Lanigan & Lanigan, P.L.
831 W. Morse Blvd., Winter Park, Florida 32789
407-740-7379
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The Law
A CEO often sees business reorganization as a way to repair what’s wrong with a company and companies sometimes hire a new leader based specifically on his vision for reorganization often at the beginning of a year. Companies are feeling strong after the end of one year and are clawing their way back to health, hoping for full recovery seems to occur in January. But the plans should actually begin with the help of a skilled legal and financially-driven law firm familiar with state and national tax laws. However, before deciding to take on a new financial plan, business structure, begin firing or hiring, consult with Eric Lanigan and Roddy Lanigan to decide whether a business reorganization in Orlando or any Central Florida city is a wise economic choice. The reorganization of a company typically addresses the efficiency or inefficiency of current or past leadership and is sometimes done haphazardly in an attempt to quickly increase profits. Corporate Reorganizations Can Be Risky New chief executives often feel compelled to reorganize their companies. In fact, nearly half launch some kind of reorganization during their first two years on the job. But corporate reorganizations are risky investments of time, energy and resources, and many do little to improve the business. The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. Reorganization is ordinarily accomplished by way of a Judicial Sale of the property of the corporation. The purchasers then often form a new corporation to which a good portion of...
The Law
For most corporations the directors and officers have the authority to make the major decisions for the company. However, this power is not absolute as they have to answer to the shareholders for any important changes. When the shareholders feel that the directors or officers are abusing their power, the shareholders have the ability to sue the company in a derivative suit for mismanagement or negligence. Although the shareholders are the “owners” of the company, the directors and officers are protected by the business judgment rule. Business Judgment Rule The business judgment rule is a principle of corporate governance that has traditionally operated as a shield to protect directors from liability for their decisions. The idea is that if the directors are entitled to the protection of the rule, then the courts should not interfere with or second-guess their decisions. If directors are not entitled to the protection of the rule, the courts scrutinize the decision as to its intrinsic fairness to the corporation and the corporation’s minority shareholders. The rule is a rebuttable presumption that directors are better equipped than the courts to make business judgments and that the directors acted without self-dealing or personal interest and exercised reasonable diligence and acted with good faith. Accordingly, the application of the business judgment rule operates in conjunction with the fiduciary duties of corporate directors and officers. A fiduciary duty is a legal relationship based on trust and confidence between different parties. Thus, the officers and directors have fiduciary duties to the shareholders and the company as an operation of the law. These duties include a duty of loyalty, due...
