Mel Wheaton focuses his practice on representing private investment funds and privately-held operating companies. He regularly advises venture capital, private equity and real estate funds in all facets of their operations, including fund formation, tax, governance, structuring, operational and regulatory matters. His fund experience extends to both domestic fund and offshore funds. In addition, he advises a number of privately-held companies, real estate property managers and family offices in matters involving asset acquisitions, financing activities, joint ventures, governance and structuring issues, strategic transactions and general corporate matters. Mel is also a contributor to The Venture Alley, a blog about business and legal issues important to entrepreneurs, startups, venture capitalists and angel investors.
Mel has particular knowledge and experience with respect to all aspects of limited liability companies and limited partnerships and he often drafts or reviews sophisticated operating and partnership agreements on behalf of clients.
In addition, Mel has significant experience in the sports and entertainment field, as he has represented professional sports franchises from MLB, the NBA and the NHL in various transactions.

What are they?

A letter agreement between a portfolio company and an investing venture capital fund which provides the venture capital fund with certain “management rights” that allow it to substantially participate in, or substantially influence the conduct of, the management of the portfolio company.

Why are they important?

A management rights letter is critical for any venture capital fund that is seeking to rely upon the venture capital operating company (“VCOC”) exemption in order to avoid its assets from being subject to the Employee Retirement Income Security Act of

Continue Reading Management Rights Letters: What they are, why they are important and potential traps to be mindful of

Earlier this month the Cayman Islands passed new legislation revising its existing Exempted Limited Partnership Law.  The new legislation, the Exempted Limited Partnership Law 2014, replaces the existing legislation in its entirety and has a primary objective of providing Cayman Islands partnerships with more flexibility in a number of areas and generally bringing Cayman Islands law into closer conformity with existing laws in more familiar jursidictions such as Delaware.  This is welcome news to both private fund investors and sponsors.  A detailed review of the changes enacted by the new legislation will follow in a future post on The Venture Alley, but here is a quick summary of some of the more material changes contained in the new legislation:

  • Allows foreign limited partnerships to serve as general partners of Cayman Islands exempted limited partnerships (previously funds typically had to set up either a Cayman Islands exempted limited partnership or Cayman Islands exempted company to serve as the general partner);
  • No longer requires an exempted limited partnership’s register of limited partners to reflect contributions by and distributions to limited partners, but rather only the names and addresses of limited partners (which will serve to increase the privacy of limited partners who are invested in Cayman Island investment funds);
  • No longer requires the limited partnership agreement to be executed as a deed and witnessed in order to make valid a power of attorney granted therein (with this change being retroactive so as to validate any power of attorney granted prior to the passage of the new legislation); and
  • Simplifies the admission process for new limited partners in connection with a transfer of interest in an exempted limited partnership.
    Continue Reading Cayman Islands Revise Exempted Limited Partnership Law and Pass New Legislation Allowing Enforcement of Contracts by Third Party Beneficiaries