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Portland Business & Commercial Law Blog

New business formation marries two small fast food chains

A business phenomenon seen recently in Oregon and elsewhere is the merging together of fast-food restaurants for the purpose of combining delivery and service functions. Such business unions attempt to increase each company's bottom line by reducing ultimate costs through a sharing of various resources. It's also a way for new business formation to occur, which often requires substantial legal services by business law attorneys to get the new structure organized and operating.

For example, in one state recently, a chain called Mama Fu's is planning to purchase a pizza restaurant chain with the intention of combining their delivery services and sharing technology resources. The model being chosen will not change each chain's basic menu. Whether their existing locations will add each other's menus is unclear at this time.

Contracts disputes over research mice are going to arbitration

Oregon is a state where research facilities engage in a wide variety of scientific inquiries. Many medical research projects traditionally involve the use of mice as subjects. According to the plaintiff in a federal district court case, only certain very special mice should be used so that the research breakthroughs will continue to maintain their integrity and reliability. The case is about contracts between research labs and the alleged attempt by one party to breach provisions that preclude the sale of the purchased mice to third parties.

The Jackson Laboratory sued a university and related research entities that purchased some of Jackson's mice years earlier. Jackson alleged that the purchaser had attempted to breach their contract and sell some of the descendants of the original mice to third parties. The lawsuit asked that arbitration provided for in the contract be ordered against the purchaser.

ZFS buys soybean processing plant in business law transaction

Oregon has many businesses that deal in some aspect of food manufacturing and/or processing. A lot of activity in business law involves the purchase and sale of businesses in the food growing and processing industries. An established food manufacturer may desire to add a certain specialty line of products to its brand or it may need to increase its production values by acquiring a business that can engage in a manufacturing procedure not yet available to the buyer.

An example is the recent acquisition of the soybean processing facility owned by CHS, Inc. The purchaser, ZFS Creston L.L.C., is a subsidiary of Zeeland Farm Services, Inc. The purchaser will use the facility to make soybean products for specialty markets. The process of locating and buying such a business by a large manufacturer can be arduous due to the variety of businesses that deal in some form or another with at least part of the activities of CHS, Inc.

Shareholder suit is latest business litigation against Facebook

Corporate litigation in Oregon often is filed by shareholders who have a complaint against the company. They may object to how the business is being run or to some major development that they believe indicates poor judgment or abject negligence by the board and the officers of the corporation. When that occurs, both the attorneys for the company and those for the dissenting shareholder(s) will have an intensely strategic job ahead in maneuvering through the business litigation loops that will inevitably be faced.

An example of a shareholder dispute, albeit one that likely surpasses in intensity and public interest most similar disputes, is the recent one that has been filed against Facebook. A single shareholder filed a purported class-action suit recently against the social medial giant, alleging that Facebook has published false and/or misleading claims about the company's promises to protect users' personal privacy and data from outside sources. The heart of the claim deals with the ongoing scandal where an analytics firm was able to take control of some 50 million Facebook accounts and use the personal information of those users for political purposes.

Business formation considerations loom for new startups

Oregon business law attorneys get the opportunity to work with many startup businesses, which gives them an insight on some of the mistakes that startups may encounter. Of course, the attorney will be primarily concerned with assuring that the legalities of business formation are established and running without a flaw. Business law attorneys are also useful for steering the startup in the right direction and sharing a wealth of knowledge with the new company.

The initial phase of the startup may be a critical time to retain a focus on the primary purposes and goals of the business. The SBA estimates that about one out of every five startups will fail in the first year. There are, however, some observations and tools to keep in mind. For example, the startup must be dedicated to the energizing values and love of the work that is ingrained in an owner's psyche.

Is it time to sell your business?

Selling a business can be a difficult decision to make. After all it can be hard to walk away from something you’ve invested in both financially and otherwise.

For some business owners there isn’t a “last straw” when they decide to make the call. Many contemplate it for months or even years before calling it quits while weighing the pros and cons of selling.

Business litigation over data breach reinstated by 9th Circuit

Data breach cases involving retail companies are becoming common in Oregon and other states. Usually, these business litigation claims are class actions filed to obtain redress for thousands if not millions of consumers. The claims usually center around the theft of the victims' personal information, including addresses, passwords and credit or debit card details, stored on a company's online servers.

The U.S. Court of Appeals for the 9th Circuit recently reinstated a class-action lawsuit against Zappos that had been dismissed by the federal district court. The case arises from an incident in 2012 when hackers accessed the Zappos servers and took the  information pertaining to 24 million customers. The lawsuit filed on behalf of the victims was dismissed due to the district court's opinion that not all of the plaintiffs could establish proof of an actual injury that was traceable.

Business litigation may include claims of fiduciary violations

In Oregon and elsewhere, claims of fiduciary duty violations are common litigation issues in the field of commercial and business law. These are sometimes brought by consumers against companies for alleged breach of fiduciary duties in providing insurance or investment services. Sometimes, such business litigation actions are brought as class actions on behalf of a group of consumers.

That type of litigation is demonstrated by a federal class action filed against Transamerica Life Insurance Co. and some of its affiliates. The case has been in litigation since 2011 but a federal appeals court recently appears to have put the matter to rest. In the federal trial court, the judge had ruled mostly for the plaintiffs and against Transamerica. Attorneys for the company argued that the defendants were not fiduciaries under the Employee Retirement Income Security Act (ERISA).

Incubators and accelerators may assist in business formation

Oregon and all states have organization that nurture and support startup businesses to get them going and to survive. They are called business incubators and accelerators. A business law attorney who provides business formation services may coordinate efforts with these programs while also assisting the startup to get its legal filings and business structure requirements established.

These organizations may focus on high tech startups but not always. Some of the functions of accelerators and incubators are to prepare companies for growth. They provide resources, mentorship and a wide scope of practical help. The incubator operates earlier, in the beginning stages of the business. It offers office space, funding, skills training, organizing financial record-keeping and integrating with professional networks.

Business formation includes mergers as well as startups

One of the tasks performed by a business law attorney in Oregon or elsewhere is to assist new companies in the initial start-up phase. Business formation can consist of a brand-new enterprise getting started with all of the legal structure being put in place with the assistance of legal counsel. It can also consist of a new company coming to birth from the merger of two existing companies.

A recent merger in another state shows an example of what may be involved when two companies come together to form one. The two companies in this case are Motion PR, a public relations and digital agency, and Agency MSL, an integrated marketing and communications company. They have merged and immediately will be known as Motion.

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