Broocks Law Firm
248 Addie Roy Rd., Suite B-301
Austin, TX 78746
(512) 201-2000
COMPLEX BUSINESS DEALS
While Broocks’ complex litigation practice has been primarily in North America, the business transactional aspect of the practice covers most of the globe, including matters handled that took him to the following places in Asia (and this listing is not exhaustive):
The kinds of “business” or “transactional” work in which Mr. Broocks has represented clients is extraordinary in its breadth, depth and geographic expanse. It is often hard to separate “friendly” business transactions from those that arise in difficult if not hostile circumstances, perhaps even when there is pending litigation.
ENTITY FORMATION AND GOVERNANCE
THOUGHTS FOR CONSIDERATION:
Advice and services are often rendered in particularly difficult, unusual circumstances.
For example, in one matter someone bought equity from another person. Later, someone surfaced claiming that the seller held the equity sold in agency or nominee capacity and tried to void the transaction.
In another, voting agreements for board representation had been unclearly drafted and thus required judicial interpretation and enforcement. Companies can find themselves in limbo, with competing “groups” claiming entitlement to lead the company.
WHAT WE CAN DO:
Often there are complex decisions to be made in entity formation. They include relatively simple decisions such as the type of entity (limited liability company, corporation, partnership) into more complex decisions (e.g., state to incorporate) and into the esoteric (e.g., voting agreements, buy sell agreements). These types of matters have been the subject of advice and services.
DUTIES
THOUGHTS FOR CONSIDERATION:
When an opportunity presents itself to a board member does it belong to the company? Is it one the board member can exploit themselves?
WHAT WE CAN DO:
Advice and services around duties owed by various stakeholders, such as (a) board members to the entity and stakeholders and (b) partners to others. These are often crucial issues. This includes advising on such things as how to narrow or broaden duties at the outset; interpreting duties in light of real decisions to be made, such as when a director is “interested” in a matter to be voted on; and enforcing duties owed or defense of claims of duties violated.
ACQUISITIONS AND RELATED TRANSACTIONS
THOUGHTS FOR CONSIDERATION:
Asset acquisitions in most places, allow for the select acquisition of assets and isolation of liabilities to be assumed whereas stock acquisitions bring it all over. These kinds of issues can be quite complex and involve litigation risk and exposure analysis.
WHAT WE CAN DO:
Structuring acquisitions is an important part of business. Advice and services have included things from due diligence to structuring the transaction (e.g., acquisition stock or assets), to offshore or onshore entities to be used for acquisitions.
Acquisitions and transactions can also involve environmental issues as acquisitions often carry with them responsibilities for existing environmental conditions.
RAISING EQUITY FROM INVESTORS
THOUGHTS FOR CONSIDERATION:
Often equity raises occur in the context of a myriad of complex, related circumstances.
The endeavor to build an ethanol refinery, like the one shown, started with a dream in the mind of one man. Early friction among the founding group led to lawsuits and injunctions. After resolution, construction contracts were sought and signed for construction of a multi-million dollar generation facility. But opposition community groups in various communities erupted. While these community obstacles were being addressed, railroad construction arrangements for bringing in corn and taking out the ethanol were being negotiated; water rights were acquired for operating the facility and disposal procedures for recycling and disposition of wastewater; output contracts were negotiated with farmers and storage silos for ensuring adequate continuous supplies; numerous private offerings for capital raising took place; and finally a publicly offering was undertaken.
WHAT WE CAN DO:
This involves many interrelated aspects including:
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deciding on the form of the investment (e.g., common, preferred, warrants, convertible, to name a few of the issues)
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structuring and negotiating rights associated with the investments (preferred distributions; veto rights on certain decisions)
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each state as well as the federal government have detailed requirements associated with raising money, which necessitates private placement memoranda that comply with state and federal securities laws
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people that assist with raising money, whether finders or broker dealers (accidental or intentional) also have state and federal compliance issues
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often offerings are conducted in the context of on-going business activities for which capital is needed to start or expand those activities
JOINT VENTURES
THOUGHTS FOR CONSIDERATION:
JV’s can be particularly tricky. A host of issues must be confronted including negotiating and determining decision making and voting rights among the venturers; commitments of money, assets, know-how or something else – and consequences for failure to contribute must be negotiated. Is related-area competition to be permitted or forbidden – this should be addressed. What will occur on dissolution regarding post-dissolution sharing or division of intellectual property accumulated during the venture? This should be addressed. All of these are complex issues that should be dealt with on the front end --- or they will be dealt with on the back end.
WHAT WE CAN DO:
Advice and services have been performed in structuring and forming joint ventures, including:
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for the exploration of natural resources
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use and development of various technologies
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partnering where different groups each brought different contributions (e.g., money, relations, customers, know-how)
INTELLECTUAL PROPERTY RIGHTS AND ISSUES
THOUGHTS FOR CONSIDERATION:
Often unaddressed, one crucial aspect of today’s business in particular, is who owns the IP? If an employee that works for a company develops something new and creative, whose is it? Who can use it?
WHAT WE CAN DO:
Advice and services have been performed in a host of areas including:
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preparing and enforcing confidentiality and non-disclosure agreements
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identifying and keeping trade secrets secret and protected
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protecting ideas
CONTRACTS AND DEALING IN THE MARKET PLACE
THOUGHTS FOR CONSIDERATION:
In most states, but particularly Texas, the virtually unassailable rule is that the contract of the parties is paramount. The Texas Supreme Court has repeatedly reaffirmed that competent parties “shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by Courts of justice.” Gym–N–I Playgrounds, Inc. v. Snider, 220 S.W.3d 905, 912 (Tex. 2007) (quoting BMG Direct Mktg., Inc. v. Peake, 178 S.W.3d 763, 767 (Tex. 2005)).
Yet most people pay little to no attention to the written words that Texas courts consider “sacred.” And when a dispute breaks out about those “sacred words” many people only then read their contracts, and then discover to their shock and dismay, what they have “freely and voluntarily” agreed to.
WHAT WE CAN DO:
Advice and consultation has been given in a veritable host of other contexts, including,
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contract for construction of drilling rigs in China
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setting up securities and currency trading businesses in China and Vietnam
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participation and joint operating agreements
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licensing of executable software for complex systems
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distributor and agency agreements including for use in foreign venues
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master services agreements, governing multifaceted relations and/or actions and/or locales
TERMINATION OF RELATIONS
THOUGHTS FOR CONSIDERATION:
Sometimes a controlling group just wants a minority member out. There can be any number of reasons, but accomplishing this removal involves analysis of rights and duties, as well as disclosure obligations.
WHAT WE CAN DO:
Buyouts and dissolutions
BORROWING, DEBT AND SECURED TRANSACTIONS
Including creation and foreclosure and recovery matters. Creating and perfecting security interests.
FRANCHISE RELATIONS
Advice and services have been performed in obtaining and/or structuring and/or restructuring franchises, both domestically and internationally.
STRATEGIC CONSULTATION ON COMMERCIAL ISSUES
In certain contexts, issues can be raised or implicated such as:
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collusion on competitive bidding (also called bid rigging)
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price fixing among would-be competitors
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tying agreements
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vertical restrictions on re-sellers
EMPLOYMENT AND SERVICES MATTERS
Advice and services have been performed in virtually all aspects of the employment and services relationships, including such esoteric issues as:
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retaining contractors and artisans to help with construction of software, programing, and other services
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crafting – and if necessary enforcing – confidentiality and non-competition agreements
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when employees create intellectual property, who owns it and who can use it – and the crafting of agreements to take the guess work out of those questions
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To arbitrate or not—the issues associated with employee arbitration programs
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employee privacy rights vs company surveillance, which involves issues of when a company can look at employee emails particularly where employee wrong-doing is suspected
GOVERNMENTAL AGENCY ACTIONS, INCLUDING CONSUMER PROTECTION RELATED AGENCY ACTIONS
Advice and services have been performed in connection with agency investigations (in many cases where the action was not publicly announced) including unfair and deceptive advertising (UDAP) charges raised by the Federal Trade Commission; as UDAP principles are applicable in other industries, financial institutions have also been advised on these requirements. Retailer catalogs have also been reviewed and edited for consumer compliance purposes. Other consultations have included OSHA, NLRB and EEOC.