California Passes Tough Law On Independent Contractor Misclassification

October 2011 On October 9, 2011, Governor Brown signed into law Senate Bill 459 regarding independent contractors.  The law significantly increases the risks and penalties for misclassifying workers as independent contractors by imposing significant penalties on employers found to have engaged in a misclassification, as well as on non-lawyer advisors (like accountants) who advise an [...]

IRS Payroll Tax Amnesty Regarding Independent Contractors Should Be Carefully Analyzed

October 2011 Many small businesses attempt to save taxes and employee benefit cost by classifying their workers as independent contractors.  When business owners classify workers as independent contractors they do not pay the employer’s share of Social Security and Medicare costs, state employer taxes, state unemployment insurance taxes, and workers’ compensation insurance premiums.  Independent contractors [...]

Weak Credit and Economic Conditions Cause Litigation Over “Material Adverse Change” Clauses

February 2008 A number of current stalled deals involve material adverse change clauses. Litigation in this area will increase because of uncertainties involving (i) the credit markets and (ii) operating disappointments associated with an economic downturn. Regardless of whether you represent sellers, buyers, or lenders, lawyers are well-advised to pay greater attention to these “standard” [...]

Alter-Ego Allegations Require Expert Accounting Assistance

March 2013 Alter-ego is one of the most commonly alleged equity-based principals.  Where the facts warrant, courts will disregard the separate legal existence of corporations (including LLCs) and its shareholders (or members).  The purpose of "piercing the corporate veil" is to prevent the abuse of corporations, and thereby protect creditors who might otherwise not be [...]