New York Business Litigation Attorney Blog

New York's new business sector has exploded in recent years, with 2011 seeing an 86 percent increase in the number of start-ups as compared to 1991.

Our Great Neck small business lawyers know that New York has always been a hub of innovation, so in many ways, this is no surprise.

The Center for an Urban Future reported that the Bronx in particular is leading the way, with the number of newly-incorporated businesses climbing from 1,159 back in 1991 to 4,690 in 2011 - an eye-popping 305 percent increase.

What we want to ensure is that these new firms are equipped to handle whatever legal obstacles come their way.

In analyzing date culled by the New York State Department of State, researchers learned that the rate of new businesses increased every year up until the housing crisis in 2007, at which time it dropped sharply (except in the Bronx, where it still rose 5 percent). But the numbers have begun to bounce back since then, and new business formation has jumped nearly 10 percent between 2009 and 2011.

While the Bronx has made great strides, it isn't even the No. 1 job-generating borough. Manhattan holds 35 percent of all new businesses (it held 52 percent in 1991), while Brooklyn held 35 percent, Queens 25 percent, Bronx 7 percent and Staten Island 4 percent.

The tech industry is a big part of this, but many other models have thrived as well in recent years. At the very least, you will need an attorney to ensure all the paperwork is properly filed, that your are in good standing with the IRS and that you haven't overlooked any potential legal liabilities.

In the long-term, you will need someone with whom you can trust with your firm's most sensitive legal issues. You need to be confident of his or her legal experience and skill and also comfortable in confiding.

In exploring whether an attorney is a good match for you and your new company, consider the following questions:

• Question the attorney's experience within the industry. Areas of business including franchise agreements, intellectual property and service contracts often require a heightened level of knowledge.


• Ask about references. While many lawyers value client confidentiality, a seasoned attorney should be able to give you at least one or two satisfied clients willing to vouch for the value of their services.


• Learn whether there are any conflicts of interest that could be relevant, such as if the attorney is working with a former business partner or competitor.


• Ask about typical communication policies. How long does he or she take to get back to clients? Does he or she prefer phone, e-mail or face-to-face correspondence? Make sure your lawyer's communication style will mesh with your needs.

Continue reading "New York Business Start-Ups Should Invest in Legal Advice" »

Robyn Fenty is not the first businesswoman to encounter major losses and headaches as a result of shoddy work by accountants. She is, however, perhaps one of the most famous.

Also known as Rihannna, the Barbadian pop star is suing her former accountants, alleging she lost tens of millions of dollars as a result of poor bookkeeping, an ongoing Internal Revenue Service audit and a failure to recommend she curb expenses during her most recent tour.

Our New York City business litigation lawyers understand that many entrepreneurs have a keen sense of the business world, but we rely on those professionals whom we hire to keep the books to do an accurate, thorough and overall competent job.

When that does not happen, and the company or enterprise loses money or assets as a result, the company may have cause to seek legal compensation. Having an attorney with experience in business litigation is crucial because these cases can become quite legally technical, and you need someone who is familiar with state law and regulatory guidelines governing accounting practices and standards.

In the State of New York, certified public accountants (or CPAs) must be licensed by the state, and the updated legislation governing their responsibilities is located in Article 149 of New York State's Education Law. There is a state board that oversees public accountancy, and determines whether an applicant is of good moral character and has met all the other requirements in order to practice, including mandatory continued education.

In this case, the accountants' licenses are not in question, but rather their competency. Fenty's lawyers claim that the accountants drained her accounts of tens of millions of dollars in potential revenue over a five-year period, as she continued to work both national and international tours.

For example, her 2009 "Last Girl on Earth" tour reportedly incurred major net losses, despite the fact that these were sold out shows. It was later revealed that the accountants had paid themselves more than 20 percent of total revenues, while paying Fenty about 6 percent.

Her lawsuit contends that the accounting company's uncommon practice of paying itself commissions on the tour as part of it's income left the agency with no incentive to inform Fenty and her team that they needed to reign in expenses - namely, a $7 million home in L.A. It later turned out that the home had a number of structural defects that reportedly made it unlivable, and she has also taken the real estate company to court on that issue.

Additionally, the ongoing audit, Fenty's lawyers indicate, has consumed her valuable time and resources in efforts to correct numerous errors.

At its core, the main issue in this lawsuit is a breach of contract. Fenty paid well for the competent accounting services for which she was promised. She'll now have to prove she has a strong case that she did not get what she was paying for.

Continue reading "Singer Sues Former Accountants for Millions in New York " »

Great Neck business litigation lawyers realize that commercial contracts are about more than simply one party keeping their word.

As multiple New York business litigation lawsuits have illustrated, violations and breaches of contracts can be the downfall of a business. That's why it's so critical to have a business attorney reviewing the contract even before it's signed, as well as immediately upon the first hint that there may be a violation or breach.

This is what happened in the case of New York City-based commercial printer, Color-Web Inc., which is suing a subsidiary of their bank, People's United Financial Inc. The civil suit alleges breach of contract and fraud, and the company, which has been forced to close, is seeking about $14 million in damages.

Color-Web, which was a printing firm and a subsidiary of 1800postcards.com, said that People's Capital back-tracked on its 2007 promise to provide financial backing in the amount of $4 million for funding of new technology for the firm. This technology included a custom-built printing press. This was an extremely expensive piece of equipment, and one that the company had been counting on to revolutionize its business.

With the promise of funding, the company put $200,000 down on the printing press and proceeded to re-work its entire business model around this new equipment, which was set to be delivered in late 2009.

But then the bank reportedly pulled its financing - in violation of their signed agreement. The equipment was never delivered, and Color-Web's business began to plummet. Primarily, the company said that the changes it made in anticipation of the new machinery were not quickly reversible. Business suffered greatly as a result.

The lawsuit alleges that the bank did not base this decision on performance issues that Color-Web had, but rather on the economic downturn. However, Color-Web says that banks, as financial institutions, have to be held to higher standard with regard to contracts, especially considering that 1800postcards, the city's largest commercial printing company, has continued to honor its financial obligations with the bank, despite the financial hits it's taken since the economy tanked.

The bank's decision, company owners say, was enough to put the business under and cause more than 100 employees to be out of work.

Making the situation worse, Color-Web had signed on for a 15-year lease contract with a landlord in New York. If the landlord doesn't release the company from that contract, it could be out even more money. If that happens, attorneys say they plan to increase the amount being requested from the bank for damages.

This case is actually a counter-suit to the original claim, which was filed by the bank in order to recoup the $200,000 deposit. Color-Web has counter-sued, and the case is being heard in the New York State Supreme Court.

Continue reading "Great Neck Business Litigation Attorneys: Breach of Contract Can Devastate a Company" »

Great Neck business litigation attorneys know that in many cases, defamation lawsuits are not always a great idea.

They can be time-consuming, difficult to prove and sometimes don't net much of a result - and that's in cases where the plaintiff is actually 100 percent in the right.

However, when Great Neck business litigation stems from defamation that clearly caused tangible and substantial financial losses, a civil lawsuit may be the best option.

That's what's happening to one New York blogger, who up until now has remained anonymous. According to Reuters and other news outlets, the blogger has been ordered by a state judge to show up in court to answer to allegations that a blog containing false reports about a Chinese company was written for the sole purpose of driving down the value of that company's stock.

The blogger, who is not identified by the media outlets except by his blog URL, was allegedly served with an electronic subpoena via e-mail. He's mandated to show up to court on May 16.

The target of the blogger's words, allegedly, was a Chinese company called Deer Consumer Products. This is a company that is known for making appliances.

According to the lawsuit, the blogger reportedly put out the (false) word that the company had been engaging in fraudulent land deals in China. This in turn caused numerous investors to back away or back out, the company says. It is seeking upwards of $100 million in compensation from the blogger as a result of lost trading profits.

What's interesting is that this is not the only case like this. In fact, a number of bloggers have been accused of writing up phony pieces aimed at Chinese companies. A number of those companies have hit back hard with legal action.

In fact, the case involving Deer is one of three against the same, anonymous blogger. Other cases were filed by Sino Clean Energy (coal fuel product) and Silvercorps. Metals Inc., a producer of Chinese silver.

Deer Products says that within little more than a week, stock in the company dropped from about $11 a share to $8. Meanwhile, short interest spiked by 500,000 shares.

Allegedly, the defamation wasn't so much about hurting the company with the defamation, as making money off the ensuing flurry of sales when the stock prices dipped.

Attorneys for the blogger say he isn't even located in New York, and therefore the case should be dismissed based on the fact the fact that this court wouldn't have jurisdiction. Further, they stand by the blogger's claims.

Of course, one of the defenses to defamation is that the claims are in fact true. Other elements of defamation include whether it is a matter of public concern and whether there has been damage to the plaintiff.

So there is a big difference between this type of case, and say, your neighbor putting fliers in your other neighbors' mailboxes alleging falsities about you. An incident such as that may fall under criminal harassment statutes, but could be a difficult sell in court.

Of course, if you are struggling with whether or not your claim rises to the level worthy of litigation, contact an experienced Great Neck business litigation lawyer, who can help you weigh your options.

Continue reading "Great Neck Business Litigation: Are Defamation Cases Worth It? " »