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exit strategy DIY / UCC filing / fire alarm ethics
November 27, 2017
exit strategy DIY
    I share a Security Alarm Company with my brother-in-law.   I wish to buy him out in exchange for my share of a home we both own.   Do you have a form for that?   Why can't we just sign off the shares to each other for the business?    Would we be responsible for any taxes if we just signed off each others shares?
    I get a lot of calls regarding selling the business, buying a business, adding owners, etc.  While not all can be considered exit strategy [because the client isn't really considering leaving the business] they more or less involve transferring some or all interest in the business operation.  
    One call recently involved an owner who for heatlh reasons has to consider his exit strategy.  Of course the sooner you plan your strategy, the better.  The difference between wanting to sell and having to sell can make a big difference in the selling price.  Buyers rarely have to buy, so it's always going to be the seller that is disadvantaged if being forced to sell.
    We don't know if the above "deal" is a forced situation.  We do know that one owner is exiting the business, the other remaining.  There is going to be an immediate buy out, not in cash but in transfer of interest in a co-owned house.  So anon wants to know if I have a form for that?  Of course not.  The transaction is not common enough to warrant a "form".  
    Anon really wants to handle this on his own.  Just wants to sign the stock certificates; probably worry about the tax consequence later.  Nothing like a DIY transaction, especially when it includes the sale of an alarm company half interest in the shares and transfer of an interest in real property.  Any alarm company owner should be able to handle that, right?  
    I don't have exact numbers, but there are millions of lawsuits started every year in this country, and most of them are between relatives and former best friends.  Nothing like a DIY transaction handled without a lawyer [or with a lawyer who would be better off working for uber].  The above deal should have an agreement that will provide sufficient protection for both seller and buyer, indemnification issues, representations and warranties, and then comes the transfer documents, which in this case includes a recordable deed.  
    So no, anon, you can't handle this on your own.  I look forward to being retained.
UCC filing
    i have a client that i sent to collection 4 month ago.  How do i file a UCC-1 lien against one of my customers?
    You didn't send your collection matter to my firm, so I suggest you ask whoever you sent it to.  If they know what they are talking about they will ask to see your contract, because only the contract can give you the right to file a UCC-1.  The All in One Agreements do provide for filing a UCC-1, and you can file anytime [assuming there isn't a bankruptcy filing].  In most states you file with the Secretary of State, so it's a statewide system of filing.  Some jurisdictions may still have local county filing; you'd have to know where to file.  Your contract will tell you what collateral your can cover in your filing.
    Once you file the UCC-1 you can ask yourself what's next.  Waiting is probably the answer.  Changes are you're not going to foreclose your lien unless it's one hellava debt owed and salable collateral.  I have't seen that yet in the alarm industry.  Where a lien can be handy is if the subscriber files bankruptcy and you can claim secured status, requiring the debtor to pay you in full or surrender the collateral.  If the alarm system is required or the subscriber-debtor wants to retain the equipment, you will be paid, at least the value of the collateral if not the full amount owed.  
    The UCC-1 option is rarely used in the alarm industry; it's not particularly useful or effective.
fire alarm ethics
    I have a question.   I have a client and it looks like their current alarm company is not doing the right thing by them.    A few fire systems they have looks like they are jerry-rigged.   Am I under any obligation to report wrong-doing or systems that are completely out of whack (not to code) when I see some crazy issues?   Please take into consideration this is a college.
Best regards,
    Legally you have no obligation to report a deficient fire alarm system to the AHJ or the subscriber, unless of course you are engaged to inspect the system.  Of course you may feel bad if there is a fire and you think injuries and damage could have been reduced or prevented had you reported fire alarm deficiencies and they were corrected timely.  So, what did you do?

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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
516 747 6700