How not to implement a social media policy

One of the really interesting things about living in Mobile, Alabama is our celebration of Mardi Gras.  It began with the French settlers in the 1700’s and was revived after the Civil War by some unruly gentlemen objecting to the Yankee Occupation.

Of course, Mardi Gras wouldn’t exist without Mardi Gras societies.  The modern version of these institutions is generally a 501(c)(3) non-profit corporation with a board and various officers.  Most of the time, the organizations strive for anonymity of its membership, hence the wearing of masks during parades.  It’s all just one great big jolly time.

Until there are rules.  Due to the evolution of Facebook, Instagram, and the like, some organizations are adopting social media policies that prohibit members from posting pictures or comments which might identify that person as a member of the secret society.

Several members of one such group recently retained me to help them with a serious problem: the powers that be appear to be acting in a capricious and biased manner toward a handful of members.  One of these members was deemed to have violated the group’s social media policy, despite the group not actually having a social media policy.

A cordial letter to a lawyer on the board has resulted in a written social media policy being proposed for adoption by the society.  So far, so good, right?

Unfortunately, last weekend the head cow, er, president of the organization held a family celebration.  Band, lots of guests, food, spirits.  All captured in photographs, some of which have been posted to social media. Including one of the, um, president wearing his head cow, er, president’s hat.

Don’t know how this is going to turn out, but, hey, rules are rules.  And it’s their rule.

If at first they don’t succeed……

I recently was asked to review a business for the purpose of either getting out of their franchise or negotiating with the franchisor about a possible modification to the business.

As Momma used to say “get your money up front!”

A client had purchased a restaurant by buying the LLC from the previous owner.  Well, most of it, anyway.  For some reason, the client only purchased 95% of the outstanding membership interests of the LLC, not the whole 100%.  I’m still not certain what the rationale behind that was.  What I am certain about is that this deal was a train wreck, and the client is doing everything in their power to make it worse.

If you are going to buy an existing business, your due diligence should include review of ALL pertinent documents, including:

  • leases
  • franchise agreement
  • vendor contracts
  • tax returns
  • bank statements
  • financial statements

It is always safer for a business purchaser to buy the assets of a pre-existing business rather than the stock or membership interests of the company, so that there are no hidden surprises.   However, that may not always be possible.

If you are faced with purchasing an existing business, be certain that you have the appropriate professional review documents and financials before you sign the purchase agreement, whether the professional is a lawyer, qualified business intermediary or accountant.  The fortune you save just might be yours.

2018 Alabama Business Law Conference

I’ve been invited to speak on Issuing, Dividing and Transferring LLC Member Interests at the 2018 Alabama Business Law Conference.  The event will be held on October 26, 2018 in Birmingham.

I attended this Conference for the first time last year and find it to be very informative with a wide range of excellent speakers. I plan on putting this on my CLE Schedule as often as possible.

Stay tuned for updated information on this Conference as it becomes available.

Be the smart one – a little advice can do wonders for your business

Smart business owners know when to ask for help. Proud business owners go out of business.
I have a client that sent a detailed email about spinning out a portion of their assets to an employee, who would set up his own company to contract with not only their former boss, but some of the competition too.
Previously, I would get a two minute phone call asking me to do something that was completely vague and would lead to a series of calls to their bookkeeper or accountant over a few week period that would finally result in whatever it was.
This time the email was direct and on point, with almost all of the information that would be necessary to complete the task. Being curious I called and found out that they had reached out to a business consultant that had come in and restructured the business in a direct, no-nonsense and reasonable way. Hopefully profitable as well.
From time to time, most folks could use a little advice. Don’t let pride get in the way of being a success!
If you’d like help with your business, please call The Corrigan Law Firm PC at (251) 476-2292.

Do it right the first time! Why core documents are important.

A number of years ago during a partnership dissolution hearing in Baldwin County, the trial Judge became increasingly agitated as issue after issue being raised in his court had not been addressed in the quite lengthy partnership agreement that had been drafted for the partners several years before. I was thankful that I was not the draftsman of that particular agreement.

Finally, as he decided that he’d had enough for the moment, the Judge looked up and said “Ladies, if you ever do this again, and I’m hoping you don’t, do it right the first time!”

Moving forward about a dozen years, I have a client that is embarking on what I think is going to be a successful venture into the area of employee leasing, or PEO (Professional Employer Organization).  It has been an absolute pleasure to create the LLC, review and revise its documentation and consult and advise on various issues facing the company. All of this before the first employee is placed.

Not every contingency can be anticipated in the operation of a company, but a number of large issues can be addressed through proper contract language. For instance, the original proposed MSA (Master Services Agreement) contained some rather broad indemnification language that had been carried over from previous versions of the MSA that had been used in the industry.  Why? Because that’s the way they’d always done it before.

The current MSA contains no such language. Clients desiring that sort of indemnification may negotiate the issue on a case by case basis.

I would urge every business owner to have their core documents reviewed from time to time by an attorney that is knowledgeable in that area. Don’t wait until you have to figure a way out of the hazards that may be lurking in your contracts. Although not every possible scenario can be anticipated, the money you will spend is an investment in avoiding problems down the road.

Do it right the first time.