No matter the size of the business, a successful business must be paid promptly and in full. However, often a business, including a medical practice, is dealing with numerous overdue accounts receivables.
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No matter the size of the business, a successful business must be paid promptly and in full. However, often a business, including a medical practice, is dealing with numerous overdue accounts receivables.
Click the following link to learn more
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The U.S. Court of Appeals for the Tenth Circuit recently made an important ruling under the federal Truth in Lending Act with respect to borrowers attempting to void foreclosure sales based upon prior demands to cancel loans under the federal law. Specifically, the court held that claim preclusion can bar such claims if borrowers fail to raise such issues prior to taking action in court.
The Truth in Lending Act
The Truth in Lending Act (TILA) grants borrowers rights to rescind certain consumer credit transactions involving security interests in the borrower’s primary residence by creating two rescission periods: conditional and unconditional. While borrowers have an unconditional right to rescind until midnight of the third business day following the consummation of the transaction, they also retain the (conditional) right to rescind until the creditor delivers the material disclosures, information, and rescission forms required under the Act.
In order for a borrower to exercise their right to rescind, they must notify the creditor of their intention to do so. The Supreme Court has held that rescission is effected when the borrower notifies the creditor within three years after the transaction is consummated. When they do so, the borrower is no longer liable for any finance or other charge, or any security interest. The creditor must then return any money or property within 20 calendar days after receipt of the notice of rescission.
Where things can get complicated is when a borrower rescinds after the unconditional three-day rescission period, when the creditor has already disbursed funds and perfected its lien. This is typically when the courts are called upon to resolve rescission claims.
In this case, the borrowers believed that their lender had failed to make the TILA-required disclosures, and delivered a notice of intent to rescind the loan several years after refinancing the loan on their home. The lender responded that it afforded their notice no significance, as this was outside the acceptable window of rescission under TILA. Their property was sold in a foreclosure sale several years later.
When the borrowers sought to rescind the foreclosure in light of their notice of intent to rescind the loan transaction, the district court denied their motion, concluding, under claim preclusion, that the borrowers could have raised their contention that the deed of trust was void due to the previous notice of rescission earlier but failed to. The U.S. Court of Appeals for the Tenth Circuit recently affirmed the district court’s decision.
Birmingham & Mobile Foreclosure Attorneys
The experienced real estate and foreclosure attorneys of Cloud Willis & Ellis can assist lenders with taking proactive steps to protect their legal and economic rights in secured financing situations involving property. This includes renegotiations of loan and mortgage modifications, short sales, deeds in lieu of foreclosure, deficiency judgments, and more. Our attorneys can save you time and money during any of these challenging processes. We are available throughout the state of Alabama to assist you with the foreclosure process for both commercial and residential properties. Contact us today to find out more.
Takata—the airbag manufacturer at the center of the largest auto safety recall in history—filed for Chapter 11 bankruptcy on June 25th, setting in motion a series of business transactions and obligations that will undoubtedly fall on the shoulders of various unsecured creditors in the U.S., such as Fiat Chrysler.
The company has specifically decided to dismantle itself in stages because it owes too much money to too many people to continue operating. Much of the work—which mostly includes settling disputes by companies such as banks and carmakers, as well as accident victims who are owed money by the airbag giant—will now take place in courts throughout both the United States and Japan.
In filing for bankruptcy, Takata announced that it would sell its surviving operations to Key Safety Systems, a Chinese-owned company which rivals its American equivalent. Takata will continue to supply replacement airbag inflators as it winds down; a move designed to insulate Key Safety Systems from the recall process.
Although antitrust regulators in various markets must first approve the deal, it appears to provide Key Safety Systems with approximately one-quarter of the global airbag market, making it the second-largest supplier in the industry. In this move, Takata has essentially placed a legal firewall between itself and its creditors.
Uncertainties for Carmakers, Takata’s Biggest Unsecured Creditors
Takata has estimated that its liabilities far outweigh its assets at this point, ranging from $10 to $50 billion. Ultimately, no one yet knows just how much the recalls will cost and/or the victims could be awarded in lawsuits. However, it also owes billions of dollars to banks and automakers, which have been funding the costs to replace the company’s airbag inflators. Declaring bankruptcy effectively leaves some of these creditors at a loss.
Because there are so many uncertainties—not only with legal payouts Takata might have to pay, but also due to the potential for additional defects to surface after Takata is long gone—and because U.S. carmakers have indicated that they are committed to ensuring that all cars are fixed, these companies are now in a tricky position. For example, Honda has already informed its shareholders that it may be difficult to recover the majority of claims that the automaker holds against Takata. Other companies include Fiat Chrysler and Toyota (amongst others), as they are amongst Takata’s biggest unsecured creditors.
Business & Corporate Lawyers Serving Alabama
Cloud Willis & Ellis offers a variety of legal services for our clients. Our practice is focused on Bankruptcy, Business Litigation & Corporate Law, Creditors’ Rights, and related areas. We practice on a broad spectrum of topics, addressing the needs of our clients in a variety of business matters and financial dilemmas.
If your company is dealing with the financial fallout of an associated company, we can help. Contact us for a free consultation—we serve Birmingham, Hoover, and Mobile-based businesses and creditors.
On June 21, the Harvard Business Review featured an interesting article on the downfall of Uber; an article which highlights the importance of companies ensuring that they work with the right corporate law counsel in order to ensure that their entire business model isn’t predicated on lawbreaking.
Uber set an important precedent for the business of transportation, a model that made vast improvements to the entire concept of taxicab transportation in general. Its major advantages didn’t involve the use of modern dispatch with GPS or Smartphone apps—as incumbents were already headed in that direction—but rather in using regular, everyday vehicles minus the special licensing and formalities. However, in using everyday noncommercial vehicles, Uber avoided the many costs that the taxicab companies couldn’t when it came to having to purchase commercial registration, insurance, inspections, and plates, specific driver’s licenses, background checks, and the many other costs of doing business and following the law.
Blatant Violation of the Laws
Instead of focusing on developing a business model that could both offer customers a new, unique service, while also complying with the law, the company, instead, focused on “defending its illegality”: employing staff to lobby legislators and regulators, and portraying those who disputed its setups as has-beens stuck in the past.
While some jurisdictions bent and new law was created in order to accommodate this business model, in general, the model simply remained illegal. And in doing so, Uber’s employees took risks; risks that even got some of them indicted and arrested under some circumstances.
The Role of In-House Counsel
So who, specifically, was responsible? A company’s attorneys are supposed to advise them on how to run their business in accordance with the law. At Uber, however, in-house and corporate counsel was, arguably, complicit in fostering a culture of illegality in this case.
Uber then began attacking the competition, making public statements to what extent the competition (companies like Lyft) were breaking the law; pointing out their failure to comply with the law when it came to lacking commercial insurance and licenses; all the while adopting Lyft’s approach and normalizing a model based on regular legal violations. This practice may ultimately lead to the company’s downfall; a downfall that could have easily been prevented had it been advised–by in-house counsel–about how to retain what was great about the business while also operating within the confines of the law.
Experienced Birmingham & Mobile Corporate Counsel
At Cloud Willis & Ellis, our business and corporate lawyers can assist you with all aspects of your business needs and ensure that you offer a unique, successful business model, all while following the law to a T.
From forming a business to developing an exit strategy, selling or purchasing ownership interests, we assist business clients in resolving a variety of issues and conflicts. We have a proven track record of assisting our corporate clients with expansions, reorganization, restructuring, commercial workouts, and other options.
Whatever your needs, we can provide you with counsel and value adding solutions necessary for navigating through every business situations. Contact us today to find out about our corporate law services.
In the field of real estate law, when carpenters, plumbers, painters, or other types of general contractors do work on your home, they can place what’s known as a “mechanic’s lien,” or a legal notice on the home (as an asset) in order to ensure that they get paid. Once a lien is placed on a home (as a consequence of an unpaid debt), it can drastically slow down a real estate transaction.
In real estate, liens occur more frequently than many buyers and sellers realize, precisely because they are often due to unpaid bills, taxes, or a judgment made in court; all of which often occur when it comes to buying, selling, or managing residential or commercial property.
Types of Liens
In addition to mechanic’s liens, there are also:
Contesting Liens & Transaction Delays
A lien will place a real estate transaction on hold if, when the title company performs a search on a home placed under contract, any liens have been filed against the property. A mortgage company will then typically finance the property until the lien is satisfied by the seller. However, if the seller decides to contest or otherwise avoid paying the lien, the sale can be put off indefinitely.
To a buyer, the seller’s refusal to pay the lien can be interpreted as a breach of contract, warranting either walking away from the transaction or accepting responsibility for the lien itself in order to secure the transaction. For example, buyers purchasing homes that are the subject of foreclosure may have to pay off the debt. Under these circumstances, real estate attorneys must typically get involved in order to help the parties come to an agreement.
In addition, if you are a seller and are dealing with especially complicated liens on your home, you will want to seek legal counsel in order to start resolving the issue as soon as possible.
Experienced Birmingham, Hoover, and Mobile Real Estate Attorneys
When it comes to real estate transactions, there are so many details involved in that having an experienced real estate attorney on your side who knows the applicable federal and state laws can help ensure that the process goes smoothly.
The attorneys at Cloud Willis & Ellis provide excellent real estate attorney services. From investigating and resolving complex title issues, to helping deal with liens, we strive to handle every aspect and answer your questions and concerns with a strong commitment to professionalism and service. Contact us today to find out more.
On May 18th, Harvard Business Review published an interesting article on how existing laws and regulations can sometimes interfere with the desire that businesses have to structure their businesses in such a way as to have a positive social impact. Specifically, the article looked at to what extent U.S. business laws are oriented towards shareholder primacy, and how both law and culture affect how companies think about purpose.
According to the article, many business leaders point out that, while they would like to structure their businesses as to have a positive social impact, they encounter two recurring obstacles in trying to do so: 1) a culture of short-termism and 2) corporate law placing shareholders first. In this respect, working with a corporate attorney during your business entity formation and/or in restructuring your business can be helpful in figuring out what your options are if you’ve found yourself frustrated in this respect.
In the U.S. and around the world, there are companies (known as “B Corps”) that have signed up to have their social and environmental performance assessed by an organization called B Lab. There are now approximately 2,000 of these companies around the world, often redefining the idea of success in business to include both social and environmental goals in addition to profits.
What the researchers who published the article found was that there are more B Corps in countries that are culturally more oriented toward the short term because in these cultures, entrepreneurs interested in building purpose-driven organizations feel the need to engage with entities like B Lab. Conversely, in long-term oriented cultures, entrepreneurs feel more compelled to pursue this type of purpose under more traditional structures.
Interplay Between Culture & Law
In addition, according to the article, they also found more B Corps in countries with a higher degree of shareholder primacy in the law, indicating that both culture and law affect to what extent purpose-driven companies can achieve scale and profitability. However, unfortunately, conversations involving culture and law typically happen independently of one another, which isn’t necessarily conducive to creating a more sustainable form of capitalism in this respect.
In this sense, the article called for a cultural shift away from short-termism in order to effectuate overall change in corporate law in an effort to support business leaders interested in promoting purpose-driven entities.
Experienced Business & Corporate Law Attorneys
At Cloud Willis & Ellis, our experienced business & corporate law attorneys can assist you with any and all aspects of structuring (or restructuring) your business. We are able to work in a similar capacity to in-house counsel by focusing on what is best for your business needs and how we can be the most effective legal counselors possible. One of our main focus areas is business entity formation, for example, and this includes helping businesses structure themselves in a way as to have a positive social impact. Contact us today to find out how we can provide you with assistance here in Alabama.
In early May, the U.S. Supreme Court ruled that cities have standing to sue banks over lost tax revenue on foreclosed properties under the Fair Housing Act. However, the final ruling is ultimately left up to the Eleventh Circuit, as the Court sent the case back in order for the Eleventh Circuit Court to determine whether the particular banks’ lending practices were the proximate cause of any damages experienced by the cities (i.e. the lost tax revenue).
In this particular case, the city of Miami argued that the lending practices of Bank of America Corp. and Wells Fargo & Co. led to a major shortfall in city tax revenues. Although the Court’s decision is something that lenders should take note of (as many would not have thought that cities had sufficient standing to assert claims that would arguably be more appropriately be brought by those parties more directly covered by the Fair Housing Act), it is also important to note that the bar for proving proximate causation is high, meaning that there is a good chance that the banks will not ultimately be found liable for the damages asserted in the case.
The Fair Housing Act & Zone of Interests
The main purpose of the Fair Housing Act is to protect people from discrimination when they are renting, purchasing, or securing finances for housing. In order for a party to be able to sue under such a law, that party’s interests must fall within the “zone of interests” established by the law. In this case, the city’s interests were found to be covered because the banks’ practices had arguably led to increased costs for foreclosed properties and decreases in tax revenue.
Proximate Cause: A High Bar
However, deciding whether or not a party (such as a city) is covered by a law is only the first step; this does not mean that the case is won for that party. In order for Miami to prevail and collect damages from the various lenders, the Eleventh Circuit must now find that these practices were the actual cause of any damages suffered by the city.
And the proximate cause argument is a difficult one; in fact, Law360 reported that all eight justices rejected the probable cause argument. The Court has arguably already recognized that Congress did not intend for the Fair Housing Act to address and provide a remedy for unforeseen “ripple effects” like these, which are somewhat speculative harms that may or may not result from particular lending practices. In his dissent, Justice Clarence Thomas specifically noted that nowhere in the text of the Fair Housing Act does it suggest that Congress was concerned about addressing potential strains on municipal budgets that may or may not result from lending practices.
Ultimately, the banks will not be held liable unless the Eleventh Circuit decides that their actions directly caused the foreclosures, and a decision like this could only be based in sold foreseeability.
Birmingham and Mobile Foreclosure & Real Estate Attorneys
The attorneys of Cloud Willis & Ellis assist institutional lenders, mortgage loan servicers and private lenders throughout Alabama. Our experienced foreclosure attorneys can assist you with any foreclosure process concerns. Contact us today with any questions you might have.
These days, many individuals interested in purchasing real estate find that they have to co-own their home with someone else, whether that person is a spouse, family member, business partner, or friend.
But what happens when a dispute arises and the two co-owning parties have to go their separate ways? Can one party evict the other? And what if the co-ownership of the property involves a business dispute?
Ownership Contract Governs
When circumstances like these arise, you need to discuss your options with an experienced real estate attorney in order to ensure that your rights are protected. The first step is understanding how you and the other co-owner own title to the property. If you and the other co-owner are unable to manage the property as co-owners, one owner can buyout the other owner’s interest, although all of this depends upon how the property was purchased and/or titled. While some co-owners may have purchased the property together, in other instances, one owner may have been placed on the title for estate planning purposes, etc. All of this affects the specific circumstances under which two co-owners can go their separate ways while preserving their ownership interests and rights.
The Law in Alabama
In Alabama, people can share title to property as tenants in common or joint tenants. When people speak of “the right of survivorship,” they are referring to what happens to the shares of a deceased co-owner in terms of distribution of those shares amongst the surviving owners (without those shares/that property first having to go through probate). However, in Alabama, joint tenancy operates more like a tenancy in common (unless the deed clear states the intent for survivorship). Overall, it is crucial that owners maintain a clear chain of title so as to simplify any issues in the future that may arise.
An Attorney Can Help
If you were placed on the title by the other owner, you may not have financially invested enough into the property to be on the same level as two people who are joint tenants with right of survivorship on the title to the home. Your attorney can sit down with you and help you figure out what is best for you and your living situation, the relationship with the other co-owner in moving forward, your finances, and any other particular circumstances involved in your situation.
The experienced attorneys of Cloud Willis & Ellis practice in business, real estate, and estate planning. We can represent you and your interests in any complex real estate, commercial litigation, business and/or title disputes, estate planning, and/or related issue. Cloud Willis & Ellis will provide you with counsel and guidance, and help maximize your quality of life and asset protection. Our attorneys will vigorously defend you and your wishes. Contact us today to schedule a consultation.
What do a 401(k) and a tax deed have in common? Well if you are self-employed and one day want to retire, working with an experienced attorney in forming what’s called a “Solo 401(k)” (also known as a “self-directed Solo 401(k)”) would allow you to invest in alternative assets such as tax deeds, tax liens, private equity, real estate, mortgage notes, personal lending, stock-bond investments, and more.
Solo 401(k)s are qualified retirement plans for self-employed individuals and/or business owners who do not have any employees. They offer both pros and cons: While featuring investor-friendly options and high contribution limits, they also carry strict eligibility requirements, such as some form of self-employment and not carrying any employees whatsoever (other than your spouse).
More on the Benefits
Solo 401(k)s can help you work towards accumulating savings that will be sufficient for your retirement precisely because they feature:
When it comes to self-directed 401(k)s, participants can very literally invest in whatever they wish (unlike the circumstances of traditional brokerage retirement accounts). Some of the most common examples that those with self-directed 401(k)s invest in include real estate (both commercial and residential), rentals, tax liens, foreclosures, and others. They also eliminate the need for a custodian, as is required with IRAs.
When it comes to rules and limitations, there are really only two rules for self-directed 401(k)s:
An example of engaging in a transaction with a disqualified person would be if the plan participant, for example, purchased a condo and let their son live there. Another prohibited transaction might involve direct or indirect lending of money, such as signing a loan guarantee for the Solo 401(k) plan, or receiving direct or indirect benefits of the plan by purchasing property and charging a management fee.
Birmingham & Mobile Business & Tax Deed Attorneys Serving Alabama
If you are self-employed and considering a solo 401(k), it is crucial that you work with an experienced attorney so as to ensure that you follow IRS rules when it comes to repayment in order to avoid unnecessary taxes and penalties. At Cloud Willis & Ellis, we can provide you with counsel and value adding solutions necessary for navigating through both simple and complex situations like these. Contact us today for professional legal assistance in Alabama or if you have any questions.