So, Your Client is Considering Investing In a Film . . . .

Harris, a white man with grey hair, wears a red and white checkered shirt and a black jacket. By Mary Craven Adams and Harris E. Tulchin

In March 2023, the North Carolina Film Office reported that 2022 spending from film production had topped over $258 million, and 2023 was off to a strong start. Governor Roy Cooper lauded the industry for creating over 16,000 job opportunities in the state, including over 70 films, television, and streaming projects in 2022 alone.

With ever-increasing film production in North Carolina, it is timely to review the basics with respect to advising clients considering an investment in film. This blog post shares top legal and non-legal considerations when advising a first-time (or relatively unsophisticated) film investor. There is a long list of potential bad outcomes for a film investor — from the producer running out of money, the film being unable to obtain distribution, a lender taking over the project due to non-payment of a loan, or even the failure to distribute profits. Set forth below are key questions to ask about the proposed project to assist you in understanding the project and advising your client regarding strategies to minimize risk.

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Recent Legislation Enacted After LexisNexis 2023 Update Deadline

By Nancy Ferguson Nancy, a white woman with light brown hair, wears a white blouse and black jacket.

The below information was provided by David Unwin, Revisor of Statutes, to alert attorneys to this limitation in the most recent update by LexisNexis. Some legislation enacted late in the session is not yet incorporated into LexisNexis, including the important S.L. 2023-134 2023 Budget Bill which includes the NC State Bar Grievance Review Committee, Disciplinary Hearing Commission, and State Bar Fees provisions, as well as later notary law amendments, NCBA corporate law recommendations, and more regulatory reform, among others.

Due to the publishing schedule of LexisNexis, when sessions last a long time, LexisNexis and the Legislative Services Office typically agree on a cutoff date to determine what session laws get included in the next update of the General Statutes. The goal is to include as many session laws as possible while also enabling LexisNexis to publish its annual update on schedule. For instance, last year, LexisNexis and the Legislative Services Office agreed to treat S.L. 2023-122 as the last session law for purposes of the 2023 update. The General Assembly’s website is drawn from LexisNexis’s electronic data, so the website currently reflects sessions laws up through S.L. 2023-122. The Legislative Services Office is currently working on a 2024 Special Supplement that will reflect the remaining 2023 session laws. The 2023 budget bill (S.L. 2023-134) is one of these session laws. It is important to be aware of how up to date the General Assembly’s website is. Because the website currently does not reflect S.L. 2023-123 through S.L. 2023-151, a researcher should check the Law Modifications list for those session laws to gain the most current picture of the statutes. This list shows what General Statute and Session Law sections have been modified by these remaining 2023 session laws.

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A Letter to My Younger Self

Patti, a white woman with shoulder-length blond hair, wears a blue suit. In the background is blurred foliage. By Patti Ramseur

Dear Patti (age 26),

You just graduated law school, got married, and started your clerkship with Judge Walker. You will learn so much from Judge Walker! He is a great mentor and will continue to be an important part of your life for many years to come. You will enjoy your DINK (double income no kids) status, while you try to learn how to be a lawyer and focus on tackling the significant law student debt you incurred. Be diligent in paying down your law student loans, but always remember this is an important part of what makes you who you are. It makes you truly appreciate the opportunity to be a lawyer and part of this noble profession.

Are you sitting? You are currently the president of this amazing group of attorneys, the North Carolina Bar Association! I know that’s difficult for you to imagine. The NCBA will be critical to your growth and development, both professionally and personally. So jump in (soon!) and participate at every opportunity you get. The current Chair of the NCBA’s Young Lawyer Division asked me to write a letter to my younger lawyer self, so here are a few tips for you: Read more

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Kearns Davis’ Remarks at 15th Annual Criminal Justice Peter S. Gilchrist III & Wade M. Smith Award Dinner

Kearns, a white man with brown hair, wears a white shirt, red tie and black jacket. By Kearns Davis 

The NCBA Criminal Justice Section held the 15th Annual Criminal Justice Peter S. Gilchrist III & Wade M. Smith Awards Dinner in Raleigh on January 18, 2024. Kearns Davis, a partner at Brooks Pierce in Greensboro, and a former Chair of the Criminal Justice Section, was the recipient of the 2023 Wade M. Smith Award. The late Elizabeth “Beth” Dierauf, a longtime Assistant District Attorney for Henderson, Transylvania, Polk, Rutherford, and McDowell Counties, was named the recipient of the 2023 Peter S. Gilchrist III Award. Beth lost a long battle with cancer on November 11, 2023.

Kearns graciously shared his remarks from the dinner, which are posted in their entirety below:

I wish so much I could share this evening with Beth Dierauf. I never had the opportunity to work with Beth, but I’ve learned about her since this event was scheduled. She and I have worked with a lot of the same people, and our kids are about the same ages and have much in common. I feel almost like I knew her, and I wish I’d had that privilege. If Beth were here, I imagine she would feel what I feel tonight: a deep sense of gratitude for the opportunity to work with an amazing group of dedicated lawyers and judges in the criminal justice system; thankful that her life’s work has made a difference in her community and her state; and honored to spend this evening with people she admires and respects so much.

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Thomas C. Watkins Receives the Business Law Section’s Distinguished Service Award

Andrew, a white man with brown hair, wears a white shirt, red tie and black suit.By Andrew Steffensen

Thomas C. Watkins recently received the North Carolina Bar Association Business Law Section’s highest honor, its Distinguished Service Award. The NCBA presents the Distinguished Service Award to recognize extraordinary service to the Business Law Section, the legal profession and the public.

In making the nomination, April Kight said of her colleague, “Tom Watkins is a wonderful teacher and leader. He is an excellent lawyer and advocate for his clients, with the best combination of knowledge and practical application. He has given much of his time to the management of our firm, the North Carolina Bar Association and the community. I can’t think of a more deserving recipient.”

Mr. Watkins is a past member of the Board of Governors of the NCBA and served as Chair of the Bar Association’s Business Law Section when that organization launched NC LEAP, now known as the Entrepreneurs Assistance Program. Under this initiative, NCBA members volunteer their time and expertise to support low-wealth entrepreneurs.

Tom, a white man with white hair, wears a pale grey shirt and dark grey suit and holds the dark blue Business Law Award.

Thomas C. Watkins

In addition to his active engagement with the NCBA, he has served the community and the state in many leadership roles. He is a past member of the Board of Visitors of the University of North Carolina at Chapel Hill, a past member of the Board of Directors of the Greensboro Sports Council, a member of the Board of Directors of the Piedmont Triad Charitable Foundation (Wyndham Championship/PGA Tour Event), a past member of the Boards of Visitors of UNC Children’s Hospital and UNC Lineberger Comprehensive Cancer Center, a past President of Greensboro Country Club and a member of the Board of Directors of Wheels4Hope.

At Schell Bray PLLC, he is the former chair of the firm’s Executive Committee and focuses his legal practice primarily on closely held businesses and investment vehicles. He has extensive experience in representing investors, borrowers and lenders in a broad range of complex transactions, including debt and equity investments, financings, mergers and acquisitions and restructurings.

In addition to the 2024 Distinguished Service Award, Mr. Watkins’ professional recognition includes:

  • The Best Lawyers in America, named 2023 Piedmont Triad “Lawyer of the Year” in Corporate Law
  • The Best Lawyers in America, named 2013 Greensboro “Lawyer of the Year” in Banking and Finance Law
  • The Best Lawyers in America, listed for banking, finance and corporate law, 2001-2023
  • Business North Carolina, Legal Elite, business law, multiple prior listings
  • North Carolina Super Lawyers, business/corporate law, multiple prior listings
  • Martindale-Hubbell AV Preeminent™ Peer Review Rated

Andrew Steffensen is the chair of the NCBA Business Law Section Communications Committee. 

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Unlocking Opportunities: Duke Law Students Create Lasting Memories in Externships and Pro Bono Projects

John, a white man with brown hair and a beard, wears a white shirt, peach tie, and navy suit.Surya, a man with black hair, wears a white shirt, pale grey suit, and teal tie. Christina, a woman with short, dark brown hair, wears a black suit. By John Godfrey Jr., Surya Korrapati, and Christina Trepczynski

In the dynamic world of law, where traditional classroom learning meets real-world application, externships and pro bono projects play pivotal roles in shaping future legal professionals. This month, we had the privilege of interviewing three law students who are gaining experience outside the classroom, either through volunteering for pro bono causes or gaining course credit in legal externships.  By highlighting their work, we hope to provide some insight as to how you can secure an externship or find the right pro bono project — and the sorts of skills you may gain along the way.

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Checking In: February 27, 2024

Compiled by Jessica Junqueira

Brooks Pierce Announces Raleigh Office Expansion

Brooks Pierce has expanded its Raleigh office with the addition of 5,915 square feet of space on the eighteenth floor of the Wells Fargo Capitol Center at 150 Fayetteville, bringing the law firm’s total Raleigh footprint to 43,047 square feet. The expanded office space is connected to the existing space with a newly designed internal staircase. As part of the expansion, the law firm added important works to its distinguished collection of North Carolina art, including works by Gayle Stott Lowry, Joe Cox, Henry Pearson, and Keiko Genka, as well as a commissioned work by Raleigh-based artist Mia Yoon.

Capua Law Adds Attorneys

Natalia, a white woman with brown hair, wears a a black blouse with coral flowers and bright blue earrings.Natalia Lynn Talbot has joined Capua Law Firm, and she is based in the Asheville office. She brings more than ten years of experience as an attorney to this role. She has practiced criminal prosecution, bankruptcy litigation, commercial litigation, and federal appellate litigation. She graduated from Boston College Law School. After earning her J.D., she became an assistant district attorney for the Commonwealth of Massachusetts. She served as a federal law clerk under W. Carleton Metcalf, U.S. Magistrate Judge in the Western District of North Carolina. Talbot serves on the board of directors for BarCARES and was an NC Pro Bono Honor Society inductee (2022).

Sam, a white man with light brown hair and a beard, wears a white shirt, dark grey suit and a medium grey tie.Sam Maier has also joined the firm. He is experienced in litigation strategy development and trial preparation. Before joining the firm, he practiced in Wilmington. He also has experience as an attorney with the International Maritime Group in Seattle, Wash. He received his J.D., cum laude, from George Washington Law School, where he graduated with honors and was a Thurgood Marshall Scholar. He holds a B.S., cum laude, from the University of Wisconsin in Oshkosh. He majored in political science and philosophy with a minor in European studies. Read more

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MIP Event Recap: Insights from NCBA’s Minority Corporate Counsel Panel

Robyn, a Black woman with black hair that is tied back, wears a white blouse. By Robyn Magee 

The legal landscape is evolving, and diversity in the legal profession is becoming increasingly important. Recognizing this, the Minorities in the Profession Committee of the North Carolina Bar Association recently hosted an enlightening event – the “Minority Corporate Counsel: Being Diverse in Corporate Law” panel. The purpose of this event was to provide a platform for students and alumni interested in corporate law to connect with and gain insights from diverse in-house attorneys and legal professionals in the corporate sector.

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Allocation of Income When a Partner Leaves a Partnership

John, a white man with dark brown hair, wears a pale blue shirt, lime green and blue tie, and black suit. By John G. Hodnette

The allocation of income when the ownership of an S corporation changes is discussed in my previous article Section 1377(a)(2) Elections for S Corporations. That article explains the default method for allocations of income when an ownership change occurs as to an S corporation is the proration method. However, one can make a Section 1377(a)(2) election and instead use the closing of the books method. In contrast, in the case of partnerships, the default is the opposite.

Pursuant to Reg. § 1.706-4(a)(3)(iii), “absent an agreement of the partners . . . to use the proration method, the partnership shall use the interim closing method.” Reg. § 1.706-4(f) defines “agreement of the partners” to mean either (i) an agreement of all the partners to select the method in a dated, written statement maintained with the partnership’s books and records or (ii) a selection made by a person authorized to make such selection under state law or the partnership agreement, provided that person’s selection is in a dated, written statement maintained with the partnership’s books and records. The interim closing method is similar to the S corporation closing of the books method. The interim closing method generally treats each change in partnership ownership as the time to close the books for such interim period. That means only partners who were owners in such period are allocated income and loss that occurred during the period. However, the regulations provide great flexibility in determining the length of interim periods.

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Member Spotlight: Douglas Wood

By Douglas Wood

Throughout the year, the Sports & Entertainment Law Section will be conducting interview spotlights of its members to showcase the careers of the section members. This month, the section is spotlighting Douglas Wood, formerly with the law firm of Reed Smith LLP, and now enjoying a solo practice in North Carolina after 47 years toiling in “Big Law.”

What brought you into sports or entertainment law, and what area of sports/entertainment law do you currently practice?

In law school, I focused on intellectual property. I continued focusing on intellectual property while pursuing my LLM. After receiving my LLM, I was very fortunate to get a job at a boutique music and entertainment law firm. The rest is history!

Over time, my practice evolved and now focuses on transactions in the advertising and marketing industry. Examples include media buying, licensing, and endorsements.

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