Covington’s tax lawyers play an integral role in the firm’s transactions practice and regularly counsel clients on major corporate and partnership transactions. Our expertise includes advising clients on the tax efficiency of various acquisition structures in public and private mergers and acquisitions, spin-offs and distributions, tax efficient capitalization of new and existing subsidiaries, and joint venture and fund formation.
Covington advises clients on the US federal tax impacts of domestic and cross-border mergers and acquisitions. Transactions range from simple state law mergers to complex multi-step international transactions involving combinations, acquisitions, or dispositions occurring under US and foreign law. We regularly advise on the design, implementation, and disclosure of such transactions, and work with clients to ensure that any US reporting and withholding obligations are satisfied. In many cases, we team with foreign law firms in all aspects of the transaction.
Covington’s tax lawyers are also an integral component of the firm’s investment management and private equity practice areas. We advise investment funds in all aspects of their business, from fund formation to acquisitions and dispositions of portfolio companies. We regularly advise principals of private equity funds on tax-efficient fund structures, including the use of carry vehicles and employee feeder entities, and we draft language disclosing the tax consequences of fund investments to potential investors. We also advise investors in funds regarding the tax implications of both primary and secondary investments in private equity and hedge funds.
Our attorneys advise clients in structuring domestic and international partnerships, joint ventures, collaboration agreements, and other flow-through arrangements. Participants in these ventures range from individuals to large multinational corporations. Typical issues include entity classification, special allocations, intangible transfers, eligibility for R&D expense deduction or credit, Subpart F and foreign tax credit issues, US withholding, and loss disallowance. We have negotiated numerous arrangements with foreign partners to ensure desired US tax treatment. In addition, our partner Dan Luchsinger teaches partnership tax at the Georgetown University Law Center as an adjunct professor of law.
We assist developers, manufacturers, and tax equity investors in the renewable energy space on the availability of federal tax incentives for various investments. We have considered the availability of these incentives in the context of “flip” partnerships, leases, and inverted leases.
Covington advises clients in connection with various types of financing transactions, including bank financing, and both public and private debt and equity offerings. We ensure that financings are done in a tax-efficient manner consistent with the business objectives of our clients. We also draft disclosure documents concerning the tax consequences to potential investors of capital markets transactions.
Representative Matters
- Represent PepsiCo in formation of joint ventures for the production and distribution of various beverage products, both domestic and international.
- Represent Kerr-McGee in its $18 billion acquisition by Anadarko Petroleum.
- Represent Kerr-McGee in the initial public offering and spin-off of its chemicals business, Tronox Incorporated.
- Represent SandRidge Energy in its acquisition of Arena Resources and in connection with multiple financing transactions.
- Represent Terrane Metals in its acquisition by Thompson Creek.
- Represent Peak in amalgamation with New Gold and Metallica, and in New Gold’s subsequent acquisition of Western Goldfields.
- Represent The Goodyear Tire & Rubber Company in connection with multiple bank financing and capital markets transactions.
- Represent the Pantheon Group in connection with numerous primary and secondary private equity fund investments.
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