South Carolina Business Law Blog

By Jessie King On June 11, 2010, Governor Sanford signed into law S452, a bill amending the South Carolina Surface Water Withdrawal and Reporting Act, §49-4-10 et seq. (Supp 2008) (the “Act”). The law takes effect on January 1, 2011. The amendments to the Act are designed to stop the taking of water from South Carolina in unlimited quantities, protect existing water users, and maintain seasonal river water flows. The amended Act creates a regulatory permitting system for water withdrawal. The need to regulate water withdrawals came to a head recently after recurring droughts, legal battles with neighboring states over shared water supplies, and population growth. Prior to the amendment, persons wishing to take millions of gallons of water out of South Carolina rivers and lakes needed only to “register” with the South Carolina Department of Health and Environmental Control (DHEC) , report the quantity of water withdrawn and the method for measuring the quantity, and notify D...

Governor Sanford recently signed three bills making changes to the South Carolina Probate Code . Summaries of these bills, provided by JP Lee , are set out below. H3803(Signed by the Governor on June 7, 2010), full text here Colloquially known as the “Summons Bill” among South Carolina trust and estate practitioners, the new law makes certain procedural amendments to the South Carolina Probate Code, and clarifies that petitions required or authorized by the Probate Code now require a summons in addition to the actual petition. Previously many sections in the South Carolina Probate Code, such as the petition for allowance of a creditor’s claim at South Carolina Code §62-3-806, required only a “petition”, with no mention of a summons. This caused confusion among laypersons and practitioners, as some Probate Judges required the serving of a summons when a petition was filed, despite no express statutory requirement for same. The new law clarifies that effective June 7, 2010, peti...

Governor Sanford has signed a bill recently passed by the SC General Assembly making several notable changes to the SC Textiles Communities Revitalization Act ("Act"). The Act provides tax credits for expenditures related to the rehabilitation of buildings in South Carolina previously used as textile manufacturing facilities. The amendments address several concerns raised by tax credit investors and others in the tax credit industry. Most notably, it makes the credits easier to specially allocate among partners in a partnership or limited liability company, adds transition rules for projects that were acquired or commenced prior to previous amendments in 2008, and allows the credits to be used against SC insurance premium taxes. The text of the bill (S728)is available here . Thanks to Chris Rogers for bringing this legislation to the Blog's attention.

The South Carolina Supreme Court determined that an appraiser report lacking "normalization adjustments" failed to meet the valuation standards agreed to by the parties, and warranted reversal of the trial court's order approving the valuation. In Blackburn v. TKT and Associates , two corporate shareholders filed a dissolution action alleging that two other shareholders were inappropriately taking the profits of the corporation in the form of excessive salaries. Following a bench trial, the trial court agreed that the defendant shareholders had "improperly drained the assets" of the corporation, determined that the defendant shareholders should pay plaintiff shareholders the fair value of their shares, and ordered an appraisal. The parties chose an appraiser, and selected the "income approach" method for valuing the corporation. The terms of the appraiser's engagement further provided that the appraisal would be done in accordance with the S...

In Poynter Investments v. Century Builders , the South Carolina Supreme Court continued a line of cases holding that the "restrictions in a non-compete clause cannot be rewritten by a court or limited by the parties' agreement, but must stand or fall on their own terms." In addition, the Court clarified that there is no separate "balancing the equities" requirement for the issuance of a preliminary injunction (modifying five South Carolina Court of Appeals opinions including such a "requirement"). Appellant Rector sold his business to Poynter in 2007, and the parties entered into an "Employment and Non-Competition Agreement" containing a four year non-competition clause, and preventing Appellants from competing in a defined geographic area ("Restricted Territory") during that time period. Poynter sued Appellants in 2008 alleging violations of the non-competition agreement. The trial judge granted Poynter a preliminary injuncti...

On May 6, 2010, the South Carolina Court of Appeals issued a ruling affirming a harsh result against Wachovia for its failure to have loan closing documents reviewed, and the closing supervised by, an independent attorney. In Wachovia v. Coffey , borrower Dr. Coffey took out a $125,000 home equity line of credit with Wachovia. Wachovia closed the loan directly without the involvement of counsel. Dr. Coffey’s wife was unaware of the closing. Dr. Coffey signed a mortgage document purporting to secure the line of credit with their home, despite the fact that Mrs. Coffey was the sole owner on the title. Wachovia wired the loan proceeds for the purchase of a thirty-six-foot boat. Dr. Coffey paid monthly payments for the boat for the rest of his life, and Mrs. Coffey continued those payments temporarily after his death. Mrs. Coffey believed the loan was secured by the boat, not the home. After Dr. Coffey passed away, Mrs. Coffey sold the boat, with the help of a boat broker. Dur...

The U.S. Supreme Court recently approved proposed changes to various federal rules of procedure (appellate, bankruptcy, civil, criminal, and evidence). These changes will be effective on December 1, 2010, unless Congress enacts legislation to the contrary. A list of the rules amended or added is found here , courtesy of Fastcase . The Administrative Office of the U.S. Courts has a summary of the proposed rules.