• +512.696.1500 | Austin, Texas

Legal Thoughts

Your (Almost) Illegal Noncompete

A proposed Federal Trade Commission rule outlaws noncompetition restrictions on workers, regardless of their job function or compensation level. Not only would new noncompetition agreements be prohibited, but employers would be obligated to cancel existing noncompetition agr

Reporting Personal Information of Business Owners

Happy New Year from Congress! Overriding President Trump’s veto, on January 1, 2021, Congress passed the Corporate Transparency Act to require reporting personal information of business owners. Millions of small businesses will be required to report the names, birth dates,

Two Questions with a $5.8 Billion Answer…

Q1. Can an acquirer cancel a hotel chain acquisition if the business suffers a "material adverse effect" ("MAE") after the M&A agreement is signed? On November 30, 2020, a Delaware court answered this question by analyzing the following COVID-19 scenario: two out of 15 h

My contract has a virus and my business needs a ventilator!

You entered into the contract fully intending to perform it. Then a virus emerged from China, causing a pandemic and requiring your business and/or your key suppliers to close. The other party is threatening to sue for damages caused by your breach of contract. This “hypot

Don’t Let an Impasse Stop You

No Impasse Required Conventional Wisdom? Shareholder differences can paralyze and destroy a business. Even without economic justification, conventional wisdom recommends an “impasse” to exercise a “push-pull,” “Texas shootout or showdown,” “Russian roulette”

Founders Forever with Multiclass Equity

With multi-class equity, founders can retain control of a business even after its ownership has been broadly dispersed by estate planning, equity incentive and other transfers. Originating with dynastic enterprises that continue to control major U.S. enterprises, modern tec

Business Transfers – Part 1: Introduction

In this first part of a six-article series on Business Transfers, we will provide a broad topical overview that will be supplemented by future articles. As used in this article, “business transfers” will include M&A (mergers and acquisitions) transactions, stock sal

Business Transfers – Part 2: Acquisition Objectives

This second of the six-part series on Business Transfers will focus on acquisition objectives of the parties to merger and acquisition transactions, including stock sales, assets sales, takeovers and buyouts. This series focuses on a privately negotiated, non-auction transfe

Business Transfers – Part 3: Seller Preparations

This third of the six-part series on Business Transfers will focus on seller preparations to be undertaken before initiating the sales process. This series focuses on a privately negotiated, non-auction transfer of a business or its ownership. To orient readers, we offered a

Family Business Succession Planning (Non-Tax Aspects) – Part 1

Based on SBA and other industry sources, CB Insights reported that 31,929,000 small businesses (0-49 employees) employed one-third of the U.S. labor force in 2015. The number of such small businesses was estimated at 41,580,000 for 2019. Although family businesses comprise a

Family Business Succession Planning (Non-Tax Aspects) – Part 2

Part 1 of this series offered an overview of family business succession planning and buy-sell agreements. Part 2 of this series will focus on the business sale as an essential component of any family business succession plan. Regardless of the desired succession plan, statis

Letters of Intent – Key Aspects and Dangers

Parties frequently sign an “agreement in principle,” “term sheet,” “memorandum of understanding” or “letter of intent” (LOI) which are synonymous terms for a summary of points forming a basis for continued negotiation of a business acquisition, merger or othe

Confidentiality Agreement Traps & Trade Secret Destruction

A nondisclosure or confidentiality agreement (CA) is frequently viewed as an unnecessary formality to be satisfied with an off-the-shelf "form" so the parties can move on to a business purchase and sale, joint venture, supply relationship, employment arrangement, service arr

Confidentiality Agreement Traps & Trade Secret Destruction – Part 2

In the first part of this series on confidentiality agreement traps, we discussed how a “time duration” trap in a confidentiality agreement (CA) strips statutory protections from trade secrets. Failing to obtain signed confidentiality agreements from the recipient’s pe

Legal Landmines – Feeling Trapped in your Business?

Early Exit Planning is the Key Preparing for Departure. It's inevitable - you will leave your business. To avoid being trapped in your business, early exit planning allows you to leave by attracting buyers and improving valuations. While there are various exit scenarios, st

Legal Landmines – Partnerships and Sinking Ships

Owner Buy-Sell Agreements Make A Difference Lifeboats. Owner Buy-Sell Agreements are the lifeboats keeping your business partnership afloat by addressing avoidable internal risks. Sinking Ships. I woke up this morning to rising water when I found out: I am in busi

Legal Landmines – It’s the Little Things

Signatures...           and...          You Can't Sell What You Don't Own   I Signed Up for Personal Liability. The different signature blocks in a recent Canadian transaction reminded me of a frequent and costly mistake. An agent signing on behal

Legal Landmines — Emails + “From” Field = A $400,000 Contract

Electronic contracts are easily made. An email without a typed signature can support an enforceable electronic contract because the sender's name in the "From" line of the email is a signature according to the First District Texas Court of Appeals in Khoury v. Tomlinson (

Capital Financing and Syndications

I. Capital Structures and Needs The lifeblood of business, capital fuels start-ups, company growth and, for the benefit of owners, the sale of the company. To address these different needs, financial markets have developed innumerable products with unique characteristics ta

Business Arrangements

Sample Business Arrangements Legal arrangements for business address: entity formation owner buy-sell agreements ownership changes purchase and sale of businesses, assets or franchises creating collateral for payment or performance obligations, and settling obligati