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Honesty Is Fundamentally the Best Policy
The Superior Court of Pennsylvania recently delivered good news for franchisors and their counsel, as it expressly held 'that there are circumstances where the nature of the breach permits the aggrieved party to immediately terminate the contract despite a 'cure' provision where a franchisee commits grievous acts of dishonest conduct.' In LJL Transp., Inc. v. Pilot Air Freight Corp., __ A2.d __, 2006 PA Super 176, 2006 WL 1977508 (Pa. Super, Pa. July 17, 2006) (No. 2068 EDA 2005), Judge Richard B. Klein, with Judge Maureen Lally-Green concurring, authored the opinion affirming a Northampton County trial court's order denying the franchisee's motion for summary judgment and granting the franchisor's cross-motion for summary judgment.
As recognized by the trial court, the case was one of first impression in Pennsylvania. At issue was an examination of the propriety of a franchise termination arising out of a franchisee's demonstrated and admitted lack of honesty. The facts are simple. Franchisor, Pilot Air Freight Corporation ('Pilot'), terminated its Lehigh Valley and Harrisburg, PA, franchisee's franchise agreement without affording the franchisee an opportunity to cure pursuant to the agreement's 90-day cure provision. Pilot stated that its reasons for terminating the franchise were that the franchisee: 1) improperly shipped products through third-party affiliated entities of the franchisee, ie, other than Pilot, and 2) failed to disclose those shipments and payments to Pilot.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability
This article explores legal developments over the past year that may impact compliance officer personal liability.