Friday, January 30, 2004

YES, I'VE GOT A LOT OF WORK TO DO


create your own visited country map
or write about it on the open travel guide

SHOULD I GET OUT MORE?


create your own visited states map
or write about it on the open travel guide

Wednesday, January 28, 2004

TV LAWYERS -- WHERE ARE THE CORPORATE GUYS? Mike O'Sullivan over at CorpLawBlog has a discussion of TV lawyers versus reality, and wonders where all the corporate lawyers are. Well, I've only spotted one. Will Truman of Will & Grace. Figures that the only one we get is on a comedy. He's been seen doing M&A work and even uttered the words "Hart-Scott-Rodino" and "due diligence."

Of course, a few episodes later, he was working on an immigration matter. Go figure.

NEGOTIATING AGAINST YOURSELF
Back in late December, I got a draft of an Asset Purchase Agreement from Buyer's counsel. Great, so I start my review, send comments back and forth to my client, getting them in shape for transmission to the Buyer's counsel.

Then, what to my wondering eyes should appear, but a new draft from Buyer's counsel. This one, more pro-buyer -- adding reps and warranties, requiring descriptions of all contracts on the schedules -- not just a list, mind you, but descriptions! Looks like the lawyers' full employment program. And then the indemnity deductible or basket and the cap are removed. What, you think we won't notice? My comment puts them back in, of course, along with "sole and exclusive remedy" language. Boneheads.

Here's a little tip. When sending out your first draft, don't plan on taking another swipe at things and trying to toughen up your document later. Not only is it bad form, it makes you look sloppy and, worse, stupid.

Friday, January 16, 2004

AMERICAN IDOL CONTRACTS AND MORE We've all had clients who didn't seem to care about what the contracts say, they just want the deal done. That's fine, it's our job to look after them, but that job is made difficult when the client pays no attention to the risks of nonperformance, of incorrect or weak representations and warranties, or whether any breach is going to require litigation against the judgment proof with no other recourse.

Here's a story on the contracts that American Idol contestants are required to sign - basically, giving immense power to Simon Fuller's 19 Entertainment companies. It's a prime example of the deal being a deal the client must close, without regard to the contractual provisions (see some of those provisions here). After all, the music business sets in stark relief the difference between doing the deal with a bad contract and not doing the deal at all. It's the difference between flipping burgers or being a household name, jetting around the country and performing in packed arenas for money never dreamed of. If Kelly Clarkson makes $750,000 this year while Simon Fuller gets much more from her fame and work, I'm sure Kelly would choose that over her old waitress position. Heck, if Clay Aiken came to me before signing the American Idol contract, I'd have told him that it sucks, but probably would have said go ahead and sign it. You'll be better off than you are now. At least the downside isn't that he could lose everything. And who knows, maybe we could call it a contract of adhesion. But don't count on it.

But with investors (especially angels), nothing is the downside and that potential payoff often blinds the less sophisticated (especially if they don't know they are less sophisticated -- accredited or not). So, we lawyers are in the position of saying "have you thought about warrant coverage for that debt"? Or, "I know you trust the management and they are good buddies, but if things tank, you're screwed and your "friends" can't help you."

Anyway, for you business people out there reading this, my exhortation to you is Open Your Eyes and Ears and Listen to Your Lawyer, don't be blinded by the potential upside. Don't tell the lawyer that you only want him to look for the "gotchas" in the agreement and not to spend a lot of time because you think it is OK. If you don't want protection on the downside risk, don't hire a lawyer. At least then you'll be admitting to yourself that you are flying blind and going on a handshake. Remember, the downside of signing that Amercian Idol contract is that you don't win and you lose the cost of traveling to the audition site and the upside is that you win and make a lot of money, just not as much as you might have made if you worked your vocal chords off playing local clubs for years hoping to be discovered.

As an investor, your downside is to lose everything (and even more if there are capital call obligations). You may be smart, but there's plenty you don't know, that's what lawyers are for.

Thursday, January 08, 2004

COOL STUFF OK, so I chose to read How I Accidentally Joined the Vast Right-Wing Conspiracy (and Found Inner Peace) by Harry Stein. It seems his transition started when he began to suspect that raising children in the home was better than day care. It's lighter reading than I'm sure The Elegant Universe is.

Here's a cool link. Ryanchurch.com. Ryan Church is one of the lead conceptual artists for Star Wars: Episode III, and he "paints" digitally. Amazing work.

Now, back to figure out how we're treating Seller's Employees. I think the buyer gets the right to hire anyone prior to closing, but will not have to take them all. That's fair.

Wednesday, January 07, 2004

POST-CHRISTMAS READING Well, I got a number of books for Christmas, and I haven't started reading any of them. Here are my choices:

Charlie Wilson's War: The Extraordinary Story of the Largest Covert Operation in History by George Crile. It's about a Texas congressman who was on the appropriations committee, found out about the mujahideen resistence, and then went over there and fought with them.

The Elegant Universe: Superstrings, Hidden Dimensions, and the Quest for the Ultimate Theory by Brian Greene. I love this stuff. I've actually read A Brief History of Time (I understand that, for most, it's a decoration). But I never understood what the hell superstrings were. And maybe this will help defeat my skepticism about spacial dimensions beyond the third.

Tombstones: A Lawyer's Tales from the Takeover Decades by Lawrence Lederman. I found a reference to this over at Corp Law Blog, and although his discussion of the book seems to imply a more rigorous and time-consuming drafting process than may be reasonably possible for most clients, the focus on the craft of what we do seems very interesting. I'm glad that my family could find a used book store to pick up this out of print book. Lord knows if I were in middle management or sales, I'd have thousands of books to choose from. I wonder what else is out there on this subject.

How I Accidentally Joined the Vast Right-Wing Conspiracy (and Found Inner Peace) by Harry Stein. It's good to see what former liberals thought of the right wing when they were on the outside, and what inspired them to join. Maybe the candidates and political consultants should study things like this and then try to persuade rather than simply spin.