Obama (hearts) Spam Musubi!

Remember, a couple of months back when Gina Tsai ordered a big pan of "Spam Roll" for our Knot Just Knitting meeting? And most of us had never heard of it and didn't know that it was really called "Spam Musubi?"

Well, On Sunday a New York Times pool reporter disclosed that Barack Obama ordered "spam musubi" for lunch during a golf outing in Hawaii.

Just remember - you read about it here first!

Happy Holidays!

Letters From Noto, Alta Galleria, through January 22, 2009

"Letters from Noto" - an exhibit of letters and photographs illustrating life in Japan from 1955 to 1964.


Photography by David L. Beckman



Alta Galleria
2980 College Avenue, Suite #4
Berkeley, CA 510-414-4485
www.altagalleria.com

KNOT Just Knitting, Next Meeting, Tuesday, January 13, 2009

Tuesday, January 13, 2009
5:30 p.m. - 6:30 p.m. or so

Paulson Esquire
44 Montgomery Street, Suite 1100
San Francisco, CA 94104


Telephone 415.591.3333 ext. 1688
Facsimile 415.591.3335
Mobile 415.306.3514


The meeting will be hosted by Gina Tsai and Danette Rugg and Chaired by Rhonda Simpson, Co-Founder

Have a peaceful and safe holiday!

Attention Last Minute Shoppers. . .

If you're looking for something unusual to give or get, Natasha can help.

She has handmade items for sale, including the following:

* Freshwater pearl bracelets and earrings, all done with gold/silver hooks/clasps
* Holiday earrings, from whimsical to elegant
* Tea Cup Candles - these make good hostess gifts!
* Collage Bookmarks - great, mailable gifts for readers


To contact Natasha Glushkoff, email:

Nataliasha2004@yahoo.com

Happy Shopping!

Kimora Lee Simmons at Macy's Hilltop Mall

"Fabulousity"

Kimora Lee Simmons Comes to Macy's Hilltop Mall in Richmond

KIMORA LEE SIMMONS COMES TO MACY’S HILLTOP

President and Creative Director of Baby Phat
inspires with her glamorous,over-the-top style


WHAT: Macy’s Hilltop customers can meet Kimora Lee Simmons and get a
signed autograph. The first 200 customers to make a $75 Baby
Phat purchase will receive a $20 Macy's gift card and a
stationary kit from Baby Phat. Customers who bring in an
unwrapped toy for YES (Youth Engagement Service) will receive a
special thank you gift from Kimora. YES assists low income
parents and their children of all ages in the Richmond area.

Kimora’s influence in the world of fashion is undeniable while
her savvy as a businesswoman has made the former runway model a
worldwide brand phenomenon. Through her success as a model
Kimora developed her renowned sense of style, which propels her
as a designer. She is the instrumental force behind the brands’
creative designs, ad campaign strategies and marketing
concepts.

“Kimora: Life in the Fab Lane” debuted on Style and E! Networks
in 2007 and became the #1 rated program on cable television of
women between the ages of 18-34. Kimora stars and executive
produces the reality sitcom, which chronicles her life.

WHEN: Thursday, December 11, 2008 at 4:00 p.m.


WHERE: Macy’s Hilltop
Juniors’ Department
2500 Hilltop Mall Rd
Richmond, CA 94806


*While time permits. No personal items, please. One signature per customer.
Baby Phat purchases must be made December 11th, only at Macy’s Hilltop.
While supplies last.

Hogwart Hotel (Le Meridien San Francisco)

Made by the Pastry Chefs at Le Meridien, 333 Battery Street, San Francisco

Tough times and exciting innovations

One of the silver linings of a tough economy is that, absent heavy-handed government intervention or regulation, a business will adopt, adapt and improve if it wants to survive. Currently, my real estate developer clients are trying to innovate in an effort to stay alive in a credit freeze.

One of my clients, a commercial developer, tells me that even up to a year ago, when he began a project, he'd have five or six banks competing for his business. Now, however, he has to aggressively search out his own lenders and is lucky to find even one willing to make the loan.

Given this credit drought, I see innovative developers looking for new ways to get the funding necessary to complete their projects. In fact, I'm working with one client to come up with new methods of funding in these difficult times. What are some areas to consider?

1. Private financing. This has been around for a long time. There have always been private individuals or small companies willing to loan money. With large development transactions, I see a few practical issues with this. First, are you going to find any one person or private organization willing to loan you the amount of capital needed--not, say, $100,000 for a house, but perhaps two, three, four, or five million dollars? If not, are you going to have to procure multiple lenders? How will they each be equally secured? Even in boom times, private lenders typically charged a premium interest rate to cover what typically was a higher risk (i.e., if the venture was less risky, the thinking goes, it could've gone to a bank and paid bank rates). I recently saw a loan with a 50 percent interest rate! Most states have interest rate ceilings that mandate maximum interest rates chargeable on loans, but at least in North Carolina, that does not apply to non-consumer development loans.

2. Venture capitalism. I've written in other blog posts about venture capitalism, and v.c. has had a role, and will likely now have an even greater role, in real estate development. The main difficulty for developers is to price the increased cost of this money into its budget plan.

For example, perhaps a developer was creating a build-to-suit lease with an option to purchase for an 80,000 square foot commercial building, with a tenant lined up. The sales price, if the option is exercised, is $4,000,000. Previously, the developer would've created a pro forma (a projection of costs and income), and perhaps the developer worked out that the initial building costs would run at $3,000,000. The developer would also add into this the "carry costs"--i.e., what the loan payments would be. This figure would be pretty easy to figure out, based on standard loan rates or--even better--a promised loan rate from a particular lender.

But what about now? Just to make up numbers, the venture capitalist, approached to enter the deal, may have the money to loan, but may loan the money at a premium rate--i.e., instead of, say, six percent interest, the capitalist is charging 15 percent interest--which means that the carry costs will be higher. In addition, perhaps the venture capitalist wants 25 percent ownership. In such a tough time, these aren't necessarily costs that can be passed on to the tenant through increased rent or purchase price. In the previous example, the developer could count on $1,000,000 profit for taking on a $3,000,000 risk. Now, however, the profit will be less because of the increased carry cost (let's say, hypothetically, $100,000 more costs), and the net profit will then be shared with the v.c., leaving the developer, instead of $1,000,000, $675,000. This is still worth doing, hopefully, but the margins have decreased by one-third, in this example.

3. Stock offerings. Developers will also turn to stock offering in these days to raise capital. Instead of one venture capitalist providing funds, it will be numerous investors. One benefit of such an offering is that the developer's risk is reduced because the money is not a loan but is equity. On the down side, to raise the money necessary for a good sized development, the developer will have to part with a large share of the ownership. Going back to the previous example, if a developer only offered to sell 25 percent of its venture for the $3,000,000 it needs, those stock holders would be entitled, as a whole, to 25 percent of the final profit. Assuming again that the profit was $1,000,000, the stockholders' share would only be $250,000. Are stockholders collectively going to pony up $3,000,000, for a chance at $250,000 (or about eight percent) profit? Probably not. Instead, the developer will have to strike a balance by providing enough of his venture to make stock purchasers want to buy, but leave for himself enough to make it personally worthwhile.

Where will it end? Who knows. If you need advice about investment vehicles for your real estate development, and how to legally structure these vehicles, please contact me at 704-735-0483.

How The Angel Made it to the Top of the Christmas Tree

When four of Santa's elves got sick, the trainee elves did not produce
toys as fast as the regular ones, and Santa began to feel the Pre-Christmas pressure.

Then Mrs Claus told Santa her Mother was coming to visit, which stressed Santa even more.

When he went to harness the reindeer, he found that three of them were about to give birth
and two others had jumped the fence and were out, Heaven knows where.

Then when he began to load the sleigh, one of the floorboards cracked, the toy bag fell to
the ground and all the toys were scattered.

Frustrated, Santa went in the house for a cup of apple cider and a shot of rum.

When he went to the cupboard, he discovered the elves had drank all the cider and hidden the liquor.

In his frustration, he accidentally dropped the cider jug, and it broke into hundreds of little glass pieces all over the kitchen floor.

He went to get the broom and found the mice had eaten all the straw off the end of the broom.

Just then the doorbell rang, and irritated Santa marched to the door, yanked it open, and there
stood a little angel with a great big Christmas tree.

The angel said very cheerfully, 'Merry Christmas, Santa. Isn't this a lovely day? I have a beautiful tree for you.
Where would you like me to stick it?'

And so began the tradition of the little angel stuck on top of the Christmas tree . . . .

Open House - Sunday, December 7, 2008 from Noon until 3 pm at the Haas-Lilienthal House

Thank you to Natasha E. Glushkoff at GOODWIN PROCTER LLP for the following announcement:

There's a festive little "Holiday Open House" event this Sunday, from 12-3. This would be the big old Victorian (the Haas-Lilienthal House). It's all beautifully decorated throughout, with a real 13-foot tree in the front parlor...

and there'll be refreshments and live music (& a visit from Santa at 2!) as well as a silent auction downstairs (& I think some other stuff for sale), and a holiday boutique upstairs (that would be me, selling stuff that I & some of my friends, made). Admission is $10/adult and $5/kid - but your admission covers not only all the food and drink you can hold, but a year's membership at Heritage - which, among other things, entitles you to free House and walking tours for yourself and guests for the next year (normally $8 each.) You'll also get discounted admission to Heritage lectures and other events for the year.

Anyway - it's a great deal, and a festive time! You can explore most of the House on your own that day - no tours (& no ropes)! Tickets can be purchased at the front door ~ & if you come by, be sure to come upstairs and say hello!! If you plan to shop, bring along cash/checkbook (tho they will take credit cards downstairs.)



The Haas-Lilienthal House is at 2007 Franklin Street, between Washington & Jackson Streets, in Pacific Hts. Public transport is recommended, as parking is usually somewhat of a nightmare around there. The House is a museum owned and operated by the non-profit architectural preservation organization, San Francisco Architectural Heritage.
Check the website for further details (like what buses go there): www.sfheritage.org

Holiday Time in the Financial District

Here's a shot from the lobby at 50 California Street, San Francisco.

Business sales and having your own attorney

I'm gearing up to help the purchasers of a business that has gone bad, and I'm mad.

My clients came in, and informed me that they'd purchase ABC Business. Once they bought the business, they quickly found out that--contrary to the seller's representations--the business was loaded with debts which the seller intentionally failed to disclose to my clients. Bad, but seems straightforward enough, doesn't it? Surely that would constitute a breach of the sales agreement, wouldn't it? Well, not so fast--here's where things get interesting.

Seller talked my clients into using his attorney to draw all the documents. The documents, at first blush, looked like a standard set of business sale documents, except for the part where the seller's attorney cut out all warranties of title, and basically provided that the buyers were taking the business "as is."

The lawyer, hired by Seller, had his fee paid equally between the buyers and the seller--all the while knowing that the seller was hiding from them tens of thousands of dollars of liabilities. That's a breach of his ethical responsibility, one that may cost him.

It's too early in the game to discuss details of what I intend to do on my clients' behalf, but let me use this opportunity to offer some advice to other potential business buyers.


1. NEVER use the seller's lawyer to represent you in a business purchase. The case I mentioned above is extreme--most lawyers wouldn't purport to represent both sides yet withhold information from one party that the other is lying. But often, this joint representation is "de facto"--i.e., the lawyer represents that he represents the seller only, but the seller is telling the buyer that he really represents both sides. Don't fall for this trap. You need someone to specifically protect your own interests as a business buyer--especially if (as here) you're a first-time buyer.

2. Make sure your purchase agreement contains all the representations IN WRITING that the seller has been making to you verbally. Sounds easy, right? But often, a seller will make lots of verbal statements that for some reason don't find their way into the written document. And the standard sales agreement also contains a clause providing that the only representations being made are in writing, and that no other representations have been made. If you, as a buyer, sign this, you may not later be able to rely on oral representations made to you earlier. In the instant case, the seller, of course, made all sorts of representations about the business being free of any liabilities. But, in the document cooked up by the seller's attorney, absolutely no representations were made--as to amount of property, as to title to the property, or anything else. Think about it: if a seller expects you to give him money for his business, shouldn't he--AT THE ABSOLUTE VERY LEAST--be willing to say "I am the owner of this business, and have good title to the business?" Of course. But with my clients, the owner wasn't willing to do that. They should've smelled a rat right then.

3. Do your due diligence! Many business buyers are investing their life savings to follow a dream of running their own business, but get so excited with the dream, that they blind themselves to the realities. Take the time to look under the hood. Investigate the business finances, do a background search of the seller, do everything a smart person should do to make sure you don't get yourself into a quagmire!

If you're involved in a bad business purchase in North Carolina and need help, call me at 704-735-0483, and set up an appointment.

"Movin' On Up To the East Side. . .

To A Deluxe Apartment In The Sky." (Theme song from "The Jeffersons" sitcom, 1975-1985, brainchild of Norman Lear)


Many thanks for Sarnoff Court Reporters and Legal Technologies for a fabulous evening last night. We enjoyed wining and dining (Jason even cooked for us!) at the fabulous Sarnoff Penthouse Suite on Pine Street in California.

Bravo to the multi-talented, multi-tasking Jason Buktenica!


Jason D. Buktenica
Business Development Executive
Sarnoff Court Reporters & Legal Technologies
450 Sansome Street, Suite 1550
San Francisco, California 94111
Phone: 415.274.9977 - Fax: 415.274.9998
Cell: 415.999.5970

Happy Turkey Day

And remember in the words of Curtis Mayfield, "Just Be Thankful for What You Got."

Thankful for our jobs, if we have them

Thankful for our skills, because we have them

Thankful for our friends, because we need them

Thankful for our health, because it is all we have

Have A Wonderful Thanksgiving!

Knitting, Knoshing and KNITworking

We had a GREAT time last night (thanks Danette Rugg and Gina Tsai of Paulson Esquire Court Reporters). We welcomed at least four new members - special shout out to Murry Wheeler who came over from the East Bay - "Oakland in da house!"

I/we discovered SPAM Roll (Gina, I'm going to get you for turning me on to this because it is SO delicious). There will be a SPAM quiz in the coming weeks ;)

So many new and exciting projects - Lara is working on a really nice tablecloth, Bryanna has some cool curtains coming along and Gina's baby blanket is coming along so well. . .

OH - another "shout out" to Melissa Lyon - this was her first meeting and first time knitting and she picked it up in about ten minutes. Gina is a great teacher!

"Keep on Crafting"

Paris Hilton Sighting in San Francisco

San Francisco paralegal, John Cervantez, stumbled upon Paris Hilton while shopping at Macy's Union Square. John reports that as he was descending the escalator to the first floor, he spotted a mob scene, and much to his suprise he looked up and stared directly into Paris Hilton's eyes.

They gave each other the cursory "once over," and not to be mistaken for papparazi, John smiled (not a grin - just a smile) and went about his business.

Apparently, Ms. Hilton was in town promoting her new fragrance "Fairy Dust."

Thanks for the tip John!

Remember, celebrity sightings always welcome ;)

Dot

An Interview with Sue Ann Jaffarian

Q: I just finished “Thugs and Kisses,” my first Odelia Gray mystery and I loved every minute of it. I could not put it down – literally. I could relate to Odelia on so many different levels. Especially the tote bag. However, I wondered – does Odelia ever have hot flashes? I found myself so jealous of her lounging in her pajamas ;)

Hot flashes are mentioned a few times in my books, especially, in “The Curse of the Holy Pail,” but I haven’t quite decided how to incorporate menopause into other books, or if I will. But it is definitely on my mind, since I’ve already traveled that road and Odelia is a few years behind me.

Q: Seriously, when did you first know you wanted to be a writer? At what age did you learn to read?

I don’t remember reading until I got to school and learned how, but did have a lot of books as a young child. When I was young, I wrote a lot of little stories and poetry, and once when I was in junior high I wrote what I thought was a book and sent it off to a publisher in New York. I’m sure they had a big laugh when they received a handful of handwritten pages from a twelve-year old. They actually sent me a letter back suggesting that I take classes if I was interested in becoming a writer. That was my first rejection letter, and I wish I had kept it. It would be the jewel amongst my other rejections. For years after, I dreamed of being a writer, especially in high school and college when I read as much classical literature as I could get my hands on. I would even go into libraries and book stores, find where my books would one day be on the shelf, and spread the books apart to make room for them. Later in life, I made several starts on books, but never completed any of them. Didn’t even get past the first few chapters. It wasn’t until I was 42 years old that I finally realized if I was going to fulfill my dream, I had to get serious and make it happen. That was the real beginning of my writing career today.


Q: What are the similarities and differences between Odelia and Sue Ann?

My pat answer is that Odelia is much nicer than I am, swears less, and has a better wardrobe. All of which is true. But seriously, we are very much alike, if not the same, in temperament and in the way we see the world. I make up the plots and scenes and say to myself “what would I do in this situation.” Although I write other books, such as the soon to be released “The Ghost of Granny Apples,” Odelia is really the only character drawn so closely from my own personality.

Q: Do you see Odelia as a role model?

I hope she is and many readers have written to tell me how much she means to them. Not that I hold myself up as some great example of how to live life (Yikes!), but in Odelia, as in other characters in the series, I wanted to show that people who don’t fit the Hollywood or Madison Avenue molds are not only attractive, but vibrant and real and capable. These are the real role models. The real heroes and heroines of life. There are far many more Odelias and Gregs in the world than the glamorous types we see in the movies and on TV. Although, Odelia Grey can be insecure in many ways, for the most part she is very sure of herself and her place in the world. She doesn’t wait for people to accept her, nor recoil if they don’t. She puts one foot in front of the other with a “bite me” attitude towards bigotry and ignorance.

Q: Have you ever worked for a guy like Steele?

Not exactly, but I’ve worked for people who have displayed many of his traits. Basically, Mike Steele is a good guy, but wears his personality flaws, such as arrogance, snobbery, and entitlement, on his sleeve. He’s an ass, but in the end a loveable ass.

Q: Have you ever found yourself in any true-life crime fighting situations?

Thankfully, no. Not even close. Though I do wear underwire bras, just in case.


Q: Are you still working as a paralegal? When did you know you had “made it” as a writer?

Yes, I am still a full-time paralegal in Los Angeles. Funny thing about writing novels, you can “make it” in terms of successful book sales and readership, but still not make enough money to support yourself. If being able to support yourself with writing is the litmus test of “success,” then it’s safe to say that most writers are failing, since only a very small percentage actually support themselves through their books (without the help of a spouse or partner to pay the bills).

Personally, I considered myself as having “made it” when I first saw “Too Big To Miss” on book store shelves around the nation. Being a published author was my first goal. Having succeeded at that, I set another goal – being able to sustain a successful series through several books. That, too, has been accomplished, so now on to the next goal – to sustain two successful series. That will be determined next fall when “The Ghost of Granny Apples” is released. The goal after that is to have published a non-mystery novel. I’m currently working on making that a reality.
A successful writing career is a lot like dieting. You set small attainable goals along the road to the big goal, and you celebrate each accomplished small goal to keep you focused and enthusiastic.

Q: Is your firm supportive of your writing career?

My firm is very supportive of my writing career. They allow me to have a fairly flexible schedule, within reason of course, to attend conferences and events, and are proud of me when I show up in magazines and newspapers. Many of my co-workers, both attorneys and staff, are faithful readers of my books and attend my book launches.

Q: In what ways do you find that being a paralegal is similar to being a writer? In what ways is it similar to solving mysteries?

The two careers use similar skills, such as good communication (both written and verbal), research, flexibility, the ability to organize facts, and time management. Just as I must make my deadlines in my legal work, so I must hit deadlines in my writing. The same goes with paralegal work vs. solving mysteries. Both involve reviewing information, finding correlations, and organizing it into sensible possibilities or useful tools.

Q: Have you written any non-fiction?

No, I haven’t.

Q: Last question – any chance that Odelia and Greg will now become a “team of sleuths.”

Keep reading.


Below is a list of books by Sue Ann Jaffarian
* Too Big to Miss (Odelia Grey Mystery)
* The Curse of the Holy Pail (Odelia Grey Mystery)
* Thugs and Kisses (Odelia Grey Mystery)
* Booby Trap (Odelia Grey Mystery, coming Feb. 2009)
* The Ghost of Granny Apples (Granny Apples Mystery, coming Sept. 2009)
* Corpse on the Cob (Odelia Grey Mystery, coming Feb. 2010)

In addition, Ms. Jaffarian has contributed short stories to two published anthologies:
* Love at Large
* Carols and Crimes, Gifts and Grifters
Also, her publisher, Midnight Ink, has contracted with me for a total of twelve Odelia Grey novels and for three Granny Apples mysteries, so there are many more books to come.

Ms. Jaffarian’s books can be purchased in all the “usual places,” including amazon.com

-Dot

Tip of the Day - Allegro Coffee from Whole Foods

In my never ending quest to find the "perfect cup of coffee," I stumbled upon this simple pleasure.

Allegro Coffee - found at Whole Foods - this morning I enjoyed the "Light/Dark" roast. . .what a way to start the day.

Morning Jolt In Chicago - Thank God No One Was Hurt

A taxicab and a car collided at the intersection of North Avenue and Wells Street in the Old Town neighborhood at about 5:30 a.m. this morning, sending the cab crashing through the window of a Starbucks coffee shop, a Fire Department spokeswoman said.


Each car had only a driver, and both were taken to Northwestern Memorial Hospital, she said. No pedestrians were hurt.

"Hold Please" - Diablo Actors Ensemble

"Hold Please"
Diablo Actors' Ensemble, 1345 Locust St., Walnut Creek

Diablo Actors' Ensemble presents the Bay Area premiere of Anne Weisman's comedy "Hold Please."

Plot: Secretaries try to bring down one of the firm's partners due to allegations of sexual harassment.

Sounds like fun!


8 p.m. Thursdays-Saturdays through Nov. 8; 8 p.m.

Fridays-Saturdays Nov. 14-22; 2 p.m. Sundays through Nov. 23
RUNNING TIME: 2 hours
TICKETS: $25; 925-482-5110 or www.diabloactors.com

A Bucket O'Treats from Merrill. . .

to unload a "pail" of stress

Great goodies, including, a much appreciated "Stress Ball."

Thanks, Julie Basurto!

julie.basurto@merrillcorp.com

Knitting Tonight, 5:30-6:30, Paulson Esquire Court Reporters

44 Montgomery Street, Suite 1100
San Francisco, CA 94104
Telephone 415.591.3333

Partnerships -- an issue of trust

Partners in a partnership are said to owe "fiduciary duties" to one another--that is, they owe a duty each to the other to look out after the others' best interests.

Though partnerships are usually meant to be equal (i.e., equal sharing of responsibilities, equal contributions, etc.), they are, in practice, rarely so. Someone, for example, may handle the actual rental of rental properties in a partnership. Another, for example, may handle the bookkeeping and bank accounts of the company.

Regardless of all the plans that partners make, regardless of the legal mechanisms put into place to make the machinery run more smoothly, one thing any partnership needs to thrive is trust.

The past few weeks, I've been representing partners who desired to dissolve their partnership with a remaining partner. When the partners, who'd been friends, decided to wrap up their business, they asked the partner handling the bookkeeping to give everyone copies of the accounts just to reconcile things. This partner was offended, and told them he'd not give them anything, that they should trust him. Of course, then my clients also got their suspicions up, and claims began being thrown by each way.

At the end of the day, after threats of a judicial dissolution, the managing partner provided us the information we needed, and everything is going to be resolved without the need for a lawsuit. The sad thing is that--other than some very minor disagreements about the way certain things were handled--there appears to have been no dishonesty on either side, just a conflict of personalities.

If you're a partner--even if you believe you're doing the bulk of the work--remember that you owe duties to your other partners to be open, honest and forthcoming. Provide your partners with all information. Be upfront, don't be controlling and--most of all--don't get defensive when you're asked for information.

At the end of the day, these ex-partners will have resolved their partnership by splitting everything equally. But if one partner had simply been forthcoming, they could have done this without the added expense of attorney's fees

No Tricks, Just Treats

Lisa Águeda, Account Executive

FIRST LEGAL SUPPORT SERVICES

Direct: 415.850.8354 ▪ Office: 415.626.3111 ▪ lisa@firstlegalsupport.com
www.firstlegalsupport.com

Cohn-Stone Glass Studios, Richmond, CA

What Cinderella Would Drive

These pretty pumpkins were picked from the glass patch of Cohn Stone Studios, located in Richmond, CA.

Molly Stone, and artist Michael Cohn opened the studio in the '80s."

For details, call 510-234-9690
www.cohnstone.com

Email:
cohnstone@sbcglobal.net.

Stay Tuned. . .an interview with author, Sue Ann Jaffarian coming soon. . .

In the meantime, check out her work on amazon.com

Thanks to Laura Basaloco-Lapo for a Great Time Last Night

Thank you so much to Laura Basaloco, San Francisco Family Law Attorney for hosting our Knitting Circle. In addition to great food and company, Laura even broke out some very nice Portuguese wine. :)

We had a great group of women and a special "shout out" to our newest group member, Katy Sullivan, soon-to-be graduate of the SFSU Paralegal Program.

Next meeting date is Tuesday, October 18 - details of location, etc. to follow.

Remember to bring a friend - and it's NOT just for knitters - crocheters, cross-stitchers and general crafts folk welcome :)

Welcome Back, Julie!

New "mum" Julie Basurto is back at work at Merrill Legal Solutions. Isn't Christopher just the cutest little guy you've ever seen?

Stuffed or Fried. . .?

. . .or maybe baked into a nice warm loaf with a steaming cup of hot coffee on a crisp autumn day. . .yummy

Ana Costa of Barkley Court Reporters grows some mean zucchini ;0

I Get By With A Little Help From My Friends

This was one of those days that I just was not quite sure about. . .doubting myself, doubting my worth - having a pity party - just plain feeling sorry for myself.

Just when I thought no one cared - Liebchen came to the rescue. Now all my friends know that a hot cup of STRONG coffee is one guilty pleasure I can never resist. Liebchen left this nice little Keurig cup on my desk (we have one of those fancy Keurig coffee machines at work).

And this blend must have been created especially for me, it's called "Dark Magic" Extra Bold Roast by Green Mountain Coffee. . .

5:00 clock here I come!

Halfway Through the Work Week

"Palace in the Haze" by Greg Gandy

“Palace in the Haze”- 24x30 in oil on panel. It’s available at the John Pence gallery in San Francisco and Greg also has a website.

www.greggandy.com.

Next Knitting Circle - October 14, 5:30 pm

Hosted by:

Laura Basaloco-Lapo
lapo2000@aol.com
Location:
Oct 14th 5:30-8pm
155 Montgomery St, 12th Floor
San Francisco, Ca 94104
p: (415) 392-2018

Staying afloat in tough economic times

Even in the Charlotte Metro area, which has tended in the last decade to better weather tough economic times than most parts of the country, we're filling the pinch of the current economic downturn.

Many of my clients have told me that their business is down: fewer homes are being buit, materials purchased, real estate sold, and so on. This, of course, is no surprise, and many of my clients are currently retooling their business to help bring in additional income during these times.

But staying profitable isn't just about earning money off of new business; it also means that you need to get paid for the business you have already performed. It's easier to lose one job (and the potential income) than it is to perform the job, expend the effort, labor and materials, then not get paid. For many of my clients, it may take two or three paying jobs to cover the cost of one job for which they didn't get paid.

How, then, can you protect yourself so that you get paid for the work you do, so that you get paid?

1. Written contract. Many of my clients are subcontractors (brickmasons, graders, plumbers, etc.), who work on houses, and they rarely get a written contract with the person or company who hired them. However, this is very important. Obviously, a written contract will show proof there's an agreement, but that's the least important factor (after all, if you've done the work, that's proof as well). No, a contract is more important because it will outline the terms of what you are supposed to do, and when you can collect your money, so that your client can't hold you at bay (e.g., saying, "I'm not paying you until the house is finished by everyone"). Also, in North Carolina, you typically can't collect attorney's fees unless you have a contract providing for it, nor can you collect interest on late payments without an applicable provision in your contract. Sure, if you hire an attorney who successfully collects your fee, you're somewhat relieved; but you'll also be disappointed once you subtract his fee, and realize that your money could've been earning interest over the six months it took to collect. By contrast, a well-written contract could provide that the debtor has to pay you 15 percent attorney's fees and legal costs if you have to sue, and can provide for 18 percent annual interest on bills more than 30 days due.


2. Personal guaranty. Many clients simply do business with the "company," even if the company is a one-man operation. If you're doing business, attempt to wrangle a personal guaranty, in writing, from clients. In other words, if you don't get paid, the person with whom you're dealing should personally guarantee payment of the debt. If you're performing contract work for, e.g., Wachovia Bank, this may not be possible. But I suspect most of your clients are small businesses. These businesses' owners have to guarantee their bank loans; make them guarantee payment for your work. If a business owes two bills, and one of them is personally guaranteed, the bill personally guaranteed will be paid first--simply because that bill shall cause the owner personal liability and therefore is more urgent!


3. Cutting off work early. Nobody wants to quit a job or stop supplying a customer, but as a small business owner, you need to be careful not to extend credit for too much work/supplies, nor should you let the unpaid bills linger. Often, a customer may get further in debt trouble the longer your bill lingers. If you haven't been paid in 30 days, do not continue to supply services, material or labor, or you can be getting YOURSELF further indebted to your customers. Some of my clients used to take a "double down" gambling approach: they know they shouldn't keep supplying goods or services, but don't want to make their customer mad and have them walk away. The problem with this approach is that the more the customer owes you, the more desperate YOUR become, and the harder the debt becomes to pay. Get out early, and collect your debt--by lawsuit if necessary. My clients, under my advice, now cut off credit after 30 days and send accounts to me shortly thereafter. Some of their customers get upset, but in the past two years, many of their customers became insolvent--but we got paid because we called our accounts due while there was still money for us to be paid.

If you have questions about account collections or creditors' rights, please contact me for an appointment at 704-735-0483.

Recommended Reading from "Ginger's Mom"

Thanks to Gina Tsai for a great time last night, noshing and knitting.

Gina mentioned a fun read, "Thugs and Kisses" written by SoCal paralegal, Sue Ann Jaffarian. "Thugs and Kisses" is available in paperback and is from the Ms. Jaffarian's "Odelia Grey" series of mysteries.

Check it out at:

www.amazon.com

KNOT Just Knitting, Tues. 9/23, 5:30-6:30 pm

Location:

Paulson Reporting & Litigation Services
44 Montgomery Street, Suite 1100
San Francisco, CA 94104
Telephone 415.591.3333

Hosted by Gina and Brandon

The Art of Killing the Deal

I've had the privilege, in my business law practice, to work on transactions and cases with good lawyers not only in my own state, but in other states as well. Each state (and state's lawyers) brings with it its own subculture and quirks. However, I've never, until a recent transaction, worked with attorneys who seemed hell-bent on picking a deal apart until it died a painful death.

I'll caveat what I write next with the possibility that perhaps I and/or my client were played, and (for whatever reasons) were manipulated for reasons we don't understand. But assuming not, I'll try to provide a few non-identifying details. My client, a commercial contractor, has certain niche construction that it has perfected and gained a reputation for in that niche. So much so, in fact, that it has expanded its operations in numerous states all over the U.S.

My client is run by its astute owner, who understands his own risk tolerance. Therefore, in negotiations, once he's received my advice, he accepts some, and rejects other, and we tend to quickly come to agreements with the other party. We negotiate hard, but we're flexible--and my client has become very successful with this.

But this time things simply have not worked out, and they may now crash and burn. We sent the other party a standard document, and what usually would be a process of a couple of negotiating back-and-forths has turned, instead, into months of excrutiating negotiation from the attorneys, nitpicking over minutae, creating far-fetched scenarios to justify their extreme positions. The result of this is that my client may simply be unable to do a deal with this client, and because of the length of time in these ridiculous negotations may no longer be able to enter into this contract anymore. Here then, are my own thoughts about the role of an attorney in negotiating a business transaction.

1. The attorney's role is to inform and protect. Notice that I didn't say just to protect. Of course, an attorney is supposed to protect his client, but in a business transaction, the client needs to understand what is contained in the contract or transaction. I always tell a new business client something like this: "I can protect you in a contract so that you're as protected as you'd ever want to be--but nobody would probably ever sign it." The point is, a contract that is too one-sided in favor of my client would not be commercially reasonable. Therefore, I try to protect my client as much as I can, but there will be issues on which the other party will not budge (perhaps, for example, the seller of a business will only allow my client 30 days due diligence). My job then is to let my client know the tough spots, let him know the risks, and fully inform my client so that he can make an informed risk decision about what he should do.

2. The attorney's role is not to be a roadblock in the way of the client's goals. Business clients, espcially experienced ones, are not children. Your job as an attorney is not to protect a client from himself, and shouldn't argue and negotiate ad infinitim. Some attorneys seem to get some pleasure in negotiating, haggling, and fighting for even the most minute and unimportant provisions in the contract, mentally chalking up points for every single concession they've obtained. I don't know what the "opposing counsel" feels like the score is in the contract I've been working on, but to me, we both score a big fat zero when a perfectly good deal dies as a result of the lawyers. If you want to fight and beat up your opponent, be a litigator! Transactional attorneys are supposed to HELP their clients accomplish goals.

3. The role of a business attorney is to help a client achieve goals, not to thwart them. This particular client has big goals (as do many of my clients). My job is to help these clients meet their goals: by making sure they comply with applicable laws, by drafting contracts that protect them and by helping them perform careful analysis so their dreams do not turn into nightmares. Yes, there are times when it is my job to tell a client, as I did a week ago, that a particular deal SHOULD NOT be done. But with most deals and most clients, it is a balancing act whereby I try to help my client reach what is a workable goal on a workable deal, while protecting the client.

Does this mean that I'm a "yes man" for my clients? Absolutely not. I often have to tell clients that the way they want to do something will, e.g., violate a contract or will not comply with the law. But for a good business attorney, the work doesn't stop there. My job then becomes how to help my client still reach that goal WITHIN the constrictions of law, contract and all practical considerations.

I look back at my clients, and what they have accomplished, and I am proud that I can say I have had a role (however small) in these accomplishments. Do these lawyers to which I refer take pride in how many deals they've killed?

Dine 'n Dash - Compliments of Paulson Reporting and Litigation Services

Dine n' Dash - Compliments of Paulson Reporting & Litigation Services

5:00 to 7:00 p.m. Wednesday, September 17th

Paulson Reporting and Litigation Services
44 Montgomery Street, Suite 1100
SF

YOU MUST RSVP NO LATER THAN FRIDAY, 9/12 TO:

gtsai@paulsonreporting.com

A great meal at a price you can't pass up. . .

HOLLA at Hollie!

A huge THANK YOU to Hollie Ashby and Merrill Legal Solutions for opening up their space to us last night. WOW - their new digs are fat, I mean "phat." I mean, their offices are sweet, I mean nice. . .can you say "Boston Legal."

A special "shout out" to Amelia and Pam. . . the newest members of our group. Wow, these women can KNIT. . .

Stay tuned for details about the next "KNOT Just Knitting" meeting.

Have a great day! It's Wednesday - we can do this!

NEXT KNITTING/CROCHET MEETING, TUESDAY, SEPT 9

Tuesday, September 9, 2008, 5:30 p.m. - 6:30 p.m.

Hosted by: Holly Ashby of Merrill at her brand new digs located at:
199 Fremont St.

RSVP: Hollie Ashby
Merrill Legal Solutions Account Executive
Cell (415) 505-1765

REFRESHMENTS AND BEVERAGES PROVIDED BY HOLLIE AND MERRILL LEGAL SOLUTIONS

Venture Capital, Part Two

One of the biggest things to consider when entering into (either side of) a venture capital agreement is to determine whether the capital infusion will be treated as debt, as equity, or a mixture of both. I will write this article from the standpoint of the venture capitalist, although you, the reader, will quickly comprehend the different advantages and disadvantages for the recipient of the capital as well.

When providing venture capital for a startup, should you structure your capital as a loan to the company, as partial ownership in the company, or as some combination of both?

First, consider the advantages and disadvantages to treating the capital infusion as a loan.

Advantage One: Security. Venture capitalism is a speculative matter. That is, you, the capitalist, are putting money into a venture that may or may not succeed. If the business fails, will you get all, some or none of your money back? Part of that may depend on whether, if the business goes bust, you are treated as a creditor or as an owner. When a business becomes financially insolvent, any remaining assets or monies are typically paid out according to certain priorities. There are many nuances, but put simply, creditors will be paid before the owners. Therefore, if the business fails, you have a BETTER chance of getting paid if you have structured yourself as a creditor than if you have structured yourself as an owner.

Advantage Two: Protection. Similar to the first advantage described, structuring the transaction as a loan will give the venture capitalist more protection than as an equity owner. Often, the venture capitalist will not be involved with the day-to-day operation of the company. I have seen numerous instances in which the business operators mismanaged the funds of the "money partner," spending in a deficit until nothing was left. By structuring the capital as a loan--and more importantly, as a loan secured by collateral of the company--the venture capitalist can better protect against the squandering or liquidation of the assets. Using an example, say the operation is run by the two majority shareholders, and you, the venture capitalist, provided $250,000 for a 33 percent stake. If the majority shareholders, who saw the business was floundering, decided to start selling off the company property to keep funds coming (and to pay their salaries), they could do it. And if they did it quickly enough, you would not know about it soon enough to stop it. By the time the company went bust, there would be nothing left to divide. On the other hand, if you were a secured creditor, the shareholder/operators would be unable to sell off the company property without paying you off first (or at least, getting your permission to sell).

Advantage Three: Control. Believe it or not, being a creditor of the company may give you more control than being an equity holder. As a simple shareholder, you can be outvoted on many of the corporate decisions unless you are given a majority of the stock (which is unlikely). As a creditor, however, you can place certain restrictions within the initial loan agreement, such as:
1. Prohibitions against selling off the assets;
2. Prohibitions against the company owners taking excessive salaries or dividends;
3. Prohibitions against taking major company actions without the approval of the creditor.

Of course, there are disadvantages to treating the venture capital infusion as a purely loan transaction. The biggest, and most important, is that a loan limits the amount of profit that can be realized. A loan will contain interest, and some sort of repayment plan. At the end of the day, there is ceiling to what profit the creditor can realize. For example, if the venture capitalist provides a $100,000 loan for five years at eight percent interest,then the capitalist would know that, at best, he would realize a total profit of $21658.36--and that's if the loan is not paid off early! Remember too, that venture capital involves, quite often, higher than average risk, for which a venture capital should expect (if successful), a higher than average reward. There are easier ways to earn eight percent returns than by investing in risky ventures that may completely fail.

Owning equity in the company, of course, allows the venture capitalist a chance to share in both the risks and rewards of the start-up company. In theory, as an equity holder, the capitalist risks losing his investment if the company busts, but shares the potential reward with all other shareholders if the company succeeds.

The disadvantages to being an equity holder are, as you may guess, the converse to the advantages of lending shown above.

1. Security. If the company goes bust, an equity holder is the last in line to get paid from the remaining company assets (and usually, there are none by that time).

2. Protection and Control. As a pure equity holder, the capitalist will have less chance to exert control over the company, and stands a higher chance of being susceptible to abuse by the majority shareholders.


What then is the best approach? There is no solution that fits all, but a typical venture capital deal will try to combine the two approaches: that is, the venture capitalist's money is treated in part, like a loan, but also provides the capitalist an ownership interest in the company. The following are some of the provisions that may be found in this approach:

1. Typical loan provisions, that provide a promise to repay (a promissory note), as well as some sort of security (for example, a lien on company assets).

2. Restrictions that the company cannot take certain actions (selling all of its equipment, for example) while the loan is still outstanding.

3. Sometimes, a provision that, at a given time, part or all of the loan is converted into stock.

4. A certain amount of stock ownership.

5. A guaranteed director or number of directors on the company's board.

6. A shareholder agreement that the company may not issue additional stock without the venture capitalist's approval.

7. A provision that provides the start-up owners the right to buy out the venture capitalist or, conversely, a provision giving the venture capitalist the right to force his stock to be bought.

If you have questions about engaging in a venture capital agreement in North Carolina, please contact me for an appointment at wldeaton@ppd-law.com

ARTIST RECEPTION TONIGHT 9/5/08 AT JOHN PENCE GALLERY, 6 to 8 pm

TGIF!!

Artists' Reception Tonight

9/5/08

6 to 8 p.m.

John Pence Gallery
750 Post St.
San Francisco, CA 94109

Featuring works by local artists, including, GREG GANDY

John Pence Gallery
415-441-1138

KNOT Just For Women ;)

Brandon Wai had a great time at the last meeting. We can't wait to see his new crocheted tie when it's finished :)

Brandon is issuing a challenge to all the guys out there - be not afraid to get in touch with your creative side.

Next meeting:

Tuesday, September 9, 2008, 5:30 p.m. - 6:30 p.m.

Hosted by: Holly Ashby of Merrill at her brand new digs located at:
199 Fremont St.

RSVP: Hollie Ashby
Merrill Legal Solutions Account Executive
Cell (415) 505-1765

Venture Capital, Part I

A client came to me last week with the opportunity to be a venture capital investor in a small start-up company. He knew how much he wanted to invest, had some clear ideas about what he wanted back out of the company, and then left it to me to prepare a venture capital agreement.

Venture Capital is simply a term for money obtained by a company that needs to change its position. Perhaps that position is that it needs to actually get started ("start-up capital"). Perhaps the company is on the verge of collapse. Often, as in this case, an already-existing company needs additional money in order for it to successfully grow in order to keep up with its new business.

Often, the business can raise money by debt--that is, by borrowing money (either from a bank or from private lenders). But borrowing, however, is tied in with risk--and most lenders do not want an exceedingly risky loan. If a business is brand new, or is getting ready to expand or change direction, there may be certain risks involved such that a traditional lender is unwilling to take the loan risk, considering that its return would likely be somewhere between six and ten percent per year.

On the other hand, there are investors who may be willing to invest their money or capital in riskier propositions--if they believe the risk will be appropriately rewarded. These are venture capitalists. These investors quite often will infuse money into a company that may have more risk, in return for the possibility of greater reward. In the next few blog posts, I'm going to discuss items to consider if you're asked to invest capital into a small or start-up company. But for today, the major considerations are as follows:

1. Debt versus Equity: Is your investment going to be treated like a loan, like ownership in the company, or like a mixture of the two?

2. Period of the investment: Is this open-ended, or do you want a specific time-frame in which your investment return should be realized?

3. Control: What rights of control will you have in the company?

4. Operation of the Company: What can the company do with your money? How much can the owners pay themselves?

Hopefully, this discussion will help both potential investors, as well as company owners looking to find investors.

KNOT Just Knitting, Tuesday 8/19, 5:30 p.m.

Esquire Court Reporting
505 Sansome, 5th Floor
SF
Hosted by Danette Rugg

(please yarn, needles, hooks, etc.)

Refreshments and beverages provided.

BE THERE - KNIT A SQUARE ;0

TONIGHT, Monday, 8/18, Elixir Bar, SF

Sorry for the late notice, but thanks to Natalie Tan for this information.

It's a guest bartending thing where all tips go towards the Susan G. Komen 3-Day Breast Cancer walk. Natalie is doing the walk on September 5-7th.

If you're interested in finding out more about the Susan G. Komen Breast Cancer Walk and Natalie's involvement in it (and if you are interested in donating directly online), you can go to Natalie Tan's 3-day Walk web page at:

http://08.the3day.org

Click on "donate now" and enter NATALIE TAN'S namein the participant field to pull up her page.


IF YOU'RE AVAILABLE TONIGHT (8/18), REMEMBER ELIXIR BAR, 9:00 P.M.

Common Reader Questions Regarding Partnership Disputes

I got some reader questions this week. While I normally don't respond (it's not that I don't want to help, but I don't like giving advice to someone whose laws may be different), I thought I could perhaps give general advice to situations like these.

I will caveat that my law license is limited to just North Carolina. However, I hope to give some general principles that can help:

"I just recently opened up a company but the amount of problems and arguments that I am having with my business partner is unbelievable. We are always arguing, during working hours she will just sit there going on about things that are not even necessary, wasting time and money and she will complain over the smallest thing. She has asked me to buy her out but she wants way more money than she actually put in to opening the company--which I am not agreeing to. The company has not even made that amount of money as yet so I don't know what to do. I can not work with the lady anymore ,its come to a stage where I don't even want to work myself but its my company so I am going to have to find a solution to this matter SO CAN I PLEASE GET SOME ADVICE ON WHAT TO DO?"

Unfortunately, your problem is one of the most common. You've not told me whether you are equal partners, or whether there is some unequal distribution of ownership. You've also not told me if your contributions were equal and in-kind (i.e., did you each put in the same amount of money? Or is she putting in money, and you're putting in sweat-equity?). Finally, you've not said if you have a written agreement (though I guess not).

Knowing so little about your situation, at least let me throw an idea your way that I talked about in my last blog: offer a buy/sell deal (see previous blog entry from July 26).

In other words: go to your partner, let her know that you appreciate things need to be resolved one way or another. Then make the offer I discussed in my last blog, and put the ball back in your partner's court.

1. Tell her that one partner should by the other out.
2. Tell her that you'll give her the choice: either you can set the value for the whole business, and then she can decide whether she wants to buy or sell at that value; or she can set the value, and you get to decide whether to buy or sell.

This works even if you're not equal partners (e.g., if you're 60/40, for example, the value would be set at the price for the whole company (assume your partner set value as $100,000), and then you'd decide whether to buy the partner out for $40,000, or sell to her for $60,000.

Here's the good thing that I gathered from your scenario: you're early on in this business relationship. What would be more difficult is if, three years from now, you were wildly successful (no thanks to your partner), and she wanted to be bought out--in essence, getting paid for the equity you created in the company. At this stage, however, you've not turned a profit yet. Also, you know she wants out. Most likely, if she has any sense, she'll let you choose the price of the company. Be sensible, and don't go too low, or she may buy you out. If, however, she wants to set the price of the company--then let her. After all, if she really does think it's worth so much, she may make you an offer that will financially reward you!

Hope this helps.

Here is one very similar:

"Hi Wesley.
A scenario for you:

My partner came up to me and said it would be a good idea to open a shop in
the area [certain medical equipment]. I agreed.

So I found the location, came up with the business name, discussed things
with real estate agents, distributers, employed staff etc etc.
My partner has done minimal work, much to my frustration.
Thus we have decided that one should buy the other out due to this and
we cant see eye to eye on decisions.
We have a lease for 18 months.
The shop isn't open yet and therefore no stock purchased.

We have put in $X each.

Does one just pay the other that $X back?

Do we get more than that from the other because I did more than my partner
or that it was his initial instigation not mine?
Does this count at all?

Do we just work out a number randomly?"

Ok, lots of good questions here. First, my usual disclaimer is that your jurisdiction (while another common law country) is not the same as mine, so remember that my free advice MAY be just worth what you've paid for it!

That being said, let me take care of the biggest question: since you're equal owners, unless your courts are different than ours, you'll be unlikely to get paid more for your share than your partner's. Sorry. The good news though, is, like the other reader, you didn't get too far into the relationship before realizing its inequalities.

I'm going to give you very similar advice to what I gave the other reader, with a few additional opening questions:

1. First, are you enjoying this business? I.e., would you want to continue it if you could buy your partner out?
2. Second, can you afford to continue the business?

It sounds to me as if, now that the ball is rolling, you'd like to try and make a go at it if you could.

3. Is it more likely that your partner would just like to be bought out and leave?

If so, offering your partner his initial start-up money might buy him out.

If you're not sure as to question number 3, then you might want to make your partner the offer I suggested to the first reader:

Offer them a buy/sell workout. One of you sets the price, the other gets to choose whether to buy or sell at that price. In my mind, the best thing in the world that could happen to you (or the reader above) is that your partner would want to set the price. In such situations, the partner (who truly wants to be bought out anyway), could set the price so high in their greed that you'd rather take a buyout, and start a new business.

But considering that your partner will be scared of this happening, he'll most likely ask you to make the price. Unfortunately, then, you've got a hard decision. Probably, in your mind there's one price you think HE should be bought out at (a low price), and a different price that YOU'D be content with being bought out at (the high price). The buy/sell price you make, will likely need to be somewhere in between.

The best advice I can give you for the price you set is not really legal advice--it's more practical. Set a price, and then make yourself comfortable--before offering it--that, come what may, you'll be happy with the results. Think of all the benefits you'll get if you can buy your partner out. But then think of the freedom you'll have if your partner buys you out and you go your own way (perhaps you can start your own business now, or take a regular job with shorter hours, etc.).

Finally, there is a legal consideration. As part of this buy/sell deal that I suggest you offer your client, you need to agree, as part of the deal (before either of you makes a decision), that the BUYING partner will take over the lease and all partnership obligations and indemnify the SELLING partner from any liability therefrom. Even better, if at all feasible, see if the landlord will be willing to release the SELLING partner from the lease's liability (I'd say chances are against it, but at least try).

It's only fair to the selling partner that he (or you) not have to worry about any partnership liabilities creeping back in the next 18 months.

For both of the individuals above, I'd suggest that if your disgruntled partner takes you up on the offer, that you then hire a qualified attorney/solicitor to draw up the paperwork. I'll be happy to recommend someone in your area if you desire. And please, let me know how things turn out!

How Much Is That Doggie In The Window?

I was returning from lunch with some friends on Tuesday when I was sidetracked by these adorable puppies in need of a good home.

I learned that the San Francisco SPCA does "Adoption Outreach" events throughout the City. The next event at the Embarcadero Four will be on August 12 from 11am – 2:30pm.
If you're thinking of somebody to keep you warm this winter, I'm sure one of these adorable canines or felines would be happy to oblige.

Have a great day!

2-4-6-8, We DO NOT Discriminate - Cross Stitchers and Crochet-ers Welcome Too!

Come one, come all - we're going to have a ball! (Pardon the Pun)

Tuesday, August 5, from 5:30 to 6:30 p.m.

Paulson Reporting & Litigation Services
44 Montgomery Street, Suite 1100
San Francisco, CA 94104
Telephone 415.591.3333 ext. 1688
(Ask for Gina Tsai)

The easiest and fairest way to resolve a partnership dispute

If you read my posts regularly, you know that in my business practice I run across business ventures in which--for whatever reason--the owners no longer have the same goals. Sometimes, they outright dislike each other, in others, they simply want to do different things. Sometimes these differences involve LLCs, corporations or true partnerships (and here, I'll refer generically to the co-owners as "partners").

Hopefully, a good organizational agreement will provide for a way to resolve these disputes between partners, but, as you have seen in previous posts, they don't always.

What I'm going to provide you today is the easiest, fairest, most common sense way to resolve a dispute between two partners over the direction of the business. First, however, a few caveats:

1. You'll need to have your finances in order.
2. You'll need to understand the possible ramifications that will result from this method.
3. You'll need to prepare yourself to be satisifed with whichever result occurs.

Those warnings are cryptic, aren't they?

Here it is, then: If you and you partner are at odds, or are wanting to go in different directions and can't resolve your differences, meet with your partner, and make him this offer (and for this example, I'm assuming two partners who are equal owners).

1. You think that the partnership between the two of you is going in different directions.
2. The best thing for everyone is if one partner buys the other one out.
3. One partner should set a value for the business (i.e., what that partner thinks the partnership, or at least his half of it, is worth).
4. The other partner then gets to decide whether to sell at that price, or to buy at that price.
5. You give him the option to decide whether he wants to set the price, or whether he'd rather decide whether to buy or sell.
6. You wait.

Think about how absolutely, finally, quickly and fairly this can effect a business buyout and a resolution of the dispute--whether you're running a lucrative partnership or one that is barely struggling along.

I was involved with a buyout, recently, where this occurred. One partner decided to make this offer to the other. Before he made the offer, he searched his soul, and made a decision at what value he'd place on a partnership interest. Then he determined that he'd be happy either way--if he got bought at for that price, he could live with it, or if he was asked to buy the partner out at that price, he'd live with it.

He then approached his partner, and made the suggestion for a buy/sell. The other partner agreed. Now, think about how easy things become at this point: My client had already decided his value point. If the other partner decided to set the value, my client could make his buy/sell decision in about 30 seconds, simply based on whether the offer was higher or lower than my client's buy/sell point he had already mentally set.

Or if (as was the case in this instance) the partner asked my client to set the price, my client could offer the price he'd already decided, and then sit back and wait for the partner to make the decision of whether to buy or to be bought out.

The two hardest parts about this mechanism are (1) coming up with a value that you can live with whether you buy or sell and (2) convincing the other partner to do this (for example, perhaps the other partner would only want to sell, or would only want to buy, etc.). But once the other partner agrees to this mechanism, the buyout will be fair.

In my client's case, if his partner had thought the price offered was too low, then the partner had the right to buy my client out at that low price. If he thought the price was unrealistically high, then he could sell out to my client at that price. Conversely, my client had to be realistic about the price. Perhaps he would've liked to have sold for a higher price, or to have bought out his partner for a lower price, but since he did not know which choice his partner would make, he had to make a price that he could live with either way.

If you have any more questions about partnership issues in North Carolina, feel free to schedule an appointment at 704-735-0483.

On Your Mark, Get Ready, Get Set. . .KNIT!

Meeting announcement:

The first meeting of the Knitting Group will be held on August 5, 2008 from 5:30 to 6:30 at the following location. Our hostess is Gina Tsai.

We don't have a name yet and all suggestions for a name are welcome.

ALL LEVELS ARE WELCOME - HOPE TO SEE YOU THERE!

Paulson Reporting & Litigation Services
44 Montgomery Street, Suite 1100
San Francisco, CA 94104
Telephone 415.591.3333 ext. 1688

Yo-Yo-YO - Free Yogurt Today 7/16, 2:30-3:30 pm

Gina Tsai and Brandon Wai of Paulson Court Reporters are inviting all us "legal-types" to stop in for a quick "YO" to go. They're calling it a "Treat n' Meet." How cool is that? (Pardon the Pun)

Anyway, it's today, July 16, 2008 from 2:30-3:30 p.m. at:

YoCup Frozen Yogurt
Rincon Center
101 Spear Street
SF

RSVP to Gina Tsai at

Gtsai@paulsonreporting.com

(or just stop by and tell them Dot sent you ;))

One Legal Now Offering Process Service Throughout the United States

I just received an email this morning from One Legal (formerly Fax & File), that they are now offering service of process throughout the United States.

Just an "fyi."

For more information, check out their website at:

www.onelegal.com

Limited Liability Company Buyouts

A client and his wife came in a few weeks ago with some questions. He, his wife, and another couple had formed an LLC for a new business venture. Each member owned 25 percent. The venture was still fairly new, though experiencing some apparent success already, when one of the two couples decided it wanted out. My clients, who wanted to keep the business going, came to me for some counsel about what to do.

Fortunately for all parties, we reached a very easy and amicable solution by which my clients will, next week, buy out the other couple for a sum representing their initial investment. It's a good thing that everyone was reasonable, however, because the Operating Agreemeent did not provide a good "dissolution" mechanism, in the event that the discussions had become acrimonius, and it made me realize the importance of a good buyout provision in these operating agreements.

The operating agreement, like most in our state, was written so that the departing couple could not have sold its interest in the company without my clients' approval. And without my clients' approval, they'd have been out of look. Worse yet, my clients owned the physical location of the LLC's business, and, if they'd wanted, could have evicted the LLC from the location and simply set up a new LLC to run practically the same business.

Of course, the departing husband and wife were decent people, and my clients were decent people, and they quickly and fairly negotiated a fair resolution that was mutually beneficial.

The majority of limited liability companies I set up seem to be two parties (usually two men, but sometimes two couples), and in these LLCs, when you're setting them up, think about the exit provisions:

1. Consider putting in a provision that would allow you to sell your interest to a third party if the remaining owners are not willing to buy you out; and/or

2. Consider a provision that will value your interest and set up a payment plan so that while you can force the remaining parties to buy you out, conversely a mechanism is in place so that they can do it without ruining their cashflow.

Of course, picture yourself in the reverse provision: what if you want to stay in but your co-owners do not? A good operating agreement will provide provisions that will provide you a comfort level so that if you start going different ways, you'll already ahead of time know that Agreement has provided a way for all of you to easily separate your interests.

They Told Me to "Walk This Way, Talk This Way. . .!"

Monique Defebaugh was kind enough to share this photo from her trip through Uganda, Zambia, Zimbabwe and South Africa.

They're so cute, all dressed up in their little tuxedos :)

Thanks, Monique!

Business Litigation, pt. 2 Victory

We won our trial, and now I can describe more details about it. My client, a real estate developer, had been sued for issues arising from a former partnership. My client and three other men had formed a partnership to develop a tract of land. One of the partners, who happened to work for my client, was bought out years ago. However, in 2006, when the partnership sold its last lots in 2006, the former partner sued, saying he was still a partner and entitled to partnership proceeds. The Plaintiff lost and received nothing. My client received satisfaction and bragging rights--but at what cost? Here is what I believe my client learned from this lawsuit:


1. Get everything in writing and keep good records.

My client had evidence that he'd gotten, in writing, something showing the Plaintiff had given up his interest, but that the file mysteriously disappeared when the Plaintiff quit working for my client. What could my Plaintiff have done differently? He could've had his lawyer at the time draw up the document, make it legally clear, and keep triplicate originals--one for the client, one for the man who gave up his interest, and one for the lawyer (just to be safe). Also, my client could have kept his employee files locked (the testimony was that the files weren't locked).


2. Understand the sheer randomness of a jury.

I always tell clients that you never know what a jury is going to do in a trial, and I really couldn't tell, until they returned a verdict in our favor, what the jurors were thinking. I try to pick up on body cues (do they appear bored when I talk? Are there arms crossed? Are they attentive), but this is not an exact science, and worse yet, an attorney (or his client) can drive himself crazy trying to put meaning into every action of a juror. At one point, the jury sent a question to the judge, and when it was read, my client thought we had lost. Instead, we won; jurors create an emotional rollercoaster for the parties involved, and I think my client knows this now.



3. Place a value on your opportunity costs and your time. This case, in the grand scheme of things, did not involve a lot of money. In fact, early on it became clear that--if carried to its finish--my fees would eclipse the value of the case. However, this case involved (to my client) principle, and, honestly, a bit of a grudge between two individuals. My client was fully prepared to to pay my costs to the end. However, I believe if he were to be asked now, he'd rethink settling earlier, not for the fees he's having to be me, but for the amount of money he probably lost having to sit at trial for a week. My client is an entrepeneur, a commercial real estate developer, who travels the country. During the time he spent in trial, my client missed an important meeting with his largest customer in South Carolina (who, in fact, was going to present him with an achievement award), and also had to forego trips to other parts of the country to oversee and/or initiate start-up projects. The greatest loss, for a client like this, is not the court costs, but the missed opportunity costs.

Things aren't all bad, however. I obtained this client because he was on the opposite side of a lawsuit about five years ago and, though I'd handled many cases for him in the interim, they'd all either gotten dismissed or settled. This was the first opportunity I'd had to show my client how I reacted in the stressful setting of a courtroom in a week-long jury trial. Many corporate lawyers sit behind their desks advising clients, but I hope that my client has now seen my advice put to action.

Calling All "Knit Wits"

If you like to knit, or want to learn, we want to hear from you!

While I am by no means an expert knitter, I have been known to knit a pretty mean scarf. Well, okay, sometimes I do drop a stitch, but hey - practice makes perfect, right?

So. . .if you want to get a headstart on your winter gear or maybe whip up some light summer knits, contact Rhonda at:

rsimpson@littler.com

This girl knows how to knit and purl ;0

Dot

TGIF

Thank God, It's a Flamingo!

Have a great weekend.

The Business of Business Litigation

In cities larger than the one in which I practice, most attorneys either fall into the category of litigators (i.e., trial lawyers) or office attorneys who never see the inside of a courtroom.

I've volunteered to be part of a working group of the Bar Association's Business Section, that is comparing the corporate laws of North Carolina versus the analogous laws of Delaware. I'm going to have to miss the group's first face-to-face meeting next week because it appears that I'm going to be in court trying out a partnership case.

The benefit I believe I bring to the table for prospective business clients is that, when I'm advising them or drafting something for them, my experience comes not just from a knowledge of the law or from what someone has taught me, but quite often from my experience in litigating similar issues.

When I reach a trial, I already feel in a sense as if I've failed, because I have been unable to reach a resolution of the case (whether through obtaining a court dismissal or a settlement) for my client. At trial, you see, there comes a point at which the result will be out of the hands of myself and my client: that is, the jury will take over.

In my experience, juries really do try to do the right thing, and also in my experience, I've found they most times have done the right thing. We've all heard the stories of runaway jury verdicts that appear to rape justice, but at least where I practice, the jurors have good common sense and try to do the right thing.

Still, a business tries to control uncertainty as much as possible. Sure there's risk--without which, we wouldn't have entrepeneurism--but most businesses I represent don't want uncertainty (which is different than risk). A jury trial is the ultimate uncertainty. I can do my best for a client in court, but on any given day, something can happen--a bad judge, a runaway jury, whatever--and the unbelievable happens.

Therefore, though I'm happy to litigate for clients, I always advise them that they need to be in the business of THEIR business--not in the business of fighting in court. Because no matter how good your lawyer is, and no matter how good your case is, there are always two sides, and there's always uncertainty.

No, I Did NOT Consume Alcohol At Lunch. . .

and I know that I'm not in Miami. . .while on my way out for my mid-morning coffee, I ran into these guys - ALL over the lobby. Needless to say I was pleasantly surprised. Unfortunately, I was "without camera." But that's what friends are for, right?

Natch - I called on my trusty colleague, who is never without "digital," and he came to the rescue - Thanks, Jason - you rock.

Dot