The Colorado Supreme Court (the “Court”) has now weighted-in on the requirements for foreign courts to create enforceable charging orders against Colorado LLCs.  In JPMorgan Chase Bank N.A. v. McClure (2017 CO 22. No. 15SC816 (Colo. 2017)), the Court ruled that to be enforceable, foreign charging orders against a Colorado LLC must be either (i) procedurally domesticated in Colorado, or (ii) issued by a court with proper jurisdiction over the LLC or the membership interest in question. Continue Reading Enforcing Foreign Charging Orders against Colorado LLCs

Negotiations occurring over e-mail may, in certain circumstances, create a binding contract.  Two cases out of New York have held that where a meeting of the minds is evident through email correspondence, a contract can arise.

  • Naldi v. Grunberg:  Although the court ultimately determined there was no “meeting of the minds” of the parties and therefore no contract, the Supreme Court of New York, Appellate Division (which is an intermediate appellate court) stated that the terms “writing” and “subscribed” under the statute of frauds should be construed to include, records of electronic communication (such as e-mail) and electronic signatures (such as a name typed at the end of an e-mail).
  • Newmark & Co. Real Estate Inc. v. 2615 E. 17th St. Realty:  The Supreme Court of New York ruled that an e-mail under which the sending party’s name is typed can constitute a subscribed writing for purposes of satisfying the statute of frauds.

In reaching these decisions the Supreme Court of New York relied on the federal Electronic Signatures in Global and National Commerce Act (“ESIGN”) and a New York statute similar to the Uniform Electronic Transactions Act (“UTEA”), a version of which has been enacted in Colorado. 

Although Colorado courts have not yet interpreted ESIGN and Colorado’s adopted form of the UTEA yet, these cases are noteworthy because of their impact on interstate business transactions (and in particular transactions with parties in New York).  Further, Colorado’s version of the UTEA could provide a basis for similar rulings in Colorado.

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Numerous Colorado registered entities have recently received solicitations through the mail offering report-filing services.  Official-looking letters titled “Periodic Report” are being issued and sent by “Corporate Controllers Unit” and seek to have Colorado registered entities pay an “Annual Fee” of $225 to have a “Periodic Report” filed on their behalf.  These letters contain a form requiring the name and address of the registered entity, registered agent, and person submitting the form.  In addition, the letters include a disclaimer towards the bottom of the page which states that “[t]his product or service has not been approved or endorsed by any Governmental Agency and this offer is not being made by an agency of the Government.”  A copy of this letter may be found here.

If your Colorado registered entity receives one of these letters, please be advised that the service offered is unnecessary.  The form contained in the letter is not required to be filed with the Office of the Colorado Secretary of State (the “Secretary”).  Additionally, please note that beginning in 2012 the Secretary will no longer mail notifications for when annual reports become due, but instead will send e-mail notifications to the e-mail address listed on file with the Secretary for the registered entity, and the cost of filing an annual report is only $10.  You can review the record and status of a Colorado registered entity and, if necessary, file an annual report at the Secretary’s website.  Also, information concerning the importance of having your registered entity’s e-mail address on file with the Secretary may be found here.

If you have any further questions or concerns regarding this possibly deceptive report-filing solicitation, additional information and resources may be found here.

According to law enforcement officials, identity thieves have been using the Colorado Secretary of State’s (the “Secretary”) website to engage in business identity theft.  By accessing the Secretary’s website, identity thieves are able to obtain public information about Colorado registered entities, and then for a nominal fee are able to change the registered agent of a registered entity to themselves.  Once the identity thieves have implemented the change, they will use the registered entity’s name to apply for fraudulent lines of business credit for their own personal use.  By some accounts, this scheme has affected at least twenty-five Colorado registered entities and allowed identity thieves to steal over $750,000.

Identity thieves are able to engage in this crime due to the lack of procedural safeguards to check the authenticity of forms implementing changes to the records of registered entities as they come into the Office of the Secretary.  Oftentimes, a registered entity will not even know that a change has been made to its entity records upon the submission of a form to the Office of the Secretary. 

An entity registered in Colorado can combat these identity attacks by listing an email address for the registered entity with the Office of the Secretary.  Thereafter, an email notification will be sent to the listed email address upon any change to the records of the registered entity, thereby alerting it of any unwarranted changes.  However, the option to list an email address for a registered entity is only a recent development and remains completely voluntary.  As a result, a majority of Colorado’s registered entities do not have an email address listed and may not be notified of identity theft attacks. 

Therefore, an entity registered in Colorado should consider subscribing for email notifications from the Office of the Secretary to try to protect the entity against identity theft.   A registered entity can subscribe to email notifications by visiting the Secretary’s website.  Additional information and resources about identity theft and protecting registered entities against identity theft attacks can also be found here.