Editor’s Note: The State Bar of Texas is providing this collection of important links, blog posts, and media stories to keep its members and the public informed of the latest news and resources related to the novel coronavirus outbreak and its impact on the legal community.
May 15 hearing set for Texas vote-by-mail arguments — U.S. District Judge Fred Biery has ordered a hearing on expanding vote-by-mail to all Texas voters in advance of the July 14 Democratic Party runoff election, due to fears of coronavirus transmission should in-person voting be required. — Rivard Report
Editor’s Note: The State Bar of Texas is providing this collection of important links, blog posts, and media stories to keep its members and the public informed of the latest news and resources related to the novel coronavirus outbreak and its impact on the legal community.
Texas AG helped donor fight virus lockout — Records reviewed by The Associated Press show that an exclusive group of Texans stood to benefit when Attorney General Ken Paxton urged a small Colorado county to reverse a public health order during the coronavirus outbreak. — The Associated Press
Texas voters sue over age restrictions for mail-in ballots — Citing the threats of the coronavirus, six Texas voters filed suit in federal court Wednesday challenging restrictions that limit age eligibility for voting by mail to those 65 and older. — The Texas Tribune
Tips for minimizing law firm liability during COVID-19 — As with any significant upheaval, this sudden and radical transformation of the legal profession creates new risk management challenges for law firms. (Subscription required) — Law360
Big Business wants immunity from Covid-19 lawsuits — At issue is how to balance protecting businesses from lawsuits, while enabling justice for customers and workers who in a time of rapidly rising unemployment may not have the option of leaving their jobs for something safer. — The Associated Press
McLennan County judges, court officials prepare for return of jury trials — As Texas and county officials prepare to resume more work under whatever the new normal will look like, judges are realizing McLennan County courtrooms were not built with social distancing in mind. — Waco Tribune-Herald
Supreme Court to begin live oral arguments; here’s how it works — For the first time in its history, the U.S. Supreme Court will hear oral arguments by telephone conference. All nine justices and counsel will participate remotely starting Monday, May 5. — Court TV
Shared custody in the time of COVID-19: A Q&A with Susan Myres — Houston attorney Susan Myres, president of the AAML, discusses shared custody and the challenges divorced/separated parents face during the time of COVID-19. (Subscription required) — Texas Lawyer
Working from home does not excuse employers from safety responsibility — It is imperative that all employers who employ home workers understand that they still have an obligation to keep all workers safe and they also must keep their Workers’ Compensation insurance in force. — Workplace Safety blog
Google zooms in on Zoom with a freebie — Google on Tuesday made its business videoconferencing service free to all users, ramping up competition for Zoom as people flock online to stay connected during the pandemic. — Agence France-Presse
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Editor’s Note: The State Bar of Texas is providing this collection of important links, blog posts, and media stories to keep its members and the public informed of the latest news and resources related to the novel coronavirus outbreak and its impact on the legal community.
Reopening Texas: A Q&A with David Coale — Dallas attorney David Coale recently discussed who has the authority to decide when Texas businesses reopen. (Subscription required) — Texas Lawyer
Texas courts zoom forward with virtual hearings — One month after the rollout of the first virtual courtroom in Texas held via Zoom, more than 8,500 separate proceedings have been held remotely. — Courthouse News Service
Best practices for Texas lawyers negotiating over email — Texas lawyers should be acutely aware of legal developments in our state applying the familiar themes of contract law—such as offer and acceptance—to this digital landscape. (Subscription required) — Texas Lawyer
SXSW sued over no-refund policy after cancellation — The company that puts on Austin’s internationally acclaimed South by Southwest festival is being sued over its no-refund policy, after the annual event was canceled this year because of the coronavirus pandemic. — Austin American-Statesman
Judge tells feds to abide by 20-year deal on release of detained immigrant kids — A federal judge in Los Angeles said Friday the risk of Covid-19 spreading in immigrant detention facilities requires the government to adhere to a longstanding settlement requiring prompt release of immigrant youth from custody. — Courthouse News Service
Legal separation in New Jersey doesn’t really exist. If you want to separate from your spouse, you can do so, and you don’t need an agreement to do that; but if you have children and you want to leave the marital home, you cannot take the children with you unless you have your spouse’s consent or permission from the court.
https://family-court-corruption.com/wp-content/uploads/2020/03/legal-separation-in-new-jersey.jpg400600adminhttps://family-court-corruption.com/wp-content/uploads/2021/11/fcc-logo-jpg.jpgadmin2020-03-30 12:00:042022-08-04 15:01:24Alternatives to Legal Separation in New Jersey
A commentary by Dallas Attorney Mark Nacol, of the Nacol Law Firm PC.
*In our current state of a national emergency in the United States, we feel that this blog rings true for all individuals and families as we enter into a serious unknown territory in your lives.
During the last 30 years of general practice in a number of civil areas, I have had the opportunity to observe repetitive mistakes and decisions made by clients in regard to whether or not preventive legal care is cost-worthy.
Most prudent people do not think twice about having their teeth cleaned, becoming vaccinated for the flu or other childhood illnesses, going to their doctor if they are dizzy, having speech problems or other symptoms of stroke diagnosed or changing the oil in their automobile.
The average person clearly acknowledges the flu shot is definitely preferable to two weeks in bed. Basic dental hygiene trumps a root canal every time. A blood thinner medication is far preferable to paralysis or brain damage, and early detection of cancer or other invasive diseases, may significantly improve prognosis for recovery.
On the other hand, when it comes to the ordinary individual’s legal needs, I have noted throughout the years and continue to note a juvenile and somewhat cavalier attitude. The result is denial and refusal to consider relatively small fees required to bring preventive legal care into play.
Depending on the size and nature of a man, woman or a couple’s estate, probate planning in the form of wills, durable powers of attorney, medical directives, medical authorizations, medical powers of attorney, testamentary and/or intervivos (living) trusts can avoid future attorney’s fees from 50 to 100 times the amount required for preventive care. Probate and/or litigation without a will in a large estate, disability, dementia, Alzheimer disease or other medical issues requiring guardianship and/or extraordinary legal procedures vastly exceed the basic costs of preventive care. The cost of fixing the legal problem after the event is extraordinary versus the simple matter of preventive legal care in the first place. Fees ranging from $500 to $5,000, depending on the complexity of the estate or matter, at first blush might appear large but may frequently be increased by 2 to 3 zeros in complicated, complex litigation that can last for years.
Marital prenuptial agreements are emotionally delicate, but may be a useful and significant tool to provide creditor protection throughout a marriage and reduce the cost of dissolving a marriage, an unfortunate circumstance, by thousands and thousands of dollars.
A properly prepared and executed contract for the purchase and sale of land or for the purchase and sale of a business when accomplished before the transaction is essential in fixing the rights of the parties, establishing enforceability of their promises and the cost necessary to force compliance with those promises. Time after time, I find a client who comes into my office and looks at me with dog eyes and says, “Can you help me in this business transaction? I’ve already signed the contract.” My response, of course, is “Yes, it is my pleasure. But, it is going to be far more expensive now than if you had simply prophylactically entered into an enforceable agreement prior to the conduct you allege is fraudulent or the subject of a breach at this time.”
The examples above may be extended into almost every area of the law. Why in the world would anyone want to market an invention, a well known mark of their business or trade, a manuscript or other written document without first having protected those items through trademarks, patents, copyrights or, at the very least, non-disclosure agreements? A common complaint echoed throughout the years has been the significant cost of the judicial system and the financial burden of enforcing one’s right in the courts of law of the state or federal government. With a bit of foresight and ingenuity and the help of an ethical, competent attorney, and the willingness to spend a smaller sum of money, many of the problems, disappointments and disenfranchisement with the judicial system may be bypassed altogether.
In closing, I am reminded of the classical advertisement by Mr. Goodwrench. “Pay me now or pay me later.” Preventative maintenance of the most important legal aspects of your life are as important as preventive maintenance of your car. Have you priced a new engine versus a can of oil lately?
*In thinking about the current National Medical Emergency, now is the time to think about your loved ones and family. In the case of illness or death, will they be protected or have to experience multiple problems with an old will or, more seriously, no will at all on your estate. Be proactive and review your legal documents now to help alleviate difficult probate situations.
https://family-court-corruption.com/wp-content/uploads/2020/03/Preventive-Legal-Care-Relatively-Simple-Things-Make-Large-Differences-in-Legal-Costs.jpg266399adminhttps://family-court-corruption.com/wp-content/uploads/2021/11/fcc-logo-jpg.jpgadmin2020-03-18 16:11:592022-08-04 16:01:38Preventive Legal Care: Relatively Simple Things Make Large Differences in Legal Costs
If you are going through a divorce, or are about to go through a divorce, you have many important legal rights. The Constitution, the U.S. Supreme Court, as well as the laws of many states, guarantee you a number of rights and protections.
Your ex-spouse may try to “run you through the wringer.” However, you have legal rights, which can prevent him from doing that. Some of the many legal rights, which frequently arise in divorce cases, include:
11 Legal Rights for Women During Divorce
The right to notice and opportunity for a hearing
The Fourteenth Amendment to the Constitution says that no state can deprive you of life, liberty, or property without due process of law. The Supreme Court has held that this means that, before a court takes any action against you, the court has to notify you, and the court has to give you an opportunity to present your argument in court. Thus, a court cannot grant your ex-spouse a divorce, or make any ruling regarding custody, visitation, property division, or alimony, without first notifying you and giving you an opportunity to respond.
The right to a neutral decision-maker
The Supreme Court has also held that the “due process” clause guarantees you the right to a judge who is neutral. Thus, if you have a judge who is biased (for example, is your ex-spouse’s relative or friend) then you have the right to ask that the judge recuse himself from your case.
The right to file your divorce petition for free, if you can’t afford the filing fee
Most states require you to pay a filing fee when you file your divorce petition. But, in Boddie v. Connecticut, the Supreme Court ruled that the state cannot deny you the right to a divorce if you can’t afford to pay the filing fee. So, if you want to file for divorce and can’t afford to pay the fee, ask the court clerk for a “pauper’s affidavit” which will allow you to file for free.
The right to remarry someone of another race
In Palmore v. Sidoti, the mother, who was white, divorced her husband, and obtained custody of their three-year-old daughter. The mother then remarried an African-American. The trial court then changed custody of the child to the father; the trial court held that, because of the “social consequences of interracial marriage,” it was not in the child’s best interests to grow up in a household with a stepfather of a different race.
The Supreme Court reversed the trial court. The Supreme Court ruled that the trial court could not take the race of the stepparent into consideration when awarding custody. The mother had the constitutional right to marry anyone regardless of race. So, it the mother married interracially, the trial court could not penalize the mother for her marriage, by removing the child from her custody.
The right to custody of your children if your ex-spouse dies
The Supreme Court has stated that, if your ex-spouse dies, the state must return your children to you, unless a court rules that you are an unfit parent. A court cannot rule that you are an unfit parent unless the court first gives you notice and a hearing.
In many states, you cannot be denied custody simply because you are a woman
In much of the nineteenth century, the husband was considered the “head and master” of the household, and the husband would automatically obtain custody of the children when the parties divorced. Then, in the late nineteenth century, many states changed their laws and created the “tender years doctrine,” which held that courts were to prefer the mother in child custody cases.
Since the 1970s, many states have passed laws stating that the predominant consideration in custody cases is the “best interests of the child,” and that a court may not prefer to award custody to either parent because of the gender of that parent. The Supreme Court, however, has not yet ruled on this issue, and the laws vary from state to state. It would be wise to consult an experienced family attorney to see what the law in your state says on this issue.
If a third-party, who is not a parent, seeks visitation with your child, the court must give your decision “special weight.”
In Troxel v. Granville, the Supreme Court held that parents have a “fundamental right … to make decisions concerning the care, custody, and control of their children.” Troxel held that a consequence of this right is, if someone other than a parent seeks visitation with a child, the court must give the parent’s decision “special weight.” This holding often comes into play when grandparents seek visitation.
This does not mean, however, that a court may never award visitation to a non-parent. The Supreme Court did not specify exactly how much weight a trial court must give to a parent’s decision; the Court said, “We do not, and need not, define today the precise scope of the parental due process right in the visitation context.” However, Troxel makes clear that a court may not award visitation to a non-parent simply because the court believes visitation would be in the child’s best interests.
The right to have your case heard in a state with which you have some contact
In general, you must have some contact with a state, in order for a court of that state to have jurisdiction to hear your case. The state in which your case may be heard depends in part on the issues being adjudicated.
Granting of a divorce – which state may hear the case?
A court may grant a divorce decree if either spouse resides in the state where the petition is filed. Thus, if your husband files a divorce petition in his state of residence, the court may grant him a divorce decree even if you have no connection with the state. See Williams v. North Carolina. However, the court may not adjudicate financial issues, or custody issues, unless you have some type of contact with the state.
Adjudication of financial issues – which state may hear the case?
The Supreme Court has held that, in a divorce case, a court may not adjudicate financial issues (for example property division and alimony) unless the defendant has “minimum contacts” with the state. In Kulko v. Superior Court, the father, who lived in New York, bought his daughter a one-way plane ticket to California, where the girl’s mother lived. The mother then filed a motion in a California court. In the motion, Mother asked the California court to modify Father’s financial obligations which had been entered in the original divorce decree.
Father’s only connection with California was that he had bought his daughter a one-way plane ticket to go there. The Supreme Court held that Father’s buying his daughter an airline ticket to California was not enough to give a California court jurisdiction to rule on financial issues related to the divorce. In the Supreme Court’s view, Father did not have minimum contacts with California.
The Supreme Court has not precisely defined “minimum contacts”, and the law on minimum contacts is highly complex and takes up the space of many law school lectures and textbooks. However, other Supreme Court cases have said that in order to have minimum contacts with a state, a person must have “purposefully avail[ed] [her]self of the privilege of conducting activities within the forum State,” and “the defendant’s conduct and connection with the forum State [must be] such that he should reasonably anticipate being haled into court there.”
So, in order for a court to have jurisdiction to rule on financial issues in your divorce case, you must have purposefully availed yourself of conducting activities with the state, and your conduct and connection with the state must be such that you should reasonably anticipate being haled into court there. (The Supreme Court has also held that, if you do not have “minimum contacts” with a state, a court of that state may still hear financial issues in your divorce case, if you are served with the summons when you are present in the state.)
Adjudication of child custody and visitation – which state may hear the case?
The Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) governs the venue for child custody decisions. The UCCJEA is state law, not federal law, but, because all fifty states have adopted the UCCJEA, then your rights under the UCCJEA are similar anywhere in the country. The UCCJEA is highly complex, and cannot be fully discussed here. However, to sum it up, the UCCJEA says that a court may not make a child custody determination unless at least one of the following is true:
The state is the child’s home state on the date the case was filed or was the child’s home state less than six months before the case was filed, but a parent or person acting as a parent continues to live in the state; or
No other state has jurisdiction, or a court of the child’s home state has declined to exercise jurisdiction, and
The child and the child’s parents, or the child and at least one parent or person acting as a parent, have a significant connection with the state other than physical presence, and
Substantial evidence is available in the state concerning the child’s care, protection, training, and personal relationships.
All courts of states having jurisdiction have declined to exercise jurisdiction; or
No court of any other state has jurisdiction under the above criteria; or
An emergency exists.
Also, if any court has made a child custody determination, that court has “continuing, exclusive jurisdiction” over any future cases involving custody of the child. “Continuing, exclusive jurisdiction” means that no other court may modify or change the child’s custody decree unless a court determines that the child, the child’s parents, and any person acting as a parent do not currently reside in the state.
NOTE: The above description only scratches the surface of the UCCJEA. There are other provisions of the UCCJEA that may allow, or not allow, to hear your particular case. If you have further questions about the UCCJEA, consult an attorney.
Know Your Rights and Protect Them!
If you are in the process of a divorce, and you believe that a court has violated any of your rights mentioned in this article, speak up and assert your rights. Your ex-husband may want to trample on you, but courts and legislatures have determined that you have the constitutional right not to be trampled on.
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Our previous posts have stressed the critical importance of buy-sell agreements for both majority owners and minority investors in private companies (Read here). For majority owners, securing a buy-sell agreement avoids the potential of becoming “stuck” in business with a difficult co-owner without the ability to force a buyout of this minority investor’s ownership stake. For at least some majority owners of private Texas companies, however, another option exists. This option is commonly known as a “freeze-out,” “cash out” or “squeeze-out” merger.
What is a Freeze-Out/Squeeze-Out Merger?
A freeze-out/squeeze-out merger is a merger of two or more business entities that results in one or more of the equity holders of one of the pre-merger entities being cashed out as a result of the merger (i.e., not allowed to own equity in the post-merger surviving company).
Mergers are governed by state corporate law, and most states have several similar, but separate, merger statutes for corporations, LLC’s and other forms of business entities recognized under state law that govern mergers of those entities under various different circumstances. In that regard, it is worth noting that a “freeze-out/squeeze-out” merger is not a distinct type of merger governed by its own separate statute, but rather is a “characterization” given to a merger reflective of the purpose behind the merger, irrespective of the specific merger statute under which the merger is effectuated.
The Requisite Authorization and Approval for a Freeze-Out/Squeeze-Out Merger
Under state corporate law, mergers typically must be authorized and approved by both the equity holders and the directors of each of the entities participating in the merger. In the case of corporations, that means that typically both the directors and the shareholders must authorize and approve the merger, whereas in the case of LLC’s that means that typically the members and the managers must authorize and approve the merger. The actual level of that approval (i.e., unanimous consent vs. 2/3rds consent vs. majority consent) is governed by the applicable state merger statute together with the operative provisions of the entity’s organizational documents. By way of example, under Texas law, unless the entity’s governing documents provide otherwise, (i) the affirmative vote of at least two-thirds of the outstanding voting shares is required to authorize and approve a merger of a corporation, and (ii) the affirmative vote of the holders of at least a majority of the outstanding voting membership interests is required to authorize and approve a merger of an LLC.
So, the gating question for any individual or group wanting to possibly effectuate a freeze-out/squeeze-out merger is: Do you have the requisite vote under applicable law and under the entity’s governing documents to authorize and approve the merger?
The Fair Market Value Presumption
It is important to remember that while a freeze-out/squeeze-out merger may well enable the “majority” to force one or more minority holders out of the company, a freeze-out/squeeze-out merger does not entitle the majority to steal, or cheat the minority holders out of, their equity interests. The minority members who are being frozen or squeezed out should receive fair value for their interests. Otherwise, the majority proponents of the freeze-out/squeeze-out merger will likely be vulnerable to claims by the minority interest holders for oppression, breach of fiduciary duties, etc.
In the case of corporations, the “fair market value” presumption is governed by statute. In many (but not all) mergers involving corporations, under state corporate law, the effected shareholders, including any minority shareholders who will be frozen or squeezed out as a result of the merger, have statutory “dissenter’s rights” or “appraisal rights”. In short, a shareholder with “dissenter’s rights” or “appraisal rights” who objects to the amount that he is going to receive in exchange for his equity interests as a result of the merger is entitled to go to court and appeal the valuation. The court then has the power to revise the amount that the shareholder will receive based on its determination of fair market value.
Curiously, LLC statutes do not typically include dissenter’s rights provisions. However, given (i) the well–established fair market value presumption that exists in the context of corporate mergers, together with (ii) the strong “fiduciary duties” overlay that exists under statutory and common law with respect to the duties and obligations of members of LLC’s with respect to their fellow members, prudence dictates that the majority proponents of a freeze-out/squeeze-out merger make every effort to honor the fair market value presumption in any freeze-out/squeeze-out merger they effectuate.
Logistics of a Freeze-Out/Squeeze-Out Merger
So, assuming that the majority proponents of a freeze-out/squeeze-out merger have the requisite vote under applicable law and under the entity’s governing documents to authorize and approve the merger, how do they do it? The answer to that question will again depend in part on the form of the entities involved, the governing corporate statutes, and the organizational documents of the entities involved, but with those qualifications, the answer is pretty simple: The majority proponents form a new entity with whatever ownership and capital structure they desire, and then they merge the existing entity (i.e., the entity in which the soon-to-be frozen or squeezed out equity holders hold an interest) into the new entity. Under the terms of the merger agreement, among other things, the new entity will be the surviving entity, and the equity interests of the frozen or squeezed out minority interest holders will be redeemed for cash in an amount equal to the fair market value of the redeemed equity interests.
Conclusion
The freeze-out merger is a legal avenue that may not be widely known by majority owners of private companies, but it is used with some regularity in Texas and is rarely disallowed by the governance documents of most companies. There should be a note of caution for majority owners in deploying this technique, however, because if dissenter’s rights apply and are exercised by the minority investors in response, the freeze-out merger may result in a time-consuming and a costly appraisal process.
https://family-court-corruption.com/wp-content/uploads/2019/08/Teddy-Bears_770x330.jpg378770adminhttps://family-court-corruption.com/wp-content/uploads/2021/11/fcc-logo-jpg.jpgadmin2019-08-05 15:16:192022-08-04 15:01:28Just in Time For Summer: The Freeze-Out Merger, A Legal Option Available to SOME Majority Owners of Privately-Held Texas Companies
