When a corporation is being sold, merged, or acquired, the duties of the board of directors shift.
The board members must not think of the business’ survival and instead focus on getting the best price and upholding the shareholders’ interests. Of utmost importance is the duty of care for the directors to utilize and gather all the materially accurate information to be able to determine the most appropriate buyer and make the most informed decision.

The business judgment rule will be used by the courts to see if the duty of care was upheld. This rule analyzes if actions were done in good faith and in line with how a reasonable person would have acted.

Board members should not be acting with self interest, bias, or only looking to preserve their roles. This duty of loyalty also includes the board of directors disclosing any conflicts of interest and a duty of confidentiality to prevent potentially harmful publicity or crises.

In real terms, all efforts must be made to receive the highest value for the corporation. Any preference for one bidder over another should be in line with getting the maximum price. If bias is discovered or a dispute ensues because favoritism is occurring for the wrong reasons, a breach of fiduciary duty can be claimed.

The courts recognize that even when the sale of a corporation is completed, some amount of business risk is taken. If the board of directors has made a decision that is in the shareholders’ best interests to further its’ goals, board members will be greatly protected from liability. But if the duties of care, loyalty, and disclosure are not upheld, a lawsuit can ensue. When wrongdoing is proven and shown to have caused damage to the shareholders, compensation for actual damages and sometimes even punitive damages can be sought. Courts do not rule favorably in circumstances where a board of directors or select individuals on the board have a conscious disregard for their duties in a sale, merger, or acquisition.

It is therefore advised to have a team in place to help the board of directors make the soundest judgments when an opportunity arises for the business to change ownership. An experienced business attorney is essential for the board of directors to have to review their duties and actions as the research and transactions unfold. Enlisting a competent attorney ahead of time can help to minimize risk and comply with all pertinent regulations.

Anthony Spotora is a Los Angeles business lawyer and Los Angeles business litigation lawyer. To learn more, visit Spotoralaw.com.

In-N-Out Burger has a following of restaurant-goers that crave its “fresh to order” hamburgers. Since 1948, the company has excelled in burgers, fries, shakes and a devout commitment to clean, efficient fast food. It has also relied on its boomerang logo and signage to stand out from the competition since its inception. No wonder that In-N-Out Burger was recently shocked to find that another restaurant was using a very similar boomerang to promote its company.

The lawsuit, In-N-Out Burgers vs. Pappas Restaurants alleges that Pappas’ used boomerang arrow signage outside its Houston, Texas airport location. In-N-Out Burgers has more than 260 locations throughout California, Texas, Arizona, Nevada and Utah. They allege that the boomerang logo is closely identified in the marketplace for In-N-Out Burgers and could cause confusion amongst the public. Thus, Pappas’ is allegedly engaging in trademark infringement under federal laws and unfair competition under Texas law, In-N-Out Burgers claims.

Pappas Burger has three burger restaurants in Houston and uses a yellow boomerang that bends with lights similar to In-N-Out’s signage. Case watchers say that the case will come down to how similar the signs are and how much confusion the two signs could have caused. What is interesting is that its logo is more of a baseball-oriented font and feel but the Houston signage does largely use a boomerang.

When companies go after each other for trademark infringement for a sign or logo, it shows that they are concerned about consumers being deceived, confused, or mistaking one company for another. Businesses spend a lot of time and money on signage and logos to have the public associate a set of words and images to their brand. Packaging, advertising, and promotions can also mirror the large-scale logo. Unless there is a partnership or marketing agreement that allows one business to utilize key parts of another’s logo for mutual benefit, trademark infringement can be charged.

An experienced trademark attorney is essential to protecting a logo and associated intellectual property assets. When a problem arises, a company can request a temporary injunction to prevent further harm, amongst other pursuits of resolution. Lost profits and losing part of a customer base can be devastating to a business when a trademark dispute arises. Moreover, in instances where a rival is acting in bad faith or confusion can be proven, monetary awards can be given. Punitive damages and attorney’s fees can also be sought after. Unjust enrichment and deterrence to continue the act of infringement is something that the courts will also look at when deciding a trademark case.

Anthony Spotora is a Los Angeles trademark attorney, Los Angeles intellectual property attorney, and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

Franchisee-franchisor relations are getting tense in the down economy. Several companies such as Wendy’s, Burger King, and Quiznos have been in the headlines because of franchisee unrest, including charges of racketeering and corruption and complaints about food costs, supplies, and the use of marketing and advertising funds.

“When your profits are gone, the first place you look is to see who is taking the most money off you,” said Kevin Tackett, the president of the Quiznos Franchisee Association (QZFA).

With less people going to restaurants, franchisees start to look around the store for answers. Is it new food that is cutting into profits, forced advertising campaigns, or upgrade costs, for example? When a franchisee feels that their part of the franchise agreement is not being upheld, they should present their concerns to a franchise attorney, allow him or her to review the terms of their agreement, advise on those terms and potentially seek to initiate negotiations or litigation against the franchisor. Resolving a franchise dispute quickly is essential to making sure the business can run smoothly and be profitable.

Wendy’s recently settled with its largest franchisee, the WendPartners Franchise Group, after it wanted stores to install new toasters for an up-and-coming cheeseburger that would increase sales by more than two percent. Big costs like new toasters across many stores can be tough when profits are not as plentiful as they were in the past.

Burger King settled a lawsuit with its franchisees in the spring after store owners were required to sell a double cheeseburger for $1 as part of a promotion. Franchisees said they were losing at least a dime per sandwich, and when you add it up, it hurt their bottom line. The Burger King National Franchisee Association says the settlement has been a positive step that allows franchisees to have more input in future promotions. The restaurant is also hoping that a menu makeover will also drive more profits to the franchisees.

Quiznos survived a slew of franchisee lawsuits back in 2009 too. Franchisees were in disputes over royalties, marketing funds, and food and supply issues. The QZFA seeks to work with Quiznos Corporate in an open way so that business decisions are more transparent and profit concerns are addressed more efficiently.

And even over at KFC, the franchisee-led KFC National Council and Advertising Cooperative (NCAC) won a recent battle against the corporate office over advertising. Advertising strategies and promotional dates should be a discussion between both sides to have the most impact.

In the end, franchisees are wise to have a franchise lawyer on speed dial and open lines of communication with their fellow stores. The downturn in the economy is too severe to go it alone against the corporate office.

Anthony Spotora is a Los Angeles business lawyer, Los Angeles franchise lawyer, and Los Angeles business litigation attorney. To learn more, visit Spotoralaw.com.

Logos are one of the cornerstones to a business’ sales and marketing identity. It can be as essential as the business itself for a brand’s identity to clients and the public. Logos that are not thought out or resemble other well-known logos may not only appear amateurish to the audiences the business is trying to attract but may further be committing infringement. An individual or a business can protect an original logo, provided it has proof of authorship via the U.S. Copyright Office and/or by registering for trademark protection through the United States Patent & Trademark Office.

Original authorship on websites, business slogans, and even innovative marketing campaigns are critical to protect. A skilled intellectual property attorney can help you acquire and protect these coveted assets that mean so much to your business. Otherwise, these parts of your business could be jeopardized because you did not get adequate protection. It is worth the time and investment to have an experienced attorney help you with these steps.

It is important to note that if you are the first to use a name, logo, or slogan in a geographic area, then you might have gained some common law rights and have a ‘first use’ argument. You have the right to initiate a lawsuit should someone infringe on these business assets, but they are limited without registration. So if you want to protect these assets on a national or international level, you must register and trademark them.

In a recent intellectual property suit, graphic designer Bill Dawson was shocked to find that a logo design he created for an independent film company was on the big screen, when months before the company had expressed no interest in his designs. This issue started when the designer saw his logo at the end of the Conan the Barbarian movie, but then he noticed it was in several Millennium films, including Elephant White, Trespass and Puncture, and that it was also on Millennium’s website. Dawson is claiming at least $200,000 in damages for copyright infringement and breach of contract for unauthorized use of his work.

Originally, Dawson had been contacted by Technicolor, a technical production services company to create a logo for Millennium Films for a small fee. Dawson, as the head of the graphic studio XK9, says that he had a verbal contract with a Technicolor agent. But when Millennium did not show any signs of interest in the designs, no further compensation was pursued.

That there seems to be a missing gap of information between Dawson, Technicolor, and Millennium in this exchange will make for a very interesting court case. Perhaps the court case will show what the agreement, if any, was between Technicolor and Millennium. Regardless, the lack of written terms will likely weigh in Dawson’s favor under copyright laws. As the rightful owner of the designs, he is seeking $200,000 in damages and wants any products, advertising, and marketing collateral with the unauthorized logo to be given back to him.

Anthony Spotora is a Los Angeles intellectual property lawyer, Los Angeles entertainment lawyer, and Los Angeles business litigation attorney. To learn more, visit Spotoralaw.com.

When a company is looking to raise funds without an initial public offering, a private placement memorandum (PPM) is one of the best ways to raise capital. A company must have the consent of the Securities Exchange Commission (SEC) before this can be done, and will need an information memorandum along with the PPM. Because of the complexity of SEC rules and documentation, it is highly advised to seek a knowledgeable business attorney to help throughout this process.

PPMs are a great sales tool to attract investors, which are also known as subscribers. This document shows that the company directors and officers are serious about their company, have the professionalism to succeed in their particular industry, and are committed to having good products, no matter what sector they are in. The content should be focused on information that allows the investor to make an informed investment decision. Some of the information is required by law, and this is where the business attorney provides valuable insight.

The length of a PPM will be greatly influenced by the caliber of angel investors sought and the amount of capital needed. All PPMs should be very polished, professional documents. The company must disclose all material and relevant facts. No half truths, omissions, or false statements of facts are tolerated. Otherwise, making material misstatements can lead to a securities fraud claim that can affect the company as well as the company’s directors and officers. The SEC can also levy civil and criminal penalties for securities fraud. Thus, taking the time to create and thoroughly review the PPM with a business lawyer’s guidance is well worth the effort and money.

A PPM has numerous technical sections. This includes:
• Summary of Offering Terms: Usually laid out via a term sheet
• Issuer Description: Describes the company and its structure, a short overview, a cap table and context of the offering
• Business plan: Contains information on the company’s position in the market, its unique value proposition and products, as well as the sales and marketing plan, financials, intended use of proceeds, and management
• Risk factors: Details potential and actual risks that could affect the investor; cautionary language should also be included about investment risks in general with unregistered securities; and conflicts of interest should also be described
• Supplemental information: Any additional information should be included that is critical for the investor to make an informed decision
• Subscription procedures: Describes the steps for investors to participate in the offering

Having a trusted business attorney to create, review, and file the PPM allows a business to focus on its daily operations and long-term plan. Business owners can have peace of mind that all the paperwork is done in a thorough way to minimize issues and attract key investors.

Anthony Spotora is a Los Angeles business attorney , Los Angeles trademark attorney, and Los Angeles entertainment lawyer. To learn more, visit Spotoralaw.com.

Buy-Sell agreements are critical parts of a business’ foundation. This type of an agreement is a contract between the business partners that needs to be defined at the start of any business operations or when any new partners are added to the company. An experienced business attorney can help to create and review the buy/sell agreement for its legality, fairness, and to make sure it accounts for any unforeseen events.

The biggest obstacles most companies deal with, and nobody likes to think about them, relate to what happens if a partner should have a serious accident or illness that leaves him or her disabled, dies unexpectedly, withdraws from the partnership, or retires. A company can falter when it has a partner leave, so spending adequate time up front to create a solid buy sell agreement (also known as, “Buy and Sell Agreement”) will make sure the partnership ends in a way that sustains the business. The specifics should outline who is eligible to buy a leaving partner’s share and what the fair price is. It can also establish a buyback option. This helps to protect the remaining partners to have an appropriate new partner/owner come in and a fair price for his/her shares of the business.

Of special note in California, business partners are subject to certain property laws when they pass away. When the business partner dies, the company becomes business partners with the remaining spouse or heirs. As is often the case, these individuals might not have a clue about the business nor be interested in being involved. What they will be interested in is money. They will want payment for their loved one’s portion of the business or stock shares.

This is where setting a fair price up front or establishing a proper evaluation method comes into play. With a trusted business lawyer and a certified public accountant, a fair price can be derived from the various calculations that are typically used. These include:
- Multiple book of value: Accounts for tangible and intangible assets such as brand and trade names, copyrights, and patents
- Appraisal: Before a transfer of ownership, an experienced business appraiser will set the business price
- Book value: Price is based on assets minus liabilities from the most recent fiscal year balance sheet
- Capitalization of earnings: Value is based on past profits
- Fixed price: Current partners agree on the business price and list that value in the buy/sell agreement

Anthony Spotora is a Los Angeles business attorney , Los Angeles trademark attorney, and Los Angeles entertainment lawyer. To learn more, visit Spotoralaw.com.

It is a must to have a partnership agreement when two or more people are the entrepreneurs of a company. Without a written agreement, the viability of the long-term business can be compromised. At the start of a business, it is close to impossible to forecast how the company will evolve over time. As such, a formal agreement helps to create a foundation between partners that should define significant business issues such as how funds are distributed, how disputes will be handled, and the job duties expected of each partner.

The structure of a partnership agreement should be tailored to fit the business and management style. It should state the compensation, including the profits, losses, and draw each partner will take. Moreover, and surprising to many new partnerships, it is also commonly considered as wise for one partner to have more shares than the other(s). Otherwise, it can become a situation where the company becomes stalled with equal decision makers at the top.

The agreement should additionally show the contribution each partner has made to the business, including property, funds, and services. It should further list how new partners can be added at a later time, when applicable. Of equal importance are outside business activities a partner might take on, and what is permitted.

Basics such as who has check-signing privileges and decision making authority or voting rights is also very important and should be included. And while legalese to many, miscellaneous provisions that cover matters like how the agreement can be revised at a later date to meet the growing needs of the business should also be incorporated into the partnership agreement.

Of particular importance are the portions of the agreement that define what action will be taken if a partner leaves or can no longer perform the job duties. This facet is also important for financing as lenders want to see a rational agreement that will help the business maintain stability should this occur.

Stipulating what will happen should a dispute ensue is also critical. Partners should think this through as arbitration or mediation can be a better route than litigation in most cases.

Partners should get a skilled business attorney to create the contract and review it to ensure that each person’s rights and obligations have been addressed and are fair. Without legal representation, the agreement might be so threadbare that state law might override it during a dispute. It might feel awkward to think about all of the “what ifs” during the infancy of the business, but it is crucial to ensure that the business can develop in a healthy way. Time spent with a qualified business attorney will pay off later.

In California, Los Angeles business attorney Anthony Spotora, of Spotora & Associates, P.C. is accomplished in counseling business partners to create solid partnership agreements. Their team of Los Angeles business lawyers helps many businesses, from California companies to major international corporate entities. They are known for their high-quality services and prompt attention to a client’s business needs.

Anthony Spotora is a Los Angeles entertainment lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

Musicians who want to regain control of their hit songs from the mid 1970s can now reclaim them due to the copyright law termination rights. As long as music artists apply for these rights two years before the 35th anniversary of the songs being copyrighted, they can reclaim them. Music labels are livid about this development, but musicians have been waiting for this opportunity for decades. Award-winning musicians such as Bruce Springsteen, Van Halen, Billy Joel, and Steve Miller have made millions for record companies and songs from 1978 are now in the two-year timeframe.

“In terms of all those big acts you name, the recording industry has made a gazillion dollars on those masters, more than the artists have,” said Don Henley, from the Eagles and a founder of the Recording Artists Coalition. “So there’s an issue of parity here, of fairness. This is a bone of contention, and it’s going to get more contentious in the next couple of years.”
The big record companies such as Universal, EMI, Sony BMG, and Warner Brothers are ready to battle this copyright provision. They believe these songs and records are classified as works for hire. Musicians are thus employees and not independent performers for the record label from their viewpoint.

The Recording Academy is concerned about termination rights disputes overwhelming the courts. Musicians are getting legal representation now to send termination rights notices to labels and get ready for 2013. As it stands now, record labels are not giving in. Some onlookers predict the issue might even make it to the U.S. Supreme Court in due time.

Next year, musicians will be able to send notices for songs made in 1979, and with each passing year more hits will be up for grabs. When a song qualifies for the 35-year expiration, an author has five years to claim it; otherwise the right to reclaim it passes. This issue also brings up questions of what a song author is – do record producers, foreign artists (think Led Zeppelin), and songwriters who write for big names have the right to request termination rights from labels?

As many of these songs and artists from 1978 defined their generation, this issue also becomes important for licensing rights. Many of these songs are coveted by advertisers, used in TV and film, and for ringtones and video game soundtracks. Musicians will therefore greatly benefit by having an experienced attorney represent their concerns for their song rights and licensing agreements.

In California, Los Angeles entertainment attorney and Los Angeles business lawyer Anthony Spotora is a strong ally for musicians as they exercise their rights. The Law Offices of Spotora & Associates, P.C. is experienced in negotiations, contracts, and litigation to uphold a client’s rights. Their team is skilled in all genres of the industry and represents some of the biggest names in the recording business.

Anthony Spotora is a Los Angeles entertainment lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

Celebrity estates are currently waging full-on legal battles with various furniture companies. It seems that furniture retailers want to use sophisticated, luxury-loving deceased actor icons to sell more sofas and sectionals. But without proper licensing agreements, furniture companies cannot casually use a late actor’s name or likeness for their benefit.

In August, Brando Enterprises sued Rooms to Go in Los Angeles Superior Court for trademark infringement on a furniture line called the “Brando”. Brando’s name, image, and any trademarks should have been cleared with Brando Enterprises before Rooms to Go used it. Brando Enterprises also sued Ashley furniture earlier in the year for unlicensed “Brando” sofas and ottomans. A look on Brando Enterprises’ website shows that they do have many licensing agreements and partnerships and are willing to entertain putting the Brando likeness on products from apparel and hotels to cars. “The goods” – as it is called on the website – shows the business interests the group is willing to align with as outlined in Marlon Brando’s trust documents and wishes.

Ashley Furniture has also been sued by Humphrey Bogart’s estate over “Bogart” couches. His estate alleged that the furniture could “confuse, mislead or deceive the consuming public” that the estate approved the use of his name. Ashley Furniture contends that the name has become more of generic term akin to “bogarting” an object. As the number one furniture retailer in the U.S., Ashley Furniture made $2.3 billion in 2010 sales on all product lines.

Companies do not have to skirt licensing agreements to make their furniture successful and profitable. Good partnerships with celebrities – living or deceased – to sell and market furniture items can be created. For example, the Cindy Crawford line at Rooms to Go generated $100 million in revenues and by all accounts seems to be a mutually beneficial product line.

“We’re living in the age of celebrity,” said Carl Levine, a New York licensing consultant. “We are looking for endorsements. People are looking for something to connect to. Consumers shopping for furniture respond to names they’re used to seeing in People magazine.”

The furniture industry and many retailers, for that matter, vie for a celebrity to make their items more glamorous, coveted, and make a person feel like the object will give them the lifestyle of the icon that is attached to it.

The Los Angeles trademark attorney Anthony Spotora is skilled in upholding a celebrity and estate’s trademark rights and aggressively protecting them. The Law Offices of Spotora & Associates has decades of experience representing clients in their intellectual property and entertainment law matters. Their team of attorneys are all senior level counsel that have represented well-known talent, studios, agencies, networks, and production houses in all facets of the industry. To learn more, visit http://www.spotoralaw.com/ or call (877) 4U-EZ-LEGAL.

For more information:
www.spotoralaw.com
Law Offices of Spotora & Associates, P.C.
1801 Century Park East, 24th Floor
Los Angeles, California 90067-2302

P (310) 556.9641
F (310) 556.9642
Toll Free: (877) 4U-EZ-LEGAL

Anthony Spotora is a Los Angeles entertainment lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

With the current state of the economy, if you are a company in good standing, it can be a fantastic time to buy another company to increase your market share and strength. As such, news headlines are currently filled with numerous power-play moves. Google recently bought Motorola Mobility to become more dominant as a mobile technology powerhouse and acquire some of its coveted patents. In Los Angeles, OpenGate Capital investment company has been acquiring controlling interests in solid companies throughout 2011. As businesses look for these types of opportunities, they will want to be on the lookout for stable business fundamentals that show the potential for growth and enlist a qualified business attorney for due diligence and all the steps needed to structure a successful deal.

Big purchases need regulatory approval, so finding a skilled attorney to review the financing structures, prepare and review agreements and securities filings, draft and negotiate contracts, and iron out any employee issues is critical. A business attorney can “partner” with the appropriate company’s management to close the transaction in a way that is conducive to all parties involved. Considering the heightened scrutiny in business today, the creation of a special committee that may include your legal counsel can also help skirt conflict of interest and fiduciary violations when an acquisition is at hand.

The business attorney’s mission is to understand the client’s goals and expectations for the acquisition and recommend the best legal, tax, and business decisions. All the while, the business attorney also provides counsel on potential pitfalls and liabilities that need to be addressed before the closing can occur.

Intellectual property, real estate and litigation services are also available when the need arises for legal counsel in these matters. This allows a business to have an ally for most legal concerns that can transpire throughout and after the transaction. It is all about adding value to the transaction and being a part of the solutions and energy to spur the deal forward.

In California, Los Angeles business attorney Anthony Spotora, of Spotora & Associates, P.C. is known for counseling corporate clients in the acquisition of another or other businesses and to help them take advantage of growth opportunities. The team of business attorneys at the law firm is also accomplished in mergers and acquisitions, corporate turn-arounds, franchises, dissolution and bankruptcy matters. As a premier California law firm, Spotora & Associates is actively involved in business matters for a diverse array of clients including Hollywood studios and distributors, TV and multimedia production houses, technology and communications companies, restaurants and nightlife, retail, manufacturing, and pharmaceutical companies. They excel in giving high-quality legal counsel and assisting in the management of the businesses they advise. To learn more, visit http://www.spotoralaw.com/ or call 877.4U.EZ.LEGAL

For more information:
www.spotoralaw.com
Law Offices of Spotora & Associates, P.C.
1801 Century Park East, 24th Floor
Los Angeles, California 90067-2302

P (310) 556.9641
F (310) 556.9642
Toll Free: (877) 4U-EZ-LEGAL

Anthony Spotora is a Los Angeles entertainment lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.