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Tampa Business & Commercial Law Blog

Radio Shack says dispute resolution worked in gift card debacle

Many Florida consumers keep gift cards until they find something they really want or need. Some RadioShack customers held their gift cards too long and were unable to redeem them when the company filed for bankruptcy. One state decided to file a complaint against the retailer on behalf of those consumers, and other states joined in as well. A settlement was recently reached through an alternative method of dispute resolution, which kept the parties out of court.

The Bankruptcy Court, and the attorney generals of several states, will still need to approve the settlement. However, many of the people holding nearly $46 million in gift cards could receive either all or a portion of the value as a result. Reports indicate that priority will be given to consumers who purchased gift cards for themselves or others, and they could receive the full value of their cards, along with others who own cards under specific circumstances. People who received them in lieu of a cash refund or as the result of a dispute may only get a portion of the value back.

Company will use Chapter 11 to put restructuring plan into action

Oil and gas companies across the country have fallen on hard financial times since the cost of crude oil plummeted. Lower gas prices may be good for Florida consumers. However, companies such as KKR's Samson Resources are resorting to filing Chapter 11 bankruptcy in order to reorganize and stay in business. 

Samson Resources recently finalized its plan to restructure the company. The company's second lien holders will ultimately end up with control over the company. Cash payments of up to $485 million will reduce Samson's debts and give it the opportunity to become a viable company again.

Corporate restructuring could help turn a business around

Sometimes, it can be difficult for a Florida business owner to see the forest for the trees once a business begins to decline. Filing for bankruptcy protection does have its benefits, but it may not be the first or best solution for a company. Corporate restructuring could help turn the business around without involving the Bankruptcy Court.

Many creditors are willing to renegotiate existing agreements in lieu of writing off the debt. Knowing where to start, however, can be problematic. Involving a Florida attorney who is familiar with corporate reorganization is typically a smart choice.

Business litigation filed by company officers against partner

Many of Florida's small businesses are owned by a group of people who got together for a common goal. Each of them brings a certain skill set to the business, and the goal is to make the company successful. Sometimes, however, a member of the group fails to live up to his or her obligations to the company, which puts the business in jeopardy. If the conflict cannot be worked out amicably, the other members may file business litigation.

An out-of-state concrete company does projects on streets, highways and bridges, among other things. Two of the company's officers claim that they discovered that a third officer was embezzling from the business between April 2014 and June 2014. Allegedly, the officer's indiscretion was discovered in Dec. 2014.

Chapter 11 bankruptcy recently filed by A&P grocery company

As many Florida businesses know, a critical error in planning could prove disastrous for a company's success. This could be part of the reason why the A&P grocery company has filed for Chapter 11 bankruptcy for the second time in the last five years. At one time, it was the leading grocery company in the country.

Unfortunately, the company failed to adapt to the changing market place. Sources say that the company has failed to even update its look in order to appeal to today's consumers. Competitors were able to easily surpass the infamous grocery chain and grab some of its market share.

Shareholders lacked standing in Facebook business litigation

Florida readers may remember that Facebook went public on May 18, 2012, with a per share price of $38. By Sept. 4, 2012, the price of the social media giant's stock dropped to just $17.55 per share and stayed below the initial public offering price for over a year. Shareholders filed business litigation against Facebook and others, alleging that vital financial information was kept from them, which would have affected their decision to purchase the stock.

In Feb. 2013, a U.S. District Court dismissed the case. The 2nd U.S. Circuit Court of Appeals recently upheld that dismissal. The court ruled that the shareholders lacked standing to file the lawsuit because they did not own shares at the time of the alleged misconduct.

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.

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