On Monday, May 4 it was announced that Steve Easterbrook, new CEO of McDonald’s Corporation, would reorganize the company’s business units, cut costs, and sell restaurants to franchisees in an effort to transform the world’s largest restaurant chain into a “modern, progressive burger company.” Easterbrook made the announcement via video, in which he vowed to eliminate “cumbersome” management and thoroughly analyze the business for inefficiencies in an effort to save the corporation about $300 million net annually, most of which he anticipated would be realized by the end of 2017.

Mike Andres leads the U.S. McDonald’s market, which news reports at Reuters claim account for more than 40% of the fast-food giant’s operating income. He will continue to lead this market. In the video, Easterbrook said that in the year 2015, $8 to $9 billion would be returned to shareholders of McDonald’s.

Ultimately, the goal is to improve how consumers perceive McDonald’s restaurants in terms of slow service and food quality. In recent years, McDonald’s has been in a decline in the burger fast-food franchise industry. Easterbrook said in his announcement following one of the iconic fast-food restaurant’s worst years that he would “not shy away from the urgent need to reset this business.” Easterbrook took the McDonald’s helm on March 1 of this year.

Prior to Easterbrook taking over the helm, it was planned that McDonald’s would sell 1,500 restaurants by 2016. Under Easterbrook’s management, the plan is to sell 3,500 restaurants by 2018 to franchisees, which would result in an increase of franchisee ownership around the world from 81% to 90%. However, it appears that investors were not thoroughly impressed by Easterbrook’s plan, considering that the announcement seemed to provoke a “prove it” sentiment in immediate reactions noticed in investors according to Stephen Anderson, analyst at Miller Tabak & Co.

Australia, Canada, France, Germany, and the UK will comprise the new “international lead” market according to Reuters, which accounts for 40% of the burger franchisors’ operating income.

McDonald’s has been a successful franchise in the U.S. and many international markets for decades, and has proven a successful business model for tens of thousands of franchisees. However, the latest news can make anyone who is thinking of investing in a McDonald’s franchise apprehensive, to say the least. Anyone considering a franchise investment should consult with an experienced and knowledgeable attorney before making a decision that could change your life, and your financial future. Count on the Los Angeles business attorneys at Spotora & Associates for sound legal guidance and support in franchising or any business matter.

Recently, it was announced that Twenty-First Century Fox and Walt Disney Co. would no longer run Verizon FiOS commercials in certain markets that advertise Verizon’s cable package, arguing that the company’s FiOS TV, a cable program that is said to be cheaper and slimmer than basic cable, violated existing agreements.

According to a news article at L.A. Biz, Verizon called the move made by the two companies, along with Comcast Corporation, an “anticompetitive tactic.” A spokeswoman for Verizon revealed to the New York Times that Disney would pull ads run for the cable program at television stations in New York including A & E and WABC, in addition to ESPN radio. In Philadelphia, the ABC affiliate pulled advertising for the FiOS custom TV stations. Fox has decided to pull the Verizon ads from WNYW, its New York affiliate, and YES, a sports cable channel.

According to another article at Reuters, Walt Disney Co. did run the Verizon ads in Pittsburgh, Boston, and Washington, D.C. last week. Disney declined to comment on the commercials, while a spokesperson for Fox told the Times that the company desired to keep the company’s discussions regarding commercials confidential.

Verizon’s FiOS Custom TV package makes it possible for customers to sign up for a basic package consisting of 36 channels; customers are also able to add on two news, sports, children’s program, or other genre-specific packages. With a cost of $55 per month, the package targets those who have chosen streaming services over cable due to cost.

On Wednesday, April 22, Disney notified Verizon via e-mail that the company would not run FiOS Custom TV ads on their channels, claiming that the ad violates contract agreements. Verizon maintains that the company, under current agreements with media companies to offer the slimmed-down service, is within its rights by giving subscribers their basic package of 36 fixed channels for the monthly charge.

Ultimately, at the bottom of the dispute is that while pay-TV providers desire to break up the large bundles of channels being offered by online companies and cable rivals at the current time, media companies are attempting to keep specific channels that are popular in the larger packages they offer in an effort to protect business.

At the time of news reports, Verizon and Disney had no comments on the pulled television ads.

The Los Angeles business attorneys at Spotora & Associates realize that the business and entertainment worlds are highly competitive, and the claims arising from television programming package agreements can be particularly complex. Whether your company is being accused of violating a contract or another entity is in breach of your agreement, contact us right away and our senior associates will identify and enforce your contractual rights to resolve the issue as efficiently as possible.

Today, Samsung and Apple were sued by the Coalition Against Distracted Driving, a citizens groups supporting education of drivers against distracted driving, specifically the use of smartphones and smartwatches while driving, according to a news article at West Side Today. The group, who is said to be anticipating the risks regarding the use of the Apple Watch, is attempting to force makers of smartphones to pay $1 billion for a program designed to educate motorists regarding the dangers of distracted driving.

Filed on Monday, April 20th, the lawsuit also names Microsoft Corporation and Google Inc. The lawsuit claims that the Coalition Against Distracted Driving (CADD) is a group based in Los Angeles that was formed for the purpose of promoting ongoing and effective education to the public regarding the use of mobile devices while driving. Stephen Joseph, a plaintiff in the lawsuit, said he is “acting in this case in the public interest.” Joseph also states in the suit that he recognizes the potential of injury to himself caused by the “possibility of being hit by a driver who cannot see the road because he/she is using a smartphone or smartwatch.”

The lawsuit against the defendants claims that the use of smartphones while operating a vehicle is an “epidemic” across the nation, and cites numerous instances across the U.S. in which accidents were the fault of inattentive drivers. Specifically, one truck driver was allegedly looking on Facebook at photos of women using a Samsung Galaxy smartphone, when he killed one police officer after plowing into five police cars.

While the Apple Watch has not yet been made available to the public, the lawsuit claims that the watch “creates a far greater distraction than smartphones” because given the fact the watch is attached to the driver’s wrist, ignoring notifications is more difficult. In regards to teenagers, the suit claims the temptation for teens to view the notifications by the watch is “irresistible,” particularly in situations involving conversation via text.

According to the CADD, the $1 billion cost the group wants Samsung and Apple to pay to educate people nationwide regarding the use of smartphones and smartwatches “is a tiny fraction of profits that defendants receive from the sale of these products.”

At Spotora & Associates, our senior associates understand that in many cases, the products companies manufacture are open to lawsuits of this nature, lawsuits which claim the dangers of using the products in specific situations. Given advances in technology today, litigation is often difficult to avoid and regardless of your industry, the potential of a lawsuit exists. Rely on our team of skilled and experienced Los Angeles business attorneys for outstanding legal advisement and to limit your liability.

Recently it was announced that two giants in the food industry, Kraft and Heinz, would merge. Once combined into one company, Kraft Heinz will be the 5th largest food and beverage groups in the world, according to an article at the New York Times. In fact, the Kraft Heinz Company is expected to have a market value in excess of $80 billion. As you can imagine, this is the largest merger of 2015 thus far.

While Heinz focused primarily on condiments and canned goods such as ketchup, baby food, Classico spaghetti sauces, and other sauces, meals, and infant/nutrition, 3G Capital will take control of Kraft Foods, famous for Planters nuts, Jell-O, Mac and cheese, Oscar Mayer label meats, and other foods. 3G acquired Berkshire Hathaway, a companied formed by billionaire investor Warren Buffett, in 2013.

What is the intention of the merger? 3G, who took over beer giant Anheuser-Busch in 2008, intends to take ownership of iconic brands in an effort to expand the companies internationally, and drastically cut costs. According to news resources, Warren Buffett and 3G are hoping that combining Heinz and Kraft will result in steady growth of sales for such names as Velveeta, Lunchables, and Kool-Aid, just as the Heinz ketchup brand has risen in sales steadily since its acquisition in 2013.

Currently, the majority of Kraft products are sold in the U.S., while most of Heinz sales are generated abroad. 3G chairman of Kraft Heinz Alex Behring hopes that by merging, Kraft’s sales will expand into the global market. According to Behring, “Combining our two businesses, we’ll create the third-largest food and beverage company in North America, and the fifth-largest food and beverage company in the world.” Behring went on to say that the merger will enjoy a substantially enhanced scale at both the retail and food service channels in North America, its key market.

The merging of Heinz and Kraft has been in the works for years, however it wasn’t until the beginning of 2015, when John T. Cahill took over as CEO at 3G that Mr. Buffett approached Kraft about the two companies merging. In a statement, Buffett said that he was “delighted to play a part in bringing these two winning companies and their iconic brands together.” Buffett went on to reveal his excitement and anticipation of the opportunities possible for the newly combined organization.

At Spotora & Associates, our LA business merger attorneys know the complexities involved when two companies become one, and the potential pitfalls. Whether your company is small and local or known globally, work with a skilled and experienced Los Angeles business attorney to ensure positive, profitable results for your company.

At Spotora & Associates, our Los Angeles mergers and acquisitions attorneys understand the complexities involved when one company acquires or merges with another.  Purchasing another company must be approached carefully and thoughtfully, with the assistance of a skilled lawyer.  Recently, El Segundo’s PCM Inc. purchased some of the assets of En Pointe Technologies Sales Inc., an IT firm who specializes in Microsoft products according to an article at the Los Angeles Business Journal.

PCM Inc. manufactures MacMall and PC Mall technology product catalogs in addition to information technology solutions designed for both local governments and businesses.  In acquiring specific assets from En Pointe Technologies Sales, PCM agreed to pay $15 million for the IT solutions acquired from En Pointe, a Gardena-based company.  Over the next three years, PCM will also pay 10% of certain agreed upon services revenues and 22 1/2% of the company’s future adjusted gross profit, according to a filing with the SEC (Securities and Exchange Commission.)

En Pointe is expected to retain its inventory and accounts receivable; this includes a $72 million contract over the next five years to provide more than 30 Los Angeles County departments with cloud-based software, a contract that was signed in June of 2014.  At the time the company’s year ended on September 30, 2014, revenue was reported to be $393 million.

The acquisition deal between PCM and En Pointe is scheduled to close on April 1st of this year, with PCM planning the creation of a new division which will assume the En Pointe name.

According to chairman and chief executive of PCM Frank Khulusi, the company feels that acquiring En Pointe will complement PCM’s commercial and public sector segments.  In addition, the 240 employees of En Pointe will be offered equivalent positions at PCM.

Bob Din, Chief Executive at En Pointe, founded the company more than two decades ago in 1993.  When the acquisition of En Pointe by PCM was announced on Monday, shares at PCM closed at $9.11, an increase of one percent.

We understand how difficult it can be in making a decision to acquire a company, and all of the issues involved including often times difficult negotiations, regulatory filings, reaching your objectives and goals, tax implications, and more.  At Spotora & Associates, our LA acquisition lawyers want to help ensure your decisions are solid, smart, and most important of all, that all transactions and strategies are sound, protecting you from potential litigation in the future.

Recently, Cupertino-based Apple Inc. has been hit with a slew of new patent infringement lawsuits after the company was ordered last week to pay more than $530 million for infringing on the patents of a Texas company, according to an article at the LA Times.

Texas-based Smartflash was awarded $532.9 million by a jury, then filed an additional lawsuit on February 25 alleging that Apple violated the company’s patents in relation to devices that debuted after the original lawsuit was already in court. In the midst of all this, Ericsson, a pioneer in the Swedish mobile phone industry, hit Apple hard when the company filed seven federal lawsuits against Apple in an ongoing patent dispute, along with two complaints filed with the U.S. International Trade commission alleging that Apple had infringed on more than 40 patents in relation to various technologies relevant to iPads and iPhones.

In January of this year, a licensing agreement between Apple and Ericsson regarding royalties to be paid to the Swedish technology company for its mobile technology expired. Since that time, the companies have traded lawsuits, with Apple filing a suit against Ericsson in January regarding a fair rate for the rights to Ericsson’s patents. A spokeswoman for Apple revealed a statement made by Apple saying, “We’ve always been willing to pay a fair price to secure the rights to standards essential patents covering technology in our products. Unfortunately, we have not been able to agree with Ericsson on a fair rate for their patents so, as a last resort, we are asking the courts for help.”

Some of the patents Ericsson is taking legal action against Apple for include 2G, 3G, and 4G/LTE high-speed wireless technology; complaints filed in federal court also indicate Ericsson has taken legal action in regards to GPS technology.

While the initial lawsuit filed by Smartflash against Apple claimed infringement on three patents including devices that use iTunes and iTunes software, the new lawsuit filed by Smartflash LLC accused Apple of continuing to infringe on patents such as those for payment for songs, games, and other data in addition to methods utilized to manage digital rights. Apple denies the allegations, saying that the company manufactures no products, has no presence in the U.S., creates no jobs, and has no employees, and that Smartflash is exploiting Apple’s patent system in order to claim royalties for technology that Apple actually invented.

Spotora & Associates is a skilled team of Los Angeles intellectual property attorneys highly experienced and knowledgeable in the areas of patents, trademarks, copyright, trade secrets, and other areas of Internet law. Contact us today for unsurpassed legal guidance, support, and representation in matters regarding intangible rights.

Business owners work diligently to build value in their company and to attract consumers and investors. Many plan for the day when they can go public and have an initial public offering (IPO). With recent technology companies raising some serious cash, it’s no wonder that many businesses are contemplating if they can mimic LinkedIn and Pandora’s IPO successes. To that end, whether your company is in the tech sector or a different industry, you’ll want to get a qualified business attorney on your side.

When a company files for SEC registration, the information becomes public record. As such, a knowledgeable business attorney will ensure that the registration and documents meet SEC requirements and protect your corporate image. Preparing for an IPO is tedious work, and unless your company can get an SEC exemption, the paperwork is best drafted and reviewed by counsel.

For those companies who want to pursue other methods of raising capital and are eligible for one of the SEC exemptions, legal counsel remains critical. For example, the Rule 504 exemption of Regulation D allows a company to avoid SEC registration if they: sell up to $1 million in securities in any given year timeframe privately; do not have to file reports per the Securities Exchange Act of 1934; and, it is not a blank check company. The Rule 504 exemption lets a company avoid SEC registration and some report filing, but a company will still need to file Form D after the first securities are sold in a private sale. An experienced business attorney will help a client make sure the documents for the private sale and Form D are completed thoroughly without erroneous statements and violations of antifraud provisions.

This also applies to Rule 505, Regulation D of the SEC exemptions. Rule 505 allows up to $5 million in securities offerings and has different investor requirements, but Form D is still mandated. A business attorney will give a company peace of mind that they are completing investor disclosure documents and Form D efficiently.

Rule 506 exemptions allow a company to raise unlimited monies but all non-accredited investors must be sophisticated investors, unlike the guidelines of Rule 505’s non-accredited investors. Form D is still required.

Overall, a business attorney is well worth the investment to ensure that all the steps are completed with precision. The SEC is not a governmental body anyone wants knocking at the door for failing to comply with their rules and regulations. Retaining legal counsel, whether to raise capital through an IPO or privately, helps a company move forward in the best way possible. Business owners can therefore focus on the aspects they are best at and lessen their stress and potential liability during this critical time.

In California, Los Angeles business attorney Anthony Spotora counsels businesses from sole proprietorships to major international corporations on raising capital and SEC requirements and exemptions. The Law Offices of Spotora & Associates, P.C., has decades of experience with businesses throughout California, the U.S., and abroad.

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.

In today’s economic downturn, more and more businesses may be looking to alter their business models. Such a plan for change is often referred to as a corporate turnaround strategy.

With revenue streams suffering, it can be difficult to figure out what to do when your business is experiencing such disappointment. But with the few tips below, it is possible to develop a plan that will help you identify problems and alter the course of your business for the better.

1. If your business is experiencing problems and feels like it is in freefall, the first step to take before you do anything else is to seek stabilization. Take a look at what assets are critical for the survival of both the company and its ownership and then protect and preserve those assets.
2. Next, you need to undertake a lengthy and comprehensive identification period. You need to get back to finding out what your business is all about. What are the core values that your company holds? Who are your main customers, and are you continuing to provide them with goods or services that they want? What do you really stand for? Have you gotten away from your business principles?
3. Once you have answered these questions, you need to make an honest list of the core problems with your business. Seek input from not only management, but staff, too. What processes are counterproductive? What uncritical functions need to be scaled back? Remove the excess. Perhaps layoffs need to take place. Perhaps entire departments need to be scaled back. If it doesn’t fit with the core values of your business, it probably needs to go.
4. Put together an implementation plan for making these changes. Provide specifics on how these changes will be implemented. Develop a timetable for taking certain steps. Eliminate the chance of chaos by carefully explaining how the restructuring will take place.
5. Now you are ready for the actual restructuring. It will be all-important to follow the specified steps in your implementation plan.
6. Review your restructuring plan periodically and make updates and tweaks as necessary.

Undertaking a corporate turnaround can be a complex and stressful process. If your business is looking to complete a turnaround, it may also be helpful to hire a consult or an experienced corporate attorney who can offer a fresh set of eyes.

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

Becoming an S corporation for United States federal income tax purposes can be a very enticing thing to do.

S corporations are unique in that they don’t pay federal income taxes. The incomes and losses are divided among the corporation’s individual shareholders instead. Unlike C corporations, S corporations are not double-taxed through the company’s profits and shareholder dividends, which is perhaps the most important part of S corporation status. Predictably, this can result in substantial income savings.

There are a variety of other benefits a corporation can gain from electing to be treated as an S corporation, including the ability to offset losses against taxable income from other sources. Also, some corporate penalties and the federal alternative minimum tax do not come into play for an S corporation.

It is important to note that while S corporations have many advantages, there are other operational matters that should be considered. Firstly, there are other costs associated to S-Corp election, such as filing an annual S corporation tax return and quarterly and annual payroll tax paperwork. Individual and corporate assets also need to be separated.

Regardless, S corporations are becoming ever-popular in the United States. There were about 725,000 in the United States as of the mid-1980s, yet these numbers grew to more than 3 million by the early 2000s. They are currently the number one type of corporate entity.

But the Internal Revenue Service has had ongoing problems with S corporations, only 25 percent of which are believed to be in compliance. The IRS in recent years has worked to increase the number of taxes collected for S corporations.

The complete S corporation rules are contained in Subchapter S of Chapter 1 of the Internal Revenue Code (sections 1361 through 1379). It is a good idea to consult an experienced attorney to learn the ins and outs, advantages and disadvantages, of becoming an S corporation.

To learn more, visit https://www.spotoralaw.com/.

There are a lot of challenges and unknowns when getting a new business venture off the ground. Am I ready for this launch? How long will it take me to recoup my capital? When will the customers begin rolling in?

If you are operating the business with a partner, one of the things that can save you a lot of headaches later on is putting together a partnership agreement. A partnership agreement clearly outlines each partner’s responsibilities and rights, therefore preventing disagreements in the future. It is not uncommon for disagreements between partners to sink new business ventures, destroy friendships and cause long, drawn-out legal battles.

A partnership agreement can be tailored to each venture’s specification, yet they all should include a section detailing each partner’s individual job duties. Consider life without a partnership agreement: If each party is under the impression that the other person is handling a particular task and it is not completed, the new business venture can crash before it has a chance to get off the ground.

“This legal document can minimize the number of risks that new business ventures face, creating a better chance for success,” said Anthony Spotora, a Los Angeles-based business and entertainment lawyer. “Included in the agreement are specifics on what authority each partner has when it comes to borrowing or lending money, buying supplies, executing lease agreements or entering other types of legal contracts.”

Perhaps certain business transactions can only take place with the consent of both partners. Perhaps Person A exclusively handles the purchasing of supplies while Person B exclusively handles the hiring of new employees. Whatever the arrangement, it is important to make the rules of the game clear to all.

The partnership agreement might also want to include procedures if one partner wants to leave or passes on, how profits will be shared, how an additional partner would be added, management responsibilities, how each partner contributes cash flow, management restrictions and other decision-making protocol.

Each state has a uniform business partnership law, but a partnership agreement can override this law to suit your particular needs. A partnership agreement is a small investment in time and resources that can often mean the difference between success and failure.

There is a lot to consider when putting together a partnership agreement so it is best to consult an attorney with experience in such matters.

To learn more, visit https://www.spotoralaw.com/