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Ryan Alexander’s Answers

94 total

  • Construction loan document preparation

    I am looking for a service for loan document preprattion for a investment property purchase and remodeling. This is going to be a short term baloon note where interest. Principal fees. Is due in 6 months. Also I would like to keep clauses in d...

    Ryan’s Answer

    Are you the developer or the lender? If you're a developer, my initial reaction is to ask why your lender isn't presenting you with documents that the lender prefers in such a transaction as is customary. Typically, lenders do not entertain a developer's form agreement, barring unique circumstances of course.

    If you're the developer and looking to syndicate your own debt through your own placement of private debt, that's a different story, but you'll need to find someone with experience in creating debt offerings. If this is the case, you might search on here for a local securities attorney if that's the case.

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  • I know a repo man who lives next door to me. He is constantly parking the cars he repossess on the street which causes problems

    Which causes problems for parking since every neighbor has a few cars to each house. Is there something I can do because he will have anywhere from 1 to 3 cars parked on his street and across the street. Is this legal depending on the city yo...

    Ryan’s Answer

    You have some options, but you may need a land use attorney that is familiar with local zoning issues in your area to help you.

    Under the Business and Professions Code, your neighbor is entitled to operate a collateral repossession agency from his home, but you might check your local municipal code to see whether this operation is prohibited by the city in which you live, possibly not.

    Moreover, depending upon your neighborhood, there may be local city zoning ordinance and possibly private restrictive covenants which may prevent the abandonment of vehicles, limiting the number of business-based traffic in the neighborhood, or even, as is possible with restrictive covenants, limitations on the number of vehicles you're allowed to park on the street.

    With respect to the city's zoning requirements, the city typically enforces these, and you can contact your council person, the police or maybe the mayor's office, depending the specified proper channel for making complaints of this type. You may have to file a complaint specifying the problem and the basis as to why the city is compelled to act if your audience is uninformed. You may not need legal assistance to go this route, but it could hasten the process.

    Restrictive covenants are commonly found in neighborhoods with HOAs, but not always. These are rules specifically created for the local area to ensure the proper aesthetics of the neighborhood; you would've received notice of these special rules upon your purchase of your house as these are often recorded with the deed to your property. If you have restrictive covenants, you can contact your HOA for assistance as these entities often enforce HOA restrictions on behalf of residence, but this may depend upon the HOA management's position on the topic (Sometimes management is your neighbor in violation of the covenant.).

    As far as legal action through civil litigation, you may also have options to file a nuisance claim for violations of the zoning ordinances and possibly for the diminished use/value of your property if these cars are parked in front of your house. If you live in a residential development having restrictive covenants, you may also have standing to enforce the restrictive covenants of the neighborhood through your own private legal action. My belief is that you'll have more success in obtaining a decree to stop doing the bad behavior rather than monetary damages, so proceed cautiously, and ask the right questions of your attorney before going this route.

    Neighborly issues aren't uncommon, just make sure you have good fences with your neighbors and think through your process before you act as causing problems with your neighbors could upset the enjoyment of your home if you create some unintended hostilities.

    Good luck.

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  • If one enters into a partnership in CA. with no employees, is the partnership still required to have workman's comp insurance?

    If the answer is no, then what is the highest number of partners a LLP can have and still not be required to have Worker's Comp insurance?

    Ryan’s Answer

    The answer to your question cannot be definitively determined as this is not defined by statute nor has ever been an issue before any trier of fact. If you want better guidance, ask whether the number of actual members you have in your partnership could safely rely upon the exception for Labor Code S 3700. In other words, I agree with Mr. Jacobson.

    Your decision on this issue is to decline coverage for a risk, a personal exclusion of management, by those having the input and power to make the decision (management). You should explore the soundness of the decision in light of the risk as any trier of fact would do so, and give credit and weight to your decision if you could articulate your process of determination. To understand whether your applicable circumstances are permissive, I would want to know whether (i) the number of partners is a reasonable number; (ii) the type of service the partners perform for the partnership is not a service where obtaining such insurance is reasonably prudent; and (iii) the partnership reasonably evaluated its options and made a prudent decision with the appropriate amount of information.

    Ultimately, this is a partnership question as much as a compliance question in that knowing and trusting your partners is equally important to understand the likelihood that this could become a point of contention between the partnership and a partner. You’ll likely never have any concern relating to this for this question with the California Unemployment Insurance Appeals Board until something happens to a partner, and the partner files a claim. Having a discussion and input from your partners is a recommendation for you so that you can validate the reasonableness of this decision and measure the impressions of your partners. Moreover, having record of a partner voting for or otherwise approving the decision to forgo such insurance prior to any partner having suffered an injury that would otherwise be coverable by such insurance would serve to nullify any contention on the matter.

    Beyond these steps, and assuming you decline coverage, I would consider this a topic of discussion that you would want to periodically review with your partners as the business of the partnership may change as well as the demographics of your partners, and an out-dated historical decision would not be of much use to your defense in such matter should something happen years later.

    Good luck.

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  • Inestors for business

    i want to start up pharmaceutical business but i need investors for finance upto 1.5 million, where can i find one? any website or any group? how can i stay as majority of share holder as owner or main owner since i will be opearting these busines...

    Ryan’s Answer

    Based on your investment amount, you're looking at equity investors that may take some form of equitable security in your business. If you have no business track record, it's possible that you won't have any commercial lenders available to you as this would not meet their risk profile. This is probably true for those willing to provide you any form of promissory note (money in exchange for the promise to repay), unless you're willing to allow the lender to securitize its loan with your personal assets as collateral.

    For U.S.-based equity investors, you have to be careful with the selection of investors. Using this form of fundraising (securities offering) requires compliance with state and federal securities laws whereby you'll have limitations as to the total number of investors you can have, the wealth and affluency of the investors, and their experience and awareness of these types of securities purchases. These offerings will also require documentation to clearly define the type of security you're offering, and the terms upon which the offering must be purchased, and even re-sold by the investor; it is a very restrictive process which must be fully disclosed by you and understood by the purchaser. You can avoid some of the individual wealth requirements of your investors if you provide the specified disclosures statements that describe your business and your proposed use for the funds, and these can add an additional layer of complexity. This is the traditional and most common way businesses in your situation raise money in the U.S., but it requires you to find sizable investors of sophistication (the average investment would be approx. $45,000 per investor to satisfy your raise requirement within the limited number of investors you can have).

    Finding investors for this traditional fundraising is done through networking your professional contacts, personal friends, family members, and with professional investors such as private equity and venture capital firms. You can also hire a promoter for purposes of connecting you with wealthy individuals and these professional investors, but promoters generally come at significant cost and expense, taking a percentage of your total fundraising. They also require additional documentation and reporting, but this additional burden can be worth it.

    Another option that was recently established is the use of crowdfunding websites for fundraises up to $1,000,000. Crowdfunding is a process that allows the wide-spread dissemination of shares/equity in your company to a greater number of people with no maximum number of investors, but a maximum investment of $2,000 per investor. The same restrictions for the resale of these securities are imposed upon securities sold by the crowdfunding method, and I usually do not recommend this method absent a special purpose as this can cause problems later given the lower threshold requirements for the class of investor that is entitled to invest pursuant to this style of investment.

    This is a complex question that requires detailed planning and knowledge of the securities offering process. You’ll be able to navigate these issues with the assistance if your securities attorney, and tailor a plan that meets your business requirements.

    Best of luck.

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  • Is the non disclosure agreement enforceable in the event of its breach?

    I reside in California the other parties : 1. in Australia 2. the other is an American citizen residing in Israel

    Ryan’s Answer

    An NDA is one form of agreement that has international enforcement difficulties. Unfortunately, most people (even lawyers) believe in a one-size-fits-all approach to creating NDAs, and this isn't recommended. Let's discuss some of your problems.

    For starters, you need to know the governing law of the agreement, and where you're trying to enforce the agreement. If this is U.S. law, e.g. California law, it can be difficult to domesticate and enforce an NDA in a foreign jurisdiction on the basis that American contracts do not always comport with the policies of the foreign jurisdiction, and the foreign jurisdictions will not allow the enforcement of a judgment in their jurisdiction. Ideally, you have two separate NDAs under Australian and Israeli law, respectively, to avoid the foreign jurisdiction enforcement issues. Australia and Israel are more in line to favor enforcement of American contracts, but your issues aren't over.

    Second, you have a cost-of-enforcement problem. Unless you've included an attorneys' fees provision or followed the European format for an NDA (you have liquidated damages for a violation of the agreement), you're going to face an exorbitant amount of legal fees to obtain a judgment in California, then enter the judgment in the foreign jurisdictions. You'll need a California attorney, an Australian attorney, and an Israeli attorney. I don't know whether Australia or Israel will recognize the award of fees, and more importantly, I don't know what your agreement says (whether you're entitled).

    Thirdly, what are your options under the contract for remedies/damages? Cease-and-desist? Actual damages? Consequential damages? Liquidated damages? The easiest-to-obtain remedy to receive in the US for the breach of an NDA is injunctive relief to get the parties to cease further disclosures. Some jurisdictions, e.g. China, don't enforce or entertain injunctive relief. For monetary damages, you'll have to prove you've suffered economic harm, and how do you value actual damages to the breach of an NDA - these are typically low, or consequential damages that are difficult to prove in that you have to show causation between your harm and the breach (and this is if the NDA doesn't limit these types of damages (hopefully not). Liquidated damages are the easiest to define in value, but not always allowed in all jurisdictions in that if there is a breach, there is the requirement to pay a defined sum.

    Unless you're prepared to spend a minimum of $50K in legal fees, you're likely not going to see any real adherence to the contract, or any real form of remedy under the NDA. Sorry. You'll need the consult of 3 lawyers to even understand your options, and from my experience, you're already facing insurmountable issues of costs (unless you're a Fortune 500 company) to preclude you from starting the process. You might be limited to making threats, but any Australian or Israel-based person who consults a local attorney would receive advice of the remoteness of and the bona fide lack of risk your demands would proport to be. This is the mistake my American clients make when conducting business overseas.

    Good luck.

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  • What contractual issues do I need to be aware of if I decided to trade my domain name for an equity stake in a company?

    I've been talking to a startup interested in using my domain. The agreement is I would get small equity stake and if the business ends up not working, I would get my domain back. I wanted to see if there were any other contractual issues I should...

    Ryan’s Answer

    Key issue: Is the equity worth any money? What is the probability of success that the company shares will increase in value? A company can go a number of years before it's equity has any value. Moreover, even if the shares have value, you may not be able to cash out until there is a market for the securities (maybe never), you cannot publicly offer them for sale (until they are registered with the SEC (costly), they aren't listed on an exchange, and the company has no obligation to re-purchase the shares from you if you're tired of possessing them. Equity is tricky.

    Second, make sure the securities are legit: If you're cognizant of these valuation issues, make sure that the company's shares are filed with the SEC and California appropriately, and that you obtain the Stock Plan and/or PPM that is associated with the securities offering, and you review the restrictions imposed upon the stock. Again, it's likely that you won't be able to sell them until something big happens to the company, if ever.

    Beware of your tax implications: Has the company performed a 409A valuation, and are you receiving shares that will create a taxable event for you? If it's a start-up, it's possible that this isn't an issue, but if you receive a stock that is valued at $10 or something other than $0.0001 (low value), then you'll have a tax consequence for your receipt of the payment in kind (so will the start-up btw).

    Tip: Consider a promissory note that is convertible to equity as payment, or that creates the obligation to pay you for the domain when the note becomes due. This is sensitive to the start-up's cashflow concerns, and it allows you to get paid in cash upon maturity. You can even define the maturity as an event where the company raises enough money to purchase your domain.

    You have an unlimited amount of options to create a unique opportunity for you to gain some equity, but you'll need to believe in the start-up before taking equity and understand the risks of taking equity. Think about what reward you're willing to take in exchange for the risk of taking-on equity, and negotiate something that works for you.

    Good luck.

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  • What documents do I need to file with the SOS when an LLC member withdraws?

    3 member LLC, and one of us is withdrawing. Are there any documents I need to file with the Secretary of State? I just filed our statement of information about 5 months ago; do I need to file an updated one? Anything else I need to do or file (oth...

    Ryan’s Answer

    Refile the statement of information if the managers, officers or agent for process has changed. No other filings are required as ownership changes aren't reflected (unless the interest is publicly traded - most likely not).

    If there are certificates of ownership for the withdrawn member, cancel the certificate evidencing the departing member's ownership, get a buy/sell agreement, transfer document or bill of sale to reflect the reversion of the interests back to the LLC or to the other members. You may also have to revise your schedule of members in your operating agreement. Other than these issues, you're good to go.

    Good luck.

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  • A blogger has libeled me. It has passed the 1-year statute of limitations from first publication, yet the material is still up.

    A blogger on a popular website based in California has libeled me, that much is black-and-white. The material is defamatory, shows a careless disregard for the truth, and was printed with malice (we compete in the same business). It has caused dam...

    Ryan’s Answer

    Thinking outside of the box . . . on an issue that's been here before:

    - Has the author modified the website or work since its original publication, e.g. new website, updates, amendments? If there's a modification or update of any kind the one-year period resets, and the defamation claim survives.

    - Was the author aware of your TV show potential or upcoming projects when the blog was posted? If so, you're looking at new causes of action for intentional tortious interference. If no awareness or intent to devalue your relationship, maybe there is a negligent interference claim?

    - If you're famous (maybe if you're TV show potential), California also allows claims for the inappropriate use of the name and likeness of famous people, and the use of such likeness that gains the top search result is deriving economic benefit.

    These are three off-cuff options I've conjured with a half-baked description of your dilemma. Imagine what a full-length discussion with your lawyer will produce. In short, if there is real loss of economic value and potential, there is a better likelihood of claims than without economic value.

    Good luck.

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  • Convertible note SEC/state registration requirements?

    I run a Delaware corp and am considering getting a convertible note for $15,000 from a family member in California. Business is a website, I work from California without any physical presence in DE. I believe the convertible note is exempt from...

    Ryan’s Answer

    Convertible notes require registration unless these are otherwise exempt from the registration requirements. This is applicable to both the SEC and California, not Delaware.

    Assuming the offering qualifies for a federal exemption, you can file an exemption in California using the same basis as the federal exemption. These are accepted by the California Department of Corporations Securities Regulation Division.

    If you are an issuer, I strongly encourage you to enlist the assistance of legal counsel in the preparation of your securities and the private placement memorandum.

    Good luck.

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  • Real Estate Question. Seller will not close the escrow, seller lied as to purchase price. Will not release my funds from escrow.

    I entered into a contract to buy a house for 500k. The contract had a clause that stated it is contingent upon the appraisal value at no less than the purchase price. The seller also verbally promised me that the house is worth at least 500k. ...

    Ryan’s Answer

    Does the seller possess your payment or does the escrow agent? Have you spoken with or made a demand on the escrow agent for the return of your funds? If the seller has your funds, have you made a written demand from the seller for the return of these funds?

    If the contract is interpreted as you have purported it here, then you are entitled to receive your funds, and rescind the contract. The issue is who holds your funds, and the process for getting these funds returned to you.

    If the escrow agent holds your funds, deal directly with them without getting the seller involved. Escrow companies typically don't fool around, and will comply with escrow agreement and instructions. Review these to understand the process to rescind the deal. Submit to them in writing your demand and specify the rules/terms which provide you the right to receive your money back.

    If the seller holds your funds and is not required to submit your funds to the escrow agent, you've got a different challenge, and you may have to file suit. I would consider putting your demand in writing and set forth your basis for your request.

    You should consider reviewing your purchase agreement and escrow agreement/instructions with your legal counsel to determine your options, and go from there. You don't want to file a lawsuit if you don't have to as a lawyer would need to be paid for bringing the suit, and you're unlikely to receive attorneys' fees from the seller (you're out of pocket for lawyers' fees).

    Good luck.

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