Articles Posted in Business Litigation

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AdobeStock_360567140-300x200California Governor Gavin Newsom signed several laws in 2022 that will have a significant impact on employers throughout the state, with some laws becoming effective the moment they were signed and others becoming effective as of January 1, 2023. It is important for all employers to know that New Year’s Day marked the first day of the state’s new minimum wage for all employees that is set to be $15.50 per hour, regardless of employer size. As a business owner in California, you should be aware of the following new laws that have gone into effect in 2023. By familiarizing yourself with these new laws, you can help ensure that your business remains compliant and up to date with the latest regulations.

New employment laws in California relate to many different topics, ranging from off-duty marijuana use to leaves of absence to reproductive rights. If you’re facing a business litigation concern, make sure you seek out an experienced California business attorney at Structure Law, Group, LLP. With so many changes in the law, it’s important to stay informed and get the help you need to make sure you’re in compliance with all relevant laws.

To help you stay informed, here is a brief overview of some of the new laws that have gone into effect in 2023:

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AdobeStock_363999428-300x200Post-closing disputes in many private mergers and acquisitions (M&As) can quickly turn once beneficial business decisions into sources of complete frustration and possible value destruction. When you are considering a merger or acquisition in Texas, it’s important to have the right legal representation on your side to ensure the process goes as smoothly as possible. At Structure Law Group, LLP, our experienced Austin mergers and acquisitions attorneys have the expertise and knowledge to provide you with the best possible legal advice and guidance to ensure a successful transaction.

Several post-closing disputes result from proper planning and insufficient forethought before people execute acquisition agreements. When you exercise the necessary diligence and retain legal counsel, you will be far less likely to end up in a dispute.

Earnouts

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AdobeStock_273133653-300x200California business owners face many different types of litigation. It is important to mitigate the risk of liability by consulting with a California business litigation attorney before your business is even established. The experienced California business litigation lawyers at Structure Law have helped entrepreneurs in all types of industries protect their companies from preventable losses. What follows are some of our tips to protect your business from litigation.

Have a business litigation attorney in California draft an operating agreement.

An operating agreement is not required to form a business in California. As a result, some business owners make the mistake of starting business operations without them. Without an operating agreement, the business is exposed to litigation and liability. An experienced business lawyer can draft an agreement that will reduce the likelihood of future liability. According to the Small Business Administration, an operating agreement sets the rules that guide a company’s decisions. Having an operating agreement can set decision-making processes that reduce the likelihood your company will face litigation. This agreement can even reduce the risk of future costly conflicts between owners of the company.

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AdobeStock_118045560-300x199The coronavirus pandemic changed every aspect of life in California. Though the health crisis has improved, the long-term effects of COVID continue to affect us in many different ways. One of the big problems facing the legal profession is access to the state court system. Emergency procedures shut the courts down entirely in the early days of the pandemic. Soon, the courts operated on a limited basis, but even these short closures caused serious problems in a backlog that existed long before the COVID crisis. Reuters reports on the emergency COVID-19 orders that were rescinded in March 2022. After two full years, the California court system is no longer operating under restrictions. This change does not mean that it will be business as usual for every litigant seeking help in the courts.

Court Hearings

The state court system enacted many emergency procedures to protect the health and safety of all litigants during the COVID-19 pandemic. These steps included remote hearings, mask use, and restricting the number of people in a courtroom at the same time. These restrictions have been lifted as the health crisis improves. You are more likely to find normal court procedures in cases throughout the state. The courts’ limited operations during COVID have, however, created a backlog. As a result, it can take much longer to get a court date at all.

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AdobeStock_516820932-300x200There are many risks involved with entering into any contract. Business litigation costs time and money that interferes with efficient business operations. The best way to mitigate the risk of a business contract is to hire an experienced Los Angeles business attorney to draft your contract with as much protection as possible. At Structure Law Group, our skilled Los Angeles business litigation lawyers know how to prevent disputes in the drafting phase, negotiate dispute resolution during the contract performance, and litigate disputes in court when necessary.

Financial Protections

Some contract provisions provide financial protection. Insurance requirements, for example, can provide financial security against the risk of loss. Los Angeles business owners can also create financial protection with a liquidated damages clause. This contract provision imposes a set monetary fee, that a breaching party is required to pay in the event that they breach the contract. It is not designed to be a penalty, so courts will usually not enforce liquidated damages provisions that are not closely tailored to the party’s actual financial losses. But setting the amount of these financial losses ahead of time provides one party with financial security in the event that the other party breaches the contract. It also sets a financial incentive to encourage both parties to comply with the contract.

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AdobeStock_503784636-300x202Business litigation is a major expense for many California entrepreneurs. You can save your business time and money by preventing contractual disputes. The California business litigation attorneys at Structure Law Group provide proactive legal advice to prevent contractual disputes whenever possible. Having your business contracts reviewed by an attorney is an important investment that can pay dividends in the long run.

How Business Contracts Affect Every Area of Your Business

You might not realize just how many areas of your business are affected by contracts. Your customers, vendors, and employees can all subject your business to liability in contractual disputes.

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Top-7-Ways-to-Avoid-Post-Closing-Merger-Litigation-1-scaled-e1656629461956-300x214Not all corporate mergers and acquisitions are amicable arrangements; most notably, the hostile takeover. There are various types of mergers and acquisitions in California. Even merger discussions that begin amicably may result in a perceivably unfair closing agreement, triggering expensive post-closing litigation. Oral promises may never translate into a written contract or diluted shareholders may protest. No matter the reason, California business litigation is often complex, time-consuming, and expensive.

The oldest and wisest way of avoiding costly post-closing M&A litigation is by anticipating and planning for the same. The experienced business litigation and M&A attorneys at Structure Law Group, LLP are familiar with the most common areas of post-closing M&A litigation and may help you avoid or greatly reduce the cost of business litigation.

Most Common Post-Closing Merger Lawsuits

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AdobeStock_185592300-300x200Business owners have been confronted with a host of costly legal issues as a result of the COVID-19 pandemic. For those with employees, the risk of COVID lawsuits has been a serious concern from the earliest days of the pandemic. Most employers assume that any COVID lawsuits will be covered by their liability insurance. Unfortunately, this has not always been the case.

Workers Comp Lawsuits V. Personal Injury Lawsuits

First, it is important for employers to understand the difference between workers’ compensation coverage and liability coverage. Workers’ compensation coverage pays for any injury that employees sustain in the scope and course of their employment. The employee does not have to prove negligence – so long as the injury occurred on the job, it will be covered. If an employee believes they can prove that the employer was negligent, they can file a personal injury lawsuit against their employer. These lawsuits are not covered by workers’ compensation coverage. An employer must maintain a separate general liability policy to cover claims of this nature.

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AdobeStock_229466821-300x200For over two years, landlords throughout California have shouldered the financial burdens of eviction moratoria. Federal, state and local laws have limited the circumstances, manner, and time in which a landlord could remove a tenant delinquent on rent or other obligations under the lease. While some would argue these measures were a necessary health precaution during the worst of the pandemic, they shifted the financial burden of missed rental payments onto landlords in most respects. Now, landlords are finally experiencing some relief as eviction moratorium laws expire. Learn more about commercial landlord rights in California under current eviction regulations.

How California Has Handled Commercial Tenant Evictions

Governor Newsom’s latest executive order extended eviction moratoriums on commercial landlords through September 30, 2021. Since that date has lapsed, commercial tenants are no longer protected under the expired law and must rely on state and local regulations still in effect. In sum, commercial landlords may start eviction proceedings against tenants in the counties where no extension has been provided. In some counties, local ordinances have extended eviction moratoriums and protections. Los Angeles County, for example, has created a two-phase tenant protection resolution. Different eviction rules will apply as the procedures are phased in throughout 2022. In Santa Clara County, commercial tenants must now be caught up on at least fifty percent of their arrears, or they could be subject to eviction. Tenants have until August 19, 2022, to be fully paid up on their arrears. Each county has its own rules, so be sure to consult with an attorney about your specific situation.

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AdobeStock_101676859-300x200Corporations are subject to many fiduciary rules that govern their operations. Most business persons are familiar with the prohibition on interested transactions and placing one’s own financial interests ahead of the company’s. Yet the application of this rule varies widely from state to state. The Delaware Supreme Court has recently issued a ruling that will apply to the many businesses which fall under Delaware’s state laws of corporate governance. Learn more about the standard of review for interested transactions between a controlling shareholder and their subsidiary company:

In re MFW

The litigation started with a dispute between the shareholders of M&F Worldwide (MFW). A merger was proposed between the controlling stockholder and a subsidiary company. Minority shareholders objected to the merger and brought suit to stop it. Prior case law had subjected such transactions to the stringent standard of “entire fairness.” Yet, in this case, where there were two important procedural safeguards protecting the minority interest, the Court of Chancery held that the more lenient “business judgment” standard could be applied. The ruling was appealed to the Delaware Supreme Court. Because the Supreme Court affirmed the ruling, it has created a new legal standard under Delaware law.

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