Stephen DiBonaventura

Representative Matters

• Represented Illicit Gardens in its $34 million acquisition of a deeply troubled cannabis operator, Harmony Foundation of New Jersey, out of receivership and in its conversion to for-profit status, while also securing regulatory approvals that were conditions to closing. Harmony is one of New Jersey's original medical cannabis licensees with a highly valuable permit allowing ownership of three dispensaries; Illicit's acquisition followed a two-year, multiparty receivership action in the Bergen County Chancery Division imposed due to executive misconduct.

• Represented online sportsbook operator Vigtory Inc. as transaction and gaming counsel in its sale to FuboTV Inc. (NYSE:FUBO), a sports-focused streaming television service; this is the first time a media company in the U.S. has fully acquired and will operate a live sportsbook.

• Represented DuPont (NYSE: DD), a global innovation leader with technology-based materials, in its $110 million acquisition of Evoqua’s Memcor business, which includes ultrafiltration and membrane bio-filtration technologies.

• Represented Piramal Group in its acquisition of a drug manufacturing and development facility in Pennsylvania.

• Represented a pharmaceutical company developing injectable products to treat allergic reactions in its acquisition by a developer of specialty pharmaceutical products; the transaction included upfront cash consideration, additional milestone payments, and contingent consideration based on product sales.

• Represented Perdoceo Education Corporation (NASDAQ: PRDO), a for-profit post-secondary higher education provider, in its $44-45 million acquisition of the assets of Trident University International, a regionally accredited university offering online programs, from private equity firm Summit Partners.

• Represented Pennsylvania Machine Works LLC, a leading manufacturer in the forged pressure fitting industry, in connection with the multimillion-dollar sale of all of its outstanding equity to Wynnchurch Capital Partners.

• Represented the Refac Optical Group, a leading provider of vision care products and services, in the sale of one of its subsidiaries, Nationwide Optical Group, Inc., to Clarkson EyeCare Partners, Inc.

• Represented iAnthus Capital Holdings, Inc. (CSE: IAN; OTCQX: ITHUF) in its acquisition of CBD For Life, a top-ranked producer of innovative CBD-infused wellness, self-care, and beauty products.

• Represented Polder Housewares and its affiliates in the sale of substantially all of their assets to a buyer which is majority owned by entities affiliated with Topspin Partners, a suburban New York-based private equity fund.

• Represented Clarion Capital Partners and its portfolio company, HR Outsourcing Holdings, Inc., a professional employer organization based in Atlanta, Georgia, in the acquisition of the outstanding capital stock of Fortune Financial, Inc., another professional employer organization based in Tampa, Florida, as well as the related financing transaction.

• Represented Velicept Therapeutics, a specialty pharmaceutical company, in its acquisition of AltheRx, Inc. and $20 million Series B financing.

• Represented Calumet Armature & Electric, LLC, an Illinois-based provider of design, manufacturing, assembly, and repair services of electric motors for the industrial and mass transit markets, in the sale of all its membership interests to a wholly-owned subsidiary of Integrated Electrical Services, Inc. (Nasdaq: IESC).

• Represented MELA Sciences, Inc. (NASDAQ:MELA) in its purchase of the XTRAC and VTRAC Dermatology business from PhotoMedex, Inc. for $42.5 million in cash and the assumption of certain business-related liabilities and the related financing with institutional investors consisting of a private placement of $42.5 million aggregate principal amount of senior secured notes and convertible debentures and warrants to purchase 3.0 million shares of common stock.

• Represented Sancoa International Company and TubeDec, LLC, family owned affiliated companies that manufacture and supply products to Home & Personal Care customers in North America, in their $71 million sale to CCL Industries, a Canadian public company.

• Represented Iroko Pharmaceuticals, a global specialty pharmaceutical company dedicated to advancing the science of responsible pain management, in securing $75 million in debt financing to support general business operations and the commercialization of Iroko's FDA-approved ZORVOLEX™ (diclofenac), a drug that uses iCeutica Inc.’s proprietary SoluMatrix Fine Particle Technology™ to both reduce the dosage of active ingredients ingested by the patient and accelerate the dissolution of the drug in the patient.

• Represented Guardian Capital Partners in the acquisition of a controlling interest in Kwik Tek Inc. for an undisclosed sum.

• Represented a French CAC 40 company in connection with the sale of its wind-to-energy subsidiary for $81 million.

• Represented Clarion Capital Partners, a New York private equity firm, in connection with the sale of Strategic Outsourcing, Inc., a human resources outsourcing firm, to TriNet Group, Inc.

• Represented Viking International Resources in the sale of its stock and certain assets to two separate buyers. Magnum Hunter Resources Corporation purchased 100% of Viking's stock for $106.7 million and Magnum Hunter Resources preferred stock. GreenHunter Water, LLC purchased one salt water well, along with the stock of two Viking subsidiaries, one of which owned another disposal well, for $2 million in GreenHunter preferred stock.

• Represented a major French CAC 40 company as lender and guarantor in connection with a $230 million project syndicated loan to a wind energy project.

• Represented a Virginia IT staffing and consulting company in connection with a two-step transaction involving a corporate restructuring in which the company contributed substantial amounts of its assets and liabilities to a Delaware limited liability company, which simultaneously sold its preferred units to a third party investor for $20 million.

• Represented acquiring corporations and target corporations (both public and private) in merger transactions. Advised on structuring transactions to qualify for tax-free treatment at the corporate and shareholder level where acquirer stock was the principal consideration. Advised on structuring taxable sale transactions to achieve step-up in asset basis to a buyer (e.g., structuring transactions to qualify for Section 338 elections and other techniques for achieving a basis step-up). Negotiated tax provisions (e.g., tax representations, tax indemnity and control) relevant to transactions.

• Advised clients on entity formation, the tax advantages and disadvantages of entity choices (e.g., corporation, partnership, limited liability company) and which entity best served the client's business objectives. Advised on how to maintain favorable tax entity status, such as Subchapter S qualification.

• Advised clients on how to simplify their corporate structure and avoid complex consolidated return rules.

• Represented clients before the Internal Revenue Service National Office and obtained, on behalf of such clients, favorable ruling on tax-free spinoffs under Section 355 of the Internal Revenue Code.

• Advised numerous clients in workout and debt restructuring. From the debtor perspective, advised on how to minimize tax from the income recognized on the cancellation of indebtedness and how to preserve valuable net operating losses. From the creditor perspective, advised on how to maximize tax deductions associated with restructured debt.

• Advised a waste disposal company in its tax-free acquisition of the outstanding stock of another company (valued at about $260 million). Acquirer had a preexisting stock ownership in Target which needed to be considered in choosing a viable acquisition structure. Moreover, Target had substantial net operating losses, which needed to be preserved for future use.

• Advised a major manufacturing company in its tax-free acquisition of another manufacturing company (valued at $350 million). The tax structure of the transaction was complicated by the limitation on the amount of cash consideration that could be used by acquirer and by Target's planned sale of a division, constituting thirty percent of the value of its assets.

• Advised three steel companies and their shareholders with respect to the tax-free acquisition of the companies by another steel company. the transaction was complicated in that it involved simultaneous mergers of the companies into acquirer. In addition, careful analysis had to be done to ensure capital gain treatment to any shareholder of the companies who received cash.

• Advised a chemical company on its tax-free acquisition of another corporation in which it owned a greater than twenty-percent interest. The transaction was complicated in that following the acquisition, Target was liquidated and acquirer transferred some of Target's assets received in the liquidation to a Delaware Limited Liability Company ("LLC"). Drafted ruling applications concerning the liquidation and the LLC formation. The IRS issued favorable rulings on both applications.

• Advised a client on the tax consequences of its purchase of the stock of several subsidiaries of an unrelated corporation, including the advantages of a Section 338(h)(10) election.

• Advised a venture capital company on its purchase of assets from an unrelated corporation, including the best way to allocate purchase price and account for contingent liabilities assumed in connection with the purchase.

• Advised a service corporation on its proposed spin-off of a subsidiary to its shareholders and drafted a ruling application for the spin-off. The IRS issued a favorable ruling on the spin-off.

• Advised a domestic corporation on the sale of its indirectly owned foreign manufacturing subsidiary and that subsidiary's operating companies (valued at about $350 million). Numerous tax issues were considered, including whether a Section 338 election should be made and determining the Subpart F income and foreign tax credit consequences. Reduced by $80 million the overall gain on the sale of the subsidiary stock by restructuring the ownership of the subsidiary before negotiations for its sale occurred.

• Advised domestic corporations (manufacturing and chemical concerns) on the tax consequences of their transfer of assets to foreign subsidiaries. This involved advising the client on the Section 367 aspects of the outbound transfers, as well as drafting gain recognition agreements.

• Advised domestic corporations (manufacturing and food concerns) on the U.S. tax consequences of restructuring their foreign operations. This principally involved avoiding Subpart F income and, to the extent any such income resulted, maximizing the available foreign tax credits that could be used to reduce the overall tax cost of the restructuring. Saved one client $10 million in taxes by creatively using Section 304 rules.

• Advised on the structuring of joint ventures entered into by domestic corporations and unrelated foreign corporations. This involved determining the most tax-favored structure (i.e., analyzing whether the joint venture entity would be a partnership or corporation) and ensuring that whichever structure was chosen would be respected for tax purposes. Also analyzed whether a corporation, if used, should be a CFC in order to maximize the domestic-parent corporation's foreign tax credit benefits. In addition, advised on the Section 367 consequences and exit strategies.

• Advised a domestic corporation (a financial concern) on the tax consequences of converting its foreign subsidiary corporations into foreign partnerships.

• Drafted protests submitted to IRS Appeals involving various Subchapter C issues. One protest addressed the proper tax consequences of a stock redemption. IRS Appeals fully conceded this issue and, as a result of this concession, the client's earnings per share increased by forty percent.

Admissions

• Pennsylvania
• Supreme Court of Pennsylvania
• U.S. Tax Court

Education

• Villanova University Charles Widger School of Law, J.D., 1987

Experience

• Duane Morris LLP
  - Partner, 1997-present
• Dechert, Philadelphia, Pennsylvania
  - Tax Attorney, 1989-1997
• United States Tax Court, Washington, D.C.
  - Attorney-Adviser, 1987-1989, to Judge Herbert L. Chabot

Professional Activities

• American Bar Association
  - Taxation Section
• Pennsylvania Bar Association

Honors and Awards

• Listed in The Best Lawyers in America, 2022-2024
• Listed in Chambers USA: America's Leading Business Lawyers, 2016 and 2017
• AV Preeminent® Peer Review Rated by Martindale-Hubbell®

Selected Publications

• Co-author, "New Pass-Through Entity Deduction Delivers Tax Relief and Complexity," Duane Morris Alert, January 8, 2018

• Featured in "Duane Morris Houston Lawyer Leads Quanta Services' Team on $1B Deal," Texas Lawyer, May 8, 2015
• Co-author, "House Ways and Means Committee Releases Proposal on Tax Reform," Duane Morris Alert, February 28, 2014
• "Highlights of the American Taxpayer Relief Act of 2012," Duane Morris Alert, January 4, 2013
• "Temporary Provisions of Small-Business Act Exclude Tax on 100 Percent of Gain on Qualified Small-Business Stock Through the Remainder of 2010 ," Duane Morris Alert, October 15, 2010
• Co-author, "Euro Portends Unknown U.S. Tax Consequences," The National Law Journal, July 27, 1998

Selected Speaking Engagements

• Presenter, "Cannabis 305: Tax Strategies - Building the Strongest Tax Toolbox for Cannabis Businesses," Duane Morris Cannabis Webinar Series, July 29, 2020
• Presenter, "Managing Expenses, Income and IRS Section 280E," Clearing the Smoke: Legal Pathways to Success in the Cannabis Industry, June 19, 2017
• Panelist and Speaker, "Taxation Issues in Mergers and Acquisitions," Pennsylvania Institute of Certified Public Accountants, November 13, 2001
• Panelist and Speaker, Mergers and Acquisitions in Pennsylvania, The Art of Doing Deals sponsored by the National Business Institute
• Panelist and Speaker, Taxation Issues in Mergers and Acquisitions sponsored by the National Association of Certified Valuation Analysts
• Panelist and Speaker, The ABC's of Corporate Reorganizations sponsored by the Philadelphia Tax Bar