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Long Beach Business & Commercial Law Blog

Cardi B launches $15 million breach of contract countersuit

Hip hop fans in California and around the country will likely know Belcalis Almanzar better by her stage name Cardi B. The 25-year-old diva was already a reality television star when her debut album 'Invasion of Privacy" debuted at number one on the Billboard 200, but her rapid rise to fame has left her embroiled in an acrimonious legal dispute with the man who says that he discovered her on Instagram and nurtured her career.

Klenord Raphael, who is more widely known by his stage name Shaft, says that he discovered Almanzar on Instagram in 2015 and played a key role in developing and promoting her music. Raphael claims that Almanzar agreed to pay his WorldStar Marketing Group 20 percent of her income in return for these promotional efforts, and his breach of contract lawsuit accuses the singer of cheating him and using social media to smear his name and damage his reputation.

Regulatory reform helps banks make commercial real estate loans

The first quarter of 2018 saw a relaxation of lending standards at banks in regards to commercial real estate loans. The standards set for banks in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act restricted the ability of banks to grant loans to commercial property investors. Financial analysts expect the rollback of some of these restrictions to create opportunities for commercial property owners in California to refinance their loans.

A chief economist at JLL Capital Markets said that the increased flexibility for banks should not inspire a large bump in new lending activity, but more borrowers might look at their refinancing options now. When the Federal Reserve Bank surveyed senior loan officers, responses indicated that banks were easing their lending terms for construction and land development, multifamily buildings and loans for nonfarm and nonresidential buildings.

Errors when selling commercial properties

There are many errors that can be committed by all of the parties involved in the sale of a commercial property. Commercial real estate owners in California should take care to avoid certain mistakes when selling their commercial properties.

One mistake to avoid is not informing the potential buyer of tenant defaults. Buyers should be advised of tenants who have delinquent rents or if a security deposit had to be applied to a missed rent. Not being upfront about such matters can compromise deals.

Failed bitcoin exchange prompts contract dispute

Many California investors held Bitcoin at Mt. Gox, a prominent exchange for the cryptocurrency that collapsed after an attack on the service. Now, the consequences of the losses that accompanied the fall of Mt. Gox are playing out in litigation, including a complaint by several former Mt. Gox customers against Mizuho Bank. Several former Bitcoin holders who used the exchange allege that the bank tortiously interfered with their contract with the exchange.

The bank is seeking to dismiss the case filed by former customers of the Bitcoin exchange, who allege that the bank is responsible for breaching its contract. Mizuho was the only bank to provide services to Americans who used the Bitcoin exchange and, at some point, it made a decision to stop processing requests for international wire transfers. However, the transfer requests were submitted properly according to the contract the customers had with Mt. Gox. In addition, Mizuho failed to disclose why it was blocking transfers. This meant that customers did not have information they needed to determine whether they should purchase Bitcoin on the exchange.

Changes to come in the real estate market

The commercial real estate market could change in 2018 for investors in California and across the country, according to a report published by the Mortgage Bankers Association. In the annual study, which was released in June, the association said that it expects the current year to be less strong for investments in commercial and multifamily properties, noting that the coming five years may have a different trend than the past five years. The association's report said that it is unlikely that returns will remain at the same high level that they have boasted in recent years.

The report emphasized that commercial real estate investments will continue to be a solid source of income. However, the association also offered that the growth rate would likely be slower than in previous years as the balance between demand and supply has somewhat evened out. In addition, interest rates are on the rise and net operating income is developing a flatter trend. Property values are, in many places, expected to remain relatively stable or rise in general with the economy, rather than shooting up sharply.

Menudo Boy Band Group Reboot in the Works Following Dispute

Corporate disputes can easily derail any efforts. Puerto Rican boy band Menudo is finding this out firsthand. n 2016, the company's effort to relaunch the franchise was put to a halt for two years to address business litigation issues.

At the heart of the matter was a trademark dispute over the name of the band, 'Menudo." The Puerto Rican band recently resolved the corporate dispute over its trademark. The United States District Court in Miami ruled that the name belonged to Menudo International, LLC. The South Florida group initially acquired the trademark back in 2016. This was done in preparation for a relaunch of the franchise. The franchise dates back to 1977 and is credited with launching the careers of both Ricky Martin and Robi 'Draco" Rosa. The 1980s group has been involved in a intellectual property dispute with In Miami Productions and Cristina Bruan.

How to create a favorable commercial lease

Commercial lease disputes can be harmful for California business owners. They can also be bad for those who own the land or property that is being rented. Fortunately, there are ways to reduce the chances of such disputes taking place. For example, it is imperative to have all the details of a deal in writing. This is true even if it seems trivial when the deal is first reached.

If there are conditional terms that are placed in a lease, those terms should be as clear and objective as possible. Furthermore, it is a good idea to make sure that there are contingency plans built into the contract. This is because there are some instances in which something can occur that's beyond any party's control. Accounting for such instances ahead of time could make potential issues easier to resolve.

Strategies to prepare a commercial property refinancing

Commercial properties in California have great potential to produce income, but owners must make an ongoing effort to maintain their curb appeal, occupancy and net operating income. Mortgages on commercial real estate mature every five to 10 years, and property investors need to be ready to withstand the scrutiny of lenders when the time to refinance arrives. Refinancing a commercial building could also present an opportunity for the investor to increase cash flow or cash out equity to pay for new investments.

Commercial real estate lenders look primarily at net operating income when they make lending decisions. Landlords who let space remain vacant, ignore maintenance or fail to collect rent will face an uphill battle when trying to secure a new loan. Lenders could view a building with vacant space or persistently unpaid rent as distressed properties. If a loan does come along, the terms and interest rate will be undesirable.

Commercial real estate continues to attract foreign investment

According to the Bureau of Economic Analysis at the Department of Commerce, more than $450 billion was invested into the American economy by foreign investors during 2016. A significant portion of this investment has been in commercial real estate in major California markets, and some experts predict that the trend will likely continue. Foreign investors have placed high value on commercial real estate in 2016 and beyond due to steady job creation and business expansion.

While much of the focus from foreign investors has been in major markets like Los Angeles, New York and Chicago, opportunities exist in smaller cities and suburban areas throughout the country. These markets have high-value office parks, commercial shopping complexes and modest-sized commercial buildings for relatively low prices. For some foreign organizations, investing in commercial real estate debt is seen as a less risky proposition than direct property purchases.

Craft brewery back on market after contract dispute

When an agreed-upon contract goes wrong or is otherwise breached, it can have a significant, cascading effect on the parties involved. In the case of California craft beer manufacturer Monkey Paw Brewing, it could be back on the market due to a pending breach of contract lawsuit filed by the company's own founder. A majority ownership stake in Monkey Paw was purchased by Coronado Brewing in 2017; the larger brewery was looking to develop the production levels and distribution of the smaller company. However, less than a year later, Coronado has moved the craft business back on the open market.

The breach of contract lawsuit was filed by the founder of Monkey Paw in April 2018; the plaintiff remains a minority owner of the business but left his titled role as an adviser in January. In his lawsuit, the man alleges that he is owed over $33,000 by the company. He says that he was given a promissory note in September of 2017 in which the company pledged to pay him $1,005.04 each month going forward, yet he claims that none of those payments have been made.

Creative Solutions for Complex Legal Issues

Contact Henry B. LaTorraca

400 Oceangate
Suite 700
Long Beach, CA 90802-4306

Phone: 562-216-2942
Fax: 562-216-2943
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