The Business Litigators
The Business Litigators
The Business Litigators
The Business Litigators
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Bitcoin is a cryptocurrency which is an electronic form of cash. It is decentralized without the need for a central bank or administrator. The need for an intermediary is none, as it can be sent
from user-to-user. Since its technology is relatively new, litigation surrounding this type of exchange is being closely followed by those who have invested in it and those who are wanting
to know of the direction of the future in exchange. Of course, it would not be long until the way transactions took place would be tested in the courts on an international and local level.
Since its reach has no real boundaries, we will look to a decision held in Shenzhen, China. A ruling was made involving the dispute over an equity transfer case. The matter then went before
the International Court of Arbitration. The currencies that the case concerned included: Bitcoin, Bitcoin Cash, and Bitcoin Diamond. There was so much of a buzz that the decision generated
that the Cryptocurrency news provider posted:

“Chinese court confirms Bitcoin protected by law. Shenzhen Court of International Arbitration ruled a case involving cryptos. Inside the verdict: CN law does not forbid owning & transferring bitcoin, which should be protected by law bc its property nature and economic value.”

The case, therefore, has reached to affect property and economic rights as viewed by the law. How it affects us here in the USA is yet to be seen. The decision applied followed a ruling held
in Moscow. The very classification of Bitcoin and other digital currencies as “property” could even lead to tax implications. Let’s remember this: Bitcoin and cryptocurrencies are not
considered currencies, and are not backed by the government or law. However, they are not illegal. That is the backdrop that is being worked within the dealing with the relatively new medium
of exchange. Basically, the ruling means that there is no prohibition against Bitcoin ownership and transfer in China. Continue reading

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Chicago’s elite Grace restaurant has been shuttered for nearly a year, but the acrimony surrounding its implosion continues to be played out in Illinois courts.

Grace closed abruptly in late 2017 amid a dispute between its star chef and owner, who is now suing the chef and former manager/sommelier for tortuous interference and breach of fiduciary duty.

Michael Olszewski, who opened the Randolph Street hot spot with Curtis Duffy and Michael Muser in 2013, claims Duffy and Muser worked at events in far-flung locations around the globe outside of their employment with Grace, ordered and shipped food on the restaurant’s accounts for these events without his permission or compensation to the business, according to the complaint filed in Cook County Circuit Court.

Olszewski’s suit also claims Duffy and Muser “hatched a scheme” to solicit Grace’s employees to leave the restaurant and thereby force its temporary closure, resulting in lost profits and severe damage to business expectancies. The lawsuit seeks compensatory and punitive damages for the harm caused by Duffy and Muser’s “egregious misconduct.”

Duffy’s culinary skills earned Grace three Michelin stars, making it one of only two Chicago restaurants to gain that distinction. Before the establishment closed, Duffy and Muser tried unsuccessfully to buy it from Olszewski. He accused Duffy and Muser of coming and going from Grace as they pleased, in Muser’s case taking spontaneous and unapproved vacations, with increasing frequency. Continue reading

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The #metoo, can be viewed as a disease in business practice.  In its wake, thousands of women have come forward to raise complaints of sexual harassment.  Workplace harassment does not simply remain in the realm of celebrity, its reach is much greater.  People are getting worked up about it and are taking sides.  Statistically speaking, since the movement began, the Legal Defense Fund has received more than 3,500 requests for assistance from workers in more than 60 different industries in all 50 states. Any business anywhere could be targeted for some event that could have happened for a time period prior to the current management in place.

In the past, people have not spoken up because of the fear.  With taking a stance can come the loss of job which leads to a loss of financial security.  The risk was too great.  This had lead to many debates and reconsideration of the way in which business practices transact business and of its operation.

Businesses are looking towards countering that culture.  Getting their name enmeshed in a lawsuit looks like a poor reflection on them from a commercial perspective.  Consumers have that much power.  That is why bystander protections are measures being introduced.  Ensuring policies that already exist in manuals are enforced or stood by are another way of standing firm to the commitment of culture. Continue reading

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Trump and Today’s America

Part of the Trump Brand has come about from a success story that has arisen due to being able to overcome being bankrupt.  Trump turned around and transformed the brand of a Reality TV show series by the name of, “The Apprentice,”  to eventually triumph from TV into becoming the President of the United States of America.  Did his bankruptcy define his business? Most likely not.  A story emerged, one of a businessman transition to the leadership of a country.

The Decision to File

Of course, filing a bankruptcy is a huge decision.  Sometimes the trigger can be circumstances beyond control.  Even in today’s age, there may still be a stigma applied, as some view it as a moral failure.  As it stands and within a year, we have seen corporate bankruptcies at their highest point.

When a company files for a Chapter 11 bankruptcy, it seeks protection from creditors in trying to restructure debt.  The judge oversees this.  Effectively, it transfers the ownership of the company from shareholders to the creditors.  For the most part, shareholders are the ones that suffer the greatest loss.  Creditors are normally made whole.

What is at Stake?

The tax scheme makes allowances when creditors and shareholders of failing companies write off losses.  In 2018, the new tax law adds uncertainties, but shareholders and creditors knew that losses incurred in 2018 would face the new corporate tax rate of 21%, and so the government would only pick up 21% of the losses. Continue reading

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A free market requires a free labor market, and yet many of the politicians who claim a free market as a central component of our democracy actively work against the formation and maintenance of a free labor market.

A free labor market means workers are free to work for the companies they want to work for, doing the kind of work they want to do, but many companies have been using things like non-compete agreements and anti-poaching restrictions to keep workers from leaving to work for competitors.

The problem with such restrictions is that a labor market in which employees have more options is a more competitive labor market. When employees have the option to leave to work for another company that’s offering them more money, they have the opportunity to either leave their current employer in favor of higher wages or to stay and negotiate higher wages with their current employer. More freedom means more bargaining power, but companies have been actively working to restrict that freedom – and by extension, that bargaining power.

Anti-poaching restrictions have become the latest method companies have used to try to keep employees right where they want them. Fast food restaurants, in particular, have been using anti-poaching clauses in their contracts with franchisees in order to make sure franchisees don’t poach employees from each other. Such clauses usually forbid franchisees from hiring applicants who are current or recent employees of the parent company or any of its other franchisees without the express permission of the current or previous employer. Continue reading

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A suburban business in Chicago is under scrutiny for implementation of a system in which the way the business allegedly sterilized caused emissions of a cancer-causing substance. The operational facility provides sterilization services to the medical, pharmaceutical and food industries.  Ironically, the health damage by its emissions cause might make locals worse off.

Consequently, a change was made to equipment that was being used had been installed.  Governor Bruce Rauner then, eventually, requested closing the plant completely which was also co-owned by his former private equity firm.  It was not looking good on him and locals were very angry.  Whether or not, and the type of action that would have been taken in circumstances, but for, that situation are not known. Local politicians added pressure and since we are dealing with cancer, people are not taking this issue lightly at all.

Right now, as it stands, the Attorney General, Lisa Madigan, believed that further investigations of air quality with analysis by experts would be necessary in order to make a case.  Perhaps, the one-off situation is not enough to gauge that there has been negligence or any breach that is substantial.  This would constitute as information that only a state or federal Environmental Protection Agency would be able to give in such circumstances.

It was the likelihood of the emissions ranged from “probably carcinogenic” to “carcinogenic to humans,” that became grounds for tests to be expedited.  It is speculated that the new system is less harmful, but can the damage be reversed?  Even a reduction by 90 percent cannot do much to whatever is out there in the atmosphere.  These issues are problematic, affect multiple residents’ health and will require in-depth investigation.  A school is even within the vicinity of impact.  If a class action arises, this will be one not taken lightly. Continue reading

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With the increase in sensitivities to gender and race discrimination and the resulting lawsuits, more corporations are seeking ways in which to help cater for the divisions in gender and background of employees.

Sexual harassment suits have gone up in the light of the #metoo and many other ethnic-related and religious identities are not holding back when it comes to taking behavior that they do not approve of to the courts.

Some suits have gone so far to include the following words in their pleadings as proof of an alleged racist or sexist culture:

A consumer bureau “maintains a biased culture replete with harmful stereotypes regarding its racial minority and female employees that infect its policies and decision-making, including performance evaluations, compensation, and promotions.” (U.S. Consumer Financial Protection Bureau have charged they were discriminated against by officials of the bureau once headed by Cordray.) 

In that suit, the bureau has responded by stating Cordray “worked hard to build a more inclusive and diverse workplace, launching initiatives to ensure women and minorities receive fair treatment and fundamentally reforming the management practices of the bureau. Civil rights leaders stood by Director Cordray then, and they stand by him now.”

This has forced some companies to change their approach when it comes to steering away from segregated groups within a workforce environment.  People who are not included, do not divest and are more likely to drive up costs for employers overall.  Disgruntled, angry employees take it to the news and courts, leading to bad publicity and unnecessary costs. Continue reading

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The Non-Compete

All contracts are subject to scrutiny before the law, especially when a dispute arises, including employment ones.  The importance of fair and just contracts always comes up in the media spotlight and the courts.  If a contract is too much in favor of one party who has far more bargaining power over the other party, it may violate the law. Employers should take this into consideration when drafting terms and have them reviewed by attorneys who are familiar with restrictive covenants within the scope of employment law.

One Clause Cannot Fit All Employees

A “one size fits all policy” when drafting restrictive covenants, will risk the clause being unenforceable. This is especially true if the demand is unreasonable or not necessary to protect legitimate business interests. When entering into the employment domain, covenants are imposed on employees restricting what they can and cannot do once they leave the job. Violations and restrictions are what employers often look for when they wish to seek enforceability of a contract that was entered into when employees decide to move elsewhere. Typically, such agreements prohibit the competing with an ex-employee for a certain period after the employee has left the business, or prevents the ex-employee from soliciting or dealing with customers of the business by using knowledge of those customers gained.  This issue was a reminder in the case of Dumrauf, where the Courts later deemed teh non-compete agreement to be unenforceable because it was too restrictive.

The Illinois Attorney General, Lisa Madigan, required WeWork Inc. to end its use of an overly broad clause for almost all of its employers. Overall, over 1,800 employees agreements were altered to become a less restrictive version and 1,400 agreements were rendered too restrictive voided.  The agreement went so far as to prohibit all employees from taking jobs with competitors, including cleaners, assistants, baristas and others who earn close to minimum wage.  It was viewed as being a career obstacle which did not allow people to make better decisions with their lives. The clause appeared to be one set for all employees and barred them for working with competitors after they left.  It also prohibited a worker from working anywhere where WeWork did.  That is a cost that WeWork had to bear as a social stigma in society, legally and will have a negative image in the minds of future employees as well.  Building back trust and rapport will be difficult. Continue reading

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If you’re going to claim that the use of certain content counts as fair use, you should probably know what “fair use” means.

The fair use doctrine allows people limited use of copyrighted content without the need to get permission from the copyright holder first, but the law is specific about how and under what circumstances someone can claim fair use of a particular piece of content.

First, they can only use part of the content. Just reproducing the entire piece and distributing it on your own is not fair use.

Second, fair use is generally used to make a point about the content being used, such as in a parody or a review.

Third, whether the work in question is of a creative or factual nature.

Fourth, whether the person using the content for fair use intends to profit off the material in any way.

According to Judge Thomas M. Durkin, Jasmine Enterprises Inc. did not meet any of those requirements when claiming that their use of the three copyrighted photos they stole from FameFlynet constituted fair use. Continue reading

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The primary laws that govern the disclosures to shareholders and the marketplace include the Securities Act of 1933 and the Securities Exchange Act of 1934 and the rules adopted by the Securities and Exchange Commission (the “SEC”).  These laws have come subject to scrutiny in the Camping World Holdings, Inc. who suffered financial losses in excess of $100,000 due to a failure to disclose.  Some of their executives have been charged with failing to disclose material information during the Class Period, violating federal securities laws.

Generally speaking, causes of action have been interpreted by the federal courts to specifically set forth in the statutes and to address claims brought as class actions.  These types of claims are often brought forward and against the corporation, its directors and officers, purchasers and sellers of securities, persons otherwise having a duty to investors who participate in the alleged disclosure violation.  Sometimes accountants and underwriters and persons required to make public filings with the SEC.  The history behind it is entrenched in common law notions of disclosure claims such as fraud and negligent misrepresentation. Continue reading