Articles Posted in BUSINESS LITIGATION & DISPUTES

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As the world economy tightens and companies strive to turn a profit, it is not only Georgia consumers who fall victim to illegal business tactics and unfair business practices. Georgia companies also can be affected by the illegal and unfair business practices of their competitors. Businesses today are operating in a cutthroat environment driven by increasing competition, changing sales goals, workforce cuts and cost reductions. So it is not surprising that companies of all sizes are vulnerable to competitors that will take any action required to get a competitive edge.

While many companies do follow the law when competing within a given industry and limit their strategies accordingly, some take actions that are clearly in violation of Georgia business law. When disputes do arise, it seems that the large companies with deep pockets are able to protect themselves. They appear to effortlessly litigate in order to safeguard their market share, leaving smaller companies in their wake. While some smaller companies do participate in unfair business practices, it is often smaller businesses that need greater protection. Because of their size, these smaller companies often face a challenge when defending their rights against larger companies and corporations.

The upside is that Georgia business law regulates how businesses operate so that all companies have the opportunity to do business in an environment free of illegal and unfair business practices. The laws exist to discourage unfair behavior, but for some companies the temptation is too great and the law is broken. There are a host of activities that fall into the category of unfair business practices including price fixing between competitors, false advertising, monopolies and boycotting certain businesses. When laws are broken and companies become victims of these types of activities, Georgia business lawyers are there not only to defend the interests of their clients, but also to fight for compensation for losses incurred.
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As a Corporate business Lawyer in Atlanta, Georgia, I am well aware the majority of the businesses in the United States are Close Corporations. Georgia Close Corporations are classified as having a maximum of fifty shareholders, no publicly traded stock, and active management by shareholders. Because Close Corporations usually employ the shareholders, these companies generally have a more relaxed management style. The downside is that this management model puts the minority shareholders in a situation where they quickly can be faced with Shareholder Oppression, also commonly referred to “squeeze out” or “freeze out” tactics. When this situation goes unchecked by the Minority Shareholders, this typically results in a negative impact on the minority shareholders and can lead to their termination of employment with the company.

When employed with a Close Corporation, income from employment and the input your Close Corporation shares allow the shareholder, is likely the most valuable stake that minority shareholders have. Shares held have no value on the open market. That, coupled with the fact that majority shareholders are unlikely to buy the minority’s shares at a fair price, leaves the minority shareholders with little or nothing upon being terminated.

The good news is that minority shareholders in Close Corporation have significant rights.
There are legal protections in place, which Close Corporation Shareholders can use to defend their rights. Many are as follows:

• Retaining an Atlanta Corporate Shareholder Attorney is the best route to protecting your Close Corporation interests.

• In the alternative, Business Law statutes in Georgia do provide protection for minority shareholders faced with this situation. Just as in ordinary corporations, all shareholders in Close Corporations have the right to inspect the documents pertaining to the company, including, but not limited to, bylaws, shareholders meeting minutes, documentation of actions taken outside of meetings and resolutions related to share classification.


• In the case of wrongdoing, documents discovered during inspection can provide the required evidence to file a lawsuit against the company.

• Georgia law states that the majority shareholders have a Fiduciary Duty to the minority shareholders, allowing minority shareholders to sue for dissolution of the Close Corporation when these duties are not fulfilled. These suits can be filed if the majority shareholders have acted are acting or are expected to act in an illegal, fraudulent, oppressive, or unfair fashion toward the minority.

• Minority shareholders also can sue for fair valuation of their shares.

Whatever the circumstance, it is critical to seek an Atlanta Corporate Business Attorney experienced in Shareholder Actions. Having a properly drafted operational agreement can prevent these types of disputes from developing, but if conflicts do arise, an Atlanta, Georgia Corporate Lawyer with experience in Corporate and Shareholder proceeding will ensure that all possible legal avenues are pursued to help Minority Shareholders receive fair treatment and compensation under Georgia Law.
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As a As an Atlanta, Georgia lawyer who both defends and files lawsuits on behalf of clients throughout GA and the US, I am writing to you today about Georgia lawsuit on contracts. At its simplest, a contract it is an offer by one party, accepted by another party, and performed, as agreed, by both parties.

Many parties entering into a new Georgia corporate business attorney-client relationship are either so eager to begin their business affairs, or so wary of delaying or derailing a Georgia business deal, that they are wary of bringing up the need for a written contract governed by Georgia Law. If a written contract is agreed to, many try to make it as simple as possible often without seeking the legal advice of an Atlanta, Georgia business contract attorney.

Our Firm has Atlanta business consulting lawyers giving advice to each business, which is custom tailored to their needs (we give such advice on an ongoing basis as needed after hours, on weekends, and more).

This is why many businesses enter agreements without a written contract, without attorney review of a contract, or without even reading a contract. This is also why so many contractual agreements that begin with such optimism and desire for speed, end up dragged down into the mire of contractual litigation, where they are finally forced to resort to the attorneys who could have prevented such a breakdown in the first place.

Protect your Georgia business with an Atlanta business lawyer’s advice and know that it is of the utmost important to have a written contract reviewed by experienced local Atlanta business contract attorney, that covers, simply but effectively, all necessary elements of the binding contract-agreement governed by Georgia law to ensure the rights and obligations of both parties are met.

A simple example of a situation where one clause can solve a great deal of time and expense is the question of jurisdiction to hear your case, the specific court (state or superior, etc.) and governing law.

Many Atlanta and Georgia businesses deal with other businesses, contractors, and customers that are outside of Georgia. So, if there is a lawsuit, where must it be filed? Many tend to believe that they can file a lawsuit in the state where they reside. This is not always the case, in fact, it is most often the very opposite.

Generally, a lawsuit must be filed in the state where the Defendant (the non-suing party) resides.

Thus, if you are a Georgia business, even one that feels it is the victim of a breach by an out-of-state company, you will still have to file in that company’s state with all the extra expenses involved in that.

If you wish to fight to have the case brought within your state and county, you will have to prove that your situation falls within the exceptions to this rule, known as the Georgia Long-Arm Statute (O.C.G.A. 9-10-91). Under the Georgia Long-Arm Statute a lawsuit can be brought in Georgia if the nonresident:

1. Transacts any business within Georgia;

2. Commits a tortious act or omission in Georgia;

3. Commits a tortious injury in this state caused by an act or omission outside this state if the tort-feasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state; and

4. Owns, uses, or possesses any real property situated within Georgia.

This is a very high and fact-based standard and thus a time-consuming, expensive inquiry. It is also one that would have to be addressed before the merits of the case itself could even be considered.

THE BEST WAY TO AVOID THE ABOVE PROBLEMS?

A simple clause within the contract that states, “In the event a dispute arises, the parties agree that all lawsuits, claims, etc. will be brought within the state of Georgia [including county, city, and court where possible] and be interpreted and governed by and under Georgia law.”

[THIS – AND THE ABOVE AND BELOW INFORMATION – IS NOT LEGAL ADVICE – LEGAL ADVICE CAN ONLY BE GIVEN BY A GEORGIA ATTORNEY AT A PROPERLY SET CONSULTATION]
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Yes, partnership nightmares are common. . . How common? Read on . . .

I have noticed many individuals are stepping away from their employment with large companies to start their own Georgia businesses. Some feel that the current economic situation has provided a golden opportunity that should be seized and others are forced to move on after being downsized by their companies. Often, these businesses are Georgia partnerships formed with friend, family and/or former work colleagues. Unfortunately, a great percentage of people begin these Georgia partnerships without the proper legal guidance or documentation based on Georgia’s partnership laws. Unwittingly, these would be business partners believe that long time personal relationships between partners, their own personal business knowledge, or other such reasons, will sufficiently protect their Georgia business partnership from internal strife, power struggles, and/or economic failure.

The fact is, even under ideal circumstances, Georgia partnerships are complex and should not be left unchecked. While partnership agreements do keep the “honest people honest,” they also stop abuse by others with less than honorable intentions. As an Atlanta Business Partnership Lawyer, I have handled many cases where even the best intentions between business partners could not stop Georgia partnership litigation from arising. In cases when the business entity does survive, the resulting chaos usually proves to be costly and detrimental to the business.

Thus, preventing Georgia partnership disputes is paramount. This involves retaining an experienced Georgia partnership attorney at the beginning of the partnership to construct a fair and manageable business relationship between partners. The next best thing to beginning a business relationship, in which a Georgia partnership lawyer skillfully guides you, is to catch a Georgia business partnership dispute before it gets serious in order to protect your interests. Usually, the first partner who realizes this and seeks legal guidance has the upper hand in the outcome of any Georgia partnership dispute, litigation, or dissolution.

Georgia partnership disputes can surface between and among anyone with an interest or influence on the company, including Georgia partnership shareholders and family members. Once disputes do arise, business partners are inclined to blame one another for any business failures. Common issues to address when a business is failing include whether or not to sell the company, employee retention, and company management. An experienced Georgia Business Partnership Attorney can help sort out these issues and provide the most beneficial solution to all involved.

The Georgia business partnership attorneys at The Libby Law Firm can assist you in determining and implementing solutions to resolve disagreements between partners, protect Georgia partnership interests, or effectuate partnership dissolutions. While litigation is the most common way Georgia partnership disputes are resolved, mediation or arbitration are also wise dispute resolution options. Other alternatives include buy-outs, settlements and distribution or sale of the business entity.
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Atlanta Business lawyers at The Libby Law Firm know that a Georgia corporation must be represented by an attorney in order for it to file a claim or to defend itself in a suit brought against it. This might seem like a heavy burden for a business––after all, an individual can represent him- or herself in court––so why must a corporation obtain representation instead of, say, being represented by the sole shareholder in court?

Although an individual can represent him- or herself in court––which is called “appearing pro se”––Georgia law prohibits a non-attorney from representing someone else in court. Corporations are considered to be and treated like an individual under law; therefore, permitting the shareholder to represent the corporation would be allowing the unauthorized practice of law because a non-attorney (the shareholder) would be representing another (the corporation) in court.

In fact, the Supreme Court of Georgia has held that:

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As a well-known Atlanta, Georgia Partnership Lawyer, I handle many cases involving Georgia business partnership conflicts. One of the most common scenarios is for one partner to be saddled with running the business entity single-handedly. This single-handed effort by one partner is usually in stark contrast to the terms and intent any partnership operating agreement, which governs the duties and responsibilities of the partners. This is an extremely destructive situation for the partner who is trying to maintain the business. As this partner attempts to shoulder all the responsibility for the business; including business debts, liabilities, day-to-day business problems, the financial position of all the business partners suffer. In due course, all partners in the business are on the path to failure.

Surprisingly, many business owners do attempt to struggle alone through this type of situation due to a personal sense of responsibility and unwillingness to admit that a problem exists. But this is not the recommended course of action. An Atlanta, Georgia Partnership Dispute Attorney should always be consulted with when a business partnership is suffering due to one or more partner’s inability to carry out the fiduciary duties and responsibilities implicit in most partnerships. The decision to work with a Georgia partnership attorney to resolve partnership disputes and disharmony could very well save your business, your financial situation, and possibly business and familial relationships.

It is unwise to allow a business partner to walk away from legitimate responsibilities, especially when this can both damage the partnership business and the remaining partners’ credit and future prosperity. Remember, under Georgia Partnership Law, you do have legal recourse.

At The Libby Law Firm, our team of experienced Atlanta, Georgia Partnership Dispute Attorneys are equipped to resolve almost any partnership issues which may arise in the course of a partnership. Our Atlanta, Georgia business lawyers routinely help business owners set up partnership agreements and later enforce the terms of these agreements if necessary, in order to ensure that all partners are fulfilling their obligations.

Our Atlanta, Georgia partnership litigation attorneys will work with you to equalize your partnership duties and responsibilities. Whatever your circumstances are regarding a partnership that is failing or is poised to turn into a bona fide partnership litigation lawsuit, our Firm is ready to help you get your business back on the road to success. Call our office today to discuss your situation at (404) 467-8611.
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As an Atlanta, Georgia Corporate Attorney, advising CEOs, CFOs, Secretary, Directors, Officers, Shareholders, it is critical you avoid mingling your personal affairs with any business matters, and vice versa. Many new business owners seek to protect themselves from personal liability by setting up corporations, the most popular being Limited Liability Company (or LLC). Regardless, a corporation can only protect you from personal liability stemming from your corporations liability, to the extent, you take care to separate your role in the corporation from your role as an individual.

Generally, the fist step in protecting yourself from debts and liabilities incurred by your corporation is incorporating your corporation (or business). In Georgia, filing the appropriate documents with the Georgia Secretary of State and creating a Limited Liability Company (or LLC) or a Corporation, can provide protection from personal liability. However, taking this action will not give you absolute protection from liability. Additional steps in your behavior, statements, and actions are critical in protecting yourself from being personally liable for debts of the corporation. When you are held liable for debts of the corporation because the company and your personal affairs are to tightly interwoven, is called Piercing the Corporate Veil.

Piercing the Corporate Veil occurs when opposing counsel (or another party) can show that the CEOs, CFOs, Secretary, Directors, Officers, Shareholders, etc. are mingling corporate their affairs with their individual affairs. Doing this is a huge mistake and you should avoid it at all cost no matter what inconvenience it may cause you or what your personal view of the Georgia law on Piercing the Corporate Veil encompasses.

Under what circumstances can I be personally liable for debts of the LLC, or corporation? And, why should I take additional steps for protection?


As a Corporate Lawyer in Atlanta, Georgia, I know from seeing Piercing the Corporate Veil legal proceedings first-hand that taking additional precautions can prevent creditors from going after your personal assets – such as your money or your home – in the event your business incurs debts that it is unable to pay. These debts can include car loans, bank loans, lease obligations, and money owed to lawyers, accountants, etc., for services rendered to the business.

These extra precautions can also prevent plaintiffs from collecting money from your personal accounts and assets to satisfy a judgment against you. A Georgia business could incur this type of liability in a variety of ways, including:


• A personal injury or accident in your office––coffee burn, slip and fall, etc.


• A product or service that injures a client, either physically or financially


• A car accident that occurs when an employee is making a delivery or driving to meet a client in the scope of work.

• Mismanagement of a client’s money


So what are some extra precautions you must take take?


• Georgia law requires corporate entities to file for renewal every year. This is a quick, relatively low-cost ($50.00 annual fee) process that keeps your corporation or LLC active. If you do not renew your business, the Georgia Secretary of State will administratively dissolve your corporation and, therefore, your protection from personal liability.


• Keep your corporate and personal bank accounts separate. Do not use your business account to pay for personal expenses – taking your family out to dinner with business funds, buying presents for your in-laws with corporate monies, paying for a weekend getaway “on the corporations’ tab”, etc.


• Do not personally guarantee any loans or financial arrangements for the corporation if you can avoid doing so. Acting as a personal guarantor opens the door to personal liability, as creditors can look to you to pay the business’s debts.

• Make sure that all of your contracts entered into using your corporate position and then your name in this capacity (i.e. as President, etc.) Do not use your individual name, even if you are the sole shareholder. For Example:

___________________________ Signed, Larry J. Doe, President ABC Enterprises of Atlanta, LLC

• Maintain the proper insurance for your business and make sure that the corporation’s name is listed as the “name insured” on the insurance policy. Your Atlanta, Georgia, Corporate Insurance Attorney should be able to help you with this process. Additionally, keep written records of discussions and of how the insurance agents, lawyers, CPAs, advised you to ensure your business is safe or you want to compare it to another opinion at a different time. A personal umbrella policy might also provide additional personal protection for business owners.


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In my Atlanta, Georgia Civil Arbitration Law Firm, I have worked with clients who have taken their business disputes to the court system for resolution and others who have gone through the process of arbitration. Many times, a business contract specifically states that all disputes must be resolved through arbitration, yet unless contractually mandated, arbitration is often overlooked. It is important to note that while both methods have their advantages; arbitration is often the fastest and can be very cost effective.

In Georgia, it can take a minimum of a year for a case to go to trial, while the date of the final arbitration hearing can be set much sooner. Disputes are often resolved just a few months after the arbitration process is initiated. The disadvantage to arbitration is that the parties named in the dispute will pay for the time of an arbitrator. Arbitrators belong to arbitration associations that are usually private businesses, and fees for an arbitrator can cost several hundred dollars per hour. The court system, on the other hand, is funded by tax revenue and requires that the parties pay only filing fees and some other expenses and costs.

Besides the timing advantage, another strong point to arbitration is that the parties can choose the arbitrator that will preside over the case. Arbitrators have been trained in specific technical areas of the law and can be picked with this in mind. Judges in court proceedings cannot be picked and, although they have a broad knowledge of the law, the judge assigned to a case may not possess proficiency in the area that the dispute covers. In complex Georgia Business Disputes, having the option to choose a knowledgeable arbitrator will ensure that all parties are treated fairly under Georgia law.

When involved in business disputes resolved in the court system or through arbitration, it is advisable to retain an Atlanta, Georgia Arbitration Attorney. The lawyers at The Libby Law Firm have practice experience in all areas of Business Arbitration, Construction Arbitration, Contract Arbitration, and numerous other areas of law in which arbitration is an appropriate potential resolution.

The Georgia Arbitration Attorneys at The Libby Law Firm are well versed in the Georgia Arbitration Process despite the various rules and regulations set forth by different arbitration companies. Arbitration is a somewhat new alternative to litigation. While arbitration has been around for centuries, its modern day application is rapidly increasing.

At The Libby Law Firm, our Atlanta, Georgia Arbitration Lawyers know how to use the arbitration process to your advantage. The rules in an arbitration proceeding are usually more casual and the arbitrator or arbitration panel is usually more knowledgeable about the subject matter of the arbitration. The Libby Law Firm Atlanta, Georgia Arbitration lawyers keep abreast of the arbitration trends in various areas of law as well as the tendencies of local and regional arbitration panels. Protecting and promoting the best interests of you, your families, and your business, are at the heart of our goals. We invite you to let us educate you about the Georgia Arbitration Process. It can be effective, less costly, and in many cases such as Georgia New Construction Arbitration Cases, binding with no right to appeal.
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In my years as an Atlanta and Marietta Business Attorney, I have found the area of Georgia Slander Legal Proceedings, and the First Amendment very intriguing. Under Georgia legal statutes, slander is a form of defamation that is punishable by law.

Slander occurs when a person makes a spoken statement, with negligence or malice, which is false.

The statement can damage an individual’s or business’ reputation and can be made during a conversation with one person or in front of a large audience. Statements that are true and can be proven as such, despite the negative impact of those statements, are not considered slander and cannot be considered in a Georgia defamation case. Additionally, statements that contain small inaccuracies, but that were made with good intention, will usually be overlooked by the court. This is true as long as the statement’s fundamental essence is not false.

Some statements are protected from being classified as slander due to “privilege,” but only if not made maliciously. In Georgia, privileged statements include comments regarding the actions of public officials. Attorneys also are given privilege to make statements that may be considered false by opposing counsel during the course of working on legal cases. Similarly, business people are afforded some margin of error in making statements about others. The court is likely to dismiss a single instance of false commentary about a third party, as long as that statement is not about a general incompetence, ignorance or lack of ability of that individual or business.

Federal law currently dictates the treatment of public figures in Georgia defamation cases. The premise is that these public figures, such as politicians and celebrities, have chosen a life that is subject to a certain level of public scrutiny. As a result, the plaintiffs in these defamation cases must prove that statements were made with true malice and disregard for the truth. In defamation cases involving private figures, federal law defers to state law. Private figures may collect damages in Georgia defamation lawsuits, by proving that the defendant intended simple negligence, and not necessarily malice.
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As an Atlanta, Georgia commercial dispute attorney, I have know Georgia defamation lawsuits are commonly reported in the media involving movie stars, professional athletes and other celebrities who claim that false statements have been made about them. But defamation lawsuits can also blindside Georgia business owners who may be unaware of how communications made by their employees can be interpreted under the law. Even false statements innocently made by employees about competitors or other third parties put businesses at risk. Statements made verbally in a business meeting or communicated via written documents, such as letters, advertising, press releases and emails, can be a source for damaging lawsuits. As a result, it is imperative that all communications, especially those intended for wide distribution, be checked for fairness and accuracy.

Georgia law outlines the four main elements of a defamation claim. The first is the false statement, which may be spoken (known as “slander”) or written (known as “libel”). Secondly, the statement must be spoken or communicated in writing to a third party. Thirdly, the defendant must be shown to have acted with negligence or, in some cases, malice. Lastly, the law requires that damage to the plaintiff be proven, unless the suit is classified as “per se” defamation. “Per se” defamation is based on false statements that are so egregious that they are automatically presumed to be harmful. Examples under which Georgia law considers a statement to be defamatory “per se” include statements that charge the plaintiff with a crime punishable under the law, or statements intended to damage the office or profession of the plaintiff.

The personnel departments of companies must be extremely careful about defamation concerning former employees. For this reason, it is critical to have an experienced North Georgia Business Lawyer review the policies and procedures concerning employee hiring and termination. The company’s communication policy should be reviewed as well, with the prevention of defamation lawsuits in mind. Additionally, it may be wise to consider insurance coverage in the event that any defamation claims are filed against the company.
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