Articles Posted in COMMERCIAL LITIGATION

As the world economy tightens and companies strive to turn a profit, it is not only Georgia consumers who fall victim to illegal business tactics and unfair business practices. Georgia companies also can be affected by the illegal and unfair business practices of their competitors. Businesses today are operating in a cutthroat environment driven by increasing competition, changing sales goals, workforce cuts and cost reductions. So it is not surprising that companies of all sizes are vulnerable to competitors that will take any action required to get a competitive edge.

While many companies do follow the law when competing within a given industry and limit their strategies accordingly, some take actions that are clearly in violation of Georgia business law. When disputes do arise, it seems that the large companies with deep pockets are able to protect themselves. They appear to effortlessly litigate in order to safeguard their market share, leaving smaller companies in their wake. While some smaller companies do participate in unfair business practices, it is often smaller businesses that need greater protection. Because of their size, these smaller companies often face a challenge when defending their rights against larger companies and corporations.

The upside is that Georgia business law regulates how businesses operate so that all companies have the opportunity to do business in an environment free of illegal and unfair business practices. The laws exist to discourage unfair behavior, but for some companies the temptation is too great and the law is broken. There are a host of activities that fall into the category of unfair business practices including price fixing between competitors, false advertising, monopolies and boycotting certain businesses. When laws are broken and companies become victims of these types of activities, Georgia business lawyers are there not only to defend the interests of their clients, but also to fight for compensation for losses incurred.
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As a Corporate business Lawyer in Atlanta, Georgia, I am well aware the majority of the businesses in the United States are Close Corporations. Georgia Close Corporations are classified as having a maximum of fifty shareholders, no publicly traded stock, and active management by shareholders. Because Close Corporations usually employ the shareholders, these companies generally have a more relaxed management style. The downside is that this management model puts the minority shareholders in a situation where they quickly can be faced with Shareholder Oppression, also commonly referred to “squeeze out” or “freeze out” tactics. When this situation goes unchecked by the Minority Shareholders, this typically results in a negative impact on the minority shareholders and can lead to their termination of employment with the company.

When employed with a Close Corporation, income from employment and the input your Close Corporation shares allow the shareholder, is likely the most valuable stake that minority shareholders have. Shares held have no value on the open market. That, coupled with the fact that majority shareholders are unlikely to buy the minority’s shares at a fair price, leaves the minority shareholders with little or nothing upon being terminated.

The good news is that minority shareholders in Close Corporation have significant rights.
There are legal protections in place, which Close Corporation Shareholders can use to defend their rights. Many are as follows:

• Retaining an Atlanta Corporate Shareholder Attorney is the best route to protecting your Close Corporation interests.

• In the alternative, Business Law statutes in Georgia do provide protection for minority shareholders faced with this situation. Just as in ordinary corporations, all shareholders in Close Corporations have the right to inspect the documents pertaining to the company, including, but not limited to, bylaws, shareholders meeting minutes, documentation of actions taken outside of meetings and resolutions related to share classification.


• In the case of wrongdoing, documents discovered during inspection can provide the required evidence to file a lawsuit against the company.

• Georgia law states that the majority shareholders have a Fiduciary Duty to the minority shareholders, allowing minority shareholders to sue for dissolution of the Close Corporation when these duties are not fulfilled. These suits can be filed if the majority shareholders have acted are acting or are expected to act in an illegal, fraudulent, oppressive, or unfair fashion toward the minority.

• Minority shareholders also can sue for fair valuation of their shares.

Whatever the circumstance, it is critical to seek an Atlanta Corporate Business Attorney experienced in Shareholder Actions. Having a properly drafted operational agreement can prevent these types of disputes from developing, but if conflicts do arise, an Atlanta, Georgia Corporate Lawyer with experience in Corporate and Shareholder proceeding will ensure that all possible legal avenues are pursued to help Minority Shareholders receive fair treatment and compensation under Georgia Law.
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As a As an Atlanta, Georgia lawyer who both defends and files lawsuits on behalf of clients throughout GA and the US, I am writing to you today about Georgia lawsuit on contracts. At its simplest, a contract it is an offer by one party, accepted by another party, and performed, as agreed, by both parties.

Many parties entering into a new Georgia corporate business attorney-client relationship are either so eager to begin their business affairs, or so wary of delaying or derailing a Georgia business deal, that they are wary of bringing up the need for a written contract governed by Georgia Law. If a written contract is agreed to, many try to make it as simple as possible often without seeking the legal advice of an Atlanta, Georgia business contract attorney.

Our Firm has Atlanta business consulting lawyers giving advice to each business, which is custom tailored to their needs (we give such advice on an ongoing basis as needed after hours, on weekends, and more).

This is why many businesses enter agreements without a written contract, without attorney review of a contract, or without even reading a contract. This is also why so many contractual agreements that begin with such optimism and desire for speed, end up dragged down into the mire of contractual litigation, where they are finally forced to resort to the attorneys who could have prevented such a breakdown in the first place.

Protect your Georgia business with an Atlanta business lawyer’s advice and know that it is of the utmost important to have a written contract reviewed by experienced local Atlanta business contract attorney, that covers, simply but effectively, all necessary elements of the binding contract-agreement governed by Georgia law to ensure the rights and obligations of both parties are met.

A simple example of a situation where one clause can solve a great deal of time and expense is the question of jurisdiction to hear your case, the specific court (state or superior, etc.) and governing law.

Many Atlanta and Georgia businesses deal with other businesses, contractors, and customers that are outside of Georgia. So, if there is a lawsuit, where must it be filed? Many tend to believe that they can file a lawsuit in the state where they reside. This is not always the case, in fact, it is most often the very opposite.

Generally, a lawsuit must be filed in the state where the Defendant (the non-suing party) resides.

Thus, if you are a Georgia business, even one that feels it is the victim of a breach by an out-of-state company, you will still have to file in that company’s state with all the extra expenses involved in that.

If you wish to fight to have the case brought within your state and county, you will have to prove that your situation falls within the exceptions to this rule, known as the Georgia Long-Arm Statute (O.C.G.A. 9-10-91). Under the Georgia Long-Arm Statute a lawsuit can be brought in Georgia if the nonresident:

1. Transacts any business within Georgia;

2. Commits a tortious act or omission in Georgia;

3. Commits a tortious injury in this state caused by an act or omission outside this state if the tort-feasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state; and

4. Owns, uses, or possesses any real property situated within Georgia.

This is a very high and fact-based standard and thus a time-consuming, expensive inquiry. It is also one that would have to be addressed before the merits of the case itself could even be considered.

THE BEST WAY TO AVOID THE ABOVE PROBLEMS?

A simple clause within the contract that states, “In the event a dispute arises, the parties agree that all lawsuits, claims, etc. will be brought within the state of Georgia [including county, city, and court where possible] and be interpreted and governed by and under Georgia law.”

[THIS – AND THE ABOVE AND BELOW INFORMATION – IS NOT LEGAL ADVICE – LEGAL ADVICE CAN ONLY BE GIVEN BY A GEORGIA ATTORNEY AT A PROPERLY SET CONSULTATION]
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Atlanta Business lawyers at The Libby Law Firm know that a Georgia corporation must be represented by an attorney in order for it to file a claim or to defend itself in a suit brought against it. This might seem like a heavy burden for a business––after all, an individual can represent him- or herself in court––so why must a corporation obtain representation instead of, say, being represented by the sole shareholder in court?

Although an individual can represent him- or herself in court––which is called “appearing pro se”––Georgia law prohibits a non-attorney from representing someone else in court. Corporations are considered to be and treated like an individual under law; therefore, permitting the shareholder to represent the corporation would be allowing the unauthorized practice of law because a non-attorney (the shareholder) would be representing another (the corporation) in court.

In fact, the Supreme Court of Georgia has held that:

Atlanta business lawyer Duncan H. Adams, notes that as an Atlanta, Georgia Business attorney, I have seen a change in the way business is conducted since the economy started to decline more than two years ago. The change is evident in heavily populated urban areas like Atlanta, but can also be seen across Georgia. The level of trepidation is palpable and business deals that used to be handled with a verbal agreement and a handshake now often require legal review and documentation.

Atlanta business lawyers believe the shift can be attributed to the struggle that most businesses are engaged in due to the poor global economic situation. This is especially true for small business in Georgia. Atlanta business lawyers on retainer or a phone call away are a must for small businesses in Georgia.

The economic climate has influenced the business community to become more ruthless. Many companies are enforcing contractual agreements strictly and not allowing for any leeway in interpretation or timing. The ability of a customer to pick up the phone and with a short call gain one-time forgiveness for a particular contractual term, like a payment deadline, is limited. Most companies are tightening their belts and putting profits before customer service and long-standing relationships.

Moreover, the state of the economy has encouraged a more serious and illegal type of bad behavior. Some business people are resorting to fraudulent activities or unfair business practices. These activities include, but are not limited to, false advertising, product misrepresentation and substandard quality resulting in known product defects. As the incidence of business failure increases, more business are resorting to these desperate measures. Because of this, even business dealings between close friends, relatives and long-time business partners are being scrutinized more closely.

Some of the types of matters we handle are as follows:

• Breach of contract claims

• Partnership disputes

• Corporate disputes

• Industrial or commercial lease disputes

• Minority shareholder oppression claims

• Insurance disputes

• Business purchase or sale agreements

Commercial litigation

Land use and zoning violations

• Enforcement of nondisclosure or non-compete covenants

• Fraud, misrepresentation, or material nondisclosure

• Enforcement of nondisclosure or non-compete covenants

• Officer and Director Liability

• Breach of fiduciary duty

• Theft of corporate opportunities

• Premise liability

Ownership disputes

Employment matters

Conversion by employees
Misappropriation of corporate assets

Corporate Theft

• Shareholder derivative lawsuits

• Breach of fiduciary duty

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As a well-known Atlanta, Georgia Partnership Lawyer, I handle many cases involving Georgia business partnership conflicts. One of the most common scenarios is for one partner to be saddled with running the business entity single-handedly. This single-handed effort by one partner is usually in stark contrast to the terms and intent any partnership operating agreement, which governs the duties and responsibilities of the partners. This is an extremely destructive situation for the partner who is trying to maintain the business. As this partner attempts to shoulder all the responsibility for the business; including business debts, liabilities, day-to-day business problems, the financial position of all the business partners suffer. In due course, all partners in the business are on the path to failure.

Surprisingly, many business owners do attempt to struggle alone through this type of situation due to a personal sense of responsibility and unwillingness to admit that a problem exists. But this is not the recommended course of action. An Atlanta, Georgia Partnership Dispute Attorney should always be consulted with when a business partnership is suffering due to one or more partner’s inability to carry out the fiduciary duties and responsibilities implicit in most partnerships. The decision to work with a Georgia partnership attorney to resolve partnership disputes and disharmony could very well save your business, your financial situation, and possibly business and familial relationships.

It is unwise to allow a business partner to walk away from legitimate responsibilities, especially when this can both damage the partnership business and the remaining partners’ credit and future prosperity. Remember, under Georgia Partnership Law, you do have legal recourse.

At The Libby Law Firm, our team of experienced Atlanta, Georgia Partnership Dispute Attorneys are equipped to resolve almost any partnership issues which may arise in the course of a partnership. Our Atlanta, Georgia business lawyers routinely help business owners set up partnership agreements and later enforce the terms of these agreements if necessary, in order to ensure that all partners are fulfilling their obligations.

Our Atlanta, Georgia partnership litigation attorneys will work with you to equalize your partnership duties and responsibilities. Whatever your circumstances are regarding a partnership that is failing or is poised to turn into a bona fide partnership litigation lawsuit, our Firm is ready to help you get your business back on the road to success. Call our office today to discuss your situation at (404) 467-8611.
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As an Atlanta Partnership Dispute Attorney, I realize that a partnership is created anytime two or more people go into business together. Our Top Atlanta Business Partnership Lawyers typically refer to “partnerships” as specific legal entities called general partnerships or limited partnerships. However, for simplicity in this discussion we will refer to any group of people who are in business whether shareholders in a closely held corporation or members of an LLC as “partners.”

REDUCE YOUR PARTNERSHIP TO WRITING!

My first and foremost advice as an Atlanta Business Partnership Lawyer, is to reduce your Georgia Partnership Relationship to writing. The worst thing partners can do is establish a business or enter into some form of joint venture without a clear agreement. This agreement should be reduced to writing to avoid any ambiguities or misunderstandings about these responsibilities. With or without a written partnership agreement, disputes will occur. If the dispute cannot be resolved between the partners, each partner needs effective legal representation. Atlanta, Georgia, Litigation or Negotiation, Mediation or Arbitration (Collectively referred to as Alternative Dispute Resolution – ADR) may become necessary. While Georgia Partnership Litigation is never a pleasant option, the consequences of not enforcing your rights may be far worse. AThe Libby Law Firm Atlanta-Based Business Attorneys are exceptional ADR masters and may possibly carry the day and protect your best interests without see in the inside of a courtroom

QUESTIONS YOU SHOULD ASK YOURSELF
Are you the minority shareholder in a closely held corporation? Are you being prevented from viewing the company’s financial documents, which precludes you from knowing whether you are receiving your proper share of business profits? Is the majority shareholder paying himself an exorbitant salary (or flying on a private jet)? Not taking action to protect your legal rights and interests can cost you lots of money over the years.

MORE QUESTIONS YOU SHOULD ASK YOURSELF
Are you the majority shareholder? Have you exercised your fiduciary duties to your partners in responsible and reasonable manner? Can you avoid a lawsuit from your partners for breach of your fiduciary duty?

TAKE ACTION IMMEDIATELY!

Other Atlanta, Georgia Partnership Disputes may arise when one partner takes an opportunity for herself, which, should have been presented to the business, over competing business by one partner or over business funding. Whether you are an individual, family, business, or other type of clientele, please take the opportunity to let us assist you. Without action, your problems will almost surely get worse and you will find yourself in at the point of no return.

Should you ever find yourself in a position where you or your partners have a dispute, you should immediately seek legal advice to protect your interests. We will work to resolve disputes informally and inexpensively, but when litigation or ADR is necessary, The Libby Law Firm will be glad to be your zealous advocate for your position to obtain you the best possible result. An initial consultation on these matters is available without cost or obligation. The Libby Law Firm Attorneys are Smart, Resourceful, and Aggressive and may be your saving action. However, you need to act by Contacting Us immediately.
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As an ATL business lawyer, handling numerous Non-Competition (non-compete) and Non-Solicitation laws on a regular basis. The Atlanta Small Business Lawyers at The Libby Law Firm specialize in Georgia Contract Law for small to medium sized businesses. The Libby Law Firm is a well-known and well-respected Atlanta Small Business Law Firm. Our Firm represents a numerous small and medium sized businesses in an abundance of capacities. In this Blog, I analyze the “Georgia Restrictive Covenants Act”, which I believe will significantly change relationships between employers and employee in small and medium sized businesses. I believe this will be especially true in small to medium sized businesses and businesses that employ in specialty areas.

THE “GEORGIA RESTRICTIVE COVENANTS ACT” – THE “BLUE PENCIL” COMES OUT

I write this Blog as an Atlanta, Georgia, Small Business Attorney, to let you know a most recent change in Georgia Contract Law, which is bound to have a profound affect on Atlanta Small Business Employer – Employee relations. Georgia voters have favored a constitutional amendment on November 2nd, 2010, which speculated on stringent trade laws; thereby setting constraints on trade and its laws for workers in Georgia. The newly enabled law allows Georgia Courts to repair Restrictive (Non-Compete) Covenants in Georgia Contracts, which bind the employee. In the past, any illegality in the Georgia Restrictive Non-Compete Covenants would have caused the whole contract to fail.


To put it plainly, a fatally drafted Georgia Non-Compete clause or Non-Solicitation Clause drafted by an employer will be given effect as if it were drafted within the limits of the law. Thus, it alters already existing law, which previously rendered the entire restrictive covenant ineffective. This means if any of the restrictive covenants in the contract were unenforceable, whether because of geographical restrictions, scope of work restrictions, or time constraints, the whole contract will be held void ab initio. Now, the Judge can write in the restrictive covenants so that they are enforceable. This action is referred to as “blue penciling” and is tantamount to the judge correcting the contract so that the restrictive covenants are enforceable.

The new law is viewed as dubious, given the incongruity/discrepancy in the date of it being effective. While those who drafted the Georgia House Bill 173 declared that it would be enforced from November 3rd, 2010, the Georgia Constitution asserts that new laws should come into effect from the beginning of the coming year, January 1st. How this drafting error will affect anyone legally is uncertain and chances are that it may have to do the rounds of the courts to determine how it will be applied.

In its most practical aspect, what concerns those employees who intend to start a new business venture, is that; (a) An employment contract implemented before November 3rd, 2010, consisting of a restrictive covenant (a Georgia Non-Compete or Non-Solicitation Clause) will not be qualified for the new law; and, (b) Conversely, any employment contract implemented after November 3rd, 2010, with restrictive covenants; in particular, the restrictive covenants referred to as Non-Compete or Non-Solicitation Clauses, will fall under the new law. However, given the discrepancy in the dates, employment contracts may not be carry the power of this law as the date of commencement, or the new law may be held unconstitutional. This grey area in Georgia Contract Law may be of great concern to those workers aspiring to compete with their previous employers. This is particularly true in a densely populated competitive area such as Atlanta.
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As an experienced ATL Business Lawyer and Real Estate Lease Lawyer, I always recommend that my clients have a lawyer review all lease agreements. This is especially true with Georgia commercial leases in Atlanta, which when entered into carelessly can severely limit your success. Without the proper due diligence, your business may suffer if the Georgia commercial lease prevents you from addressing important issues such as signage, parking and physical expansion. This is definitely where spending money to protect your interest is a good idea. Of course, this is my opinion, but I have seen Commercial Landlords become more and more ruthless. The reason? This economy has them losing money and scared, like the rest of us. Therefore, I tender to you the following suggestions:

Keep an eye out for leases that contain the following five pitfalls, and remember to always consult with a qualified real estate contract attorney before signing any lease.

1) Short lease term with a vague renewal clause. It is risky to sign a short lease that gives you no option to renew or that has only vague renewal terms. Lease renewal options give you flexibility and should be clear and concise. The renewal clause should state when you must renew and the percentage that the rent may increase when renewing. Long-term leases are fine for established businesses, but if you are signing a lease for a start-up, then a shorter lease with an option to renew may be ideal.

2) Unfavorable relocation terms. In a relocation clause the landlord states his right to move your business to a different part of the building in order to accommodate another tenant. It is not always possible to avoid this clause, but you can make sure that you have a written agreement that states the terms of the relocation. In the clause you can ensure that the rent will not increase and that the landlord will pay for moving expenses and any required renovations to bring the space up to the same standard as the previous space. It is a good idea to make sure that the clause gives you a minimum of one-month notice if relocation is required.

3) Undefined Fees. All fees to be paid must be stated in the lease agreement. It is not uncommon for landlords to charge fees that were not agreed upon in the lease. In these cases, it is best not to pay these undefined fees. Consult an attorney if the landlord insists.

4) Restrictions that limit growth of your business. All businesses grow and change. Your lease should not restrict you from improving and modifying your space to meet your business needs. This should be negotiated with the commercial landlord and written into the lease before signing.

5) Verbal Agreements. All negotiated terms should be included in the written lease agreement. Verbal or handshake agreements are hard to enforce and can risk your business. Put everything in writing.

Georgia Commercial Leases are generally landlord friendly. Our Firm’s specialty practice areas. From our Atlanta-based Main-Office, Our Atlanta Lease Lawyers handle Georgia Contract Drafting, Negotiating, and Disputes, all over Georgia. Some of the counties and cities include Atlanta, Buckhead, Sandy Springs, Fulton County, Gwinnett County, Duluth, Lawrenceville, Forsyth County, Cumming, Cobb County, Marietta, Acworth, Kennesaw, DeKalb County, North Atlanta, Decatur.
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In my years as an Atlanta and Marietta Business Attorney, I have found the area of Georgia Slander Legal Proceedings, and the First Amendment very intriguing. Under Georgia legal statutes, slander is a form of defamation that is punishable by law.

Slander occurs when a person makes a spoken statement, with negligence or malice, which is false.

The statement can damage an individual’s or business’ reputation and can be made during a conversation with one person or in front of a large audience. Statements that are true and can be proven as such, despite the negative impact of those statements, are not considered slander and cannot be considered in a Georgia defamation case. Additionally, statements that contain small inaccuracies, but that were made with good intention, will usually be overlooked by the court. This is true as long as the statement’s fundamental essence is not false.

Some statements are protected from being classified as slander due to “privilege,” but only if not made maliciously. In Georgia, privileged statements include comments regarding the actions of public officials. Attorneys also are given privilege to make statements that may be considered false by opposing counsel during the course of working on legal cases. Similarly, business people are afforded some margin of error in making statements about others. The court is likely to dismiss a single instance of false commentary about a third party, as long as that statement is not about a general incompetence, ignorance or lack of ability of that individual or business.

Federal law currently dictates the treatment of public figures in Georgia defamation cases. The premise is that these public figures, such as politicians and celebrities, have chosen a life that is subject to a certain level of public scrutiny. As a result, the plaintiffs in these defamation cases must prove that statements were made with true malice and disregard for the truth. In defamation cases involving private figures, federal law defers to state law. Private figures may collect damages in Georgia defamation lawsuits, by proving that the defendant intended simple negligence, and not necessarily malice.
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