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Tampa Business & Commercial Law Blog

Arbitrations can be used to resolve business disputes

Many Florida breach of contract lawsuits involve multiple plaintiffs and/or defendants. In some cases, the use of arbitration to resolve the dispute is not outlined in all of the contracts. In the interest of saving time and money, arbitrations can be used to resolve these disputes.

For example, the Chief Executive Officer of American Momentum filed a lawsuit against two of the company's executives alleging breach of contract. It is alleged that two executive vice presidents of the company were acquiring another bank while they were still employed by American Momentum. The two are further accused of contacting American Momentum's customers in an attempt to persuade them to move their accounts to the other bank.

Oil and gas company files for Chapter 11 bankruptcy

Falling gas prices are wonderful for Florida residents. Unfortunately, the same cannot be said for companies in the oil and gas industry. Many of them are experiencing serious financial difficulties, and some are filing for Chapter 11 bankruptcy in an attempt to survive.

One such company is American Eagle Energy. It has joined other oil and gas companies who have turned to a U.S. Bankruptcy Court for help in restructuring and dealing with their debts. Sources estimate that American Eagle will not be the last energy company to file bankruptcy. At least two other companies, Venoco Inc. and RAAM Global Energy are also encountering financial difficulties.

Alternative dispute resolution: The pros and cons of arbitration

Many Florida businesses are realizing that resolving a dispute with another business or an individual in court can be costly, time consuming and frustrating. Other methods of resolving disputes, such as arbitration, are often preferred. Understanding the pros and cons of arbitration might help companies decide whether to pursue this method of alternative dispute resolution.

Cost is often seen as both an advantage and disadvantage of arbitration. Depending on the complexity of the case, costs can be lower or higher than taking the matter to court. Often, the parties agree to be bound by the arbitrator's decision, which can keep the costs down when compared to litigation. In a non-binding arbitration, however, the parties are free to go to court even after a decision is made, which would drive up the cost.

Some mergers require federal approval, which may not come easy

Nearly everyone in the Florida food service industry knows that Sysco Corp. and US Foods are two of the largest food distributors in the country. Back in Dec. 2013, the two companies announced a merger worth $8.2 billion. Like other large mergers, it requires federal approval, which Sysco is having to fight for in this case.

The Federal Trade Commission opposes the merger based on the belief that the two companies represent too large a share of the food distribution market. Sysco says that food distribution is not a national market and that many national restaurant chains have contracts with several food distributors other than Sysco and US Foods. On May 5, a federal judge will make a ruling regarding a request for a preliminary injunction from the FTC. The injunction would stop the merger from moving forward.

Business litigation over marketing strategy settled

A Florida business may spend a great deal of time developing a marketing strategy that will help it sell its products or services. In doing so, a business may inadvertently infringe on a trademark or patent belonging to another business. This could result in timely and costly business litigation being filed against the company.

An outdoor apparel company sells shirts referred to as "Henleys," which are half-button, pullover shirts with no collars. The company developed an advertising campaign to sell these shirts. The slogan was "Don a Henley and Take It Easy." This may seem clever, but without receiving permission to use the name of the founder of the popular music group, the Eagles -- Don Henley -- and the name of one of the group's songs, the company opened itself up to litigation.

Business litigation against a lender could halt foreclosure

Nearly everyone in Florida has heard about the "robo-lending" scandal that led to several lenders negotiating settlements to repay borrowers. These cases highlighted just some of the issues plaguing the personal and commercial lending industry. When these problems came to light, many home and business owners facing foreclosure initiated business litigation against their lenders in response to foreclosure filings.

Many Florida companies take out a mortgage loan in order to purchase the property out of which the business is run. If it becomes difficult to make payments on the mortgage loan, a lender may begin foreclosure proceedings. In some cases, the lender failed to meet both state and federal requirements in making the loan, and the borrower may have a claim for lender liability.

LightSquared emerges from Chapter 11 bankruptcy

Many Florida readers are unfamiliar with the company LightSquared or the most valuable asset that the entity owns, which is known as wireless spectrum. However, virtually everyone has become accustomed to the service that wireless networks provide, and many people make use of various forms of wireless technology on a daily basis. The company went into Chapter 11 bankruptcy in 2012, but recently received approval to end the case and repay its largest creditor.

The bankruptcy case has received a great deal of media attention due to the insistence of Dish Network Chairman Charles Ergen that the debt that LightSquared owed to him be paid in full. That debt was listed at nearly $1 billion. As part of the bankruptcy settlement, Ergen will receive that amount, plus an additional half a billion in interest.

Merger between grocery retail giants is scrutinized by the FTC

When two giant corporations in the same retail field propose a merger, the Federal Trade Commission (FTC) must approve the deal. A main concern of the FTC in these matters is that the new entity not turn out to be a monopolistic enterprise that is capable of snuffing out any competition. Nationally, including in Florida, federal antitrust laws do not favor a merger that will be monopolistic, because a monopoly could lead to higher prices, decreased quality, and stifled economic growth.

A proposed merger of two massive grocery retailers, Albertsons and Safeway, is a merger that the FTC has extensively monitored and regulated, prior to final approval of the deal. One of the ways in which the FTC manages the consummation of a merger is by requiring the two companies to sell off, or divest, themselves of a certain number of stores. These must be sold to other retailers so that competition and competitive pricing will be protected.

Bank merger will increase Seacoast Banking Corp.'s holdings

Federal Deposit Insurance Corp. records indicate that Seacoast Banking Corporation (Seacoast) currently serves Florida residents at 48 Seacoast National Bank locations. Seacoast recently announced that it is increasing that number through a merger with three Grand Bank & Trust of Florida branches currently owned by Grand Bankshares, Inc. (Grand). Current Grand customers will ultimately have access to all of the services offered by Seacoast.

When Seacoast takes control of the branches, its assets will increase by approximately $207.8 million. The bank will also receive net loans and leases valued at nearly $123.3 million, deposits of approximately $184.6 million and repossessed properties of around $8.2 million. Seacoast is expected to purchase Grand's three branches with a combination of cash and stock. The estimated value of the transaction is $16.2 million, which represents around 77 percent of the last reported value of Grand's Tier 1 capital.

Dispute resolution ends in almost $150M settlement by Duke Energy

Duke Energy holds the distinction of being the largest electric company in the United States with over seven million customers across six states, including Florida. However, that did not stop several of the company's shareholders from filing a lawsuit against it after its buyout of Progress Energy Inc. in July 2012. Recently, dispute resolution efforts resulted in a settlement whereby Duke Energy will pay out somewhere around $150M to its shareholders.

The lawsuit was filed in the wake of the termination of the company's CEO within hours of when the buyout was finalized. Shareholders claim that Duke Energy made certain misrepresentations regarding the terms of the buyout. Even though the electric company has settled the lawsuit, it denies that it did anything wrong.

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