This is filed not served right? That would mean he’s threatening to sue Ronco I believe. That may seem like semantics but the difference is not trivial at allll.
"The filing is what makes it officially into a real lawsuit before the court"
That is only true in the sense that the court will now view it as "something" rather than "nothing". You are not being sued until a lawsuit is served, and the difference between having a lawsuit filed against you and having a lawsuit served against you is massive. A lawyer has a decent amount of liability for filing a lawsuit that turns out to be total bullshit, but that liability skyrockets once it is served, so if the public is trying to determine how seriously to take a suit, whether it is threatened/filed/served are three very different tiers.
How many lawsuits are filed but then not served intentionally (not from lack of being able to find the other party)?
If the liability skyrockets there should be a decent number of cases where the suing party has a change of heart and does not take it to the next tier of seriousness. If there isn't the difference is without distinction.
There is little incentive to use the filing as a seperate tactical step and then not try to serve or delay it (for the plaintiff). I'd say the filing is the start of the lawsuit for the plaintiff, the serving is the start for the defendant. Which makes the filing the overall start of the lawsuit.
But after discovery, I think Conway will have fee waiver shoved down his throat. Like if he's ever done it or if anyone else in the firm has ever done it .... I know next to nothing about either of these guys but IMHO Conway should have settled this matter yesterday.
I hate the way the tax code, and subsequent decades of legal hacks, produces weird structures like the standard VC fund. There have to be ways of collecting the same total taxes, or more, without distorting markets.
What the tax code is trying to do here is to incentivize VCs and entrepreneurs to take risks. At the same time, you need anti-abuse to keep people from unfairly taking advantage of the incentives. This ends up being complicated.
Maybe something like a 10% corporate AMT would help. Your WSGR startup lawyer will strongly recommend against trying A Double Irish Dutch Sandwich. Apple can do this because they will hire an army of lawyers to keep the Feds busy. You can't but at the same time you have to compete with Apple and Google and .... A corporate AMT would help level that playing field.
not to be overly cynical but a complicated, convoluted, tax system, benefits government by assuring there will always be a violation they can act on to get to those they want.
Personally, I've had the best experience with David, and it would be hard to imagine that he would've filed a suit if he wasn't right. He seems as a very honorable guy to me.
> Conway also believed his former partner to be paying himself far and above the fund’s $250,000 annual salary cap by skimming off of SV Angel funds through a technique known as a fee waiver, a fairly common way for fund managers to cover the costs they are expected to invest upfront.
Can anyone clarify how this would be considered skimming? Here's a definition of a Fee Waiver from Mondaq.com:
A management fee waiver or conversion is a strategy whereby the general partner or management company of a private equity fund "waives" the management fee (often up to 2 percent of assets or committed capital per annum), which would typically be paid quarterly and treated as ordinary income for tax purposes, in exchange for an increased "carried interest," which often qualifies for long-term capital gain treatment. In many cases, the receipt of an additional carried interest pursuant to a fee waiver can be used to satisfy the general partner's capital contribution obligation. The key to the strategy is to change the management fee, which is unconditionally payable, into a payment that is conditioned upon future profitability of the fund. However, that does not necessarily mean that the fund has to have an overall net profit for the general partner or manager to earn the waived fee. In many variants of the strategy, the additional carried interest obtained as a result of the waiver results in a priority allocation of the fund's profits from certain investments and/or during certain fiscal periods, unlike the basic carried interest. In these cases, the general partner can realize some carried interest (and, effectively, some portion of the "waived" management fee) even if the fund has a net loss at the end of the overall investment lifecycle.
If the structure is upheld, a management fee waiver effectively allows the general partner to largely convert ordinary income (management fee), currently taxed at a maximum federal rate of 35 percent, into capital gain, currently taxed at 15 percent. There also may be a deferral benefit — delaying current taxation on the waived management fee income and pushing the tax to later years when the gains that produce the additional carried interest are realized. Limited partners who are individuals may also avoid limitations that might otherwise apply to management fee deductions. Finally, the waived amount is categorized as a "profits interest," which is not subject to employment taxes, whereas management fee income generally is.
For New York taxation purposes, there is no rate differential between ordinary income and capital gains, although there could be a deferral benefit. In addition, some non-resident general partners who waive their management fees take the position that no New York income or New York City unincorporated business tax is due on the additional carried interest.
My guess is the management fee is part of the salary cap, but the capital gain it is converted into is not. Thus he pays himself the $250,000 + capital gains instead of management fees + salary up to a grand total of $250,000.
So he used money from the management fee to get himself extra carry? I'd assume that the carry would have to be evenly distributed to all the partners. Also, if he's able to get superior returns without spending his management fee, what's wrong with reinvesting the unspent money into the carry to benefit the partners (as long as it's equally distributed)?
I'm talking about the potential difference between carefully filing the correct paperwork (or what have you) with the company and being frank and up front before carefully filing the correct paperwork.
This is all just tax loophole money anyway thanks to the carried interest scam. They're fighting over money that rightfully belongs to schools and the needy. These seem like particularly greedy thieves.
They probably think I am trolling or off-topic. Here you can’t do either. I don’t mind getting downvoted. It’s only an online thing. But thanks for the reply though, totally appreicate it.
That's not really the way it is. It is possible for something like this (these two being related) to not appear on wikipedia, and it is also possible the commenter is not able to come up with something interesting on google (maybe he suspects he's not using the correct search terms).
Well, then, just like Stack Overflow or anywhere else, tell us what you tried. Otherwise, just like Stack Overflow or anywhere else, prepare to be mocked and ridiculed. Because not only am I not a virtual assistant, I’m not psychic, either.
But did I ask you specifically to answer that question? No. So you are not obligated to answer. So perhaps you shouldn't accuse me for making you into a virtual assistant. But you do have the right to downvote.
