Published on January 11
Bankruptcy is the process by which a business that is insolvent may eliminate or modify its existing obligations. Corporate bankruptcy means any bankruptcy entered into by an entity organized as a corporation, a limited liability company, partnership, limited liability partnership or any other form of business entity. The term corporate bankruptcy is also frequently misused to refer to any bankruptcy other than an individual bankruptcy. The corporate bankruptcy process is governed by the Federal Bankruptcy Code, codified in Title 11 of the United States Code.
Corporate bankruptcies are divided into two distinct types.
Chapter 7 “liquidations”. In Chapter 7 liquidation, the business …
Added in Banking & Finance, Bankruptcy
Published on January 11
What is an Arbitration Agreement
An arbitration agreement provides that two or more people will submit an existing or future dispute to arbitration. Arbitration allows a dispute to be decided by one or more persons (the “arbiters” or “arbitrators”) selected by the parties to the dispute instead of decided by a judge or jury in the court system. Arbitration agreements are most commonly made “prospectively” (meaning parties agree to arbitrate any future disputes) but can also be made “retrospectively” (meaning parties agree to arbitrate a dispute that has already arisen).
Arbitration agreements can be mandatory (the parties are required to seek arbitration …
Added in Business Disputes, Other Forms
Published on January 11
As noted in the article Corporate Bankruptcy Overview, a Chapter 11 bankruptcy allows a company in financial distress to reorganize and continue operating as a going concern business. The key document in a Chapter 11 bankruptcy is the bankruptcy reorganization plan, also known as the bankruptcy plan. Under Federal Bankruptcy law, a debtor cannot emerge from a Chapter 11 bankruptcy until a bankruptcy plan meeting all of the Bankruptcy Code’s requirements has been approved by the court. Although any party in interest to the bankruptcy may propose a reorganization plan, the debtor is given the exclusive right to propose a …
Added in Bankruptcy
Published on January 11
What are Golden Parachute Payments?
The phrase “golden parachute” refers to an agreement between a company and a high ranking executive which calls for the executive to receive a large predetermined amount of compensation in the event there is a “change-in-control” of the company. Although employment agreements may limit the circumstances under which the compensation is received, the rules regulating the tax treatment of golden parachute payments apply regardless of whether or not the executive’s employment is terminated.
In theory, golden parachutes allow executives to retain their objectivity during the takeover process by enabling them to evaluate the terms of the proposed …
Added in Banking & Finance
Published on January 11
Did you know that as an employer you can be held responsible for the harmful acts of your employees? This article will discuss how and why. Another article in this series will discuss how you can minimize your risks.
The law governing when an employer will be liable for a subordinate’s harmful acts goes by many names. The most common are: “vicarious liability” (holding any party liable for the acts of another), “respondeat superior” (a Latin term meaning, let the master answer, which designates holding a party liable for the acts of their subordinate), “master-servant liability” (another term for respondeat superior), …
Added in Employment
Published on January 11
Expenses incurred entertaining customers, clients, and employees are often deductible under 26 U.S.C. § 274. Because the rules are quite detailed and contain a collection of exceptions and specific treatments of specific forms of entertainment, including foreign travel, conventions, and cruises, it is particularly important that taxpayers consult with a reputable lawyer or accountant to insure compliance.
Deductible Entertainment
Entertainment is defined by the IRS as any activity that provides amusement or recreation. Entertainment can also include meals. Expenses related to the entertainment such as taxes, tip, cover charge, parking, or room rental fees also qualify as part of the cost of …
Added in Employment, Helpful Business Info, Taxation
Published on January 11
A fraudulent conveyance, also called a fraudulent transfer, is a transaction where one party (“Transferor”) gives or sells for less than full value an asset to another party (“Transferee”), leaving the Transferor without sufficient assets to pay his obligations. An example of a fraudulent transfer is an individual gift all his assets to a close friend in order not to pay his debts. Although historically a fraudulent transfer required a transfer to be made in bad faith, under modern law a good-faith transfer can still constitute a fraudulent conveyance. Simply put, a transaction …
Added in Business Disputes, Helpful Business Info, Real Estate
Published on January 11
Why Take a Lien
When a Creditor lends money to a Debtor, the Creditor may wish to have a lien on some property or right owned by the Debtor in case the Debtor does not voluntarily repay the money. Such property or right is called “collateral”. If the Debtor does not voluntarily repay the loan, the Creditor may sell the collateral to produce money to repay the loan.
Why Perfect a Security Interest
How does a Creditor lien collateral and know its lien is valid against all other creditors and enforceable against the Debtor? The Creditor perfects its lien. Perfection is the …
Added in Banking & Finance
Published on January 11
What is Insider Trading?
Insider trading is the trading of a corporation’s securities, such as stock, bonds, or stock options, by people who have access to non-public information about the company. Although generally thought of as criminal, certain types of insider trading are completely legal and in fact common. The Securities and Exchange Commission (“SEC”) is the government entity in charge of policing and prosecuting illegal acts of insider trading as well as creating rules to clarify what conduct is prohibited.
An “insider” is a person with access to “material” inside information – information that might affect the company’s stock price and/or …
Added in Banking & Finance, Helpful Business Info, US Laws
Published on January 7
Any business that owns real estate of any kind can be faced with the issue of whether or not the business is liable for injuries a person receives while on the business’ property. Although most business owners think of premises liability primarily in the context of a “slip and fall” injury to a potential customer, premises liability is much broader. Understanding what injuries a business will be held liable for is a crucial step in not only determining how much to spend protecting against possible injuries, but in determining the appropriate amount of liability insurance.
What Injuries Can a Business Be …
Added in Business Insurance, Helpful Business Info, Real Estate
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