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WHY HIRE A BUSINESS LITIGATION ATTORNEY FOR YOUR BUSINESS?

1. Protection of business interests
Business litigation attorneys are focused on protecting your business interests. No matter what issue a business litigation attorney is asked to provide counsel on — a new contract, a compliance matter, partnership conflict, a new hire or employment issue, or something else — you will have someone who is devoted to providing timely legal counsel and protecting the interests of your business.

2. Specialization of focus
Business litigation attorneys focus on commercial legal conflicts — which means you do not have to. Many business litigation issues are not routine matters. In fact, conflict which may lead to litigation can be very disruptive to your business. Having a business litigation attorney available to assist you when conflict arises or liability may be a concern means you have a go-to person who is prepared to focus on addressing these issues so everyday operations are not sidelined.

3. Expertise in business conflict
Business litigation attorneys can help determine whether litigation is the right course of action. Perhaps most important, a business litigation attorney can help you and your business decide whether and how to pursue a legal matter. A business litigation attorney can also recommend the most cost-effective and expedient strategies for resolving disputes — again, looking out first for the best interests of your company.

Please contact us to discuss your business.
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Seller’s Duty to Disclose

The real estate market in Atlanta and surrounding cities is considered a sellers’ market, meaning that the amount of real estate available is limited, allowing sellers to sell their property at a higher price. However, before you sign on the dotted line and pass over those keys, here are some things to remember regarding sellers’ disclosure requirements.

Georgia law requires that sellers of real estate, both commercial and residential, inform buyers of any material or important defect with the property. Sellers do not need to disclose any condition on the property that a buyer would discover upon a reasonable inspection. Buyers must use due diligence to inspect the property and discover defects that could reasonably be discovered. According to O.C.G.A. 44-1-16, sellers are not required to tell a buyer if a diseased person ever lived in a home, or if a homicide, felony, or any other death occurred on the property. However, the seller must honestly answer any direct question a buyer asks. The only time a seller does not have to answer a buyer’s question is if it is protected by the Federal Fair Housing Act (any question based on race, color, religion, sex etc.).

If a seller fails to inform a buyer of a material defect in the property, the buyer has several causes of action they can bring against a seller including fraud, misrepresentation, and breach of contract. Even if a seller had a property disclosure statement in the contract, which is designed to disclose to a buyer all known material facts relating to the condition of the property that are not readily observable, it will still not protect them from these causes of actions if it is discovered that the statement was not full and accurate.

If a buyer brings a legal action successfully against a seller, the buyer is entitled to rescind the contract and is entitled to reimbursement for the price of the property and any other expenses incurred because of the seller’s failure to disclose. The buyer could also keep the house and require the seller to compensate the buyer for the reduced value of the house because of the defect that the seller failed to disclose.
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Non-Compete Agreements

Georgia is a "right to work" state as well as a "fire at will" state generally allowing workers to come and go as they please, while giving employers the ability to cease the employment of any employee at any time and for any reason. A non-compete agreement is essential for many businesses to protect their trade secrets and client list from competitors. A non-compete agreement is a contract between an employer and employee that restricts the ability of an employee to engage in business that competes with his or her current employer. Historically courts are hesitant to enforce non-compete agreements and will look closely at the agreement closely to ensure that it is reasonable. As an employer, it is important that your agreement is reasonable and enforceable. Georgia law is becoming more employer-friendly regarding the enforcement of these agreements. Georgia is considered a “blue pencil state” which means that if any portion of the agreement is found to be to over broad or restrictive then that provision is void, and the judge can modify the contract to make it enforceable. Holland Ins. Grp., LLC v. Senior Life Ins. Co., 329 Ga. App. 834, 766 S.E. 2d 187 (2014). Even with this it is important to ensure that the non-compete is narrowly tailored to avoid unnecessary litigation.

Here are some common factors that courts look at to determine whether a non-compete agreement is enforceable:

1, The employer’s legitimate interest in protecting their business with the non-compete agreement.
  • Georgia courts will enforce a non-compete agreement only if its restrictions involve nothing more than is reasonably necessary to protect an employer's legitimate business interests, and if the agreement reasonably and specifically defines limitations with respect to duration, activity, and territory. For example, if you introduced all your best customers to your employee, you may have a legitimate interest in keeping them from going to a competitor and luring those customers away. Similarly, if your employee has trade secrets that could hurt your business if that employee were to divulge that information to a competitor, that would be a legitimate interest a court would protect.
2. The employee must have specific responsibilities in order for the non-compete to be enforceable against them.
  • Under Georgia Code 13-8-53, a non-compete agreement can only be enforced on certain types of employees. The employee must be a (1) sales personnel; (2) brokers; (3) management personnel; and (4) anyone performing the duties of a "key employee" or "professional. The employee must regularly direct the work of two or more employees, have a position of management, and have the authority to hire and fire other employees.
3. The geographic scope of the restriction.
  • Non-Competes usually describe a restricted area in which the employee cannot compete. Oftentimes this restricted area is determined based on a certain mile radius from employer headquarters or facilities or by a list of towns or counties in which the employee is prohibited from competing. Restrictions on where the employee can go after leaving their job depends on length of time of the restriction and the nature of duties that are restricted. O.C.G.A. § 13-8-53 provides that employers may now “estimate” the employee’s future territory when defining the area to which the non-competition provision applies. According to the statute, the phrase, “the territory where the employee is working at the time of termination,” or language similar to that, is considered sufficient to describe the geographic area where the employee will be restricted from competing with the employer, so long as the employee “can reasonably determine the maximum reasonable scope of the restraint at the time of termination.” O.C.G.A. § 13-8-53(c)(2).
4. The length of time the non-compete agreement is enforceable.
  • The general rule is that the duration of the agreement should not exceed the time reasonably necessary to protect the employer’s legitimate business interest. In regards to a former employee, Georgia courts will presume that a time restraint of two years or less in duration is reasonable and will presume that a time restraint more than two years in duration is unreasonable. If the non-compete is between a distributor or franchise, then courts will presume that any time restraints three years or less is reasonable and anything over three years is unreasonable. The clock starts from the date of the termination of the business relationship. O.C.G.A. § 13-8-57.
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Post-Judgment Collection

You won your case and have your judgment. Now what? How do you enforce it or collect on it? Once a judgment is granted, it is left in the creditor’s hands to take the appropriate steps to enforce it and collect the amount due.

Voluntary payments are of course the preferred method of collection, but many times a creditor is forced in a situation where the debtor refuses to pay. If a debtor fails to pay a monetary judgment or is unwilling to make payment arrangements, the creditor may employ one or more post-judgment collection techniques like interrogatories, garnishments, and liens to collect the balance.

The key to effective post-judgment debt collection for any creditor is information. Knowing what, if any, assets a debtor has and where they are located are critical to ensuring the possibility of collecting an outstanding debt. Once equipped with the appropriate information, a creditor may timely and aggressively pursue collection of any debt.

If you have any questions about post-judgement collection, feel free to contact us.
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Conflicts Concerning Lease Agreements

Whether you are a commercial landlord, tenant, broker or an asset or property manager overseeing housing or another piece of real estate, you will eventually encounter a conflict concerning a lease. When it comes to lease agreements on property, there are numerous potential conflicts, including disagreements over common area maintenance, property tax increases, re-location expenses, nonpayment of rent, guaranty default, maintenance or repair failures and violations of local ordinances.

Normally in commercial leases, non-monetary defaults and monetary defaults are differentiated. Non-monetary defaults occur when one party breaches a material term of the lease such as failure to maintain the premises. Monetary defaults occur when a party, usually the tenant, fails to meet its financial obligation.

When a default caused by either party occurs, it is important for the harmed party to use caution and be sure that any remedial action taken will stand up in court. For example, if a commercial landlord uses self-help remedies to evict a tenant and does not follow proper procedure under the law, there could be negative legal repercussions for the landlord, and the landlord, despite being the harmed party under the lease, could be liable for any damages, monetary losses, injuries and attorney’s fees suffered by the tenant.

If a party is in default of a lease agreement, make sure you review the default and remedies section of the lease before taking any actions. If you have any questions about your commercial lease agreement, feel free to contact us.
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Personal Liability for Business Debt

One of the biggest advantages of becoming a corporation or LLC is that the owner will not be held personally liable for business debt. However, there are some instances where creditors and courts can “pierce the corporate veil” and find owners personally liable for the debt of their companies. Here are some business tips that owners should follow to protect themselves from personal liability:

1. Make sure that there is a clear separation between the company and the owner. Make sure the business has its own accounts and assets that are separate from the owners' accounts. Also, keep assets like equipment and property separate.

2. Follow corporate formalities. Owners need to update their bylaws, maintain business status, and hold annual meetings for the members or managers.

3. Make sure there is a reasonable initial investment in the corporation or LLC so that the business is adequately capitalized. Courts will look at whether a company's level of assets available to creditors is fair.

4. Make your corporate or LLC status known. Place your status on your business cards and create invoices for your clients with your company's name.

Remember if a judge cannot distinguish between what belongs to the business and what belongs to the owner, then the owner is at risk for personal liability. If you have any questions about your liability, feel free to contact us.
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Should Your Business File Bankruptcy?

Most business owners borrow money to start, build, and sustain their companies, and the business world is ripe with ups and downs, financially speaking. Unfortunately, for many companies, the downs often seem too difficult to survive. In situations of financial difficulty, as debt piles up and vendors are no longer getting paid, many business owners are at a loss as to how to recover.

Bankruptcy should be your last option to save an ailing business. Consider financial restructuring, debt restructuring, and other turnaround options to address the problem instead. Why? Only a small percentage of businesses that file a Chapter 11 bankruptcy ever recover. Chapter 7 bankruptcy, total liquidation of your business, is an even less desirable option. Moreover, bankruptcy can be extremely expensive. There are many misconceptions that accompany commercial bankruptcy. One of them is that it will provide companies with a new start from which they can rebuild. Unfortunately, this is rarely the case with small and middle market companies.

Below are some issues to consider:

1. Is bankruptcy really necessary?

2. Do you want to close your business or do you think you can operate on a profitable basis in the future?

3. If you want to continue operating your company, do you have a realistic plan as to how your company will return to profitability?

4. Are some or all of your company’s debts guaranteed by you or others?

5. Do you need immediate relief for a particular problem, such as foreclosure, repossession, garnishment, eviction, or utility shut-off?

If you would like to discuss your business’s financial health or any of the issues above, please contact us at Johnson Litigation Law, LLC.
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Review Carefully Before Signing Contracts

Businesses, no matter the size, are presented with contracts on a regular basis. Many times business owners are unsure of what they actually signed or misunderstand a critical term in the contract. Here are 6 tips to keep in mind BEFORE signing a contract.

1. Does the contract have all the parties full name and addresses? Are those the parties that you understand to be responsible for the terms of the contract?

2. Does the contract clearly state all tasks to be performed by each party?

3. Does the contract clearly assign liabilities for each task?

4. Does the contract clearly state prices and payment method?

5. Does the contract state how disputes are resolved?

6. Does the contract assign responsibility for attorney's fees should there be a dispute?

7. Do you understand all the terms of the contract? If not, you should have an attorney review the contract for your protection.

If you have any questions about a contract, feel free to contact us.
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