In the case of Nancy A. Schmidli et al. v. Rodney K. Pearce et al. recently decided by California’s Court of Appeal in the Third Appellate District (San Joaquin), the plaintiffs sought to extinguish a lien of deed of trust held by defendants against their property. Schmidli et. al. claimed that the defendants’ lien had expired under a 10-year statute of limitations triggered by defendant’s recording of a notice of default employing as a rationale that the “record” from which to determine the maturity date of the obligation secured by the trust deed included any recorded document that disclosed the debt’s maturity date, including a notice of default.Defendants countered that a 60-year statute of limitations applied if the last date fixed for payment of the debt is not expressly set forth within the recorded trust deed. With this line of reasoning intact, their notice of default did not trigger the 10-year statute, and their lien remained viable under a 60-year statute of limitations.

Two previous appellate decisions addressed this issue and reached different results. Slintak v. Buckeye Retirement Co., L.L.C. LTD. (2006) concluded a notice of default triggered a 10-year statute. Ung v. Koehler (2005) determined a notice of default did not trigger a notice of default where the notice was recorded after the 10-year period had expired and the trust deed failed to provide the maturity date of the debt, and therefore, the 60-year statute applied.

The trial court relied upon Slintak and granted a summary judgment in favor of the plaintiffs. Although the notice of default in this case was recorded before the 10-year period expired, the court concluded that Ung’s precedent was the better reasoned authority, and so reversed the judgment.

Because of this decision, a split between appellate districts on whether a 10 or 60 year statute of limitations applies to a lender’s recorded trust deed against real estate where that trust deed fails to provide for a maturity date of the loan. Although the California legislature has changed the statute to clarify 60 years as the term of maturity in the event that the trust deed failed to state a maturity date and regardless as to whether or not a subsequent notice of default so indicates, a significant number of trust deeds still recorded prior to the change are in existence which must be interpreted based upon the district where recorded unless there is further clarification from the California Supreme Court.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

The October 29, 2009, decision rendered by the California Court of Appeal, Sixth Appellate District, in the case Berg & Berg Enterprises, LLC versus John Boyle et. al. concluded that Berg failed to plead a cognizable claim for breach of fiduciary duty against the individual directors (John Boyle et. al.) of Pluris Inc. being sued.

The Berg case was born out of a dispute between Berg & Berg, a real estate developer, and Pluris, a Silicon Valley-based start-up company engaged in the business of developing advanced network routers. Pluris dissolved in 2002, a victim of a depressed sector economy as its financing efforts and product development efforts “tanked.” Berg alleged that it became Pluris’s largest creditor when its predecessor-in-interest, MWP, agreed to build and then lease two office buildings in San Jose, California, to Pluris and Pluris allegedly repudiated the lease agreement and subsequently made an assignment of its entire assets for the benefit of its creditors. Berg retaliated initially by attempting to file an involuntary bankruptcy proceeding against Pluris to try to exploit approximately $50 million in net operating losses. When the involuntary bankruptcy proceeding was dismissed, Berg litigated, claiming in state court that Pluris’s directors had breached fiduciary duty, alleging that the directors had failed to conduct a reasonable probe into the proposal to pursue the Berg bankruptcy plan for the intent of preserving the net operating losses. After several additional challenges, the actions were dismissed due to Berg’s “failure to state a cause of action for breach of fiduciary duty” and Berg appealed.

On appeal, Berg raised the theory that directors of a corporation owe a fiduciary duty to the corporate creditors even before the corporation is actually insolvent and merely in the “zone of insolvency” so as to vitiate the normally singular duty owed to shareholders. The rule was originally posted in a Delaware Chancery court in the case of Credit Lyonnais Bank Nederland N.V. v. Pathe Communications Corp., 1991 Del. Ch. Lexis 215 (Del. Ch. Dec. 30, 1991). In rejecting the invitations to expand directors duties before actual insolvency, the court instead reaffirmed California’s “Trust Fund” approach which rejects a fiduciary duty to creditors and merely fasten liability where the assets which otherwise could have been used to satisfy creditors is in some way diverted, dissipated or put at undue risk.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

There was optimism that the real estate market was making a comeback and then – experts said it was looking really bad for commercial property owners and getting worse. This doesn’t sit well with you when you realize that the vacancies in your 100 unit apartment building have soared upwards from 5% to 15%.

It’s no small wonder then that you have also been forking over more money every month to make the mortgage payments on both the first and second mortgages. One night while reviewing the dismal situation, you decide to quit throwing good money after bad and make a resolution to let the lender take the property in foreclosure.

Being a smart businessperson you make a call to a lawyer first to ask what your personal liability is if the first or second lender forecloses on the property. Your lawyer gives you the “it depends” answer and you’re thinking you’d rather have a straight answer instead. The straight answer only comes when she has the history of the loans in question.

When you bought the building, it was financed with a loan from your local bank with the second one provided by the building’s seller. Three years after the purchase, you refinanced loan number one for a better interest rate. The seller who held loan number two agreed to subordinate his loan to the new first loan so long as the principal of the first wasn’t greater and the interest rate was lower than the original loan.

While doing that was a smart move, the property currently can’t support either the first or the seller’s carry-back second loan. The straight answer from you lawyer, based on those facts, is that you could be personally liable to the lender holding the first trust deed but not the second. That revelation startles you and you discover that it is because the current first was securing a loan that was not used to buy the property – it was a refinance situation.

On the other hand, the seller carry-back second was used to buy the property and the refinance and subordination to the new first did not change the nature of what the seller originally financed with his second. As such, the law would not change the rule that as a purchase money loan, you had no personal liability.

In a 1991 case, Thompson v Allert (1991) 233 Cal. App. 3d 1462, the facts were quite similar to what we have discussed to this point. In that case the court outlined that the subordination to a new loan for the same amount at the same or lower interest didn’t alter the purchase money character of the loan. Under the California Code of Civil Procedure §580b, the holder of the second isn’t entitled to get a personal judgment against our apartment owner in this story – even if the first forecloses before the second and wipes out the second. Put another way, the second becomes worthless, leaving the holders with no ability to recover any of the unpaid loan amount.

By comparison, Wright V Johnston (1988) 206 Cal. App. 3d 333 provides a contrasting situation where the seller subordinated their loan to a new loan that was for a significantly greater amount then the original first trust deed so as to remove it from the borrower protections of California Code of Civil Procedure §580b. In other words, it lost its purchase money character by virtue of the changed nature of the financing risk with the refinance. Other situations which could trigger a seller carry-back losing its purchase money character are increased interest rates, balloon payments not in original first, and substantial cash-out loans.

If you’re knee deep in a commercial, industrial or multi-residential real estate property and thinking about letting it go to foreclosure, seek legal advice well in advance of letting the property go into default. This is an extremely complicated area of law where mistakes can be costly, and the need to think through the consequences of a default strategy is crucial to obtain the best possible result. At least that’s what this lawyer thinks.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

While the lessons may sound rather drastic, it is unfortunately true that if you wish to do business as a contractor you must be licensed at all times without any lapses. At least that’s what building contractor Terry Criddlebaugh found out the hard way.

The facts are a bit boring, perhaps even laughable when you examine them deeply. Terry was not licensed and had actually been trying to use the license of another contractor that was out of the country; a contractor that had assigned his license to Terry. Now on the surface that sounds like it would work, but it didn’t.

The actual registered owner of the company Terry was representing was Robert Diani. However he’d been an absentee officer and had turned over the work responsibilities to Terry. Diani left the country in 2004 and only returned to the U.S. twice and only had active control of the building company prior to leaving the country. Terry had never held a California contractor’s license. Because Diani was absent, he let Terry use his contractor’s license under the auspices of Diani’s company.

The problem was that when Diani’s company got its contractor’s license it had to qualify through a responsible managing officer (Diani) or a responsible managing employee who was eligible to get the same license.

If the managing officer isn’t associated with the licensed company, it has 90 days to replace the person. If the person is not replaced the contractor’s license is suspended automatically. In this case, the Diani company wasn’t qualified for a contractor’s license because Diani wasn’t actively in the construction business after 2004, Terry didn’t have a contractor’s license and there was no replacement put into Diani’s position.

So, here was a home built and one that exceeded the White’s expectations, but that didn’t matter. White was happy but he nonetheless sued Terry to recover all monies invested in the home because he found out that Terry had no contractor’s license.

This particular case is another in a series since 1990 and the Hydrotech Systems, Ltd. v. Oasis Waterpark, supra, 52 Cal.3d at p. 997 case. California courts have been interpreting the California Contractor’s law to say that the importance of licensing for a contractor is similar to other professionals like lawyers and accountants.

The California Supreme Court broadly interprets section 7031: “it bars a person from suing to recover compensation for any work done under an agreement for services requiring a contractor’s license, unless proper licensure was in place at all times.” In essence, the statute’s position that justice be done regardless of the equities is justified by how important it is to deter violations of licensing requirement. (WSS Industrial Construction, Inc. v. Great West Contractors, Inc., supra, 162 Cal.App.4th at p. 596.)

Section 7031 (b) deals with people who use unlicensed contractors regularly whether or not they have paid for the unlicensed work. People who have not paid are protected from lawsuits. On the other hand those who do pay may recover all they paid under this 2001 addition to section 7031.

Before the White vs. Criddlebaugh case, a lawyer recovered $3.5 million in paid fees in a similar case, MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 419. The White case goes one step further and says even if the construction job was the most outstanding in the world and the material will last 50 years or more, an unlicensed contractor will not be reimbursed for it. To put this another way, the White case extends the consequences of the Business and Professions Code 7031b’s disgorgement to even prevent the unlicensed contractor from recovering out-of-pocket costs expended on the job – in this case material.

This case also raised the question of whether or not compensation under section 7031 (b) may be reduced by offsets for “materials and services or by claims for indemnity and contribution.” The court concluded unlicensed contractors must return all compensation received without reductions or offsets for the value of material or services provided. (Goldstein v. Barak Construction (2008) 164 Cal.App.4th 845, 856.)

While this may seem nitpicky in the extreme there is sense in the decision. It’s a fact of life that there are cases where unlicensed contractors perform substandard work which ultimately may mean demolition of what was initially built by the unlicensed contractor in order to correct it.

The harsh results express a strong public policy intended to send a message. The message being that if you are unlicensed at any moment from the time you sign a contract to do work for which a contractor’s license is required through the time of completion of the job, you just gave the client free material and labor and built them their dream house as a gift – and even if they knew all along you were unlicensed. So, be aware that if a contractor is unlicensed, even for a fleeting moment, the same kind of decision may apply.

Wait, there’s more. Fight in court and you also get to pay the property owner’s legal fees and costs. On the other hand, if you are licensed, contractors have a formidable array of weapons they can bring to bear in order to get paid for their efforts.

While there are sometimes clearly inequitable results from such a harsh rule, it is more than offset against the circumstances where the contractor has never been licensed and has little clue on how to build a doghouse let alone a custom Beverly Hills chateau. At least that’s what this lawyer thinks.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

While it might be “the in thing to do,” expanding a business into foreign countries and hiring manufacturers and suppliers right on the spot, you need to watch that you do not exploit local labor. If you do, and insist they follow “your” notions of minimum labor standards, working conditions and health benefits; chances are you might wind up as a party to a nasty lawsuit later, just the very thing that happened to retail giant Wal-Mart, Inc.

Now you may think it odd that U.S. lawyers are representing plaintiffs in foreign exotic countries, however it appears to be a growing legal trend. They are doing this because the foreigners can sue U.S. companies in the United States. Perhaps this is the wave of the future; the legal industry relying more on imports over domestic sources to stay in business.

Just the Facts Ma’am!

The plaintiffs are workers of foreign companies that sell goods to Wal-Mart Stores, Inc. They collectively brought claims against the retail giant based on working conditions in each of their employer’s factories. The basis of the claims was that a code of conduct included in Wal-Mart’s supply contracts with these foreign companies stated that the suppliers had to meet basic labor standards.

The standards insisted foreign suppliers adhere to local laws and local industry standards relating to working conditions like discrimination, child labor, forced labor, hours and pay and something called a right of inspection. The right of inspection clause stated: “Wal-Mart or a third party designated by Wal-Mart will undertake on-site inspection of production facilities, to implement and monitor said standards. Any supplier which fails or refuses to comply with these standards or does not allow inspection of production facilities is subject to immediate cancellation of any and all outstanding orders, refuse [sic] or return [sic] any shipment, and otherwise cease doing business [sic] with Wal-Mart.”

Wal-Mart promotes itself to the public as a corporate entity that improves the lives of its suppliers’ employees and won’t stand for any violations of their standards. The plaintiffs argue that Wal-Mart doesn’t properly monitor the suppliers and that standards are honored more in the breach than in actuality. They further alleged inspectors are coerced to produce positive reports for those not in compliance and that the short deadlines and low prices of Wal-Mart’s contract conditions forces suppliers to violate the standards to meet the agreements.

And the Contentions Are

The plaintiffs offer four legal theories that attempt to establish that Wal-Mart’s standards and California common law provides obligations that may be enforced by foreign workers against Wal-Mart. Those theories are that the plaintiffs are third-party beneficiaries of the standards contained in Wal-Mart’s supply contracts; Wal-Mart is the plaintiffs’ joint employer and they negligently breached a duty to monitor the suppliers and protect plaintiffs from the suppliers’ working conditions and finally that Wal-Mart was unjustly enriched by the plaintiffs’ mistreatment.

And the Court Said

Re: Third-party beneficiary contracts: the Court set out the oft quoted rule that a person will be entitled to sue on a contract as “an intended [third party] beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties.” Furthermore it is accepted that “contract interpretation is a question of law that the court reviews de novo.”

The court felt that Wal-Mart’s supplier agreement didn’t obligate them to inspect and a workplace’s standards violation has no consequence if there were no inspection. Therefore, Wal-Mart didn’t obligate itself with a duty owed to the supplier’s workers as 3rd party beneficiaries of the supplier contracts between Wal-Mart and its foreign based suppliers.

Re: Wal-Mart was the direct employer of the foreign based supplier’s employees. The court stated that “in order to be a direct employer, they must be determined to have the right to control and direct people’s activities or the manner/method used to perform those activities.” In addition any finding as to the right to control workers requires a comprehensive and “immediate level of ‘day to day’ authority over employment decisions.”

The agreement that Wal-Mart could monitor the work environment was already determined not to create a duty to carry that out. Therefore, this can’t rise to the level of control over method or manner necessary since Wal-Mart didn’t assume the obligation.

Re: Wal-Mart is liable in tort to the workers for negligently supervising the supplier’s facilities and their working conditions.

The court said that “Negligence requires a duty owed by defendant to plaintiff which is alleged to have been breached.” And further that “Wal-Mart did not owe the plaintiffs a common-law duty to monitor Wal-Mart’s suppliers or to prevent the alleged intentional mistreatment of the plaintiffs by the suppliers. Without such a duty, the plaintiffs’ negligence theories do not state a claim.”

Re: Wal-Mart was unjustly enriched because it knowingly profited from their suppliers substandard labor practices.

The court’s response to this contention was that “A person who has been unjustly enriched at the expense of another is required to make restitution to the other.” California’s approach to unjust enrichment is consistent with this general understanding. And in addition, “The fact that one person benefits another is not, by itself, sufficient to require restitution. The person receiving the benefit is required to make restitution only if the circumstances are such that, as between the two individuals, it is unjust [emphasis added] for the person to retain it.”

The lack of any prior relationship between Wal-Mart and its supplier’s employees precludes the application of the unjust enrichment theory to recover. As you can see, this case was very nearly a case of no good deed goes unpunished and is a warning shot fired at other entrepreneurs and large corporations to watch their step when dealing in foreign countries.…… at least that’s what this lawyer thinks.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

Let’s take a quick look at a major case that deals with non-competition agreements in the employment area.

CPA Ray Edwards (Edwards), a tax manager, was hired by a Los Angeles accounting firm – Arthur Andersen LLP (Andersen) in 1997. Edwards had to sign a noncompetition agreement that prohibited him from working for or seeking Anderson clients for limited periods upon his termination.

The agreement Edwards signed stated: If you leave the Firm, for eighteen months after release or resignation, you agree not to perform the professional services you provided clients you worked with during the eighteen months prior to release or resignation. This does not prohibit you from accepting employment with a client.

For twelve months after you leave the Firm, you agree not to solicit any client of the office(s) to which you were assigned during the eighteen months preceding release or resignation.

Edwards worked for Andersen for six years and was promoted to senior manager with an eye to becoming a partner. The United States government indicted Andersen in connection with Enron Corporation.

In May 2002 Andersen internally announced that HSBC USA, Inc. would purchase a portion of Andersen’s tax practice, including Edwards’s group. HSBC offered Edwards a job. Before hiring, all Andersen employees were required to execute a “Termination of Non-Compete Agreement” (TONC)
The TONC required employees to (among other things): release Andersen from “any and all” claims, including “claims that in any way arise from or out of, are based upon or relate to Employee’s employment by, association with or compensation from” defendant and continue indefinitely to preserve confidential information and trade secrets except as otherwise required by a court or governmental agency, etc.

In exchange, Andersen agreed to accept Edwards’s resignation, agreed to Edwards’s employment by HSBC, and released Edwards from the 1997 noncompetition agreement.

HSBC demanded Andersen provide a completed TONC signed by every employee before the deal went through. Andersen would not release Edwards, or any other employee, from the noncompetition agreement unless they signed the TONC.

Edwards signed the HSBC offer letter, but he did not sign the TONC. Andersen terminated Edwards’s employment and withheld severance benefits. HSBC withdrew its job offer. Edwards refused to sign the TONC because he didn’t want to give up his right to indemnification. He felt some of Andersen’s clients may sue them and name him as a defendant.

When all was said and done the California Supreme court decided that Andersen’s noncompetition agreement was invalid because the agreement restricted Edwards from working for Andersen’s Los Angeles clients after his separation from Anderson, and therefore restricted his ability to practice accounting – his profession. This violated express California law.
Said the court: An employer “cannot lawfully make the signing of an employment agreement, which contains an unenforceable covenant not to compete, a condition of continued employment. [A]n employer’s termination of an employee who refuses to sign such an agreement constitutes a wrongful termination in violation of public policy.”

Put another way, the agreement Andersen made Edwards sign in 1997 was invalid because it didn’t allow him to practice his profession for a period of time once he left his employment with Andersen. The court added that under the circumstances of this case, what was illegal was restraints that precluded one from engaging in a lawful profession, trade or business. Indeed, California courts are clear in their expression that section 16600 of the Business & Professional Code demonstrates a strong public policy of the state which “should not be diluted by judicial fiat.”

In reference to Edwards not signing the TONC because he didn’t wish to waive his right to indemnity, the bottom line was that the Labor Code says that right can’t be waived.

To say that this case was a landmark decision would be a major understatement, and even today it is still being discussed for the ramifications it has on non-competition agreements in a whole host of contexts beyond just employer-employee relationships. The court seemed to make clear that section 16600 expresses a legislative decision to invalidate non-competition agreements to be entered into by a seller of a business so long as its limiting scope is reasonable.

If you find yourself facing a situation where you are required to sign or want to get someone to sign a non-competition agreement, speak to a knowledgeable business attorney first before you sign or ask for anything. The Court in Edwards seemed to suggest that asking for a non-competition agreement beyond what you are entitled to do may expose you to liability. So don’t take a chance or you may wind up not being able to compete after the person from whom you wrongfully extracted that non-compete gets a big judgment against you. At least that’s what this lawyer thinks.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

Non-disclosure agreements (NDAs) ideally are the most potent when the parties who are contemplating a potential business relationship agree in advance to keep each other’s confidential information confidential. Not doing this right up front may end up with the other party telling others your secrets, using them for their own economic benefit, and exposing valuable intellectual property rights for use by anyone.

John, the innovative entrepreneur noted for his unique approach to doing business in a way that made him a roaring success, decided to partner on his newest venture with an employee he thought had the moxy to become successful. John was almost paranoid about locking sensitive files in the safe every night and taking the time to encrypt all his e-files. He didn’t give much thought to the information he shared daily with his protégé.

John didn’t mention a NDA when he first proposed his business idea to his employee, Tyler. In fact, he didn’t really think he’d need one. After all, they chatted daily and he felt Tyler was an upstanding young man.
John’s business idea of launching an online MLM that taught people how to get out of debt and make money at the same time had real potential in today’s dire economy. Tyler appeared to share his enthusiasm about the launch and how to set up the business.

John was understandably shocked when he discovered a few months later that there was a new site on the Internet that offered to teach people the tools to get out of debt and then recruited them into the business of selling the ‘get out of debt information’ to others. He called his business attorney, Arnold, to find out what he could do about this distressing state of affairs when he found out Tyler was behind the new website.

Arnold regretfully informed John that it was typically recommended that a NDA be entered prior to doing any negotiations, interviews or anything else that related to a proposed new venture where confidential information or material is shared. The fact that the cat was out of the bag was unfortunate, but there was not much anyone could do about that in the absence of a NDA.
Typically, a non-disclosure agreement clearly spells out conditions between party A and B, specifically dealing with sharing and using confidential information and materials. It usually makes reference to the parties keeping highly sensitive information confidential, details solutions for violating the agreement, and suggests arbitration for disputes over violations if necessary.

Sadly, in John’s case the NDA would have been essential to keep his brainchild MLM idea protected and it should have been put into place prior to any discussions taking place or material changing hands.
There are many examples in which a NDA is considered a critical tool. One instance involves software or other network solutions or the sharing of intellectual property (such as John’s online MLM idea.) In many instances the NDA is specific to the business being contemplated – tailored to cover each different case. So borrowing someone’s NDA won’t cut it, as it might not be enforceable later.

Generally speaking the vast majority of NDAs contain information about who the parties are, various clauses that may need to be incorporated, and most importantly, what information should be kept confidential. If either party violates the agreement, legal action can be taken. Having said that though, the whole idea of having a NDA in the first place, is to avoid litigation.

If you’re about to set up business with another person, call a business attorney and discuss the value of drafting a non-disclosure agreement. It will save you a lot of grief later. As for John, he had to kibosh his idea and move on to opening a business towing wrecks rather than make money online, while his former employee became rather wealthy from John’s original idea. If John had taken precautions up front to get a NDA in place, these roles might have been reversed….at least that is what this lawyer thinks.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

Just because you go into partnership with another person, with all of the best intentions in the world, doesn’t mean that at some point in time you may not have a falling out over – well, over any one of a number of things that happen when trying to run a company and stay friends and partners. No matter whether the form is a partnership, limited liability company or corporation, making sure the principals have properly prepared buy-sell arrangements is critical.

Think that will never happen? Think again. It’s a far too common occurrence and many people have made the mistake of not dealing with this eventuality in a buy-sell agreement, and have lived to regret that decision. The essential parts of this type of contract must be outlined in detail by your corporate lawyer and include an evaluation method for the business and how to pay out in the event of the big four – death, disability, disillusionment and transfer of the interest in the business on retirement.

If you’re having trouble imagining what kinds of situations would make you have a dust up with your business partner, speak to your lawyer. Most corporate lawyers have seen it all and been there and done that. That’s what they’re paid for, to craft a buy-sell agreement that will withstand any of the above-mentioned eventualities.

The importance of having a buy-sell agreement in place cannot be underestimated. It is a crucial document that will ultimately ensure the continuation of your business and allow your family a return on a lifetime of your hard work. Caution: this will only happen if there is money behind this agreement. No cash can end up in a major disaster, as the agreement may obligate more than the signing parties. It may obligate family, heirs and partners. Without cash, no one will be able to carry on the empire or have any security.

These issues need to be discussed in great detail prior to signing anything and they need to be resolved to the satisfaction of both partners. If something does happen and one party wants to pack it in because they fell out of “love” with their partner, they need to be covered for this possibility.

Of course, before getting that far into drafting an agreement, the crucial question of where will the money come from to fund it needs to be asked, along with how much will you need and whether or not, realistically, you are able to afford it. Remember, that without money in the background, a buy-sell agreement is potentially worthless. A worthless contract without money backing may have serious consequences; just ask your lawyer to fill you in.

In the meantime, while you are waiting to have that buy-sell agreement drafted, make a list of important questions to ask your lawyer such as “How much money in before tax dollars do we need?” “Where does the money come from?” “How much money in total is required to live up to the terms of the agreement?” Make the list a substantial one, because these kinds of agreements need to be discussed in great detail. Your lawyer knows this and will walk you through the sticky parts.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

“Within a few weeks, the 2009 edition of Selecting and Forming Business Entities will be available,” said Alan Insul, Los Angeles business attorney and respected author of Chapter’s 3 and 7 in this year’s edition. The two looseleaf volumes along with a forms CD are specifically designed for California business lawyers working with their clients to assist them in choosing the “best” entity for their business.

The material covers the basics and more of how to go about choosing the entity, how and where it needs to be organized and also how to manage it once it is set up. The companion CD is especially crucial, as it contains annotated operating agreements that attorneys are able to use.

“This is not a lightweight publication by any means and covers evaluating entity choices, general partnerships, limited partnerships, limited liability partnerships, S&C corporations, close corporations, professional corporations and limited liability companies,” outlined Insul.

Insul’s contributions this year, Chapter 3 and Chapter 7 cover, limited liability partnerships and selecting a business names. Insul’s experience as a business attorney precedes him and he is highly regarded in Los Angeles as someone who is able to get to the heart of any legal matter, paring it down to the bare bones to deal with it. Many of Insul’s clients appreciate his ability to take a complex legal subject and sum it up in a nutshell.
“Being the CEO of a major corporation doesn’t mean they don’t appreciate the clarity of succinct advice on legal matters that affect their bottom line. This is why I strive for language that makes sense and good common sense when dealing with my areas of expertise,” explained Insul.

In a world gone complex with the intricacies of today’s business transactions, having a complete set of well written, informative and easy to understand how-to instructions makes eminent sense. “Business law isn’t getting any easier to understand, and when something like this is available for attorneys who practice in this area, it’s usually in high demand,” added Insul.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

Being creative and thinking beyond the usual parameters has stood Los Angeles attorney Alan Insul in good stead for over 30 years. His personal and incisive touch when it comes to business and real estate law has gained him the reputation as the “go to” guy in the City of Angels.

Insul is noted for his deft handling of various transactional matters or adversarial proceeding in litigation. Insul is a tough and business savvy corporate management expert that takes the time to see all sides of an issue prior to proceeding.

This same tough and yet laid back approach is something that permeates Insul’s personal style when handling his clients affairs as well. He’s known to have a flair for taking some really nasty legal concepts and being able to explain them in plain English. A rare gift for an attorney, and one that will come in very handy for Insul’s newest appointment to Chairperson and Managing Editor of the Business Law News.
“We’re pleased to be making a concerted effort to reach out to and be more accessible to smaller law firms and solo practitioners. After all, the information we have is useful to everyone, no matter what the size of their firm,” outlined Insul.

The Business Law News (BLN) is the official news periodical of the California State Bar’s Business Law section – the largest section of the State bar. This periodical publishes articles that deal with, among other things, ex parte communications in a transactional law practice, the unfair competition law and how it is evolving, what commercial landlords need to understand about bankruptcy and intellectual property issues that need to be taken into consideration when doing due diligence for a merger or acquisition.

While the various topics that business lawyers handle may be as exciting as watching paint dry for the average reader, those in business who rely on attorneys with this kind of skill have a vested interest in their attorney being intimately familiar with various concepts that affect businesses of all sizes. No issue is too small when its eventual applicability may affect a major corporation sometime later.

This is something that Alan Insul is quite conversant with and as an attorney who makes the law look and sound easy, his appointment to Chairperson and Managing Editor of the Business Law News will continue to improve on the long tradition of excellence of delivering the latest developments and insights in business law to California business attorneys.

“I try to meld the advice I give as a lawyer with the actual situations that clients face, simply because giving legal advice in a vacuum just doesn’t cut it in today’s legal arena. Clients are looking for advice that is clear cut, straight forward and to the point in order to make decisions,” said Insul.

The Business Law News is responsible for publishing four quarterly periodicals featuring content written by experts in various areas of business law. The BLN also produces an annual review which is a retrospective of major developments in the area of business law during the previous year.

Roni Balint writes for the Law Office of Alan M. Insul. The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship. To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.