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Cypen & Cypen
December 12, 2019

Stephen H. Cypen, Esq., Editor

Going out of business sales may seem like golden opportunities to grab great deals. But before you head to one, here are a few things to keep in mind.
How can you tell if you’re getting a good deal?
Comparison shopping is your best bet. Check to see if someone is selling the same, or similar, products somewhere else for less. If you’re at the store, use your smart phone to compare prices online.
Who’s handling the sale?
Most large retailers sell off their merchandise to third party liquidators, who hold the sale. Liquidators may base discounts on the manufacturer’s suggested retail price, which often is higher than what stores typically charge. That means items can end up costing more than they did before the sale began. Liquidators generally don’t honor coupons or store credits. They probably also have a “no refunds or returns” policy. So, look things over carefully before you buy them. If you have a gift card for a store that’s going out of business, use it right away. There may be a deadline to use it. After that, your card will be worthless.
When can a company advertise a going out of business sale?
The short answer is: only when a store is going out of business. It’s against the law to advertise a going out of business sale when a store isn’t, well, going out of business. If a store in your area is advertising what looks to be a bogus going out of business sale, tell your state Attorney General’s office.

For more tips to help you save money, check out Shopping & Saving. Colleen Tressler, Consumer Education Specialist, FTC, Federal Trade Commission, December 4, 2019.
Property tax collections by local governments in Illinois increased nearly $1 billion between 2017 and 2018 even as the state lost thousands of residents over that year. Combined, 6,042 local governments received $31.8 billion in property taxes last year, according to Illinois Department of Revenue reports. That was $944 million more than what was collected in 2017 by those agencies. Meanwhile, the state lost 45,116 residents in 2018, according to U.S. Census Bureau figures. That increased the tax burden on the remaining population to pay for services provided by towns, schools, counties and other local governments. Statewide, local governments combined to collect $2,496 in property taxes for every resident in 2018, up from $2,413 per person in 2017, according to a Daily Herald analysis. In Cook and the collar counties, the amount of property taxes collected per resident is even higher. The results of the analysis highlight the number of local governments in Illinois -- the most in the nation -- as well as how much local governments rely on property taxes, government finance experts said. Local governments that collect property taxes also include townships, park districts and a bevy of smaller specialized agencies that oversee operations of libraries, fire protection districts and other amenities. Ralph Martire, executive director of the bipartisan Center for Tax and Budget Accountability, said that while the state's population decline has been much ballyhooed, it's not enough to move the needle on local government expenses. "Public services are labor-intensive," he said. "The population shifts would have to be much more dramatic to allow local government authorities to significantly reduce head count." Property taxes are the primary funding source for schools and many other local government agencies, said Laurence Msall, head of The Civic Federation, a nonpartisan government research organization that specializes in Illinois tax and financial policy. He said that while property tax increases are limited by a state tax cap law, that only applies to local governments in certain parts of the state, it can be overridden by home-rule authority, and the cap affects only certain parts of local governments' overall property tax levy. Msall believes consolidation of local governments would reduce administrative and personnel costs, which are the largest drivers of local government expenses. "Costs are not tied to delivering services to a smaller and stagnant population. They are tied to the historical levels of expense," he said. "Unless (Illinois) chooses to force consolidation and efficiency, the overhead remains fairly constant." While it is true that property tax revenue continues to grow each year, 2018 was the first year since 2014 that the single-year increase fell below $1 billion statewide, according to the IDOR reports. More than 80% of the new property tax revenue came from Cook and the collar counties, which lost a combined 25,346 residents from 2017 to 2018. In Cook County, local governments collected $2,899 per resident in 2018. That was $117 per person more than in 2017, according to the analysis. Cook County's plethora of local governments were responsible for more than half the additional property tax revenue collected last year statewide. DuPage County's local governments collected $3,138 in property taxes for every resident in 2018, up $88 from the year before. Local governments in Lake County collected $3,422 in property taxes per resident in 2018, up $75 per person from 2017. In Kane County, local governments received $2,499 per person in taxes, up $62 from last year's per-person cost. In McHenry County, it was $2,724 for every resident, up just $20. And in Will County, local governments collected $2,801 per person, up $80 from 2017. Increasingly, that cost is borne by homeowners rather than businesses. Nearly two-thirds of the property taxes collected in Illinois come from homeowners. In 1999, residential property taxes made up barely half the total property tax collection in the state. Here's how much in property taxes local governments combined to collect per resident in 2017 and 2018.
Local governments' taxes rising
County 2018 2017
Cook $2,899 $2,783
DuPage $3,138 $3,050
Kane $2,499 $2,436
Lake $3,422 $3,347
McHenry $2,724 $2,704
Will $2,801 $2,721
Jake Griffin, Daily Herald analysis of IDOR and U.S. Census Bureau records, Daily Herald, December 2, 2019.
Wednesdays to Return to Full Public Service Hours;
Agency to Hire 1,100 Direct Service Employees
Starting on January 8, 2020, Social Security offices nationwide will be open to the public on Wednesday afternoons, Andrew Saul, Commissioner of Social Security, announced. This change restores Wednesday public service hours that were last in place in late 2012. “I don’t want someone to come to our office at 2:30 on a Wednesday only to find our doors closed,” Commissioner Saul said. In another move to improve service to the public, Commissioner Saul announced in his Open Letter to the Public, that the agency is hiring 1,100 front line employees to provide service on the agency’s National 800 Number and in its processing centers. The agency is currently bringing onboard 100 new processing center employees and approximately 500 new teleservice representatives for the 800 Number. An additional 500 hires for the 800 Number will occur later in 2020. “Improving service is my top priority. Increasing full public service hours at our nationwide network of more than 1,200 field offices is the right thing to do and will provide additional access,” Commissioner Saul said. “The hiring of a thousand new employees to provide service through our National 800 Number and an additional 100 hires to process people’s Social Security benefits at our processing centers around the country are steps in the right direction in our mission to greatly improve the service we provide.” Currently, a field office is generally open to the public from 9:00 a.m. to Noon on Wednesdays. Beginning on January 8, 2020, offices will remain open until 4:00 p.m. on Wednesdays, with typical field office hours from 9:00 a.m. until 4:00 p.m., Monday through Friday. While the agency continues to improve both the access to and the experience with its services, it is important to note that most Social Security services do not require the public to take time to visit an office. People may create a my Social Security account, a personalized online service, at www.socialsecurity.gov/myaccount. Through their personal my Social Security account, people can check personal information and conduct business with Social Security. If they already receive Social Security benefits, they can start or change direct deposit online, and if they need proof of their benefits, they can print or download a current Benefit Verification Letter from their account. People not yet receiving benefits can use their online account to get a personalized Social Security Statement, which provides earnings history information as well as estimates of future benefits. Currently, residents in 40 states and the District of Columbia may request a replacement Social Security card online if they meet certain requirements. The portal also includes a retirement calculator and links to information about other online services, such as applications for retirement, disability and Medicare benefits. Many Social Security services are also conveniently available by dialing toll-free, 1.800.772.1213. People who are deaf or hard of hearing may call Social Security’s TTY number, 1.800.325.0778. Mark Hinkle, Acting Press Officer, Social Security Administration, December 2, 2019.
Three of four banks in Southwest Florida also posted higher earnings during the third quarter. Profits rose modestly during the third quarter in Florida’s banking industry. The state’s 109 banks and thrifts earned a combined $541 million in the July-September period, up 3.7% from the $521 million profit one year earlier, according to data released last week by the Federal Deposit Insurance Corp. But that was better than the scant 1.8% annual increase in the second quarter, when the state-based banks reported $507 million in earnings. Florida’s third-quarter numbers also were stronger than the U.S. banking sector, which reported a 7.3% decline in profits. Florida still has some lenders in the red. Nine banks, or 8%, lost money in the third quarter, although several are start-ups that typically lose money for a year or longer. Just over two-thirds of the Florida-headquartered banks posted higher profits compared with 2018, but that was lower than the 80% last year that benefited from the new lower corporate tax rate. As previously reported, Sabal Palm Bank of Sarasota, Charlotte State Bank & Trust and EnglewoodBank & Trust each posted higher earnings for the quarter. Gulfside Bank of Sarasota, which opened in November 2018, lost money as expected for a new bank. Bad loans continue to shrink at Florida lenders. With the recovery of the real estate market, the ratio of nonperforming assets to total assets dipped to 1.97% from 2.06% as of Sept. 30, although that was up slightly from 1.87% in the previous quarter. The value of real estate they have seized from busted borrowers is down from $171 million to $160 million. Total loans and leases -- a key indicator of economic activity -- expanded over the year, to $149.4 billion from $145 billion, when there were nine more banks in the state. Customer deposits rose by $4 billion to $156.5 billion. The state’s banking sector keeps getting smaller. Ten years ago, Florida was home to 301 banks. Meanwhile, the nation’s 5,256 banks and savings institutions reported combined net income of $57.4 billion in the third quarter, down by $4.5 billion, or 7.3%, over the year. FDIC officials blamed non-recurring events at three large banks -- previously disclosed asset writedowns at Bank of America, Wells Fargo and MUFG Union -- and higher noninterest expense for the decline. “Overall, the banking industry reported strong loan growth, and the number of ‘problem banks’ remained low,” FDIC Chairman Jelena McWilliams said in the earnings announcement. “Community banks also reported another positive quarter. Net income at community banks improved due to higher net operating revenue, and the annual rate of loan growth at community banks exceeded the overall industry. “This quarter, we also saw two reductions in short-term interest rates and a flat yield curve, which present new challenges in credit extension and funding. It is imperative that banks maintain careful underwriting standards and prudent risk management in order to maintain lending through this economic fluctuation,” she said. Sixty-two percent of the U.S. banks reported annual growth in quarterly earnings, while the share of unprofitable banks was at 4%. The number of “problem banks” dipped from eased from 56 to 55 in the third quarter, the smallest amount of weak lenders since early 2007, before the start of the financial crisis. No banks failed during the second quarter, but three have been shuttered so far in the fourth quarter. Four new banks opened in the quarter, bringing the year-to-date total to 10. John Hielscher, Sarasota Herald-Tribune, December 2, 2019.
Retired steelworkers and their families have something to be thankful for this week. And no, it’s not turkey. This week’s notable decision is Stone v. Signode Industrial Group LLC, No. 19-1601, __ F.3d __, 2019 WL 6139680 (7th Cir. Nov. 20, 2019), where the Seventh Circuit held that Signode Industrial Group LLC’s successors were obligated to continue to provide benefits to retirees even after the employer’s termination of the underlying collective bargaining agreement. Defendant Signode was the sponsor of a health care benefit plan for retired steelworkers, the terms of which it had negotiated with a union. Defendant terminated the underlying benefits agreement and ceased paying benefits to the retirees and their families. Plaintiffs initiated a class action under both ERISA and the Labor-Management Relations Act contending that benefits under the plan were vested and thus could not be terminated. On cross-motions for summary judgment, the district court (Judge Thomas M. Durkin, N.D. Ill.) granted Plaintiffs’ motion and denied Defendants’ motion, holding that Defendant did not have the right to terminate benefits. The district court entered a permanent injunction against Defendants, who appealed. The Seventh Circuit affirmed. The court noted that while ERISA does not require that welfare benefits be vested, such benefits may be vested if the contract providing the benefits contains vesting language. The court further found that the plan’s language “unambiguously provided retirees with vested lifetime health-care benefits.” Specifically, the plan stated that covered individuals “shall not have such coverage terminated or reduced (except as provided in this Program) … notwithstanding the expiration of this Agreement, except as the Company and the Union may agree otherwise” (emphasis added). This language “made clear that the promised health-care benefits vested, i.e., they would survive the termination of the underlying agreement.” Defendants contended that another plan provision constituted an exception to the vesting language, but the court rejected this argument, finding that the cited provision only applied to the underlying health insurance agreement, not to the plan’s overriding promise of continued coverage. Finally, the court found that even if the plan was ambiguous regarding vesting, extrinsic evidence in the form of industry usage and the behavior of the parties showed that the benefits were intended to be vested. In doing so, the court relied on other agreements in the steel industry as interpreted by the Fourth and Eleventh Circuits, and on statements made by a benefits program administrator for Defendants who helped to negotiate the terms of the plan with the union. Michelle Roberts, Kantor & Kantor.
The Federal Deposit Insurance Corporation (FDIC) issued its list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in September 2019. The CRA is a 1977 law intended to encourage insured banks and thrifts to meet local credit needs, including those of low- and moderate-income neighborhoods, consistent with safe and sound operations. As part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Congress mandated the public disclosure of an evaluation and rating for each bank or thrift that undergoes a CRA examination on or after July 1, 1990. A consolidated list of all state nonmember banks whose evaluations have been made publicly available since July 1, 1990, including the rating for each bank, can be obtained at www.fdic.gov or from the FDIC's Public Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226 (877.275.3342 or 703.562.2200). A copy of an individual bank's CRA evaluation is available directly from the bank, which is required by law to make the material available upon request, or from the FDIC's Public Information Center. 

See also: 
Monthly List of Banks Examined for CRA Compliance December 2019 List of Banks Examined for CRA Compliance
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877.275.3342 or 703.562.2200). LaJuan Williams-Young, PR-118-2019, Federal Deposit Insurance Corporation, December 4, 2019.
The comptrollers of New York state and New York City announced that they had reached a settlement with casino operator Wynn Resorts, which agreed to pay $41 million in damages and enact a series of governance reforms. Thomas DiNapoli, the state comptroller, and Scott Stringer, the city comptroller, fiduciaries of two large pension funds, represented institutional investors as the co-lead plaintiffs in the case against the company and current and former officers, including ex-CEO Stephen Wynn, alleging sexual misconduct by Mr. Wynn toward employees and alleging inaction by other executives and board members to prevent the misconduct. "We filed our lawsuit in response to serious and repeated allegations of sexual misconduct by Steve Wynn and the prior board's alleged failure to stop it," Mr. DiNapoli said in the news release. He is the sole trustee of the $215.4 billion New York State Common Retirement Fund, Albany, which held $22.6 million in Wynn Resorts stock as of Oct. 31. "This agreement institutes a number of landmark reforms to improve governance and accountability at Wynn Resorts," Mr. Stringer said in the news release. He is the custodian and trustee for the five pension funds in the $208 billion New York City Retirement Systems. The pension funds own about $22.3 million in Wynn Resorts stock. The company acknowledged the settlement, which requires court approval, in its own news release, noting that $20 million of the settlement money would come from Mr. Wynn and $21 million from the company's insurance carriers. "Neither the company nor its current or former directors and officers were found to have committed any wrongdoing in connection with the settlement," the company said in the news release. The two New York pension funds sued Wynn Resorts in March 2018, through their counsel at Cohen Milstein Sellers & Toll PLLC. They filed a derivative lawsuit, described in the news release as a "legal action taken on behalf of a company when it is believed its officers or directors failed to comply with their fiduciary obligations to the company." Several other institutional investors also sued the company. The New York pension funds were designated co-lead plaintiffs in May 2018 by Joe Hardy Jr., a Clark County (Nev.) District Court judge. Clark County is the location of Las Vegas-based Wynn Resorts. The news release by Mr. DiNapoli and Mr. Stringer also cited non-monetary provisions of the proposed settlement, worth, they said, another $49 million. These provisions include:

  • Electing an independent board chairman and amending the company bylaws to separate the role of board chair and CEO.
  • Amending the bylaws to require all directors seeking election to the board should receive majority vote support except in the case of a proxy contest.
  • Making a commitment to greater diversity by requiring the board to announce its goal of achieving a 50% diversity on board membership.
  • For company employees, the settlement calls for:
  • Prohibiting employer-forced arbitration clauses and non-disclosures agreements.
  • Improving the ability of company employees to report complaints, including the establishment of a third-party hotline.
  • Improving the company's sexual harassment and diversity training for all employees.

Robert Steyer, Pensions & Investments, November 27, 2019.
Lettin' the cat outta the bag is a whole lot easier 'n puttin' it back in.
With the new day comes new strength and new thoughts. - Eleanor Roosevelt
On this day in 2000, United States Supreme Court releases its decision in Bush v. Gore.


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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.

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