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Helpful articles to aid Management Companies, Board Members, and Housing Cooperative Professionals in handling complex legal issues.

CTA TAKES A ROLLERCOASTER RIDE THROUGH THE HOLIDAYS

A nationwide preliminary injunctive order issued by Judge Amos Mazzant on December 3, 2024 in the Eastern District of Texas (ECF No. 24), that applies to all reporting companies, including all housing cooperatives nationwide was appealed by the Federal Government. In its Emergency Motion for Stay Pending Appeal, the Government pleaded with the Fifth Circuit Court to grant an immediate stay of the nationwide injunction. On December 23, 2024, the Fifth Circuit Court Motions Panel granted the Government’s request and entered an Order staying the District Court’s nationwide injunction.

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CTA TAKES A ROLLERCOASTER RIDE THROUGH THE HOLIDAYS

    Wayne County, MI - A nationwide preliminary injunctive order issued by Judge Amos Mazzant on December 3, 2024 in the Eastern District of Texas (ECF No. 24), that applies to all reporting companies, including all housing cooperatives nationwide was appealed by the Federal Government. In its Emergency Motion for Stay Pending Appeal, the Government pleaded with the Fifth Circuit Court to grant an immediate stay of the nationwide injunction. On December 23, 2024, the Fifth Circuit Court Motions Panel granted the Government’s request and entered an Order staying the District Court’s nationwide injunction.
    The impact of this Order meant that millions and millions of American businesses were once again required to report to FINCEN in accordance with the Corporate Transparency Act or face substantial monetary fines and/or jail time. FINCEN responded quickly by issuing an update on its website advising all reporting companies that in light of the eleventh hour stay order, the CTA compliance deadline was moved back to January 13, 2025.

    In the interim, attorneys for Plaintiffs in the Texas case filed their own appeal the next day and on December 26, 2024, the Fifth Circuit Court of Appeals’ Merits Panel, comprised of the same Judges who will be hearing and deciding the appeal set for oral argument in March 2025, entered its own Order vacating the stay entered on December 23, 2024 - effectively reinstating the Texas District Court’s December 3, 2024 nationwide injunction.

    So once again, all reporting companies are relieved of the CTA reporting requirement – at least for now.

    There are approximately 26 days remaining in Janet Yellen’s position as Secretary of Treasury and it is therefore anticipated that the Government will file another appeal. But until such time as the Texas District Court’s Order is definitively overruled, vacated, or amended, by the Fifth Circuit Court or SCOTUS, CTA compliance is once again stayed for all reporting companies, including all housing cooperatives, nationwide.

    Reporting companies that are utilizing their legal counsel to assist with the filing of Beneficial Ownership Information are nevertheless encouraged to continue to submit reporting information to their attorneys with the caveat that such information be held until such time as further ordered by either the Fifth Circuit or SCOTUS - unless those companies opt to voluntarily have their information filed with FINCEN.

    For more information, press only:

    PR Contact Name: Karlynn Wilburne
    Phone number: (734) 281-7100

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    NCLC
    NCLC
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