Lanigan & Lanigan, P.L.
831 W. Morse Blvd., Winter Park, Florida 32789
407-740-7379
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The Law
One of the most important questions for people involved in a legal dispute is, “what do I get if I win?” More often than not a prevailing litigant is entitled to monetary damages as a result of establishing that he or she has been wronged in a way the law recognizes. Although the law affords different kinds of damages to a winning plaintiff, compensatory damages are the most common. It’s Usually About the Money The purpose of compensatory damages is to award a sum of money to a victim for some loss that they have sustained. Known as the “rightful position” principal, the idea is to put the plaintiff in the position it would have been but for the defendant’s wrong. This could be the result of tort, property, contract, or constitutional law but it is measured based on the particular circumstances of the case. Nevertheless, compensatory damages are different from consequential or “special” damages. Compensatory damages are a direct result of the defendant’s harm which is usually a capital interest. On the other hand consequential damages tend to be later in time and are not the inevitable result of the harm. Thus, compensatory damages are awarded more often because there is a direct link. One of the important issues that arise with damages is the concept of valuation. Generally, the law employs market damages to determine the appropriate amount that should be awarded to a plaintiff for property damage. The market can be defined as what a willing seller and a willing buyer would normally exchange. Several factors are relevant in this valuation such as: the scope of...
The Law
Civil law consists of a wide variety of legal disputes between individuals or organizations, usually to provide compensation to a victim. Opposed to criminal law, civil law does not invoke the state’s statutory power against the individual but instead attempts to rectify civil wrongs between its citizens. It provides a forum for citizens to remedy disputes without resorting to violence or revenge. Thus, civil litigation is the process by which civil matters are brought before a court of law. It involves disputes concerning torts, contracts, probate of wills and trusts, property, administrative law, commercial law, and other matters between private parties. In civil law cases, the burden of proof requires the plaintiff to convince a trier of fact (whether judge or jury) of the plaintiff’s entitlement to the relief sought. This means that the plaintiff must prove each element of the claim, or cause of action, in order to recover. Unlike criminal law where the standard of proof is “beyond a reasonable doubt,” generally in civil cases the standard is a “preponderance of the evidence” which is a slight tipping of the scale. Premise of Civil Action For a civil court to be able to render a judgment on an individual, it must first have personal jurisdiction. Personal jurisdiction is concerned with where and when is it acceptable to make a person defend him or herself in a court of law. It is the notions of fairness, constancy, justice, and transparency through due process that keep the system working. Thus, personal Jurisdiction involves state boundaries and whether a court in a particular state can bind a citizen of another...
The Law
Almost every day of our lives we sign and agree to contracts. Whether it’s buying goods online, paying for groceries at the store, or purchasing a new car, contracts make the business world go round. While contracts play a major role in our lives, many are not familiar with the exact components that make up their contractual rights. Definition of a Contract: Bilateral Exchange of Promises First and foremost, a traditional contract is a bilateral exchange of promises. It is either a promise in return for a promise or a promise in return for an action. For instance, if I promise to wash your car and you promise to give me $10 then we have both exchanged promises. However, before contract formation there must first be assent by both parties for the contract to be deemed enforceable. Assent is the intention to enter the contract and is based on both objective and subjective factors. Without assent there can be no contract. Secondly, there must be a true offer and consideration in the formation of a contract. An offer is an act whereby one person confers upon another the power to create contractual relations between them. It must lead the offeree reasonably to believe the power to create a contract is conferred upon him and it must exclude invitations to deal, acts of preliminary negotiations, and acts evident in jest. In addition, there must be sufficient consideration with the offer which makes it a bargained for exchange. If there is no consideration than the promise is gratuitous which destroys the contract. Lastly, there must be acceptance by the offeree to...
The Law
No matter what industry your business competes in, it is more likely than not that a legal dispute will inevitably arise. Whether you are a private individual, a partnership, or a large corporation, it always helps to have an experienced attorney to go to bat for you in court. 36 Years of Litigation Experience Business litigation lawyer Eric Lanigan has 36 years of experience when business litigation is necessary and knows what it takes to resolve complex legal issues. Roddy Lanigan and Eric Lanigan of Lanigan and Lanigan P.L., will work to help your business handle all manner of legal situations you’re likely to encounter at some point and make sure that it can continue to grow and remain profitable. Generally, when a business dispute arises it can be resolved through negotiation or arbitration proceedings which give both sides a swift and efficient resolution. Negotiation and arbitration are excellent ways to avoid going to court and paying unnecessary fees for many legal issues. The Lanigans are very aware of how expensive legal fees can become when there’s need for litigation. However, other times the dispute can grow into a problem that neither side could have foreseen and the only way to resolve it is through business litigation. At this point it’s very important to have an attorney with courtroom experience. Contract and Tort Related Issues Business litigation covers a wide array of legal issues but most are contract and tort related. Many times businesses just want to continue business as usual but a breach of contract can result in bad blood between two companies and the only way to...
Bankruptcy
Although the trustee is permitted to avoid transfers that prefer certain creditors, there are some fairly common exceptions. However, before consulting the exceptions in section 547(c), the elements of 547(b) must first be fulfilled. If the elements of a preferential transfer are met then the burden shifts to the transferee to show one of the exceptions apply. Avoiding Transactions That Circumvent Priority System The whole idea behind preferential transfers is to avoid transactions that circumvent the bankruptcy’s priority system. Thus, the exceptions are provided to prevent the trustee from avoiding ordinary business transactions and to distinguish them from last minute preferences. Although the code describes a number of exceptions, there are some that are much more common than others. PMSI 90 Days Before Bankruptcy The first major exception is the purchase money security interest. If a debtor grants a creditor a PMSI in the 90 days before the bankruptcy filing then the creditor has 30 days to perfect the security interest to put other creditors on notice. While normally the granting of a security interest would be considered an avoidable preferential transfer this exception will allow the transaction if the creditor files within the time period. The second major exception is the so called “new value” exception. If a debtor makes a payment to a creditor based on antecedent debt and this induces the creditor to provide another loan then the transfer fits the exception. The additional funds the creditor grants the debtor will offset the total amount of the preferential transfer. This is based on the theory that the only reason the creditor is giving new value...
The Law
In recent years leveraged buyouts have become more common in the business world despite opposition from courts. Although leveraged buyouts are not per se fraudulent, creditors may look to fraudulent transfer law to avoid the transfer made by a corporation if it fails to pay its debts. In simplest terms, a leveraged buyout is a transaction in which the purchase of shares of in a corporation is financed by the corporation itself or secured by the assets of the corporation. In essence, the corporation makes available its own funds or other assets to enable the buyer to finance the purchase of its shares. The expectation is that the corporate assets will be restored over time from future profits that the buyer will make from the operation of the corporation’s business. Leveraged Buyouts Structures Leveraged buyouts are structured in many different ways. One method is for the corporation to allow the buyer to use its unencumbered assets to secure the purchase price of the shares. The seller may give the buyer credit for the price of the shares and secures this credit by having the corporation grant a security interest in its assets. However, if the business does not produce large enough profits, the debt will not be repaid, and the assets will be foreclosed upon. The risk of failure is borne not only by the corporation, but also by its unsecured creditors who have lost the protection of recourse to unencumbered assets. Purpose of a Leveraged Buyout Some people view leveraged buyouts as serving useful purposes, such as facilitation of changes in corporate management, the promotion of efficiency, and...
Bankruptcy
One of the most important features of a secured transaction is the right of the secured party to enforce its security interest after the debtor’s default. The security interest is put in place to back up the obligation owed by the debtor to the secured party and is what gives the transaction its enforceability. Thus, the debtor will be working toward fulfillment of its obligation not just because of the fear of a breach of contract, but may also lose possession of some valuable piece of property. Best Case: Security Interest is Never Enforced Because it’s a headache for the creditor, most of the time the secured party wants the debtor to succeed and does not want to have to enforce the security interest by taking possession. In the best of cases the security interest is never actually enforced and the subject of repossession never enters either party’s mind. Accordingly, the event of default is a sign that something went seriously wrong and the secured party is left with no other alternative but to bring in the “muscle” of the contract. While there is no exact definition of “default,” the UCC leaves to agreement of the parties the circumstances giving rise to the event of default. It is the written security agreement that spells out the terms and conditions of a default. Thus, you should expect to find in some paragraph or section in the security agreement that lays out precisely what events will constitute defaults allowing the secured party to choose to exercise its rights and remedies. For example, one event that is expected to be on...
Bankruptcy
Article 9 of the Uniform Commercial Code governs any transaction, regardless of its form, which intends to and creates a security interest in personal property. On the other hand, Article 2A deals with any transaction, regardless of its form, that creates a lease of goods. This distinction can be very important in bankruptcy because sometimes a transaction may appear as a lease, but in reality it is a disguised sale with a security interest. If it really is a sale, this can be bad news for a creditor because he may not be fully secured and will only receive pennies on the dollar from the debtor in bankruptcy. In theory at least it should not be difficult to tell the difference between these prototypical commercial transactions but many times it comes down to the facts of the case. The UCC defines a lease as a transfer of rights to possession and use of goods for a term in return for consideration, but a sale, or creation of a security interest is not a lease. To determine if transaction is true lease or disguised sale, courts endorse the “economic realities test”. This test considers the likelihood at the time transaction entered into that the lessor will receive the goods back at a time when goods still have meaningful economic life. Accordingly, the UCC has codified the economic realities test by providing a bright line test to distinguish the two transactions. Section 1-203 of the UCC states that a security interest is created if the transaction is not subject to termination (no termination clause) AND 1 of the following conditions apply:...
Bankruptcy
Before a creditor can collect from a debtor who has filed bankruptcy, the creditor must file a claim in bankruptcy court. Generally, after the debtor files he or she provides a schedule with the petition, listing all creditors and the amounts due to those creditors. If the debtor omits a certain creditor, the amount owed will not be discharged in the bankruptcy. After the debtor provides a schedule of debts, the court sends a proof of claim form to all listed creditors. Generally the creditors attend a “341 meeting” where they either accept or dispute the amount the debtor listed. All chapter 7 and 13 debtors must return the proof of claim form within 90 days of the 341 meeting. On the other hand, chapter 11 creditors only need to return if they object to the amount or how they are classified by the debtor. If the trustee or debtor in possession agrees with the claimed amount, the creditor has a claim in that amount. If the trustee disagrees, he brings a contested matter before the court to determine the proper amount of the claim. Once all claim amounts are determined, the creditors are paid based on secured status and priority. Many courts are split on when the actual claim arises or becomes legal right to sue for the debt. However, most courts use either the “relationship” test or the “fair contemplation” test. The relationship test provides a claim only arises when there is a pre-petition relationship between the parties and the conduct giving rise to liability occurs pre-petition. Conversely, the fair contemplation test provides that a claim arises...
Bankruptcy
Under a Chapter 13 plan, the debtor makes payments based on the type of claim by the creditor. Each creditor’s claim is classified into three types of categories: secured, priority, and unsecured. As such, it is important to understand the different rules for claims based on their classifications. Here is a basic outline for the treatment of creditors in a Chapter 13 case. Secured Claims: The debtor has three alternatives for treatment of secured claims. First, the debtor is allowed to treat secured creditors consensually and provide them equal treatment. This means each secured creditor is treated the same and can only receive different payments if he agrees to a lesser amount. Second, the debtor is allowed to pay the claim and preserve the lien while payment is pending. This means the creditor becomes entitled to foreclose on the full balance only if the debtor defaults before completion of the Chapter 13 plan. Third, the debtor is allowed to surrender the collateral to the holder of the claim. This means that the secured claim is disposed and the debtor’s obligation to pay is terminated. Each alternative is an option decided by the debtor under a Chapter 13 plan. Priority Claims: All priority claims are required to be paid in full by deferred cash payments unless the holder agrees to different treatment. Thus, the order of priority is not as directly relevant in a Chapter 13 case as it is in chapter 7. Unsecured Claims: The debtor is allowed to divide unsecured claims into classes. However, the required amount to be paid on each unsecured claim must be no lower...
