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Kerkman & Dunn
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Milwaukee Business & Commercial Law Blog

Helping entrepreneurs choose the best business organization

Entrepreneurs in Wisconsin who are currently thinking of starting a new business have plenty of planning to take care of, including filing paperwork with the state and federal governments, capitalizing the venture and figuring out the right organization for the business. It is essential to choose a business structure that will meet both current needs and will allow the business to grow with changes in the economy and with new challenges and opportunities.

The typical business organization uses one of four main types: sole proprietorship, partnership, corporation and limited liability corporation. Sole proprietorship is the easiest to set up and run. As the sole owner of the business, its founder will be responsible for all liabilities the business has, including debts and profits. The owner files the taxes on business earnings with personal taxes.

Rapper 50 Cent files for Chapter 11 bankruptcy

Chapter 11 bankruptcy is used to reorganize debts and pay back creditors over a pre-determined period of time. Chapter 11 protection is also used to halt all pending debt recovery proceedings, giving debtors extended time to pay off the debts.

Curtis Jackson III, more commonly known as rapper "50 Cent," has recently filed for Chapter 11 bankruptcy. He is also facing a lawsuit from a woman who alleged that he posted a sex tape of her online without her consent. The woman was awarded $50 million as compensation. There is now an automatic stay on this judgment due to the Chapter 11 filing.

Newly merged Kraft and Heinz start trading as single company

Wisconsin businesspeople know that mergers are a part of modern corporate life. For many executives, a merger is one of the fastest ways to expand a business's product offerings, customer base and financial assets. A merger also can be used to enter a new sphere of business or expand an existing business, all while making a business leaner and better able to react to market changes. The recent merger of two food giants, Kraft and Heinz, is a case in point.

In March, H.J. Heinz Co. and Kraft Foods Group merged under the direction of investor Warren Buffet. Stock for the new Kraft Heinz started trading on the NASDAQ in early July. Now the third largest food and beverage company in the United States, after PepsiCo and Nestle, the company's new KHC stock saw a 3.5 percent increase in valuation in early trading. With $9.5 billion invested in the merged company, Buffet's investment firm, Berkshire Hathaway, now owns around 325 million shares, making it Berkshire's second largest investment after Wells Fargo.

Closely held businesses and divorce

Married entrepreneurs with small businesses may lose a substantial portion of their business if their marriage ends in divorce. With no prenuptial or postnuptial agreement, the business will be divided between the spouses like any other marital property under Wisconsin's community property law.

Assessing the value of a small business can be challenging. Such businesses consist of tangible assets, such as bank accounts and equipment, but also intangible assets, such as goodwill, skilled labor and intellectual property such as trademarks and patents. Since those assets are not traded on the market and do not change hands frequently, it is a challenge to assess their fair market value.

Angie's List sues Amazon over alleged trade secret thefts

The secret processes, methods and materials that a company uses are valuable assets that can give it an edge over competitors. If somebody misappropriates such trade secrets, the company has every right to take legal action against the responsible business or person. As some Wisconsin residents may know, Angie's List recently filed suit against a subsidiary of Internet giant Amazon, accusing it of stealing provider lists and misappropriating other valuable information.

According to the lawsuit, some Amazon Local employees joined Angie's List and used their membership access to Angie's provider lists to secure company information, provider profiles and other important information. According to Angie's List, the Amazon Local executives used this information to help establish the competing service.

Protecting trade secrets can be critical for many businesses

Organizations that use proprietary materials, designs or processes have strict policies regarding the protection of their intellectual property. Unfortunately, not all employees comply with these policies, and some misappropriate trade secrets for their own benefit or to benefit another organization. This can lead to unfair competition, as well as causing serious financial damage to the company whose secrets were stolen.

Employers who want to protect their information should make clear to all employees that Wisconsin law prohibits employees or competitors from stealing, concealing or carrying away an employer's trade secrets.

Why and how do workers file a complaint against their employers?

There are times when a company's former or current employee may file a complaint against their employers, alleging that the employer has failed to pay wages. Complaints that allege a business has violated one or multiple labor standards, such as minimum wage, child labor or overtime, are also common. In accordance with the Wisconsin Business Closing and Mass Layoff Law, proof that the filing party was "affected" due to lack of notice period is required to file a complaint. Claims for wages due must be filed in court within two years from the date they were due.

When it comes to complaints regarding labor standards, investigators in charge of the case will mail the employer requesting them to provide a written response to the complaint. When the allegations are based on child labor, the investigator will seek access to the employer's payroll and time records for every employee.

Wisconsin frozen food company files for Chapter 11 bankruptcy

A Wisconsin-based manufacturer of frozen foods recently notified the state Department of Workforce Development of its intention to lay off all the employees from its two Plover, Wisconsin, processing plants as a part of a bankruptcy filing and in preparation for sale of the company. Golden County Foods reportedly filed for Chapter 11 bankruptcy last month and is also in negotiations to sell the company to Monogram Appetizers. However, the proposed sale has yet to be approved by the U.S. bankruptcy court.

A Golden Food County spokesperson said that the company will terminate its employees before closing the sale as a part of the agreement with Monogram Appetizers. However, the spokesperson said it is expected that the employees would be re-hired after the sale. She also said Monogram is expected to continue serving the company's customers after sale.

How a mediator may help resolve a contract negotiation impasse

Wisconsin's Employment Relations Commission provides mediation services to private sector employers and employees to help settle issues, such as contract disputes. Statutes authorized by WERC encourage voluntary settlement so WERC provides the services of its commissioners or mediators to assist parties in reaching an amicable settlement of contract grievances and contract negotiation disputes.

WERC's mediators can only assist parties in reaching a settlement; they do not have any authority to decide and enforce a decision for the matters at hand. The mediator first contacts both parties to provide the basic information pertaining to the matter and then provides and notifies both parties of a date, time and place to meet. The mediator then asks for contract and bargaining positions in writing from both parties.

A general overview of the theft of trade secrets

U.S. business law considers the misappropriation of a trade secret intended for use in interstate or foreign commerce by an employee for his or her own benefit, or for the benefit of any other organization, a serious legal transgression. The law prohibits employees or competitors from stealing, concealing or carrying away the intellectual property of any business by fraud or without prior approval.

The term "trade secret" identifies all forms of confidential business information, including those derived from business, financial, technical, economic or engineering activities. This information may include designs, patterns, plans, methods, techniques, computer codes or programs and manufacturing procedures, whether tangible or intangible.