Recent Answers to Asset Protection Law Questions

Darryl S.

Answered Jul 16, 2024

An Asset Purchase Agreement (APA) is a legal contract used in business acquisitions where a buyer purchases specific assets of a company rather than acquiring the entire business entity. Here are some of the key provisions and potential risks involved: Key Provisions: 1. Identification of assets: Clearly defines which assets are being purchased and which are excluded. 2. Purchase price: Specifies the total amount and payment terms. 3. Liabilities: Outlines which liabilities, if any, the buyer will assume. 4. Representations and warranties: Statements made by the seller about the condition and status of the assets. 5. Conditions precedent: Events or actions that must occur before the deal closes. 6. Covenants: Agreements on how parties will behave before and after closing. 7. Indemnification: Protections for the buyer if the seller's representations prove false. 8. Closing mechanics: Details on how and when the transaction will be completed. 9. Transition services: Any support the seller will provide post-closing. 10. Non-compete clauses: Restrictions on the seller's future business activities. Potential Risks: 1. Incomplete due diligence: Buyer may miss critical issues with the assets. 2. Undisclosed liabilities: Buyer might inadvertently assume unexpected debts or obligations. 3. Environmental liabilities: Hidden contamination or compliance issues. 4. Contractual obligations: Existing contracts may not be transferable or may have unfavorable terms. There are many other risks - so this list is far from comprehensive.

David B.

Answered Dec 6, 2023

I'd be happy to help with this. Normally, leases are freely transferable (by the landlord and the tenant) if the lease does not mention assignability and/or subleasing. However, the landlord and tenant are free to agree to limits to assignability/subleasing in the lease and such limits are enforceable against both parties. Landlords typically want to know a lot about any potential tenant, so the right to assign or sublease is substantially curtailed in most leases. Often, the landlord will reserve the absolute right to approve a new tenant (meaning such approval can be withheld for any or no reason). Tenants are often bargaining from a seriously disadvantaged position. Not only does the lease limit the ability to assign but the tenant is typically in tight economic circumstances. On the other hand, the landlord typically wants the premises filled with a rent-paying tenant. I've negotiated subleases from both perspectives and am confident I can guide you to a mutuallt beneficial resolution to this matter.

Paul S.

Answered Aug 4, 2023

The LLC is a good starting point for asset protection. How you operate the LLC, and in particular the LLC's finances, is even more important. You should be careful to keep the business's finances separate from your personal finances - for example, don't pay the rent or mortgage on your home out of your LLC bank account. And of course, liability insurance is your first line of defense.