Charles E. Wern

Shareholder

Summary

Charles specializes in the areas of tax planning and business transactions.

Charles has extensive tax planning expertise with respect to partnerships, “C” and “S” corporations, and individual income tax rules. He has served as tax counsel to clients, other attorneys and accountants in connection with formations, operations, mergers/reorganizations, private equity transactions, joint ventures/strategic alliances, sales/purchases of assets/equity, and exit plans (including distributions, redemptions and liquidation transactions) with respect to various types of business entities.  Charles also has experience with specialized tax issues concerning amortization of 197 intangibles, partnership 754 adjustments/basis step-up analysis, debt restructurings, tax indemnities, cancellation of debt/COD income planning, distress debt acquisitions and other transactional tax issues in connection with real estate, M&A and other business transactions.

As a consequence of his combined tax and transactions practice, Charles has accumulated extensive experience with the drafting of LLC operating agreements and partnership agreements to effectuate new ventures/start-ups, private equity/investment transactions, real estate investments and other joint venture transactions, particularly with respect to structuring of tax allocations/cash distribution waterfall provisions and the issuance of incentive profits/carry interests.

Charles has advised clients in a broad range of business transactions, including:

  • Start-up and choice of entity planning;
  • M&A transactions (including tax-free mergers, reorganizations and spin-offs);
  • Private equity placements and investments;
  • Sales/purchases of business assets and equity (including distressed businesses);
  • Real estate purchase and sale transactions (including 1031 tax-free exchanges);
  • Joint ventures and strategic alliances;
  • Executive compensation/incentive equity planning;
  • Commercial lending/financing transactions;
  • Commercial/shopping center leasing;
  • Business succession, asset protection and estate planning; and
  • General corporate matters and contracts.

Charles also has experience with international transactions and foreign tax planning matters, including inbound and outbound transactions, foreign joint ventures, foreign tax credit maximization planning, controlled foreign corporation rules and income tax treaty planning (including permanent establishment issues and back-to-back license arrangements).

Charles is a graduate of the New York University School of Law Graduate Tax Program where he received his LLM in Taxation. Prior to joining Jones & Keller, Charles was a partner with Nadler, Nadler & Burdman Co. LPA, a boutique northeast Ohio law firm that represents high net worth individuals and business owners. Prior to that, Charles was an associate in the corporate and tax department of the international law firm Reed Smith LLP in New York, New York. Charles is also a regular lecturer on LLC and tax planning matters.

Significant Representations

  • Advised family in connection with structure and implementation of a multi-fund mineral interest acquisition joint venture deploying equity and convertible financing arrangements
  • Advised public and private companies on tax structuring of incentive equity compensation plans for management
  • Advised family in connection with sale of manufacturing business for over $95 million in cash and roll over equity; structuring of pre-closing "F" reorganization of S corporation seller entity; analysis and negotiation of post-closing tax allocation issues; extensive tax analysis of partnership disguised sale rules, 197 intangibles amortization issues, partnership tax allocations/distribution rules, and S-corporation inadvertent termination issues
  • Represented shopping center group looking to transition out of active management concerning implementation of joint venture with drop-down of multiple developed and undeveloped properties valued at over $25 million to new LLC for tiered preferred returns, with active management group receipt of incentive profits/carry interest; extensive tax analysis of partnership profits interests issues, structuring tax allocations/cash distribution waterfall provisions, and ameliorating medicare tax impact
  • Represented company on negotiation and closing of purchase of 144-room hotel and sports center complex
  • Represented multiple auto dealerships with respect to purchases of new franchises and dealership real estate/equipment and generally advise dealerships with respect to leases, bank financing matters, dealer sale/service agreements, dealer franchise laws, settlement/release agreements, tax planning and other general counsel matters
  • Served as mediator in divorce proceedings to guide parties and divorce counsel through complex business and tax issues relating to division of multiple manufacturing businesses worth over $100 million plus various oil and gas rights and investment real estate assets
  • Advised family-owned plastics injection molding business on purchase of land for expansion of manufacturing facilities, with analysis of mineral surface rights issues Advised family-owned manufacturing businesses on implementation of succession plans and voting trusts to help ensure successful transition of business to next generation and assure stakeholders, strategic partners and lenders of operational/management continuity
  • Advised family in connection with contentious exit from oil and gas working interests and injection well investments
  • Advised private investor on sale and 1031 tax-free exchange of a CVS property for multiple NNN replacement properties and subsequent sale and 1031 exchange one year later of one of the replacement properties
  • Advised company in connection with private placement offering for over $5 million investment capital to start-up injection well business and on subsequent potential acquisition of distressed injection well facility
  • Represented family owned manufacturing business on consignment agreement with major customer for supply of inventory to Texas warehouse facility for cross-border shipments
  • Advised manufacturing business on sale of assets of subsidiary while retaining proprietary lines and customer base, combined with post-closing transition services agreement, seller financing/ security components and purchaser’s bank subordination arrangements

Admitted to Practice Before

Colorado, New York , Ohio

Speeches and Publications

  • "Why LLCs, Fully Using Tax Advantages, and Advantageous Uses of LLCs", National Business Institute (2014)
  • “LLC Workshop - Entity Taxation and Compare and Contrast", National Business Institute (2012)
  • “LLC Taxation: An Introduction to Limited Liability Companies", Association of Enrolled Agents of Northeast Ohio (2009)
  • “Formation and Operation of LLCs and Impact of State Law on LLC’s", National Business Institute (2008)
  • “The Tax Impact of Real Estate Debt Workouts and Restructurings", Association of Enrolled Agents of Northeast Ohio (2008)
  • “1031 Tax-Free Exchanges and Real Estate Tax Trends", Realtors Association (2006)
  • “The Stapled REIT on Ice: Congress’ 1998 Freeze of the Grandfather Exception for Stapled REITs”, Capital University Law School published law review article (2000)

Honors / Distinctions

Mahoning Valley Professionals "40 under 40" award

Community Activity & Personal Interests

Charles has been involved in a variety of charitable organizations during his career, including:

  • Member of Board of Directors, Loan Review Committee, Executive Committee, andStrategic Planning/Venture Capital Sub-Committee of the Mahoning Valley Economic Development Corporation, a non-profit lender and economic development corporation
  • Board Member of the Warren Commerce Park, a non-profit industrial park
  • Board Member and prior chapter Chairman of the American Red Cross of the Mahoning Valley, where he orchestrated the reorganization and merger of two separate county Red Cross chapters
  • Member of the Garden Club Angels, a venture capital/angel investor forum sponsored by the Youngstown State University and the Youngstown Business Incubator

During his free time, Charles enjoys spending time with his wife and their three boys, especially  skiing and other outdoor recreation activities. In addition to skiing with his family, Charles enjoys mountain biking, hiking, camping, racquet sports (particularly tennis but also racquet ball, squash, paddle tennis and table tennis), golf and "fire-side" chats about history and philosophy.