Bailey Brauer PLLC: Grower’s actions violated animal welfare standards DALLAS – A federal judge in the Eastern District of Oklahoma has dismissed a poultry grower’s breach of contract claim against OK Foods Inc. of Fort Smith, Arkansas, after the company severed ties with the grower amid concerns over animal welfare standards. The company terminated its grower’s agreement with Earl Oldham of Stigler, Oklahoma, just over a year into the three-year agreement following the drowning deaths of an estimated 19,000 broiler chickens during a May 2015 rainstorm. It was the second mass die-off in five years blamed on groundwater flooding at the farm. After realizing the water was rising in his three poultry houses, Mr. Oldham requested the company remove all chickens from his property. Upon arrival, a company representative discovered that many of the chickens had already died. OK Foods took immediate steps to relocate the surviving chickens to a nearby poultry farm. After OK Foods notified Mr. Oldham that his contract would be terminated, the grower filed a breach of contract suit. The lawsuit dismissal follows a summary judgment motion filed by OK Foods’ attorney Clayton Bailey of Dallas’ Bailey Brauer PLLC. In granting the summary judgment, the court threw out Mr. Oldham’s claims seeking nearly $330,000 in lost-profit damages. “Mr. Oldham in essence moved to terminate the contract with his demands to remove the broilers from the farm, something OK Foods was more than willing to oblige,” says Mr. Bailey. He noted that the swift termination of the contract was in accordance with animal welfare policies implemented by OK Foods CEO and President Trent Goins, Vice President of Live Operations Gary Hogue and Director of Broiler and Hatchery Operations Kelly Garris. “OK Foods
Bailey Brauer PLLC represented Pilgrim’s in antitrust lawsuit DALLAS – A federal judge in Marshall, Texas, ruled in favor of Pilgrim’s Pride Corp. in a $500 million antitrust lawsuit filed by a group of poultry growers who accused the company of unfair trade practices and manipulating poultry prices. Pilgrim’s originally was sued by more than 500 plaintiffs who were current or former chicken growers in Texas, Louisiana and Arkansas, each of whom sought approximately $1 million in damages. They claimed, among other things, that Pilgrim’s forced them to spend millions of dollars to upgrade their operations before the company stopped doing business with them. The plaintiffs alleged Pilgrim’s made the move in order to manipulate poultry prices by reducing availability. The lawsuit claimed Pilgrim’s violated the Packers and Stockyards Act of 1921, which governs the interstate purchase and sales of livestock, poultry and swine. The case is Adams, et al. v. Pilgrim’s Pride Corp., No. 2:09-CV-00397, and was decided in the U.S. District Court for the Eastern District of Texas in Marshall. Pilgrim’s lead counsel was Clayton Bailey of Dallas’ Bailey Brauer PLLC. Pilgrim’s argued that it ceased operations with the facilities not to cause the chicken growers’ financial harm or manipulate the market, but rather because of market forces that led Pilgrim’s to file for bankruptcy protection shortly before the growers filed their lawsuit. In the opinion issued April 22, U.S. Magistrate Judge Roy Payne ruled in favor of Mr. Bailey’s client by dismissing the plaintiffs’ claims and holding that Pilgrim’s did not violate the Packers and Stockyards Act. In the seven-page ruling, Judge Payne agreed that Pilgrim’s shut down its operations at the contested facilities in response to “extrinsic market forces” and that
DALLAS and LOUISVILLE, Kentucky – The Louisville Board of Zoning Adjustment has approved JBS Swift’s proposal to implement a new, more humane slaughter method at the company’s pork processing plant in the city’s Butchertown neighborhood. The new system, approved April 17, will use carbon dioxide to render the hogs unconscious and unable to feel pain. The company needed zoning board approval to make room for a new building and equipment needed for the new system. Animal welfare experts say the carbon dioxide process is more humane and reduces the amount of stress for the animals. The method also is safer for Swift employees, who previously used approved electric devices for the same purpose. The change will make the Butchertown plant’s methods consistent with JBS’ three other U.S. facilities. “The carbon dioxide process is the preferred method because it reduces stress on the animals and is safer for workers,” says Clayton Bailey, name partner in the Dallas complex litigation boutique Bailey Brauer PLLC and one of the attorneys representing Swift before the zoning board. “We’re pleased that the board approved the plan.” In addition to Mr. Bailey, Swift was represented by attorneys Glenn Price and Bart Greenwald, from the Louisville office of Frost Brown Todd LLP. Bailey Brauer PLLC is committed to providing efficient, effective legal representation in high-stakes litigation. Led by experienced trial and appellate lawyers Clayton Bailey and Alex Brauer, the firm focuses on complex commercial litigation, agribusiness, appeals, and class and collective actions.
DALLAS – Lawyers from the complex litigation boutique Bailey Brauer PLLC have asked a Dallas judge to affirm a $46 million arbitration award against Merchant Customer Exchange LLC (MCX), a joint venture of some of the nation’s largest retailers, including Wal-Mart, Target, Hobby Lobby and Best Buy. The filing is the latest volley in a dispute between Boston-based MCX and Bailey Brauer’s client Gemalto NV, a worldwide developer of digital payment technologies. In 2013, MCX contracted with Gemalto to develop a mobile payment platform that could be used at the roughly 40 retailers that make up the MCX consortium. In February 2014, MCX canceled its contract with Gemalto and hired competitor Paydiant to complete the work. Shortly thereafter, Gemalto filed an arbitration claim against MCX, seeking $40 million in damages, plus interest, attorney’s fees and expenses based on the wrongful termination of the contract. On March 18, 2016, a three-member arbitration panel unanimously found for Gemalto, awarding the company $42.8 million and an additional $3 million in attorney’s fees. On April 4, MCX filed a new lawsuit in Dallas state court seeking to vacate the arbitration award. Gemalto called on Bailey Brauer’s Clayton Bailey and Ben Stewart to assist the company in the state court dispute. Gemalto’s response, filed April 14, asserts that the arbitration panel did not exceed its authority in issuing the award and that the court should therefore uphold it. Mr. Bailey and Mr. Stewart also successfully prosecuted a discovery battle in Delaware superior court over the production of documents pertaining to MCX’s communications with Paydiant while MCX was still under contract with Gemalto. The arbitration panel’s award included Bailey Brauer’s attorney’s fees in the Delaware dispute. In the underlying arbitration proceeding,
DALLAS – JBS USA LLC and Swift Pork Co. have successfully resolved a 10-year dispute over Swift’s use of a parking lot near JBS’ pork processing plant in the Butchertown area of Louisville, Kentucky. On Jan. 12, the Louisville Board of Zoning Adjustment (BOZA) granted Swift a conditional use permit to use the lot as a staging area for trucks awaiting pick up by grocery stores and other buyers of Swift brand processed pork. Among other improvements, Swift has agreed to install clean combustion technology on trucks in the staging area; install a tall wooden fence around the lot; add a landscaped buffer zone; and refrain from operating within 100 feet of homes between 10 p.m. and 7 a.m. The plant’s use of the lot has been in dispute since 2006, when the Butchertown Neighborhood Association Inc. and individual residents filed a lawsuit against Swift and the Louisville/Jefferson County Metro Government, which leased the parking lot to Swift. Neighbors complained about noise and diesel emissions from truck engines, among other issues. The lawsuit sat mostly dormant until 2013, when the plaintiffs amended their filing to include Swift’s parent company, JBS USA, as a defendant. Around the same time, Swift and JBS brought in their longtime litigation counsel Clayton Bailey from the Dallas complex litigation boutique Bailey Brauer PLLC to serve as co-counsel with fellow attorneys Glenn Price and Bart Greenwald from the Louisville office of Frost Brown Todd LLP. JBS and Swift defeated the lawsuit in March 2015, but still needed BOZA to grant its conditional use permit, which happened in January. “This has been a lengthy and complex dispute,” says Mr. Bailey. “But my clients weren’t going to back down, nor should they have.
Bailey Brauer PLLC co-founder recognized for commercial litigation expertise DALLAS – Attorney Alex Brauer, co-founder of the complex litigation boutique Bailey Brauer PLLC, has been named to D Magazine’s exclusive list of the Best Lawyers in Dallas for 2016 based on his work for clients in commercial litigation. Mr. Brauer’s broad commercial litigation practice includes representing clients in a wide range of industries. His current representations include, among others, an investment fund that was defrauded out of millions of dollars; a telecom company based in China involved in a dispute with a Brazilian supplier; and a commercial real estate brokerage firm in a tortious interference and breach of contract lawsuit. “I’m thankful to my peers and colleagues who voted for me,” says Mr. Brauer. “To be named among the city’s top lawyers is particularly gratifying when you consider the many excellent attorneys who are being recognized.” In addition to the recent D Magazine honors, Mr. Brauer has earned selection on the Texas Rising Stars list published by Thomson Reuters each year since 2010. A cum laude graduate of Florida State University, he completed his law degree at the Georgetown University Law Center, where he served as a law journal executive editor. To learn more about Mr. Brauer and his background, please see his Attorney Bio on this website. To compile the annual list of the top lawyers in Dallas, D Magazine editors solicited nominations from lawyers across North Texas. A handpicked panel of attorneys then worked with the magazine’s staff to determine the final list, which includes attorneys involved in a wide range of practice areas. The complete list is featured in the May 2016 edition of D Magazine and is available online at www.dmagazine.com.
Firm News As of this month, it has been over two and a half years since Bailey Brauer was formed in May of 2013. We have a tremendous team and appreciate the opportunity to work with our clients to obtain great results. We would like to thank our clients and friends and wish you much success in 2016. Can a defendant moot a class action by making an offer of judgment to the class representative for the full amount of damages available? Class action lawsuits can be very expensive to defend against. Defendants therefore seek every opportunity to end such lawsuits as quickly as possible. One strategy recently employed is to offer the class representative all damages to which she would be entitled and argue that the lawsuit is therefore moot. The Supreme Court recently heard oral argument on this issue and will decide whether the strategy can be successful going forward in early 2016. One of the mechanisms available to a defendant in federal court is Federal Rule of Civil Procedure 68 (“Rule 68”). Under Rule 68, a party defending against a claim can make an “offer of judgment” to the other side offering to allow judgment to be entered against the defendant on specified terms. If the plaintiff accepts the offer within 14 days, the court enters judgment against the defendant and the case is over. Why would a defendant make such an offer as opposed to forcing the plaintiff to convince a jury or judge to award a judgment? The reason is that an unaccepted offer creates risk for the plaintiff. If the plaintiff does not accept the defendant’s offer within 14 days and the judgment the plaintiff eventually obtains from the
LOUISVILLE, Kentucky, and DALLAS – The Kentucky Court of Appeals has ruled in favor of JBS USA LLC and Swift Pork Co. in a long-running dispute over improvements at the JBS Louisville Pork Plant in the Butchertown area of Louisville, Kentucky. In its July 10 decision, which became final on Aug. 10, the court ruled against the Butchertown Neighborhood Association (BNA) in its efforts to prohibit JBS from making improvements at the plant. The dispute dates back to 2009, when JBS sought a Modified Conditional Use Permit (MCUP) to build a covered hog chute. The Louisville Board of Zoning Adjustment (BOZA) granted the MCUP with several conditions, including requiring JBS to add $137,000 worth of landscaping around the plant and surrounding area. JBS appealed the zoning board’s ruling to Kentucky state court, claiming the landscaping requirement was unconstitutional. The court agreed and sent the MCUP back to the zoning board for further consideration consistent with the court’s ruling. Although the BNA raised numerous procedural objections before BOZA in an effort to thwart the board from considering or granting the company’s request for a MCUP, JBS was granted another MCUP that allowed the company to build the new hog chute and make other improvements at the processing plant. As a result of its unsuccessful effort to procedurally bar the company’s MCUP application from being reconsidered by BOZA, the BNA appealed to a Louisville district court, which likewise rejected the BNA’s arguments. Ultimately, the case worked its way up to the Kentucky Court of Appeals. In the recent decision, the appeals court rejected the BNA’s complaints. The opinion marks the first time the Kentucky Court of Appeals has issued an opinion on the merits of the long-standing, highly-publicized
Firm News Bailey Brauer client JBS USA LLC and Swift Pork Co. won a ruling from the Jefferson Circuit Court in Louisville, Kentucky that allows the company to make a series of major improvements at the JBS Louisville Pork Plant in the Butchertown area of Louisville. Attorney Clayton Bailey was recently selected as a Litigation Star by Benchmark Litigation for its 2016 edition. Attorney Alex Brauer recently presented at the Association of Corporate Counsel’s Small Law Fair in Austin, Texas. Attorney Ben Stewart was selected to be a member of the Dallas Stars Season Ticket Holder Council. What types of damages are available if someone fraudulently induces you to enter into an agreement? If you are damaged by a material misrepresentation that you reasonably relied upon in entering into an agreement, you can recover certain damages. The trick is to know which damages to pursue as not all damages are created equal. Today’s newspapers are filled with stories about people and companies being defrauded. Whether it be investments, contracts for goods and services, or partnerships, lawsuits are filed every day alleging fraud claims. But litigants must beware – damages sought based on a fraud claim are not one-size-fits all. In fact, as reflected in a case involving a Baylor coach, the particular damages sought can lead to the unraveling of a fraud case. If you enter into an agreement based on a fraudulent representation and are damaged, you have two remedies: (1) maintain the contract and recover damages for the fraud; or (2) rescind the contract, return what you purchased, and receive back what you paid. Damages for fraud are divided into two categories, direct damages and consequential damages. An example of consequential damages would
DALLAS – JBS USA LLC and Swift Pork Co. have won a ruling that allows the company to make a series of major improvements at the JBS Louisville Pork Plant in the Butchertown area of Louisville, Kentucky. The judge’s order clears the way for JBS to complete work on a set of improvements aimed at upgrading the appearance of the plant as well as reducing the plant’s impact on the surrounding neighborhood. The improvements include an enclosed chute for processing animals, a covered outdoor employee break area, a decorative fence in front of the facility, and a small expansion of the plant’s processing area. Click here and here to see news coverage of the ruling. The Louisville Metro Board of Zoning Adjustment (BOZA) approved the proposed improvements in March 2014, but that ruling was appealed by the Butchertown Neighborhood Association (BNA), which has a history of lodging complaints against JBS. In her April 7 ruling, Jefferson Circuit Court Judge Ann Bailey Smith upheld the zoning board’s decision and chastised the neighborhood association for its history of antagonism toward JBS: [T]he Association has made what amounts to hyper technical objections to the Board’s approval process that can only lead the Court to conclude that the Association’s problem is not with the physical modifications themselves, but with JBS’ very presence in Butchertown. Indeed, the Association’s main objection is that the Board did not reconsider the conditional use permit it issued in 1969 for the entire premises, thus calling into question whether JBS should continue to operate its meat packing plant in the neighborhood at all. Attorney Clayton Bailey, a name partner in the Dallas complex litigation boutique Bailey Brauer PLLC who briefed and argued JBS’ case before
Firm News - March 2015 Bailey Brauer client JBS USA LLC and Swift Pork Co. won the dismissal of a nuisance lawsuit filed by multiple plaintiffs over the JBS Louisville Pork Plant’s use of a parking lot near the processing plant in the Butchertown area of Louisville, Kentucky. Attorney Clayton Bailey was a guest speaker at the 2015 Louisiana Poultry Seminar held in Shreveport, Louisiana. Attorney Alex Brauer was named to the 2015 Texas Rising Stars list, marking the sixth consecutive year that attorney Brauer was selected by the publisher of Rising Stars. Attorney Ben Stewart was featured in articles published by the Dallas Morning News and The Texas Lawbook addressing shadow banking and a recent decline in Texas business bankruptcy filings. Texas law may be changing regarding the ability to recover attorney’s fees in breach of contract cases. In the past, successful plaintiffs in breach of contract cases were able to recover their reasonable attorney’s fees from defendants under Section 38.001 of the Civil Practice and Remedies Code. Recent decisions from the Houston Court of Appeals and a Dallas federal district court may limit this ability if the defendant is a partnership or limited liability company. Texas law follows the “American Rule” when it comes to recovery of attorney’s fees in a litigation matter. The American Rule provides that each party must pay its own attorney’s fees. You may have heard that despite the American Rule, parties in Texas can recover their attorney’s fees if they are the prevailing plaintiff in a breach of contract case. This ability generally arises in one of two ways: (1) the contract at issue contains a clause providing that the prevailing party in a dispute can recover its
DALLAS – JBS USA LLC and Swift Pork Co. on March 2 won the dismissal of a complaint filed over JBS Louisville Pork Plant’s use of a parking lot near the processing plant in the Butchertown area of Louisville, Kentucky. Click here to see news coverage of the lawsuit’s dismissal. The suit by Butchertown Neighborhood Association Inc. (BNA) and individual area residents was filed in 2006 against Swift and the Louisville/Jefferson County Metro Government, which leased the parking lot to Swift. The company used the lot as a staging area for trucks awaiting pickup by grocery stores and other buyers of Swift brand processed pork. Neighbors complained about noise and diesel emissions from truck engines, among other issues. The lawsuit sat mostly dormant until 2013 when the plaintiffs amended their filing to include Swift’s parent company, JBS USA, as a defendant. Around this time, Swift and JBS brought in their longtime litigation counsel Clayton Bailey from the Dallas complex litigation boutique Bailey Brauer PLLC to serve as co-counsel with attorneys Glenn Price and Bart Greenwald from the Louisville office of Frost Brown Todd LLP. After the plaintiffs amended their petition, JBS USA and Swift filed a motion asking the plaintiffs to substantiate their allegations. JBS and Swift later served written discovery and sought to depose BNA President and Butchertown resident Andrew Cornelius seeking information supporting the plaintiffs’ claims. The plaintiffs responded on Feb. 25 by filing a motion for dismissal. Circuit Court Judge A.C. McKay Chauvin of Louisville approved the motion on March 2, dismissing the case against JBS, Swift and the county with prejudice. “Clearly, my clients are pleased with this turn of events,” says Mr. Bailey. “And in return for the dismissal, JBS
DALLAS – Attorney Alexander M. Brauer, a name partner in the Dallas trial and appellate boutique Bailey Brauer PLLC, has been recognized on the 2015 Texas Rising Stars list for his work in litigation matters. This is the sixth consecutive year that Mr. Brauer has been selected by the publishers of Rising Stars, which honors young legal leaders. To be eligible for the exclusive annual listing, a candidate must be either 40 or younger or in practice for 10 years or less. No more than 2.5 percent of Texas lawyers are selected to Rising Stars, which is published by Thomson Reuters’ legal division. To compile the list, the publication conducts a statewide survey of lawyers. Mr. Brauer represents individual and corporate clients in high-stakes litigation at both the trial and appellate levels. Mr. Brauer and his colleagues have a track record of delivering exceptional results for clients, including: • Obtaining dismissal of a lawsuit filed against a Florida-based company after challenging the jurisdiction of Texas courts; • Obtaining a favorable ruling in bankruptcy court for the former parent of Furr’s Cafeteria against the purchaser of the company’s assets; • Defeating antitrust and deceptive trade practices claims filed by nearly 200 plaintiffs from Louisiana, Arkansas and Texas in one of the nation’s most challenging venues; • Successfully resolving claims of an alleged fraudulent investment scheme during a federal jury trial, and; • Defeating fraud and contract claims alleged against a technology company officer in a complex multi-party dispute stemming from the issuance of preferred stock. “Alex is an extraordinary lawyer who achieves great results for his clients,” says Bailey Brauer co-founder Clayton Bailey. “He has had great success over his past 10-plus years of practicing, so
By Mark Curriden Senior Writer at The Texas Lawbook DALLAS (Jan. 13) – Former American Airlines General Counsel Gary Kennedy told a private gathering last month of a hundred internal legal and corporate advisers for Energy Future Holdings that the utility should brace itself for the “almost unimaginable costs” of being in U.S. Bankruptcy Court. “Our legal bills in the bankruptcy case at American Airlines ran about $500,000 a day,” Kennedy said, causing audible gasps from the EFH folks. “It has become too expensive to go bankrupt today. I tell people to avoid bankruptcy if at all possible because it is not a good time.” Apparently, a growing number of Texas business leaders agree. Hundreds of companies facing significant financial distress are bypassing federal bankruptcy courts as a means of restructuring debt and reorganizing their business models and are turning to private sources of relief instead. The number of Texas businesses filing for bankruptcy declined 20 percent in 2014 and plummeted more than 56 percent during the past five years, according to new statistics compiled by Androvett Legal Media. Legal and financial experts say the factors include a booming economy, dirt-low interest rates, an unprecedented access to cash through the emergence of a shadow banking system and the ballooning cost of litigating a case in bankruptcy court. But those same insiders predict that the plunging price of oil and gas will likely lead to a significant increase in new business bankruptcy filings in the next six months. “No business wants to go into Chapter 11 if they can help it,” says Martin Sosland, a partner in the Dallas office of Weil, Gotshal & Manges, which is widely acclaimed as one of the best bankruptcy law
DALLAS – Attorneys from the Dallas complex litigation boutique Bailey Brauer PLLC defeated a motion by TracFone Wireless Inc. to enforce an injunction filed against two mobile phone resellers. Named partners Clayton Bailey and Alex Brauer and of counsel Ben Stewart were hired the day before Thanksgiving and took the case to trial only a week later. “We may not have had a traditional Thanksgiving this year, but we were highly motivated to prevent TracFone from obtaining a court order that would have been a massive overreach against our clients,” Mr. Bailey says. “Had TracFone won, our clients could have been held in contempt, possibly jailed, and forced to pay damages and attorneys’ fees – all for buying mobile phones that weren’t even listed in the injunction.” TracFone Wireless Inc. v. Vicki S. Brooks and Mohamed A. Mohamed was originally filed in 2008 in the U.S. District Court for the Northern District of Texas in Dallas. In the lawsuit, TracFone claimed that Ms. Brooks and Mr. Mohamed bought TracFone mobile phones in bulk, unlocked them to alter the software code so that other providers’ airtime could be loaded onto the phones, and then resold them. A default judgment was entered in September 2008 against the two defendants, along with an injunction prohibiting them from buying any TracFone products in the future. The case was dormant until earlier this year, when Ms. Brooks and Mr. Mohamed were allegedly seen buying TracFone products. TracFone then filed a motion to reopen the case and enforce the 2008 injunction by holding Ms. Brooks and Mr. Mohamed in contempt and awarding TracFone damages and attorneys’ fees. The two defendants appeared without an attorney at a preliminary hearing in November and
DALLAS, Dec. 24, 2014 /PRNewswire/ -- Attorneys from the Dallas complex litigation boutique Bailey Brauer PLLC won a court battle over the filing and payment of back taxes for Buffet Partners L.P., the former parent company of Furr's Cafeteria. In a Dec. 17 ruling, Judge Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas ordered Atlanta-based Chatham Credit Management III LLC (CCM) to file and pay Buffet Partners' 2013 and 2014 taxes and preparation expenses, the combined total of which could be as much as $130,000. In April, CCM purchased the assets of San Antonio-based Buffet Partners, including Furr's Cafeteria, just two months after Buffet Partners filed for bankruptcy protection. Shortly after, CCM resold the same assets to Arizona-based Fresh Acquisitions LLC, which has since rebranded the Furr's franchise as Furr's Fresh Buffet. Although the purchase agreement between CCM and Buffet Partners required CCM to file Buffet Partners' tax returns and pay the taxes and preparation expenses, CCM repeatedly refused to do so, says Bailey Brauer named partner Alex Brauer. He represents Buffet Partners Holding Co. LLC (BPHC), which owns Buffet Partners and its general partner, Buffet G.P. Inc. BPHC did not file bankruptcy and participated solely as the equity interest holder of Buffet Partners and Buffet G.P. "Chatham Credit's purchase and immediate asset resale left Buffet Partners without the resources necessary to wind up their corporate affairs, including filing and paying their taxes," Mr. Brauer says. The situation was complicated by the fact that Chatham Credit is an affiliate of Chatham Capital Partners Inc., which holds the vast majority of Buffet Partners’ debt and essentially controls the company. "Chatham Capital has used its unique position to maximize its own recovery
Firm News - December 2014 The attorneys at Bailey Brauer obtained successful outcomes for several clients over the past quarter, including two notable examples. Defeating federal contempt allegations: Bailey Brauer was hired on the Wednesday before Thanksgiving to represent two individuals at a show cause hearing the following week. The defendants were facing contempt charges for allegedly violating a federal injunction. Attorneys Clayton Bailey, Ben Stewart and Alex Brauer, and Paralegal Brynn Long sprang into action over Thanksgiving weekend in preparation for the upcoming hearing. The federal magistrate judge found not only that our clients did not violate the injunction, but also that Bailey Brauer’s legal arguments carried the day and the injunction was unenforceable as written. Obtaining resolution of Furr’s Cafeteria bankruptcy issues: Within 90 days of being retained, Attorneys Ben Stewart and Alex Brauer obtained a favorable ruling in federal bankruptcy court requiring the investment fund controlling the bankrupt entities to pay administrative expenses and address outstanding tax issues. The ruling benefited limited partner investors represented by Bailey Brauer and allowed them to avoid potential tax liability. Is Your Injunction Enforceable? Injunctions are court orders that govern a party’s conduct. The most common form of injunction prevents a party from taking certain actions. An example is an injunction that prevents a person from buying or selling certain products. This is the type of injunction recently faced by two of Bailey Brauer’s clients. Because injunctions are orders issued by state or federal courts, they can be very powerful weapons. However, injunctions must meet certain requirements to be enforceable. Federal Rule of Civil Procedure 65 and Texas Rule of Civil Procedure 683 govern injunctions. They require, among other things, that the injunction: (a) state the
Firm News - September 2014 The attorneys at Bailey Brauer obtained successful outcomes for several clients over the past quarter. Examples include: - Defeating antitrust and deceptive trade practices claims of nearly 200 plaintiffs from Louisiana, Arkansas and Texas filed in one of the nation’s most challenging venues; - Successfully resolving claims of an alleged fraudulent investment scheme during a federal jury trial; and - Defeating fraud and contract claims alleged against a technology company officer in a complex multi-party dispute stemming from the issuance of preferred stock. Attorney Clayton Bailey was a guest speaker and provided a “Legal Update” at the U.S. Poultry & Egg Association’s 2014 Live Production and Welfare Seminar held in Nashville, Tennessee. As Hiring Improves, the Likelihood of Litigation Rises. As the jobless rate decreases, there has been an avalanche of lawsuits filed by former employers relying on the vagaries of trade secret and unfair competition laws to prevent the hiring of employees by competitors. What can you do to minimize your exposure? As the economy has improved over the last 18 months and individuals are joining new employers, we have noticed an uptick in lawsuits filed by employers accusing their former employees of stealing “trade secrets” or confidential and proprietary information. While many lawsuits may be necessary to shield against unlawful conduct, these lawsuits can unfortunately also be used by former employers as a sword to lash-out against the former employee that had the audacity to effectively “fire” his former employer. The lawsuits may also be used by companies to strike fear in competitors that might be contemplating issuing job offers to other current employees. The basic rule of fair competition for a departing employee is easy to state:
Firm News - June 2014 Attorney Clayton Bailey and the Director of Litigation and Policy for the USDA's Grain Inspection, Packers and Stockyards Administration, Brett Offutt, co-authored a paper and discussed current legal issues impacting the agribusiness industry at the State Bar of Texas' 8th Annual John Hufaker Agricultural Law Seminar. Attorneys Alex Brauer and Ben Stewart’s representation of a Texas investment fund in a lawsuit filed against Hammerman & Gainer International, Inc. and various related entities and individuals was profiled by the Texas Lawbook on April 24, 2014. The legal representation provided by Bailey Brauer attorneys has resulted in over a dozen published opinions by federal and state courts in Texas and other jurisdictions. What are Your Rights as a Minority Owner of a Company? Claims for minority shareholder oppression no longer exist under Texas law. Are minority owners now left out in the cold when company insiders engage in bad acts? Not necessarily. When a minority owner of a Texas corporation, limited liability company or partnership disagrees with the actions taken by a majority owner, officer or director, he is generally left with two choices: (1) sell his interest in the company; or (2) go to court in an effort to change the behavior. Regarding the first option, the owner of a Texas partnership has a legal right to transfer or redeem his ownership interest. Unfortunately, owners of Texas corporations and limited liability companies do not. Assuming the company’s shares are not publicly traded and there is no contractual right to sell, the owner may have a very difficult, if not impossible, time selling his interest in the company. This is why it is extremely important to enter into an agreement governing the
© 2014 The Texas Lawbook. By Jeff Bounds Staff Writer for The Texas Lawbook (April 24) – A Dallas private equity fund is taking officials of a Louisiana company to task over allegations that they secretly set up a “shell” company to funnel money out of the business when the fund owned a piece of that company, court records show. The North Texas Opportunity Fund LP alleges in a petition filed April 9 in state district court in Dallas that officials of Hammerman & Gainer International Inc. surreptitiously set up the shell business partly so they could enrich themselves. Hammerman & Gainer previously was based in Irving, and shifted its headquarters to New Orleans in late 2008, court documents say. Additionally, the petition alleges, Hammerman & Gainer officials wanted to reduce the value of their company in anticipation of buying back the private equity fund’s 3 million preferred shares, for which it paid a total of $3 million between 2004 and 2005. “The fund was alerted by government authorities that Hammerman & Gainer and its related entities and principals were being investigated and hid revenue and profits from the fund. We believe they did hide revenue and profits, and we intend to aggressively pursue all of our claims,” said Arthur Hollingsworth, a partner at the fund, which has in excess of $25 million in capital under management. The fund previously sued the defendants over this same set of issues in 2012. North Texas Opportunity and the defendants agreed to postpone that litigation because of an on-going criminal investigation by the Internal Revenue Service, court documents show. North Texas Opportunity officials said in their petition this week that they received a grand jury subpoena from the