Americans are a demanding group but, when you cut to the chase, we can live with inconveniences. However, lack of power, and the accompanying implications on our life and lifestyles, would not be among those conveniences we could easily do without. Power is integral to all facets of our lives and, as society evolves, demand for power grows. As a result increasing demand for new and cleaner sources of power creates opportunities for investment as companies expand to meet demand or innovate to produce cleaner or more efficient power.

While the M&A market continues to recover, business owners are utilizing Employee Stock Ownership Plans (“ESOPs”) to satisfy the need to convert some of their illiquid privately held company stock into cash and other liquid investments. The ESOP is attractive due to significant tax savings to the owner and company, flexible deal structures and speed with which a transaction can be completed. With higher capital gains taxes looming in 2011, now is a great time to evaluate this liquidity strategy.

The year started with a proverbial “BANG” from an estate planning perspective with the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 late last year. The Act, as some have named TRUJCA, could almost just as easily been titled “Estate Tax Repeal.” Regardless of the name, the new rules certainly have people talking about the numerous planning opportunities it affords, although those may be temporary.

Lately the “L” seems to be missing from LBO’s (leverage buy-outs) as a result of the lack of leverage over the past few years. However the slower mergers & acquisitions activity in the healthcare market first seen in late 2008 has recently improved, undoubtedly partially driven by the renewed health of senior debt lending to support transactions.

Increasing numbers of businesses are turning to the U.S. Bankruptcy Code for economic survival.

Merger and acquisitions transaction activity dropped slightly in the third quarter of 2010 after a strong second quarter performance, almost solely to the decrease in under $50 million transactions. The decrease in activity is somewhat surprising given reports that financial and strategic buyers across multiple sectors are reporting an uptick in deal flow. Business owners seeking liquidity prior to the upcoming change in tax laws is one reason given for the increased deal flow activity. Hopefully the drop is a minor blip that will be offset by significant activity in the 4Q10. Even though activity was off slightly in 3Q10, total transaction volume in 2010 has surpassed the levels achieved during all of 2009. Through the first three quarters of the 2010 total transactions equaled 8,480 versus 8,325 for all four quarters of 2009. This achievement is certainly encouraging considering the challenges 2009 presented, but additional progress will need to be made before a healthy M&A market is achieved.

Virtually all investments lost value during 2008, and 2009 did not herald the end of the recession, or begin the economic recovery, that many hoped would occur. Appetites for taking risk, including the risk of potential tax audits associated with complex estate planning, have remained restrained. However, recent tax court decisions could re-ignite interest in utilizing Family Limited Partnerships (FLPs) or similar entities as part of asset protection and estate planning.

Merger and acquisitions transaction activity picked up in the second quarter of 2010. The increase is due to a number of factors. Deal momentum improved as the economy continued to show modest signs of improvement, debt markets became more active and valuations remained strong for companies that performed well. Additionally, a segment of business owners are motivated by pending tax law changes that will increase taxes and lower net proceeds after 2010, unless there is an extension of the Bush tax cuts. As a result, companies are evaluating liquidity alternatives resulting in the uptick in transactions. For companies that are performing well this is a good opportunity for shareholders to maximize the proceeds from a sale.

In spring 2010 I addressed the difficulty of obtaining credit. A friend had asked about the current environment so I am sharing my thoughts with all of you. Hard to believe that so much time has passed so quickly since I last wrote about credit. Before you know it, the year will be 2020, and we will have emerged from these economic shackles of debt and unemployment. But back to the issue at hand – credit availability in the current economic climate.