Uber VC  and all around sage Fred Wilson proclaimed in his fantastic blog that he often wishes that he we could do business on a handshake. He goes on with this story:

I always like to imagine the way that Andy Bechtolsheim handed Larry and Sergey that check for $100,000. I have no idea how it went down, but I always imagine they that pitched him, he said “sounds great” and whipped out his check book and wrote a check for $100,000. I sure hope that is how it happened. If instead he said “I will get my lawyers to draft a purchase agreement” I will be really bummed out.

The biggest problem with doing business on a handshake is you may not be dealing with the same folks in a few years. And when the person you are dealing with changes, things change. In those situations, you have to have a written agreement to fall back on. And it will be too late to get that document in place when the circumstances change.

So the right thing to do is get it in writing before you part with your cash. That is how I have always done it and how I suspect I will always do it.

So on Monday I am going to trial  on a case just like Fred Wilson  imagined where a check was whipped out and there was no written agreement between the parties. As you can imagine, it turned out to be a bad idea.

The case started in 2010 and we are finally going to trial in 2013. The parties disagree about the basic essence of their relationship. The suit could have been avoided if they had a written contract.  As lawyers, my adversary and I are making money while the clients are out of pocket for thousands of dollars. Don’t let them be you.

Before you decide to enter into a business relationship make sure you trust your business associates and remember to enter into a written contract.

The Law Office of Frederic R. Abramson represents business and individuals in New York. Feel free to contact me at 212-233-0666. 

There is no shortage of  examples of corporate wrongdoing. Officers and directors have been using the business judgment rule as an excuse for corporate malfeasance since the stone age. The defense is used in complex cases, such as mortgage backed securities indiscretions, to the relatively mundane where officers are accused of purchasing New York Knicks season tickets out of the corporate till for personal use.

The business judgment rule, which began as a minor exception, is now so strong a winning argument that the only fun left is trying to prove that it  does not cover absolutely all forms of corporate stealing.

WHAT IS THE BUSINESS JUDGEMENT RULE? 

If you are an officer or director  of a corporation then you are responsible for managing and directing the business and affairs of the corporation. The larger the business, the more challenging the issues the officers face. Should your fashion tech start-up expand and open up a store? What if the lease is in a building that your family owns and the terms are unfavorable for the company?

If you own a business and have partners and shareholders, you don’t want to be scared that you will be subject to an expensive lawsuit if things don’t work out. However, if the officers and directors are acting against for personal gain and against the interest of the other shareholders, who should be to blame?

The courts have given large leeway to the decisions the directors and officers must make.

Under the business judgment rule, the officers and directors of a corporation are immune from liability to the corporation for losses incurred in corporate transactions within their authority, so long as the transactions are made in good faith and with reasonable skill and prudence.

When lawsuits focusing on the businesses judgement rule are commenced, they are usually highly fact driven and subjective. Was the CEO acting in good faith or did she have dual allegiance? In the example regarding the fashion tech start-up, the issue regarding dual allegiance is relevant but you may not win on that alone.

If you are an office or director and there comes an issue where your business judgement may be called into question, I would suggest that you disclose any potential conflicts up front. Open communication and fostering a business environment based on trust is the best preventive medicine.

The Law Office of Frederic R. Abramson represents business in New York. If you have questions about corporate governance and the business judgement rule, feel free to call me at 212-233-0666. 

Are you looking for funding for your new startup? Do you plan on brokering a deal between an entrepreneur and an angel investor. Check this form out.

Be aware that this form is for guidance only. I would strongly advise against using this form prior to contacting an attorney like myself. 

The Law Office of Frederic R. Abramson represents businesses and individuals in New York. If you have a legal issue in New York, feel free to contact me at 212-233-0666

  New York Finder Agreement Funding

The New York Times reports Johnson & Johnson, the maker of the company’s DePuy orthopedics unit, which made and marketed an all-metal hip replacement loses its first case due to a faulty hip replacement.  The verdict before a jury was $8.3 million dollars. Be aware that Johnson & Johnson is planning to appeal the decision. This case is a California decision, however, in New York most large judgments are usually reduced in the appeal process. Since the case is in California, a New York judge is not required to follow the decision. Nevertheless, this is a huge win for plaintiffs.

Bad hip replacements are a big problem. If you received one you may understand what I am talking about. The devices have a mechanism which malfunctions and releases metal shavings and dust into nearby tissues and blood. Obviously this cannot be good. This causes various side effects including:

1. Loss of mobility. 
2. Pain and irritation.
   
3. Swelling and Inflammation.
4. Allergic reaction to the metal.
5. Tumors
6. The bone structure can completely weaken causing bone fractures. 

If you have experienced pain (or even if you haven’t been feeling pain) as result of a faulty hip implant make by DePuy and you may have a case. If you have not made the connection that the above symptoms are related to your hip replacement call a doctor (don’t call me for medical device, I’m only a lawyer ).

This is what you need to do:

1. Verify if your hip implant was included in the 2010 DePuy Orthopedics recall. How do you do this? Call your doctor. Ask for your medical records.
   
2. After reviewing your records and visiting your doctor, ascertain if hip replacement surgery is needed.
3. I can’t emphasize enough that even if you are not experiencing pain now, it doesn’t mean that you won’t experience problems later.
4. Contact the Law Office of Frederic R. Abramson at 212-233-0666 and let me help you.

The Law Office of Frederic R. Abramson practices civil litigation including personal injury law in New York. 

Are you looking to form a non-profit organization in New York? Because your entity will enjoy tax exempt status, there is a number of hoops that you will need to go through. Attached, please find my New York non-profit 501(c)(3) formation checklist.

Be aware that this list may not be all encompassing and I suggest that you contact a lawyer first prior to attempting to do this yourself.

If you have any questions regarding this form, call me at the Law Office of Frederic R. Abramson at 212-233-0666.

New York 501c3 Checklist by Fred Abramson

Cyber insurance: Because the costs of investigating and responding to cyber attacks can be staggering for small firms, some companies are turning to cyber liability insurance. If your business stores data in the cloud, I would certainly look into purchasing. FYI, my friend Chad Ezkanazy over at Morstan General Agency Insurance can help you out.

Texas Bill to Allow Service of Process Via Facebook. Bradley Shir, an attorney based in Washington, DC. reports that Texas recently introduced a bill that would allow for service of process via Facebook. Texas House Bill 1989 if enacted would make the Lone Star State the first in the United States to allow for service of process via social media as an alternative means of service. No word if New York plans to allow service of process by Facebook anytime soon.

To Place Graduates, the New York Times reports that Law Schools Are Opening Firms. It is hard to believe that it has come to this. We all know that law schools have been running a scam for decades. With relatively low overhead law schools are a cash cow. They charge more and more each year yet their expenses remain stable. Unlike medical schools, law schools don’t have to pay for expensive lab equipment.

Law schools are now getting into the law firm business and it really is not very helpful. They just add another layer of competition. Since they are able to fund their “firm” through high tuition, they have no profit incentive. They could sell services at a loss. This could have the net effect of killing law firms that could have hired these graduates later. It could drive the cost of law firm salaries down.

I am already seeing the effect of this. The Brooklyn Tech meetup is currently hosted at Brooklyn Law School. A couple of months ago I attended the event. Their legal clinic was giving legal services to start-ups for free. Yes, it is a decent deal for entrepreneurs. Free advice from a law student with help from a professor. Yet, if I were able to nab one of these start-ups, I would be hire these law students and actually pay them for their work. This model simply doesn’t make economic sense for attorneys.

What do you think of Law Schools opening law firms? Is it a good idea to bring legal costs down, or will it further damage the legal industry?

The Law Office of Frederic R. Abramson represents businesses and individuals in New York. If you have a legal question, feel free to contact me at 212-233-0666

Hugo Chavez died yesterday. I have always expressed an in intense interest in the study of other cultures. My love for all things Latin American began when I was a young youth in sixth grade.  My parents were avid New York Times readers and the Times was delivered daily to our home.

My daily habit of  reading the New York Times also commenced when I was twelve. At that time, I made sure to read any articles about Latin America. I became fascinated with Brasilia which looked so modern. I thought that South America represented the future.

The Latin America of today falls short of my sixth grade vision. Some Latin American countries have enjoyed economic success since Chavez was brought to power, such as modern Brazil.  But there has been no huge influx of Brazilian businesses here in New York. Google “Brazil Tech Startups” and  the lead article is from four months ago. In NYC e have Little Brazil located on 46th between 5th and 6th. But the small business community hasn’t done much to branch out. Nevertheless Brazil is a growing economy, dependent on its people for economic prosperity.

In contrast, Chavez’ Venezuela was a country of contradictions. When Chavez democratically took power, the main source of revenue in Venezuela was oil.  Most of the profits of the petrochemical industry went into the pockets of United States oil multinationals and a small number of the ruling elite. The rest of the country was left dirt poor.

Chavez came to power running on a platform of redistribution of the oil wealth to the poor. With the dissolution of the Soviet Union, Fidel Castro needed another source of subsidies to fuel his socialist “paradise.”  The charismatic Chavez was in sympatico with Fidel.  Chavez gained his ideology through the teachings of Castro. In return, Venezuela provided copious amounts of oil to Cuba. This allowed Cuba to maintain its “socialist” lifestyle while the poor of Caracas lived in abandoned high rises. See Jon Lee Anderson’s epic article on the high rise slum in located in Caracas in the New Yorker.

In the near term any leader would be better than Hugo Chavez for New York small businesses. The country is wholly dependent on foreign revenue generated by oil (an awe inspiring 95%.) The entrepreneurial class is negligible. Chavez’ anti-American stance certainly discouraged American investment. The hope is for a democratically elected leader who is willing divert resources from Cuba into encouraging Caracas entrepreneurs.

After Chavez, CNN says that there is a power vacuum.  Will the ideology of the Chavez revolution live on without its charming leader. Will Rosanne Barr, Oliver Stone and Sean Penn continue to visit? Can Caracas further reduce the distance between rich and poor while encouraging people to actually work? I wouldn’t bet on it.

The Law Office of Frederic R. Abramson represents businesses and individuals in New York. Feel free to call me at 212-233-0666

Since we live in a capitalist society, we exchange money for goods and services everyday. Last week I leased a new car and and I was required to sign on the dotted line. When we go to the store to purchase a package of gum with cash, that type of activity clearly does not require a contract. However, if you are running a business, clearly you need to be aware of contracts. The big questions is whether you need a contract for every business relationship. The answer is ABSOLUTELY!

The biggest issue is dealing with unwanted and risky litigation. I’m about to go to trial a case in New York Supreme Court where there was no written contact and a certain of amount of money that was loaned was not returned. Since there are issues of fact, the judge  will decide the nature of the agreement by ascertaining  their subjective course of conduct. Two days of trial, plus trial preparation is an expense that only your lawyer can love.

Some business relationships have no written agreement and work fine. Fred Wilpon and Saul Katz  co-owners of that hapless team the New York Mets, do not have a partnership agreement between them. But I would not recommend that you follow in their footsteps.

California attorney Elizabeth Potts Weinstein notes that the contract defines the relationship.

Everyone knows what is expected throughout this relationship, so it is less likely there will be difficulties or misunderstandings.

This is huge.

People think that contracts are just there to make the lawyer happy – but this contract is primarily to make the relationship go smoothly! If everyone knows what they are supposed to do (and what happens if they don’t do it) – then you guys will be able to do business together that much longer, and that much more profitably.

So be smart and have all of your business relationships reduced to writing.

The Law Office of Frederic R. Abramson represents businesses and individuals in New York. If you have a legal issue, feel free to call me at 212-233-0666. I would love to hear from you. 

While perusing the internet you notice that someone copied your website.  As you write more content, the chances of this happening to you increase over time. It has even happened to me.  One of my fellow attorneys here in New York copied one of my pages. What should you do?

It depends on how aggressive you want to be.

One option is to simply contact the other party.  Let them know that that you have noticed that they have copied some of your content without attribution. Simply ask them to take it down and be cordial. This is merely a stylistic approach.  Be natural.

Next step is to hire  a lawyer (yes this is selly selly.)  You may have already contacted the other party and they have refused to take down the material.  You can then contact my office and I can draft a cease and desist letter asking for certain relief, such as taking down the information, asking for potential statutory attorneys’ fees and the like. The cost of is around $600 for around two hours of work. These cease and desist letters written by a lawyer is more likely to work because there is the threat of legal action, which is a bigger headache.

However, your business is larger and your content is your intellectually property and you want to collect money, then you’re going to have to do more.

You automatically own a copyright to your content that you published online. But to collect you need to….

REGISTER YOUR COPYRIGHT

It is remarkably easy and inexpensive to register a copyright to your website.  Simply go to the U.S. Copyright website  and register your copyright for your website for a mere $35. What do you have to lose? You then call my office and let the federal lawsuit begin. You may win money damages.

Frederic Abramson is a business attorney at the Law Office of Frederic R. Abramson in NYC. He represents companies and individuals in cases including copyright, trademark and litigation.

Ceast and Desist Defamation- SAMPLE FORM by Fred Abramson