtable. He also has served as a director of the America-Israel Chamber of Commerce, and as a member of the French-American Chamber of Commerce in the U.S. and the American Society of Corporate Secretaries. He was the Chairman of the Board of Labyrinth Theater Company and a director of The Jewish Community Center in Manhattan for more than 15 years, a member of the Executive Committee of the Lawyers’ Division of UJA-Federation for more than five years and an officer of the Henry Kaufmann Foundation for more than a dozen years. He currently serves as Chairman of the Board of The American Playwriting Foundation and Building for the Arts and is a member of the Board of Directors of StreetSquash and The George Balanchine Foundation. He also served as a Vice Chair of the Associates’ Campaign for The Legal Aid Society.

Jeff has been with the firm for his entire career and lives in Manhattan and Connecticut.

Photo of Seetha Ramachandran Seetha Ramachandran

Seetha Ramachandran is a partner in the Litigation Department, and a member of the White Collar and Asset Management Litigation practices. An experienced trial and appellate lawyer, Seetha has conducted 10 criminal jury trials, argued 10 appeals before the U.S. Court of Appeals…

Seetha Ramachandran is a partner in the Litigation Department, and a member of the White Collar and Asset Management Litigation practices. An experienced trial and appellate lawyer, Seetha has conducted 10 criminal jury trials, argued 10 appeals before the U.S. Court of Appeals for the Second Circuit, and handled ancillary civil proceedings in forfeiture cases.

Seetha is a leading expert in anti-money laundering (AML), Bank Secrecy Act, economic sanctions and asset forfeiture matters. Her practice focuses on white collar and regulatory enforcement defense, internal investigations, and compliance counseling. She represents banks, broker dealers, hedge funds, private equity funds, online payment companies, and individual executives and officers in high stakes and sensitive matters. Seetha has deep experience representing institutions and individuals in financial penalty phase of criminal and regulatory matters, and is often retained to litigate forfeiture and restitution claims on behalf of victims and third parties in criminal cases, as well as handling these issues for individual defendants.

Seetha served as a federal prosecutor for nearly 10 years, including as Deputy Chief in the Asset Forfeiture and Money Laundering Section (AFMLS), Criminal Division, U.S. Department of Justice. She was the first head of DOJ’s Money Laundering & Bank Integrity Unit, where she supervised DOJ’s first major AML prosecutions, and oversaw all of the Criminal Division’s AML cases. In that role, Seetha coordinated closely with state and federal banking regulators, including FinCEN, the OCC and the New York State Department of Financial Services, giving her deep experience with how these agencies work together, especially in matters involving civil and criminal liability. Her work developing and charging criminal cases under the Bank Secrecy Act (BSA) formed the model for AML enforcement that regulators and prosecutors follow today.

Seetha also served as an Assistant U.S. Attorney for the Southern District of New York for nearly six years, in the Complex Frauds, Major Crimes and Asset Forfeiture units where she investigated and prosecuted white-collar cases involving a wide range of financial crimes, including bank fraud, mail and wire fraud, tax fraud, money laundering, stolen art and cultural property, and civil and criminal forfeiture cases.

Seetha is a frequent speaker and prolific author on topics including enforcement trends in the financial services industry, OFAC sanctions, effective AML programs and asset forfeiture.

Photo of Robert Sutton Robert Sutton

Robert is a partner of the Private Funds Group and a member of the Corporate Department. He is a seasoned practitioner with over 20 years of experience counseling managers and advisers of private funds on regulatory matters, as well as regulatory issues related…

Robert is a partner of the Private Funds Group and a member of the Corporate Department. He is a seasoned practitioner with over 20 years of experience counseling managers and advisers of private funds on regulatory matters, as well as regulatory issues related to the formation and operation of private equity, credit, real estate, infrastructure, hedge and other private funds.

Rob has a deep knowledge of the market practice of asset managers and in particular, as it relates to Advisers Act-related issues. From some of the largest and most sophisticated firms in the global asset management industry to start-ups and mid-sized firms, Rob’s experience includes a wide spectrum of funds and asset classes across their life cycles. Rob regularly advises on matters in connection with: U.S. investment adviser registration and regulation; Advisers Act and other U.S. securities law issues relating to the formation, marketing and offering of private funds; Identifying and managing conflicts of interest, and addressing related Advisers Act risks, SEC examinations, and exam readiness preparation; Design and implementation of investment adviser compliance policies and procedures; U.S. regulatory issues relating to purchases and sales of investment advisory businesses (minority stake and control stake transactions, buy-side and sell-side representations); Advisers Act and other U.S. regulatory issues relating to private fund restructurings and recapitalizations, strip sales, continuation fund formations and similar transactions; Advisers Act issues relating to the formation of SPACs by investment advisers; and, Investment Company Act status analyses of private fund structures, investment transaction structures and other non-registered investment company structures.

Rob has been recognized by his clients and peers for his extraordinary work, gaining various accolades including mentions in preeminent directories such as The Legal 500.  He is also very active within the private funds industry, contributing to numerous publications and collaborating on several speaking engagements.

Prior to joining Proskauer, Rob was a partner in the Investment Funds Group at Kirkland & Ellis.

Photo of Yuval Tal Yuval Tal

Yuval Tal is a partner in our Corporate Department where he co-heads our internationally recognized Hospitality, Gaming & Leisure Group. Yuval also heads our Asia practice. He is a general corporate and securities lawyer with diverse experience in cross-border mergers & acquisitions (public…

Yuval Tal is a partner in our Corporate Department where he co-heads our internationally recognized Hospitality, Gaming & Leisure Group. Yuval also heads our Asia practice. He is a general corporate and securities lawyer with diverse experience in cross-border mergers & acquisitions (public and private, debt and equity), long-term joint ventures, private equity real estate and corporate and real estate finance. He advises clients on the full range of their activities including any form of financing, operational matters and commercial transactions. He advises sponsors and funds on the structuring, execution, entering into, restructuring and exiting of investments.

Yuval has decades of experience representing clients on complex, first in kind transactions.  His strength is providing original, workable and practical solutions that get the deal done. Qualified in New York, Hong Kong and Israel, Yuval has negotiated transactions in six continents and has experience representing clients on cross border transactions, including inbound to or outbound from Asia. Yuval regularly works with clients in various industries including real estate, hospitality, entertainment, sports, financial services, technology and life sciences.

Yuval is co-chair of Proskauer’s CARES Act Team and was an active member of the Firm’s cross-disciplinary, cross-jurisdictional Coronavirus Taskforce which helped to shape business guidance for clients impacted by the pandemic.

As an international M&A lawyer, Yuval has many years of experience dealing with complicated, non-customary transactions involving parties from different countries, cultures and legal systems.  He has represented private equity, family offices, corporations and individuals in structuring, restructuring, managing and disposing of investments in Asia, Europe and the United States.  He is typically called upon to strategize and structure complex transactions that do not follow a prescribed form or pattern. Yuval’s experience enables him to forsee future issues and clients have commented on his “ability to think seven moves ahead of the competition”. Yuval is also well known for his ability to broker deals between opposing parties in order to get the deal done, irrespective of the legal, business or practical obstacles. His efforts have earned him recognition by Legal 500Chambers Asia Pacific and IFLR1000, where clients have referred to his “ability to play the honest broker to all parties involved, and to bridge the different cultures, legal systems and language barriers and to continually solve the unsolvable, is what allowed us to get this difficult deal done” and another stated “he was completely invested in the deal in a way lawyers seldom are, and his creativity and efforts allowed us to bridge considerable gaps between the parties and find common ground”.

As co-head of our Hospitality, Gaming & Leisure Group, Yuval has worked on virtually any kind of transaction, including mixed-use development and construction, acquisition and sale, restructuring and public offerings of real estate, hotel and casino companies. He has completed numerous high profile transactions involving the buying, selling and combining Asian and Western based hotel operating companies, including AccorHotels’ [EPA:AC]  US$2.9 billion acquisition of Fairmont, Raffles and Swissôtel brands, its acquisition of Tribe, Australia’s first integrated modular hotel brand, Accor’s long-term alliance with Huazhu Hotels Group (also known as China Lodging Group [Nasdaq: HTHT]) and its strategic partnership with Singapore-based Banyan Tree Holdings [SGX:B58]. He also advised Formosa International Hotels’ sale and resulting joint venture with Intercontinental Hotels Group with respect to the Regent brand.  Recent transactions include the formation of  Ennismore, a worldwide hospitality lifestyle platform which currently owns 14 brands and operates over 100 properties; and the sale of the Mexico-based Hoteles City Express brand to Marriott for $100 million.  His real estate and hospitality work has included transactions for brands and properties from China to India to the United States to Australia. He also has many years of experience with hotel licensing, franchising and management.

Yuval’s broader Private Equity Real Estate experience includes working on The Recording Academy’s (The Grammys) deal to develop Grammy Museums in China, a public/private deal to finance an office building in Delhi, India; acquisitions of hotels in Bangkok by a large Japanese institutional investor and a joint venture between a Hong Kong developer and an Asian based private equity fund for the acquisition and redevelopment of a property in Kowloon into a mixed use property including co-living and co-working properties.

Yuval is a member of the Hospitality Development Council of ULI in both the United States and Asia and was previously  a member of the Steering Committee of the Asian council; he was also a member of the Law 360 2020 Hospitality Editorial Board. He is a regular speaker at real estate and hospitality related conferences such as the Hotel Investment Conference Asia-Pacific in Hong Kong.

Prior to rejoining Proskauer in 1999, Yuval practiced law in Israel, representing Israeli clients in transactions in Europe and the United States and European and U.S.-based clients in transactions in Israel. He handled transactions for major publicly traded Israeli companies such as Clal (Israel) Ltd., LifeWatch, Kitan Consolidated Ltd., Orckit Communications Ltd., ECI Telecom Ltd., Scitex Corporation Ltd. and Tecnomatix Technologies Ltd. Since joining Proskauer, Yuval has continued to represent Israeli clients on a wide range of corporate and securities matters.

Photo of Elanit Snow Elanit Snow

Elanit Snow is a senior counsel in the Corporate Department and a member of the Finance Group.

Elanit represents financial institutions, hedge funds, private equity funds and multinational corporations on complex over-the-counter derivatives and other synthetic financing transactions and secondary market and distressed…

Elanit Snow is a senior counsel in the Corporate Department and a member of the Finance Group.

Elanit represents financial institutions, hedge funds, private equity funds and multinational corporations on complex over-the-counter derivatives and other synthetic financing transactions and secondary market and distressed debt trading. She represents clients in structuring and negotiating ISDA, MRA, GMRA, MSFTA, clearing, prime brokerage and other related documentation. Elanit advises clients on structuring bespoke transactions to gain synthetic leverage or to hedge exposure to key market risks. Elanit also advises clients on the legal, compliance and regulatory requirements of the Dodd-Frank Act applicable to derivatives transactions.

Elanit represents both buyers and sellers on a diverse range of transactions involving syndicated loans, bankruptcy claims and other distressed and illiquid assets.