Archive for Litigation

November 8, 2013   Posted by: Margarita Smirnova

RELATIONSHIP BETWEEN BUSINESSES AND LOCAL GOVERNMENTS

On November 22, 2011, Massachusetts allowed casinos through the Expanded Gaming Act.  This month is a 2 year anniversary since the casino business became legal in this state.  So, what happened since Governor Deval Patrick signed the law.

205 CMR regulates gaming through Massachusetts Gaming Commission.  Under the 194 §1(7), Massachusetts Gaming Commission was established that consists of chair and four commissioners and it is tasked to overview fair and transparent gaming experience.  Chapter 194 §1(13) requires businesses to “have received a certified and binding vote on a ballot question at an election in the host community in favor of such license; provided, however that a request for an election shall take place after the signing of an agreement between the host community and the applicant; provided further, that upon receipt of a request for an election, the governing body of the municipality shall call for the election to be held not less than 60 days but not more than 90 days from the date that the request was received; provided further, that the signed agreement between the host community and the applicant shall be made public with a concise summary, approved by the city solicitor or town counsel…”

This means that Massachusetts requires local voters to agree before casino applicants can even obtain a state license to conduct any type of gaming activities.  While Boston residents voted against casinos entering their city, Revere residents voted for the casinos and dog racing trucks to enter their city.  Leominster residents were a bit more conservative and allowed only slot machines.   With casinos entering the area, the employment and financial improvement will affect the economic growth of the city.  At the same time, the local government will have to raise security to balance out the influx of the visiting people and to protect from potential criminal activity.  Similarly, Jamaica Plain is legendary opposed to work with chain companies.  For example franchises such as Arthur Murray, Fred Astair, and Apple store will have a tough time opening their doors in Jamaica Plain.  At the same time, a small independent dance studio or a computer store would have no problem doing their business.  What this essentially means is that people decide what business they want where they live.

Its a known fact that business owners must comply with all Federal, State, city/town to ensure their business is legal and runs smoothly.  States and cities/towns are of local nature and still hold enormous power over how they want their businesses to run.  Not all is lost.  Besides compliance, there is another way to make sure the business process in the community is doable.  Business owners can and should become an integral part of their local government.  They can work with and participate in the community to ensure they reflect the area and assist growth in the community which in turn improve their chances of staying afloat and profiting.

Written by Margarita Smirnova, Esq.

If you have a specific question relating to your business or any other legal questions, please contact Margarita

Call: (617)398-7482

E-mail: margarita.smirnova@gmail.com

 

 

 

 

 

 

 

 

 

 

no comments posted in: Business Law   |   Commercial Law   |   Litigation
October 25, 2013   Posted by: Margarita Smirnova

BUSINESSES PARTNERSHIPS ARE COMPLEX RELATIONSHIPS

 

The U.S. businesses consist of sole proprietorships or various forms of partnerships and corporations.  It’s not unheard of that solo businesses enter business ventures with other businesses.  Due to the tough economy, more and more business partners join business partnerships with each other than before to survive.  A business partnership union can be compared to a marriage.  Like in a marriage, a business partnership has a honeymoon period filled with well-meant, and perhaps, not-so-well-meant promises.  Then, there is a drudgery of ins and outs of a daily and weekly workload and activity with potential lack of communication may lead to contempt and breach of respect and/or trust.  Does it sound too familiar?  Yes.  That’s because it happens all the time.  Luckily, there are ways to prevent a fall out, and in case if it’s too late, peacefully depart.  Similarly to a good marriage, a personal responsibility and entering the business partnership with the idea that nothing in this world is permanent is the key to success.

There are many issues that can arise among partners and wreck a business partnership.  For example, a closed company shareholder dispute over under performance, a lack of sufficient capital and an increase in business expenses, a breach of fiduciary duty, among other things such as including but not limited to business debt collection and/or personal disputes.

A scenario where business partners are partnering with each other instead of hiring happens all the time.  Sharing household tasks is not an unfamiliar approach.  In short, two or more partners with different set of skills agree to make an input and be responsible for separate aspect(s) of the business.  Sometimes one partner’s particular or unique skill or service in the beginning is what brings the company to its success.  Later, someone could be hired instead of him.  At one point, one of the partners may think that hiring someone else with the same set of skills would be a cheaper alternative than to retain the original business partner leading to a rift in the relationship affecting the daily business flow.  Perhaps, communicating would have helped.

There are many issues that can arise among partners and financial outcome be at stake.  For example, a conflict may arise in a closed company shareholder dispute may arise over an under performance, a lack of sufficient capital and an increase in expenses.  That can lead to a breach of fiduciary duty, and unfulfilled promises and wreck a business flow.  In addition, a simple business debt collection suit by a creditor or personal disputes can lead to a prolonged grudge.  This is exactly what happened in one of the cases in Massachusetts.  See, Weiler v. PortfolioScope, Inc., 83 Mass. App. Ct. 216 (2013).

In Weiler, the business structure involved a complex array of partnerships among companies and individuals making separate contractual agreements and obligations.  The outcome resulted in securities regulations preempting over contractual agreements between the parties because there was a properly secured and timely perfected creditor.

Milton Weiler (Weiler), the plaintiff in this case, was a President and CEO of the PorfolioScope, the defendant.  Weiler developed a certain portfolio that became a part of PortfolioScope, Inc. (PortfolioScope).  PortfolioScope is an entity formed when formerly named Spencer Trask acquired Computer Aided Decisions (CAD) and CAD Research along with Plaintiff’s, among with Weiler’s, software.  In 2008, PortfolioScope sued iFlex Solutions, Ltd for the theft of trade PortfoliosScope’s secrets software.  The case with iFlex Solutions Ltd. settled and PortfolioScope was to receive a lump-sum payment in the amount of $10 million.  However, in 2002, Weiler resigned leading to replacing of the CEO within the company.  Through a stock option purchase and the sale agreement with PortfolioScope, Weiler, in exchange for the sale of his portion of ProtfolioScope, retained the right to five percent (5%) of its net proceeds received in connection with the iFlex Solutions, Ltd.

Plaintiff argued that PortfolioScope breached the agreement with the plaintiff to pay (5%) of the proceeds from a settlement related to a pending lawsuit between PortfolioScope and iFlex Solutions.  See, Weiler, at 218.

The main issue was whether an agreement between the plaintiff and the defendant stating that the plaintiff was entitled to 5% of defendant’s net proceeds in connection with the third party litigation gave the plaintiff a priority over a secured creditor who had a preferred his claim.  The Trial court held that the agreement gave Weiler the priority of payment and said that the defendant “was required to pay because the agreement did not mention any creditor, secured or unsecured.” See Weiler 218-223.

The Appeals Court of Massachusetts, however, disagreed with the trial court and interpreted the effect of the contract between the parties differently.  The Court said that the payment was simply one of several parts of the consideration for the sale of his stock options back to the company…  The court held that “PortfolioScope lacked authority to encumber collateral preciously securitized in favor of the creditor…”  “The resolution of priority conflicts is governed by the general rule “first in time, first in right” See Weiler 225-226.  Because the creditor did not subordinate his interest to Weiler, “Weiler was an unsecured creditor, whatever the nature of his interest in the settlement proceeds, was not superior to other creditor who had their interest secured.

Communication is crucial.  Comparisons with marriage aside, writing is a great communication tool.  While its not always perfect it can show the meaning among the parties.  A well drafted agreement between partners could divert a disaster by laying out possible creditors.  It can also minimize the possibility of misinterpretation and help to avoid losses and costly litigation.

 

Written by Margarita Smirnova, Esq.

If you have a specific question relating to your business, please contact Margarita

Call: (617)398-7482

E-mail: margarita.smirnova@gmail.com

no comments posted in: Business Law   |   Commercial Law   |   Litigation
July 15, 2013   Posted by: Margarita Smirnova

DANCING AND THE LAW

Dancing is beautiful.  Dancing takes us in a different world full of glamor, feelings, fashion, and a holiday.  People go to learn dancing for various reasons and take different dance classes.  While there are different types of dances, it is important to keep in mind that running a dance studio business is providing service where dance instructors give dance instruction to their students.

From legal point of view, similar to many businesses, a dance studio owner should think of protecting studio’s assets.  Some of the most important assets are music and video equipment, a music collection, instruction materials, teachers and studio’s name.   From my personal experience as a professional Ballroom and Latin dancer, the name and its reputation are probably one the most valuable assets.  Generally, the name is earned through dancing community by competing, teaching, and judging and is very respected for years to come.  If done right, they can be protected.

Some of the things to keep in mind when running a dance studio.  First, to run a successful dance studio, the owner has to consider incorporating the studio as business to limit liability and bring structure for the business to run smoothly.

Each state has different rules and regulations governing incorporation process.  For example, to form a Corporation, New York, under the Section 301 of the Business Corporation Law,  requires a special taxation for shares that the corporation is authorized to issue which must be paid at the time of formation of the corporation.  To form LLP, New York, under Section 121-201 of the New York State Revised Limited Partnership Act, requires the filing of the certificate of limited partnership, a limited partnership (LP) plus publication within 120 days.  While Massachusetts doesn’t require the above requirements, the M.G.L. Chapter 156D controls all corporations in Massachusetts, which means that a corporation in Massachusetts is still required to submit its annual report with the appropriate fee.  There are cheaper ways to incorporate in other states.  Dance studio owner should consider the location prior incorporation where s/he wants to conduct the business prior incorporating.

Second, the provisions of the lease and its renewal are important to protect the studio from losing its location.  From my personal experience, many real estate developers/landlords do not think of dancers as business savvy people.  Dancers are considered to be artsy.  Often, verbal promises are not included in integrated written agreements.  This can make it difficult to run a profitable studio smoothly.  Also, moving studio’s location a lot may not be beneficial and should be kept to the minimum.

Third, is insurance.  Insurance is here to protect our property from many types of damage; environmental and/or human made.  Also, insurance should cover clients’ possible injuries to minimize costly litigation.  There are waivers available but they may not protect your studio 100%.  In some places, waivers are not valid or partially valid.  In New York, the waivers are valid for instructional purposes only and if drafted properly.  That means that your studio may still be liable for injuries that occur on the premises.  In Massachusetts, “the issue of waiver is for the fact finder.  When the facts are undisputed, the waiver is a question of law.”  See, Linda Coal & Supply Co. v. Tasa Coal Co., 416 Pa. 97, 101 (1964).  Also, it is an affirmative defense.  See, Sharon v. City of Newton, 437 Mass. 99 (2002).  Under Mass. Gen. Laws, Ch. 93A protects from unfair and deceptive business practices.  “A statutory right or remedy may be waived when the waiver would not frustrate the public policies of the statute and the court “ordinarily would not effectuate a consumer’s waiver of rights under c. 93A”.  See, Canal Electric Co. v. Westinghouse Electric Corp. 406 Mass. 369 (1990).

Fourth, handling employees is just as crucial.  There is an employee’s contract, immigration that may require sponsorship, human conflict, termination, and a non-compete agreement issues.

Fifth, sometimes there is an occasional encroaching on dance business by other dance studios that can bring a lot of frustration and litigation.  A dance studio owner, can address these issues timely and avoid further losses down the road.

Sixth, as of late, Internet and media took a whole different spin on how the studio appears on-line.  Domain name, hosting, visibility/ranking and copyright of videos along with music and its combination came to play an important role in dance business industry.

 

Written by Margarita Smirnova, Esq.

If you have a specific question relating to your business, please contact Margarita

Call: (617)875-8663

E-mail: margarita.smirnova@gmail.com

 

no comments posted in: Business Law   |   Litigation
April 28, 2012   Posted by: Margarita Smirnova

Value of the legal advice!

Many people seek legal help at least once in their lives. Legal questions range from assisting in dealing with local, State or Federal government. Business related questions such as drafting a contract or review one prior to signing. Employment contracts can be tedious to read. I always tell my clients to read everything their sign. A criminal or civil litigation representation or even preventative consultation are last but not the least issues that people need legal assistance in; among other things.

First question every attorney gets is “How much will it cost me?”

There are few types of legal fees. They vary based type of the case. For example, some attorneys take contingency fees. Generally, contingency fee is 1/3rd or 33% from the entire disputed amount of the case. Court costs are usually not included. However, parties can agree on different percentages.

Some attorneys charge hourly fees and some offer flat fee arraignment. While there are pricing guidelines, there is no general price set for an actual legal hour. Lawyers’ prices vary depending on location, local custom and office expenses. This is a fair market value price.

The attorney with higher prior experience and/or skill in particular field, which charge more. Size of the firm where the attorney works can also affect the cost. Keep in mind that ethical guidelines forbid attorneys charging contingency fees for criminal and marital cases.

The contents of this and future articles is for informational purposes only and should not be construed as providing legal advice. Each individual case is different and the outcome of your case depends upon its circumstances.

Written by Margarita Smirnova, Esq.

If you have a specific question relating to your business, please contact
Margarita

Call: (617)398-7482

E-mail: margarita.smirnova@gmail.com

no comments posted in: Business Law   |   Family Law   |   Immigration Law   |   Litigation
November 1, 2011   Posted by: Margarita Smirnova

Welcome to the Virtual Law Office

Hi all,

I am an attorney and I am licensed to practice law in MA and NY. Currently, I practice law via Virtual Law Office in the Boston area. That means that I can meet with you after work/business hours and in the area near you; reasonably placed. If an office space is required due to the nature of the legal issue or by client’s request, I will arrange a meeting by appointment. Meetings for NY clients are available in special circumstances.

I specialize in business, family and immigration matters; will represent you during negotiations and in court. I am bilingual and speak English and Russian for your convenience.

 

If you have a specific question relating to your business, please contact
Margarita

Call: (617)398-7482

E-mail: margarita.smirnova@gmail.com

no comments posted in: Business Law   |   Commercial Law   |   Immigration Law   |   Litigation
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