Weekly Bankruptcy Alert May 20, 2025 (For the Week Ending May 18, 2025)
Covering reported business bankruptcy filings in Massachusetts, Maine, New Hampshire, and Rhode Island, and Chapter 11 bankruptcy filings in New York and Delaware listing assets of more than $1 million.
Chapter 11
Debtor Name
BusinessType1
BankruptcyCourt
Assets
Liabilities
FilingDate
CHG US Holdings LLC2(Miami Beach, FL)
Restaurants and Other Eating Places
Wilmington(DE)
$50,001to$100,000
$10,000,001to$50 Million
5/12/25
Oracles Capital Inc.(Stuart, FL)
Not Disclosed
Wilmington(DE)
$1,000,001to$10 Million
$100,001to$500,000
5/12/25
Winthrop Street-Morra Solar, LLC(Rehoboth, MA)
Not Disclosed
Boston(MA)
$0to$50,000
$1,000,001to$10 Million
5/18/25
Chapter 7
Debtor Name
BusinessType1
BankruptcyCourt
Assets
Liabilities
FilingDate
Harvest Direct, LLC(East Weymouth, MA)
Not Disclosed
Boston(MA)
$0to$50,000
$1,000,001to$10 Million
5/14/25
Yale Entertainment, LLC(Rye, NY)
Not Disclosed
Manhattan(NY)
$10,000,001to$50 Million
$50,000,001to$100 Million
5/14/25
Cutrade, Inc.(Brockton, MA)
Not Disclosed
Boston(MA)
$0to$50,000
$100,001to$500,000
5/16/25
1Business Type information is taken from Bankruptcy Court filings, which may include incorrect categorization by the debtor or others.
2Additional affiliate filings include: PLANTA Bethesda LLC, PLANTA Brooklyn LLC, PLANTA SOHO LLC, PLANTA Nomad LLC, PLANTA DC LLC, PLANTA P Street LLC, PLANTA KROG LLC, PLANTA Denver LLC, PLANTA WEHO LLC, PLANTA West Palm Beach LLC, PLANTA Miami Beach LLC, PLANTA River North LLC, PLANTA CocoWalk GP, LLC, PLANTA FLL LLC, PLANTA Buckhead LLC, PLANTA Brentwood LLC and PLANTA Marina LLC.
Was Rescheduling a Pipe Dream? DEA Questions Reliability of State-Run Programs and Impact on Transnational Crime
Often wrong, never in doubt. That’s our promise here at Budding Trends. A little over a year ago, we wrote these words: “DEA will reschedule marijuana from Schedule 1 to Schedule III.” We later acknowledged we (may have) jumped the gun on that and modified our prediction to be that rescheduling won’t happen in 2025. To be fair, that prediction is almost going to prove true but not exactly the way we meant it.
If you’d permit us to revise and extend our remarks (hopefully) just once more, there have been several recent developments, which could suggest that with the changing administration came a shifting of tides such that rescheduling marijuana has returned to an uncertain proposition.
Most notably, last week DEA released its 2025 National Drug Threat Assessment (NDTA) Report. That report of DEA’s actions and inactions related to the formal rescheduling process, coupled with other recent accusations noted here and here, points toward a DEA that will fight against rescheduling.
What’s the Report Say About Marijuana?
Robert Murphy, DEA’s acting administrator, states that the purpose of the report is to provide a “national-level perspective on the threats posed by deadly illicit drugs and the violent transnational criminal organizations (TCOs) responsible for producing the drugs poisoning our communities.” Given this purpose, it might surprise many readers that a decent sized section of the report is dedicated to marijuana, specifically marijuana that has been legalized. For context, the other drugs the DEA decided warranted a separate section in the report are fentanyl, nitazenes, xylazine, heroin, methamphetamine, and cocaine.
With respect to marijuana, the report states:
Cannabis growers in states where cultivation is legal (e.g., Oklahoma), particularly Chinese TCOs and Mexican cartels, are the main suppliers for the illicit marijuana markets in the rest of the United States.
Despite legalization, the “black market” for marijuana has expanded significantly during the last two decades as Chinese and other Asian TCOs have taken control of the marijuana trade.
Chinese TCOs are producing the “most potent form of marijuana in the history of drug trafficking,” with a THC content averaging 25% to 30%.
Even in states where marijuana has been legalized, THC levels are “largely unregulated.”
States that have legalized marijuana usually have the highest rates of marijuana use in the country, with increasing usage by vulnerable demographics.
Product labeling controls are insufficient, including for Delta-8 products, leading to an increase in injury due to unintentional exposure, particularly among children.
Notably – and if we’re being candid, frustratingly – the report does not include sources or citations for most of its sweeping assertions regarding marijuana, including its assertions regarding the interconnection between the legalization of marijuana and increased transnational crime and the suspect claims that legal markets don’t sufficiently regulate THC potency or product labeling. That said, the assertions are there.
Does the Report Spell Doom and Gloom or Is It DEA’s Way of Outlining What Safeguards Need to Be in Place?
One fair reading of the report is that DEA is all but guaranteed to oppose rescheduling, especially given the report’s repeated emphasis on the connection between state-run programs and both increased transnational crime and increased marijuana usage among vulnerable populations. A more glass-half-full reading could be that DEA is telling us, and the administrative law judge that will one day oversee the rescheduling hearings, what rulemaking it will insist be in place if marijuana is ultimately rescheduled.
The marijuana-specific concerns outlined in the report could foretell universal regulations that should apply to all legal markets, including:
Better tracking to avoid legally grown marijuana from entering illicit markets, especially through Chinese TCOs and Mexican cartels;
Refined implementation of THC potency caps;
Uniform product labeling requirements, including for Delta-8 products, to limit unintended exposure;
Uniform testing regulations across all legal markets; and
Regulation of hemp-derived products to ensure product labels are accurate and such products do not contain other cannabinoids, terpenes, or chemical contaminants that are not listed on the product label.
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United States: SEC’s Division of Trading and Markets Issues Crypto Asset-Related FAQs (And Withdraws Previous Guidance)
On 15 May 2025, the US Securities and Exchange Commission’s Division of Trading and Markets (Division) released Frequently Asked Questions (FAQs) clarifying how certain broker-dealer and transfer agency rules relate to crypto asset activities. On the same day, the Division and FINRA’s Office of General Counsel withdrew their 8 July 2019 Joint Statement on Broker-Dealer Custody of Digital Asset Securities.
In the context of spot crypto exchange-traded products (ETPs), the FAQs address the Division’s views about broker-dealer custody rules in the context of in-kind creations and redemptions, noting that the possession and control requirements in Rule 15c3-3 under the Securities Exchange Act of 1934 are not triggered if non-security crypto assets are held for customers, but broker-dealers taking proprietary positions in the assets underlying an ETP must account for them as part of their net capital calculations. The Division also stated it would “not object” if broker-dealers were to treat a proprietary position in bitcoin or ether as being readily marketable for purposes of determining whether the 20% haircut applicable to commodities applies. The FAQs also clarified that:
A broker-dealer can establish control of a crypto asset that is a security under Rule 15c3-3(c), even if it isn’t in certificated form, when held at an otherwise qualifying control location; and
Crypto assets that are investment contracts that aren’t the subject of a registration statement filed under the Securities Act of 1933 aren’t treated as securities under the Securities Investor Protection Act of 1970 (and aren’t protected by Securities Investor Protection Corporation).
However, not all answers are “yes” or “no.” For example, whether a transfer agent for a crypto asset security is required to register as a transfer agent with the SEC depends on the type of security and the services, functions or activities provided with respect to it.
EEOC Opens EEO-1 Data Collection Portal With Reporting Changes
The Equal Employment Opportunity Commission (“EEOC”) has opened the 2024 EEO-1 data-collection cycle and set Tuesday, June 24, 2025, as the filing deadline for submissions. According to the EEOC, this year’s reporting window is shorter than in prior cycles as part of its “efforts to identify continued cost savings for the American public.” In its announcement about the opening of the portal, the EEOC made clear that the collection period will not be extended.
Relatedly, and as a follow-up to our previous post, the Office of Management and Budget (“OMB”) has approved the EEOC’s requested change to the EEO-1 report, eliminating the option allowing employers to voluntarily report employees who self-identify as “non-binary.” Employers now only have the option to report employees as male or female.
In connection with the opening of the portal, Acting EEOC Chair Andrea Lucas issued a public statement reminding employers of their “obligations under Title VII not to take any employment actions based on, or motivated in whole or in part by, an employee’s race, sex, or other protected characteristics.” She cautioned companies not to “use information about your employees’ race/ethnicity or sex—including demographic data you collect and report in EEO-1 Component 1 reports—to facilitate unlawful employment discrimination based on race, sex, or other protected characteristics in violation of Title VII.” Emphasizing that “Title VII’s protections apply equally to all workers, regardless of their race or sex,” Acting Chair Lucas addressed DEI programs, stating that “[d]ifferent treatment based on race, sex, or another protected characteristic can be unlawful discrimination, no matter which employees or applicants are harmed. There is no ‘diversity’ exception to Title VII’s requirements.”
She also referenced the Trump Administration’s recent Executive Order “direct[ing] all agencies to … de-emphasize ‘disparate impact’ enforcement.” Acting Chair Lucas confirmed that the EEOC “will fully and robustly comply with this and all Executive Orders,” and “will prioritize remedying intentional discrimination claims.” She also warned employers that “under existing law, the fact that a neutral employment policy or practice has an unequal outcome on employees of a particular race or sex—that is, has a ‘disparate impact’ based on race or sex—does not justify your company or organization treating any of your employees differently based on their race or sex.”
In light of these developments, employers should promptly gather the workforce data necessary to complete their 2024 reports, verify that their contact information is current in the portal, and monitor emails for further instructions. Early preparation will help ensure timely compliance within the shortened filing window.
“Big, Beautiful Bill”: Federal Tax Bill Would Restrict the Employee Retention Credit
A sweeping federal tax bill that is currently under consideration in the US House of Representatives contains provisions that would significantly change the administration and enforcement of the Employee Retention Credit (ERC).
The ERC was enacted in 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide financial relief to businesses affected by the COVID-19 pandemic by incentivizing employers to retain employees on payroll and rehire displaced workers. The ERC allowed employers that experienced significant disruptions due to government orders or a substantial decline in gross receipts to claim a tax credit equal to a percentage of qualified wages paid to employees. Millions of employers have filed refund claims seeking ERC for periods in 2020 and 2021. Since the enactment of the CARES Act, the Internal Revenue Service (IRS) has issued roughly $250 billion in ERC. More than 500,000 claims remained pending as of April 2025.
The federal tax bill, dubbed the “Big, Beautiful Bill” by US President Donald Trump, would prevent the IRS from allowing ERC that was claimed by a taxpayer on or before January 31, 2024. The deadline to claim ERC for taxable quarters in 2020 was April 15, 2024, and the deadline to claim ERC for taxable quarters in 2021 was April 15, 2025. The tax bill would thus appear to render ineligible all pending claims that were made after January 31, 2024, which are likely to be considerable in number. The bill is ambiguous as to whether taxpayers who have already been allowed ERC would need to repay those amounts to the extent their claims were made after January 31, 2024.
The tax bill would also extend the statute of limitations on the IRS’s ability to assess amounts attributable to ERC. Presently, the IRS has three years to assess amounts associated with ERC for all periods in 2020 and for Q1 and Q2 of 2021. The IRS has five years to assess amounts associated with ERC for Q3 and Q4 of 2021. The proposed legislation would extend both of these limitations periods to six years. This change would be significant, especially because the IRS is authorized to assess and collect erroneously allowed ERC by notice and demand.
Practice Point: Taxpayers with pending ERC claims should be alert to ongoing legislative developments – as this area continues to be a prominent focus of federal tax policy – and prepare now to defend ERC claims (even those filed after the potentially new deadline of January 31, 2024). Enactment of the changes proposed in the tax bill could dramatically restrict the amount of ERC currently eligible to be paid or credited and may empower the IRS to recapture a greater amount of claims already allowed. But considerable uncertainties remain as to the scope of the changes proposed in the bill. In the face of this uncertainty, taxpayers should consult experienced counsel who can assist them in preparing to defend ERC claims to which they are entitled.
Justice Department Launches Initiative Targeting Contractors’ and Grantees’ DEI Programs, Anti-Semitism, and Transgender Policies
On May 19, 2025, Deputy Attorney General Todd Blanche issued a memorandum (the “Memorandum”) establishing the Department of Justice’s “Civil Rights Fraud Initiative” (the “Initiative”). The program “will utilize the False Claims Act to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws,” led by a team of attorneys from the DOJ’s Civil Rights Division and Civil Division’s Fraud Section who will “aggressively pursue this work together,” while consulting with the DOJ’s Criminal Division and other federal agencies.
Describing the False Claims Act (“FCA”) as the “the Justice Department’s primary weapon against government fraud, waste, and abuse,” the Memorandum states that the FCA is “implicated when a federal contractor or recipient of federal funds knowingly violates civil rights laws—including but not limited to Title IV, Title VI, and Title IX, of the Civil Rights Act of 1964—and falsely certifies compliance with such laws.”
The Initiative builds on President Trump’s “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” Executive Order (the “Order”). The Order, among other things, requires federal agencies to include two provisions in every federal contract or grant award:
(A) A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of [the FCA]; and
(B) A term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.
The Administration has been issuing contract modifications incorporating these provisions which, as we discussed in a prior post, create significant risks for contractors. The Memorandum makes clear that the Justice Department is focused on relying on these provisions to pursue federal contractors and other recipients of federal funds that violate civil rights laws and provides instructive examples of the practices and entities that the Initiative will target.
For example, the Memorandum calls out universities, stating that “[c]olleges and universities cannot accept federal funds while discriminating against their students,” and that “a university that accepts federal funds could violate the False Claims Act when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions.”
The Memorandum also states that the FCA is “implicated whenever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin.” With respect to DEI programs, the Memorandum signals that the Justice Department will be looking for programs that are “camouflaged with cosmetic changes that disguise their discriminatory nature.”
Finally, the Memorandum seeks the assistance of the public in this effort, “strongly encourag[ing]” qui tam claims, in which individuals file FCA claims on behalf of the government “and, if successful, shar[e] in any monetary recovery.” The Justice Department also “encourages anyone with knowledge of discrimination by federal-funding recipients to report that information to the appropriate federal authorities so that the Department may consider the information and take any appropriate action.”
Unlocking Success: How ESOPs Empower Small Businesses and Employees
Employee Stock Ownership Plans (ESOPs) are unique employee benefit plans designed to invest primarily in the stock of the sponsoring employer.
For small businesses, ESOPs can serve as a powerful tool for succession planning and employee engagement. By allowing employees to become partial owners of the company, ESOPs can foster a sense of ownership and commitment among the workforce, potentially leading to increased productivity and loyalty. The history of ESOPs dates back to when the US Congress endowed them with several tax advantages, making them an attractive option for business owners looking to transition ownership while maintaining the company’s legacy.
Tax Advantages of ESOPs for Small Businesses
One of the most significant benefits of ESOPs for small businesses is the tax advantages they offer. For instance, sellers can defer or even avoid taxes on the gains from selling their shares to an ESOP if they reinvest the proceeds in qualified replacement securities. Additionally, companies can deduct the principal and interest on loans used to finance the ESOP’s purchase of employer stock. This can result in substantial tax savings, making the transition to an ESOP financially viable for many small businesses. Furthermore, if a company is a 100% ESOP-owned S corporation, it generally does not pay federal income taxes, which can significantly enhance cash flow and reinvestment opportunities.
A company can achieve a partial or complete liquidity event through an ESOP without resorting to selling to competitors or private equity firms. By selling shares to an ESOP, business owners can unlock liquidity while maintaining control over the company’s strategic direction and preserving its legacy. This approach allows owners to gradually transition ownership to employees, ensuring continuity and stability. Additionally, the tax advantages associated with ESOP transactions can enhance the financial viability of this option, making it an attractive alternative to traditional sales. By leveraging an ESOP, companies can facilitate a smooth succession process, reward employees with ownership stakes, and avoid the potential disruptions that may arise from external acquisitions.
Common Misconceptions About ESOPs
Despite these advantages, there are common misconceptions about ESOPs that small business owners should be aware of. One misconception is that employees will run the company, which is not the case. While employees become beneficial owners, the company’s management and board of directors continue to make strategic decisions. Another misconception is that employees will have access to all company information, which is also untrue. ESOPs do not require full transparency of all business operations to employees. Additionally, ESOPs do not preclude incentives for top management; in fact, many companies implement a Management Incentive Plan alongside the ESOP to ensure that key executives remain motivated and aligned with the company’s goals.
Identifying a Good ESOP Target
Identifying a good ESOP target involves assessing several factors. A consistent business with leverageable cash flows is ideal, as it ensures the company can meet its financial obligations under the ESOP structure. Business owners interested in allowing employees to participate in future wealth creation and seeking partial tax-advantaged liquidity are also prime candidates for ESOPs. Moreover, specific industry situations or a failed S-corporation auction can make a company a suitable ESOP candidate. By understanding these elements, small businesses can effectively evaluate whether an ESOP is the right fit for their succession planning and employee engagement strategies.
The Role of the Trustee
The trustee plays a crucial role in the administration and oversight of an ESOP. As the fiduciary responsible for the ESOP, the trustee’s primary duty is to act in the best interests of the plan participants, ensuring that the ESOP is managed prudently and in compliance with applicable laws and regulations. The trustee is involved in key decisions such as approving the valuation of the company, overseeing the purchase of shares, and monitoring the ongoing administration of the ESOP. They also ensure that the ESOP transactions are fair and reasonable, protecting the interests of both the employees and the company. By maintaining transparency and accountability, the trustee helps safeguard the integrity of the ESOP, fostering trust and confidence among the workforce.
Transaction Steps for Implementing an ESOP
Implementing an ESOP involves several key transaction steps to ensure a smooth transition. Initially, a feasibility study is conducted to assess the financial and operational implications of establishing an ESOP. Following this, the company engages with legal and financial advisors to structure the ESOP plan and negotiate terms. The next step involves obtaining a valuation of the company to determine the fair market value of the shares to be sold to the ESOP. Once the valuation is complete, financing arrangements are made, which may include securing loans to fund the purchase of shares. Finally, the transaction is executed, and the ESOP is formally established, with ongoing administration and compliance measures put in place to manage the plan effectively.
Key Takeaways
Embracing an ESOP can be a transformative decision for small businesses, offering a pathway to sustainable growth and a more engaged workforce. By carefully evaluating the suitability of an ESOP and addressing common misconceptions, business owners can leverage this powerful tool to align the interests of employees and management, ensuring a smooth transition of ownership. The potential tax benefits and enhanced employee commitment make ESOPs an attractive option for those looking to secure their company’s future while rewarding the people who contribute to its success. As more businesses recognize the value of employee ownership, ESOPs are likely to play an increasingly important role in shaping the landscape of small business succession planning.
The Family Office and the Magic of Philanthropy
The proliferation of family offices tests the boundaries between external risk management and the unique challenges faced by families navigating significant changes in financial status. Adding philanthropy to the list of services softens those boundaries and often strengthens communication and integrity across family office activities.
Challenges
Most advisors working with family offices have seen the drama behind the curtain. Lack of communication and transparency, infighting and jealousy, conspicuous consumption, and addiction are some of the monstrous outcomes that grow out of the change in purpose that can happen after a liquidity event. The book, Fragile Power, Why Having Everything is Never Enough; Lessons from Treating the Wealthy and Famous, by Dr. Paul Hokemeyer, explores these issues and opportunities in depth.
Purpose Driven Engagement
Problem solving in communities and supporting medical, arts, and educational institutions are all well and good, but the value of family led, purpose-driven engagement can be enormous. Internal opportunities that arise from a philanthropic focus include:
Contextualizing values across generations
Deep learning and collaboration within the family
Connecting with peer groups with similar interests
Financial education within a discrete fund or set of funds
Leadership skill building
The Hat Trick
Sadly, the magic isn’t instantaneous. It’s intentional, arduous, and rarely done without objective, experienced facilitation. Attention to purpose-driven engagement can change the way people interact.
The parents (G1) in one family I work with were adamant about building legacy through a perpetual foundation, but were disinclined to talk to (G2) about it because of fear the kids wanted to support funding something not in line with their own values. What G1 wanted was to do something transformative in their community. The options in this case are to continue not to talk to G2 and let them deal with it themselves when the time comes (likely with horrible outcomes) or create an opportunity for facilitated collaboration around shared values culminating in a meeting and engagement agreement that everyone signs. Once that agreement is done the next step is to define everyone’s role, in the same way you might for a corporate board.
A glimpse of the structure behind the scenes takes the mystery away from working together and allows everyone a seat at the table to talk about a defined way of giving.
Takeaways
Identify philanthropic advisors and services that align with your client’s needs
Encourage wealth generators to think about their current and future goals
Ensure PF by-laws capture roles and responsibilities clearly
Focus on consensus building around an agenda that supports the whole family
It takes courage to look behind the curtain, but taking the mystery out of engaged philanthropy uncovers where the magic really lies.
Resource: Fragile Power by Dr. Paul Hokemeyer
EPA Announces Plans to Roll Back Aspects of PFAS Reporting Rule and PFAS Drinking Water Standards
The US Environmental Protection Agency (EPA) recently announced significant changes coming for two of its major rules that regulate per- and-polyfluoroalkyl substances (PFAS). First, EPA announced on May 12, 2025, that it is delaying the reporting period for the Toxic Substances Control Act (TSCA) Section 8(a)(7) PFAS Reporting Rule and is also considering reopening the entire rule to make substantive revisions. Second, on May 14, 2025, EPA also announced that it plans to withdraw its drinking water standards under the Safe Drinking Water Act (SDWA) for four of the six PFAS that EPA sought to regulate.
These announcements are consistent with EPA’s strategic plan released on April 28 to address PFAS across all program offices (see a previous blog post). These actions signal that EPA is taking steps to provide regulated entities more flexibility and much needed relief from overly burdensome requirements pertaining to PFAS.
TSCA PFAS Reporting Rule
EPA released an interim final rule that extends the reporting period for the TSCA PFAS Reporting Rule by nine months. The prior reporting period would have begun on July 11, 2025 and closed on January 11, 2026, with a longer deadline of July 11, 2026, for small article importers. The new reporting period will now run from April 13, 2026, to October 13, 2026, with a deadline of April 13, 2027, for small article importers. The interim rule became effective on May 13, 2025. EPA is accepting comments on the interim final rule until June 12, 2025, on the topic of the reporting period only. After receiving comments, EPA may decide to reopen the rule again and make changes to the reporting period.
The reason for the delay is that EPA needs more time to prepare and beta test the reporting software being developed to collect information that companies will be submitting in response to the reporting rule. EPA believes additional time will also be necessary to take advantage of recently appropriated funds from Congress ($17 million) to improve functionality of the reporting application.
Notably, EPA is also considering reopening certain yet unidentified aspects of the rule for public comment. Stakeholders have been calling for revisions to the PFAS Reporting Rule for years because the rule is one of the most expansive TSCA reporting rules promulgated by EPA. The rule imposes detailed reporting requirements on entities that have manufactured or imported PFAS at any time from January 1, 2011 until December 31, 2022. The reporting rule also applies to importers of articles containing PFAS, which could include many consumer, industrial, and commercial products. The rule does not have any traditional TSCA reporting exclusions such as PFAS that are impurities, byproducts, used in commercial research and development (R&D), or only produced or imported in low volumes (see the previous blog post about the rule for more details). EPA also imposes a complex and highly subjective standard of diligence that companies must consider when gathering PFAS data from their own records and from their supply chains.
While EPA did not indicate what changes it plans to make, its April 28 announcement about PFAS suggests that it may consider easing requirements for small businesses or companies that import articles.
SDWA Drinking Water Standards
EPA also announced that it plans to maintain the national primary drinking water regulations (NPDWRs) promulgated by the prior administration for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS), two of the most well known PFAS. The maximum contaminant levels (MCLs) established for PFOA and PFOS, which are legally enforceable levels that are allowed in drinking water, will continue to be 4 parts per trillion (ppt). See our previous blog post for more information on the final rule.
Though it is maintaining the MCLs, EPA intends to propose a rule this fall to extend compliance deadlines for PFOA and PFOS to 2031, establish a federal exemption framework, and initiate outreach to water systems through its new PFAS OUTreach Initiative (PFAS OUT). EPA states that these steps will address the most significant compliance challenges EPA has heard from public water systems, members of Congress, and other stakeholders.
By contrast, EPA will rescind regulations setting MCLs and reconsider the regulatory determinations for four other PFAS that were included in the rulemaking: perfluorohexane sulfonic acid (PFHxS), perfluorononanoic acid (PFNA), HFPO-DA (commonly known as GenX), and the Hazard Index mixture of these three plus perfluorobutane sulfonic acid (PFBS). EPA seeks this rescission to “ensure that the determinations and any resulting drinking water regulations follow the legal process laid out in [SDWA].”
This announcement is in response to a court-ordered deadline for EPA to indicate its plans for the NPDWRs that are currently being challenged in the US Court of Appeals for the District of Columbia (American Water Works Association (AWWA), et al. v. EPA). EPA intends to support the US Department of Justice in defending any ongoing legal challenges to the NPDWRs for PFOA and PFOS.
Supreme Court Allows Trump Administration to End Temporary Protected Status for Venezuela
On May 19, 2025, the U.S. Supreme Court granted the Justice Department’s request to lift U.S. District Court Judge Edward Chen’s March 31 order halting the Department of Homeland Security’s (DHS) rescission of Temporary Protected Status (TPS) for approximately 350,000 Venezuelans.
Under the rescission, announced in a Federal Register Notice on Feb. 5, 2025, Venezuelans who registered for TPS under former DHS Secretary Alejandro Mayorkas’ October 3, 2023, designation of Venezuela for TPS, would have lost their TPS-based work authorizations on April 2, 2025, while TPS itself would have expired on April 7, 2025.
While the language of the Federal Register Notice indicates that Venezuelan TPS holders who registered under the 2023 designation will no longer be work authorized, the Supreme Court specifically noted that its Miscellaneous Order (05/19/2025) does not preclude challenges to any DHS actions that seek to invalidate TPS documents, including work authorizations, with an Oct. 3, 2026, expiration date.
DHS has not yet provided guidance regarding the status of TPS holders who registered under the Oct. 3, 2023, designation and remained employed in the United States beyond April 2, 2025.
DHS has also not provided guidance on the status of TPS holders who registered under the initial May 9, 2021, Venezuela TPS designation. Under the Federal Register Notice, the TPS of individuals who registered under the 2021 designation expires Sep. 10, 2025.
Representatives Maria Salazar (R-FL) and Debbie Wasserman Schultz (D-FL) recently introduced the bipartisan Venezuela TPS Act of 2025, which, if enacted, would provide an 18-month extension of TPS, and a renewal option, for all Venezuelans currently in the United States.
New Procedural Rules for Trade Secrets in Germany
On April 1, 2025, the Act to Strengthen Germany as a Location for Justice—formally titled Justizstandort-Stärkungsgesetz of October 7, 2024 (Federal Law Gazette 2024 I No. 302)—entered into force. This legislation aims to enhance Germany’s attractiveness as a venue for international commercial litigation by, among other things, establishing commercial courts and permitting the use of English in civil proceedings.
To strengthen the protection of trade secrets, the new law amends both the German Code of Civil Procedure (ZPO) and the Introductory Act to the Code of Civil Procedure (EGZPO). These changes respond to a growing practical need for stronger procedural safeguards for trade secrets across a broader range of legal disputes.
Procedural protection for trade secrets is primarily governed by Sections 16–20 of the Trade Secrets Act (Geschäftsgeheimnisgesetz, or GeschGehG). However, these provisions only apply directly to proceedings involving claims brought under the Trade Secrets Act itself. They do not extend to other civil cases where trade secrets could be relevant—such as disputes over confidentiality obligations in employment or service contracts, or in copyright matters.
This limited scope was confirmed by the Higher Regional Court of Düsseldorf in a decision dated January 11, 2021 (Case No. 20 W 68/20, GRUR-RS 2021, 7875, paras. 12–13), where the court held that Sections 16 ff. GeschGehG could not be applied analogously to copyright disputes.
While certain provisions of the German Courts Constitution Act (GVG)—namely Sections 172 no. 2, 173(2), and 174(3)—do allow for some restriction of public access in civil proceedings, they offer only limited protection. For one, parties do not have a legal entitlement to a non-public hearing. More importantly, these provisions only take effect from the oral hearing onward and do not protect sensitive information disclosed in earlier stages, such as in the statement of claim. As a result, litigants may be forced to choose between withholding crucial information—thereby risking procedural disadvantages—or disclosing trade secrets and compromising confidentiality.
Furthermore, under the current legal framework, the confidentiality obligation in Section 174(3) sentence 1 GVG does not restrict the use of information acquired through the proceedings. This means an opposing party may legally use trade secret information for their own benefit outside the courtroom (see Bundestag printed matter 20/8649 of October 6, 2023, p. 32).
To address this gap, the newly introduced Section 273a ZPO now provides a comprehensive framework for the procedural protection of trade secrets in all civil proceedings governed by the ZPO—not just in commercial court matters. Upon request by a party, the court may designate certain disputed information as confidential, in whole or in part, if it qualifies as a trade secret under Section 2 no. 1 GeschGehG. Notably, it is sufficient for the information to potentially be a trade secret.
Once such a designation is made, the procedural protections of Sections 16–20 GeschGehG apply accordingly. This includes, for example, the obligation to treat the information confidentially under Section 16(2) GeschGehG, and the prohibition on using or disclosing it outside the proceedings—unless the information was already known to the parties independently of the litigation.
According to the transitional provision in Section 37b EGZPO, the new Section 273a ZPO applies immediately upon the Act’s entry into force, including to cases that were already pending at the time. Parties and practitioners must therefore be aware that the new rule is applicable to ongoing proceedings.
Why This Matters
The new Section 273a ZPO marks a significant shift in the procedural protection of trade secrets in German civil litigation. Whether you’re navigating ongoing proceedings or planning future litigation strategy, it’s crucial to understand how these changes affect your rights and obligations.
Stop Guessing the Price – Use Material Escalation Clauses to Protect Your Bid in a Volatile Tariff Climate
In today’s market, contractors often find themselves playing The Price is Right when bidding material costs — trying to hit the number just right without going over. But with new (and changing) tariffs targeting steel, aluminum, and other goods in 2025, that guessing game just became even riskier.
Should contractors base bids on current prices and absorb the risk of dramatic cost increases down the line? Or should they build in a buffer against future uncertainty and potentially price themselves out of the job? Another move may be to include a material escalation clause in your contracts.
In fixed-price or lump-sum contracts, general contractors, subcontractors, and suppliers typically bear the brunt of material price increases. However, supply chain disruptions and price volatility are increasing in the current economic climate, so builders have an incentive to address cost escalation more directly.
A material escalation clause allows parties to adjust the contract price if material costs rise significantly during the course of the project. It effectively shifts risk away from the contractor and toward the project owner. Material escalation clauses can be either “cost-based” or “index-based.” A cost-based clause compares the contractor’s actual incurred material cost to bid-day estimates, while an index-based clause ties pricing to published indexes such as the Producer Price Index (PPI) from the U.S. Bureau of Labor Statistics.
A typical material escalation clause would provide a contractor with entitlement to a change order if a significant change in the price of material occurred after the contract was executed. A significant price change would be defined contractually and tied to a threshold percentage increase in the cost of the material. Many clauses also include a cap on the amount of a price increase that an owner would be required to absorb.
Convincing an owner to include a material escalation clause can be a challenge, especially if they’re focused solely on keeping upfront costs low. Here are two strategies to make the conversation easier:
Offer Bid Transparency – Explain that bidding based on current material costs, rather than padding your bid with risk premiums, is only possible if the contract allows for later adjustments. In short, escalation clauses can lower the base bid.
Include a De-Escalation Component – Consider a two-way clause that benefits the owner if material prices drop beyond a certain threshold. This gives owners comfort that the clause isn’t just a one-sided windfall for the contractor.
Even though it may be a difficult conversation with an owner, spending the time to sort through material cost escalation clauses prior to contracting may be beneficial to both parties by providing more certainty around price risk during a period of expected volatility in global markets.
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