By A. Thomas DeWoskin
Who would have thought we’d be in a situation like this? This is the 21st century, not the Middle Ages. The need for action is certain, but the need for panic is not. In fact, panic makes the matter worse for all concerned.
On the personal front, take care of yourself first. You need to have your wits about you at a time like this.
- Keep your mind busy with something other than worry. If you have a hobby, now is a good time to engage in it. Read a book; write a letter; call your mother. If working 80 hours a week has limited time with your kids, spend some time with them now. Just speak to them with open-ended questions. Find out what’s on their minds. Do something together.
- Help someone else – you’ll feel good about it.
- We’ve all heard the saying that every problem is an opportunity. One of the best ways to stay calm is to do something. You can’t sit and fret your way out of this.
On the business front, now is a great time to analyze your situation, both short- and long-term.
Continue reading »
03/24/20 8:38 AM
Bankruptcy, Business Law, COVID-19, Emerging Business, Employment Law | Comments Off on Thoughts for Business Owners Trying to Run a Business During a Pandemic |
Permalink
Thoughts for Business Owners Trying to Run a Business During a Pandemic
By Ruth Binger
UPDATED 3/7/2022
Review the links below for guidelines for reopening your business based on your location. If you have any questions, one of our employment attorneys can assist you.
Additional Resources:
COVID-19 ORDERS AND INFORMATION
State of Missouri
St. Louis Metro Area
St. Louis County
City of St. Louis
St. Charles County
Franklin County
Jefferson County
Lincoln County
Warren County
Other Missouri City and County Orders
Continue reading »
03/23/20 9:21 AM
Business Law, COVID-19, Emerging Business, Employment Law, Manufacturing and Distribution | Comments Off on Updated COVID-19 Information: St. Louis City, St. Louis County, Missouri, Outstate Missouri Areas, and Illinois |
Permalink
Updated COVID-19 Information: St. Louis City, St. Louis County, Missouri, Outstate Missouri Areas, and Illinois
By A. Thomas DeWoskin
If you own a small business (defined as one owing less than $2,725,625 in total debt) and are in or nearing financial difficulties, you should contact your attorney to learn more about The Small Business Reorganization Act of 2019 (the Act).
Effective in February 2020, this new addition to Chapter 11 of the U.S. Bankruptcy Code provides the benefits of a traditional Chapter 11 case, but with fewer burdens and more flexibility.
For instance:
- There will be no creditors’ committee to deal with (unless the court orders otherwise).
- A trustee will be appointed instead. This may be a mixed benefit.
- On one hand, a good trustee might be able to help keep the case moving, negotiate a consensual plan of reorganization, object to claims, and take other burdens off the debtor.
- On the other hand, a bad trustee might misuse his/her powers and make things worse for the debtor.
- In either case, the debtor will pay the trustee on a percentage basis, generally under 5% of debtor’s quarterly revenues.
- A status conference must be held within 60 days after the commencement of the case to further a prompt and economical resolution of the various issues involved.
- No disclosure statement will be required, saving both time and attorney fees in the process.
- Only the debtor may file a plan; creditors may not.
- It is somewhat easier to “cram down” the terms of the plan on objecting creditors.
- The Absolute Priority Rule is essentially eliminated, making it easier for owners to retain their ownership in the debtor.
- Confirmation standards are relaxed, making it easier to get your reorganization approved.
Continue reading »
09/16/19 3:18 PM
Bankruptcy, Business Law, Emerging Business, Litigation | Comments Off on New Benefits for Those in Financial Difficulty: The Small Business Reorganization Act of 2019 |
Permalink
New Benefits for Those in Financial Difficulty: The Small Business Reorganization Act of 2019
By Katherine M. Flett
Equal Pay Day was celebrated this month on April 2, 2019. This date symbolizes how far into the year women must work to earn what men earned in the previous year. Thankfully, this date is not stationary. In fact, the date occurs seventeen days earlier than it did in 2005. While there is a lot to celebrate with that achievement, there is still a long way to go to completely close the gender wage gap.
In fact, the Supreme Court recently faced the opportunity to potentially close this wage gap even further when it granted cert to Rizo v. Yovino. See Katherine Flett’s blog post titled “Salaries Speak Louder than Words” for more discussion on the case. In Rizo, the Ninth Circuit sitting en banc found that the use of salary history to establish a starting salary violated the Equal Pay Act, as it perpetuated the discriminatory nature of women historically being underpaid in almost all sectors of employment. Thus, reliance on prior pay could no longer be considered as an affirmative defense under the Act’s fourth catchall exception, “any other factor other than sex.” Continue reading »
04/16/19 3:05 PM
Business Law, Emerging Business, Employment Law, Litigation, Manufacturing and Distribution, Restaurants & Entertainment | Comments Off on UPDATE: Salaries Speak Louder than Words |
Permalink
UPDATE: Salaries Speak Louder than Words
By A. Thomas DeWoskin
On June 4, 2018, the U.S. Supreme Court held that an individual’s false oral statement about his assets would not support a finding of fraud under the relevant provision of the U.S. Bankruptcy Code. That provision required the false statement to be in writing if it were to serve as the basis of a fraud claim. (Lamar Archer & Cofrin LLP v. R. Scott Appling, Case Number 16-1215, 584 U.S. ___ (2018), issued on June 4, 2018.)
In this case, Mr. Appling hired a law firm to represent him in some litigation. When he had fallen behind on his legal bill to the extent of some $60,000, the firm threatened to withdraw from the case. He told the firm that he was expecting a tax refund of about $100,000 which would cover that bill and all future fees. Relying on Mr. Appling’s assertion, the law firm continued with the representation.
As you probably have concluded by now, there was no $100,000 refund. It was only $60,000, and Mr. Appling invested it in his business rather than paying his attorneys. Worse, when his attorneys subsequently asked about the refund, Mr. Appling lied and told him that he hadn’t received the refund yet. Continue reading »
06/19/18 7:04 AM
Bankruptcy, Business Law, Emerging Business, Litigation, Real Estate | Comments Off on An Oral Agreement Is Not Worth the Paper It’s Printed On |
Permalink
An Oral Agreement Is Not Worth the Paper It’s Printed On
By A. Thomas DeWoskin
As most commercial attorneys in Missouri know, the previous Missouri statute governing receiverships, which was enacted in 1939 and consisted primarily of one sentence, provided very little guidance to attorneys, judges, or the parties involved. Missouri’s new receivership statute solves that problem. Effective August 28, 2016, and consisting of some 34 sections, the Missouri Commercial Receivership Act now provides guidance regarding the appointment of a receiver, the powers of a receiver, the rights and duties of the parties, and claim and distribution procedures.
A petition to appoint a receiver is now an independent cause of action. It does not need to be merely an “add on” request to some other claim the creditor has against the debtor. Receiverships can be instituted in order to dissolve an entity, enforce a lien, enforce a judgment, and other specific purposes, as well as any other situations in which the court may find a receivership appropriate.
Commencing a receivership is also a useful new way to resolve an ownership dispute or allow a majority shareholder to challenge a misbehaving management without destroying the business.
One of the most important improvements in Missouri’s receivership process is the requirement of notice to debtors. Continue reading »
01/9/17 1:26 PM
Bankruptcy, Business Law, Emerging Business | Comments Off on Missouri Finally Has a New Statute Governing Receivers and Receiverships |
Permalink
Missouri Finally Has a New Statute Governing Receivers and Receiverships
By Corporate Law Practice Group
The entrepreneurial press, indeed, even the popular press, is abuzz about regulation crowdfunding (i.e., investment crowdfunding), which became legal on May 16, 2016. And according to some advertisements (primarily by portals, the businesses which will provide the platforms for such crowdfunding), the fund-raising company does not need an attorney, although it would be “nice.” Rather, they say, or imply, small and large businesses with their portals can simply get on the internet to quickly fund their ideas and better the economy at the same time!
Do not believe either the buzz or the advertisements.
Regulation CF is Only a Small (Albeit Very Important) Part of the Applicable Law
Regulation crowdfunding (17 CFR Parts 200, et seq.)(“Reg. CF”) though it is a sea change from (some of) the rules governing entrepreneurial finance, it is not for everyone. Indeed, for most entrepreneurs it should be considered as a last resort only. (See, for example, “Regulation Crowdfunding; Is it Right for You?”, St. Louis Small Business Monthly, June 2016, p. 29.) Secondly, Reg. CF adds to the rules and required steps for legally raising capital , and thus creates even more of a need for the assistance of a lawyer.
That is, the only (albeit very important) change in the law is that now certain “general solicitation” is allowed to promote certain types offerings of securities. But not all general solicitation is allowed. (For example, much information which could be promulgated other than on the platform of a portal such as by newspaper or television is still illegal.)
Virtually all other regulations, statutes, laws – and judicial lore – applicable to raising capital prior to Reg. CF remain applicable and will be applied by securities regulators – and by attorneys for investors who lose money in their crowdfunded investments. The securities regulators, which have authority to prosecute suspicious offerings, have been opposed to and wary of investment crowdfunding since it was required by the JOBS Act in 2012, including Missouri (see, for example, “Kander Issues Investor Alert on Crowdfunding.”)
With the exception of allowing (limited) general solicitation, all the law (and the lore of the regulators and courts which developed since the Securities Act of 1933) still applies to all offerings, including crowdfunded offerings. So do the complicated rules and methods. For example: Continue reading »
12/15/16 8:34 AM
Business Law, Crowdfunding, Emerging Business, Securities Law | Comments Off on Investment Crowdfunding Requires an Attorney — with Long Securities Law Experience |
Permalink
Investment Crowdfunding Requires an Attorney — with Long Securities Law Experience
By A. Thomas DeWoskin
Restaurants fail for a variety of reasons, from failure to watch costs to failure to develop the right menu to a nearby construction project eliminating most of your on-street parking. If you followed the tips in my previous article, you should have some money to rely on going forward.
If your financial problems are operational or managerial, one of the things you can do at this late stage is to hire a consultant to help you tweak your menu, streamline your operations, or take any of a number of additional steps to bring you back to profitability. This is the time to be humble, rather than arrogant – ask for help! You should also consult with a bankruptcy lawyer at this point. That does not mean you are necessarily going to file bankruptcy, but an attorney knowledgeable in this area can tell you what to expect if different scenarios unfold. Unanswered ‘end-game’ questions will add to your stress and divert you from your primary mission of saving your restaurant. You can learn a lot of useful information for not a lot of money, and gain some peace of mind as well.
A bankruptcy attorney also can help with your current problems. For instance, the attorney can negotiate with the landlord, either to reduce the rent or give back some space. He can negotiate with your lender and your suppliers to negotiate better terms, or a temporary break in your monthly payments. Continue reading »
09/19/16 6:00 AM
Bankruptcy, Business Law, Emerging Business, Restaurants & Entertainment | Comments Off on Your Restaurant is Failing – Now What? |
Permalink
Your Restaurant is Failing – Now What?
By A. Thomas DeWoskin
Failure is a topic most restaurateurs would prefer to avoid when setting up a new venture, when their heads are full with visions of success. However, the restaurant business is tough, and problems can arise due to circumstances both within and outside of your control.
A great time to protect yourself from potentially devastating problems is now, while you are setting up your business and you can plan calmly.
In this post, I will discuss several of the initial legal steps you can take to prepare for a potential failure. In my next post, I will turn to the ramifications of failure and what actions you can take at that time.
First, consult an attorney to prepare your initial legal documents. There are many issues of which you may be unaware, or that you may not know how to resolve. You need to choose an appropriate legal structure and learn about human resource issues. Especially if you have a partner, you will want to deal with buyout issues, succession issues and how to handle deadlocks if multiple owners are unable to reach decisions on major issues. As they say, an ounce of prevention is worth a pound of cure. Continue reading »
09/16/16 7:51 AM
Bankruptcy, Business Law, Emerging Business, Restaurants & Entertainment | Comments Off on Opening a Restaurant: Plan for Success – and Failure, Too |
Permalink
Opening a Restaurant: Plan for Success – and Failure, Too
By Corporate Law Practice Group
In the JOBS Act adopted in April 2012, Congress required the Securities and Exchange Commission (“SEC”) to adopt rules legalizing (i.e., exempting from the requirement to register with the SEC) the offer and sale of securities by small business issuers (which cannot afford registered public offerings) using mass media, to-wit: the Internet, social media, etc. Historically, both state and federal exemptions required “privateness” and forbade “general solicitation.”
On October 30, 2015, the SEC, in a 686 page release, finally adopted rules (see pages 547-686) to allow investment crowdfunding (the use of mass media to make offers and sales to non-accredited investors, i.e., persons with less than $1 million net worth and incomes under $200,000 annually). The rules will become effective in April 2016.
Supporters argue that these rules simply bring the offering and sales of securities into the modern age of mass media and allow persons of limited means to participate in the great boom of entrepreneurship. Critics, on the other hand, point out that those are the very persons who are the least investment sophisticated and the most vulnerable to financial fraud.
What Was Available Before Investment Crowdfunding?
Continue reading »
12/11/15 1:33 PM
Business Law, Crowdfunding, Emerging Business, Intellectual Property, Manufacturing and Distribution | Comments Off on Investment Crowdfunding Will Be Legal But Will It Be an Improvement? |
Permalink
Investment Crowdfunding Will Be Legal But Will It Be an Improvement?