Entertainment, Business and Real Estate Law

What Works and What Does Not Work to Protect Business Trade Secrets

2011-05-04T17:42:00.000-07:00

Doron F. Eghbali Business Law

Often, businesses have information they would not and should not share with others. Such information could take the form of ideas, methods, devices, formulas, compilation, among other things. Let us explore what could work and what would not work in protecting a business' trade secrets.

SOME BACKGROUND ON TRADE SECRETS

In California, trade secret is information that:

Generally, is not known to the public, the industry or the people who now how to monetize it.
Generally, has INDEPENDENT economic value derived from its secrecy. AND,
Generally, is under REASONABLE protection for its secrecy.

Such information includes but is NOT limited to:

Formulas
Patterns
Compilations
Programs
Devices
Methods
Techniques
Processes

WHAT MIGHT NOT WORK TO PROTECT TRADE SECRETS

The business does not place any warnings on trade secrets and does not require confidentiality agreements for employees and third parties.
The business does not inform employees of the secret nature of such information and does not impose safeguards.
The business does not require employees to sign non-disclosure agreements.
The business signs non-disclosure agreement with a company known to have violated previous non-disclosure agreements.
The business does not admonish employees for making public such information.
The business does not protect its information and allows the public or competitors to view it.

WHAT MIGHT WORK TO PROTECT TRADE SECRETS

The business treats certain information as secret and locks it in a room AND employees know such documents are trade secrets.
The business restricts access to trade secrets, places warning signs on such information, requires employees to sign confidentiality agreements.
The business uses coded information for trade secrets and requires employees to sign confidentiality agreements.
The business hires security guards to protect trade secrets.
The business issues ID badges to employees allowed to view or access to restricted areas containing trade secrets.

SALIENT POINT ON SECRECY OF TRADE SECRET

Undoubtedly, the most salient point on protecting trade secret is keeping trade secret actually secret. In fact, even inadvertent exposure of trade secrets would destroy the "secret" status. Nonetheless, some cases hold "absolute" secrecy is not required. Albeit, what "absolute" entails is rather difficult to answer.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More information, Please, Visit: HERE.

Skeletal ANATOMY of Insurance Policies

2011-04-21T15:59:00.000-07:00

Doron F. Eghbali Business Law

Skeletal ANATOMY of Insurance Policies

Tuesday, April 19, 2011 by Doron F. Eghbali

Insurance policies are rather esoteric documents. Let us dissect insurance policies main parts and understand the BASICS of Declarations, Endorsements, Conditions and Exclusions.

DECLARATIONS

Declarations page "Dec Page" is the page often attached to the top of the policy and contains certain important information, including but not limited to the following:

The Name and Address of the Insured
The Particular Type of Coverage
The Period of Policy
The Limits of Liability
The Premium of the Policy

ENDORSEMENTS

Endorsements, in insurance parlance, are referred to additions to the terms and provisions of insurance policy often enclosed by variety of professionals to address needs and requirements of the underlying circumstances or transactions. Often Endorsements are in STANDARD industry forms.
Endorsements might be crafted to:

Enlarge the Insurance Pool by Adding More Coverage to More People
Limit Coverage of the Policy

Since Endorsements are specifically crafted for a particular policy, EXPRESS Endorsements OFTEN supersede any conflicting terms and provisions found inside other parts of the policy.

EXCLUSIONS

Exclusions are to a great extent similar to Endorsements, in that they also limit the scope of insurance coverage. Insurance company OFTEN has the burden of proof in such cases. Exclusions MUST be conspicuous, clear and plain and construed in favor of coverage. Exclusions are OFTEN found under the "Exclusions" section of each policy type.
The insured has the obligation to ensure all the exclusions have been enumerated by the time the policy commences to forestall problems down the road, to the extent possible. If there are exclusions the insured does not agree with, revisions should be intelligently and prudently made.

CONDITIONS

Conditions set forth the obligations of the insured and the insurance company vis-a-vis each other. Conditions are OFTEN meant to give proper NOTICE to the insurance company in the event it is served with a suit.
HENCE, this NOTICE requirement is extremely important and MUST be taken seriously by the insured. In fact, the insured is OFTEN required to give NOTICE to the insurance of a claim or POTENTIAL claim which might trigger coverage under the policy. Notice is often entitled "Duties in the event of Occurrence, Claim, or Suit". In fact, the insured's failure to fully comply with Notice requirements of the policy can adversely affect or even DENY coverage.

CAVEATS

Insurance needs and requirements vary from business to business. This article in no way seeks to render any advice on types of business insurance.
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DORON EGHBALI Is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertain ment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

What Does Estoppel Certificate Encompass In Commercial Properties?

2011-04-18T18:02:00.000-07:00

Doron F. Eghbali Commercial Leasing Law

What Does Estoppel Certificate Encompass in Commercial Properties?

Monday, April 18, 2011 by Doron F. Eghbali

Estoppel Certificates serve a salient purpose to landlords, lenders and potential buyers of commercial property. Let us explore the salience and legal effect of such Certificates to some extent and further educate ourselves about them.

WHAT IS A ESTOPPEL CERTIFICATE?

An Estoppel Certificate is a signed statement by tenant or landlord certifying certain information as to the commercial premises. Estoppel Certificate is often required by lenders or potential buyers in refinancing or sale of commercial properties. In addition, it is possible for tenants to use Estoppel Certificates while seeking transfer of their interest under the lease, if possible.
Estoppel Certificates could literally derail a potential sale or refinancing, as lenders or buyers dissect the enclosed information as to the viability or liability of the building.

WHAT IS THE SALIENCE OF ESTOPPEL CERTIFICATE?

Estoppel Certificate provides some clarification and confirmation to interested parties in sale, refinancing or, to a lesser extent, transfer of commercial properties. The information to be provided on an Estoppel Certificate includes, but not limited to the following:

Clarify Whether the Lease Still is Enforceable or Not
Clarify Whether the Lease Contains any Changes, Amendments, Modifications, Assignments or Not
Clarify Whether the Lease Contains any Defaults
Clarify What the Lease' Essential Terms and Provisions Are, Such As: The Amount of Rent, The Place of Rent, The Rights Under the Lease Bestowed on Tenant(s).

Hence, by seeking such information, the most salient questions tends to become clearer, i.e. how much money is the property making? What are the existing or potential problems? The following lists some potential pitfalls for lender or potential buyer:

Whether The Tenant is Solvent.
Whether There are Still Renewal Option for the Property and Whether Such Rights have or Are Being Exercised.
Whether There Are any Violations of the Lease Agreement.
Whether There Are Any Security Deposits, How Much They Are and Where They Are, If Possible.

SALIENT NOTE
Given the salience of Estoppel Certificate, most leases contain a clause obligating tenant to provide it when requested. It might be possible for the tenant to negotiate a clause which obligates the landlord to provide the same document when and if tenant reasonably requests. __________
DORON EGHBALI Is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

What Does TV Production Encompass?

2011-04-11T13:40:00.000-07:00

What Does TV Production Encompass?

Friday, April 8, 2011 by Doron F. Eghbali

Film and TV production are rather largely dissimilar. Let us explore such esoteric variations in some detail.

SOME BACKGROUND ON TV PRODUCTION

Film production, arguably and relatively, embraces a larger number of independent producers compared with Network Television, often dominated with large studios and a limited number of large independent producers. Even, those few independent producers supplying programming to Network Television have production-financing deals with larger studios or larger independents. In fact, unfortunately, industry demands such symbiosis because of the costs involved in producing original/new programming. Such costs surpass first-run license fees and such producers MUST accomplish long runs spanning at least 22-episode seasons to provide enough programming to run in a 5-episode week and become profitable through foreign sales and reruns.

SOME ESOTERIC MECHANISMS IN TV PRODUCTIONS DEFICIT FINANCING

Deficit financing is probably the most salient aspect of Network TV production since it determines if someone can or cannot produce. To understand deficit financing, it is useful to understand how prime-time series are financed and created.

The Federal Communications Commission (the "FCC") has severely restricted the ability of TV Networks in the Network's control of and financial interest in Network Programming, to foster a relatively more competitive environment. This FCC restriction has culminated in the fact that most prime-time series are not owned by TV Networks, but licensed from rather large independent producers.

Now, the way TV Networks pay for prime-time series to such independent producers is fascinating and daunting:

TV Networks, to make their programs more attractive, require independent producers to budget each hour of a new series more than $1.1 to 1.3 million.
TV Networks pay a starting license fee of around $800,000 to $900,000.
TV Networks payment arrangement, thus, creates anywhere between $300,000 to $500,000 or more budget deficit per episode for TV producers.

HOW COULD INDEPENDENT PRODUCERS RECOUP THE BUDGET DIFFERENCE, IF ANY?

Now, the question arises how could relatively large independent producers recoup their money if it costs them to produce each episode around $1.3 million and receive only $900,000? The answer is as elusive as the money since most producers could recoup by having a repository of at least 50 to 70 episodes (22 episodes per season for three to four years of syndication). Nonetheless such recoupment strategy is fraught with perils since:

Possibly, TV Networks do not renew prime-time series beyond pilot let alone the second season.
Possibly, even if successful on TV Networks, the series are not necessarily successful upon syndication.
Possibly, even if successful on TV Network and syndication, it takes at least several years after the series were created for it to become profitable.

CAVEATS

Hence, given this rather daunting TV Production economics already delineated, the following caveats are worth considering:

It is incumbent on TV producers to be large, well heeled and diversified. Such TV producers must be able to front the whole money required for production in the hopes of recouping the deficit with some reasonable yields in foreseeable future.
It is incumbent on TV producers to have a balanced portfolio of programming. In other words, such portfolio diversification should encompass one or more prime-time series. It is ideal, not always feasible or foreseeable, to have a mix of programs some in syndication yielding profits, others in renewals on Network TV, and some in development and pilot stages.

It is incumbent on TV producers to take note of two evolving trends. First, the ever increasing number of new programming channels COMBINED with new media to broadcast and monetize TV programming, is revolutionizing TV production market and economics. Second, Reality TV (unscripted TV) often involves different economics as there are no reruns, but other evolving opportunities for its monetization.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

What Do Mortgagages Encompass in Real Estate Transactions?

2011-04-07T17:08:00.000-07:00

Doron F. Eghbali Real Estate Law

What Do Mortgages Encompass in Real Estate Transactions?

Thursday, April 7, 2011 by Doron F. Eghbali

Purchasing real estate, residential or commercial, most often requires large sums of money. While potential purchasers might borrow from family and friends to consummate the transaction, financial institutions such as banks, loan associations and credit unions are the common sources of such financing. Let us explore the mechanics and some intricacies of mortgages and further enlighten ourselves about them.

WHAT IS A MORTGAGE?

Borrowing money to buy real estate involves signing two documents, among other things: Promissory Note and Mortgage.

A. PROMISSORY NOTE

Promissory note is rather a formal IOU by which the borrower promises to pay the money back to the lender according to certain terms including payment of the interest for using the money and compliance with the time schedule for making payments on the loan, among other things.

B. MORTGAGE

Mortgage is just another document which secures the debt or provides collateral for the loan if the borrower defaults on it. In fact, if the borrower defaults on the loan or breaches the terms of the mortgage agreement can foreclose on the secured property.

PURCHASE-MONEY MORTGAGE: Purchase money mortgage, in reality, is the money SELLER lends BUYER to purchase the property.

SOME OTHER IMPORTANT YET RELATIVELY BASIC TERMINOLOGY AND OBSERVATIONS

Mortgage Not Always On Purchased Real Estate: This is noteworthy, mortgages are not always made on the purchased real estate. It is conceivable, and feasible for borrower, for instance, to purchase a vacation home but borrows against the already-purchased residence. In such scenario, if the borrower defaults, lender would generally have recourse against the residence, unless their agreement provides otherwise.
First Mortgage OR Second Mortgage, Senior Mortgage OR Junior Mortgage: This ranking order establishes the priority (right) over proceeds of a sale. In fact, mortgages of a lower priority (second and third) are referred to as junior mortgages and mortgages of higher priority are called Senior Mortgages. Hence, if borrower has three mortgages, the second mortgage is Senior to the third mortgage and Junior to the first mortgage. Consequently, the lender having the first priority MAY use all proceeds from sale of real estate (foreclosure sale) if possible and necessary to satisfy the amount owed. Then, if any sales proceeds remain after satisfying the first mortgage, the money MAY be used to satisfy the second mortgage holder, and so on. Any proceeds remaining after satisfying all notes secured by the mortgages belong to the property owner, if any.
Due-On-Sale Clauses: Due-on-sale clauses require the entire note be paid before seller can deed the property to a new purchaser. Nonetheless, some lenders MIGHT allow the new purchaser to ASSUME the loan and make payments on it. In such scenario, the new purchaser becomes wholly liable on the note. Generally, if the underlying property cannot be sold great enough to extinguish the secured indebtedness, then the lender might have RECOURSE to the subsequent purchaser's other assets for the deficiency. In addition, the first purchaser, generally, remains liable to the lender for any unpaid amounts.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

Some Last Minute TAX CREDITS for 2010 Tax Filing

2011-04-06T12:11:00.000-07:00

Filing taxes could be deservedly daunting as we all strive to painstakingly collect all our data and reflect them accurately on our 2010 tax returns, if we have not already done so. Accordingly, taxpayer should be mindful of venerable TAX CREDITS to legally and ethically slash our taxes dollar for dollar, if possible. Let us further educate ourselves about such important subject, to some extent.

APRIL 18, 2011 DEADLINE NOT APRIL 15, 2011

Unlike most years, this year, the due date for filing taxes is April 18, 2011 and not April 15, 2011. This is because a District of Columbia holiday coincides with April 15, 2011.

SOME BACKGROUND ON CREDITS

There are two types of credits: refundable and non-refundable.

1. NON-REFUNDABLE TAX CREDITS

Non-Refundable tax credits - similar to refundable tax credits - would slash taxable income dollar for dollar. However, the drawback for non-refundable tax credits would be, since it is non-refundable, if we do not have tax liability, we will lose it.

2. REFUNDABLE TAX CREDITS

Refundable tax credits would be the best of two worlds. You have not paid anything towards taxes, yet you receive money. Such nature of refundable tax credits make them increasingly susceptible to fraud, unfortunately.

SOME RELATIVELY USEFUL CREDITS

1. EARNED INCOME TAX CREDIT (REFUNDABLE)

Earned Income Tax Credit (EITC) is a way for low-wage people to put some money back into their pockets, if possible. To become eligible for EITC, the person claiming it, MUST meet the following criteria, AMONG OTHER THINGS:

MUST have a valid Social Security Number
MUST have earned income from a business or self employment
MUST be a US citizen or resident alien all year, or a nonresident but married to resident alien or US citizen, filing jointly.
CANNOT be a qualifying child of another person.
CANNOT have income from investment of more than $3,100.
CANNOT be married, filing separately.

CAVEAT

This list is TRUNCATED and NOT EXHAUSTIVE at all.

2. CHILD CREDITS

A. CHILD TAX CREDIT
Child tax credit could be worth up to $1,000 per qualifying child. The question is who considers qualifying child.
SOME of the criteria to be met for such qualification include BUT NOT limited to:

To Qualify, the child MUST HAVE BEEN under age 17 at the end of 2010.
To Qualify, the child MUST BE YOURS or LEGALLY ADOPTED.
To Qualify, the child MUST NOT HAVE provided more than half of their own SUPPORT.
To Qualify, the child MUST HAVE BEEN reported DEPENDENT on your federal tax return.
To Qualify, the child MUST BE a US Citizen, Legal Resident Alien or US National.
To Qualify, the child MUST HAVE LIVED with you more than half of 2010, generally.

B. CHILD AND DEPENDENT CARE CREDIT
Such tax credits range from $600 to $1,050 per child UP TO two children. To qualify for $1,050, the parents must have earned $15,000 or less. In addition, to qualify for such tax credit, usually, both parents MUST, usually, work.

CAVEAT

This is a very LIMITED description of such tax credit.

3. EDUCATION CREDITS

A. AMERICAN OPPORTUNITY CREDIT (REFUNDABLE)

The full credit of UP TO $2,500 is available, FOR 40% of tuition and fees, to individuals whose MODIFIED adjusted gross income is $80,000 or less or married couples filing jointly with MODIFIED adjusted gross income of $160,000 or less. The tax credit covers cost of books, supplies, and course-related equipment. This tax credit is available ONLY for undergrad and not for GRAD school. Nonetheless, one can take advantage of such tax credit for the four years of college.
The best aspect of such tax credit id even if there are no such expenses, $1,000 of the tax credit is refundable.

B. LIFETIME LEARNING CREDIT(NON-REFUNDABLE)

As the name signifies, this tax credit covers more than four years of college and could be used for graduate school or even learning job skills. The amount is up to $2,000 and can be used only for tuition and fees.

DISCLAIMER

This article in no way supplants specific facts and circumstances of a case and in no way provides an exhaustive description, delineation, or articulation of such rather salient subject.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

Actor's Film Performance: Pre, Post and Concurrent Issues with Performance

2011-04-04T16:49:00.000-07:00

Doron F. Eghbali Entertainment Law

Actor's Film Performance: Pre, Post and Concurrent Issues with Performance

Thursday, March 31, 2011 by Doron F. Eghbali

Actor's film performance starts not from principal photography and does not end with shooting the scenes. Such performance actually starts from actor's reading of the script and deciding to accept the role to control or approval over the script to the actor's make-up and physical appearance in the film. In addition, such actor's performance encompasses the final editing and the way the final product is altered or diminished, thereby altering or diminishing the actor's performance.

ISSUES RELATED TO PRE-PERFORMANCE

1. APPROVAL/CONTROL OF SCRIPT BY ACTOR OR LACK THEREOF

Between actor and producer inevitably exists some kind of friction as to the amount of control or approval each one contractually can exert over the project. On the one hand, actor prudently desires to ensure the role accepted is the role actually performed after numerous revisions of the script.
On the other hand, producer desires flexibility to modify or alter the script depending on fluid conditions such as:

Casting Issues: Reducing the significance of some roles to accommodate others. For instance, the possibility of altering or modifying the script to accommodate a star actor and tailor the dialogue to showcase a particular's star's strengths rather than weaknesses.
Budgetary and Contractual Issues: It all comes down to money. It is often possible the producer concludes it will be too expensive to shoot in certain locations or it is absolutely necessary to cut the script to comply with censorship or studio guidelines or the film is literally too long.
Balancing Issues: The reality is there are so many other participants involved in creating a movie and there are not just the actor and producer. In fact, myriad stakeholders ranging from studio, distributor to financiers, director, co-stars and possibly writers desire to exert some kind of control over the film. In such situation, the producer prudently seeks to balance such often divergent interests.

2. MAKE-UP AND PHYSICAL APPEARANCE

Actors rightly are concerned about any drastic transformations demanded by the role and not disclosed to them in full or in part. Such transmutations might not be befitting the actor's its public persona and whether or not such persona is appropriate for a particular role.

ISSUES CONCURRENT WITH PERFORMANCE

There are a couple of issues that often arise concurrent with actor's film performance. Such issues relate to the dynamics between the actor and other personnel especially other actors on the set AND rarely the actor's desire to have exclusive control over the performance.

1. Actor's Dynamic with Other Film Personnel

Actor's concern might not include only the actor's relationship with other actors, but also such dynamic with the director and production personnel. In such instances, problems might arise as to the compatibility, stature compared to others and even the quality of their work. For instance, some actors might demand - depending on their level of control laid out in their contract - a particular director, photographer, cinematographer or star-quality supporting cast.

ISSUES RELATED TO POST-PERFORMANCE

As indicated before, the salient issue connected with an actor's post-performance concerns edition of the movie. In fact, it is well known that in Hollywood "films are made on the cutting-room floor." In such scenario, it is prudent actor demands and receives assurances the end product audiences will see would not be very different from what the actor reasonably came to believe. Undoubtedly, the producer, as always, longs for the most possible flexibility to ensure the ultimate film is not hamstrung by contractual obligations.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

Should We E-File Our Taxes Or Not?

2011-03-31T05:20:00.000-07:00

Doron F. Eghbali Tax Law Blog

Should We E-File Our Taxes Or Not?

Wednesday, March 30, 2011 by Doron F. Eghbali

One of the most basic and rather vexing questions confronting taxpayers - especially the affluent - might be the choice between e-filing or filing paper returns. The IRS has slowly but steadily promoted e-filing and it seems e-filing will soon supplant to a very large extent paper filing. Nonetheless, some taxpayers might balk at e-filing. Let us explore, to some extent, the pros and cons of e-filing and paper filing.

ADVANTAGES OF E-FILING

1. Ease and Less Prone to Error

The most obvious advantage of e-filing is the ease with which returns are filed mostly free on IRS website and spares taxpayer going to the post office. In addition, e-filing makes it possible to catch errors before it is too late such as incorrect birth dates, social security numbers and even names. Such hypersensitivity would certainly foreclose problems down the road.

2. Fast Notification of Return Acceptance and Easy Payment

In addition, within a day or so, e-file taxpayers would be notified of acceptance of their return and would not have to wait a relatively long period for such notification or even entertain the loss of their returns. Moreover, any taxes owed could be easily withdrawn from your bank or sent via check.

3. Fast Refunds

The sweetest part of e-filing is to receive tax refunds in your bank account directly and relatively faster. Depositing tax refunds directly into bank account is relatively safer, too.

DISADVANTAGES OF E-FILING

1. E-Filing Not Possible or Probably Not Advisable

Sometimes, e-filing is not possible or advisable - for example - for taxpayers taking adoption credits, or first-time home buyer credits, among others. In addition, if a power of attorney is required, e-filing might not be the most prudent approach.

2. Internet Security Concerns

It is a cogent argument for taxpayers with lots of information fearful of security breach to paper file. In addition, some taxpayers might not like the idea of entrusting their information to vendors.

3. Audit Concerns

Although there seems to be no direct correlation between e-filing and being audited, a 2009 report from Congress's Joint Tax Committee linked e-filing to higher chances of being audited, stating cost cutting would enable IRS to "make use of its computer infrastructure to target returns with audit potential."
Hence, a lot of factors should be considered before deciding whether to e-file or not.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More information, Please, Visit: HERE.

Some HARD TO IMPOSSIBLE Help for Underwater Homeowners

2011-03-29T03:14:00.000-07:00

Doron F. Eghbali Real Estate Law Blog

Some HARD TO IMPOSSIBLE Help for Underwater Homeowners

Monday, March 28, 2011 by Doron F. Eghbali

Despite auspicious prognostications as to the state of real estate market long after the "Great Recession" in 2008, today still the real estate market seems to be reeling from similar turmoil. In fact, despite some specious improvement in the status of real estate market for some time, again, data portend weakening or worsening real estate climate. Hence, the government with banks are speciously to the rescue. Let us explore some of the programs offered by the government and banks for struggling homeowners with properties worth less than what the homeowners owe on the property. Nonetheless, such rescue maybe hard to impossible for many.

SOME BACKGROUND ON STILL DECLINING REAL ESTATE MARKET

For relatively a short period of time last year, it seemed real estate prices were increasing as the number of underwater homeowners were declining. Nonetheless, according to fourth quarter data from CoreLogic, nearly 23% of homeowners with a mortgage are currently underwater. In addition, another 2.4 million homeowners are literally on the brink of joining the nearly 23% with only 5% equity in their homes since it is very likely home prices in the coming year will decrease by another 10% or so.

SOME BANK PROGRAMS TO HELP SELECTED HOMEOWNERS

This looming real estate catastrophe, as illustrated, has propelled banks to prudently conclude reducing or deferring payments through loan modifications or similar programs are worth losing a lot more down the road. Nonetheless, such programs are rather stringent and require homeowners to pass some rigid guidelines devised to spuriously foreclose fraud. Let us explore some of such programs and their stringent requirements.

1. 2% CUT IN INTEREST PAYMENTS OR LOAN EXTENSION TO 40 YEARS: One of the bank programs for homeowners would cut interest rates by 2% or extend loan period to 40 years, thus reducing monthly payments. To be eligible, homeowners MUST prove with legitimate documentation a good reason for having trouble making payments. Such good reason could be job loss, pay cut, large medical expenses or other legitimate unanticipated losses. For the 2% cut, the bank MUST participate in the government's Home Affordable Modification Program (HAMP).

2. PRINCIPAL DEFERMENT OR PARTIAL FORGIVENESS OF PRINCIPAL: For homeowners delinquent on their payments and whose home values have greatly suffered, some help might be available in forms of principal deferment where large portion of their loan is set aside to be paid out later or partial forgiveness of their principal amount. To be eligible, the following requirements MUST be met:

Income Limitations Related to Mortgage Payments: Homeowners to be considered for such bank program must have their monthly mortgage payment exceeding 31% of their pre-tax household income. AND,
Principal Reduction Limitation: Homeowners to be considered for such bank program must have their principal balance on a single family home not exceeding $729,250.

NOTE: Principal loan forgiveness, as a whole, is often not a substantial amount relative to amount owed.

SOME OTHER HELP FOR STRUGGLING HOMEOWNERS

The following provides a TRUNCATED list of some other options available to homeowners. Please, note this list is PARTIAL and LIMITED in detail and scope.

Short Sale: Despite tax ramifications of short sale, banks are now relatively more amenable to such proposition where property is sold less than what is owed.
Refinance: Through government's programs, refinancing could further help out struggling homeowners in SOME situations.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertain ment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, visit: HERE.

What Are Some Basics of Film Director's Credit: "Directed By" or "Film by"?

2011-03-10T18:40:00.000-08:00

Doron F. Eghbali Entertainment Law

What Are Some Basics of Film Director's Credit: "Directed by" or "Film by"?

Thursday, March 10, 2011 by Doron F. Eghbali

Unsurprisingly, film director's credit, to a large extent, is governed by Director's Guild of America (DGA). Nonetheless, such DGA governance provides only minimum requirements and protections. As importantly, not all movies fall within the purview of DGA and for such movies all the minutia of credit must be negotiated . Accordingly, directors are well advised to exact more contractual concessions above and beyond DGA requirements, to the extent possible, and even on some occasions negotiate all the elements of credit.

1. PLACEMENT OF "DIRECTED BY" CREDIT

"Directed by" credit, in accordance with DGA requirements, MUST be the last credit in the main titles. If all credits follow the picture, no main titles, then "Directed by" credit MUST be the first of such credits following the movie. As importantly, if film falls outside the purview of DGA, then such details should often be negotiated.

2. APPEARANCE, SIZE, AND WIDTH OF "DIRECTED BY" CREDIT

Other important issues governed by DGA or contemplated in negotiations include but not limited to:

Appearance: No other credit should appear on the screed aside from "Directed By" credit. In other words, the "Directed by" credit should be on a separate card.
Size: DGA requires that "Directed by" credit not be smaller than 50 percent of the size of type used for the film's title. Nonetheless, with deft negotiation such size could come much closer to the film title's.

3. POSSESSORY CREDIT: "FILM BY"

In addition to "Directed by" credit, it is often the case directors might be bestowed upon another credit, separate from "Directed by". Such credit is referred to as the Possessory Credit or "Film by" credit. Such credit, often, appears in of the two following forms:

"A Film by [Name of Director]"
"A [Name of Director] Film"

CAVEAT

Possessory credit is NOT governed by DGA and directors aspiring to have it MUST negotiate all elements of its appearance, color, width, size, boldness and its place on the screen, among other necessities.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More information, Please, Click: HERE.

What Are Some Damages in Breach of Real Estate Sales Contract?

2011-03-08T19:03:00.000-08:00

Doron F. Eghbali Real Estate Law

What Are Some Damages in Breach of Real Estate Sales Contract?

Tuesday, March 8, 2011 by Doron F. Eghbali

It often happens parties fail to fully perform their contractual obligations in sale of real estate. Often, the most immediate consequence of such contractual breach is the nature and amount of damages, if any, PLUS other conceivable remedies available at law and in equity. Let us explore, to some extent, some detail of such damages.

1. "GENERAL" LOSS OF BARGAIN DAMAGES

The standard measure of loss of bargain damages, for a TOTAL BREACH, would encompass the difference between the agreed contract price and the market value of the property on the date of breach. For instance, if a property was sold for $100,000 and at the time of the total breach by buyer, the property was worth $60,000, then the seller - as the non-breaching party - would presumably be entitled to $40,000 in losses. Likewise, if the value of the property had risen to $140,000 on the date of breach, if the seller is in total breach, the buyer is entitled to $40,000.

SOME NOTES FOR LOSS OF BARGAIN DAMAGES

Loss of bargain damages is not as straightforward as it seems. In fact, the following scenarios illustrate the gulf of opinion on some seemingly straightforward situations.

A. Future Market Fluctuations, Generally, Irrelevant in Loss of Bargain Damages

What is astonishing in loss of bargain damages is the irrelevance of future real estate fluctuations, generally, in a total breach by a seller. This means, generally, if the purchaser in the above example has to purchase a property after the seller's total breach for $150,000, the purchaser - the non breaching party - would be out of luck. The purchaser, generally under loss of damages principle, would be entitled to only $40,000, the difference between the contract price and the market value of the property on the date of the breach.

B. Seller's Good Faith But Inability to Convey Good Title Could Impact Recovery of Loss of Bargain Damages

Courts are sharply divided as to whether a purchaser can recover loss of bargain damages when the seller acted in good faith but was unable to convey satisfactory title. Almost half of the cases - in such situation - limit purchaser's recovery to return of earnest money or other payments with interest PLUS other incidental damages such as abstract, title examination and loan application costs.

2. "SPECIAL" DAMAGES

There are two categories of special damages which non-breaching party could recover. Both of theses damages MUST satisfy foreseeability test. Foreseeability in this context means such damages were within the contemplation of the contract when made.

A. EXPENSES IN RELIANCE ON THE CONTRACT

The first category is those expenses non-breaching party incurred in reliance on the contract. Such expenses could include but is not limited to:

Seller's Eviction of an Actual Tenant
Refurbishment of the Premises in Accordance with Contract's Specifications
Broker's Commissions
Title Search
Examination Fees
Surveys
Document Drafting Expenses
Appraisals
Traveling to and from the Property
Moving In or Out of the Property
Expenses for Arranging Financing

B. LOSS OF PROFIT
Often, purchasers tend to acquire real estate hoping to make profits from sale, rental, development or even flipping it. In such circumstances, the purchaser might be able to recover loss of profit in addition to loss of bargain damages and expenses, articulated above. Nonetheless, purchaser MUST overcome several obstacles, including but not limited to:

FORESEEABILITY: The loss of profit incurred by the purchaser MUST be foreseeable, i.e. within the contemplation of parties. This requirement is extremely important and argued and contested extensively.
REASONABLE CERTAINTY: The loss of profit must be proven with reasonable, not total, certainty. Courts are typically cynical of such claims. Nonetheless, if proof is cogent, recovery might be possible.

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DORON EGHBALI is a Partner at the Law Offices of Law advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertain ment Law. Doron Can Be reached at: 310-651-3065. For More Information, Please, Visit: HERE.

How to Launch Your Business with Prudence and Caution

2011-03-07T13:47:00.000-08:00

Doron F. Eghbali Business Planning Law

How to Launch Your Business with Prudence and Caution

Monday, March 7, 2011 by Doron F. Eghbali

Launching a business could be quite daunting as economy is still not on a sound footing and credit market not yet amenable to lending. Yet, for those entrepreneurs yearning to intelligently and prudently launch their small business, there are ways to make this rather impossible task a manageable one with prudence and caution.

1. HAVE A TRUSTWORTHY RELIABLE ADVISORY BOARD

Instead of asking numerous people their opinions of what you should do and how you should go about it, it is more prudent to assemble an advisory board. The advisory board would consist of experienced entrepreneurs with proven business acumen and highest degrees of trustworthiness and ethics. Assembling your advisory board would be of paramount of importance since if you keep asking disparate experienced entrepreneurs for a long time, you will probably receive some variation of the same advice. This will delay launching your business and erroneously create unfounded doubts in your mind as to feasibility and prudence of your plans. To eschew such problems, it is advisable to rely on your assembly of experts for continued guidance and monitoring of your business.

2. HAVE SUFFICIENT CAPITAL, NOT TOO MUCH NOT TOO LITTLE

Granted, sufficient capital is vague and undefined. What does it mean to have sufficient capital? What is sufficient?
The bottom line is to calculate your start up costs including BUT NOT limited to:

Paying for Renting space
Paying for Buying Equipment
Paying for Buying and Storing Products
Paying for Salaries
Paying for Health Care
Paying for Taxes
Paying for Advertisement
Paying for Insurance
Paying for Utilities
Paying for All Costs Until Your Business Turns Profitable

SALIENT NOTES

A. NON-EXHAUSTIVE LIST

The list is, by no means, exhaustive. There are so many other costs and expenses to consider. As reiterated before, you should have sufficient capital not only for launching your business, but also for being able to sustain your business until your business becomes profitable and is no longer bleeding cash.

B. NOT TOO LITTLE CAPITAL

As much as this is extremely important not to raise or spend too much money on advertisement, trade shows, website and promotions, it is, likewise, extremely important to always, keep some money for rainy day. You need to have sufficient capital to help you get through difficult days.

C. NOT TOO MUCH CAPITAL
When investors realize you have not been cautious and prudent with their hard-earned money, they will certainly think twice to dole out more money. This means your business will be bereft of any available capital while prudent cautious investors are deserting you.

3. HAVE A BUSINESS PLAN

For most businesses, devising and implementing a prudent business plan is a sine qua non for survival and ultimately success. Especially, if your business needs to raise significant funds and takes a year or so to turn profitable, investors and others will require a business plan detailing how you plan to operate, spend money, raise money, sustain and grow and return their money with profit.

4. HAVE A TRUSTWORTHY RELIABLE BUSINESS PARTNER

Despite the problems associated with having a partner, launching a solo business is really difficult. Having a well-written agreement would make it possible to partner up with reliable trustworthy people who complement your skills and, to some extent, reduce your responsibility to solely shoulder launching and maintaining your business. Trust, expertise and reliability are the bedrock of a successful partnership.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More information, Please, Visit: HERE.

Some BASICS of Actor's Agreements

2011-03-03T16:57:00.000-08:00

Despite the fact Screen Actor's Guild (SAG) governs and regulates actor's working conditions, travel and residuals and even minimum fee requirements, not all actors are SAG members and not all production companies are SAG signatories. In addition, principal photography might occur in foreign jurisdictions outside SAG purview and high-level actors often negotiate far beyond SAG requirements. Hence, let us explore some basics of actor's agreement.

1. CONDITION PRECEDENTS TO ACTOR'S CONTRACTS

There are usually some condition precedents to actor's contracts. This means unless and until such conditions are met, the producer may not be contractually required to perform under the contract.
Some of the basic condition precedents include but are NOT limited to:

Obtaining and being qualified for insurance at NORMAL premiums. This requirements could be overcome if actor during negotiation agrees to pay for any higher premium out of pocket, if acceptable.
Obtaining appropriate work visas.
Obtaining and providing pertinent tax documents.

2. ACTOR'S COMPENSATION

A. SAG MINIMUMS

SAG sets out minimum fees for actors, nonetheless, high-end actors often surpass such minimums.

B. ACTOR'S PREVIOUS COMPENSATION

Similar to writers, the producer or studio will consider what the actor has been paid for previous rather similar projects. What the actor has earned in the recent past for similar work is often used as a FLOOR for negotiations. Such quotes are often given either on per picture basis OR on per week basis. Other factors - some of which - discussed here are also considered.

C. ACTOR'S ACHIEVEMENTS OR LACK THEREOF

Another extremely important consideration - in an actor's compensation - is any accomplishments garnered so far, especially, just prior to the project at issue. For instance, winning an Academy Award, Golden Globe or accumulating critical acclaim or even box office success are salient consideration in obtaining more dollars. In addition, some actors might attract viewers in foreign countries, so that they possess "foreign value".

D. ACTOR'S WILLINGNESS TO FORGO HIGHER COMPENSATION FOR "OTHER" REASONS

Often, actors are willing to accept less money that they "deserve" in exchange for other considerations. Such considerations often revolve around actor's willingness or rather penchant for working with a particular director or on a particular project. In fact, in such situations, there are more immediate considerations than just "deserved" compensation. In such circumstances, actors might agree to more back-end in exchange for less up-front, especially when the projects budget warrants such move.

E. ACTOR'S EXTENT OF INVOLVEMENT IN THE PROJECT

Another important consideration in actor's amount of compensation is the role and the length of such performance. It is easy to fathom the more complicated, prominent and lengthier a role, the more compensation the particular actor receives or should receive.

3. ACTOR TO GET PAID FIRST, IF POSSIBLE

It is incumbent on actor's representatives to ensure the compensation due actor be placed in ESCROW. This is especially of paramount of importance when the producers are independent, foreign or not-financially stable. Despite the subtlety of this issue, most producers should concede if actor, in the absence of escrow, flatly refuses to perform. In fact, actor does not want to start acting and after investing considerable time, energy and capital, with dismay realizes producer cannot or does not pay.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.
Posted at 16:31 PM

What Are Some Basics of Film Producer's Compensation?

2011-03-01T07:11:00.000-08:00

Producers' compensation, similar to directors', may encompass disparate elements ranging from development fee to guaranteed fee to pay-or-play. Let us explore these salient components in some detail.

1. DEVELOPMENT FEE

Development Fee is extremely important since it might be the only money producer ACTUALLY is paid. This is often because so many projects are produced, but FEW are developed.
SOME BASICS OF DEVELOPMENT FEE

AMOUNT OF PAYMENT: If there is any payment, then most studios customarily pay $25,000. This is important to note such amount could range from $10,000 to $60,000.
MANNER OF PAYMENT: Development Fee is payable, typically, half upon commencement of services and half upon the earlier of (1) abandonment of the project or (2) the studio proceeding to production.

2. GUARANTEED FEE OR PRODUCING FEE
This is extremely important to ascertain there is NO union-prescribed minimum producing fee. Hence, studios are free to pay as low a fee as parties are willing to negotiate.
Accordingly, such negotiating prowess depends - subject to Federal Minimum-Wage Statute - on variety of factors, including but not limited to:

The Box Office Success of Any Films the Producer Has Been Associated with.
The Critical Success of Any Films the Producer Has Been Associated with.
The Nature and Scope of Services the Producer Will Provide.

SOME BASICS OF GUARANTEED FEE

MANNER OF PAYMENT

The Producer's Producing Fee LESS Development Fee is paid based on the following schedule for more VETERAN Producers:

20 percent of the Guaranteed Fee payable during 8 weeks immediately preceding principal photography, typically in weekly installments
60 percent of the Guaranteed Fee during the period of principal photography
10 percent upon completion of the director's last cut
10 percent upon delivery to the studio of the answer print

Such fee schedule is referred to as 20/60/10/10.

3. PAY OR PLAY

A Producer needs to identify the point in time at which producing fee becomes GUARANTEED, subject ONLY to default, disability, death and force majeure.
SOME SALIENT POINTS ON PAY OR PLAY

TERMINATION AND CREDITS: Studios often contend even if they terminate producer without cause, then they have no obligation to accord credit to such producer. On the other hand, Producers feel even if they are terminated early, they are entitled to credit. Such tension might escalate especially when the Producer brought the project to the studio. Such point is usually governed by the Producer's contract and NOT union arbitration. Thus, it is incumbent upon Producers to seek competent knowledgeable legal counsel.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Contacted at: 310-651-3065. For More Information, Please, Visit: HERE.

How To Sell Your House with Prudence and Caution

2011-02-25T15:46:00.000-08:00

Doron F. Eghbali Real Estate Law

How To Sell Your House With Prudence and Caution

Friday, February 25, 2011 by Doron F. Eghbali

A lot of us seeking to sell our houses, have wondered what we should do except, possibly, hiring a real estate agent and thinking about the day after when we have sold the house. In fact, without having specific plans and objectives, selling a house might not be a pleasant experience and we might not obtain the dollar amount we reasonably deserve. Hence, to facilitate the selling process, let us explore the steps we should take.

SETTING SPECIFIC OBJECTIVES AT THE OUTSET

Do you want to wait for the right seller and the right market to sell?
Do you want to sell hassle free and get what you put into the property?
Do you want to wait, wait and wait for the seller you have in mind, but the market may not bring you in the foreseeable future?
Do you want to and can you move out on a few weeks notice?
Do you have a place to move into?
Do you want to time your sale of you home and purchase of another?

SETTING A REASONABLE SALES PRICE

Do your homework.
Do not rely on what real estate agents just tell you. It might be you are told a house is worth a lot, so that you list it. Just, they ask you later to lower the price to sell it.
Do not overprice it since it might languish in the market.
Do obtain a professional reliable appraisal, if possible.

SETTING SIGHTS ON FLAWS AND PROBLEMS IN THE HOUSE

Do inspect your house carefully.
Do identify any problems or flaws, such as: leaky roof, dry rot, asbestos, flooded basement, termites, septic problems, etc.
Do notify the potential buyer of such problems or flaws.
Do take disclosure very seriously since if you do not disclose such and possibly other problems, your sale might be sued for fraud, in a number of states.

SETTING YOUR HOUSE IN ORDER COSMETICALLY

Do major repair work before the sale, if it economically makes sense.
Do beautify your walkway outside your house. Plant some flowers and trim shrubs.
Do paint inside, if possible.
Do remove extra stuff from your house to make it look neater and larger.

SETTING YOUR SIGHTS ON WHAT IS LEFT AND WHAT IS TAKEN

Do decide what you are leaving behind and what you are taking with you.
Do leave behind drapes designed for your house and custom cushions. Such incentives attract buyers to be amenable to your pricing or even concerns, to some extent.

SETTING YOUR FINANCING IN PLACE

Do calculate what you pocket and what your expenses are.
Do calculate real agent's fees up to 6% of the selling price.
Do calculate the amount you owe the bank and the net, you receive after all these and probably other expenses, such moving, packing, etc.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at 310-651-3065. For More Information, Please, Visit: HERE.

Merchandising and Commercial Tie-Ins in Entertainment Transactions

2011-02-24T16:01:00.000-08:00

Merchandising and commercial tie-ins are relatively related concepts in entertainment transactions to further optimize dollar amount by promotion of a work and marketing of products. Let us further explore these two concepts and the related concerns from the perspectives of various parties involved in an entertainment transaction.

SOME BACKGROUND ON MERCHANDISING AND COMMERCIAL TIE INS IN ENTERTAINMENT TRANSACTIONS

1. WHAT IS MERCHANDISING?
Merchandising is the marketing of a product that maybe based on the underlying work. Such examples could encompass posters or dolls based on characters in the work, clothing inspired by the work or only the work's title or artwork.

2. WHAT IS COMMERCIAL TIE-IN?
Commercial tie-in is a commercial arrangement between the marketer of the work and the marketer of a product in which the product marketer provides advertising for the work as part of advertising for its own product. Hence, the marketing of the product is "tied in" with the marketing of the work. For example, fast-food chains often advertise giveaways of toys or cups featuring a new movie and its characters, if possible.

SOME OF ARTIST'S CONCERNS IN MERCHANDISING AND COMMERCIAL TIE-INS
Despite the fact merchandising and commercial tie-ins could be a bonanza for most parties involved, artists should exercise caution before permitting how their name and features are used. Some of the concerns include, but not limited to:

APPROPRIATE REMUNERATION MERCHANDISING USE: Artists are frequently used to be spokespersons for products or endorse products associate with the underlying work. Hence, it is appropriate for the artists to receive remuneration for use of merchandising associated with their endorsement or publicity.
APPROPRIATE EXPOSURE AND NOT OVEREXPOSURE: In this area, both artists and sponsors share a common concern: overexposure of the artist. For artists, overexposure related to act as spokesperson or endorser, might make audiences perceive the exposure as quote "selling out" and overexposure may diminish the financial price of artist's endorsement for other works. For sponsors, overexposure might make audiences or potential customers perceive the merchandise as not being genuine. In fact, it is customary to specify the artist's name and likeness will not be used in a manner that won't constitute product endorsement.

SOME OF MARKETER'S CONCERNS IN MERCHANDISING AND COMMERCIAL TIE INSThe ensemble of merchandising and commercial tie ins represent great financial opportunity for the marketer. However, the marketer should exercise caution to avoid any potential litigation, to the extent possible. Some of Marketer's concerns are as follows:

APPROPRIATE ACQUISITION OF ARTIST'S NAME AND LIKENESS: The markets should ensure it has acquired the appropriate rights to use the artist's name and likeness for both merchandising and commercial tie ins. It is extremely important the contract clarifies the distinction between the two and their compensation, probably even the lowest possible royalty for merchandising.
APPROPRIATE DISTINCTION BETWEEN WHO OWNS WHAT: The marketer should also ensure who owns the character's identity and who owns the character's personality as portrayed by the artist. The latter might be subject to a separate and even higher royalty.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. He Primarily Practices Business, Real Estate and Entertainment Law. Doron Could Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

CAUTION: Home Equity Loan Perils Still Lurking

2011-02-24T15:59:00.000-08:00

Recent statistics indicate a slow but, rather, steady revival of home equity loan originations for some select group of homeowners by some regional banks. Nonetheless, homeowners should be extremely mindful of such offers and exercise caution before tapping into their home equity. Let us explore some of the perils still lurking for the unwary.

SOME BACKGROUND

Some homeowners confronting budget shortfall used to tap into their home equity as a piggy bank to finance their necessities or sometimes trappings. Such loans became an albatross around the neck of such homeowners when the price of their properties dropped precipitously combined with another calamity namely when a substantial portion of such people either lost their jobs or wold not earn as much as before to properly pay their financial obligations. This problem was exacerbated further when banks tightened their lending spigots and would not refinance such loans or would lend out more loans to satisfy previous loans. This vicious cycle continued for about three years since the "financial collapse" of 2008.
Now, there are some signs some regional banks have started to loosen their lending spigots and allow some select group of homeowners to again tap into their home equity to acquire loans or lines of credit.

SOME PITFALLS FOR THE UNWARY

1. PERIL OF FURTHER PLUNGE IN THEIR NEIGHBORHOOD HOME PRICES
Probably, one of the most salient perils of tapping into one's equity is the non-remote possibility of further drop in home prices of the loan's recipient. This risk is extremely paramount especially in areas where foreclosure is alarmingly mounting.

2. PERIL OF FURTHER STEEP PRICE FOR HOME EQUITY LOANS OR LINES OF CREDIT
Compared to car loans and home mortgages, home equity loans and lines of credit are still, generally, very expensive.
Granted, it might be argued, home loans or lines of equity might be better than refinancing since banks might waive origination fees or lines of credit. Nonetheless, most banks instead impose other requirements on the borrower such as borrowing a minimum amount, or keeping a line of credit or loan OPEN for a set number of years.

SALIENT NOTE
Despite the perils just enunciated, some homeowners might find such lines of credit or loans helpful. For example, if homeowners do not need the cash on hand for renovation or other emergencies such as aging parents' medical bills, then with relatively lower interest rates now, such loans and lines of credit might be worth more in 10 years when such rates are reasonably expected to rise further.

SOME CAVEAT
Still, banks impose rather stringent requirements on home equity loan borrowers. For instance, borrowers should have at least a 720 FICO score, at least 20% equity in the home, and income verification such as pay stubs, for the past two years.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. He Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

How To Protect Director's Compensation in Entertainment Contracts

2011-02-24T15:50:00.000-08:00

Director's role in conceptualizing, structuring, animating and executing a successful motion picture production is, to a great extent, incontrovertible. Nonetheless, such prominent role could perpetuate frictions among various players and leave the director even bereft of "proper" compensation. Let us explore to some extent how directors should navigate the maze of compensation universe and protect their rights, to the extent possible.
SOME BACKGROUND
Director's compensation could be negotiated like authors. Nonetheless, director's compensation is negotiated based on the following prescriptive standards:

DURATION OF SERVICES: According to the duration of services rendered by Director.
COMMERCIAL SUCCESS: According to the production's commercial success, namely additional contingent compensation.
MEDIA USE OR REUSE: According to the use or reuse of media encompassing residuals fees.
EXPENSES: According to the director's expenses for directing the motion picture.
DGA MANDATED PAYMENTS: According to DGA (Directors Guild of America) mandated pension, health and welfare payments.

DIRECTOR'S COMPENSATION
1. FIXED FEE COMPENSATION
It is customary for directors to receive compensation for their services according to the duration of such services. This means the director receives a flat sum of money for a set period of time. When the director has to work beyond the set time, for instance, for periods of production or post-production, the set fee could be increased by a prorated weekly salary.
NOTE
This set fee, generally, is separate from other compensation director should or could receive. The set fee is generally sacrosanct against other parts of a director's compensation package.
2. CONTINGENT COMPENSATION
In addition to fixed fee, it is essential for director to request and receive some compensation based on the production's commercial success. Such contingent compensation could be based on a portion of "net profits" or gross participation. The most successful contingent compensation could be tied to a share of gross profits as collected by the distributor.
NOTE
This is important for the director to be mindful if the producer is an independent producer. In such circumstances, it would be prudent to determine if the director's contingent compensation is defined as to level of the net proceeds or gross profits received by the producer, distributor or not. As enunciated earlier, it is usually the best to negotiate for a sizable portion of the gross profits as collected by the distributor. Nonetheless, sometimes, directors and their agents should be pragmatic and accept other reasonable offers give the totality of the circumstances.
3. REUSE OR RESIDUALS FEES COMPENSATIONA director may ask for more compensation, in addition to fixed fee and contingent compensation, in the form of residuals fees. Such fees often refer to use of the motion picture the director directed for use in different mediums or repeated use of the motion picture. For instance, a director may negotiate and receive a share of books, video games, theatrical releases based on the motion picture.
NOTE
For productions subject to DGA jurisdiction, usually, a mandatory residual schedule is used for additional uses in domestic or foreign territory.
SALIENT NOTE
This article represents only SOME of the issues and concerns related to directors' compensation in entertainment contracts. You may contact Doron Eghbali, Esq. with any questions.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. DORON Primarily Practices Business, Real Estate and Entertainment Law. DORON can be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

What Are Some Latent S Corporations Pitfalls?

2011-02-24T15:49:00.000-08:00

S Corporations could be regarded as favorable business structures since shareholders could avoid double taxation and take advantage of protecting their other assets against liability except the ones invested in the S Corporation. Nonetheless, there are salient caveats before embarking on forming an S Corporation as opposed to other forms of business entities, especially LLCs. Let us intelligently and incisively explore some of the issues in more depth.
SOME BACKGROUND ON S CORPORATIONS
One of the most advantageous characteristics of S Corporations is the ability to avoid double taxation i.e. paying taxes at both corporate and individual level. In S Corporations, income is taxed like partnerships. Each item of income is "passed through" directly to the shareholders and it is not taxed at all at the corporate level.
This "pass-through" advantage provides owners of S Corporations with the advantages of corporate form such as centralized management and limited personal liability, while avoiding double taxation.
SOME LATENT PITFALLS IN S CORPORATIONS

S CORPORATION GENERATION OF OPERATING LOSSES: If a business is expected to generate losses, LLC could be more advantageous than an S Corporation. This is because S Corporation shareholders cannot write off losses exceeding their actual investments. In other words, S Corporation shareholders can write off losses equaling their investments PLUS any other amounts they are "at risk". On the other hand, LLC members could write off investments equaling their investments PLUS their ALLOCABLE SHARE OF LLC DEBT.
S CORPORATION ALLOCATION OF LOSSES AND PROFITS: In S corporations, profits and losses are distributed among shareholders in proportion to their stock ownership throughout the year. On the contrary, generally, LLC members could agree to allocate profits and losses disproportionately. This means LLC members could agree to allocate profits on one basis and allocate losses on another basis.
S CORPORATION LIMITATION TO ONE CLASS OF STOCK: S Corporation are limited to one class of stock while LLCs can have different financial interests.
S CORPORATION PROSCRIPTION FOR FUTURE SERVICES OR UNSECURED PROMISES: S Corporations shareholders are proscribed from becoming shareholders in exchange for rendering future services or giving unsecured promise to pay. In contract, LLC membership can be obtained through future services or any other obligation to pay including a promise to pay.

CAVEAT
This article provides ONLY SOME of the issues relevant to S Corporations. For any questions, you may contact Doron Eghbali, Esq.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. He Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

Why and How Are Condition Precedents Salient in Real Estate Contracts?

2011-02-24T15:48:00.000-08:00

Condition precedents play an integral role in protecting disparate parties in contractual transactions. Such salience comes to the fore, especially, in real estate transactions where parties do not have substantive control over financing or other requirements laid out in the contract. In the absence of well-drafted enforceable condition precedents, parties are left bereft of real protection. Let us explore, to some extent, such salient building block of contractual transactions.
SOME BACKGROUND
Condition precedent is referred to a condition which must take place before a party to a contract has to perform. If a condition precedent does not take place, no duty of performance arises and no tender is required AND the party protected by the condition precedent is not in breach, if the party does not perform. In other words, in a real estate sales contract, if the contract encompasses a condition precedent specifying the buyer must first acquire a bank loan, and then the buyer is obligated to pay the seller, if the bank does not approve the buyer or the loan process takes longer, the buyer is not in breach, if the seller does not buy the property, with the proviso the condition precedent is enforceable.
Condition precedents in real estate contracts are not only limited to buyers. Sellers also insert a variety of condition precedents to ensure they are not bound to perform if certain conditions do not occur. For instance, sellers might need a way out of the contract without incurring any unreasonable costs, if the buyer's credit references are not satisfactory for the seller OR if the seller cannot find real estate for 1031 tax exchange, living or other reasonable reasons.
DRAFTING AND ENFORCING CONDITION PRECEDENTS IN REAL ESTATE CONTRACTS
There are several points to consider while drafting enforceable condition precedents. The following are just a few of such considerations:
1. LENDER'S APPROVAL: "GOOD FAITH" AND "REASONABLE EFFORTS"
It is incumbent on attorneys and clients alike, to include in real estate contracts a condition precedent, i.e. conditioning the sale upon LENDER'S APPROVAL. This point seems to be easy, but often overlooked.
CAVEATS ON LENDER'S APPROVAL CONDITION PRECEDENTS

The condition precedent cannot be entirely in control of one party without no qualifiers. In such circumstances, there is no mutuality of obligation and NO PARTY CAN ENFORCE THE CONTRACT. Usually, the courts dislike this result and often construe the contract as to deny the party with unfettered discretion to perform the contract. A party who has failed to make a good faith effort to obtain financing, is found LIABLE even though the obligation to perform the contract as a whole has not arisen. Such breach is typically treated as a total or material breach as though the defaulting party had refused to consummate the sale itself.
To avoid the problems just set forth, contract should contain "GOOD FAITH" and "REASONABLE EFFORTS". Nonetheless, it is insufficient if the defaulting party only invokes such principle without putting in any good faith or reasonable efforts to obtain financing.

2. VAGUENESS OF "GOOD FAITH" AND "REASONABLE EFFORTS"Understandably, the problem arises when it comes to interpretation or construction of "good faith" or "reasonable efforts". The reality is that how hard the defaulting party should seek financing before such efforts are deemed reasonable or in good faith. Courts are, to some extent, divided on this issue. Nonetheless, most of the courts follow SOME of the following guidelines:

Most courts are willing to fill in the missing terms by referring to reasonable expectations and practices in the locality.
The actual behavior of the parties might provide additional information even if the terms are indefinite or ambiguous.
A party may waive the indefinite provision. However, such waiver is effective only if the provision was inserted for the benefit of the waiving party. For financing conditions, the buyer is often deemed to be the benefiting party. Such construction might prove more problematic in non-financing condition precedent circumstance.

SALIENT NOTE
This article in no way supplants a thorough investigation of the facts and the law pertinent to the situation at hand. In fact, this article provides ONLY a small portion of this salient topic.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. He Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

Some BASICS of Film Production Contracts

2011-02-24T15:32:00.001-08:00

Film production contracts encompass some "standard production guidelines" which producers must adhere to. Such standard production guidelines include but are not limited to: picture length adherence, budget adherence, screenplay adherence, rating adherence, cover shots adherence and end credits adherence, among other provisions. Let us further explore this salient rather complicated topic.
SOME BACKGROUND ON THE ROLE PRODUCERS
Producers, unlike writers or directors, do not necessarily have specific functions. Producers could do some, most or all of the following depending upon their title and scope of responsibility:

LINE PRODUCER: Often, most productions include line producers, whether or not such individual is referred to it by such title. The Line Producer is often the hands-on manager of the production preparing budgets, securing locations and negotiating leases, among other functions.
PRODUCER STATUS BY VIRTUE OF ASSOCIATION: It is conceivable and standard practice to earn producer status solely because the person is a personal manager to the film's star, is the film writer, is film star's friend or is the film star. In such scenarios, studios, usually, do not require full-time producer work from such individuals.
EXECUTIVE PRODUCER: This title was traditionally bestowed on people who helped secure financing for the film. Nonetheless, this is no longer necessarily the case. For instance, it is possible production companies accord such status to one of their people credited with spearheading the project during its development stage.

FILM PRODUCTION REQUIREMENTS
It is customary for most studios to require producer to adhere to the following guidelines:
1. BUDGET ADHERENCE
Studio contracts, generally, provide that "the picture shall be produced and delivered in accordance with the approved budget - subject only to the changes approved by the studio, in writing". In fact, as the contract specifies, producer needs to closely watch the approved budget and should not unreasonably expect more budget or deviations from what the studio approved, unless the studio in writing acquiesces to such changes.
2. PICTURE LENGTH ADHERENCE
Studio contracts, generally, provide that the completed picture must have a running time of "not less than 95 minutes and not more than 110 minutes." Nonetheless, it is possible that the studio and producer could modify such length of time and agree on the precise running time, at the end. It behooves the producer to closely work with the editor to consummate such picture length, as agreed to by the parties.
3. RATING ADHERENCE
Studio contracts, generally, specify a particular rating requirement in the producer's agreement. Such rating requirement, usually, varies based on the type of the film. For instance, if the movie is an animated feature for children, such requirement would be for a "G" rating. It is important to note the Motion Picture Association of America (MPAA) is the final arbiter of the rating. Producer, based on the specific language of the contract, might be expected to use his best or reasonable efforts to accomplish this objective.
4. SCREENPLAY ADHERENCE
Studio contracts, generally, specify a particular language ensuring the motion picture adhere to the approved shooting script. This requirement is intended to minimize, to the extent possible, any "significant" deviation from the approved screenplay for which the studio agreed to pay.
5. COVER SHOTS ADHERENCE
Studio contracts, generally, require the producer to include "cover shots". Cover shots are referred to alternate scenes and language used to replace or "cover" scenes containing nudity or profanity shot for the film's theatrical release. Such cover shots are used to supplant such scenes or dialogue in television network, airline, or other versions of the motion picture.
6. END CREDITS ADHERENCE
Studio contracts, generally, impose running-time limits on end credits. The contracts require that the end credits not exceed 3 minutes.
DISCLAIMER
This article NEITHER in any way supplants seeking competent professional legal counsel NOR serves as legal advice. In fact, this article encompasses ONLY SOME of the salient points concerning this rather complicated topic.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

Paying and Caring for Somebody? Probably, You May Deduct Some Taxes

2011-02-21T15:43:00.000-08:00

With taxes looming over us and haunting our financial and non-financial decisions alike, it is time to delve into our expenses and find places where we could deduct some taxes, if possible. There are some ways to deduct some of the medical expenses you incur while caring for a friend or relative. Let us explore this important subject further, in some detail.
1. CAREGIVERS' DEDUCTION OF UP TO $3,650 FOR 2010 (STRINGENT CRITERIA)
Many of us care for some people, however to be able to claim some deduction as a care recipient on our taxes, we must pass ALL of the following criteria:

Caregiver MUST provide, at least, half of the care recipient's financial support for 2010.
Caregiver MUST live with the non-family member receiving care and financial support for the whole past year. If the care recipient is a family member, they could be living on their own.
Caregiver MUST provide for somebody who is a legal resident of the US, Canada or Mexico or US citizen.
Caregiver MUST provide for a person whose GROSS personal income for 2010, EXCLUDING social security benefits, does not exceed $3650.
Caregiver MUST provide for somebody who cannot file a joint tax return.

THEN, if ALL of the above criteria apply, then we MIGHT reduce our taxable income by $3,650 for 2010.
2. CAREGIVER'S CREDIT OF UP TO $1,050 FOR 2010
Even if the Caregiver does not meet of all of the requirements laid out above, the caregiver MIGHT be able to take advantage of dependent care credit of of up to $1,050 if AMONG OTHER THINGS, the care recipient is "mentally or physically unable to care for himself or herself."
3. CAREGIVER'S ITEMIZED DEDUCTION OF MEDICAL EXPENSES EXCEEDING 7.5% OF AGI
Still, there might be another tax break, if the caregiver is not eligible to receive the $1,050 tax credit. This is when the caregiver itemizes tax deductions and the money spent on qualifying expenses exceed 7.5% of Caregiver's Adjusted Gross Income (AGI).
For instance, if the Caregiver's AGI is $60,000, then the Caregiver MAY ONLY deduct whatever is beyond $4,500 (7.5% of $60,000) for qualifying expenses.
A. DEFINITION OF QUALIFYING EXPENSES
Some of the examples of Qualifying Expenses include, but not limited to:

Insurance Premiums
Out of Pocket Costs for Doctors and Hospitals
Some Equipment
Nursing Home Bills (Restrictions Apply)

B. CAVEATCaregiver, still MUST provide at least half of the Care Recipient's financial support, in this scenario.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. He Primarily Practices Business, Real Estate and Entertain ment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.

Why and How Are Condition Precedents Salient in Real Estate Contracts?

2011-02-17T17:36:00.001-08:00

The condition precedent cannot be entirely in control of one party without no qualifiers. In such circumstances, there is no mutuality of obligation and NO PARTY CAN ENFORCE THE CONTRACT. Usually, the courts dislike this result and often construe the contract as to deny the party with unfettered discretion to perform the contract. A party who has failed to make a good faith effort to obtain financing, is found LIABLE even though the obligation to perform the contract as a whole has not arisen. Such breach is typically treated as a total or material breach as though the defaulting party had refused to consummate the sale itself.
To avoid the problems just set forth, contract should contain "GOOD FAITH" and "REASONABLE EFFORTS". Nonetheless, it is insufficient if the defaulting party only invokes such principle without putting in any good faith or reasonable efforts to obtain financing.

Most courts are willing to fill in the missing terms by referring to reasonable expectations and practices in the locality.
The actual behavior of the parties might provide additional information even if the terms are indefinite or ambiguous.
A party may waive the indefinite provision. However, such waiver is effective only if the provision was inserted for the benefit of the waiving party. For financing conditions, the buyer is often deemed to be the benefiting party. Such construction might prove more problematic in non-financing condition precedent circumstance.