Representation of Industry Service Providers
Drawing on a deep understanding of the benefits industry and the methods, priorities and practices of regulators, Craig has represented many service providers in the benefits industry, including financial institutions, trust departments, investment firms, insurers, accounting firms and law firms.
For example, twice he has represented national financial institutions facing potentially disastrous liabilities for violations of ERISA and Code prohibited transaction rules with respect to client retirement plans and IRA investments. Working directly with the regulators in Washington DC, both financial institutions were able to obtain governmental approval of retroactive exemptions and minimize their financial exposure. One of the resolutions was the first formally approved joint retroactive exemption by the Internal Revenue Service and Department of Labor.
Representation of tax-exempts, governmental entities and churches: establishment and operation of 403(b) plans, litigation and fiduciary compliance
Special rules and retirement vehicles exist for tax-exempt entities, governmental entities and churches. Craig’s experience includes advising these clients as to compliance and controversies related to these special laws and the related plans, including 403(b) plans or “tax-exempt annuities.”
These special rules and plans present unique and challenging compliance issues and in recent years have become subject to increasing governmental scrutiny and investigations. Surprisingly, the limitations applicable to the federal law of ERISA, may result in increased risks, including potential personal liability, for fiduciaries of plans sponsored by these entities. In turn, this increases the need and focus for these entities to establish and maintain a prudent governance structure.
Executive Representation and Related Compensatory Arrangements
Craig provides representation for executives and employers with respect to retention, severance and change of control involving senior executives, including adversarial matters and litigation. He successfully represented senior executives in litigation related to the change in control provisions for the merger of two publicly traded financial institutions. He provided representation involving a separation from employment for the CEO of a publicly traded entity with a German home office and represented one of the largest integrated healthcare entities in North Carolina in negotiations involving the transition of its CEO and the disposition of large reverse split dollar polies. He provided representation for a UK publicly traded entity concerning US litigation relating to the senior executive of a South American subsidy.
Craig advises employers as to complex executive compensation arrangements, including related funding vehicles, such as trusts and insurance, for compliance with applicable laws, including tax laws and ERISA. Deferred compensation laws, including Section 409A, have materially increased the complexity and risks of compensatory arrangements, including those not traditionally considered deferred compensation, such as certain bonus, reimbursement and severance arrangements. In addition to helping employers understand the scope of the deferred compensation laws, Craig has helped employers address deficiencies through the available correction programs.
Representation of Providers and Integrated Healthcare Systems: establishment and operation, litigation and fiduciary compliance
Craig has provided representation to a substantial number of large integrated healthcare systems as well as provider practices of all sizes. This representation has included the development of a cost-effective compliance strategy for minimizing the risks related to a complex organizational structure that may include tax-exempt entities, governmental entities and taxable entities.
The services provided for large integrated healthcare systems include:
- Strategies for the acquisition of physician practices and related compensation structures.
- Compliance issues related to the conversion of cash balance pension plans.
- Executive compensation strategies for tax-exempt entities, including deferred compensation and insurance funded arrangements.
- The structure and negotiation of executive severance arrangements.
- Prohibited transaction and fiduciary issues related to self-funded healthcare benefits and the provision of healthcare services to employees.
- Advising as to structural and governance issues related to the status of the entity as governmental or tax-exempt.
- Worker status strategies, including eligibility for benefit plans.
Craig regularly has advised clients as to compensatory and benefit related matters in a transactional context. From advising complex controlled groups as to funding and fiduciary strategies for multiple defined benefit pension plans to addressing the mechanics and legal issues related to a merger of 401(k) plans, Craig helps clients effectively address complex benefit issues that arise on a change in control.
ESOPs: leveraged transactions, establishment and operation, litigation and fiduciary compliance
Craig has provided representation for a number of tax-favored “leveraged” ESOP transactions that often involve the sale of closely-held stock to an ESOP established by the employer. He has advised ESOP owned companies and the purchasers of ESOP owned companies as to the fiduciary issues and risks of mergers and acquisitions.
He has also represented ESOP fiduciaries, including financial institutions, in ERISA litigation challenging the prudence of the transactions or the value of the shares purchased.
Defined Benefit and Cash Balance Plans: establishment and operation, litigation and fiduciary compliance
Craig has provided representation for numerous defined benefit plans for clients ranging from large publicly traded entities and integrated healthcare systems to unions and physician practices. He represented a national service provider in the successful resolution of Internal Revenue Code compliance issues in the conversion of cash balance plans for its clients. He successfully provided representation is a class action involving the actuarial assumptions for a defined benefit plan sponsored by a large utility. For numerous corporate transactions he has advised buyers and sellers as to effectively determine and address the material costs and liabilities related to defined benefit plans maintained by the target entity.
Self-funded and insured Health Care and other welfare plans: establishment and operation of plans and funding vehicles, litigation and fiduciary compliance
Craig has significant experience representing both employers and service providers as to the complex and constantly changing laws related to health care plans, including self-funded arrangements and collective funding arrangements such as MEWA’s. He provides representation with respect to the requirements of the Affordable Care Act and related laws, including COBRA and reporting and disclosure requirements.
Craig provided representation to a large service provider in the restatement of dozens of self-funded healthcare plans for which it provided administrative and fiduciary services in North Carolina, including the related administrative documents. He also provided representation for IRS and DOL investigations involving health care and other welfare plans, including the first full-scope Affordable Care Act investigation in North Carolina that extended to the VEBA, a tax-favored trust.