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Tampa Business & Commercial Law Blog

Timing is essential when it comes to corporate restructuring

Part of being a perceptive business owner is being able to look ahead and make any changes necessary to give the company the best chance of success. In some cases, that means knowing whether corporate restructuring is needed in order to keep the business going. Many Florida businesses encounter financial setbacks at one time or another, and the trick is figuring out the best way to deal with those setbacks.

Determining how much restructuring will be needed can be a daunting process. In many cases, it is not necessary to go to extremes in order to turn things around. Restructuring debts, selling assets and eliminating processes that are not contributing to the success of the business can all help give your company a chance to thrive. Determining the best course of action will most likely require the assistance of an attorney and perhaps other advisers.

PacSun becomes latest mall retailer to file Chapter 11 bankruptcy

In the last few years, brick and mortar retailers in malls around the country and here in Florida have come up against a common problem -- trying to compete with the increase in online shopping. Many of those retailers have turned to Chapter 11 bankruptcy in an attempt to restructure their businesses in order to remain alive. Pacific Sunwear of California Inc. recently became the latest mall retailer to file for bankruptcy protection.

PacSun's problems began in the 2000s, but an online presence was not the only challenge facing the company. The skate and surf styles the company was known for have fallen out of grace with younger consumers. When new leadership was introduced in 2009, positive changes were made to fix the problem. However, rapid expansion and high rental rates made those changes inadequate for saving the company.

Dispute resolution might not completely satisfy either party

Florida companies who have disputes with other companies can turn to the legal system to help resolve their issues, but there is a caveat. There is not always a clear winner even if the resolution appears to be fair. Whether the matter is resolved through alternative dispute resolution -- such as mediation or arbitration -- or through the court system, there is a possibility that neither party will be completely satisfied with the outcome.

For example, a county in another state filed a lawsuit against a construction company because there were numerous deficiencies in the courthouse the company was contracted to build. There were cracks, mold and other issues that had to be addressed nearly from the day the project was completed. The county has spent approximately $8 million repairing the building.

Google wins business litigation on appeal

Any time a Florida company enters into litigation, there is the chance that the court could rule against it. If that happens, it might be possible to appeal the decision to a higher court. In some cases, the lower court's decision in business litigation is overturned, and in other instances, the case is remanded back to the lower court for further consideration. Either way, the company is not necessarily bound by the trial court's original decision.

Take, for instance, a case filed against Google for patent infringement. The company that owns the patents that the internet search giant is accused of infringing is considered to be a patent troll in the tech community. SimpleAir filed has filed similar cases against other tech giants such as Microsoft, Apple and Amazon, among others, over patents for "push" notifications.

Company uses stalking-horse bid in Chapter 11 bankruptcy

When a Florida company intends to sell its assets at auction in a bankruptcy, it can be difficult to know what kind of interest the sale will receive from bidders, along with an idea of how much bidders are willing to spend. A stalking-horse bid might be used in order to test the market, avoid low offers and otherwise maximize the sales price when the auction takes place. This is what Jumio, an online identification verification company, has done in its recently filed Chapter 11 bankruptcy.

The company's former management team put it under investigation by the federal government in connection with suspicious stock sales and financial irregularities. The new management team claims that this caused the company to encounter obstacles to new funding. Therefore, filing for bankruptcy protection will provide the change to restructure the business and get back on its feet.

Important facts about alternative dispute resolution

These days Florida companies that are involved in disputes are often looking for alternatives to spending time and money on a court battle. Alternative dispute resolution (mediation and arbitration) are designed to resolve disputes without litigation. However, it can be difficult to decide what method would be best under the circumstances. Therefore, it would be helpful to understand some basic facts about each of them. 

Mediation is a process during which a neutral party -- the mediator -- helps the parties come to an agreement. It is ordinarily not binding on the parties. If either party is dissatisfied with the results, litigation could be filed.

Store closures planned in Sports Authority's Chapter 11

Florida residents are probably familiar with a retailer called Sports Authority. Recently, the popular sporting goods retailer filed for Chapter 11 bankruptcy protection. As part of the case, numerous stores are being slated for closure or sale.

Now that more consumers are shopping online, traditional brick-and-mortar retailers are having to catch up with the ever growing e-commerce market. Those companies who are unable to do so could experience financial difficulties. This appears to be the case with Sports Authority.

When a dispute cannot be resolved without business litigation

Most Florida business owners would probably prefer to settle any disputes they might have with other parties without having to go to court. Resolving the issues outside the courtroom often saves time and money for the parties involved. However, if one party simply refuses to discuss an issue, business litigation might become necessary.

For example, IBM recently filed a lawsuit against Groupon for patent infringement. According to IBM, Groupon used its patents to build its business model without first obtaining the right to use the patents. It is alleged that Groupon received warnings from IBM about the continued use of the patents without authorization but ignored them.

Recent purchase will mean 4 acquisitions for IBM in under a year

Truven Health Analytics analyzes and manages the plethora of information generated by the health care industry. Approximately 8,500 insurers, government agencies and hospitals -- including some here in Florida -- are clients of the company. If its purchase of the company goes through later this year, it would mean four acquisitions in this area for International Business Machines Corp. in under a year.

In 2012, a private equity firm called Veritas Capital purchased Truven. At that time, the company sold for $1.3 billion. IBM agreed to pay $2.6 billion for the company now, which will be the largest of its acquisitions. IBM is gathering artificial-intelligence that will analyze, interpret and predict data patterns.

50 Cent might have ruined his chances for a bankruptcy discharge

As the old saying goes, a picture is worth 1,000 words. As it turns out, this saying has become a central point in the bankruptcy filed by Curtis James Jackson III. Florida music fans know him by his name in the entertainment industry: 50 Cent. The words being spoken by three pictures of him could cost him a discharge. As it is, the bankruptcy judge presiding over his case has called him back into court for an explanation.

The photographs, which have shown up on several social media sites, show the 40-year-old entertainer surrounded by money. In one photo, there are piles of money inside a refrigerator. The second one shows the word "BROKE" spelled out in bundles of money. The third shows Jackson sleeping with the money. On Instagram, he discusses purchasing a home in Africa.

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