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Tampa Business & Commercial Law Blog

Campbell Soup discussses corporate restructuring in Florida

In order for a business to thrive, it must be willing to change in order to adapt to an ever-changing market. Even large corporations like Campbell Soup need to make adjustments to remain competitive. In Feb. 2015, the company provided details of its plan for corporate restructuring, which was announced at the end of January at a conference in Florida.

At the core of the company's plan are cost reduction initiatives that are aimed at reducing costs over the next three years by approximately $200 million. The savings could then be applied to those portions of the company in which significant growth is anticipated. However, cost savings are not enough.

Sales of businesses do not always proceed as planned

A Florida developer made a $95.4 million deal to purchase a struggling casino in the gambling capital of the northeast. However, the Revel Casino Hotel is asking its bankruptcy judge to cancel the sale. If the developer is not allowed to go through with the purchase, this will make two failed sales of the casino.

The casino says that it wants to cancel the sale because, for the second time, a dispute has cropped up over the casino's power plant. In addition to the power plant, the nightclubs and restaurants associated with the casino are also disputing the sale for fear of losing their leases. At this point, it is unclear whether those properties were included in the sale to the Florida developer.

Will Radio Shack be able to restructure under Chapter 11?

Radio Shack used to be the country's premier electronics dealer. However, Florida residents may not know that in recent years, the company has sustained steady losses when it was not able to transform itself into a successful cell phone retailer. The company has now filed for Chapter 11 bankruptcy protection and might just avoid going out of business entirely.

As part of the company's proposal to restructure the business, it brokered a deal with its biggest shareholder and lender, Standard General. Radio Shack currently has over 4,000 locations. As part of the deal, the company agreed to sell between 1,500 and 2,400 of them to General Wireless, which is an affiliate of Standard General. Sprint Corp. is ready to set up shop in these locations and will occupy about one-third of the store, which Sprint says will allow the cell phone retailer to provide faster and better service to both current and potential customers. Moreover, in a side deal with Standard General, Sprint would also take over operations of up to 1,750 of Radio Shack's other locations.

Seminoles cancel another bank acquisition

The Seminole Tribe of Florida has backed out of its plans to acquire a bank for the second time within the past 10 months. In May 2014, the tribe had filed an application with the intent to acquire Valley Bank, located in Fort Lauderdale. Tribe leaders planned to rename the location Seminole Bank, as well as inject capital and provide it with a holding company that was owned by the tribe.

The existing bank was described as being undercapitalized, consisting of four branches that were underutilized and assets worth more than $84 million. The application was filed on May 7, but the tribe stopped the acquisition approximately one month later. The tribe claimed that after performing a thorough review, it decided to wait for an opportunity to acquire another bank investment in the near future. During the third quarter of 2014, the tribe publicized its intent to acquire Mackinac Savings Bank in Boynton Beach.

Family Dollar and Dollar Tree set to merge

On Jan. 22, Family Dollar Stores shareholders voted to merge with Dollar Tree in an $8.5 billion deal. The merger will allow Family Dollar to retain its brand identity, and the CEO of Family Dollar will have a seat on the board of directors of the merged company. Almost 90 percent of Family Dollar shareholders approved the merger of the two discount chain retailers.

In early 2014, the CEO of Family Dollar put his company up for sale after making several ill-timed business decisions, including an over-expansion and a pricing change. Although many people speculated that Dollar General would purchase Family Dollar, Dollar Tree ultimately won the bid.

Chapter 11 bankruptcy for Florida businesses

Florida businesses that are in trouble with their debts may choose to reorganize them through filing of a Chapter 11 petition. Through this mechanism, the business's debts can be reorganized while the debtor is able to remain in possession of the business. In some cases, a business's creditors may force a business to file Chapter 11 bankruptcy as well.

A Chapter 11 bankruptcy proceeding begins with filing the petition and paying the filing fee of $1,167 along with a $500 administrative fee. In addition to the bankruptcy petition, the debtor must also file a schedule of liabilities owed and assets owned, an income and expenditures schedule, a statement of financial affairs and a statement of all unexpired leases and executory contracts.

How to settle a business dispute

Starting a new company can be an exciting time in a Florida entrepreneur's life and a validation of his or her ideas. However, it is possible that an emerging startup could become the target of a lawsuit. When this happens, it is important to have a plan that can help protect the company's brand as well as the interest of its owner.

It is recommended that a business owner call an attorney prior to taking any other action. Without representation, attempting to explain actions to the party bringing the suit could do more harm than good. Additionally, it is important to use the services of an attorney who has experience in business litigation matters. After a legal team is built, it should have as much information as possible to help dispute the case in court.

Defunct Aereo to auction off assets

Investors and business professionals in Florida may be interested in a Dec. 24 ruling that allows Aereo to auction off its technology assets designed for TV streaming. After the defunct company settled on an agreement with broadcasters concerning the sales process, a bankruptcy court approved the auction of the assets. The broadcasters involved in the sales agreement included Fox, ABC, NBC and CBS. Aereo agreed to provide the broadcasters with weekly updates regarding the sales process and will allow them access to the auction.

Earlier in 2014, the U.S. Supreme Court ruled that Aereo violated the copyrights of broadcasters by using antennas to transmit programs that were captured live and recorded. Aereo was selling the rights to access the programs to subscribers for up to $12 per month. Five months later, Aereo filed bankruptcy because the entire business model was based on the ability to provide consumers with an inexpensive alternative to cable subscriptions.

Making the most of a business sale

Business owners in Florida may find it advantageous to start considering the potential benefits of having an exit strategy readily available. There are currently around 12 million businesses in the country owned by people nearing retirement and which may be available for sale during the next 10 years. Many of these owners began planning the sale of their business years ago. Owners are advised to consider the tax implications of the final sale during the business formation phase.

Certain types of business structures may be more attractive to prospective buyers. In regards to the sale of the business, an S corporation might have approximately half the tax liability of a C corporation. Owners typically benefit from understanding the tax implications of their business structure years before any final negotiations begin. Failing to properly assess taxes in the formation period may cost some owners millions when closing the sale.

What is a reverse merger?

Tampa business owners who are looking to go public with their companies may be interested in one way to minimize the cost and time involved. Depending on the company's circumstances and long-term interests, a reverse merger may be the best way to go.

Taking a private company public is one way to increase the access it has to capital. Being publicly traded, however, generally involves doing an initial public offering. For a private company to go public, the IPO process can be very expensive and time-consuming.

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