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After the signing of the lease, the last thought entering the landlord's consciousness is that its new tenant is going to file for bankruptcy protection during its tenancy. In the beginning stages of the relationship between landlord and tenant, there is a brief period of shared optimism about the future and the joint prosperity that the new union is bound to offer.
Since its enactment in 1978, the Bankruptcy Code has provided a means for debtors either to reorganize their financial affairs or to liquidate their assets. Within this framework, bankrupt tenants have often utilized the provisions of the Bankruptcy Code to the detriment of landlords, and landlords have increasingly become either involuntary creditors or financiers during a bankruptcy case or have suffered some type of unexpected loss.
Bankruptcy presents a unique forum for a cash-strapped debtor to sell otherwise unassignable and unprofitable leases to third parties, for immediate cash, and free of liens, certain contract restrictions, certain transaction costs, and future liability. While the bankruptcy arena offers unique opportunities, it poses special risks. The primary players in a bankruptcy lease sale scenario are the debtor, the prospective buyers, and the landlord. A debtor's goal is getting as much value as fast as possible for its creditors. A prospective buyer wants to pay as little as possible, with sufficient due diligence, and have an unassailable sale with whatever lease modifications are necessary for it to remodel and reopen. A landlord's objective is timely lease compliance and a financially and operationally sound buyer. Each party can benefit from following these four basic rules of bankruptcy lease sales.
Recent developments in e-commerce law and in the e-commerce industry.
The U.S. Census Bureau reported Nov. 19 that estimated third-quarter e-commerce sales accounted for $17.6 billion of economic activity ' 1.9% of the total estimated $916.5 billion.
Given the now-common nature of e-commerce, new challenges face traditional firms and e-only businesses regarding adequate protection of the companies' computer systems, data and Web sites. These challenges are somewhat similar to those faced by a traditional retail business, but extend beyond those boundaries because of the Internet. For an e-business, a comprehensive disaster-recovery plan, including proper protection of computer systems and data, is critical to the success of the enterprise, and essential for daily operation.
Features
Traditional business-valuation tools don't work well online. As a result, problems arise if the owner wants to price an online business for sale. Book value rarely approximates real value without hard assets ' which many online firms don't carry. A value based on earnings or revenue can work ' if the firm has enough of a track record, through good years and bad, to make it reliable. <br>But a brick-and-mortar solution, the earnout, can solve this high-tech dilemma. In an earnout, a business-seller receives contingent payments based only on a business's profits in the hands of the buyer.
When initiating a private action against a spammer, the first issue the plaintiff must grapple with is jurisdiction. If a recipient of spam is located in the same state as the spam sender, for instance, ordinary private-action rules apply. <br>But the problem there is that many would-be defendants reside outside the state where the spam recipient resides, and long-arm jurisdiction must be employed.
Recent cases in e-commerce law and in the e-commerce industry.
While some companies are unfamiliar with the Public Company Accounting Oversight Board (PCAOB), PCAOB has recently been making its presence known. PCAOB is a private-sector nonprofit corporation created by the Sarbanes-Oxley Act of 2002 (SOX), whose stated purpose is to "oversee the audit of public companies that are subject to the securities laws, and related matters, in order to protect the interests of investors ... " Section 101(a). Although some questioned whether PCAOB would ultimately have any real-world impact on accounting firms and the public issuers they audit, PCAOB has proven that it has the authority, ability and appetite to shape the heightened environment in which companies now operate following passage of SOX and its focus on restoring investor confidence in companies' financial reporting.