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Tampa Business & Commercial Law Blog

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.

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.

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