In this situation the employer’s lawyers may give you what is called a “corporate Miranda warning.”  The attorney will indicate that she represents the corporation, not you as the employee, and will remind you that conversations and other types of communication between you and her will be privileged.  However, this privilege belongs to your employer.  Therefore, you have no right to declare these communications privileged in any litigation; meaning that the content of your communications with this lawyer could be disclosed in court.  If your employer’s lawyer does not give you these warnings it does not mean you should not take heed.  All the more reason to consider having your own counsel present to protect your interests.

Please contact your Bamberger attorney for more information on this subject.

Author: Lori Young (bio)
Phone: 812.452.3560
email: lyoung@bamberger.com

The following is a list of places you will want to “kick the tires” on almost all business purchases:

1. Inspection of Assets.  You may need to get the assistance of a professional to assist in this process.  You will not want to rely on valuations or appraisals that are out of date or created for the benefit of the seller. 
2. Review of financial statements.  Try to review audited financial statements if possible. You may need the assistance of an accountant to review the financial statements.  Ask for documentation of any questionable information.  As part of your review of financial information you should also review recent tax returns.
3. Customer and supplier lists and contracts.  If after the purchase of the business you will be relying on existing relationships with customers and suppliers you will need as much information about those customers and suppliers as possible, including any existing contracts.
4. Corporate Records.  You will need to review the corporate records (i.e. articles of incorporation, bylaws, recent board and shareholder meeting minutes) of the seller to ensure that the individuals you are dealing with have proper authority to sell the stock or assets of the business.
5. Employee Matters.  If you are purchasing all of the stock or substantially all of the assets of an entity you will need to obtain detailed information about the employees including any pension plan or other employee benefits.  You need to know the status of any liabilities of the business to its current employees, including accrued vacations and options or rights to purchase stock. 

The above list is not intended to be exhaustive but simply illustrative of the type of information you need to obtain in almost any business purchase that you are considering.  You may hear accountants and lawyers referring to this as performing “due diligence.”

Knowledge is power in the hands of the buyer of a business.  Information about the business you are purchasing will reduce your risks and put you in a better negotiating position with the seller.

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com

We would need a lot more facts about the relationship between Pete’s and Cathy’s to determine whether it could be considered a franchise.  There are a few important points to keep in mind.  Something doesn’t have to be called a franchise to be a franchise for purposes of state and federal law.  Generally such laws will look for three characteristics:  (1) a specified marketing plan or system, (2) sale of goods or operation of the business related to a certain trademark or logo type, and (3) a fee. 

And so what if a business is a franchise?  If we are Pete’s we care because franchisor’s must follow extensive reporting and disclosure requirements and are also restricted on how a franchise can be terminated.  If we are Cathy’s we care because we gain many rights and protections under these laws.

Agreements like those between Pete’s and Cathy’s, often referred to as distributor contracts, must be carefully drafted to avoid falling under franchise laws if that is not the intent of the parties.  Contact Lori Young or another attorney on the Manufacturing and Distribution Team if you need help with franchise or distributorship issues.

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com

A lower court determined that the IRS had a right to the rent collected. Fortunately for the lender, the Seventh Circuit saw things differently and reversed the lower court, giving the lender priority over the IRS in the rents.  The Appeals Court did not rely on the lender’s separate lien on the rents, but on characterizing the monthly rental as the value of the real property for that particular month, as a new asset that came into existence subsequent to the mortgage.

If you have questions about tax liens or real estate financing, please contact a Bamberger attorney.

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com

Indiana Code section 32-34-1-29 states that “A holder of property that is presumed abandoned…shall report in writing to the attorney general concerning the property.”  The statute does not state that a business that is not a holder of unclaimed property must also report.  Additionally, the Attorney General’s website states that “”Negative” or “Zero” annual reports reflecting that no unclaimed property is held by the holder or business enterprise are not statutorily required.” 

A number of groups are currently working with the Attorney General’s office to resolve what seems to be a possible discrepancy between the statute and enforcement activity. We will keep you updated as we receive any additional information.  In the meantime, if you received this notice, please consider contacting your legal counsel before paying the penalty.  A few minutes with your advisor might save you some money.

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com

1.         Help You Avoid Personal Liability. 

Minutes of annual meetings are important to maintain a Corporation’s identity and to help protect a Corporation’s shareholders from personal liability for the Corporation’s business activities.  Under the Program your Corporation’s standard minutes of annual meetings of shareholders and directors will be timely prepared and delivered to you for signing.

2.         Help You Avoid Administrative Dissolution. 

Failure to timely file the Business Entity Report can result in a Corporation’s existence being administratively revoked by the Secretary of State.  A Corporation may not receive notice of this administrative revocation.  When a Corporation’s charter is administratively revoked, a costly and time-consuming procedure must be followed to obtain reinstatement.  Under the Corporate Services Program, your Corporation’s Business Entity Report is timely filed with the Indiana Secretary of State. 

3.         Help You Avoid Being Inadvertently Defaulted in a Lawsuit.

The Registered Agent for a Corporation receives notice in the event a lawsuit is filed against the Corporation.  Compliance materials are mailed by the Secretary of State to the Corporation’s Registered Agent at the address listed with the Secretary of State.  If this address is out of date, mail may not be forwarded and the Corporation could suffer adverse consequences, such as being defaulted in a lawsuit filed against it.  Under the Program, current addresses are kept on file with the Indiana Secretary of State for your Corporation’s Registered Agent and Principal Office.

4.         Added Value to You.

To enhance the value of the Program to you, we include one hour of in-office attorney consultation annually.  The agenda can include any matters you wish to discuss. 

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com

There are three elements that must exist for marshalling to apply:

1. The senior creditor and junior creditor must be creditors of the same debtor
2. There must be two funds that belong to the debtor
3. Only one of the creditors can have the right to resort to both funds 

This concept does not come out of the Uniform Commercial Code; it is an equitable principal that courts may apply. 

Author: Lori Young (bio)
Phone: 812.452.3560
email: lyoung@bamberger.com

The law in Indiana allows a guarantor of a debt to avoid personal liability when sued by a creditor by proving the “impairment of collateral’ defense.  Therefore, a guarantor’s liability may be discharged if the creditor’s conduct unjustifiably decreased the value of the collateral securing the debt. 

Generally, the discharge will only be to the extent the value of the collateral is impaired.  And, such impairment is to be measured at the time of the default with the burden of proof being on the guarantor to establish the amount of the loss.  The lesson to be learned is that the guaranties on a loan may not be of any value if a mistake is made by the secured creditor in creating the security interest in the collateral.

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com

It is not appropriate for the individual that is being authorized to sign loan documents or other papers on behalf of the corporation to also sign the Resolution unless this one individual serves in all officer positions.  Preferably, a president or vice-president is the one being authorized to execute documents with the secretary or assistant secretary signing the Certificate of Resolution. 

It is also important that if the form of the Certificate of Resolution you are using requires a sample of the authorized signature that such is actually obtained and this fully completed Certificate is kept in the bank’s files. 

Finally, obtaining properly executed Certificates of Resolution is as important for very small corporations as it is for very large corporations.  A challenge to corporate authority can be made no matter what the size of the business.

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com

The following is a list of places you will want to “kick the tires” on almost all business purchases:

1. Inspection of Assets.  You may need to get the assistance of a professional to assist in this process.  You will not want to rely on valuations or appraisals that are out of date or created for the benefit of the seller. 
2. Review of financial statements.  Try to review audited financial statements if possible. You may need the assistance of an accountant to review the financial statements.  Ask for documentation of any questionable information.  As part of your review of financial information you should also review recent tax returns.
3. Customer and supplier lists and contracts.  If after the purchase of the business you will be relying on existing relationships with customers and suppliers you will need as much information about those customers and suppliers as possible, including any existing contracts.
4. Corporate Records.  You will need to review the corporate records (i.e. articles of incorporation, bylaws, recent board and shareholder meeting minutes) of the seller to ensure that the individuals you are dealing with have proper authority to sell the stock or assets of the business.
5. Employee Matters.  If you are purchasing all of the stock or substantially all of the assets of an entity you will need to obtain detailed information about the employees including any pension plan or other employee benefits.  You need to know the status of any liabilities of the business to its current employees, including accrued vacations and options or rights to purchase stock. 

The above list is not intended to be exhaustive but simply illustrative of the type of information you need to obtain in almost any business purchase that you are considering.  You may hear accountants and lawyers referring to this as performing “due diligence.”

Knowledge is power in the hands of the buyer of a business.  Information about the business you are purchasing will reduce your risks and put you in a better negotiating position with the seller.

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com