Third Party Claims to Divisive Mergers in Texas and Delaware
Delaware is widely recognized as the leading state for business incorporation, due largely to its comprehensive and well-established legal framework. Texas, however, was the first mover in one important area: divisive mergers. Divisive mergers are a statutory mechanism that allow businesses to divide into multiple entities and allocate assets and liabilities among them without, among other benefits, triggering contractual restrictions on assignment. They can facilitate restructurings, acquisitions, divestitures, or allocation of assets or liabilities, but must be approached carefully to avoid potential fraudulent claims and third-party challenges.
D.C. Circuit Upholds U.S. EPA’s HFC Cap-and-Trade Program Under AIM Act
On August 1, 2025, the U.S. Court of Appeals for the D.C. Circuit upheld the U.S. Environmental Protection Agency’s (EPA) authority under the American Innovation and Manufacturing (AIM) Act to phase down hydrofluorocarbons (HFCs) through a cap-and-trade program. In IGas Holdings, Inc. v. EPA, No. 23-1261, a unanimous panel rejected constitutional and administrative law challenges from refrigerant industry members, finding that the AIM Act provides a clear “intelligible principle” to guide EPA’s allowance allocation. The Court also held that EPA’s decision to exclude 2020 market data from its allocation methodology was not arbitrary and capricious.
Preferred Equity: A Capital Solution to Meet the Looming “PIS” Deadline
The One Big Beautiful Bill Act signed into law by President Trump on July 4, 2025 (the “OBBBA”) terminates the Section 45Y Clean Electricity Production Tax Credit (the “45Y PTC”) and Section 48E Clean Electricity Investment Tax Credit (the “48E ITC”) for wind and solar facilities that are placed in service (“PIS”) after December 31, 2027, except for those projects that begin construction by July 4, 2026. This significantly accelerates the timeline for sponsors and investors to bring projects online in order to maintain profitability of the project via tax credit sales.
CARB Proposes to Repeal Advanced Clean Fleets Regulation
The California Air Resources Board (CARB) has proposed to repeal the High-Priority and Drayage components of the Advanced Clean Fleets (ACF) regulations. The proposal also includes changes to the Low Carbon Fuel Standard (LCFS) regulations and implements AB 1594 (flexibility for public utilities).
