Commercial Litigation

Litigation exposes companies to new dangers, including discovery of confidential information, exclusion orders, and court orders freezing assets. It is also extremely expensive, time-consuming, and a drain on a company's bottom line. This is why a company's choice of litigation counsel is so important.

Jafari Law Group, Inc., will save your company's time and money by identifying the real issues at stake in a business dispute, evaluating the hidden costs to the company of litigation, recommending alternative methods of handling the dispute, and proposing ways to resolve the dispute without litigation. If litigation has already begun, we look for ways to bring the dispute to a quick and amicable end.

We appreciate the importance of personal relationships in business. Therefore, the decision on how to handle a business dispute will always remain with your company's executives and/or in-house counsel. Our role is to serve as a resource in providing your company with viable alternatives in resolving your business disputes.

Our primary aim is always to maximize your company's opportunity to avoid litigation and, if necessary, to provide stronger support for the company's decision to litigate.

We recognize the fact that litigation is seldom the best option, but sometimes it may be the only option. In that event, we will work with your company and the opposing side to resolve the issues as quickly and efficiently as possible.

We have represented clients in litigation both in state and federal courts involving breach of contract, breach of lease agreement, shareholder derivative suit, breach of fiduciary duty to a minority shareholder, copyright infringement action, and trademark infringement action.

 

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Buying or Selling a Business

While no two deals are ever the same, the purchase and sale of a business will typically fall into one of three categories:

• An asset purchase simply means that you're buying the assets of the business without necessarily buying the business entity itself.
• A stock purchase means that you take over the business by stepping into the shoes of the existing owners
• A merger refers to combining two or more existing businesses into one.
  

There are numerous pros and cons to each type of arrangement.
From a buyer's perspective, an asset purchase is sometimes the cleanest way to go. As a buyer, you could acquire all the assets of the business subject to an understanding that they would be free and clear of all liabilities.

In contrast, a buyer agreeing to a stock sale can usually be held accountable for all debts and obligations of the corporation that's being sold. For this reason alone, many buyers decide not to go with a stock sale.

On the other hand, a stock sale can be much easier to accomplish because it may involve nothing more than swapping a check for stock certificates. The transition process is sometimes much easier with a stock sale, too, because title to the business assets remain with the corporation. The buyer is simply stepping into the shoes of the stockholder.

Depending on the size and complexity of the deal, there may be spin-offs, divestitures, or other undertakings that make it difficult to pigeonhole the transaction as an asset purchase, a stock purchase or a merger. However, most deals will progress in a similar manner:

Preliminary Discussions
Negotiating a letter of intent
Signing a confidentiality agreement
Drafting and finalizing a formal agreement
Undertaking due diligence
Seeking approval from governmental authorities and consents from third parties
Closing
Post-closing adjustments
Negotiating the Deal
Depending on the nature of the transaction, bringing a deal to closure could take anywhere from three months to a year or more. Without much doubt, the process will take longer than you would have expected.

As early as possible in the process, a lawyer and a financial advisor should be brought into the picture. One immediate benefit to doing so is that they may be able to help you to structure the deal to your best advantage before the transaction takes on a life of its own.

Proper representation is critical even in preliminary discussions. Many unsuspecting sellers have signed something while in preliminary discussions that is later regretted; so common sense dictates having a lawyer on your team before you sign anything.
Once the parties "shake hands" on a deal, the next step is usually to negotiate a letter of intent. The logic of having a letter of intent is to secure a level of commitment from the parties to show that they are serious about the deal. Otherwise, they may never get to the point of negotiating the finer points that always show up in the formal agreement. Unless you have some advantage to be gained from signing an enforceable letter of intent, it will usually be drafted as "non-binding" on its face.

As soon as possible, the other side is going to want access to the inner workings of your business to verify that it is everything you say it is. Before you turn over on your belly, though, you should have a confidentiality agreement in place to protect your interests - just in case the other side has unscrupulous motives.

Somewhere along the line, a formal agreement will have to be finalized and signed. As deals evolve now, though, the parties may not actually sign the final document until the deal is ready to close. There are almost always many drafts that go back and forth. This is where you absolutely need good legal representation because the risks are just too great.

The due diligence process involves turning over all the rocks of a business and looking to make sure that everything is in good order. Be ready to come under the microscope. Your business may be given more scrutiny than ever before.

The closing may involve a third-party escrow company (especially when real property and public notices for "bulk sales" are involved). If there is an escrow, another level of documentation and compliance with the escrow company's requirements will be involved.

Some form of post-closing adjustments may be involved as well. One of the terms a buyer may negotiate, for example, is a representation that the business will perform at a given volume for a certain period of time after closing. Based on what happens, the purchase price may be adjusted up or down after the fact.

This is but a short synopsis to the process of buying and selling a business.

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Contracts

Often the best way to avoid litigation is to have a well-drafted contract. On the other hand, you should fully understand your rights and obligations before you sign any legal instrument. Jafari Law Group, P.C., can help your business avoid potential legal pitfalls by drafting, vetting, or negotiating contracts in the following areas:

• Commercial Lease Agreements
• Corporate Bylaws
• Employment Agreements
• Employee Handbook
• Franchise Agreements
• Landlord/Tenant Agreements
• Licensing Agreements
• Noncompete Agreements
• Partnership Agreements
• Settlement Agreements
• Trade Secret/Non-Disclosure Agreements

In the event that a dispute has already arisen, our firm can help your business enforce your rights and understand your options based on the executed contract. We realize and appreciate the potential risks and costs associated with litigation. Our aim, therefore, is always to minimize this risk and work towards an amicable solution for both sides through alternatives such as mediation and arbitration. Of course, sometimes the only option is litigation.

Our firm offers litigation/negotiation services in the following areas:

• Breach of contract
• Breach of covenant not to compete
• Breach of fiduciary duty
• Calculating and recovering damages
• Collections
• Corporate officers and directors liability
• Interference with contractual relations
• Interference with prospective economic advantage
• Partnership disputes
• Rent actions
• Unfair competition
• Unfair use of trade secrets and customer lists
• Trade libel

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