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Succeeding in mergers and acquisitions

The primary job of a Texas company's CEO is to apply the correct values and visions to company strategies. Mergers and acquisitions are tactics rather than strategy, and the failure of executives to see that they must must fit the overall strategy leads to transactions that are unsuccessful. According to a study by KPMG, 83% of M&A deals failed to increase returns to shareholders. Entrepreneurs and company leaders can avoid the typical pitfalls by owning the values and the vision of a merger.

Owning the values means recognizing that company values are at the heart of any merger deal. Bringing two companies together requires that they share culture, or that their cultures can be successfully melded. At bottom, the path to cultural merger is about strategy. The first step is to target M&A deals that have the potential to enhance already-established strategic decisions. The second step is to target companies that match up with regard to company culture as well.

Aretha Franklin family still fighting over estate

Some Texas fans of singer Aretha Franklin may be aware that her family has been fighting over her estate. Franklin had four sons, but her niece has been acting as executor.

It was initially believed that Franklin had died without a will. However, her niece reportedly found three handwritten wills in the home in May. One was created in 2014 and the other two in 2010. They have been filed in a probate court where a judge will determine whether they are legal. One of Franklin's sons says he was named as executor in the 2014 will, and one brother is supporting him in this claim. Reportedly, the names of another brother and the niece were crossed out although it is unclear who did this.

About reverse mergers

Texas residents who own a private company and want to make it public should be prepared for a complicated process. In addition to getting regulatory approvals, an investment bank has to be hired in order to underwrite and distribute shares, a lengthy due diligence process has to be conducted and there can be an extensive waiting period for optimal market conditions to launch the company into the public sector.

However, a reverse merger can be used to make a company public faster. Also known as a reverse takeover, a reverse merger can be beneficial for some private companies that take this avenue. It is important that business owners and investors understand how reverse mergers work as the practice can be a popular tool for scammers and fraudsters.

Consider these points when choosing a business partner

If you decide to start a business, you may want to bring a partner into the fold. There are many benefits of a partnership, including additional experience and industry knowledge.

However, before you formally create a partnership, it's important to carefully consider if the person is a good fit. Here are some points of consideration that will help you choose the right business partner:

  • Trust: Do you trust the person to do the right thing, every time? If the answer is yes, you can feel confident moving forward. However, if you have any reason to believe they're dishonest, it could come back to harm you in the future.
  • Try it out: Rather than jump in full steam ahead, work closely with the person for several weeks or longer. This gives you the opportunity to test the relationship, learn how they work and understand their strengths and weaknesses.
  • Responsibilities: Both you and your partner should have a clear understanding of your responsibilities, as this helps prevent disagreements in the future. Outline these responsibilities in your partner contract.
  • Finances: Will one or both of you manage the company's finances? Will you both have access to the business bank account? What's your plan for raising funds? Will you both personally invest in the business? These types of questions are critical to answer, as money has the potential to cause a divide in your business.
  • How to handle disagreements: It's bound to happen. There will come a time when you and your partner don't see eye to eye. It's best to plan for this in advance, such as by implementing a system for handling disagreements. You hope you don't run into this issue often, but preparing in advance can save you time, money and hassles in the future.

Breach of contract lawsuit filed against Harvey Weinstein

You have probably heard about the sexual assault and harassment accusations from dozens of women against film producer Harvey Weinstein. He is now facing accusations that he reneged on a payment of $450,000 promised to a former employee.

The employee, Frank Gil, was the head of human resources at The Weinstein Company. According to Gil, Weinstein told Gil that he would pay him if he could provide the identity of the people who leaked internal documents to "The New York Times" about the allegations of assault and harassment. Allegedly, Weinstein made the request in October 2017, one day after the story appeared. Gil says he identified the company president, David Glasser, and the company chairman, Bob Weinstein, as the people responsible for the leak. Gil also said that Glasser had taken illicit payments. He says that Glasser and Bob Weinstein then fired him as an act of retaliation.

Fox scores points in contract dispute with Netflix

High-ranking executives in Texas often commit to employment contracts when taking a new position. While state laws permit noncompete agreements, there are limitations on what types of agreements are acceptable. However, even when an employee has the right to break an employment contract, other companies may be restricted from trying to induce such a breach. This issue has come to the forefront in a major dispute in the entertainment industry as major studio 20th Century Fox Film is clashing with Netflix in court over what Fox claims was an orchestrated effort to poach its executives.

The case has been moving forward since 2016 when Fox sued Netflix after the streaming company recruited two of its leading executives. Netflix attempted to defend its activities by arguing that the executives' contracts with Fox were already illegal. California, the location of the lawsuit, bars many types of non-compete agreements. In addition, the company also argued that Fox's employment contracts were extended for multiple periods, breaking a state restriction on personal service contracts longer than seven years.

Estate of Carrie Fisher worth $6.8 million

Star Wars fans in Texas might be interested in learning about the estate of Carrie Fisher, the late actress who played Princess Leia in the series. Fisher, who died at age 60 in December 2016, left some relatively specific estate planning instructions. According to news reports, she asked in her will that her estate should be placed in the Carrie Fisher Living Trust, which has her 26-year-old daughter named as its beneficiary.

On May 13, the executor of the estate filed a document in court asking that the court order a final distribution to the trust. He stated that all of the administrative costs had been paid and that he had completed all of his duties. The document also indicates that Fisher's estate had assets that are worth an estimated $6.8 million.

Filmmaker's untimely death causes legal battles

When a Texas resident creates a will, its terms determine how some or all of a person's assets are distributed upon his or her death. Although John Singleton had a will, it was created in 1993 and was not updated once it was executed. At that time, only one of Singleton's six children was alive and included in the will. Therefore, his other siblings could potentially be denied a share of their father's assets.

Another question that needs to be answered relates to the value of his estate. While it is estimated to be worth $35 million, only $3.8 million has been accounted for to date. It is unclear whether Singleton had a trust for his kids or if there is any other explanation as to where the assets went. However, one of the children says that Singleton's mother may be attempting to keep the children from their father's estate.

Avoid these common business formation mistakes

There's a lot on your mind when starting a business, so it's not out of the question that you'll overlook an important detail. Before you do anything, it's critical to learn more about proper business formation.

Here are five mistakes that many new business owners in Texas have made before you:

  • Choosing the wrong business type: You have many options, including LLC, C Corporation, S Corporation, partnership and sole proprietor. There are pros and cons of all these entities, so make sure you carefully consider which one is best.
  • Skipping this step: Yes, you're in a hurry to get down to business, but doing so before you legally form a company is a big mistake. This may not harm you now, but it will hold you back in a variety of ways in the future. For example, neglecting to form a company may put your personal assets at risk in the event of a lawsuit.
  • Forming a business in the wrong state: Sometimes this is straightforward, but, other times, it's difficult to decide where to incorporate. This typically comes into play if you have locations in different states.
  • Neglecting to maintain compliance: It's one thing to form a corporation, but another thing entirely to maintain compliance as the days go by. For example, you're required to keep personal funds and business funds separate. There are also a variety of tax requirements to meet.
  • Neglecting to change: Even though it can be a time-consuming process, you have the right to change business types in the future. For instance, an LLC may have been best when starting your business, but you now realize that a C Corporation makes more sense. Don't hesitate to compare your options once a year (or more often) to decide if it makes sense to change.

Startup reveals problems with intellectual property law

After a Texas jury awarded $706 million to a housing data analytics startup based on claims of trade secret theft, major vulnerabilities were found in policies related to intellectual property law. Released information showed that the startup was distorting the facts of the case and misleading jurors. The case involved the use of the plaintiff's Automated Valuation Model, or AVM, a technology that's widely used in the online real estate industry.

Industry experts believe that current IP law is flawed partly because the plaintiff in this case was able to win its suit purely based on emotional appeals. Reports show that the company used no sales or revenue information to show that its AVM was worth hundreds of millions of dollars, instead relying on deception, lies and collusion to influence the jury. Whistle blowers from the plaintiff reported that the plaintiff had taken extensive action to hide the fact that their AVM didn't even work.

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