Personal Liability of Officers for Corporate Guarantees

Last January, the 1st District Court of Appeals issued a noteworthy opinion reinforcing the personal liability for loan guarantees made by corporate officers while acting within their capacities as officers of the company.  The court’s ruling in 84 Lumber Co. v. Powers, No.-01009-00986-CV, 2012 Tex. App. LEXIS 590 (Tex. App.—Houston [1st Dist.] Jan. 26, 2012, no pet.), will likely force many corporate officers, including those in larger corporations, to now rethink placing their own necks on the line for those companies to which they owe fiduciary responsibilities.

David Powers, acting within his capacity as president of his company David Powers Homes, Inc., signed a statement that he “UNCONDITIONALLY AND IRREVOCABLY PERSONALLY GUARANTEE[D] [THE] CREDIT ACCOUNT….”  Mr. Powers took the position that he no longer possessed any personal liability for the loan because he signed the guarantee as a corporate officer and he no longer held that position.

In rejecting Mr. Powers’ stance that his personal liability was precluded by the statute of frauds (which requires the guaranty to be in writing and signed by the person to be charged), the court held that liability remained on Mr. Powers, individually, and not merely with the office of president of his company.  As the court noted, generally speaking a guarantor of a debt is an individual who willingly stands for the debt of another.  The court reasoned that had it ruled in favor of Mr. Powers, it would essentially render a guarantor agreement meaningless because personal liability would thereby reside in the same person—i.e., the company would then become both the account debtor and the guarantor of the corporate debt.

Ultimately, the court determined that Mr. Powers remained liable for his “unambiguous” guarantee of personal liability for the company’s debt, largely due to the fact that Mr. Powers was the owner of the company.  The court did, however, leave open the question regarding liability under situations involving more ambiguous contractual terms or where the corporate officer-guarantor owned minimal or no shares in his or her company.

Authored by Scott A. Meyer and John Sokatch.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services to individuals, inventors, entrepreneurs, start-ups, spin-offs, universities, research institutes, and small to large public and private companies and businesses.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us at 214-445-4040.  Please follow us on Twitter at @chalkerflores.

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Music Industry Filing Lawsuits Against Bars and Restaurants for Copyright Infringement

Due to the ever-increasing advances and efficiency over the past few decades in the way we share various forms of information, several royalty collection agencies, such as Broadcast Music Incorporated (“BMI”) and American Society of Composers, Authors, and Publishers (“ASCAP”), have begun ratcheting up their efforts to protect the music industry from copyright infringement.  These efforts now, specifically, have focused upon several bars and restaurants that play music, albeit copyrighted material, as a way to provide a certain ambiance to their establishment and attract more business.

Generally speaking, bars and restaurants are expected to obtain performance licenses from these agencies which, in turn, permit them to play copyrighted works at their establishments for negotiated fees.  But with the recent uptick in karaoke nights, cover bands, hired DJs, and general free-play provided by bars and restaurants, the cost-benefit of cutting through the music industry’s red-tape when compared with the perceived low probability of getting caught has now led to several well-known and respected establishments receiving attorney letters and federal lawsuits due to their business oversight.

For example, just this past year, the Ninth Circuit denied the appeal of a judgment for nearly $200,000 in damages, attorneys’ fees, and costs against a Long-Beach, California restaurant, Roscoe’s House of Chicken and Waffles, for alleged copyright infringement of various John Coltrane numbers, among others, where Roscoe’s allowed these songs to be played for its patrons.

While many bars and restaurant owners may think the time and costs associated with obtaining these licenses is not a business savvy investment in the short-run, not changing their practices may eventually force owners to invest larger sums in the long-run for legal fees and costs in defending lawsuits against agencies like BMI and ASCAP.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services of the highest quality.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.  Clients include individual inventors, start-ups, spin-offs, major national universities, research institutes and medium to large corporations.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment with one of the attorneys in Dallas or Fort Worth, please contact Tom Jacks at 214-866-0001 or email at tjacks@chalkerflores.com.  Please also follow us on Twitter @chalkerflores.

Dallas Trademark Attorneys, Chalker Flores, LLP, Prosecuted Several Trademarks in January, 2012

Oct 30, 2012 – In January of 2012, Dallas intellectual property, business, corporate and litigation law firm  Chalker Flores, LLP, successfully prosecuted several trademarks the United States on behalf of its clients. The newly registered trademarks include: SATISFI TEA®,U.S. Trademark Reg. No. 4,080,187; B&D LITHO® (Stylized), U.S. Trademark Reg. Nos. 4,082,312, 4,082,313 and 4,082,452; ATLAS TAG & LABEL®, U.S. Trademark Reg. No. 4,084,095; and RAILROAD CHAPLAINS® (RRC) (Logo), U.S. Trademark Reg. No. 4,082,727.

ABOUT CHALKER FLORES, LLP

Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services of the highest quality.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.  Clients include individual inventors, start-ups, spin-offs, major national universities, research institutes and medium to large corporations.  If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact Cynthia Minchillo at cminchillo@chalkerflores.com or 214-445-4060.

CHALKER FLORES, LLP RATED AV BY MARTINDALE-HUBBELL® PEER REVIEW RATINGS™

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Dallas, Texas; October 23, 2012:  The law firm of Chalker Flores, LLP is pleased to announce that it has achieved an AV® Preeminent™ peer review rating by Martindale-Hubbell®.

This is an exciting time for Chalker Flores, LLP, as the firm marches towards its ten-year anniversary of tailoring solutions for the needs of its diverse array of clients worldwide.  The firm just earned an overall peer review rating of 4.8 out of 5.  As a highly rated firm, the special demands of its clients will continue to be met with the same excellent service and boutique feel.

Lawyers and law firms achieve ratings from Martindale-Hubbell through a peer review system.  A rating from Martindale-Hubbell assists consumers in locating legal services of high quality through an expansive network of lawyers and law firms.  Martindale-Hubbell Peer Review Ratings also identifies lawyers with the highest ethical standards and professional ability.  Ratings are an invaluable aid when seeking any type of legal representation.

“This is a distinguished honor for our firm as we strive every day to fulfill our mission to our clients,” states Scott Meyer, Partner.  Mr. Meyer adds, “our lawyers and staff are the true recipients of this honor as it shows their constant integrity and confidence in assisting our clients with their unique legal needs.”

More About Chalker Flores, LLP:

Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services of the highest quality.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.  Clients include individual inventors, start-ups, spin-offs, major national universities, research institutes and medium to large corporations.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact Eileen Cortez.