Reasons for Business Disputes
Conflicts in business relationships may arise when the envisioned growth does not materialize or when company and personal interests no longer align. Sometimes, the only recourse is to file suit to stop fraud or to obtain money damages, property recovery, a business accounting, specific performance, rescission of a contract, or a declaratory judgment. Acknowledging that offense is sometimes the best defense, the Oberheiden & McMurrey, LLP provides full litigation services in the following scenarios:
- Theft, Fraud & Forgery
- Contract & Duty Breaches
- Misappropriation of Funds
- Tortious Interference
- Non-Compete Violations
- Partnership Disputes
- Lack of Written Agreement
- Intellectual Property Issues
- Divorce Impacts on Business
- Employment Conflicts
- Computer Hacking
If you find yourself in a position where you need to defend yourself or your business, you should call Oberheiden & McMurrey, LLP trial attorneys today for a free and confidential case assessment.
Personal Liability of Business Owners
Can business owners be held personally responsible for company liabilities? Can a judgment against the company be enforced against the owner’s personal assets? Traditionally, a company’s liability cannot extend to the individual owning the business. However, in rare circumstances, business owners may be held personally accountable for company debt and affairs — typically when personal and company interests were comingled or in instances of business fraud.
- Personal Guarantees: The most common way of being personally liable for company debt is to sign a personal guarantee to the benefit of the company.
- Pledging Personal Property as Collateral: In order to get a loan or to bring a start up business with no assets into existence, business owners sometimes pledge their house or other personal property to secure financing. In the event of default, company creditors may have a claim against, and may be able to take, the pledged personal property.
- Fraud & Illegal Acts: Business owners may be held personally liable if they defrauded the company. Fraudulent misrepresentations to a bank to secure a loan are among the most common grounds for personal liability of business owners in litigation today. Note that fraud charges will not be discharged in bankruptcy.
- Piercing the Corporate Veil: Courts have struggled for decades to define the exact contours of this widely used doctrine. Most courts today will agree that comingling of assets, using the business as a shell to hide assets, lack of corporate infrastructure or operations, non-existence of officers and directors, dominant control by one shareholder, absence of corporate records, offices, and events such as shareholder meetings are among the reasons for courts to legally disregard the corporate umbrella.
Attempts to hold business owners personally liable for company debt are common and Oberheiden & McMurrey, LLP has successfully handled a great number of such cases. For example, we helped a physician escape a $ 600,000 personal loan by convincingly demonstrating that the circumstances that led to the physician’s signature justified nullification of the liability. Other favorable outcomes include cases in which we either avoided or materially lessened personal exposure in connection with bank litigations.
What Damages Can Be Recovered?
Demands for damages may arise in business disputes when one party fails to perform the services promised under a contract and no legal excuse for non-performance exists. These damages may include actual costs as well as future profits, attorney’s fees, and compensation demands. The following damage types are among the most frequently litigated compensation and restitution claims in business frictions.
- Compensatory Damages: As the name implies, compensatory damages are to compensate the plaintiff for the loss, harm, or injury incurred as a result of the defendant’s wrongdoing. Compensatory damages are limited to solely replace the loss amount.
- Liquidated Damages: Liquidated damages are contractually agreed damages, typically at the time of contract formation. In the interest of clarity but also as a deterrence, parties may specify the consequences of specific breaches such as non-compete violations and late or lack of performance upfront. Unless the penalty is vastly disproportional to the actual damage or the concession to a penalty came rather involuntarily, penalty clauses tend to be enforceable under the principle of freedom of contract.
- Consequential Damages: In a case involving a breach of contract, consequential or special damages are those that occurred because of the other party’s breach. In contrast to compensatory damages, consequential damages go beyond the actual cost of the breach and cover other losses caused by the breach. For example, if a business lost an opportunity because of a failure to deliver materials, consequential damages would cover the expected profit from the lost opportunity.
- Punitive Damages: Feared and worshipped at the same time, punitive damages are granted above any amount of compensation awarded and do not necessarily have any relation to the amount lost by the plaintiff. With the principle of deterrence in mind, courts award punitive damages both to penalize wrongdoers and to serve as an example to others.
- Attorney Fees: In Texas, a party who breaches an oral or written contract is generally liable for reasonable attorney’s fees incurred in seeking redress of the breach.
Proven Litigation Strategies
While every case varies, the following traits have proven to be characteristic for the success of Oberheiden & McMurrey, LLP.
- Sophistication. The attorneys at Oberheiden & McMurrey, LLP litigate smarter, not harder. We are unimpressed by “litigation cowboys” who see litigation as a chance to beget drama and theatrics— typically at the expense of their clients. We rely on academic and intellectual strength as much as we do on courtroom toughness. With reputations built over decades, our legal profundity and procedural efficiency are respected by judges and feared by lawyers.
- Fortitude. Because resolving disputes can be taxing and nerve-racking at times, you need attorneys that remain calm and confidently lead you through the process. The positive outcomes of hundreds of court hearings and the mastering of any imaginable crisis and emergency gives the attorneys of Oberheiden & McMurrey, LLP the resilience and the fortitude to resolve disputes of all calibers and all magnitudes.
- Access. Because we take your case seriously, we do not wall you off with junior lawyers, paralegals, or secretaries. We treasure the relationship we have with our clients and we cultivate a bond, whereby clients have direct access to our attorneys and receive competent, reliable advice whenever questions or issues arise.
- Clients First. Litigation is not always about winning or losing. In fact, quite often it is about accomplishing a result that serves you and your business best. You will not benefit from a two-year litigation if the end result is to collect less than what you spent. We have favorably settled a plethora of cases at an early stage knowing that a quick resolution was in the best interest of our clients. Achieving your goals defines our success.
- Trust. Attorneys are prohibited from sharing information confided by clients with anyone, even the court. This premise of the attorney-client privilege is critical as it allows a client to disclose all facts, even inconvenient and cumbersome ones, with us with the assurance of absolute confidentiality. Regardless of what oversight or what mistake may have occurred, it is our job and our mission to protect you, not to judge you. We value your trust and we will return that trust with results.
Contact us today. Let us help you handle your business litigation needs. We are here to help you!