Successfully proposed a creative solution to a sublease problem.
I wanted my client (the subtenant) to have the legally enforceable right to deal directly with the landlord, rather than always going through the tenant. Usually, only the tenant has the right to make legal claims against the landlord - if the subtenant has a complaint, he has to convince the tenant to make that complaint.
No form book language was available for this novel approach, nor had anyone in my firm ever seen such language used. Therefore, I used the legal concept of "privity of contract" to draft a completely new contract clause to achieve the desired result.
My creativity in coming up with this new language, only 5 years out of law school, was complimented by one of the top real estate attorneys in town.
Dental Practice Purchase - Seller Died Prior to Signing Contract
Mergers & Acquisitions
Nov 10, 2008
Closed the sale in 40 days (not 6 months).
My client (the buyer) found a dental practice for sale. I negotiated and drafted a very favorable contract for my client, but prior to signing the contract, one of the two sellers died. While finalizing the contract, the buyer's financing had been approved, due diligence was completed, and the new lease had been finalized.
Had the deceased seller completed proper estate planning, the sale could have closed immediately on his widow's signature. Unfortunately, no corporation or trust existed to allow this result, nor was there a will. Ordinarily, it would take many months to go through a intestate estate probate and complete the sale.
I came up with a creative solution to give the seller's widow authority to sign the sale contract without going through probate. I did this with a specialized (and relatively unknown) post-death estate planning document that gave the widow full legal ownership of the deceased seller's share of the dental practice only 40 days after his death, without probate.
My technique permitted the sale to close only 40 days after death, rather than an estimated 6 months after death.
The IRS accepted the retroactive claim, saving the heirs $550,000 in estate taxes.
Marcella died in early 1987 with a substantial estate. The $1M GST tax exemption had just been passed in 1986, while the client was alive, but due to illness she never changed her estate plan to take advantage of the tax exemption. I obtained written evidence from Marcella's doctor that she was incompetent at the time the GST law was passed, told the IRS that had Marcella been competent she would have amended her trust to take advantage of this exemption, and submitted that evidence to the IRS on a form I created (no form was yet available from the IRS to claim this exemption).
Non-Deductible Stock Purchase 80% Converted to Deductible Goodwill Purchase
Mergers & Acquisitions
Dec 31, 2012
Buyer saves an estimated $120,000 in taxes over 15 years.
I represented Buyer. Seller was a partial owner in a dental corporation, and the original corporation stockholder agreement required that stock be sold, but not specifying personal goodwill as part of the sale. Payments for stock are not tax-deductible expenses. By adding the sale of personal goodwill to the stockholder agreement, and allocating 80% of the price to that goodwill, Buyer can now deduct 80% (rather than 0%) of the purchase price. Since stock and goodwill are both eligible for capital gains treatment, Seller remained in the same tax position as before and did not object.