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		<title>Penalties for Water Law Violations Go Into Effect July 1, 2009</title>
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		<pubDate>Mon, 01 Jun 2009 22:30:59 +0000</pubDate>
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		<category><![CDATA[Client Alerts]]></category>

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Whether you currently own water rights or plan to acquire water rights in the State of Nevada, it’s important to know that beginning July 1, 2009, fines and penalties for the violation of certain provisions governing the use of water within Nevada will go into effect.  While the new regulations were adopted September 18, 2008, [...]]]></description>
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<p class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">Whether you currently own water rights or plan to acquire water rights in the State of Nevada, it’s important to know that beginning July 1, 2009, fines and penalties for the violation of certain provisions governing the use of water within Nevada will go into effect.<span style="mso-spacerun: yes;">  </span>While the new regulations were adopted September 18, 2008, no process or enforceable procedures were in place to assess the fines and penalties – until now.<span style="mso-spacerun: yes;">  </span></span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">As you know, water continues to be a complex, yet very important topic in Nevada.<span style="mso-spacerun: yes;">  </span>The State Engineer’s recently adopted regulations and ability to assess penalties only enhances the responsibilities of water rights owners within Nevada.<span style="mso-spacerun: yes;">  </span>In light of these recent changes, it is important to understand Nevada Water Law and the specific terms and conditions of your permits and certificates which serve as evidence of your ownership interest in this valuable commodity.</span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">We not only have to safeguard water rights against cancellation or forfeiture proceedings, but now are faced with penalties should we not be good stewards of this precious resource. </span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small; color: #000000; font-family: Times New Roman;">This client alert involves Nevada Revised Statutes (NRS) Chapters 533, 534, 535, and 536 which are enforced by the Nevada Division of Water Resources, Office of the State Engineer (State Engineer) and its adopted regulations within the Nevada Administrative Code (NAC).</span><span style="font-size: small; color: #000000; font-family: Times New Roman;"> </span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><strong style="mso-bidi-font-weight: normal;"><span style="text-decoration: underline;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">The New Regulations:<span style="mso-spacerun: yes;">  </span>What it means to you and your business</span></span></span></span></strong></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small; color: #000000; font-family: Times New Roman;">The new regulations, which amend Chapter 532 of the Nevada Administrative Code, authorize the State Engineer to assess a penalty for a violation of any provision of Nevada Water Law with respect to appropriation of water rights, surface and stream water rights, underground water rights and wells, as well as dams and ditches.<span style="mso-spacerun: yes;">  </span>Penalties may also be assessed by the State Engineer for a violation of any permit, certificate, order, decision, or regulation adopted by the State Engineer.<span style="mso-spacerun: yes;">  </span>Finally, the newly adopted regulations also set forth procedures for a hearing before the State Engineer wherein penalties could be assessed for a violation of Nevada Water . </span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small; color: #000000; font-family: Times New Roman;">These new regulations are broad sweeping as they provide for the assessment of penalties not only for violations of Nevada Water Law, but specific terms and conditions of water rights permits and certificates, which are often unique to the circumstances under which the permit or certificate was issued.<span style="mso-spacerun: yes;">  </span>Violations also include engaging in any activity without a required permit or without approval required to engage in certain activities.<span style="mso-spacerun: yes;">  </span>Finally, a violation is also defined as the failure to perform a requirement or the failure to perform a requirement in a timely manner. </span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">To better illustrate, one water rights owner may be assessed a fine based upon a violation of a permit term for an activity that a second water rights owner is engaged in, but because the activity is not in violation of the second owner’s permit, no fine is levied against the second owner.<span style="mso-spacerun: yes;">  </span>One particular instance that comes to mind would be the amount of water a person is permitted to use under a particular permit or certificate issued by the State Engineer.<span style="mso-spacerun: yes;">  </span>These amounts can vary on a case by case basis, as do related deadlines to file a proof of completion or proof of beneficial use.<span style="mso-spacerun: yes;">  </span>Therefore, water rights holders will need to be ever vigilant in not only complying with Nevada’s Water Law, but the specific terms and conditions set forth within the permits and certificates issued by the State Engineer.<span style="mso-spacerun: yes;"> </span></span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">As background, prior to September 2008 and since 2007, the State Engineer had maintained statutory authority to levy fines pursuant to Nevada Revised Statutes (NRS) NRS 533.481, NRS 534.193, NRS 535.200, and NRS 536.200, but no regulations had been adopted to set forth the procedure to enforce the law and levy fines.<span style="mso-spacerun: yes;">  </span></span></span></span></p>
<p class="MsoNormal" style="margin: 0in 0in 0pt; text-indent: 0.5in;"><span style="mso-spacerun: yes;"><span style="font-size: small; color: #000000; font-family: Times New Roman;"> </span></span></p>
<p class="MsoNormal" style="margin: 0in 0in 0pt;"><strong style="mso-bidi-font-weight: normal;"><span style="text-decoration: underline;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">Enforcement Actions and Penalty Assessment: Three forms of action </span></span></span></span></strong></p>
<p class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;" align="center"><span style="text-decoration: underline;"><span style="text-decoration: none;"><span style="font-size: small; color: #000000; font-family: Times New Roman;"> </span></span></span></p>
<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">When the State Engineer determines there is a violation, the staff may take one of three forms of action:<span style="mso-spacerun: yes;">  </span>(1) issue a warning letter setting forth the alleged violation and request that the violation be corrected; (2) commence an administrative enforcement action; or (3) bring an action with the District Courts seeking injunctive relief to enjoin the alleged violator from continuing to engage in the unlawful activity.</span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">If the State Engineer chooses to commence an administrative enforcement action, the water rights owner is afforded an opportunity to appear at a hearing wherein the State Engineer will make one of the following determinations:<span style="mso-spacerun: yes;">  </span>(1) no violation; (2) a violation with no penalty assessed; or (3) find a violation and forward the same to a penalty panel to determine what penalty should be assessed.<span style="mso-spacerun: yes;">  </span>Once a penalty has been assessed by the State Engineer, the water rights owner can negotiate with the State Engineer to settle the dispute through what is deemed to be an alternative but equal penalty.<span style="mso-spacerun: yes;">  </span>Resolution through this process is a compromised settlement, not subject to judicial review.<span style="mso-spacerun: yes;">  </span></span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small; color: #000000; font-family: Times New Roman;">Alternatively, if the water rights owner chooses not to engage in negotiations with the State Engineer regarding the penalty, the penalty will be assessed and the owner has 30 days after the imposition of the penalty to seek a hearing before an independent advisory committee to determine if the penalty was just and proper.<span style="mso-spacerun: yes;">  </span>The advisory committee, which is appointed by the Director of the State Department of Conservation and Natural Resources, has 30 days from the date of the appeal to schedule a hearing.<span style="mso-spacerun: yes;">  </span>Ultimately, the advisory committee’s ruling is subject to judicial review proceedings before the District Court, providing various levels of review.</span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><strong style="mso-bidi-font-weight: normal;"><span style="text-decoration: underline;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">The Penalties: Monetary Fines, Reimbursement to the State Engineer, and Water Replacement</span></span></span></span></strong></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">The newly adopted regulations provide the State Engineer with the discretion to assess very harsh penalties on violators, depending on the circumstances of the violation.<span style="mso-spacerun: yes;">  </span>First, the State Engineer may assess a penalty not to exceed $10,000 per day for each violation.<span style="mso-spacerun: yes;">  </span>Although the cap on this portion of the penalty is $10,000, the amount of the penalty accrues for each the violation is not rectified. </span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">S</span></span></span><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">econd, in addition to the administrative fine described above, the State Engineer may also assess enforcement costs.<span style="mso-spacerun: yes;">  </span>Enforcement costs include time spent to enforce actions surrounding the violation by State Engineer staff, supervisors, as well as the Attorney General’s Office.<span style="mso-spacerun: yes;">  </span>Additionally, the State Engineer can assess the costs associated with compliance inspections as a part of the administrative penalty.<span style="mso-spacerun: yes;">  </span>The reimbursement of these costs, pursuant to the regulation, is at the full cost of the hourly rate of each employee, including salary, benefits, overhead and directly related costs.<span style="mso-spacerun: yes;">  </span></span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">Third, the State Engineer can order that the violator replace up to 200 percent of any water that has been unlawfully used, wasted, or diverted.<span style="mso-spacerun: yes;">  </span>Considering the cost of water today, this portion of the penalty could easily be the most expensive, and is obviously designed to deter illegal activity.</span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">Clearly, the State Engineer has many options with respect to the penalties it can assess under these new regulations.<span style="mso-spacerun: yes;">  </span>The amount of the total penalty assessed, however, is not purely at the discretion of the State Engineer, as the regulations provide the State Engineer with some guidance in this regard.<span style="mso-spacerun: yes;">  </span>Finally, only time will tell the severity of penalties the State Engineer will levy on a case by case basis. </span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><strong style="mso-bidi-font-weight: normal;"><span style="text-decoration: underline;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">Penalty Assessment:<span style="mso-spacerun: yes;">  </span>Six Factors to Consider </span></span></span></span></strong></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">The State Engineer is to consider the following factors when assessing a penalty:<span style="mso-spacerun: yes;">  </span>(1) the gravity of the violation, including any economic injury or impact to other persons; (2) whether the violator made significant progress toward correcting the violation and attempted to comply with any applicable orders of the State Engineer; (3) whether the violator has committed any prior violations; (4) the economic benefit, if any, derived by the violator from committing the violation; (5) in the case of unlawful use, waste, or diversion of water, the amount of water involved; and (6) any other relevant facts established at the hearing before the State Engineer. </span></span></span></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><strong style="mso-bidi-font-weight: normal;"><span style="text-decoration: underline;"><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">Contact Us</span></span></span></span></strong></p>
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<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="color: #000000;"><span style="font-size: small;"><span style="font-family: Times New Roman;">Should you have any questions about your present water rights and the implication of these new regulations, please contact Sev Carlson from Kummer Kaempfer’s water law group at 702-792-7000, 775-852-3900, or by email at </span></span></span><a href="mailto:scarlson@kkbrf.com"><span style="font-size: small; font-family: Times New Roman;">scarlson@kkbrf.com</span></a><span style="font-size: small; color: #000000; font-family: Times New Roman;">.</span></p>
<p> </p>
<p><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">This client alert is intended for informational purposes only.<span style="mso-spacerun: yes;">  </span>Nothing in this alert is to be considered as either creating an attorney-client relationship between the reader and Kummer Kaempfer or as rendering of legal advice.<span style="mso-spacerun: yes;">  </span>Readers are responsible for obtaining such advice from their own legal counsel.</span></span></span></p>
<p><span style="font-size: small;"></span><span style="font-size: small;"><span style="color: #000000;"><span style="font-family: Times New Roman;">No client or other reader should act or refrain from acting on the basis of any information contained in this client alert without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue.<span style="mso-tab-count: 1;"> </span></span></span></span></p>
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		<title>Kummer Kaempfer Repositions for Continued Growth and Announces New Organizational and Leadership Structure</title>
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		<pubDate>Wed, 20 May 2009 22:18:56 +0000</pubDate>
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		<description><![CDATA[For release May 20, 2009
Contact:  Diane Lancaster Gibes, Kummer Kaempfer, (702) 792-7000  or dgibes@kkbrf.com  
Becky Maizel, Kummer Kaempfer, (702) 792-7000  or rmaizel@kkbrf.com
Kummer Kaempfer Repositions for Continued Growth and Announces New Organizational and Leadership Structure
Firm Continues to Offer Clients a Full Complement of Practice Areas 
LAS VEGAS – The statewide law firm of Kummer Kaempfer Bonner Renshaw [...]]]></description>
			<content:encoded><![CDATA[<p>For release May 20, 2009</p>
<p>Contact:  Diane Lancaster Gibes, Kummer Kaempfer, (702) 792-7000  or <a href="mailto:dgibes@kkbrf.com">dgibes@kkbrf.com</a>  <br />
Becky Maizel, Kummer Kaempfer, (702) 792-7000  or <a href="mailto:rmaizel@kkbrf.com">rmaizel@kkbrf.com</a></p>
<p style="text-align: center;"><strong>Kummer Kaempfer Repositions for Continued Growth and Announces New Organizational and Leadership Structure</strong></p>
<p style="text-align: center;"><strong>Firm Continues to Offer Clients a Full Complement of Practice Areas </strong></p>
<p style="text-align: left;">LAS VEGAS – The statewide law firm of Kummer Kaempfer Bonner Renshaw &amp; Ferrario (Kummer Kaempfer) is realigning its practice areas and introducing a new organizational structure that will support the firm’s continuing market dominance in government and legislative affairs, energy and utilities and the litigation and transactional practice areas.</p>
<p>These changes coincide with several of the firm’s partners, of counsel attorneys, associate attorneys and staff members departing on June 1 to join the international law firm of Greenberg Traurig.  This repositioning follows many months of careful thought and deliberations about a possible merger between the two law firms.  </p>
<p>“The firm will continue its longstanding tradition of serving our clients with the highest levels of excellence,” said Bob Gronauer, who will remain managing partner and a senior member of the land use and governmental affairs team of Kummer Kaempfer.  “During the transition, our clients we serve can rest assured that our collective commitment to seamless service and client delivery stands above all else.”</p>
<p>“This is a difficult, but cordial decision that reflects the desires of certain practice groups in our firm to practice in an international firm,” said Michael Bonner, who will be joining Greenberg Traurig and currently serves as Kummer Kaempfer’s Chairman of the Executive Committee. “We will continue to work together with our Kummer Kaempfer colleagues as co-counsel on many matters now and in the future. More importantly, we will remain good friends.”</p>
<p>Founding partner Chris Kaempfer, who will remain with Kummer Kaempfer, said, “The foundation of Kummer Kaempfer’s success is its fundamental philosophy that a firm is nothing more than the talent, integrity and commitment of its attorneys and staff.  While some members of the firm will leave and some will remain, the dedication of the attorneys and staff that our clients and the community have come to know will continue.”</p>
<p> Founding partner Thomas Kummer, who will join Greenberg Traurig, said, “We have discussed, analyzed and contemplated this business decision for many months.  We are a diverse firm with broad ranging expertise, and we first and foremost considered the well-being of our clients.” </p>
<p>“Change is happening all around us – throughout Nevada, our nation and around the globe,” said Gronauer.  “While we believe this is the right time to carve out a new path, it is also with a heavy heart that we have had to implement workforce reductions of attorneys and staff today.  This was an extremely difficult decision and one that we hoped to avoid.  However, in light of the new structure, it was a necessary step given the competitiveness of the new marketplace.  These are our friends and colleagues with whom we’ve worked side-by-side for years, and we will miss them.”</p>
<p>Over the next 30 days, partners Tom Kummer, Mike Bonner, Mark Ferrario, John Brewer, John Jeppsen, Gregg Vermeys and Brandon Roos, along with several associates and support staff will transition their practices to Greenberg Traurig.</p>
<p>Bob Gronauer along with partners Chris Kaempfer, Robert Crowell, Mark Fiorentino, Tom Amick, Kathleen Drakulich, John Griffin, Jennifer Lazovich, John Renshaw, Russell Rowe, Jim Smyth, Steve Tackes, Jason Woodbury, several associates and support staff will remain at Kummer Kaempfer.<br />
  <br />
 Kaempfer added that “knowing and doing what’s best for our clients has always been what’s set us apart.  The most difficult part of the decision is knowing that some of the people whom we’ve all come to respect, admire and love, will now be a phone call or e-mail away rather than in the office next door.”</p>
<p>Gronauer added, “we can see the tremendous opportunities that are ahead of us not only for our firm, but most importantly, for our clients and our communities.”<br />
 <br />
Kummer Kaempfer is a prominent force in Nevada, serving local, regional, national and international clients in the real estate development, hospitality, gaming, manufacturing, service, high-technology, and energy and utilities industries.  Founded in 1994, Kummer Kaempfer is one of Nevada’s law firms, specializing in complex corporate transactions, commercial litigation, zoning and land use and regulatory law. </p>
<p>With offices in Las Vegas, Reno and Carson City, Kummer Kaempfer’s lawyers provide counsel to top corporations, business owners, corporate executives and individuals. Kummer Kaempfer is the Las Vegas member of Meritas, an affiliation of outstanding business law firms that serve international customers worldwide. The firm’s attorneys are routinely rated among the best corporate, mergers and acquisitions, real estate and litigation lawyers in Nevada, including high-ranking recognition by the prestigious Chambers USA – America’s Leading Business Lawyers since its inception in 2003; The Best Lawyers in America®; and Mountain States Super Lawyers.  For more information about Kummer Kaempfer, call (702) 792-7000 or visit <a href="http://www.kkbrf.com">www.kkbrf.com</a>.  Kummer Kaempfer Bonner Renshaw &amp; Ferrario, Ltd., is a Nevada professional corporation.</p>
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		<description><![CDATA[Originally published in Communiqé, May 2009
Nevada General Partnerships: To Be Or Not To Be . . . An Entity

by Neal A. Klegerman and Eric C. Willis
In 2005, the NRS was amended to adopt the Revised Uniform Partnership Act (1997), NRS 87.4301 to 87.4357 (“RUPA”). However, Nevada gives general partnerships the choice of either being governed [...]]]></description>
			<content:encoded><![CDATA[<p><em>Originally published in Communiqé, May 2009</em></p>
<p style="text-align: left;"><strong>Nevada General Partnerships: To Be Or Not To Be . . . An Entity</strong></p>
<p style="text-align: center;"><strong><br />
by Neal A. Klegerman and Eric C. Willis</strong></p>
<p>In 2005, the NRS was amended to adopt the Revised Uniform Partnership Act (1997), NRS 87.4301 to 87.4357 (“RUPA”). However, Nevada gives general partnerships the choice of either being governed by the Uniform Partnership Act, 87.010 to 87.430 (“UPA”) or RUPA. For a general partnership formed on or after July 1, 2006, the partnership must affirmatively elect to be governed by UPA, or it will be subject to RUPA. Similarly, a general partnership formed before that date is subject to UPA unless it opts in to RUPA. NRS 87.025; 87.4314. Lawyers advising clients on the formation of a Nevada general partnership should make them aware of the alternatives. As used in this article, “partnership” refers only to general partnerships and not limited partnerships.</p>
<p> <br />
Whether a partnership is an entity may be important to the client. For example, partners may wish to be contractually committed to their business enterprise, but may want to at least preserve the argument that their partnership is not an entity for purposes of some legal, business, regulatory, or international tax consequences. On the other hand, the partners may want to have some certainty that their partnership will be treated as an entity.</p>
<p> <br />
UPA states that “a partnership is an association of two or more persons to carry on as co-owners a business for profit . . . .” NRS 87.060. According to the Official Comment to RUPA § 201(a), the ambiguous nature of this provision was the catalyst behind the adoption of Section 201(a) of RUPA (NRS 87.4321), which states that “[a] partnership is an entity distinct from its partners.” The comments to RUPA make clear that RUPA Section 201(a) was intended to “allay previous concerns stemming from the aggregate theory” of partnership in light of UPA’s “ambivalence on the nature of partnerships.” Official Cmt. to RUPA § 201(a).</p>
<p> <br />
With regard to UPA, Nevada case law has done little to eliminate the ambiguity. In Watson v. G.C. Assocs. Ltd. P’ship, 100 Nev. 586, 691 P.2d 417 (Nev. 1984) the Nevada Supreme Court addressed whether a partnership could be held liable as an entity independent of its partners when the partners are immune from liability under another state statute. Watson, 100 Nev. at 588, 691 P.2d at 418. After referring to the definition of “partnership” under NRS 87.060(1), the court, citing an article written by one of the drafters of UPA, stated that “this language was intended to make clear that the act was based upon a common law or aggregate theory of partnership, as opposed to an entity theory which would have endowed the partnership as a separate legal personality.” Watson, 100 Nev. at 588-89, 691 P.2d at 418 (citing William Draper Lewis, The Uniform Partnership Act, 24 YALE L.J. 617, 638-40 (1915)). In an unreported case, the federal district court relied on Watson to state that “a partnership cannot be regarded as an entity independent of the persons who compose it.” Home Haven, Inc. v. United States, 1999 WL 691869, at *3 (D. Nev. 1999). </p>
<p> </p>
<p>On the other hand, as discussed below, the Nevada Supreme Court has held that, for purposes of pleading and defending litigation, a partnership is “deemed a legal entity.” Richard Matthews, Jr., Inc. v. Vaughn, 91 Nev. 583, 589, 540 P.2d 1062, 1066 (Nev. 1975). But, even so, the court noted that a “partnership is not a separate legal entity in the sense that a corporation is a legal entity.” Richard Matthews, 91 Nev. 589, 540 P.2d 1066.</p>
<p> <br />
Considering the ambiguity in UPA and the lack of Nevada case law settling this “age-long conflict,” the nature of the UPA partnership may be categorized as a “hybrid” encompassing aspects of both the “entity theory” and the “aggregate theory,” consistent with the views of UPA drafters when discussing UPA generally. Summary: Uniform Partnership Act, Uniform Law Commissioners, available at <a href="http://www.nccusl.org/Update/uniformact_summaries/uniformacts-s-upa1994.asp">http://www.nccusl.org/Update/uniformact_summaries/uniformacts-s-upa1994.asp</a> (last visited April 1, 2009) [hereinafter Summary: Uniform Partnership Act].</p>
<p> <br />
As noted above, other factors beyond the definitional or conceptual aspects may be relevant to the question of whether an UPA partnership is a separate legal entity. For example, one may wish to consider the following:</p>
<p>Factors indicating that an UPA partnership should be considered a separate legal entity.</p>
<ul>
<li>An UPA partnership can be sued as an entity. UPA does not explicitly address whether a partnership can sue and be sued, and at common law, a partnership—not being a legal entity—was unable to sue or be sued in the partnership’s name. Official Cmt. 1 to RUPA § 307. But Nevada, like many other states, has authorized partnerships to be sued in the partnership name in the state civil procedure statutes. See Official Cmt. 1 to RUPA § 307. NRS 12.110 states that “[w]hen two or more persons, associated in any business, transact such business under a common name . . . the associates may be sued by such common name . . . and the judgment in the action shall bind the joint property of all the associates . . . .” NRS 12.110; see also NRCP 23.1, 23.2. A partnership is “deemed a legal entity for purposes of pleading and defending litigation.” See NEV. CIV. PRAC. MAN. § 5.15 (October, 2007) (citing Richard Matthews).</li>
<li>An UPA partnership can own real property in its own name. NRS 87.080. However, whether a partnership can own personal property in its own name is unclear under UPA. See NRS 87.080; see also Official Cmts. to RUPA §§ 203-204.An UPA partnership can, by implication, enter into a contract in its name. NRS 87.090 (“Every partner . . . and the act of every partner, including execution in the partnership name of any instrument . . . binds the partnership . . . .”); see also Official Cmt. to § 301 of RUPA (stating that “by virtue of partnership status, each partner has apparent authority to bind the partnership . . .”).</li>
</ul>
<p>Factors indicating that an UPA partnership should not be considered a separate legal entity.</p>
<ul>
<li>The NRS states that an UPA partnership is an “association of two or more persons to carry on as co-owners a business for profit,” without reference to partnerships being considered “entities.” NRS 87.060.</li>
<li>RUPA defines a partnership as “an entity distinct from its partners.” NRS 87.4321. This suggests that UPA partnerships were not “entities.”</li>
<li>“No person may become a member of an UPA partnership without the consent of all the partners.” NRS 87.180(7). Although this may be varied by the partnership agreement, simply having this as the default rule appears somewhat inconsistent with the concept of a distinct entity.</li>
<li>Notwithstanding the broad statement in Richard Matthews cited above, whether an UPA partnership can commence an action in its own name is unclear in Nevada. In 1868, the Nevada Supreme Court held in The Proprietors of the Mexican Mill v. The Yellow Jacket Silver Mining Co., 4 Nev. 40 (1968) that “a partnership does not have the capacity to commence suit in its own name.” NEV. CIV. PRAC. MAN. § 5.15 (October, 2007) (citing Mexican Mill). Neither UPA nor any predecessor was in effect in Nevada in 1868, so the relevance and applicability of Mexican Mill is questionable. This ambiguity has been cleared up in RUPA, which provides that “[a] partnership may sue and be sued in the name of the partnership.” NRS 87.4331. The drafters of RUPA point out that this provision is intended to simplify suits by and against partnerships. Official Cmt. 1 to RUPA § 307.</li>
<li>An UPA partnership does not need to file or register to form. See NRS 87.070. While a RUPA partnership also need not file, as noted above, it is an entity pursuant to the language of RUPA.</li>
<li>An UPA partnership automatically dissolves upon the death, resignation, expulsion, or bankruptcy of a partner. NRS 87.310. This aspect of UPA partnerships has been changed in RUPA, which allows continuation of a partnership notwithstanding the departure of a partner. See NRS 87.4351. It should be noted, however, that even under UPA the actual winding up of the partnership business can be avoided notwithstanding dissolution.</li>
<li>Although “real property may be acquired in the name of an UPA partnership” in accordance with NRS 87.080 (emphasis added), it seems that ownership in the partnership’s name is not required. See NRS 87.080; NRS 87.100. First, NRS 87.080 uses the word “may” instead of “shall” or “must.” Second, NRS 87.100(3) and (4) indicate that title to real property may be “in the name of one or more but not all the partners.” On the other hand, RUPA provides that property acquired by a partnership is property of the partnership and not the partners individually. NRS 87.4323. Moreover, assets owned by an UPA partnership are co-owned by the partners.  NRS 87.250(1) states that “[a] partner is co-owner with his partners of specific partnership property holding as a tenant in partnership” whereas RUPA provides that “[a] partner is not a co-owner of partnership property and has no interest in partnership property which can be transferred . . . .” NRS 87.4339. As indicated in the comments to RUPA, this “section abolishes [NRS 87.250(1)] . . . and reflects the adoption of the entity theory.” Comment to RUPA § 501.</li>
</ul>
<p>If the client wants a partnership to be an entity, then make sure RUPA applies. Although the result is ambiguous, if the client wants to preserve the argument that a partnership is not an entity, UPA is the way to go.</p>
<p> <br />
<em>Neal A. Klegerman (</em><a href="mailto:nklegerman@cekcounsel.com"><em>nklegerman@cekcounsel.com</em></a><em>) is a stockholder of Coppedge Emmel &amp; Klegerman PC where he focuses on corporate and securities law and transactions. Eric C. Willis (</em><a href="mailto:ewillis@kkbrf.com"><em>ewillis@kkbrf.com</em></a><em>) is an associate of Kummer Kaempfer Bonner Renshaw &amp; Ferrario where he focuses on real estate and corporate law and transactions.</em></p>
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		<title>Nevada Limited Partnerships: Rules for New (and Old) Limited Partnerships</title>
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		<pubDate>Wed, 06 May 2009 22:31:08 +0000</pubDate>
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		<description><![CDATA[Originally Published in Communiqué, May 2009
Nevada Limited Partnerships: Rules for New (and Old) Limited Partnerships
By  Jordan Pinjuv
In 2007, the Nevada legislature adopted a new set of rules governing the formation, operation and dissolution of limited partnerships based on the Uniform Limited Partnership Act (2001) or ULPA (2001). Those newer rules, which are codified in Chapter [...]]]></description>
			<content:encoded><![CDATA[<p><em>Originally Published in Communiqué, May 2009</em></p>
<p style="text-align: left;"><strong>Nevada Limited Partnerships: Rules for New (and Old) Limited Partnerships</strong></p>
<p style="text-align: center;"><strong>By  Jordan Pinjuv</strong></p>
<p>In 2007, the Nevada legislature adopted a new set of rules governing the formation, operation and dissolution of limited partnerships based on the Uniform Limited Partnership Act (2001) or ULPA (2001). Those newer rules, which are codified in Chapter 87A of the Nevada Revised Statutes (NRS), presumptively apply to limited partnerships established after October 1, 2007, while the original Nevada limited partnership rules contained in Chapter 88 of NRS presumptively apply to limited partnerships formed before that date. However, limited partnerships formed on any date can voluntarily elect to be governed by the non-presumptive set of limited partnership rules if the limited partnership so chooses. Understanding the differences between the statutory frameworks is crucial to properly advising clients who may be considering a limited partnership as a business entity.</p>
<p><strong>What is a limited partnership?<br />
</strong>Both chapter 87A and 88 of the NRS define a limited partnership as a business entity “having one or more general partners and one or more limited partners.” The general partners manage the business, and are liable for the debts and obligations of the partnership. Limited partners are passive investors, with little or no involvement in the day-to-day operations of the partnership. The liability of the limited partners is limited to their original investment in the entity. Typically, the general partner of a limited partnership is itself an entity with limited liability, such as a corporation or a limited-liability company.</p>
<p><strong>NRS Chapter 87A Limited Partnership Act<br />
</strong>According to the National Conference of Commissioners on Uniform State Laws (NCCUSL)—the drafters of the Uniform Limited Partnership Act (2001)—the rules adopted in Chapter 87A are intended to reflect the modern day uses of limited partnerships. Specifically, the new rules have been drafted for the use of the limited partnership in the context of manager-entrenched commercial deals and family limited partnerships. In light of the highly specialized purposes of the limited partnership, as noted in the NCCUSL’s summary, the default rules reflect a preference for strong, centralized management and passive investors with little capacity to exit the entity. Among the areas in which the new limited partnership act makes significant changes are the liability of partners, the fiduciary duties owed to partners, and the duration of and withdrawal from the limited partnership. Additionally, the new limited partnership statute is completely de-linked from the general partnership rules found in Chapter 87. In contrast, the pre-2007 limited partnership statute provides that in any case where the chapter is silent, the general partnership rules will govern.</p>
<p><strong>Liability of limited partners<br />
</strong>Some of the most significant changes to the limited partnership rules are the additional limitations on liability contained in the new act. Under the old rules, a limited partner could be held liable for the debts of the partnership if he participated in the control of the business and a third party engaged in business with the partnership under the belief that the limited partner was a general partner. The new rules provide a full shield against limited partner liability on the basis of limited partnership status, despite limited participation in the management of the limited partnership. NRS 87A.330. Additionally, the Uniform Limited Partnership Act (2001) made the limited-liability limited partnership available to shield general partners from liability, though these provisions were already codified prior to the 2007 adoption of the ULPA (2001).</p>
<p><strong>Fiduciary duties</strong><br />
The new limited partnership act rules also specify and limit the fiduciary duties owed by general partners to the limited partnership. General partners owe a duty to account for and hold property derived from limited partnership’s activities as a trustee for the limited partnership. NRS 87A.385(2)(a). General partners must also refrain from self-dealing with and competing against the limited partnership in limited circumstances. NRS 87A.385(2)(b) and (c). The duty of care owed to the limited partnership is limited to refraining from negligent or reckless conduct, intentional conduct, or a knowing violation of the law. NRS 87A.385(3). The fiduciary duties of general partners were not explicitly defined under the pre-2007 limited partnership rules and were therefore left open to interpretation under the general partnership rules. General partners operating without the benefit of the new specified and limited fiduciary duties may likely owe a greater duty to their limited partners, one that requires as then-Judge Cardozo put it, “Not honesty alone, but the punctilio of an honor the most sensitive.” Meinhard v. Salmon, 164 N.E. 545 (1928).</p>
<p><strong>Duration and dissolution</strong><br />
The new limited partnership rules also change the procedures for the duration and dissolution from the partnership. Whereas the original rules provide that the duration of the limited partnership is to be specified in the certificate of limited partnership, the new rules provide that a limited partnership shall continue as a perpetual entity. NRS 87A.155. The original limited partnership statute provides that a decision to dissolve the limited partnership requires the unanimous consent of all partners. NRS 88.550(3). The new statute provides that only the consent of all the general partners and those limited partners owning a majority of the rights to receive distributions as limited partners are needed to dissolve the partnership, essentially concentrating more power with the general partners. NRS 87A.435</p>
<p><strong>Use of limited partner’s name<br />
</strong>Under Chapter 88.320, the use of a limited partner’s name in the name of the limited partnership is disallowed except under certain circumstances. Under the new rules, a limited partnership may now use a limited partner’s name in the name of the limited partnership. NRS 87A.175.</p>
<p><strong>Making a choice</strong><br />
Limited partnerships new and old need to make an informed decision regarding which limited partnership act will apply to the entity’s business. Generally, in the specialized circumstances in which a limited partnership is the chosen investment vehicle, the new rules found in Chapter 87A are more likely to be appropriate. Clients who formed a limited partnership before October 1, 2007 should take a long look at the potential benefits of opting-into the new statutory framework.</p>
<p> <br />
<em>Jordan Pinjuv is an associate at Kummer Kaempfer Bonner Renshaw &amp; Ferrario where he focuses on corporate and securities laws and transactions. He can be reached at </em><a href="mailto:jpinjuv@kkbrf.com"><em>jpinjuv@kkbrf.com</em></a><em>.</em></p>
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		<title>Lyssa Anderson Named a Panelist for “Ask the Expert: Legal Roundtable” on April 21</title>
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		<pubDate>Thu, 16 Apr 2009 23:21:43 +0000</pubDate>
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		<description><![CDATA[Discussing employment law and other important business-related topics, attorney Lyssa Anderson of Kummer Kaempfer will be a featured panelist at the Business Advantage Network’s “Ask the Expert: Legal Roundtable” on April 21.  Presented by the North Las Vegas Chamber of Commerce and Nevada State Bank, the “Ask the Expert” series is designed to give Chamber [...]]]></description>
			<content:encoded><![CDATA[<p>Discussing employment law and other important business-related topics, attorney Lyssa Anderson of Kummer Kaempfer will be a featured panelist at the Business Advantage Network’s “Ask the Expert: Legal Roundtable” on April 21.  Presented by the North Las Vegas Chamber of Commerce and Nevada State Bank, the “Ask the Expert” series is designed to give Chamber members an opportunity to talk to professionals in a variety of areas important to business.  This Chamber members-only event will be held at the North Las Vegas Chamber of Commerce in the Nevada State Bank Conference Room from 9:30 to 11:30 a.m.  To register for the event, please visit <a href="http://www.northlasvegaschamber.com">www.northlasvegaschamber.com</a>.  To view details of the event, click here <a href="http://blog.kkbrf.com/wp-content/uploads/2009/04/nlv-chamber-ban-lyssa-april-21-2009.pdf">nlv-chamber-ban-lyssa-april-21-2009</a>.</p>
<p>Anderson is a partner in the Litigation Department and also serves as the firm’s General Counsel. She focuses her practice on employment law, constitutional law, appellate law, commercial litigation and professional malpractice defense. As an experienced trial attorney and appellate attorney, Anderson has successfully argued multiple cases before the Ninth Circuit Court of Appeals and the Nevada Supreme Court. Anderson is a member of the, the Clark County Bar Association, the State Bar of Nevada, the Defense Research Institute, the Association of Trial Lawyers of America (ATLA), the Nevada Trial Lawyers Association, and is a life member of the National Registry of Who&#8217;s Who. Anderson provides pro-bono services to variety of non-profit organizations and supervises associates in their representation of pro-bono clients through Clark County Legal Services.  In 2007, Anderson was named one of the top 40 business leaders under age 40 who have distinguished themselves in their profession. For more information about Anderson, please visit <a href="http://www.kkbrf.com">www.kkbrf.com</a>.  </p>
<p>Anderson joins esteemed panelists Ms. Brooke Borg of Lubbers &amp; Borg and Ms. Teresa Jackson of Clark County Collection Service for the roundtable discussion.</p>
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