Unranked Cal “Almost” [Key word] Beat #8 Miami.   We like to look for insights, examples and learning opportunities in other professional arenas, including sports.  On October 5, 2024, the #8 ranked Miami Hurricanes traveled to Berkeley to play the unranked California Golden Bears in college football.  Miami was a heavy favorite at -10.5.  

The “Calgorithm” Seemed to Be Working.  Cal surprised everyone by leading 35-18 after three quarters.  Great coaching and execution was on display as Cal scored quickly on three big-plays of 57 yards, 66 yards and a 40-yard interception return for a touchdown.  In fact, things were looking so good for the Bears that with 12:16 to go in the 4th quarter, Cal had a 99.3% probability of winning (i.e. 0.7% chance of losing) and pulling off a MAJOR upset.  At 5:43 to go in the 4th quarter, Cal has a 98.3% probability of winning the game. (Probabilities from ESPN).  Unfortunately, long time Cal fans knew victory was FAR from a sure thing.

With a 99.3% chance of winning in the 4th quarter, Cal obviously won right?  Well, first, anyone who asks that question does not know their Cal football history.  Sometimes when things are going well, we might miss the proverbial “boiling frog.”  Here, despite the big lead, there was a serious problem developing for Cal.  Yes, Cal had three quick strikes for scores, but Miami started to drive on the Bears defense — fatiguing the defense.  Meanwhile Cal’s offense couldn’t seem to find another big play, had trouble staying on the field and ….the game wasn’t over.  

Reversion to the Mean is Strong.  For the purposes this newsletter, we could theorize that for three quarters Cal was “over” performing — great team, well coached — and over performing against another great team, well-coached that was supposed to be a much better team coming into the game.  Over the balance of the 3rd quarter and through the 4th quarter, Miami started to perform as expected and perhaps so did Cal.   A picture is worth a thousand words, and this picture shows the final score and probability of victory.  

Lessons and Takeaways.  

1.   When things are going well on the surface — in life, sports and business — it is good to enjoy it.  It also pays to look around at what might not be going so well.  In business they call it de-risking operations or de-risking cash flows.  A good lawyer can help you with that. 

2.   Analytics and probabilities need to be viewed in context.  Yes, Cal had a nearly 100% probability of winning the game late in the 4th quarter, but before the game, they had almost no chance. 

3.   Keep playing, whether you are ahead or behind.  “It ain’t over until it is over.”  

4.   Sometimes experience knows more than Analytics and AI.  Many experienced Cal fans did not believe the probability numbers.  What did they know from experience that the probabilities did not?  They’d seen Cal suffer crazy, improbable losses many times over the years.  This was another one!   When evaluating opportunities in business and life, it helps to have experienced counsel on your side.

5.   The term “Continuous Improvement” could be viewed an effort to improve the “mean” so when we “regress to the mean” it still lands at a pretty high level.  For businesses and real estate operations adding technology systems, improving operating processes and good legal counsel all help raise the mean.  

6.   It was still the best game in college football that weekend.  #GoBears

ABOUT ADISHIAN LAW GROUP, P.C. Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other Press Releases.

If you need help with your sale or acquisition, please contact us at:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @adishianlaw |  LinkedIn | Facebook | YouTube

The UK, EU and USA.   Since our last newsletter the Bank of England cut its rate to 5.00%, and, per a Reuters poll of economists, a further reduction is expected in November.  The ECB cut rates this morning to 3.5%.  At the annual Jackson Hole symposium, Fed Chair Powell indicated that the Fed would maintain rates in the target 5.25%-5.50% range.  He also stated: “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” 

We Always Like the Long View and Rates Appear Historically Reasonable. The following chart of the Federal Funds rate from 1980 to present is from the St. Louis Fed. 

What Do Current Rates Mean?   We believe there is often too much discussion about rates in the short term.  The impact of rates on activity may very well be different depending on overall resources and the amount of variable interest rate leverage being used. 

For well managed companies, and wealthy groups, high interest rates can be positive.  For conservatively run companies and high net worth individuals or families with strong cash positions and low or no leverage, higher interest rates provide money for sitting on cash (i.e. doing nothing).  Cash is king….even more so when interest rates are high for prolonged periods.   Charlie Munger, deceased Vice Chairman of Berkshire Hathaway was quoted as saying, “It takes character to sit there with all that cash and do nothing.”  As of today, Berkshire is sitting on approximately $280 billion in cash, earning interest.

What about high leverage operations or those with variable debt?  For high leverage operations or investments with variable interest debt (credit cards, HELOC, variable rate loans, securities loans) — whether a company, a private equity investment, real estate investment or family balance sheet — a change in interest rates can disastrous.   

These are not new concepts.  However, it seems worth revisiting as market participants often seek optimization without fully appreciating or appropriately addressing the associated risk.  There is a wonderful framework and discussion of this topic in Nicholas Taleb’s book “Anti-fragile:  Things That Gain From Disorder.”   

While attorneys generally like order, it is our view that reality is filled with chaos and disorder at any given moment.  When selecting counsel, we suggest that you will want attorneys who appreciate this reality and help prepare you, your company and your investments to survive and even thrive when chaos and disorder inevitably appear.

ABOUT ADISHIAN LAW GROUP, P.C. Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other Press Releases.

If you need help with your sale or acquisition, please contact us at:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @adishianlaw |  LinkedIn | Facebook | YouTube

” “We are pleased to build upon the One Pacific brand that Jim Lisi started in California. We continue to look for high-quality brands to add to our platform.  For owners looking to retire, we can be a great option to preserve their legacy and brand.” 

– Chris Adishian, CEO of Adishian Capital

Transaction Overview.   Adishian Law Group served as exclusive buy side counsel to Adishian Capital. 

Documents and Work.   Our work included negotiating, overseeing, reviewing or drafting the following: Asset Purchase Agreement, IP Assignment and Assumption Agreement, Bill of Sale, Disclosure Schedules and other ancillary agreements

About One Pacific.   Originally launched in the summer of 2011 by real estate broker and former CPA, Jim Lisi, the One Pacific brand has a strong presence in the South Bay real estate market, providing premium services for its brokerage and property management clients.  During its formative years, the firm closed more than $150M in annual sales volume for transactions throughout the Greater South Bay area. 

About Adishian Capital.  Adishian Capital is a property management firm started by attorney and real estate broker, Chris Adishian, focused on the South Bay of Los Angeles.  As of June 2024, Adishian Capital manages an estimated $65 million commercial and residential portfolio located in the South Bay of Los Angeles (including El Segundo, Hawthorne, Manhattan Beach, Redondo Beach and Torrance) and San Francisco.    

ABOUT ADISHIAN LAW GROUP, P.C. Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other Press Releases.

For more information about this transaction, or if you need help with your sale or acquisition, please contact Chris Adishian:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @adishianlaw |  LinkedIn | Facebook | YouTube

Chris Adishian is now available as a Commercial Mediator

With a true breadth of experience, including a substantial ongoing general counsel transactional practice, over a decade of litigation representing plaintiffs and defendants throughout California and externships with a United States Federal District Court Judge and a California Supreme Court Justice, Chris Adishian brings a unique approach and wisdom to connecting with Parties locked in conflict.

Litigation is expensive, time-consuming, emotionally and physically taxing and high-risk, among other adjectives.  Give us a call, we just might be able to help.

How does a commercial mediator work with parties?

A commercial mediator is focused on resolving disputes that arise between parties in the day to day operations of commerce — business disputes. These can range from minor to material to critical depending on the nature and size of the underlying transaction that is the source of the dispute. The goal of commercial mediation is to help the parties work to a negotiated settlement of their dispute that saves time and money that would otherwise be spent in litigation.

What type of commercial disputes will Chris mediate?
As a commercial mediator, Chris is available to mediate a wide variety of business, real estate and employment related disputes, with a focus on high-value, complex matters, including:

Business and Commercial Law

  • Complex, high-value business transactions
  • Breakup Fee Disputes
  • Partner \ Member Disputes
  • Corporate, LLC, Partnership Dissolutions
  • Buy-Sell Agreements, Buy Outs
  • Commercial transactions 

Real Estate Law

  • High value breach of contract (purchase and sale) 
  • Multi-generational partnership disputes
  • Quiet Title \ Partition Actions
  • Commercial Leases
  • HOA 
  • Property Boundaries
  • Easements

Employment Law

  • Failure to pay bonus, wages
  • Wrongful termination
  • Breach of contract
  • Retaliation

If you are not sure if we will take your case, ask us. 

How do we hire Chris Adishian as a Mediator?

To check Chris’s availability for a mediation, and tentatively reserve a date, please use the following links:

For In Person Mediations:   Full Day or Half Day

For Online Mediations:   Full Day or Half Day

If you do not see a date available for the date you need, or for other mediation inquiries, please contact us at our office number or via our Contact Us page.

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian, recipient of Martindale-Hubble’s “AV-Preeminent” rating. To see past transactions, please view our Case Studies.

For more information about this article, or if you need help with your sale or acquisition, please contact Chris Adishian:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @adishianlaw | LinkedIn | Facebook | YouTube

In this installment, as promised in an earlier newsletter, we provide our detailed review of the Corporate Transparency Act (“CTA“).  If you own any portion of any business entity doing business in the United States, you may want to save this email for reference.   

As we “go to print,” this legislation is the subject of litigation.  Lower in this section you will learn about the Alabama Federal Court ruling — handed down just before this past weekend — that could stop or slow the CTA.  

What is the Corporate Transparency Act (CTA)?
The CTA is new legislation in effect as of January 1, 2024, that requires small businesses (i.e. “small entities”) to file a Beneficial Ownership Information Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).  This is a new filing requirement for all “small entities” conducting business in the US (whether or not the business is registered/formed in the US or abroad).

We strongly advise every small business to review whether the CTA applies to them, and if it does, file your reports timely.  Reporting is mandatory.  Non-compliance with the CTA comes with severe potential penalties including fines of up to $10,000 and even jail time.

This is arguably the biggest development in business law this year.  

Who Is affected by the CTA?

All “small entities” are affected by the CTA.  A “small entity” is defined as basically any entity that is not otherwise listed on a public exchange, subject to some other exemptions (e.g. banks, investment advisors, accounting firms, public companies, inactive entities, tax-exempt entities, etc.). If you have an entity, and it is registered with any state government, you likely have to file.  For specific questions about your entity, please contact us. 

If my small entity is subject to the CTA, what do I have to report?
The CTA requires that the Reporting Company provide:

  1. The names and IDs of all “Beneficial Owners” of the Company (and, for any new entities created or registered on or after January 1, 2024, all “Company Applicants”).
  2. Information about the Reporting Company itself, including: full legal name, trade names, any registered and unregistered d/b/a, current address, and IRS TIN/EIN. 

Where do I have to report?
Effective January 1, 2024, the US Financial Crimes Enforcement Network’s (FinCEN) Beneficial Ownership Information (BOI) Reporting System went live.  It is located at Beneficial Ownership Information Reporting | FinCEN.gov and contains a lot of helpful information. 

If you are required to report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website BOI E-FILING (fincen.gov).  You can download/upload a PDF or report directly through a website.   

It is not particularly difficult to file, however you must have a scan of the passport or other government issued ID for each beneficial owner being reported, which can become burdensome.

When is my reporting deadline?

If your business entity existed prior to January 1, 2024, you have a full year to file your report (prior to January 1, 2025). 

For any new entities formed this year (2024), you must file within 90 days.   

For any new entities formed after this year (starting January 1, 2025), you must file within 30 days.

I’ve heard about FinCEN IDs.  What is a FinCEN ID?
From FinCEN.gov a FinCEN ID is a unique identifying number issued to an individual by FinCEN.  There is no requirement to obtain a FinCEN ID in order to complete your CTA mandatory reporting.  However, having one can simplify the reporting process and minimize repetitive distribution personal information.  This may be particularly helpful with serial entrepreneurs or investors in multiple entities.  With a FinCEN ID, an individual beneficial owner or company applicant’s FinCEN ID can be reported instead of required information about that individual on the reporting company’s Beneficial Ownership Information Report (BOIR) submitted to FinCEN.

To register for a FinCEN ID, you will need to create an account with login.gov, and provide some personal information as well as a scan of a government approved identification. This process can be completed by following this link:  FinCEN ID | Financial Crimes Enforcement Network (FinCEN)

Kush obtained his FinCEN ID in about 15 minutes to complete and received his FinCEN ID immediately online.  My experience was the same.  

Our advice is that each individual —  whether you own some or all of 1 or 89 or more businesses — obtain a FinCEN ID so that you never have to send a PDF scan of your ID to third parties every time that party needs to include you on a report. You would just provide your FinCEN ID number!

Why did the United States create the CTA?
The United States created the CTA to combat fraud and financial crimes (e.g. money laundering). The US is actually one of very few countries that historically hasn’t tracked beneficial ownership of business entities.  This is an attempt to right that wrong and better track the direct and indirect ownership of business entities and who controls them in order to combat financial crimes.

The reporting will work all the way up the ownership chain. This is because the owner of a Company may also include another company. Each company up the chain must be reported until you arrive at the individuals who own 25% or more, or exercise substantial control, no matter how far up the ownership structure they may be.

But Wait…an Alabama Federal Judge Just Declared the CTA Unconstitutional.  Late Friday afternoon March 1, 2024, Federal Court Judge Liles C. Burke, sitting in the Northern District of Alabama ruled that the “the Corporate Transparency Act is unconstitutional because it exceeds the Constitution’s limits on Congress’ power.”  National Small Business United dba the National Small Business Association, et. al., v. Janet Yellen, in her official capacity as Secretary of the Treasury, et. al.  The Court also ordered that “[t]he Defendants, along with any other agency or employee acting on behalf of the United States, are permanently enjoined, from enforcing the Corporate Transparency Act against the Plaintiffs.” 

Now, before anyone not looking forward to figuring out the CTA’s complexity says “Roll Tide,” we do expect that this decision will be appealed.  There also may be some clarification as to the scope of the injunction as the plain language of the order states “against the Plaintiffs.”   Lastly, we expect that any challenges that survive appeal will likely be remedied in future drafts.  In short, it is our expectation that this battle will continue and at the end of it, we expect that either the CTA or something very similar will be part of a new norm for corporate reporting.  We’ll see what happens over the next few months. 

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian, recipient of Martindale-Hubble’s “AV-Preeminent” rating. To see past transactions, please view our Case Studies.

For more information about this article, or if you need help with your sale or acquisition, please contact Chris Adishian:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @adishianlaw | LinkedIn | Facebook | YouTube

Selling your business can be a significant milestone for any entrepreneur or business owner. However, when navigating the process of selling your business in California, it is crucial to be aware of the legal considerations involved. This blog article provides a review of some of the key legal aspects to consider when selling your business in California.

1. Confidentiality and Non-Disclosure Agreements (NDAs):

Before sharing confidential information (i.e. trade secrets, proprietary processes, customer lists, etc.) about your business with potential buyers, it is vital to have them sign a well-drafted Non-Disclosure Agreement (NDA). A well-drafted NDA protects your business value by clarifying the handling of confidential information and remedies for breaching the NDA.

2. Valuation and Due Diligence:

Having a supportable rationale for the value of your business is essential for a successful sale. Working with experienced professionals, such as valuation firms, bankers, brokers or appraisers, can help establish a fair market value or a range of fair market value. Additionally, conducting thorough due diligence, including financial audits and legal reviews, is crucial to uncover any potential liabilities or legal issues that could affect valuation and ultimately, the sale.

3. Asset Purchase Agreement or Stock Purchase Agreement

In California, the sale of a business can be structured as an asset purchase or stock purchase. Each option has different legal implications. An asset purchase agreement (APA) involves selling specific assets and liabilities of the business, while a stock purchase agreement (SPA) involves selling the ownership shares of the business entity. Consult with your attorney, CPA and other advisors to evaluate potential tax consequences, liability transfers, and legal obligations associated with each structure.

4. Intellectual Property Rights:

Ensure that your business’s intellectual property (IP) rights, such as trademarks, copyrights, and patents, are protected during the sale process. Conduct a comprehensive IP audit on the front end to identify all protectable (and potentially protectable) IP, and to address any potential infringement issues, pending litigation, or license agreements that could impact valuation and sale.

5. Employees and Contractual Obligations:

Review and address any existing employment agreements, non-compete agreements, vendor contracts, or lease agreements that may affect the sale. Analyzing compliance with state and federal employment laws, including providing appropriate notice to employees, and addressing potential severance, bonuses owed, wage and hour liabilities or retention agreements is crucial.

Conclusion:

Selling your business in California can be a wonderful, rewarding milestone on your entrepreneurial journey and it involves navigating numerous, serious legal considerations. From protecting confidential information with NDAs to structuring the sale agreement and addressing employment obligations, understanding the legal aspects is vital for a successful transaction. Seeking guidance the experienced mergers and acquisitions business attorneys at Adishian Law can increase the probability of maximizing the value of your business while minimizing the risk. By carefully addressing these legal considerations, and many others that may arise, you can proceed with confidence and achieve a successful outcome in selling your business in California.

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see past transactions, please view our Case Studies.

For more information about this article, or if you need help with your sale or acquisition, please contact Chris Adishian:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @adishianlaw |  LinkedIn | Facebook | YouTube

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“Chris and his team did a great job making sure were protected on all deal points and all on the same page.  He made the process very smooth, expeditious and drama-free! We trusted him as our legal advisor 100%.”
— Jill De Forest, Founder & CEO, De Forest Search Partners

Transaction Overview:  Our firm served as exclusive sell-side legal counsel to the owners of De Forest Search Partners in its exit sale to Talento, Inc.  

Documents and Work: On behalf of our clients, our firm led the legal work on this sale transaction from post LOI and Due Diligence through Closing.  Our work included negotiating, overseeing, reviewing or drafting the following:

  • Deal Structure and timeline
  • Stock Purchase Agreement
  • Consulting Agreement
  • Transition Services Agreement
  • Security Agreement and UCC filing  
  • Corporate Resolutions
  • Stock Power and 
  • other ancillary agreements

A Word About Our Clients.  We feel it is important spotlight the vision and drive required to build an organization to the point where it is ready for exit.  Our clients had the vision, persistence and creative problem solving to build De Forest Search.  That is a remarkable effort.  Overnight success doesn’t happen overnight.  Without the client’s dream, there is no transaction to report. Here, founder Jill De Forest says it best: 

“I started De Forest Search over 25 years ago with a simple mission — to connect employers with the best possible candidates without the burden of expensive retainers and long hiring cycles.  On this premise, we’ve placed thousands of leaders across every conceivable industry.  While the hiring landscape is ever-changing, we remain a constant in our client’s search strategy.  We’re excited to become part of yours.”  

Choice of Legal Counsel.  Every time a client has a choice to retain legal counsel for an M&A transaction it is often a competitive situation.  With reports showing that entrepreneurs have up to 95% of their net worth tied up in their business, it is easy to understand why these transactions have such critical importance to wealth planning, retirement and legacy.  When clients place their faith in us to assist them with accomplishing their major goals it means a lot to us.  We’re grateful for their trust and confidence, and for the privilege to contribute our skills to their success.  

ABOUT DE FOREST & ASSOCIATES, INC.
De Forest Search (www.deforestsearch.com) is focused on working with clients to meet their hiring objectives.  Whether working on a C-level search for a global Fortune 200 company or assisting a venture-backed startup in their recruitment strategy, we approach every engagement with attention, urgency and confidentiality.  It is this approach along with an impressive track record that establishes us as a preeminent global search firm.

ABOUT TALENTO, INC.
At Talento (www.TalentoHC.com) our team blends the career expertise of in-house HR Executives alongside proven innovative processional services leadership to deliver world-class human capital solutions to organizations in any state of their business life cycle. This expertise spans continents, functions and industries, bringing broad business acumen and depth to delivery unparalleled customer experiences and results. 

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other Press Releases.

For more information about this transaction, or if you need help with your sale or acquisition, please contact Chris Adishian:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @adishianlaw |  LinkedIn | Facebook | YouTube

Healthcare Transaction Overview:  In another sale transaction involving a leading California healthcare provider, our firm served as exclusive sell-side legal counsel to the Owner of South Bay Hearing and Balance Center.  We also served as counsel to the Buyer at the request of, and with the written consent of, both the Buyer and Seller. 

Quotes from the Healthcare practice Seller and Buyer:

“I worked with Chris on some employment matters and lease negotiations prior to beginning the process to sell my company. He was always efficient, reliable and most of all, insightful. When it came time to sell my business I immediately turned to Chris for support and counsel. I appreciate Chris’ flexibility and honesty in representing the issues to us. Thank you, Chris, for all that you have done for us.”
— Former Owner & President, South Bay Hearing and Balance Center, Inc.

“Chris and his team modeled professionalism and expertise throughout the transaction.  Ours was a unique situation that Chris handled with the utmost proficiency and personal care.  As a result, all of us at South Bay Hearing are able to continue our legacy of providing the best hearing care available in Southern California to all of our many wonderful patients.  A big thank you to Chris and his team for their personalized approach that made this possible.” 
—  New Owner & CEO, South Bay Hearing and Balance Center, Inc.

Legacy.   With many sales of privately held businesses, “legacy” is often a leading consideration for the selling Owner.  This is especially true with healthcare practices. A business often represents the Seller’s professional life’s work.  Therefore, Sellers often want to sell to a Buyer who (a) shares their same values and (b) will continue to conduct the business to the same standards they have established.  In the public sphere it has been noted that many top performing privately held businesses feel comfortable selling to Berkshire Hathaway because they feel confident that the business will be well run long after the Seller has passed. 

A Record of Award-Winning Healthcare Delivery.   Below are just some of the awards earned by South Bay Hearing and Balance over the years:

  • Best Audiologists of the South Bay in the Daily Breeze Readers’ Poll from 2009 to 2018
  • Board Certified in Audiology by The American Board of Audiology
  • Best of the Beach 2022 by the Easy Reader News
  • Excellence in Audiology
  • Audigy Certified
  • Certified Member of the American Speech-Language-Hearing Association
  • Excellence in Business Award, Palos Verdes Chamber of Commerce 

Documents and Work: On behalf of our clients, our firm led the legal work on the transaction from post Letter of Intent (“LOI”)\Due Diligence through to Closing.  Our work included negotiating, overseeing, reviewing or drafting the following:

  • Deal Structure and Timeline
  • Stock Purchase Agreement
  • Promissory Notes
  • Security Agreements and UCC filings  
  • Corporate Resolutions
  • Stock Power and 
  • Other ancillary agreements

A Word About Clients.  We feel it is important to spotlight the vision and drive required to build an organization to the point where it is ready for exit.  Our clients do that.  South Bay’s founder and CEO had the vision, persistence and creative problem solving to build it into perhaps the largest audiology practice of its kind in Southern California.  That is a remarkable long-term effort.  Overnight success doesn’t happen overnight.  Without the client’s dream and a focus on patient care, there is no transaction to report. 

Choice of Legal Counsel Matters.  Every time a client has a choice to retain legal counsel for an M&A transaction it is often a competitive situation.  With reports showing that entrepreneurs have up to 95% of their net worth tied up in their business, it is easy to understand why these transactions have such importance.  When clients place their faith in us to assist them with accomplishing their major goals it means a lot to us.  We’re grateful for their trust and confidence, and for the privilege to contribute our skills to their success.   Read about our other healthcare transactions by clicking on the following links: Adishian Law Group Serves As Exclusive Sell-Side Counsel to Bay Area Pain Center in Sale to Prospira PainCare and Healthcare M&A: Adishian Law Advises IPM Medical Group in Sale to Private Equity Firm.

ABOUT SOUTH BAY HEARING AND BALANCE CENTER, INC.
At South Bay Hearing (SouthBayHearing.com and MissionAudiology.com) we promise to work closely with you to discover where you are having the most difficulty communicating.  Patients of South Bay Hearing enjoy our state-of-the-art treatment technology, extensive experience, and compassionate approach in providing state-of -the-art care.  Come experience South Bay Hearing and find out for yourself why we consistently receive 5-star reviews from our patients in and around the South Bay of Los Angeles. 

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other M&A Press Releases.

For more information about this transaction, or if you need help with your sale or acquisition, please contact Chris Adishian:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @adishianlaw |  LinkedIn | Facebook | YouTube

Adishian Law Group is pleased to announce that Health Care Provider Integrated Pain Management Medical Group, Inc. aka IMP Medical Group has completed its sale to a Private Equity buyer. Terms are confidential.

Health Care Experience and Expertise.  Our firm has developed a strong, niche expertise in health care sell-side transactions as well as ongoing outside general counsel work for medical corporations.

Structure is Central to these Transactions.  “Structure” is often a critical consideration for the health care acquiror for many reasons:  tax, financing, ROI and compliance with the prohibitions against the corporate practice of medicine to name just a few.  Entity structure and Financing structure (both in terms of overall capitalization stack and the allocation of consideration) are key aspects of these transaction.

Documents and Work: On behalf of our clients, our firm led the legal work on the transaction from post LOI through Due Diligence and Closing.  These transactions are complex.  Our work included negotiating, overseeing, reviewing or drafting the following:

  • Deal Structure and timeline
  • Unit Purchase Agreement
  • New Holding Company
  • Multiple LLC formations (with associated operating agreements)
  • Stock Repurchase Agreements
  • MSA Termination Agreement
  • Sale of non-clinical assets
  • Personal Goodwill Contribution Agreement
  • Administrative Services Agreement
  • Corporate and LLC Resolutions
  • Stock Power
  • Restrictive Covenant Agreement
  • Physical Shareholder Agreements
  • Independent Contractor Agreements and
  • many other ancillary agreements

A Word About Our Clients.  We feel it is important spotlight the vision and drive required to build an organization to the point where it is ready for exit.  Our clients did that. Our clients had the vision, persistence and creative problem solving to build the IPM Medical Group from virtually nothing into perhaps the largest medical group of its kind in Northern California.  That is a remarkable effort.  Overnight success doesn’t happen overnight.  Without the client’s dream, there is no transaction to report.

Choice of Legal Counsel.  Every time a client has a choice to retain legal counsel for an M&A transaction it is often a competitive situation.  When a client places their faith in us to assist them with accomplishing their major goals it means a lot to us.  We’re grateful for their trust and confidence, and for the privilege to contribute our skills to their success.  

ABOUT INTEGRATED PAIN MANAGEMENT MEDICAL GROUP, INC.
IPM Medical Group (ipmdoctors.com) is a leader in cutting edge pain management techniques and rehabilitation programs that set the standard in holistic approaches for managing chronic pain. Its doctors are nationally known experts in the field and are deeply involved in clinical research focused on developing the treatment solutions of tomorrow. With seventeen locations in California and services ranging from advanced interventional pain management procedures and psychological support for functional restoration, IPM’s doctors approach each patient with one goal in mind: to help patients return to normal daily activities.

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other M&A Press Releases.

For more information about this transaction, contact Chris Adishian:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888
Email: askalg@adishianlaw.com
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This blog post is the latest in our running series covering the ongoing battle over Mandatory Arbitration Agreements in Employment.

To recap, On October 10, 2019, California Assembly Bill 51 (“AB 51”) was signed into law, adding Section 432.6 to the California Labor Code. It prohibits California employers from requiring applicants to sign mandatory arbitration agreements as a condition of employment or in exchange for any employment-related benefit. AB 51 also prohibits employers from retaliating against applicants or employees who refuse to sign mandatory arbitration agreements by terminating their employment or taking other retaliatory actions. Under the law, even and an opt out process is still considered a mandatory arbitration agreement. AB 51 does not apply to agreements that have already been signed before January 1, 2020, and only applies to those dated January 1, 2020, or after. Employers who violate the law as drafted could be subject to injunctive relief, lost wages, attorney’s fees, and a violation is considered a misdemeanor under California Labore Code section 433.

AB51’s Ban on Mandatory Arbitration Agreements was immediately challenged in court

In February 2020, Judge Mueller of the Eastern District of California issued a preliminary injunction (as a result of litigation brought by the Chamber of Commerce of the United States and other business groups.  The injunction effectively prevented AB51’s ban on mandatory arbitration from taking effect.  This is where our last article left off.

Between our last article and this article, California appealed……and there was the Covid-19 pandemic.

On September 15, 2021, a three judge Ninth Circuit panel held in a split decision that AB 51 is not fully preempted by the Federal Arbitration Act. In the panel’s decision in U.S. Chamber of Commerce et al. v. Rob Bonta et al., case number 20-15291, Judge Fletcher joined Judge Lucero’s majority opinion which concluded that the Federal Arbitration Act (“FAA”) doesn’t preclude arbitration agreements, but merely requires that arbitration agreements between workers and their employers be entered into voluntarily and consensually. Additionally, the panel ruled that the civil and criminal penalties associated with AB 51 “stand as an obstacle to the purpose of the FAA” and declared those aspects of AB 51 preempted by the FAA — in other words not enforceable.

What happened next? 

On October 20, 2021, the Chamber of Commerce filed a petition for en banc review by the Ninth Circuit. As a result of this petition being granted, the Ninth Circuit panel’s September 15, 2021, decision to vacate the district court’s preliminary injunction is stayed, and therefore AB 51’s ban on mandatory arbitration agreements is still enjoined pending the outcome of future rulings.

On February 14, 2022, the same three judge Ninth Circuit panel announced that the rehearing en banc will be deferred until the U.S. Supreme Court decides relevant issues in Viking River Cruises Inc. v. Moriana. This decision was also split with Judges Lucero and Fletcher making the majority, and Judge Ikuta dissenting.

In Viking, the U.S. Supreme Court will decide whether claims brought under California’s Private Attorneys General Act, which allows workers to sue on behalf of the state of California for labor law violations, can survive federal arbitration requirements. Viking is scheduled for oral arguments on March 30, 2022.

With all this litigation activity at the federal and state level, for the moment, the court’s injunction prohibiting enforcement on AB 51’s ban on mandatory arbitration agreements remains in effect.

Employers with mandatory arbitration provisions in their handbooks should examine their options with the aid of experienced employment counsel.

For additional reading on arbitration agreements, visit Federal Judge Extends Restraining Order Preventing Ban on Employment Arbitration Agreements (AB51) – Adishian Law; California 2020: Employee v. Independent Contractors, Wage and Hour, Arbitration, Discrimination and more – Adishian Law; Arbitration Clauses in Employment Agreements, California Lawyers (adishianlaw.com) and Legal Update: California 2020 – Adishian Law

Up next in our blog: President Joe Biden signed the “Ending of Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFASASHA).”