Commercial Transactions Representative Matters
Closed an acquisition for Veristar LLC, a data management and document review company serving corporate legal departments and private law firms. Handled the acquisition of certain assets from Franklin Data Ventures Inc. With the acquisition, Veristar LLC is now a national provider of expert forensic data collection, electronic discovery and comprehensive document and managed review services.
Lead Financing Transaction for Air Transportation Company: Recently closed a $5,750,000 credit facility for our client, a business executive air transportation company. The highly complex financing transaction involved numerous state and federal regulatory bodies, including a local Chicago airport. The collateral is two leasehold mortgages on subleases of ground leases of two airport hangers. We also brought into the deal the entity that was the ultimate financing source for this transaction.
Closed Complex Real Estate Transaction at Nearly 3X Original Asking Price: Concluded a complex real estate transaction that resolved litigation between warring stakeholders that highly benefited their client. The dispute between partners of a senior manufactured housing development wound its way from trial court, to arbitration, and then on to a forced sale by a trial court judge, to the appellate court, and finally, again, to another protracted arbitration hearing. The final transaction exceeded $60 million, almost three-times the initial valuation at the inception of the litigation. In this transaction, all but one partner wanted to sell their portion of the property. Johnson & Bell represented the party that sought to retain its one-third stake. The partners initially received a valuation for the property of $20-30 million, and were in litigation over the property’s final price. Subsequently, an investor indicated it was willing to buy the property for more than $60 million, but would allow Johnson & Bell’s client to retain a one-third ownership stake. As a result, the investor and Johnson & Bell’s client became Tenant in Common (TIC) partners. Johnson & Bell represented its client throughout its litigation related to the initial forced sale, appeal and arbitration of the property. We also directed the real estate transaction, including the identification of the final partner and the sophisticated financial structuring that was required to get the transaction to the finish line.
Resolved Corporate Ownership Dispute: Successfully resolved a corporate ownership dispute involving a commercial recycling plant, saving our clients nearly $2 million in the process. In this ownership dispute, we represented two of the four shareholders, each of whom held a 25 percent stake in the company. Following the death of one of the two rival shareholders who were not our clients, the business relationship among the remaining owners began to deteriorate over several years. One of the rival shareholders was the spouse of the decedent shareholder, who assumed his 25 percent share following his death. Disputes arose between the four owners about the valuation of their respective 25 percent stakes, back-owed distributions, back-rent owed and operating issues. Moreover, the two owners not represented by Johnson & Bell sold the building where the company operated without telling our clients. At this point, we were retained to resolve the dispute.
After threatening to litigate the dispute via a demand letter and draft complaint, we convinced the two rival shareholders to mediate the dispute. As part of the mediation, our team requested a valuation of the ownership interests as determined by the company’s accountants in accordance with the language contained in the corporate buy-sell agreement. The two rival shareholders disputed the valuation of the interests, seeking a substantially higher dollar value for their respective interest pursuant to a competing valuation. The two rival owners also claimed back-rent that was owed in excess of $500,000. Our clients claimed the large roof on the plant needed to be replaced at a cost of $300,000. Ultimately, no back rent was paid and the two rival owners agreed to a valuation slightly above the valuation we claimed was correct with a buyout of each of their 25 percent stakes in the company. Compared to the rival shareholders’ initial buyout demands, we saved our clients nearly $2 million to bring this dispute to a successful resolution by way of an all-day mediation without the need for any litigation.
In addition, we are currently handling:
- Sales tax audit of our client, a vending machine company. The Illinois Department of Revenue and the IRS are pursuing the audit.
- An internal investigation of an employee embezzlement scheme (checking scam). We anticipate client will recover 100 percent of its loss.
- 50-state compliance audit for our client on its retail installment sales contracts.