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Back Cover Story: Do (Due) Diligence

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suit (any suit!) to shut that tenant up. son (which is a completely ludicrous and
The claim to support the lawsuit for an unenforceable transaction). The other
injunction was that the dispensary vio- guy then needed more money so he
lated deed restrictions which prohibit wanted to sell, while my client wanted to
“medical offices” “schools” “pharma- keep the land and develop apartments,
cies” and more, all of which the manage- which they planned from the start. The
ment claimed this dispensary to be. The other guy entered into a contract on
injunction was denied. Not many behalf of the company to sell the land
lawyers would have envisioned that law- without my client knowing. Then my
suit while conducting due diligence client found out. That’s where the law-
while negotiating that lease. suit begins.
Sometimes, the lawsuit would have My client’s suit is to remove the other
been envisioned by the lawyer during guy as manager for the company and
due diligence, but the client is in a rush replace him, cancel the sale contract,
or just doesn’t want to pay a lawyer. have a court declare who owns what per-
Sometimes they just don’t want advice. centage, etc. This case will take years to
I’m handling a suit now for a client I resolve and cost each side tens of thou-
have represented in lawsuits for years, sands of dollars in fees and costs.
simply because, for all of his money, he A corporate lawyer helping either side
does not like to spend it on lawyers. So would have prevented this suit. No
he consistently ends up in lawsuits over lawyer would have let these two do any
his business transactions. This client’s of the things they tried to do. Had my
business is land development and he’s client used counsel at any point along
been very successful, despite himself. the way, he would not be in this predica-
My client knew a realtor who found ment. He didn’t use ordinary care in his
land to develop together. The two, with- decision making. He didn’t do due dili-
out lawyers, then entered into a joint gence
venture agreement with both signing in Do due diligence. If you own a busi-
their kids’ names. They then incorporat- ness, exercise the care a reasonably pru-
ed with neither of them listed with the dent person would take before making
state as owners and their respective kids important decisions, most often by using
listed as owners. The land was bought by counsel. This isn’t a pitch for me, I just
the company with the fathers signing as clean up the messes after people don’t
the owners of the company. When the use corporate counsel. A little money on
company needed money for property counsel up front may save your business
taxes, my client lent the other man and may save yourself from years of
money and my client was given a prom- aggravation.
issory note stating that if the principal
wasn’t repaid by a certain date, the loan Michael Liss, Esq. can be reached at
would be repaid by transferring the other ml@integritycounselpa.com or
guy’s “daughter’s” interest to my guy’s (561) 981-2507, located in Boca Raton.

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