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Tampa Business & Commercial Law Blog

Rapper 50 Cent files for Chapter 11 bankruptcy protection

Florida fans of rapper 50 Cent may already know that his net worth was last estimated to be somewhere in the neighborhood of $155 million. That may be why some were surprised to hear that he recently filed for Chapter 11 bankruptcy protection. His attorney released a statement indicating that the rapper -- whose real name is Curtis Jackson -- needs the time to make some financial decisions in order to reorganize his finances without the interference of his creditors.

As the bankruptcy progresses, Jackson believes he will be able to continue pursuing his career as an entertainer and remain involved in his business interests. Like any Florida company that has filed Chapter 11, Jackson will be required to put together a reorganization plan that will be presented to the court for approval. If approved, Jackson will make payments under the plan for a specified amount of time.

Some acquisitions receive intense scrutiny from states and feds

When a company as large as Aetna wants to acquire Humana, another large insurance carrier, nearly everyone takes notice. Antitrust concerns regarding mergers and acquisitions this large normally garner federal scrutiny. However, this $33 billion deal is making several states -- including Florida -- take a much closer look.

The main concern of state regulators is whether the merger will adversely affect health care insurance premiums and/or the services patients have access to now. The U.S. Attorney General is heading up the review of this proposed acquisition, but state insurance commissioners could have significant input since local insurance regulations are often substantial. Even the American Medical Association is concerned with the ramifications of the deal.

Florida to receive $3.25B in settlement of BP business litigation

It has been nearly five years since the BP oil spill, but most people will not soon forget it. This is especially true for the states, local governments and individuals who have filed business litigation and other claims against the oil company. Recently, four states reached an $18.7 billion settlement with BP, and Florida is said to be receiving $3.25 billion of it.

BP has spent -- and will likely spend -- billions of dollars on claims, fines and clean up of what can only be described as an ecological, environmental and economic disaster. Earlier this year, a federal judge found that the rig explosion that dumped nearly 3.19 million barrels (approximately 134 million gallons) of oil into the Gulf constituted "gross negligence" on BP's part. The company appealed this judge's ruling and opened itself up for penalties under the Clean Water Act. A ruling on this penalty is imminent.

Energy company sites arbitration award as catalyst for Chapter 11

Florida readers are most likely already aware that the energy market had a major downturn in 2014, and many energy companies are experiencing financial hardship as a result. One of those companies is Saratoga Resources, which has managed to keep itself afloat until recently when it was hit with a $3.7 million award in an arbitration with another company. Saratoga decided to file for Chapter 11 bankruptcy protection for itself and some of its subsidiaries.

Saratoga is currently pursuing its own legal claims against Harvest Operating, which is the company that was awarded the $3.7 million in arbitration. Saratoga hopes that the resolution of its claims will offset at least part of the award. If that does not happen, the company will need the protection and guidance of the bankruptcy court to reorganize.

Should a Florida company join in making acquisitions to keep up?

Throughout nearly every industry, there seem to be times when businesses change hands through mergers and acquisitions. During these times, a Florida business may begin to wonder whether it should be participating in the industry consolidation that appears to be going on around it. However, just because there is an increase in acquisitions does not necessarily mean that move is right for every company.

For example, a consolidation effort seems to be going on in the superconductor and chip making industry. Reports indicate that there are billions of dollars' worth of acquisitions in the works. If they are finalized and completed, it could change the dynamics in the industry.

Corporate restructuring means Gap will close some stores

When the housing market collapsed, consumers here in Florida and across the country were either forced to tighten their belts or did so voluntarily. Either way, they were not buying new belts at retailers like Gap, Old Navy and Banana Republic. Now, Gap, which owns all three clothing retail brands, is having to do some belt-tightening in the form of corporate restructuring in order to stay in the market.

The only stores that the company is closing now are Gap stores. Here in the United States, an estimated 175 stores are going to be closed, and an undisclosed number will be closed overseas. Factors such as performance and location are being used to choose the stores that will close their doors. Out of the reported $16 billion a year that the company makes, the targeted stores bring in around $300 million in sales per year.

Florida radio personality faced with business litigation

Radio personalities are known for their on-air antics. Therefore, it may not come as any surprise that a central Florida radio host arranged to be served with divorce papers on the show. Not only is he going through what has been described as a messy divorce, but now a business litigation has been filed against him for defamation.

His estranged wife says that she suffered backlash as a result of what he did to the point where she fears for her life. She claims that she and her children are not safe due to the radio host's antics and statements regarding his divorce. The radio personality plans to file a counterclaim.

FCC reviews of mergers are often seen as subjective

When two Florida communications companies decide to merge, if may be necessary to obtain the approval of the Federal Communications Commission. Unfortunately, it can seem as if the FCC's review of mergers is more subjective, and two seemingly identical mergers could have different outcomes upon review. This can make it a challenge for businesses in the communications industry.

The focus of these reviews is to ensure that the merger does not violate antitrust laws. This means that the company that survives the merger will not become a market powerhouse to stomp out the competition. However, it appears that there are ways to skirt around this issue by making concessions to the FCC. This is why there is no guarantee that a merger will be approved or disapproved based on the outcome of a similar review.

3-year legal battle sends gun maker into Chapter 11 bankruptcy

Any Florida business owner who has been involved in a contentious legal battle knows that it can be both time consuming and expensive. When litigation expenses coincide with a drastic drop in profits, financial losses can be devastating to a struggling business. This type of perfect storm is what has caused an out-of-state gun maker to file for Chapter 11 bankruptcy.

At the heart of the litigation is the question of whether the former owner, who lost his arms manufacturing license due to his participation in an illegal scheme that violated a 2006 contract with the U.S. Army, actually sold his inventory and gun manufacturing equipment to the current owner of Vector Arms Corp. At the same time, the company's sales went from $1.2 million in 2013 to just $650,000 in 2014. This downturn in business is not unique to Vector since business has slowed for many small arms manufacturers. In fact, many have been forced to shut down.

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.

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