KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Anyone having problems with Interlogix / Kidde smoke detectors / How can I structure a sale of alarm contracts  Schedule Free meeting at ISC / Round Table Discussions at ISC
February 28, 2020
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Stop by and meet at ISC.  See below for schedule
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Anyone having problems with Interlogix / Kidde smoke detectors? 
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Ken
            I worked for Interlogix as a field sales engineer. I trained dealers on our Intrusion products as well as the SDX 135Z smoke detectors. I am aware of the issues with the SDX units and the cause which was never corrected no matter what date code they say is good. And it is not the fault of Interlogix. These unit were manufactured by Kidde a sister company.
            Our Field Sales Group with the product manager and the engineer had a meeting in Salem Oregon, during that meeting the engineer finally admitted they has an issue but they were not sure the cause.
            The reason for my email is I know that the Kidde units also have this same issue as my Neighbor had the residential Kidde units installed during renovations and they experienced false alarm the very next day.
            I am concerned because the electrical contractor does not know how to fix this issue. He has replaced units and the problem persists.  I was just told they have disabled all of the smoke detectors in their home.
            I have sent an email to Kidde and I am waiting for a response. Does my Neighbor have any recourse?
Name withheld
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Response
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            Even if I did offer free advice to the public [which I don’t] before this legal issue can be addressed the technical issue needs to be addressed by the fire alarm experts and perhaps engineers.  

            I asked a fire expert to comment.  Here is his response
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Ken
            Looks like Interlogix has closed.  Look at this link to confirm:  https://www.securitysales.com/business/interlogix-to-shut-down-at-end-of-2019/    
            The Kidde division is now linked with Edwards as survivor of the parent company that closed them down and I am sure will deny any responsible or claims on whatever the problem is from this past manufacturer.   What is this person trying to accomplish?   If they are gone there is no recourse from what I can see but you are the lawyer here to decide those facts.   Who are you going to sue and for what?   What are the damages, was there a life or property loss or just exposure if the smoke detector is called upon and it does not work?   The product in some form or totally must be replaced if there is an operational concern and this person is aware of it.   This issue has already been reported to the Federal Government on consumer products: 
                
There was a notification about a recall (I did not check for the stated model number):  Here is recall notice: 
https://www.cpsc.gov/es/Recalls/2014/esl-interlogix-hard-wired-smoke-alarms-recalled

https://www.cpsc.gov/search?site=cpsc_site&output=xml_no_dtd&getfields=*&tlen=120&client=ek_drupal_01&proxystylesheet=ek_drupal_01&filter=p&query=interlogic+smoke+detector+model+sdx+135Z

             They also list the following telephone number for more information on this that this person can call:   Consumer Contact:
     Edwards at (800) 655-4497 select option 5, from 8 a.m. to 5:30 p.m. ET Monday through Friday or online at www.edwardsfiresafety.com and click on Contact Us. Interlogix toll-free at (855) 286-8889 select option 2, from 5 a.m. to 5 p.m. PT Monday through Friday or online at www.interlogix.com and click on Customer Service for more information.  Yes the number still works, I tried it.
            Hope this helps.
Name withheld on request
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How can I structure a sale of alarm contracts
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Ken
            I have alarm accounts, mixture of residential and commercial.  RMR is under 10K.  I have a few competitors in the area that I’ve spoken to and I’ve also been talking to one of my long time employees about buying the company.  What options do I have?
Name withheld
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Response
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            You can start with your first option.  Hire K&K or don’t.  
            Next option is selling your corporation, or your corporation’s assets, principally the alarm contracts and accounts.  Most deals are Asset Purchase Agreements, though occasionally it makes sense to do a Stock Purchase Agreement.  There are tax considerations and other issues that need to be considered.  For example, the corporation can have non-assignable subscriber contracts which would make the transfer of corporation ownership a better move than trying to sell the asset in violation of the non-assignment provision.  
            Next decision is do you want to be paid at closing, less a possible holdback to secure a guarantee, or are you willing to finance the sale and accept a payout over a set number of years.  This too has tax implications as well as other considerations.  If you can trust the buyer then financing the deal may offer you the highest price, especially over the life of the payout. 
            Don’t jump to any conclusions without giving the matter careful consideration.  Your personal issues will have great bearing on how you will want to sell and discussing this with someone who does this on a regular basis will be helpful [that would be me and the Merger and Acquisition Team at K&K].  Contact Jennifer Kirschenbaum,Esq at 516 747 6700 x 302 or Jennifer@Kirschenbaumesq.com for consult or to get started.
            If you decide not to engage K&K for the deal don’t worry, we will still be there for you.  Our litigation department is will be waiting for you to help clean up the mess.
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Schedule Free Private meeting while at ISC with Ken Kirschenbaum - SOLD OUT [call to get on waiting list]:
            I am scheduling free meetings at ISC now for March 17, 18 and 19, 2020. The meetings are free and scheduled in half hour increments.  Any issues can be discussed or just stop by to chat.  To reserve a time please contact Stacy Spector,Esq at 516 747 6700 x 304 or SSpector@Kirschenbaumesq.com.
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Round Table Discussions while at ISC, at Palazzo Hotel.  Free to participate.  Space very limited so book now.  Call Stacy Spector,Esq at 516 747 6700 x 304 to reserve your seat. [waiting list available for sold out Roundtables]
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Round Table:  March 18, 2020 at 11 AM.  Join Morgan Hertel, VP of Technology and Innovation, Rapid Response Monitoring and Ken Kirschenbaum for a round table discussion on current state of monitoring including technology and well as outside influencers like minimum wages and privacy laws. 
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Round Table: March 18, 2020 at 1 PM.  Join Mitch Reitman and Ken Kirschenbaum for a round table discussion on Taxes and Corporate issues for alarm companies relevant when selling or buying accounts. Sold Out
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Round Table:  March 18, 2020 at 2 PM.  Join Ron Davis and Ken Kirschenbaum for a round table discussion on Selling or buying alarm accounts and RMR issues.  Sold Out
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Round Table: March 19, 2020 9:30 AM [note new time change] Join Troy Iverson, VP of Sales, Brian Davis, CFO of AvantGuard Monitoring Centers and Ken Kirschenbaum for a round table discussion on the Current state of the Financial/Capital Market Stability in the Security Industry and necessary agreements needed for security companies. (Titian 2202 Meeting Room just off the show floor)
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NEW: Round Table: March 19, 2020 at 11:30 AM.  Join Don Maden, EVP, COPS Monitoring and Ken Kirschenbaum for a round table discussion on how your monitoring company can help you avoid a lawsuit. 
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Round Table: March 19, 2020 at 1 PM.  Join Sharon Elder, VP Sales, USA Central Station and Ken Kirschenbaum for a round table discussion on the value of quality video contracts and services  Sold Out
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Round Table:  March 19, 2020 at 3 PM.  Join Bart Didden, Executive Claims Administrator, Security America and Ken Kirschenbaum for a round table discussion on Errors and Omissions Insurance Claims and Risk Management

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To order up to date Standard Form Alarm /  Security / Fire and related Agreements, click here:  www.alarmcontracts.com
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CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY
You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com