Bailey Brauer Helps Former Parent of Furr’s Cafeteria Prevail

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

December 31st, 2014|Categories: Cases, News|

Bailey Brauer Quarterly Newsletter – December 2014

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

December 31st, 2014|Categories: Cases, News|

Bailey Brauer Quarterly Newsletter – September 2014

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:

September 2nd, 2014|Categories: Cases, News|

Bailey Brauer Quarterly Newsletter – June 2014

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

June 2nd, 2014|Categories: Cases, News|

N. Texas Opportunity Fund Sues Hammerman & Gainer

© 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

May 12th, 2014|Categories: Cases, News|

Bailey Brauer Quarterly Newsletter – March 2014

Firm News - March 2014 Attorney Clayton Bailey has been recognized as a Client Service All-Star by The BTI Consulting Group of Wellesley, Mass. Attorney Bailey is one of only 330 attorneys nationwide to be recognized as a Client Service All-Star based on independent interviews with corporate counsel. Attorney Alex Brauer has been recognized as a 2014 Texas Rising Star by Thompson Reuters. This marks the fifth consecutive year that attorney Brauer has been recognized as a Rising Star. On February 14, 2014, attorney Brauer was quoted on alternative fee agreements in the Texas Lawbook. In December 2013, attorney Ben Stewart was interviewed by KLIF-AM’s Kurt Gilchrist regarding the lawsuit pitting Snuffer’s Restaurants, Inc. against Pat Snuffer. Attorney Paul Green was recently admitted to the United State District Courts for the Southern and Western Districts of Texas. No Confidentiality Agreement? You May Still Be Protected. One of your key employees just left and went to a competitor. Unfortunately, you never had her sign a confidentiality agreement. Is your confidential information in jeopardy? Maybe not. A best practice is to have employees working with your company’s confidential information (customer lists, bid processes, secret formulas, etc.) sign a confidentiality agreement. Even if this did not occur, however, your confidential information may still be protected. Under Texas law, a former employee may not divulge the trade secrets of his former employer. This is true even when there is no contract between the employee and employer prohibiting such disclosure. The primary issue then becomes whether your company’s confidential information qualifies as a trade secret. Many items may fall within the definition of a trade secret: customer lists; pricing information; customer preferences; and manufacturing processes to name a few. In

March 2nd, 2014|Categories: Cases, News|

Ben Stewart on Snuffer’s v. Snuffer Lawsuit

Bailey Brauer Counsel Ben Stewart joined KLIF-AM’s Kurt Gilchrist to discuss the local lawsuit pitting Snuffer’s Restaurants, Inc., against Pat Snuffer, who lost control of the Snuffer’s name after Snuffer’s Restaurants filed for bankruptcy earlier this year. Mr. Snuffer planned to open a new Snuffer’s in the original lower Greenville Ave. location, but the new owner of Snuffer’s Restaurants, Firebird Restaurant Group, demanded that Mr. Snuffer stop using the Snuffer’s name. In an apparent attempt to comply with the demand, Mr. Snuffer changed the name of his new restaurant to Pat’s Burgers & Cheddar Fries. Snuffer’s Restaurants then filed suit and obtained a temporary restraining order against Mr. Snuffer to prevent Pat’s from opening. The plaintiffs’ biggest challenge is likely to be its trademark and trade dress violation claims, Mr. Stewart said. “The Snuffer’s brand isn’t as well-known as some of the others,” he explained, referencing McDonald’s Golden Arches and the brown background and distinctive blue font on a Snickers candy bar wrapper. “You know what a McDonald’s looks like. When you drive past those arches, you know . . . Snuffer’s hasn’t reached that level.” Neither Mr. Stewart nor Bailey Brauer PLLC are involved in the Snuffer’s litigation.

December 11th, 2013|Categories: Cases, Interview, News|