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Category: Complex Commercial Litigation

Pitfalls of Single Members LLCs in Florida – Fraudulent Transfers Affecting Judgment Creditors

Posted on Jun 7, 2016 in Complex Commercial Litigation

Disclaimer:  This article does not constitute an advertisement or legal advice and does not create an attorney/client relationship. The comments herein should not be relied upon by anyone who reads them. When a judgment creditor obtains a judgment against an individual who is the sole member of a non-party limited liability company (“LLC”), the judgment creditor may seek a charging order, which is a court-supervised alternative for the process of execution on a judgment by the sheriff. A charging order is a lien that attaches to the judgment debtor’s or his assignee’s right to receive any distribution that the judgment […]

Preparing Enforceable Proposals for Settlement in Florida

Posted on May 3, 2016 in Complex Commercial Litigation

The requirements for an enforceable proposal for settlement under Section 768.79, Florida Statutes, continuously shift and evolve as Courts grapple with new factual scenarios and revisions to relevant laws and rules. Issues regarding proposals that involve multiple parties are particularly complex, and Florida’s courts have issued several rulings over the past year addressing matters that must be considered when preparing such proposals. Florida generally follows the “American Rule,” which requires each party in a lawsuit to pay its own attorneys’ fees unless a specific contract or law provides otherwise. Section 768.79 provides one potential basis for the recovery of attorneys’ […]

Pitfalls of Single Members LLCs in Florida – Judgment Creditors Can Foreclose on Your Interest

Posted on Apr 11, 2016 in Complex Commercial Litigation

Disclaimer:  This article does not constitute an advertisement or legal advice and does not create an attorney/client relationship. The comments herein should not be relied upon by anyone who reads them. Limited liability companies (“LLCs”) have become one of the most popular types of entities used by businesses in Florida. Like a corporation, one of the primary purposes of the LLC is to shield the personal assets of members and limit liability for corporate debts and obligations to the assets of the company. However, the protection from personal liability is not absolute. For instance, an individual member is not shielded […]

Florida’s Fourth District Test for Determining Whether Shareholders May Bring Direct Actions Against a Corporation

Posted on Mar 22, 2016 in Complex Commercial Litigation

In the recent decision of Strazzulla v. Riverside Banking Co., Florida’s Fourth District Court of Appeal (“DCA”) has adopted a two-prong test for determining when shareholders may bring direct actions in their individual capacity against corporations, as opposed to derivative actions on behalf of the corporation.1 In doing so, the Fourth DCA follows the Third DCA’s 2014 decision in Dinuro Investments, where that court held similarly. 2 In Strazzulla, a group of shareholders filed a complaint against two of Riverside Banking Company’s directors for negligent misrepresentation and fraudulent misrepresentation, and against Riverside Banking Company itself, under a theory of vicarious […]

Collecting Rent from Commercial Tenants in Bankruptcy

Posted on Mar 11, 2016 in Complex Commercial Litigation

A commercial tenant files bankruptcy and stops paying rent. What should a landlord do? One option is to immediately file a motion for payment of administrative rent. Unless a tenant is a large, newsworthy national chain, a landlord usually finds out about a tenant’s bankruptcy through a notice in the mail. Unfortunately, for most landlords this means the tenant stops paying rent as well. Fortunately, commercial landlords are protected under the bankruptcy code by a provision that provides for the debtor to pay administrative rent to the landlord. However, the payment of administrative rent is not typically an automatic process.  […]

The Delaware Rapid Arbitration Act: Possible Panacea or Potential Pitfall?

Posted on Feb 26, 2016 in Complex Commercial Litigation

Arbitration is often believed to be a great alternative to litigating a dispute in state or federal court.  Faster, cheaper, and more definitive.  No lengthy court dockets.  No expensive, never-ending discovery.  And no lengthy appeals.  Right?  Well, not always. Although arbitration has been lauded as solving many of the problems associated with litigating in the courts, in practice arbitration often has its own set of potential pitfalls which may include:  litigating over whether the parties’ arbitration agreement applies and the scope of arbitration, disputes over the selection of the arbitrators, extensive discovery  similar to that faced in litigation, delays in […]

Contract Damages in Florida – Avoiding the “Overhead” Trap

Posted on Feb 19, 2016 in Complex Commercial Litigation

A party suing for lost revenue under a contract in Florida must deduct a portion of its general “overhead” expenses when calculating its damages. A plaintiff who is unaware of key aspects of this requirement could easily overestimate its potential recovery in breach of contract lawsuit—or, worse, unwittingly stumble into an evidentiary “trap” that might severely limit their recovery at trial. A plaintiff typically seeks to recover damages based upon the net benefit it expected to receive under the contract. If the plaintiff has not performed some or all of its obligations under the contract, the damages will generally be […]

FLSA Settlements and Obtaining Binding Releases

Posted on Feb 19, 2016 in Complex Commercial Litigation

Originally enacted in 1938, the Fair Labor Standards Act (FLSA) was written to “protect all covered workers from substandard wages and oppressive working hours, ‘labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.”1 Employers facing FLSA litigation will sometimes turn quickly to settlement negotiations with former employees to minimize the costs of litigation.  However, the private settlement of FLSA disputes requires careful consideration. The purpose of settlement is to reach an agreement that resolves a pending legal dispute once and for all. Outside the FLSA setting, […]

Do Minority Shareholders Ever Owe A Fiduciary Duty of Loyalty and Care to the Corporation and/or Other Shareholders?

Posted on Feb 19, 2016 in Complex Commercial Litigation

It may seem surprising to many that Florida law has not clearly prescribed by statute or otherwise what duties, if any, minority shareholders may owe to the corporation and/or to other shareholders.  While minority shareholders in publicly traded or held corporations usually do not owe the same fiduciary duties of loyalty and care owed by officers and directors to the company and to its shareholders, what duties are owed to whom becomes much less clear in the context of closely held corporations. A closely held corporation usually has no publicly traded market for its stock and often is owned by […]

NLRB’S Continued Invalidation of Class Action Waivers

Posted on Feb 10, 2016 in Complex Commercial Litigation

After about a year of silence on the topic, the National Labor Relations Board (NLRB) has issued yet another decision invalidating a class and collective action arbitration waiver, doubling down on its earlier decisions in In re D.R. Horton, Inc. and Michael Cuda1 and Murphy Oil, U.S.A, Inc. and Sheila M. Hobson.2 In doing so, the NLRB is again seemingly unfazed by the federal courts’ near absolute refusal thus far to follow the NLRB’s decisions invalidating class and collective action waivers in employment arbitration agreements.3 In The Neiman Marcus Group, Inc. and Sheila Monjazeb, Neiman Marcus became the latest company to draw […]