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Tampa Business & Commercial Law Blog

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.

Examining restructuring options for restoring profitability

Florida business owners may be interested in some information on the options available when a company is not performing as it should be. These restructuring plans can help make a business profitable and viable once again. When financial difficulties threaten to shut a business down for good, restructuring the business could be the answer. There are many types of strategies that serve to change either the financial, operational or organizational makeup of the company in order to turn the business around quickly.

When finances are the issue, restructuring often takes the form of debt loading or a debt swap. Debt loading means that the company's balance sheets are adjusted to reflect large amounts of debt in order to enable a repurchase of shares. The shares are then retired, allowing a cash flow that can pay off the debts. A debt swap, on the other hand, changes debt holders' interests into equity shares. This gives them the promise of equity in future earnings and keeps the company afloat.

Preparing to take a Florida company public

Taking a company public can be a signal that the company is ready to be a force in its industry. However, there are some pros and cons that may need to be considered before deciding whether an IPO is right for a given organization. While going public can be a great way to raise money, it also means a loss of control for the company's owners as shareholders have a larger say in how the company is run.

However, going public can be a way for early investors to enjoy more liquidity in their investment. A public company may also be able to use stock options as a way to entice talent to stay with or join the business. Companies that need more money in the future can raise capital through additional stock offerings. Finally, being a public company is considered prestigious.

The difference between an acquisition and a takeover

In the Florida business world, acquisitions and takeovers take place on a regular basis. Many people regard the two terms as interchangeable; however, there are some differences between them. In the case of an acquisition, also known as a friendly takeover, the acquired company has given permission for the takeover. In the case of a takeover, the company may not have given consent for the action. If one company takes over another without the consent of the company being taken over, the action is considered a hostile takeover.

When a company wishes to take over another, it may begin by initiating either a proxy fight or a tender offer. In a proxy fight, the acquiring company will seek to control the target organization's board of directors by obtaining the shareholder's voting rights. To take over a company by way of tender offer, a company will seek to purchase a majority of the company's shares. To accomplish this, the acquiring company might offer to pay more than the market value.

5 tips for Florida owners who plan on selling their company

Across the nation, many business owners are engaging in the sale of their ventures. Such transactions can be complicated, and can be a challenge to make the sale go smoothly. However, there are five tips that may help business owners to pursue a positive outcome as they plan the sale.

First, a successful business sale requires thorough preparation that can take more than a year. Compiling the financial records of the company is one of the elements involved in this step. Second, company owners should set the correct value for their business. A price that is set too low may cause potential buyers to think something is wrong with the property while an inflated price can also be detrimental. An objective third party can help with the appraisal.

5 different types of company mergers

When one or more businesses combine their assets in Florida, this combination is referred to as a company merger. A company merger may be described as one of five different common merger types. Determining what kind of merger is taking place will depend on the relationship between the companies that are merging and the purpose for the merger.

Two of the most common kinds of mergers are conglomerate mergers and horizontal mergers. A conglomerate merger is a merger between two different companies that offer different goods or services and compete in different markets. A horizontal merger, on the other hand, is a merger between two companies that offer the same good or service in the same market. Another kind of merger, called a market extension merger, takes place when two companies that previously sold the same good or service in different markets decide to merge.

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