Many are the details surrounding the closing of a company sale or acquisition. Some details seem more important than others. Insurance fine points fall into a special class and deserve particular attention and care. In the hustle and bustle leading up to a closing, CEO’s and CFO’s should not succumb to a default stance of “let the insurance agents handle it.” Insurance is simply too important. Coordinating coverage at a time of transition, such as a sale, is often like fitting the pieces of an elaborate puzzle together. It takes great care ... Read More »
Entity Liability Insulation – A Rugged, Eloquent Voice From 1929 – Behind the “Corporate Veil”
Many of my friends know that the late Justice William O. Douglas, a rugged outdoorsman, rail hobo, eloquent author, world traveler, environmental activist, FDR’s poker buddy, and brilliant jurist, is one of my heroes. His iconic autobiography, Go East Young Man, rests on my office shelf. So I was delighted when I discovered that he had written the words excerpted below, which remain Georgia’s black letter law on the subject, in 1929 as a Professor in a Yale Law Journal article titled “Insulation from Liability Through Subsidiary ... Read More »
Georgia Noncompetes — Five Eleven Eleven! — Why May 11, 2011 Matters — Lowe Electric Supply Co., et. al, v. Rexel, Inc., et. al (Middle District of Georgia, November 2014) and Cone v. Marietta Recycling Corp. (Fulton County Superior Court, March 2013)
Introduction Georgia’s new Restrictive Covenant Act became effective May 11, 2011. On that day, Georgia swung abruptly from being one of the least friendly states for noncompete enforcement, to a much more flexible stance toward them. A key feature of the new Act is its express authority for courts to modify covenants as necessary to become enforceable. But a recent federal trial decision in Macon, and a 2013 Fulton County case, raise a red flag. Both cases remind us that if there is any question at all about enforceability of pre-Act ... Read More »
Not What But How—FDIC v Loudermilk, Georgia Supreme Court (July 2014)—Business Judgment Rule Case
Introduction: If you are a director of officer of a Georgia corporation, you should know about the recent Georgia Supreme Court case of FDIC v. Loudermilk. The Case: Like so many banks, Buckhead Bank failed in the Great Recession. The FDIC as receiver sued 9 former officers and directors, some of them well known in Atlanta, for approving $22 million in loans that later soured. The case came to the Supreme Court as a certified question from a federal court. The court overruled two Georgia Court of Appeals cases in clarifying the limits ... Read More »
Georgia Noncompetes – A New Era
For decades, Georgia was infamous among the harshest states nationally in enforcement of post-employment noncompetes. All of that changed abruptly effective May 11, 2011. With the passage of HB 30 [ O.C.G.A. §13-8-50 et seq. ] effective on that date, a new and softer era of Georgia noncompetes began. The result is a bright line divide in enforcement of restrictive covenants, between those signed before May 11, 2011 [2. Debate continues as to the new law’s effect on noncompetes signed after November 3, 2010 before May 11, 2011, with the ... Read More »