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Aaron Chausmer of Hecht Walker, P.C. Attorneys at Law is set to speak in an upcoming webinar for the Clear Law Institute. The webinar will premiere on January 31, 2018. The webinar will be titled Fiduciary Duty Litigation in Business Disputes: Identifying Causes of Action, Key Defenses, Remedies and Proof. Aaron Chausmer will be giving valuable insights on the topic and providing a wealth of information that anyone in the legal field will not want to miss.

About the Clear Law Institute

The Clear Law Institute offers engaging workplace learning for online continuing education. It focuses on providing practical and engaging continuing education on law, compliance, investigation, accounting, HR, and management topics. The Clear Law Institute, or CLE, is well-known in the legal community for its informative webinars that include over 1,000 previously recorded webinars and approximately 70 live webinars that are added each month. In addition to the webinars, the online workplace offers courses and games for continuing education. The CLE is led by Michael W. Johnson, the former U.S. Department of Justice attorney.

About Aaron Chausmer

Aaron Chausmer, Senior Counsel with Hecht Walker, P.C., has 19 years of experience in commercial and business litigation matters. Prior to becoming part of the Hecht Walker, P.C. team, Aaron Chausmer led his own commercial and business litigation practice. His primary area of focus included commercial and contract disputes, internal business affairs, corporate governance, strategic planning, litigation avoidance, and competition-based matters.

His education includes graduating from Emory University, attending the Boston University School of Law, and earning a Juris Doctor degree. As a part of Hecht Walker, P.C., Aaron Chausmer uses his years of experience and education to offer services in his area of focus as well as generalized advisory services for businesses.

As an active member of the State Bar of Georgia and an accomplished attorney, Aaron Chausmer has a history of imparting his knowledge to others through speaking events. He often speaks to attorneys and business owners and was a featured as a speaker for Strafford Publications, the Perimeter Chambers Small Business Council Educational Series, Lorman Education Services, and SHRM-Atlanta.

About Hecht Walker, P.C. Attorneys at Law

When Aaron Chausmer joined Hecht Walker, P.C. he became part of a team of experienced attorneys that value hard and honest work. Based in Atlanta, Georgia, the business law firm is home to some of the top business attorneys in the state. The attorneys on the Hecht Walker team have a combined century of experience in their specialized practices. The firm has a successful track record and solid reputation for representing their clients. Clients include individuals, small businesses, government bodies, and large corporations. No matter the size of the company or complexity of the case, the attorneys at Hecht Walker, P.C. aggressively and vigorously represent their clients and defend their legal rights.

Recently, the firm showed not just its expertise, but its charitable side. The first Annual Giving Challenge was established in 2017 to provide a matching grant of $10,000 to Children’s Rights, Inc. Children’s Rights protects children from neglect and abuse through legal work and advocacy. The Hecht Walker, P.C. team is proud to support their worthy cause.

When we speak of someone “owning” money or property, we usually presume that ownership is an all-or-nothing proposition. A wallet or a toothbrush, for example, is either yours or it isn’t. But some kinds of property – homes and cars, for example – may be the basis of a creditor-debtor relationship that legally changes an owner’s rights and control over his or her property. A home mortgage, for example, plainly legally limits what an owner may and may not do with a mortgaged property.

A “fraudulent conveyance” is the legal term for a debtor’s attempt to avoid paying an unsecured debt by transferring property or assets to another person or company when the property or assets are at risk to a creditor. Outside of the law, most of us would simply call this “hiding the money.” Maybe the debtor foresees insolvency and tries to conceal property or assets that a creditor might use to satisfy the debt. Maybe the debtor never intends to pay the debt and transfers property or assets in an effort to become judgment-proof.

To be clear at the start, the law considers a “fraudulent conveyance” or a “fraudulent transfer” to be a civil rather than a criminal matter. Fraudulent conveyance often emerges as an allegation in debtor/creditor matters and in bankruptcy proceedings. Any legal action typically is brought by the creditors or by bankruptcy trustees. In the state of Georgia, when a fraudulent conveyance happens, banks and other lenders may need the legal insights and services of an experienced Atlanta banking attorney.

HOW DID THE UFTA DEFINE FRAUDULENT TRANSFERS?

Under the Uniform Fraudulent Transfer Act (UFTA), a fraudulent transfer may be either “intentional” or “constructive.” An intentional fraudulent transfer is a transfer of property made by a debtor to delay, defraud, or hinder creditors. While intent must be determined on a case-by-case basis under the UFTA, a transfer of all of the debtor’s assets to a newly formed company or to a family member to avoid the reach of creditors or litigation is generally considered evidence of intent.

Federal bankruptcy laws give a trustee the right under state laws to challenge allegedly fraudulent transfers. Many state’s laws are based on the Uniform Fraudulent Transfer Act, which provides that an allegedly fraudulent conveyance may be challenged if there is evidence that it is either actually fraudulent or “constructively” fraudulent. In establishing constructive fraud, the debtor’s intent to defraud or harm creditors is immaterial. Instead, the issue is whether the debtor obtained more-or-less equivalent value in exchange for the transfer.

In 2014, the National Conference of Commissioners on Uniform State Laws adopted the Uniform Voidable Transactions Act (UVTA), which amends and is intended to replace the Uniform Fraudulent Transfer Act (UFTA), which had been the law in 43 states. Several states – including the state of Georgia – have now adopted the UVTA, and several others are considering it. While the UVTA clarifies the law to keep debtors from intentionally dodging legitimate debts, it also provides a creditor with a legal way to reach properties and assets a debtor has transferred to another person in order to keep those properties and assets from being used to pay off a debt.

HOW DOES THE UVTA DIFFER FROM THE UFTA?

The UVTA’s amendments to the UFTA are designed to eliminate the divergent interpretations of the Uniform Fraudulent Transfer Act that have led to different outcomes in different courts for similar claims. The changes also bring the Act into compliance with the Uniform Commercial Code (UCC) and with the U.S. Bankruptcy Code. The UVTA offers some welcome clarity to what has been for far too long an all-too-often-misunderstood area of the law.

Most of the UVTA resembles the UFCA. What are the differences? The most important revision included in the UVTA is the absence of the word “fraudulent.” In the UFTA, “fraudulent” and “voidable” are used inconsistently, so the UVTA replaces “fraudulent” with “voidable.” Another change discourages the use of terms such as “constructive fraud” and “actual fraud,” because “constructive fraud” is confusing, and what is deemed “actual fraud” under the UVTA does not actually require proof of fraudulent intent. However, these revisions in terminology should not have any substantial effect on the statute’s application.

As a result of the 2007 ruling in the case Bell Atlantic Corp. v. Twombly, the U.S. Supreme Court now requires the plaintiffs who file fraudulent conveyance claims to include enough facts in their complaint to make it plausible – and not merely possible or conceivable – that they will be able to produce the facts necessary to prove their claims. An experienced Atlanta banking attorney can help banks and other lenders determine what evidence is sufficient for filing a fraudulent conveyance claim in any specific case.

WHO HAS LEGAL STANDING TO FILE A FRAUDULENT TRANSFER ACTION?

Standing to bring fraudulent transfer actions varies, depending on the circumstances. Under the Bankruptcy Code, a trustee always has the right to initiate a legal action alleging a fraudulent transfer. Under the UFVA, both present and future creditors may also bring a claim asserting a fraudulent conveyance. A future creditor is defined as a creditor whose claim arises after the transfer in question, but which had a foreseeable connection to the debtor at the time of the transfer.

The Uniform Voidable Transactions Act establishes the right of a creditor to sue a debtor for fraudulent conveyance and also to take legal action against any person or company who has received the fraudulently transferred assets or property from the debtor. A creditor’s claim prevails when there is a recovery of the property or assets from the company or person to whom the property or assets has been fraudulently transferred.

The UVTA makes several key improvements to Uniform Fraudulent Transfer Act. The clarifications regarding burdens of proof and legal standing to bring a claim, along with the revision of “fraudulent” to “voidable,” will reduce the confusion among judges, attorneys, and the principals in fraudulent conveyance cases. The other minor changes to the UFTA made by the Uniform Voidable Transactions Act modernize the act and bring it in into compliance with other uniform laws and the U.S. Bankruptcy Code. Overall, for the banks and the other lenders who are victimized by fraudulent conveyance, the changes are helpful and positive.

For more information, speak to our creditor representation attorneys today.

An employment contract should precisely spell out the rights and obligations of both employees and employers. A written employment contract is a legal agreement negotiated and signed by both the employer and the employee. In recent years, after losing too many valuable employees – and too much intellectual property – to the competition, companies are increasingly asking – and sometimes requiring – their employees and job applicants to sign employment contracts that include non-compete agreements.

Also called a “covenant not to compete,” a non-compete agreement is essentially an employee’s pledge to an employer that he or she will not go to work for a direct competitor for a certain period of time after leaving the employer. If you are a business owner who is considering non-compete agreements for your employees, you face two questions. Is it really worth the effort, and if so, how do you draft a non-compete agreement that the courts will enforce?

ARE NON-COMPETE AGREEMENTS WORTH THE EFFORT?

You’ll have to decide for yourself if drafting and having employees sign a non-compete agreement is worth the effort. Clearly, one benefit is that non-compete agreements will impair the ability of your competitors to lure valuable employees away from you. A non-compete agreement is also legal protection for your confidential data. Almost every company needs an effective strategy for keeping sensitive information and trade secrets out of the hands of the competition.

Trade secrets are not easy to protect. Anything from a list of clients or contractors to a unique electronic circuit design or a complicated chemical formula can be a trade secret. A trade secret is typically something that gives your company its edge or uniqueness, and as the business owner, it’s something you want to be kept secret. When an employee who knows or has access to your trade secrets leaves, he or she could take and use your trade secret for personal gain. If that ex-employee is hired by a competitor, your trade secret will probably be disclosed – unless you insisted on having that employee sign a properly drafted non-compete agreement.

In California, non-compete agreements can almost never be enforced against employees. California law does not recognize non-compete agreements except in very rare and precisely spelled out circumstances, but the law in the state of Georgia gives more rights to employers. In this state, businesses have the right to sue ex-employees for breach of contract, including the breach of non-compete agreements, and employers in Georgia may also sue for revenue lost through the breach of a non-compete agreement.

WHAT MUST BE INCLUDED IN A NON-COMPETE AGREEMENT?

Non-compete agreements can legally protect an employer’s trade secrets, but the language of a non-compete agreement cannot be open-ended, vague, or ambiguous in any way; no employer can restrict an ex employee’s work options everywhere and forever. The law puts a high priority on every person’s freedom to earn a living, so the language of non-compete agreements must be extremely narrow, limited, and precise. An enforceable non-compete agreement in Georgia must include three considerations:

1. Geography: In most cases, a non-compete agreement must specify a particular community, region, or state(s) where the ex-employee cannot launch a new business in direct competition with the ex-employer. The geographic range specified will depend on the nature and range of the employer’s business.
2. Duration: A non-compete agreement must have an expiration date, which is typically from six months to two years. Georgia employers should know that in most cases, a non-compete period exceeding two years will not be enforced by this state’s courts.
3. Scope: Non-compete agreements must use exacting language to define precisely what employment activities an ex-employee may and may not engage in for the duration of the non-compete period.

Before a business owner decides to require non-compete agreements, he or she should be sure that there’s a genuinely good reason for the requirement. Don’t require non-compete agreements just to keep employees from leaving or to penalize them if they do. The most common and one of the best business reasons for requiring a non-compete agreement is to keep an ex-employee from poaching your customers or clients to establish his or her own new business. If you can’t provide a judge with a persuasive reason why you required an employee to sign a non-compete agreement, that judge may have difficulty finding a good legal reason to enforce the agreement.

WHO BENEFITS FROM A NON-COMPETE AGREEMENT?

Employment contracts are “agreements” – hence, they must offer a benefit to both parties. The law requires employers to provide something in return for an employee’s signature on a non-compete agreement. If a job offer hinges on the non-compete agreement, hiring the applicant who signs the agreement satisfies that requirement. If someone is already your employee, an employer will need to link signing the non-compete agreement to a raise, a promotion, or to some other tangible benefit.

A non-compete agreement must be “reasonable” in the eyes of a judge, so don’t ask for too much. The courts will not enforce an unreasonable agreement anyway, and it won’t be worth anything. Instead, make sure that you have an agreement that simply meets your most basic business needs. The legal limits placed on non-compete agreements are there to protect workers from unethical employers. So long as a non-compete agreement doesn’t ask for too much and exists for a genuine business reason, courts in the state of Georgia will almost always enforce it.

In an employment contract, every line and every word is important. Employers need to have precisely-worded employment contracts that are drafted exclusively with your business needs in mind. That’s one reason why the advice and services of an experienced business attorney is imperative. A good business lawyer can protect your operation by creating employment contracts that satisfy your business needs and are not subject to misinterpretation.

In Georgia, employers should have an experienced Atlanta business attorney review every line and every word of your current employment contracts. If changes are needed, your attorney will make recommendations. An Atlanta business attorney should also draft or review all of your employment contracts in the future – before anyone signs them. The modest expense of sound legal advice is a small price to pay for peace of mind, and it’s a wise investment against legal difficulties in the future.