News - LegalEase Newsletter Archive

Vol. 7, Issue 1 | January 1, 2009

With the nation’s economy having entered a recession, and the end of that recession difficult to forecast, businesses need to prepare for certain eventualities, such as laying off employees, securing payment for goods or services or navigating the long reach of the Bankruptcy Code.  In these difficult economic times, few businesses can afford to be unprepared for common legal issues that arise in the course of everyday operations.  Below are ten of the more prominent issues likely to affect your business during the current recession.   

Reclamation of Goods Sellers who deliver goods to an insolvent buyer may have rights under the Uniform Commercial Code or the U.S. Bankruptcy Code to reclaim the delivered goods.

Construction - Mechanic's Lien Rights Navigate your way through the procedural requirements by which contractors, architects, engineers and other construction professionals who supply goods and services to a construction project can establish a lien on the building and adjoining land.

Purchase Money Security Interest A Purchase Money Security Interest (PMSI) can help you to obtain a superior, secured position over existing secured creditors with respect to your ability to repossess your company’s goods.

I.P. Licensing in Bankruptcy Your business may rely in part on the ability to use software licensed from a software developer. What happens if that developer, goes out of business or files bankruptcy?

Employee vs. Independent Contractor Classifications Misclassification of an employee as an independent contractor, even if made in good faith, can result in fines, penalties and unwanted scrutiny by government agencies.

Payment of Accured Leave Upon Termination Employers who wish to avoid paying departing or terminated employees for their accrued but unused vacation leave must follow certain steps.

Construction - Important Payment Clauses Small changes in contractual provisions can make a big difference as to how and when a contractor will get paid, under what circumstances the contract may be terminated, what constitutes a default and what actions can be taken.

Employment Separation Agreements A poorly drafted separation agreement and release can expose employers to monetary liability arising from claims of discrimination and alleged violations of applicable wage and hour laws.

Preferences If you received a payment from a customer who within 90 days following that payment files for bankruptcy, chances are that the bankruptcy trustee will deem the payment a “preferential transfer” and demand that you return the money.

Layoffs Employers forced to lay off employees who fail to comply with the notice provisions of the Worker Adjustment and Retraining Notification Act (WARN) face liability for back pay and benefits as well as civil penalties.

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