Articles Tagged with Business Litigation

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AdobeStock_626749959-300x200Litigation is rarely the desired outcome to any business dispute in Texas, but it often becomes necessary when alternative dispute resolution methods such as arbitration or mediation do not produce desired results. When any person is preparing for a possible litigation matter in Texas, they will want to have the assistance of an experienced Austin business litigation attorney.

Businesses have the power to resolve disputes on their own without having to go to court, but there are many times in which two sides will vehemently disagree and not be able to come to a resolution. Litigation is often the most effective way of determining which party is right and awarding any damages.

Making Demands

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AdobeStock_602180598-300x207While people often associate the individual terms in the phrase “mergers and acquisitions” (M&A) as essentially meaning the same thing, they are actually quite different. An acquisition describes one company taking over another company to establish itself as a new owner, while a merger refers to two companies of similar sizes joining forces to move forward as a single new entity.

M&As are extremely common in today’s business environment, but they are also incredibly complex, and many hopeful deals instead end up in litigation. You can avoid many of the struggles associated with M&As when you work with an experienced M&A attorney in LA.

Why M&A Transactions End Up in Litigation

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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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AdobeStock_257476584-300x200Litigation is a costly enterprise for any business owner. It is important to work with an experienced business litigator who knows how to mitigate litigation expenses wherever possible. New statutes – such as the one that creates informal discovery conferences – can be used to help resolve discovery disputes and mitigate the over cost of business litigation.

What is an Informal Discovery Conference?

Recently, the California Code of Civil Procedure was amended to allow civil litigants to request an informal discovery conference. While the discovery process is governed by clear rules and procedures, the parties are often expected to resolve differences amongst themselves. If they cannot, they must let the court decide their differences. This is traditionally done by discovery motions. If, for example, one party refused to procedure a document requested by the other, the requesting party could file a motion to compel with the court. The attorneys would then prepare written motions to the court, make arguments at the hearing, and wait for the judge’s ruling. All of this results in added attorney’s’ fees.

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AdobeStock_316499043-300x199In California litigation, each side is generally expected to pay their own attorney’s fees. This can be a significant amount – one that is especially hard for businesses to bear when they are new, or small or subject to difficult market conditions (such as the coronavirus pandemics). There are, however, certain situations in which a party can recover attorney’s fees. Learn more about how you can mitigate the expenses of litigation.

Recovery Through Statutes

There are certain statutes that specifically provide for attorney’s fees. If a party successfully pursues a claim under a specific statute, the court can award attorney’s fees at the end of the case. This is why it is important to work with an experienced business litigator who knows which claims you can pursue under state statutes that specifically allow for attorney’s fees. These statutes typically involve cases of serious misconduct, such as fraud, concealing evidence from the other party, or lying to the court. One frequent example is California’s “Anti SLAPP” statute. Section 425.16 of the California Code of Civil Procedure prohibits frivolous lawsuits that use the judicial process to restrict another party’s right to free speech. The statute also specifically allows attorney’s fees to be awarded to a prevailing party on motions to strike filed under this statute.

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AdobeStock_151536590-300x214When filing a lawsuit in California, the original complaint may be either verified or unverified. If it is verified, the plaintiff makes assertions under the pains and penalties of perjury. A verified complaint also forces the defendant to respond to the lawsuit with a verified answer. This tactic forces the defendant to immediately make statements about the allegations under oath. There are strategic reasons to use – and not use – a verified complaint when filing a business lawsuit in California. Learn more about this litigation tactic so you can ask your litigator if it is right for your case.

Pros and Cons

As with anything in life, there are pros and cons to using a verified complaint. As discussed, the most pressing pro is that it forces the defendant to submit a verified answer. These statements can be disproven in litigation – which means your attorney can ask for the defendant to be penalized for lying under oath. You might be awarded attorney’s fees or discovery sanctions for the perjured evidence. At trial, the defendant will be made to look like a witness who is not credible to the jury. By starting your lawsuit with a strong hand, you can have more control over the direction that discovery takes throughout the case.

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AdobeStock_271469937-300x200In general, shareholders are protected from liability for the debts of the corporation. This is because the corporation is viewed as a separate legal entity with its own assets and liabilities. This “corporate veil” of protection can, however, be pierced in certain situations, and personal liability imposed on the shareholders. Creditors use this legal tactic strategically to be sure they can access funds for what they are owed. The experienced California business attorneys at the Structure Law Group can help advise creditors on how to effectively pierce the corporate veil in order to satisfy the debts they are owed.

Elements of Alter Ego Liability

In order to pierce the corporate veil, the plaintiff must prove “alter ego liability.” Alter ego literally translates to “other self.” In alter ego liability, the corporation has been treated as an extension of shareholders’ personal interests, so the courts find it fair to hold shareholders liable for the corporation’s debts, as well. Plaintiffs in California must establish: (1) that there is a unity of ownership and interest between the owners (or shareholders) and the corporation, and (2) that it would be unfair to only hold the corporation accountable for its debts in order to establish alter ego liability.

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Avoiding the Most Common Business Lawsuits 

Defending against any lawsuit has the potential to sink a Silicon Valley start-up. You must defend against even frivolous litigation especially so in today’s fast-paced and ever-expanding startup industry. There is no way to bulletproof a business from all litigation, but there are ways to greatly reduce the likelihood of lawsuits and their financial impact on your business. The experienced business litigation attorneys at Structure Law Group, LLP can help advise and protect start-ups against business litigation before it happens. While you can’t protect against all litigation, you can protect against the most common legal complaints against businesses. Business attorneys commonly defend against the following lawsuits:

  1. Breach of Contract Claims – Sometimes start-ups enter into contracts that aren’t favorable, or they run out of funding to fulfill their obligations. The business lawyers at Structure Law Group can review and draft the terms of any proposed contracts and include certain protective indemnification and liquidated damage clauses to reduce the cost of or prevent litigation.
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Despite the fact that everyone is entitled to their day in the court, the reality is that most cases are resolved out of court.  Many clients will approach their lawyers with the hope that they will be able to quickly get in front of a judge and explain their story—a vision of American justice that is reinforced in popular media and Court TV.  However, getting to trial is a long process and most cases never make it to trial.  In most situations, the cases take earlier exit ramps, such as informal out-of-court settlement, mediation, arbitration, or is resolved by a ruling before trial.  Even if a case is set for trial, it is very common for the parties to settle on the eve of trial.

Often, the cheapest and most efficient way for a dispute to get resolved is for the attorneys to work on an out-of-court settlement.  This can occur at any point either before or after a lawsuit has been filed.  Under this track, attorneys informally negotiate a resolution.  If the parties agree to it, the attorneys will memorialize the resolution in a settlement agreement.  This is often the quickest way to resolve a case, as it does not require any third-party intervention—it only requires the parties to work together to settle their differences and capable counsel to guide the parties through the process.

In addition to out-of-court settlements, cases often get resolved with the help of a neutral third-party.  For instance, cases often go to non-binding mediation before they move on to trial.  Indeed, more and more courts are making mediation a mandatory step before allowing the case to move to trial.  During mediation, the parties present their case to a neutral third party whose job is to facilitate a settlement agreement by working with the parties and their attorneys as a go-between. Sometimes, cases may end up in front of a neutral third-party who has the authority to make a binding decision.  For instance, if the parties signed an agreement for binding arbitration, a private judge will make the final decision and the parties must live with the decision whether or not they are happy with it.  Arbitration is usually less costly and more efficient than going to trial.

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Options When Faced with a Legal Dispute

When faced with a legal dispute, it is important to know what your options are. A San Jose business owner typically juggles multiple commercial relationships on a regular basis – vendors, clients, employees, contractors, and business partners. Given the nature of running a business, it is likely that a legal dispute will come up at some point. When this happens, it is very important to educate yourself on what your options are. Litigation can subject a business to unnecessary stress, be huge time sink, and cost you significant legal fees and expenses. Alternative dispute resolutions like mediation and arbitration are processes that may allow you and the other side to reach a solution that you both can live with without the substantial causalities that litigation typically entails.

The experienced San Jose corporate attorneys at Structure Law Group have extensive experience in litigation, mediation, and arbitration. They can discuss the pros and cons of each option with you and help you pick the best course of action for your business.

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