Articles Posted in Business Litigation

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AdobeStock_38444038-300x201Business Partnership Lawsuits — Disputed Between LLC Members, Shareholders, General Partners, or Limited Partners

Nobody enters a business partnership or relationship expecting to end up in litigation, but disputes may arise that can only be resolved through a formal legal process. If you are involved in such a lawsuit, the San Jose partnership lawyers at Structure Law Group can provide you with professional advice, guidance, and representation throughout the process.

Why Partnership Lawsuits Happen

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AdobeStock_79495533-300x200Business disputes arise for many reasons. For example, a vendor might have a unpaid invoice that is several months overdue. Or an insurance company may refuse to pay on a claim after your factory suffered fire damage. Or perhaps you recently had a fallout with a partner and have been going back-and-forth on how to separate them from the business.

At a certain point in the process, you may need to send a formal document known as a demand letter to try and break the logjam. Conversely, another party may send you a demand letter. In either case, it is always best to work with an experienced California business litigation attorney who can advise you of your rights and responsibilities when it comes to demand letters. The team at Structure Law Group assists many California businesses in this area, and we can put that expertise to work for you.

How a Demand Letter Works

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AdobeStock_600446210-300x200Anytime you wish to file a lawsuit against someone in California, you need to be mindful of the statute of limitations. This is the legal deadline for initiating action on a particular type of claim. Failure to comply with the statute of limitations often means your case will be dismissed without consideration of the merits.

An experienced California business litigation attorney can help ensure that you meet the statute of limitations and all other legally mandated deadlines in your lawsuit. The last thing you want is for your case to be thrown out of court before it has even begun. The team at Structure Law Group can guide you through this process and make sure that does not happen.

What Are the Deadlines?

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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_102097403-300x200As of January 1, 2024, all entities that are not exempt in California must file reports on their “beneficial ownership” with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). These reporting rules were part of the Corporate Transparency Act (CTA), which itself was enacted by Congress as part of the 2021 Department of Defense authorization bill. The Los Angeles corporate law attorneys at Structure Law Group, LLP, can advise you on your company’s obligation under the new rules and how to avoid potential regulatory issues with FinCEN.

New Requirements for Disclosing “Beneficial Owners” of Foreign and Domestic Companies

At its core, the CTA is an effort to enhance the Treasury Department’s ability to identify and take legal action against potential money laundering activities. In adopting the CTA, Congress determined that many actors involved in illegal activities like terrorist and tax fraud used “shell” companies to conceal their identities and move their illegally obtained proceeds through the U.S. financial system undetected. Given that corporation law varies from state-to-state, there were no uniform national requirements for reporting the actual or “beneficial” owners of many corporate entities.

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AdobeStock_600446247-300x200Contracts are the lifeblood of California’s economy. Every business, no matter its size, depends on the mutual performance of contractual obligations with individuals and other business entities. When there is a breach of contract, the Los Angeles business litigation attorneys at Structure Law Group can advise you of your rights and represent you in taking (or defending against) legal action to assert those rights.

How Much Time Do You Have to File a Breach of Contract Lawsuit in Los Angeles?

California law imposes a deadline–known as a statute of limitations–on most types of civil actions. For alleged breaches of written contracts, the statute of limitations is four years under Section 337 of the California Code of Civil Procedure. But for most oral contracts, the limitation period is just two years under Section 339. In certain cases, a breach of contract for the sale of goods may instead be by Section 2725 of the Commercial Code, which has a four-year statute of limitations regardless of whether the contract itself was written or oral.

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AdobeStock_366696178-300x200Many startups jumped onto the cryptocurrency bandwagon by offering Initial Coin Offerings (ICOs) in lieu of IPOs. But there were pitfalls here as there are with any new technology. ICOs can act like IPOs which are typically securities offered to investors.

If so, then the SEC governs the transaction. On the other hand, not all IPOs are securities. These are known as utility tokens and do not offer a share of the venture, but rather some other benefit, such as free services or the right to purchase a stake later.

Even with some confusion over the ICO itself, major investment banks are beginning to jump on the ICO bandwagon. In this article, a Silicon Valley cryptocurrency attorney discusses the pros and cons of ICOs to generate investment capital.

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AdobeStock_531838016-300x200It’s becoming increasingly common for manufacturers to turn to distributors to sell their products to reduce the overhead costs of processing orders, logistics, and more. The manufacturer sells the product to the distributor, which then resells the product at a profit. The distributor ostensibly has the infrastructure to process these sales and a keen understanding of the market in which they operate. Instead of taking on the overhead of distribution themselves, they can hire experts who operate within this market on a daily basis and have the infrastructure to meet demand. From the distributor’s point of view, they get access to the product without the overhead of manufacturing. Distributors and manufacturers can thus operate on a symbiotic basis, each making the other more profitable by staying in their lane of expertise.

Problems arise, however, on the distributor side. Distributors may spend years cultivating a relationship with a manufacturer only to find that the manufacturer now wants to handle distribution in-house. In Europe, you cannot fire a distributor without a severance package. In California, distributors have no such protection.

In this article, a Silicon Valley business litigation attorney will discuss how distributors can protect themselves with strong distribution agreements that protect their interest in a market.

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AdobeStock_283452126_Editorial_Use_Only-300x189It doesn’t take long on the internet to find extremist language, hate speech, and accusations of censorship. Often these are all found within the same post. Business owners have free speech rights, but free speech from any employee can expose a company to liability for false statements. It is important for business owners to create clear corporate policies about employee communications both on company websites and personal social media channels.

The Current Legal Standard

Current case law on this issue dates back a few decades. In 1964, the Supreme Court decided New York Times Company v. Sullivan, a First Amendment case involving published criticism of public officials. The Court found that Sullivan had indeed proven that the New York Times had published inaccurate statements about his office and subordinates. The fact that the statements were false did not, however, support his case for libel. The Court enacted a new standard of “actual malice.” This new rule means that an official must prove the false statement was published with the knowledge that it was false – or with gross recklessness – to sustain a libel case. Unless this legal definition of “actual malice” exists, the false statements are protected as free speech under the First Amendment.

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AdobeStock_279619074-300x200Preference related to creditor’s rights issues. If a company files for bankruptcy, the matter is turned over to a bankruptcy trustee who takes control of the debtor’s estate. In the case of the company, they have powers over the company. Preference specifically deals with voiding transactions within the last 90 days of a bankruptcy filing (sometimes longer) if it benefits one creditor to the detriment of another creditor. Such a transfer is referred to as a preference.

Let’s use a simple example commonly found in consumer bankruptcies. The debtor has maxed their credit cards with no hope of repayment, so they file for bankruptcy. Before doing so, however, they repay their grandmother the $100 they borrowed in 2015. The bankruptcy trustee can demand the $100 back from the grandmother as she has been given preferential treatment to the corporations that own the majority of the debtor’s debt.

This benefits both the creditor and the debtor. For the creditor, it prevents the debtor from moving assets out of their estate for the purpose of hiding them from the trustee. For the debtor, it prevents the creditor from using aggressive tactics that would drive them into bankruptcy since it isn’t just their debt that’s going to be repaid. In these cases, the trustee sends a demand letter to the debtor demanding the repayment of the transaction.

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