With all of the talk about Martin Marietta Materials Inc.’s proposed hostile takeover of Birmingham-based Vulcan Material’s Co., we want to give our readers a brief overview of the federal laws regarding mergers and acquisitions.

As we mentioned last week, the federal government has recently stepped up its scrutiny of proposed mergers, leaving many businesses wary of large-scale mergers and acquisitions. However, mergers can still be a great way for Alabama businesses to grow and expand into new areas.

In fact, each year, the Federal Trade Commission and Department of Justice review over a thousand merger filings. According to the FTC, 95 percent of merger filings present no competitive issues.

What mergers will be questioned?

Merger law bars mergers that may lead to harmful effects. Section 7 of the Clayton Act specifically prohibits mergers and acquisitions when the effect “may be substantially to lessen competition, or to tend to create a monopoly.” The key question the agency asks is whether the proposed merger is likely to create or enhance market power or facilitate its exercise. Issues like higher prices, fewer or lower-quality goods or services, or less innovation are often considered as well.

Due to their potential impact on the marketplace, proposed mergers between direct competitors (horizontal mergers) often get the closest examination. This was the case with AT&T’s failed efforts to buy T-Mobile USA from Deutsche Telekom AG last year.

What happens when a merger is investigated?

In many cases, the parties are able to resolve competitive concerns by consent agreement, which allows the beneficial aspects of the deal to proceed while addressing the competitive threat. Yet, in some cases, the agency and the parties will not agree on a fix, and the government may go to federal court to prevent the merger pending an administrative trial on the merits of the deal.

Source: FTC

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

A recent decision in the BP oil spill litigation highlights just how important an Alabama business contract can be, particularly when it comes to assigning liability. The federal court ruled that the oil rig owner Transocean is not liable for many of the pollution claims because it was shielded by a contract provision in its agreement with well-owner BP.

Despite this court win, Transocean is still on the hook. As reported by the Associated Press, while the contract provision saved Transocean from having to pay potentially billions of dollars in damage claims, it is not exempt from other liability. U.S. District Judge Carl Barbier found that the driller is still liable for punitive damages and civil penalties, which could also be billions of dollars.

The decision comes amidst talks of a potential settlement. BP has been working with multiple parties to reach settlements that would avoid the trial scheduled to begin in February, or at least eliminate many of the issues to be decided.

The Justice Department is working with the states to create an outline for a settlement, Alabama Attorney General Luther Strange told The Associated Press. According to Strange, a federal magistrate judge has also been asked to assist in settlement discussions.

“The closer you get to a trial date, the more pressure builds to reach a settlement,” Strange said.

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

As we discussed last week, Jefferson County lawyers were recently granted permission to view documents related to a settled civil case against JPMorgan Chase & Co. in Texas. They were also authorized to question the investor, James R. Crane, under oath.

However, Crane, owner of the Houston Astros baseball team, has now asked U.S. Bankruptcy Judge Thomas B. Bennett to cancel the order requiring him to answer questions about his lawsuit. In court documents filed with the court, Crane states that he doesn’t have any personal knowledge about JPMorgan’s role in the defaulted debt issued by Jefferson County’s sewer system.

Therefore, “it is harassing and unduly burdensome to require Crane to appear and testify,” his attorneys argued.

In his lawsuit, Crane had alleged that he suffered losses when Jefferson County defaulted on the bonds, arguing they were an unsuitable investment. Attorneys for Jefferson County had hoped to use information Crane gathered against JPMorgan in the county’s own legal dispute with the bank.

This is just the latest development in the Jefferson bankruptcy case, which promises to have many legal twists and turns. We will, of course, keep you updated.

Source: Bloomberg

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

Martin Marietta Materials Inc.’s proposed hostile takeover of Birmingham-based Vulcan Material’s Co. is now drawing the attention of the federal government. The U.S. Department of Justice is looking into anti-trust implications of the proposed merger.

Vulcan revealed in a filing with the Securities and Exchange that the DOJ has requested information about Vulcan facilities in 15 states, including Alabama. As reported by the Birmingham Business Journal, Vulcan had previously argued that Martin Marietta Materials failed to acknowledge the significant antitrust issues that could stand in the way of the merger.

In our view, the government attention should not come as surprise. The DOJ has recently stepped up its scrutiny of proposed mergers, leaving many businesses wary of large-scale mergers and acquisitions. AT&T abandoned its efforts to buy T-Mobile USA from Deutsche Telekom AG last year after the DOJ filed a lawsuit alleging that the merger would substantially reduce competition.

As we discussed last week, Vulcan is also facing lawsuits from investors regarding the board of director’s decision to reject the proposed merger. Given the recent development, one thing is clear—if Martin Marietta continues to pursue it takeover attempt, both sides are likely to face additional legal obstacles.

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

The legal dispute between Jefferson County and J.P. Morgan Chase, which recommended and sold its now defunct sewer bonds, is going on the road. Jefferson County lawyers were recently granted permission to view documents related to a settled civil case against the bank in Texas.

The investor lawsuit had alleged that he suffered losses when Jefferson County defaulted on the bonds, arguing they were an unsuitable investment. In requesting permission to review the lawsuit documents and question the plaintiff in the case, the county stated that it was concerned information he collected as part of his case may be thrown away.

“If such information is discarded, destroyed or otherwise lost, the county may be unable to obtain the documents,” the county said in its request.

What Do Jefferson County Lawyers Hope to Find?

According to court documents, lawyers are particularly interested in sworn deposition testimony of JPMorgan executives regarding the sewer bonds.

“Without limitation, the documents produced by the parties and third parties, and the sworn deposition testimony of JPMorgan representatives and others, in connection with the Crane lawsuit may be relevant … to matters which may affect the administration of the county’s bankruptcy case,” they argued before the court.

It will be interesting to see what they find and how it may impact the ongoing bankruptcy case.

Source: Birmingham News

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

Alabama Attorney General Luther Strange will be center stage on Feb. 27 in New Orleans, when the litigation against the various entities involved in the Deepwater Horizon oil spill is set to begin. Strange was appointed coordinating counsel by U.S. District Judge Carl Barbier and will lead the team of attorneys representing the plaintiffs in the case.

According to the Press-Register, Strange indicated that a settlement is still possible, and that discussions are ongoing with the defendants. However, he is also preparing to make opening arguments in the case next month, and has stated that he expects a rigorous trial that may not conclude until next fall.

“It is the biggest environmental case in the history of the United States, and certainly it will be one of the most important cases in the history of Alabama,” he said. “It’s incredibly complex, but we feel very confident heading into the trial.”

After talking office last year, Strange decided to not to hire outside counsel to represent Alabama’s interests at trial. “I just felt that we had the legal talent in house to handle it. If we’re successful, we’ll be able to keep all of the recovery (funds) for Alabama taxpayers,” he said.

What Can We Expect at Trial?

Should the case fail to settle, it will be a lengthy and complicated trial. Over 72 million pages of documents have been filed with the court so far, and more than 300 witnesses have been deposed. Given the number of legal and factual issues that must be addressed, the case is expected to be broken into three phases, as follows:

• The initial “incident phase” will examine the circumstances that caused the oil rig to explode and the role of each defendant in the subsequent disaster.
• The “source control” phase will examine the immediate responses of the defendants, including the length of time it took to contain the spill.
• The final phase will examine the cleanup process, including the use of chemical dispersants.

We will of course keep you updated as the trial unfolds.

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

Given the current economy, many businesses are walking away from their commercial leases. Thankfully, when a tenant breaks a lease without good (legal) reason, the landlord can file a lawsuit to recover damages.

In a recent case in Alabama, Colonial Realty LP has sued McCormick & Schmick’s Restaurant Corp. for violating its lease by closing earlier this month. McCormick & Schmick’s still had about six years and eight months on its 15-year lease when it closed its Brookwood restaurant, according to the lawsuit. The lawsuit also contends that the restaurant chain had previously violated the lease by closing Sundays and Mondays beginning in mid 2011.

The outcome of the lawsuit is likely to have significant implications on the businesses. According to the Birmingham Business Journal, Colonial is seeking the remaining rent due from McCormick & Schmick’s, which could amount to $2.3 million.

How We Can Help

If a tenant breaks your commercial lease, it is advisable to consult with an Alabama business attorney a soon as possible. We can advise you of the best course of action, including lawsuit proceedings.

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

As with many hostile takeover attempts, Martin Marietta’s bid for Vulcan Materials Co. is prompting Alabama business lawsuits. As we have been discussing on this blog, Vulcan’s board of directors recently rejected a nearly $5 billion stock exchange offer from Martin Marietta, who is seeking to acquire the Birmingham-based company.

In the fourth and most recent lawsuit filed to date, a Belgian-based stockholder of Vulcan filed a lawsuit alleging that the Vulcan board members rejected the takeover offer for their own financial gain. According to the Birmingham Business Journal, the lawsuit further contends that Vulcan’s board members have “deprived” shareholders of information regarding the proposal.

Instead of acting in the “best interests” of stockholders, board members rejected the proposed deal to save their own “lucrative positions,” KBC claims. “In fact, the board is so determined to thwart the exchange offer that they are depriving Vulcan’s shareholders of the ability to decide for themselves whether or not the exchange offer is in their best interests,” the lawsuit alleges.

According to the lawsuit, the proposal, which would have given Vulcan stockholders half a share of Martin Marietta for each of their shares, represented “significant bird-in-the-hand value,” particularly in light of Vulcan’s weak performance recently.

KBC asks the court to keep Vulcan’s board from “further thwarting” Martin Marietta’s hostile takeover bid, and to require the board to release the information that led Vulcan’s financial adviser, Goldman Sacs, to decide the offer was not in the best interests of Vulcan stockholders.

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

The Jefferson County bankruptcy continues to make legal headlines. In the latest development, Judge Thomas Bennett has released the county from the leases for three closed satellite courthouses.

As reported by the Birmingham News, attorneys argued that Jefferson County should be allowed to reject the leases on the Gardendale, Homewood, and Forestdale courthouses for under the “business judgment” clause of bankruptcy law. Under that rule, a court will generally approve rejection of a contract if the debtor can show that the rejection will benefit the bankruptcy estate.

In addition to the issues of the leases, the hearing was called to deal with a series of collateral matters. The court did not, however, resolve any of the more significant issues. As we have previously discussed on this blog, Judge Thomas Bennett has yet to render a ruling on the on the status of court-appointed sewer receiver John S. Young. In addition, no action was taken on the county’s legal eligibility to file for Chapter 9 protection.

Eligibility, Bennett said during the hearing, will be “decided at some time in the future.”

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.

The Vestavia Plaza shopping center has filed an Alabama business lawsuit alleging that the city of Vestavia Hills had no reason to deny a business license to the Downtown Jimmie Hale Mission. The suit claims the civil rights of both the shopping center and Jimmie Hale Mission were violated.

“By arbitrarily and capriciously making the decision to deny a business license to JHM (Jimmie Hale Mission), defendants unreasonably and unconstitutionally interfered with and infringed upon the property and liberty rights of JHM and Vestavia Plaza,” according to the lawsuit.

After entering a 40-month lease, Jimmie Hale Mission applied for a business license with Vestavia Hills to operate in the shopping center, according to the lawsuit.

However, the license application was denied “because JHM, as a charitable organization, would not be obligated to pay city sales taxes, but neither the mayor nor the city clerk or other city officer issued a written denial or provided any legal reason for the denial,” according to the lawsuit.

To help resolve the matter, Jimmie Hale Mission and Vestavia Plaza officials met with the mayor and other city officials. The parties were able to reach a proposed agreement “that addressed the city’s tax revenue concerns and was reviewed and approved by all parties,” according to the lawsuit. The city council, however, voted to deny the business license “despite the fact that the city attorney informed the council members that there was no legal basis for denying the license,” the lawsuit states.

According to the complaint, Jimmie Hale Mission terminated the lease in order to find a “suitable retail space in a more welcoming municipality.” Meanwhile, Vestavia Place has been unable to re-lease the space. “Except for an approximately six-month period, the space was empty during that entire time period and remains so to this day, and there are no likely tenants willing to pay a fair and equivalent rent to that agreed to under the JHM lease,” according to the lawsuit.

Prior to the city council vote, several Vestavia Hills residents had objected to the proposed thrift shop at that shopping center, citing concerns about after-hours dumping of donated items, undesirable elements associated with a mission thrift store and a desire for a high-end retailer to occupy the vacant space. City officials also voiced concerns that a thrift store would not compliment the vision of economic revitalization city and business leaders and residents are seeking.

The shopping center seeks unspecified compensatory damages, economic damages, incidental damages, punitive damages, attorneys fees and costs. The lawsuit also seeks to have the city’s ordinance dealing with the denial of business licenses voided.

Source: Birmingham News

Rutledge & Yaghmai is a full service litigation firm that offers more than fifty-seven years of diverse legal experience. The attorneys of Rutledge & Yaghmai leverage that experience to assist large and small businesses throughout Alabama in achieving their business goals while minimizing their risks.

In addition to offering transactional business services such as Alabama business formation and planning, Rutledge & Yaghmai prides itself on the diversity of Alabama business litigation cases it has handled successfully.

To learn more about the wide range of transactional and business litigation services we offer Alabama businesses, please contact the attorneys of Rutledge & Yaghmai today.