Legal Definitions
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Buy-Sell Agreements - also called Share Redemption Agreements when the business entity, usually a corporation, is the actual purchaser of the outgoing shareholder's shares. These, as well as all other, exit strategy agreements are always good to discuss as early as possible, such as when the Business Plan is being prepared, or at least early in the life of the business. Whether a partnership, corporation, LLC, LLP, family business, or any other business venture; the issues addressed when discussing "what if" a death, withdrawal, or disability occurs in the group of equity owners, is a healthy, mature, and admittedly unpleasant thing to do. Being unpleasant helps explain why partners and incorporators often put those "ultimate" business issues off until later. Death or disability can be covered by insurance, but often, in real life, is not. Withdrawal is a broad and vague term covering almost all business disagreements-the more serious will need resolution. These disagreements can be caused by making too much money (greed), too little money (fear), personality conflicts, and other causes of conflicts often created by unmet expectations. That is why all shareholders, partners, business joint venturers, and other businessmen ALWAYS benefit from an honest discussion of what should happen if the business does NOT go as planned. Unfortunately, this rarely happens. Family businesses can be the worst, usually once the controlling shareholder or owner has retired or passed from the scene. Orderly succession requires a Buy-Sell be created, maybe with as little input as possible from the outgoing shareholder or shareholders.
Buy-Sells can have an almost infinite number of schemes to trigger the buyout, place a value on the company, and then pay the departing shareholder or partner in an orderly, certain, and legal manner that does not take too long, but does not damage the business nor deplete the capital too much. Noncompetition clauses are common, as are stock collateral clauses, and alternate valuation methods. The state district courts in Houston, Harris County, Texas are familiar with these issues, and are quite competent to decide these business matters according to Texas law, employing the "Plaintiff - Defendant neutral" juries in Houston, Harris County, Texas. Often communities can have a certain bias due to a particularly large corporate employer, or dependence on a certain industry. Houston has a past tied to the oil and gas industry, but is really no longer significantly effected by the ups and downs of that commodity (energy), and the juries reflect that fact the new diversity of the local economy.
Douglas M. McIntyre, as a business lawyer, has handled disputes concerning Buy Sell agreements on a contingency fee basis. Once an offer at a certain price has been negotiated by the client, but not finalized, Douglas M. McIntyre will examine it to see if it is likely that a better price can be obtained for the Seller's interest in the business. That fee could be a fraction of the additional money realized, or no fee if no additional money is earned. The variation on the types of negotiations the firm has handled in the past, run the gamut from letter writing, to Arbitration, to litigation, with or without Mediation. Valuing a small business is a tricky business with plenty of room for differences of opinion.
Civil Litigation - Mediation, arbitration, and outright litigation over business disputes include enforcement of Noncompetition agreements, Confidentiality agreement lawsuits, Nonsolicitation enforcement actions, shareholder derivative lawsuits, business contract lawsuits, dissolution of partnerships, Debtor Creditor disputes or collection matters, minority shareholders who have be treated unfairly, and other less common disagreements that too numerous to name.
Douglas M. McIntyre has handled disputes concerning all kinds of business disputes on a contingency fee basis, collection matters being the most common. For Buy Sell litigation, and other corporate matters, business and corporation law in Houston, applying the laws of the State of Texas are central to the proper evaluation and resolution of the case. Often these cases are emotional and difficult to resolve quickly. Clients will say, "They'll never let this go to trial", and sometimes they are correct, but not always. It's like playing Poker, with both sides bluffing, but the courtroom subjects all your potential evidence to potentially intense scrutiny. The worst case should be prepared for, if the case is important enough.
In any number of potential breach of contract cases, once an offer at a certain amount of money has been negotiated, but not finalized, Douglas M. McIntyre will examine it free of charge, and in secret; to see if it is likely that a greater sum of money might be obtained for the client. That fee could be a fraction of the additional money realized, or no fee if no additional money is earned. Litigation is uncertain, and cases are not usually taken on a contingency fee basis unless the odds of success are excellent.
Collections - Nearly all businesses have get involved with collection matters, whether on the way up, or the way down. Since the statistics indicate that most businesses fail, there should be no shame in being on the wrong end of a collection case. These begin with the creditor's employees calling concerning payment, then progress to a Bill Collector, and may end up in litigation if the creditor is angry enough, and debt is large enough. In the business context, this is perhaps the largest category of litigation you cannot insure around.
Douglas M. McIntyre has handled collection matters for many years. This is perhaps the most common contingency fee litigation for businesses. A businessman should not pay for a collection lawyer, except on a contingency fee basis only. Businesses cannot know all the ins and outs of both the practical aspects of debtor creditor matters, as well as the laws of Texas for exempt property and litigation. Economics enter into this area with a vengeance, since you cannot "collect blood from a stone". It is smart to know your debtor before expending resources in what may be vain collection efforts.
Contracts - All businesses, from time to time, will write down agreements with other businesses, employers, other partners and shareholders, and government entities. There are also "handshakes" or oral agreements. Written contracts are more enforceable, but that is always a double edged sword. They can often be changed by oral contracts, and patterns of conduct that show actions differ from an old contract. But this not always the case, and contract disputes are examined on a case by case basis.
Contract Negotiations - Longer term supply arrangements, employment contracts, Buy Sell agreements, Noncompetition agreements, Confidentiality and Nondisclosure agreements are common when selling an entire business (needed most when selling to a competitor), collection payout agreements, and a number of other, often longer term contracts with some reliance of the parties to each other's faithful performance. These contracts need to be negotiated, hopefully by someone with experience. Experience, in this context, should include experience in litigation, some bankruptcy, collection, secured transactions, equitable enforcement matters (injunction, attachment, sequestration garnishment, etc.), and that legal knowledge ideally must coupled with some working knowledge of the industry within which the business operates. That way, cost effective legal action can be taken, with the greatest likelihood of success.
Corporate Matters - corporations are formed to perpetuate and protect a business. This is not automatic. Once you've formed a business, be it corporation, partnership, Limited Liability Partnership, or Limited Liability Company, that business entity has to be treated with respect for its own existence. It must be adequately capitalized for the business it is in, and cannot be treated as the personal "piggy bank" of the owners.
Corporate minutes and By-Laws of the corporation are often addressed once a year, but the owners do not need to worry much anymore if that is overlooked, and nothing important has taken place.
A decent "rule of thumb" is that a Resolution of the Board of Directors can, and should, be discussed, prepared, and voted on if an important matter outside the ordinary course of business is undertaken. This could be the selling of all or part of the business, or purchasing a competitor, filing bankruptcy, going public, forcing someone out, buying expensive equipment, firing and hiring CEOs, and generally very important business decisions. One of the most significant that does NOT have to involve the Board of Directors is the Share Redemption Agreement, or Buy Sell Agreement.
Share Redemption Agreements are an early and essential "corporate matter", when the business entity, usually a corporation is the actual purchaser of the shares owned by a leaving shareholder or partner. These exit strategy agreements are always good to discuss as early as possible, such as when the Business Plan is being prepared, or at least early in the life of the business. Whether a partnership, corporation, LLC, LLP, family business, or any other business venture; the issues addressed when discussing "what if" a death, withdrawal, or disability occurs in the group of equity owners, is healthy, mature, and admittedly unpleasant. Which helps explain why partners and incorporators often put those business issues off until later. Death or disability can be covered by insurance, but often, in real life, is not. Withdrawal is a broad term covering business disagreements that need resolution. That can be to making too much money, too little money, personality conflicts, and other causes of unmet expectations. That is why all shareholders, partners, business joint venturers, and other businessmen ALWAYS benefit from an honest discussion of what should happen if the business does not go as planned. Unfortunately, this rarely happens. Family businesses can be the worst, usually once the controlling shareholder or owner has retired or passed from the scene. Orderly succession requires a BUY-Sell be created with as little input as possible from the outgoing shareholder or shareholders.
Buy-Sells can have an almost infinite number of schemes to trigger the buyout, value the company, and then pay the departing shareholder or partner in an orderly, certain, and legal manner that does not take too long, but does not damage the business. Noncompetition clauses are common, as are stock collateral clauses, and alternate valuation methods. The state district courts in Houston, Harris County, Texas are familiar with these issues, and are quite competent to decide these business matters according to Texas law, employing the Plaintiff - Defendant neutral juries in Houston, Harris County, Texas. Often communities can have a certain bias due to a particularly large corporate employer, or dependence on a certain industry. Houston has a past tied to the oil and gas industry, but is really no longer significantly effected by the ups and downs of that commodity (energy), and the juries reflect that fact.
Corporate Transactions - the actions described in these sections listed on this Home page require documents to memorialize the agreements and contracts entered into. These should all conform to the laws and regulations of Houston, Harris County, Texas. Douglas M. McIntyre has considerable experience in doing exactly that. Often common documents in the business world include a Power of Attorney, documents essential to the formation of business entities, and even Wills and Trusts. "Transaction work" is considered a separate area for lawyers, from litigation. But litigation, especially within Houston, Harris County, Texas, is a valuable resource for experience in what can, and will, go wrong in business contracts. Knowing the troublesome areas can know what to negotiate for, and what you can give up.
Debtor/Creditor Rights - this is also referred to as "Collections", and is a fact of life for many businesses in Houston, Harris County, Texas. The courts in Houston, Harris County, Texas are the final arbiters of these business disputes, and a familiarity with the judges and juries in this area is essential.
Finance Law - a clear understanding of secured transactions has been gained by the firm in the past twenty eight (28) years. One party agreeing to pay is not enough. Security is always a good idea, if financing is a good idea at all.
For example, if you want to sell your corporation, cash is King. If, however, you feel you must finance the sale, try to rely on other security of the buyer, otherwise you have no security if they ruin your business, or you will then have to try to step in and help run it. Not a good option.
Formation of Business Entities - Corporations, Partnerships, Assumed Names, Limited Liability Partnerships, and Limited Liability Companies have their good points, and not so good points. Always insure around any risks you can, if it is not prohibitively expensive. Otherwise, the risk that the business will fail can be handled by a good faith establishment of one of those devices. "Good faith" is a general term that includes the concept that you understand that you do actually risk an adequate amount of somebody's money for the business entity created.
Power of Attorney - one common device to temporarily allow one person to act for another within certain either specific or broad areas of business, is the Power of Attorney. It is inexpensive and flexible. It can also be limited in time, torn up, revoked, or extended. Nearly any corporate transaction lawyer can prepare a Power of Attorney.
Real Estate Law - financing and real estate often go together. The purchase of real property usually involves simple security agreements, like Vendor's Liens and Deeds of Trust in Houston, for the more cost effective out-of-court foreclosure procedures.
Unfairly Treated Minority Shareholders - majority vote is the still the way most corporate disputes involving more important operational matters are decided. This governs Board of Directors Resolutions, and Shareholder Resolutions, such as when the Directors are elected. It is often a dubious distinction to be shareholder who is in the "minority", that is, can get out voted, and therefore has no control. While you may not have control, you do have considerable rights that allow you to keep yourself informed, and fair treated fairly in some situations.
If you feel you have been mistreated by the majority shareholder/shareholders, give me a call for a free consultation.
Solving Business Disputes - business disputes can, and ideally should be handled without outside help, but that is not always possible. Then an inexpensive, but binding method should be employed. One non-binding method is Mediation. Mediation can be an effective way to resolve ongoing litigation, but otherwise, it does not often work. Let's face it, Mediation works in litigation usually after both sides have seen the other sides' case, and both are tired of the emotions and the expense.
Contingency fee commercial litigation arrangements are available with the firm. Most clients with legitimate claims for relief seem to prefer the contingency fee, since it can mean a recovery without paying anything to the lawyer. Many commercial cases are too complex in terms of the relief available, or the claims coming from the other party. For instance, a case with a legitimate counterclaim is often not a candidate for a contingency fee, if the safest resolution is to exchange dismissals. Putting a client at risk for monetary gain is not acceptable, unless, after a full assessment, the client decides the reward is large enough, or certain enough to proceed. Some counterclaims are specious and filed only to intimidate. In sum, contingency fee arrangements in commercial litigation cases are a lot different from car accidents in that they take much more work and skill to set up properly, going into the matter.
Structuring Business Ventures - Some business ventures might only be temporary or part time. Some can be pursued with other businesses, or with new individuals who are not employees. These businesses are often called Joint Ventures, or similar entities, and need to be well defined for good times and bad.
Corporations, Partnerships, Assumed Names, Limited Liability Partnerships, and Limited Liability Companies have their good points, and not so good points. Always insure around any risks you can, if it is not prohibitively expensive. Otherwise, the risk that the business will fail can be handled by a good faith establishment of one of those devices. "Good faith" is a general term that includes the concept that you understand that you do actually risk an adequate amount of somebody's money for the business entity created, in the particular industry.
Wills - simple Wills and Trusts can be created by the firm, with or without coordinated Federal Income tax expertise.
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