Ask the Legal Professionals

Commercial Litigation Construction

Q: A:

If I bring a lawsuit against a corporation with insufficient assets to pay the judgment, will the court order the corporations owners to pay?

Q:

If tenants in my shopping center hire their own contractors for tenant improvements, would such contractors have lien rights against my interest in the property?

Probably not. To pierce the corporate veil and impose liability on its owners, you generally must show that a corporation has not properly observed corporate formalities, and that upholding limited corporate liability under the circumstances would result in an injustice. A court may pierce the corporate veil if it finds that the corporation is a mere alter ego of its parent company or its principal shareholder(s). To make that determination, a court will consider such factors as the existence of common officers or directors, whether expenses of the corporation are paid by the shareholders (or parent Mark Hummels company), maintenance of separate corporate records and mhummels@omlaw.com Tel: 602.640.9390 accounts, comingling of funds, and the filing of corporate tax www.omlaw.com returns and annual reports.

The answer depends upon whether the tenant is considered the agent of the owner under the lien law. Under the statute, every contractor, subcontractor, architect, builder or other person having charge or control of the construction project, in whole or in part, is the agent of the owner for lien purposes. If the lease requires the improvements, then the tenant is deemed an agent of the owner and the contractors lien rights will attach to both the tenants leasehold interest and your fee interest in the real property. If the improvements are not required by the lease Mike Dulberg mdulberg@bcattorneys.com but are within the tenants discretion, then lien rights only attach to 602.234.9905 the tenants leasehold interest. Thus, it is important to ensure that www.bcattorneys.com your lease agreement with the tenant is clear in this regard.

A:

Corporate

Divorce / Family Law

PLC

Q: A:

What are some considerations for issuing equity to my employees?

SEC Rule 701 provides an exemption from the registration requirements for securities issued under compensatory benefits plans and allows companies to issue securities to consultants. Compliance with the conditions of Rule 701 may allow you to compensate employees and consultants with equity, without violating the securities registration laws. Section 83(b) of the Internal Revenue Code may allow recipients to obtain capital gains tax treatment of restricted stock awards on any capital appreciation, if recipients make a Section 83(b) election. Under corporate law, you should determine the Jessica A. Benford type of equity (for example, voting or non-voting) you want jbenford@rcalaw.com to award to employees/consultants and verify that sufficient Tel: 602-440-4866 shares are authorized to make the proposed awards. The www.rcalaw.com awards should be authorized by the Board of Directors.

Q: A:

What is needed for Premarital Agreements to be binding in Arizona? What can they include?

The Agreement must be in writing, voluntarily signed by both prospective spouses, become effective upon marriage, and should include full disclosure of each persons property and debts. Each party should be represented by his or her own attorney, even if one party pays for both attorneys. Such an agreement contractually changes how the laws of Arizona will apply if a divorce occurs; most often this means limiting or eliminating the accumulation of community property and debt during the marriage, and defining, limiting, or eliminating spousal maintenance. You have great latitude as to Angela K. Hallier the financial terms of your Agreement. Agreements regarding ahallier@hallierlaw.com Tel: 602.285-5500 children, such as custody, parenting time and child support, www.hallierlaw.com will not be binding on the court.

Workplace Retaliation
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February 16, 2012

Q: A:

What should employers do about the rising trend of workplace retaliation complaints?

Space Reservation Closes February 1, 2012

The 2011 National Business Ethics Survey revealed an increasing trend in perceived retaliation among employees and a heightened pressure to compromise standards to do their jobs. Consequently, employers will be well served to set standards that keep managers focused on using best practices in navigating the critical moments accompanying an employee complaint. Actions taken in those crucial first moments can dramatically affect every subsequent step in the process. Do not tolerate poor management. Managers who do not abide by the employers values must be quickly reformed or exited from the organization. Finally, conduct fair Mark Ogden jmogden@littler.com investigations before reacting and ensure that systematic, detailed, and Tel: 602.474.3601 accurate documentation of performance problems is taking place.
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This general information is not intended to provide individual advice. Schedule an appointment with an expert to discuss your particular situation and needs. Questions sent to our experts may be answered in future ASK THE EXPERT pages.