Monday, 23 April 2018

Divorce Can Make Good People Bad

Why is it that people who seemed to be fairly rational before divorce turn into complete paranoid, hyper-defensive maniacs once the separation and divorce process begins? Couples who promised to do this divorce thing respectfully suddenly turn into ferocious warriors, letting their mean-and-petty streak show through, especially when they get into the pit with their attorney.

Sure, some people are just jerks, but what makes otherwise good people behave so poorly? It turns out this “crazy” behavior is fairly predictable and normal in such circumstances. That’s not an excuse for it, but when you better understand what’s pushing your buttons so badly, you can finally begin to make healthier choices and address the feelings of overwhelm that are triggering such unseemly (read: king of the jerks) behavior.

Divorce Can Make Good People Bad

Here are the panic-button pushing reasons that divorce makes us act so out of character:

Disappointment Over Unmet Expectations

When you said “I do” you did so with expectations about what marriage is all about. But maybe you never fully shared those expectations with the person you actually said your vows to. Many times we don’t articulate our expectations specifically because we assume everyone just knows this is how marriage is supposed to be. But, “everyone” may only be your family and the way they did things, or your closest friends with whom you have discussed this over and over. It never included your now soon-to-be-ex-spouse who (don’t forget) came into marriage with some unspoken expectations of their own. When our deeply held expectations (like “marriage is forever, no matter what”) are unmet, we often feel betrayed, making it easy to feel indignant and cast our ex as the enemy. We believe they let us down. But, if we’re honest, were they ever fully on page with us to begin with?

The big challenge of marriage is putting both partner’s expectations on the table and then working together to create a mutually agreed upon vision for how your marriage will actually work.

Fear of Change

During periods of immense and drastic change (such as divorce), your mild-mannered brain goes into survival mode, ready at a moment’s notice to fight or retreat, thanks to that reptilian brain you inherited from your ancient ancestors.

Whether is it your fear of losing status (social, financial, etc.), a sense of uncertainty about the future, a worry that you don’t belong anymore in your social circle, or just a feeling like this whole situation is so unfair—the problem-solving part of your brain can’t do its job until your panicked reptilian brain calms down.

Uncertainty and fear about how things will turn out take a steep toll on you mentally and physically. Stress from staying in an “I’m in danger” primal mindset can short-circuit your patience, your willingness to listen, and your ability to communicate effectively. Your health is also likely to take a dive as well, making you prone to sleep deprivation and low stamina at a time when you are taking on mountains of critically important paperwork, decisions, and details as part of the divorce. So, even if you want to make good choices, the stress response of facing so much uncertainty and change at once is sure to cause you at least some temporary loss of rational thought and behavior.

Feeling Powerless and Out of Control

In normal life, you are used to being competent and in charge, but now you are thrust into the unfamiliar, unsure of how to get things done right in the divorce process (and in the new life waiting after it). You are being forced to make important decisions immediately. You have to hire a high-priced expert to navigate you through the legal aspects. And hiring a lawyer kicks off what could be seen by the other as an attack; you have drawn up sides and are now ready for war.

Communication is out the window when you feel powerless and unable to fully control things that profoundly affect your life. You have to trust your attorney (who was likely a complete stranger to you before this situation) to lead the charge and make decisions that will affect your future (and your childrens’ future) for years to come. It all costs a fortune. Is it any wonder each side feels like they are being screwed?

A Sense of Entitlement

Splitting apart all of the property (and associated memories) the two of you acquired through your sweat, equity, and hard-earned money can feel like a spiteful business transaction. Each of you has a sense of ownership and “it wouldn’t have happened without my efforts” point of view. Your decisions right now are dominated by your emotions, not your logical problem-solving self.

If you have kids, there is likely an overwhelming sense of guilt and worry that this divorce experience might be damaging them. They may even think it is their fault that mommy and daddy are splitting up. The kids end up as pawns in a fight over what you and your ex believe you each deserve or never deserved. Each of you are in it to “get yours” in the name of fairness. But the ego battle waging between you both in the pursuit of “emotional justice” ends up feeling more like scrambling down an endless tunnel with no cheese at the end.

So, what’s a stressed out person to do in order to keep divorce-induced jerky behavior in check?

Take back your dignity. Get in touch with who you are when you are at your best. Be clear about what is important to you and why, and how you want to remember yourself when this is over. Now, behave your way into that outcome.

Assemble a good team to support you in this transition from married to single. Identify where you need more information, different perspectives, and validation that will get you through this in a way that lifts you up (versus pulling you down). Pick people who can support you in being your best. Fight the urge to surround yourself with people who will urge you to seek revenge, act petty, or take your ex to the cleaners. When you look in the mirror, you want the best version of you reflecting back as you move into your new future.

Listen, listen, listen. Communicate, communicate, communicate—with your children, with your ex-spouse, and with the experts you are relying on to help you make the best decisions based on your needs, wants and values. Don’t be afraid to acknowledge your role in how things are going. If you misstep and act like a jerk for a moment, own it, and then apologize and move on.

Remember your past successes. Take care of what is important to you, ask for help, and remember the times when you successfully dealt with challenging times in the past. What allowed you to be resilient then? How can that help you here and now? You’ve been through hard times before—you can handle this.

Dealing with a difficult ex certainly doesn’t make the divorce process any easier. But neither does being a difficult ex. So keep yourself in check. By understanding some of the hot buttons that you both are pushing in each other, then maybe you can pause, take a breath, drop the jerk behavior and make better choices.

Free Consultation with Divorce Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will fight for you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Sunday, 22 April 2018

Reasons Parents Lose Custody of Their Children

Although most laws are designed to help divorced parents maintain a healthy relationship with their children, there are times when some issues may disqualify divorcees from having legal custody of their kids. Most of these cases involve allegations related to child abuse or neglect. However, some allegations could be false statements from a contentious former spouse. If you are dealing with a child custody matter is best you contact a Salt Lake City child custody attorney to discuss your legal options.

Reasons Parents Lose Custody of Their Children

THE PROCESS

The process generally starts with one of the parents notifying the court about his or her concern involving a former spouse or parent of the children. Evidence must be provided otherwise the allegations of abuse are not valid. If the judge determines the behavior is a threat to the child’s safety, an investigation will take place. An investigator may take a look at the circumstances surrounding the allegations and decide whether or not the allegations are true.

CHILD ABUSE

This is a common reason why some parents may lose the custody of their children. The court will see if there is a history of child abuse. Some factors that help the judge determine if there was child abuse include scars, bruises, marks, and cuts. Whether it was initiated by anger or inappropriate behavior, child abuse will definitely cause the parents lose custody of their children. If you suspect your former spouse has abused your child, notify the police and contact Salt Lake City child custody attorney.

DOMESTIC VIOLENCE

There are cases that don’t involve child abuse yet if the child witnessed child abuse against the other parent during the last 5 years; the court may deny sole child custody. A history of abuse will be considered when making custody decisions. Granting custody to an abusive parent is not in the child’s best interest.

DRUG AND ALCOHOL ABUSE

Courts will also take a look at other factors such as the use of controlled substances. The habitual use of drugs or alcohol by either parent is detrimental to the interests and safety of the kids, therefore, the parent addicted to these substances can’t be trusted with raising the children.

VIOLATING A COURT ORDER

Parents should respect custody orders. Doing otherwise may result in a parent losing custody. Although it’s all based on how the order was written, violating the order doesn’t help advance the case. Some cases involving joint custody, for example, require both parents making important decisions about the child. If one of the parents fails to consult the other parent before making an important decision, the custody order could be modified and the parent may lose custody.

PARENTAL ALIENATION AND CO-PARENTING

When one of the parents is manipulative and he or she uses these tactics to alienate the children from his or her former spouse, there is a chance he or she will lose the custody. Co-parenting is sometimes the best option in some scenarios as it allows parents that can’t get along to follow a strict joint custody schedule.

PROTECTING YOUR CHILDREN FROM PARENTAL ALIENATION

It is natural for children whose parents live apart to want to spend more time with them. Most children feel that they will not be able to spend enough time with mom and dad after divorce. Custodial parents generally have less time for the children due to the many responsibilities they have and non-custodial parents aren’t around as much as they used to. In the midst of all this chaos, some parents may take advantage of the situation and manipulate their children into fearing or expressing hostility towards their former spouses. This is when parental alienation takes place. A child may reject one parent following a harshly contested divorce. These cases generally require the intervention of a Salt Lake City divorce attorney. Several problems may arise that only an experienced attorney is equipped to handle.

Divorce can be one of the most frightening experiences for children since their lives may change dramatically after their parents decide to go separate ways. They have to adapt to a new family structure they do not like yet they have no control over it. Children need the love and care of both parents when growing up. Unfortunately, some parents don’t understand this and they choose to involve their children in a harsh divorce battle. It is a way to harm a former spouse by taking the children from them.

HOW CAN YOU PROTECT YOUR CHILDREN?

Let’s start by taking a closer look at the common signs of parental alienation:

  • The child avoids contact with the targeted parent for no particular reason.
  • The targeted parent is constantly being accused of wrongdoing.
  • The child says inappropriate things for their age.
  • The child feels confident about the rude behavior.
  • The child insists that it is their decision to no longer spend time with the targeted parent.
  • The child may also refuse to no longer be with the family of the targeted family.

DEALING WITH PARENTAL ALIENATION

It all depends on your child’s age and your relationship with them. If you still communicate with your children, there are some steps you can take to stop the alienation:

  • Don’t talk bad about your former spouse in front of your children.
  • Don’t act like the other parent or imitate the alienating behavior.
  • Reassure your children that you will always love them and care for them no matter what.
  • Don’t blame your children.
  • Remind your children of the great times you had together.
  • Respect your visitation schedule.
  • Talk to aSalt Lake City divorce attorney to help you combat parental alienation.

Free Initial Consultation with Family Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

How to Pay Off High Interest Credit Card Debt

Perhaps like many Americans your New Year’s resolution involves paying down credit card debt. After all, even the most ardent supporter of the plastic hears that little voice in the back of their head “credit card interest rates are a huge ripoff, I shouldn’t use my Visa card as much as I do.” To be sure, if you’re trying to get your financial life in order, taming high interest credit card debt is job number one. Unfortunately, many consumers get caught in the minimum monthly payment trap, leaving stagnant balances that seem to never go away. So how do you go about paying down credit card debt and getting rid of Mr. Visa once and for all?

How to Pay Off High Interest Credit Card Debt

Damage Assessment

The first step to paying off your credit card debt is to figure out the exact amount that you currently owe. It’s not until you have exact balances and the interest rates you’re being charged that you’ll know how high of a mountain you’re faced with climbing. In addition to outstanding balances, add up the monthly payment for each card and figure out how much of your income is going to credit card payments every month. Organization is key. We’ve created a simple chart to help you organize what you owe.

Break Your Dependence on Credit Cards

In other words, stop using the credit cards! The idea in starting a plan to pay down credit card debt is to attack the principal balances rather than just paying interest every month. The credit card companies want you stuck in debt, feeding them their interest every month. The only way to stop interest from increasing is to stop the balances from increasing. Put together a budget and stick to it, without using your credit cards. Often, aggressive budgeting is the fastest way out of debt. It might hurt at first, but the sense of satisfaction you’ll receive from paying off your credit card debt will far outweigh any temporary inconvenience. If you absolutely need credit cards to live, it might be time to consider filing for bankruptcy.

Pay Off One of the Cards

To gain momentum in your quest out of credit card debt, pay off the smallest card first. Completely retire one of the balances, it feels good. Some will argue that tackling the highest balances first makes sense, but momentum will play a big role in getting you out of credit card debt. Get rid of the smallest card and the rest will start to fall in line.

Pay More Than the Minimum Monthly Payment

Salt Lake City bankruptcy attorney wrote an excellent post on the National Bankruptcy Forum describing the major problems consumers face when they try to pay just the minimum on a credit card. He listed a table showing how long it takes to pay off small debts at low interest rates which we’ve included here:

$1000 balance, 18% interest, minimum payment $100 = 11 months to payoff $1000 balance, 18% interest, minimum payment $50 = 24 months to payoff $2000 balance, 18% interest, minimum payment $100 = 24 months to payoff $2000 balance, 18% interest, minimum payment $50 = 62 months to payoff $3000 balance, 18% interest, minimum payment $150 = 24 months to payoff $3000 balance, 18% interest, minimum payment $100 = 40 months to payoff $4000 balance, 18% interest, minimum payment $200 = 24 months to payoff $4000 balance, 18% interest, minimum payment $150 = 34 months to payoff $5000 balance, 18% interest, minimum payment $200 = 32 months to payoff $5000 balance, 18% interest, minimum payment $150 = 47 months to payoff $5000 balance, 18% interest, minimum payment $100 = 93 months to payoff

As John points out in his article, these figures don’t even factor in administrative or late fees which can add up quickly! The bottom line is that minimum monthly payments on credit cards usually represent interest only, the underlying balances aren’t touched by making these payments. To actually get out of credit card debt it will be crucial to pay more than the minimum monthly payment, there’s simply no other way.

Transfer Debt to Lower Interest Cards

As the table above demonstrates, the credit card companies kill you with high interest rates. As we’ve established, if you’re trying to get out of debt, paying the minimum won’t do. Instead, try transferring balances from one lower interest card to another, and keep doing it as opportunities arise. Many banks offer promotional “teaser” rates to induce consumers to open a line of credit. If you pay enough attention to deadlines, you can move your credit card balances around to banks offering the lowest rate, this will cut down on some of the money you’re throwing away on interest.

Negotiate With The Bank

Many lenders are open to settling past-due credit card bills for less than the full amount owed and a good consumer attorney can aid in negotiating with your credit card lender as a way to avoid bankruptcy. How is this possible? Once a loan goes into default for long enough, lenders no longer carry it on their books as a performing asset. In cases where a consumer has fallen behind for many months, recovering anything at all may be considered gravy by the credit card lender. This doesn’t mean your lender will be a push over, they’ll likely ask that you produce financial information as part of the negotiation process, but to the extent you have some cash to throw at the problem, you might be able to get out of debt for far less than what you owe. In these cases, the amount of debt forgiven will be taxed as income come April. For more information, see: Tax Consequences of Forgiven Debt.

Know When to Look for Help

If you fallen behind on your credit card bills or need credit cards to purchase basic necessities such as groceries and gas, it may be wise to meet with a bankruptcy attorney. Although options outside of bankruptcy should always be explored, filing for bankruptcy protection will eliminate credit card debt as well as medical bills.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Saturday, 21 April 2018

Attestation Clause in a Will

I’m going to share a very important part of estate planning law in this post.

The act of witnessing an instrument of writing, like a Will, at the request of the party making the Will, is done in the attestation clause section of the Will. The validity and form of an attestation clause is usually a matter of U.S. state law, and can vary from state to state. The attestation clause in a Will is essential. Utah Estates, Powers and Trusts Law Section 3-2.1 provides the requirements for the signing and witnessing of a Will.  The statute has a number of provisions which include the requirement that the Will be in writing and signed at the end. A Utah attestation clause lawyer can guide you through these requirements.

Attestation Clause in a Will

The statute further provides that there must be at least two attesting witnesses and that any writing that is placed on the Will following the testator’s signature, other than the witness attestation, is not to be given any effect.  Another requirement of the statute is that the testator declare to the witnesses that the paper he is signing is his Will.

The preparation and execution of a Last Will may seem rather routine.  However, the provisions of the Will providing for dispositions to beneficiaries as well as the inclusions of significant statutory provisions such as the attestation clause allow a smooth and efficient probate and estate settlement process.  Without proper language and terms a Will may be subject to a Will Contest and invalidated.

A Will must be drafted and executed properly to be effective. I’ve seen poorly written wills and trusts alot as an estate lawyer in Utah. It is most important that the Will be worded in clear, unambiguous language. As noted, one clause that should always be inserted in a Will is the attestation clause (the part of the will that deals with the witnessing of the testator’s signature).  An attestation clause lawyer in Utah can advise you on drafting it. Utah requires that there be witnesses to a Will and that certain formalities of signing be followed.  The attestation clause in a Will provides that these requirements were adhered to. Sometimes the witnesses to the Will are dead or have moved. In either case, there may be great difficulties in obtaining probate if there is no attestation clause. The attestation clause of the Will, while not complicated, is important.

Although the statute only requires that there be two witnesses, it is common for New York Will Lawyers to have three persons act as attesting witnesses.  The witnesses should be disinterested and not receive any benefit under the Will.  At the time the Will is executed the witnesses usually also sign an affidavit which sets forth the basic elements regarding their witnessing of the Will such as the testator was over 18 years of age and that they saw the testator sign the Will and that all the witnesses were present when the testator and witnesses signed.  This paper is called a self-proving affidavit and is attached at the end of the Will and helps expedite the probate of the Will.

Free Consultation with a Will Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

SEC Charges Executives with Stealing

It’s important to keep in the loop as a Securities Lawyer. For example, the Securities and Exchange Commission charged two former executives at a credit card processing company with masterminding a fraudulent scheme to steal millions of dollars through phony expense reimbursements, inflated invoices, and other improper accounting tactics.

SEC Charges Executives with Stealing

The SEC’s complaint alleges that iPayment’s then-senior vice president of sales and marketing Nasir N. Shakouri and then-executive vice president and chief operating officer Robert S. Torino routinely reimbursed themselves for payments that were never actually made to third-party vendors using their personal credit cards.  They also allegedly conspired with vendors to inflate invoices and receive kickbacks from the overpayments, and claimed improper commissions and bonuses related to other corporate funds they improperly diverted in various ways.

The SEC’s complaint also charges three other iPayment executives – Bronson L. Quon, John S. Hong, and Jonathan K. Skarie – with participating in the scheme and helping Shakouri and Torino falsify books and records to hide the thefts of corporate funds.  Quon, Hong, and Skarie were allegedly rewarded for their assistance with misappropriated iPayment funds.

“As alleged in our complaint, these executives manipulated iPayment’s internal accounting systems, lied to the external auditor, and caused approximately $11.6 million in losses to the company,” said Sanjay Wadhwa.

In a parallel action, the U.S. Attorney’s Office for the Central District of Utah today announced criminal charges against Shakouri and Torino.

The SEC is seeking disgorgement of ill-gotten gains plus interest and penalties as well as officer-and-director bars.

SEC, NATIONAL BANK OF BELGIUM AGREE TO ENHANCED COOPERATION AND INFORMATION SHARING REGARDING EUROCLEAR

The Securities and Exchange Commission today announced that it has entered into an arrangement with the National Bank of Belgium to enhance cooperation and information sharing regarding expanded services by Euroclear Bank, which provides clearance and settlement through its operation of the Euroclear System.

Brussels-based Euroclear Bank is subject to prudential supervision and oversight by the National Bank of Belgium as a credit institution and as a clearing agency.  The SEC granted Euroclear’s predecessor an exemption from registration as a clearing agency in 1998, allowing it to provide clearing services for U.S. government securities.  On Dec. 16, 2016, the SEC approved Euroclear’s application to modify its exemption from registration, enabling it to also provide limited clearing agency services for U.S. equity securities.

On March 9, 2017, the SEC and the National Bank of Belgium added an addendum to their 2001 Understanding Regarding An Application of Euroclear Bank for an Exemption under U.S. Federal Securities Laws regarding Euroclear’s clearing activities in the U.S., enhancing their ability to exchange information about Euroclear’s new services.

“This addendum will expand the signatories’ ability to cooperate and exchange information related to Euroclear Bank and augment the SEC’s oversight of Euroclear Bank’s activities under its exemption order,” said Paul A. Leder, Director of the SEC’s Office of International Affairs.

SEC CHARGES FIRMS INVOLVED IN LAYERING, MANIPULATION SCHEMES

The Securities and Exchange Commission today announced fraud charges against a Ukraine-based trading firm accused of manipulating the U.S. markets hundreds of thousands of times and the Utah-based brokerage firm and CEO who allegedly helped make it possible.

The SEC’s complaint alleges that Avalon FA Ltd touted itself to traders as a destination to engage in layering, a scheme in which orders are placed but later canceled after tricking others into buying or selling stocks at artificial prices, resulting in illicit profits.  Avalon allegedly made more than $21 million in the layering scheme involving U.S. stocks during a five-year period.  According to the SEC’s complaint, Avalon also made more than $7 million in illicit profits through a cross-market manipulation scheme in which the firm bought and sold U.S. stocks at a loss in order to manipulate the prices of the stock and its corresponding options so that it could then profitably trade at artificial prices.  Avalon allegedly used traders in Eastern Europe and Asia to conduct its trading, and the firm kept a portion of the profits and collected commissions from the traders.

The SEC’s complaint also describes fraud charges against Avalon’s named owner Nathan Fayyer and Sergey Pustelnik, who allegedly kept his controlling interest in Avalon undisclosed and embedded himself at Lek Securities as a registered representative, using his position to facilitate the schemes.

The SEC further alleges that Lek Securities and its owner Samuel Lek made the schemes possible by providing Avalon with access to the U.S. markets, approving the cross-market trading scheme, and improving its trading technology to assist Avalon’s trading.  According to the SEC’s complaint, Lek Securities also relaxed its layering controls after Avalon complained.  Avalon was the highest-producing customer for Lek Securities in terms of trading commissions, fees, and rebates generated.

“As alleged in our complaint, Avalon openly marketed itself as a destination for manipulative trading, and Lek Securities opened the gate to allow the schemes into the U.S. markets despite repeated warnings that its customer was manipulating the market,” said Stephanie Avakian, Acting Director of the SEC’s Division of Enforcement.

After filing its complaint in U.S. District Court for the Southern District of Utah, the SEC obtained an emergency court order freezing Avalon’s assets held in its account at Lek Securities as well as freezing and repatriating funds that Avalon has transferred overseas.

SEC FREEZES BROKERAGE ACCOUNTS BEHIND ALLEGED INSIDER TRADING

The Securities and Exchange Commission today announced an emergency court order to freeze assets in two brokerage accounts used last week to reap more than $1 million in alleged insider trading profits in connection with a merger announcement by telecommunications companies.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of Utah, highly suspicious transactions have been detected surrounding last week’s announcement that Liberty Interactive Corp. had agreed to acquire General Communication Inc.  The traders, who are currently unknown, allegedly used foreign brokerage accounts in the United Kingdom and Lebanon to purchase call option contracts through U.S.-based brokerages and on U.S.-based exchanges in the days leading up to the April 4 public announcement of the acquisition.  The court’s order freezes the foreign accounts’ assets contained in the U.S. brokerages.

According to the SEC’s complaint, some of the risky options positions taken in these accounts represented virtually 100 percent of the market for those options.  Following the acquisition announcement, General Communication’s shares rose more than 62 percent and the brokerage account customers allegedly sold the bulk of the contracts.

“As alleged in our complaint, the timing, size, and profitability of the trades as well as the absence of any recent trading by the accounts in these particular securities make the transactions highly suspicious,” said Michele Wein Layne.  “We don’t hesitate to act quickly and proactively to freeze accounts and prevent proceeds from dissipating while we continue to investigate dubious transactions and identify the traders behind them.”

The emergency court order obtained by the SEC requires the traders to repatriate any funds or assets located outside the U.S. that were obtained from the alleged insider trading.  The traders are prohibited from destroying any evidence.  The SEC’s complaint charges the unknown traders with violating Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5.  The SEC is seeking a final judgment ordering the traders to disgorge their allegedly ill-gotten gains plus interest and penalties and permanently enjoining them from future violations.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Friday, 20 April 2018

Discharging Student Loans in Bankruptcy

We all know college is expensive. But just how hard is it to pay off student loans? According to new information published by the National Bureau of Economic Research (NBER), choosing the right school to attend can have a huge effect on your future — but not just on what type of job you might be more likely to get with a fancier college on your resume. It might impact your ability to pay off student loans. This topic is important to bankruptcy lawyers because if you ever get behind on payments…. well, read on.

Discharging Student Loans in Bankruptcy

Sure, picking a $40,000-per-year-tuition college over one that’s half the price should be a serious topic around the dinner table when you’re a high school student. How many grants or scholarships are you eligible and applying for? How big of a loan will you need to get to cover the rest? And how will you pay it all back?

The Treasury Department staffers who authored the working paper for NBER found that low- and middle-income college borrowers struggle with loan burdens after leaving school by matching tax data with information in the Department of Education’s Student Loan Data System. Most low-income borrowers haven’t touched repaying any of the original balance of their student loans five years after college, while a borrower from a high-income family has repaid about 19%.

This is because the employment outcomes for students from low-income families aren’t as fruitful. More than 1 in 10 students from families earning fewer than $30,000 per year are unemployed five years after leaving school, while another 36% are working but earning fewer than $25,000. Meanwhile, only 27% of students from families earning $75,000 to $100,000 are earning fewer than $25,000, while 8% are unemployed.

Additionally, about 1 in 4 borrowers from low-income families default on student loans within five years of entering repayment.

Why the difference?

According to the data gathered for NBER, students from low-income families face tougher challenges with student loans based on their lack of access to wealth. Often, the balance of their loans is larger than when they originally took them out, five years after graduating. Wealthier borrowers also rely less heavily on student debt to finance college, according to left-leaning think tank Demos.

However, the NBER paper suggests that when low-income borrowers attend less selective schools that are still in the middle of the road in terms of economic mobility, about half end up earning more than $25,000 a year after entering repayment.

It’s important to note that the data was collected for student loans in repayment between 2004 and 2009, the tail end of that being right around the time of the economic collapse.

According to the Equality of Opportunity Project, schools that ranked best for upward mobility for low-income borrowers were:

  • Cal State-Los Angeles
  • SUNY-Stony Brook
  • CUNY System
  • Glendale Community College
  • University of Texas at El Paso

The percent of students who come from families in the bottom fifth but reach the top fifth of income distribution are included in the analysis by the Equality of Opportunity Project. Cal State-Los Angeles has the best mobility rate at nearly 10% of students achieving that tier, while the average college in the U.S. only churns out 1.9% of graduates who dramatically increase their wealth.

So, which college is right for me?

You’ll need to weigh a lot of factors when choosing which college is right for you: programs offered, acceptance rate, location, price, and more. If economic mobility is important to you, it’s good to have the data behind trends seen in colleges today.

The colleges reporting the lowest median parent income on the list include schools in New York, Texas, Kansas, New Mexico, and Florida. Of the lowest set of parent median incomes, the best child (individual) median income was reported from graduates of Vaughn College of Aeronautics and Technology in New York, where graduates ages 32-34 are earning $53,000 per year compared to their parents’ $30,900 per year.

No goal of becoming a pilot or engineer? That’s OK. If you go to University of Texas, most campuses will show results of a higher child income than parents’ income — many of which also tend to be in just the $30,000 range.

At City College of New York, you’ll earn $48,500 per year compared to your parents’ $35,500. At Cal State-Los Angeles, you’ll earn $43,000 for your parents’ $36,600.

Meanwhile, some schools aren’t the best choices, economically. Beauty schools, like Paul Mitchell in Costa Mesa, California — the lowest child median income on the list at $10,300 per year compared to their parents’ $85,200 per year — and some technical and community colleges can affect upward mobility rankings. However, students earning two-year degrees at public colleges, in addition to four-year ones, generally have an easier time paying off student loans. Community college also can help students save a lot of money by earning general credits they’d pay big bucks in tuition for per credit hour at a four-year school.

For students, both child and parent, who never attended college, they’re making just $11,500 per year on their parents’ $35,200.

Interested in what school results in the highest median income for students? It’s Saint Louis College of Pharmacy in St. Louis, Missouri. The median child income is $123,600 — but that’s also coming from a parent median income of $92,500.

What’s the best plan for paying off student loans?

Student loan debt can be tough. It’s important to explore all college payment options when also considering adding student loan debt, and when you’re able to start repaying your debt, you should begin doing so immediately.

It’s also important to know that if you’re feeling crippled by student loan debt years after college, you have options. However, the law makes bankruptcy only an option in discharging student loan debt if you can show undue hardship. If you can satisfy each of these requirements, you may be able to discharge student loan debt:

  1. Based on your current income and expenses, you’re unable to maintain a minimal standard of living for yourself and your dependents if you’re forced to pay off your student loans.
  2. You have additional circumstances that indicate that this state of affairs most likely will continue during most of your repayment period.
  3. You have made good faith efforts to repay your loans.

Erasing Student Loans in a Utah Bankruptcy

Student loans are considered to be in the lowest category of general unsecured debt when you’re looking at bankruptcy, which includes credit card and medical debt. It’s incredibly difficult to get a discharge on student loan debt, even though a growing number of influencers in consumer bankruptcy think that it should be dischargeable. Right now, our office will only file a motion to have student loan debt discharged is if you are permanently disabled and will never earn sufficient income in your lifetime to pay it back.  Even then, there is no guarantee we can do it.  The best route, however, would be to research all your financing options fully before choosing a college, possibly pursuing a degree that may land you a job that allows for loan forgiveness, like being a public school teacher or a nurse, and getting on a repayment plan after you graduate and sticking to it.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Thursday, 19 April 2018

Who are Debt Collectors?

When you fall behind on a debt for an extended period of time, creditors will often send your account to “collections.” As many of you probably already know, this means that you will have a debt collector calling and writing to you in an attempt to collect on the debt. Millions of Americans are pursued by debt collection companies every year, however, very few are familiar with their business model, the laws that regulate them and how best to put a stop to their abusive tactics. As a bankruptcy lawyer, I’ve seen this time and again. This post will help you get up to speed on the debt collection industry and give you practical tips for dealing with the letters and phone calls.

Who are Debt Collectors

Who are these shadowy figures that call at all hours to collect on past-due debts?

The Fair Debt Collection Practices Act (FDCPA) is a piece of federal legislation that regulates the activity of debt collectors. The FDCPA defines debt collectors as:

any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

Just as the name implies, debt collectors are individuals or businesses whose primary job is to collect debts. Although they usually have funky names like RNC Financial or Arrow Financial Services, collection law firms who regularly pursue past due accounts qualify as debt collectors. It is important to be aware be aware that original creditors, such as a bank or credit card company, will not be governed by the FDCPA because they do not fit the definition of a debt collector. The principal purpose of their business is not to collect debts. Generally speaking, the only time an original creditor will qualify as a debt collector under the FDCPA is when they use a name other than their own to collect the debt. In these cases, the FDCPA considers creditors to be debt collectors because they are behaving like collectors.

How do debt collectors get paid?

There are two common arrangements under which creditors work with debt collection companies: contingent payment and debt sale. Under a contingent payment arrangement, the original creditor hires a debt collection company to pursue a delinquent debt, with the collection company receiving a percentage of the amount they are able to collect. Depending on the type of debt, the age of the account and how many attempts have already been made to collect on it, the fee for successfully collecting could range from 10% to 50%. The advantage for debt collectors in a contingent arrangement is cost; they aren’t required to front any money in order to gain the right to pursue the debtor.

By contrast, the second most common arrangement under which creditors work with debt collection companies, selling debt, requires debt collectors to purchase past due debts so that they can then try to come after the debtor for the full outstanding balance (or as much of it as they can get). In cases where a borrower has fallen behind and the creditor views the likelihood of successful collection to be small, they may elect to sell the debt at a highly discounted rate to a debt collection company. For example, Creditor X is owed $500,000. Based on the financial picture of the borrower, Creditor X calculates a very small likelihood of collecting the full outstanding balance. In order to recoup some money, Creditor X sells the $500,000 debt to a debt collector for $100,000 or 20% of the outstanding loan balance. The debt collector then pursues the debtor for as much of the outstanding balance as possible. Everything they collect over and above $100,000, is profit.

Consumers need to be aware that the sale of debt in no way guarantees that the debt collector has the legal right to collect. In many cases they do not. Numerous articles have been written on this Forum about debt collection companies who buy “zombie debt,” i.e. debt that is no longer owed due to the expiration of the statute of limitations. In other words, it is not uncommon for debt collection companies to try to pursue consumers for debts that they do not legally owe.

Who regulates debt collection companies? How can I stop them from calling?

Debt collectors are regulated by state and federal law. The scope of this article is to short to address all of the various state laws on the subject, so we will continue to discuss the federal FDCPA instead. I you have questions about your state’s consumer protection laws, it’s always best to contact a local attorney.

Now back to the FDCPA. In order to address widespread abuses in the debt collection industry, Congress passed the FDCPA in order to rein in the tactics of debt collectors. The FDCPA prohibits abusive or coercive behavior in pursuit of a debt and awards consumers statutory damages of $1,000 for each violation of its code of conduct.

Specifically, debt collectors are prohibited from contacting 3rd parties, such as family members and friends of the borrower, when they have knowledge of the borrowers current contact information and address. They must limit collection calls to reasonable hours and must not intentionally harass debtors. Further, once a consumer communicates to a debt collector in writing that they wish for communications to cease or the collector learns that the debtor has hired an attorney, the collection efforts must stop.

Always send written correspondence via fax or certified mail so that you can prove it was sent. If it becomes necessary to pursue a claim under the FDCPA, proof of written communication will help your case.

Debt Collector Law Summary

Debt collectors are third-party businesses whose sole purpose is to collect debts. Under federal law, original creditors do not qualify as debt collectors unless they are attempting to collect under a different business name than was used to extend credit in the first place. Debt collectors get paid when they collect on delinquent accounts; either as a percentage of what they’ve collected or after purchasing the debt outright. State and federal law regulate the debt collection industry. The FDCPA prohibits abusive or coercive tactics on the part of debt collectors when they are pursuing a debtor. If you find yourself overwhelmed by collection calls or letters, it is always a good idea to meet with a local attorney. There are powerful laws that can help.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Wednesday, 18 April 2018

Estate Planning for Blended Families

When parents remarry, children naturally feel the need for security and love from their parent. A blended family can be a major adjustment for all children and spouses. With some thought and planning, you can ensure that all of your loved ones are provided for in your estate plan, and ensure that your family remains harmonious and integrated even through the most stressful times.

Estate Planning for Blended Families

An estate planning lawyer can sit down with you and your spouse, learn your unique needs and concerns, hopes and fears, and then craft a custom estate plan and gifting strategy that will respect your wishes and ensure they are carried out.

Second Marriage

So you’ve gotten married, have settled in, and are ready to start your new life with a wonderful new life partner. Congratulations! Second marriages present many opportunities for happiness and fulfillment. They also present the opportunity for spouses to work together to prepare a comprehensive estate plan that considers the needs and concerns of both spouses, their respective children, children born into the marriage, and any goals the new family has set for their future.

Considerations in Estate Planning

When spouses have prior children, unique estate planning strategies are needed to ensure that the blended family remains harmonious and cooperative throughout the marriage and after the death of one spouse. We are all too familiar with the family contention and discord that happens when a parent dies without an estate plan in place. Add the concerns presented by children from multiple marriages and it becomes readily apparent that a comprehensive estate plan and gifting strategy is more important than ever: a plan that considers the assets of each parent, their wishes to help their children later in life, and the new couple’s own children’s needs, possibly.

Many people feel that leaving their property to their spouse at death is the easiest way to deal with estate planning. But vague assurances or even the most optimistic of hopes that the children and surviving new spouse can work it out are no substitute for a real estate plan. Leaving property to the spouse does not ensure that all the children of both spouses are provided for. It can also result in unwanted tax consequences, eroding the legacy you worked so hard to provide. Children from the previous marriages need to feel security: they need to know that with dad’s new wife or mom’s new husband, they will not be forgotten. Cherished family heirlooms are meaningful to them, and they want to make sure special memories stay in their lineage.

Beware of joint tenancy

Property held in joint tenancy poses a special danger for the blended family: when one spouse dies, title automatically transfers to the surviving spouse and becomes part of his or her estate. Eventually, it will pass to the children of the surviving spouse only. Your children may have grown up in and become attached to that home, but may end up disinherited from those fond sentiments while the home goes to their step-siblings who do not have the same emotional investment in it.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Tuesday, 17 April 2018

Financial Planning for Beginners

Earlier this year, household debt balances in America rose to $12.73 trillion, the highest in our history. In fact, 73% of us die in debt. With this much debt, it’s hard for many people to reach long-term goals such as retirement savings, or shorter-term goals such as paying for a wedding. Many of us just wing it when it comes to our finances, thereby decreasing our opportunities and our joys in life. But with a bit of planning, we can take control of our finances, which gives us much more control over our lives and our futures.

Financial Planning for Beginners

You will find that the following guidelines make a big difference.

Set Your Financial Goals

We all know it’s impossible to get anywhere without knowing where we want to go. Many of us have more than one financial goal, which means we need to set priorities. That doesn’t mean you can’t work toward more than one goal at once. Think about what is the most important thing to you now:

  • Paying off debt;
  • Contributing to an emergency fund;
  • Saving for short- or medium-term goals, such as paying for a wedding or a vacation; or
  • Saving for long-term goals, such as retiring comfortably.

In order to reduce both your risk and your anxiety, it’s best for most people to prioritize paying down their debt and building an emergency fund but without ignoring their retirement. Of course, your goal setting will depend to a large extent on your priorities in life. Recognize what those are and plan your spending accordingly. For some people, buying a large, comfortable house is paramount. For others, travel and new experiences are more important. Neither is right nor wrong. The point is to plan and act to make your personal goals become a reality.

Pay off Debt

Many people wonder how they got into so much debt and they don’t see a way out of it. But you can climb out of debt with good planning. If you are part of an average American household, you may have $15,654 in credit card debt, $27,669 in auto loans, and $46,597 in student loans. And almost half of credit card holders have revolving debt, meaning rather than paying off their debts every month, they carry it forward. If you have these kinds of debts, you are probably paying thousands of dollars per year just in interest.

Also, if you are in debt, you may occasionally overdraw your bank account trying to cover payments. That’s usually a minimum $34 bank fee and more if you don’t repay the money almost immediately. Banks are thrilled when you overdraw. They make more than $30 billion every year in overdraft fees.

Contribute to an Emergency Fund

If anything is constant it’s that nothing is constant. Life happens, and you need to be have a little cash put away for an emergency. Try to have at least enough money to get you by for three months. Six months is better. Shockingly, about 70% of Americans have less than $1,000 in the bank. If you have sudden medical bills, an accident, or lose your job, you need some cushion. If you don’t have an emergency fund, this should be a top priority.

Save for Short- and Medium-Term Goals

Once you have your debts under control and have a comfortable emergency fund, you may want to turn your attention to some short- or medium-term goals. This could be anything from buying a car, going on vacation, or buying a house. Life is to be enjoyed. Just don’t pursue these goals while going deep into debt or ignoring putting money aside for an emergency.

Save for Long-Term Goals

Of course, a long-term goal everyone should have is saving for retirement. Here are a few ways to do so:

  • Start putting money aside as soon as you can, even if it’s only $50 per week.
  • Don’t put your retirement behind everything else. It is far too easy to push it off. Don’t steal money from your retirement to renovate the kitchen or fly to the Bahamas for a few days.
  • If your employer will match retirement funds, put in the maximum amount they will match.
  • If you are over age 50, you can make a larger retirement contribution. Do this.

Know Where Your Money is Going

The first step to reaching your goals is understanding what you have to work with. You need to know where your money is going before you can redirect it to be more in line with your goals.

  • Go through your bank statements and receipts and list what you are spending on.
  • Separate your costs into two groups. The first group is fixed costs, such as rent or mortgage payment and insurance. The second group is flexible costs such as going to the movies and other entertainment, eating out, and gasoline.
  • Make a note of your assets and net worth.
  • Check your credit scores.
  • Add up your debt.

You don’t need to go back years. Just take a look at your spending and financial information from the last few months.

Build a Budget

Just as you can’t get anywhere without deciding where you want to go (your goal), you also can’t get there without a plan. Once you have a firm grasp on the money you have coming in, your debts, your expenses, and how you spend your extra money, you need to make a budget.

“Budget” is a word that can strike terror into the hearts of many people to the point that they become paralyzed with fear. The word can conjure images of failure, similar to the word “diet.” There is no need to put yourself through this. Your budget doesn’t have to look like anyone else’s. Recognize your personal priorities and be realistic.

If you are saving for a short- or medium-term goal that is extremely important to you such as a big wedding or a vacation, you might be willing to tighten your belt in some areas for a bit. But if you live and die for weekend golf or morning lattes, those may not be the first place to look at cutting your spending.

Just realize you may not be able to have it all, at least not all the time.

Get Help if You Need It

Some people become almost paralyzed with fear when it comes to dealing with their finances. If sifting through your financial records and creating a budget is too much for you, get help. There are various levels of help according to your needs. Help can come in the form of budgeting software, budgeting services, financial advisors, accountants, and bankruptcy attorneys.

The most important thing is that you get started immediately, because your future won’t wait.

Free Initial Consultation with a Utah Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Monday, 16 April 2018

An Employee is Hurt During a Workplace Emergency – Can the Employer be Held Liable?

Whenever a crisis arises in the workplace, there is often concern regarding who is liable — whether it’s the government, a healthcare provider or the company itself. Liability during emergency situations is a tricky matter, and many businesses could be held accountable for employee injuries if they respond in the wrong way or fail to respond at all.

An Employee is Hurt During a Workplace Emergency - Can the Employer be Held Liable

Emergency situation liabilities can stem from a wrongful death case to a slip and fall case that may involve a lawyer. This can put a lot of pressure on both employers and government officials from West Jordan, Utah to the rest of the state.

Potential Areas of Liability

Emergency first responders can potentially be held liable under matters of civil and criminal liability. They may be protected by different liabilities and waivers, but there’s still room for egregious conduct when responding to an emergency situation. For instance, an unfortunate slip and fall could arise during an emergency — and first responders could potentially be held liable on grounds of negligence.

Civil Liability

Civil liability is most likely where liability issues are going to arise. Civil liabilities include negligence, intentional harm, privacy violations, discrimination or misrepresentation. Even though one particular employee may have been responsible for an injury, the employee’s company would be held liable, as an employee acts as a representative of his or her company. However, an intentional tort can place blame upon an individual, if intent to harm can be successfully proven.

So if an employee were to intentionally trip someone, resulting in a slip and fall injury, then the employee could be held liable. If an accident were unintentional, then a company would have to hire a good lawyer out of West Jordan in order to ensure a smooth court case.

Defense in Intentional Torts

If you and your lawyer find yourself involved in an intentional tort case, there are two general arguments that you can make: you can either argue consent or necessity. In the argument of consent, such as in the case of a drug injury, one can argue that the patient was informed beforehand of what drug was going to be administered. This argument can also be used if medicine was administered while the person was unconscious.

Another argument that can be used is necessity. This could be used in a case in which someone intentionally causes a person to slip and fall in order to protect the person from further harm. These are a couple of routes that your West Jordan-area lawyer may take if you are involved in an intentional tort lawsuit.

Negligence

In an emergency situation, employers should do everything within their power to assist employees in danger — if not, they could be held liable for an injury due to their negligence. This could be a tough case for your lawyer to argue, especially if you had to opportunity to provide assistance but failed to take action. Your West Jordan-based company could be found liable for an injury due to negligence if you weren’t properly prepared, or breached some kind of employee confidentially.

If you find yourself in court in West Jordan Utah due to a slip and fall case during an emergency situation, use this knowledge and be prepared.

Free Consultation with a Utah Business Lawyer

If you are here, you probably have a business law issue you need help with, call Ascent Law for your free business law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Sunday, 15 April 2018

Claims in a Business Divorce

When conflict within a privately owned company cannot be resolved through negotiation and the parties stand at the brink of filing litigation to resolve their disputes, the parties must analyze whether their claims are direct or derivative in nature. The distinction between direct and derivative claims and claim procedures may trap the unwary.

Claims in a Business Divorce

Direct Claims in a Business Divorce Case

Direct claims are those claims brought by an owner for losses suffered directly to that owner and are unique to the owner. In the personal injury context, the plaintiff is entitled to bring claims based upon their bodily injuries caused by the wrongful conduct of the defendant(s).Similarly, claims by a business owner must only be for the economic harm or equitable relief necessary to correct the wrong by the defendant(s).

Derivative claims are claims brought by an owner on behalf of or in the right of a corporation or LLC. The shareholder steps into the shoes of the company to enforce the rights of the company against the defendant(s).The owners’ claims arise because of their ownership in the company.

Stemming from these basic definitions are issues related to whether damages being sought are truly direct or damages suffered by all shareholders. If the damages claimed are suffered by all shareholders then the claim is not direct.

Derivative Claims in a Business Divorce

In Utah, the code discusses the necessary steps for a derivative claim. An LLC derivative proceeding is governed similarly under the Utah Code Annotated as well. First, a shareholder may not commence or maintain a derivative proceeding until it is established that the shareholder was an owner in the corporation at the time of the act or omission or became a shareholder through transfer by operation of law from someone who was an owner at the time of the wrongdoing. In addition, the shareholder must fairly and adequately represent the interest of the company in enforcing the rights of the company.

A shareholder may not start a derivative lawsuit until a written demand has been made upon the corporation to take suitable action to correct the wrongdoings and recover losses for the company. In addition, once a written demand is received, ninety days must expire from the date of the demand before a lawsuit may be commenced. Exceptions to this rule exist when the demand has already been rejected, the statute of limitations will expire within the ninety days, or irreparable injury to the company would result by waiting for the expiration of the ninety days. The purpose of the written demand is to give the company an opportunity to investigate the claims and take action prior to being embroiled in litigation. If the corporation does commence an inquiry even after the demand and a Complaint has been filed the court may take action to stay the derivative proceedings for a period necessary to complete such investigation.

If the parties are now prepared to file their litigation, they must also comply with the Utah Rules of Civil Procedure. The Complaint should be verified and allege that the plaintiff was a shareholder or member of the company at the time of the transaction or obtained their ownership interest by operation of law from someone who was such an owner. The Complaint must further allege with particularity the efforts made to obtain the action desired from the directors or other management authority of the company and the reasons for the plaintiff’s failure to obtain the action sought or for not making such an effort. In addition, the plaintiff must demonstrate that they fairly and adequately represent the interest of all shareholders or members similarly situated in enforcing the rights of the company.

Termination of Derivative Proceedings

A derivative proceeding may not be dismissed or compromised without approval of the court after notice. On the termination of the derivative proceedings, the court may make orders with respect to expenses incurred including attorney fees. If the court finds that the plaintiff’s derivative action has resulted in a substantial benefit to the corporation it may order the corporation to pay the plaintiff’s expenses and fees. However, if the court finds that the derivative proceeding was commenced or maintained without reasonable cause or for an improper purpose, the court may order the plaintiff to pay all defendant’s reasonable expenses and fees.

The Utah statutes have a procedure which effectively terminates the plaintiff’s derivative claim and the right to be heard before a jury or a judge if certain conditions are met. First, if the corporation investigates the matter and resolves internally the issues raised in the derivative demand the basis for the lawsuit is eliminated. The second method available to obtain early termination of the litigation is for the corporation to move the court to appoint a panel of one or more independent persons to determine whether the maintenance of the derivative proceeding is in the best interest of the corporation. The court appointed panel, like the company appointed panel, must conduct a reasonable inquiry in good faith and if it concludes that the maintenance of the derivative proceeding is not in the best interest of the corporation, the corporation may ask the court to dismiss the claim. In sum then, the plaintiff’s claim falls to the hands of either a court appointed or company appointed independent panel to determine whether or not the claim should effectively be maintained in litigation. If in fact it is determined by this panel that the maintenance of the derivative proceeding is not in the best interest of the corporation, the plaintiff then has the burden to prove by clear and convincing evidence that the panel has not acted in good faith, may not have conducted a reasonable inquiry and has drawn a conclusion that is not in the best interest of the company.

In a business divorce context, plaintiffs pushing for separation who file direct or derivative claims, effectively have two fronts to attack the wrongdoers or those from whom they would like to separate. Derivative proceedings present a procedure that may reduce the cost of litigation by use of the independent panel. The pressures of litigation may force the parties to separate hopefully by settlement rather than litigation because of the direct or derivative claims.

Free Consultation with a Utah Business Lawyer

If you are here, you probably have a business law issue you need help with, call Ascent Law for your free business law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506