Category Archives:Business

An International Business Dispute

An international dispute pending in the US District Court Northern District of Ohio, case number 1:20-CV-00601-SO has been settled to parties’ satisfaction. We represent the plaintiff.

The case started in March 2020 when the plaintiff filed its complaint with the district court. Since then, parties filed pleadings, motions and engaged in discovery. Based on newly obtained information, plaintiff filed its amended complaint which drastically changed the landscape of the case. Soon after, both parties were able to sit down and discuss possible resolutions for the dispute. With the court’s assistance, the parties finally settled all issues between them in December 2021.

The case was litigated during the COVID pandemic. Thus, all hearings were conducted in a virtual setting. Plaintiff received just compensation and is satisfied with the result and our service because we maximized client’s rights and benefits.

International business litigation has many more challenges than routine domestic civil litigation. It also requires additional skills and abilities. For example, the first step – service of process could be a daunting task. In this case, the defendants tried all means to avoid being served. The service alone took many months. Nonetheless, we are good at it, and in the end, we obtained good result for the client. If you have an international business dispute, please contact us.

© 2021 Copyright by Lei Jiang LLC. All rights reserved.

A Successful Five Million Dollar Merger and Acquisition

A five-million-dollar merger and acquisition was concluded right after the Thanksgiving Holiday. The initial closing was set for November 24, 2021, the day before Thanksgiving. Instead it was closed on November 26, 2021.

In this case, the purchaser was a Nasdaq listed company specializing in international education.  It acquired 70% of the ownership of an Ohio private investment company specializing in higher education. This acquisition was done in two steps. The first was the purchasing of the 70% ownership interest. Then, immediately following the first closing, the company subscribed 900 new shares as part of the deal (subscription closing). Two closings were scheduled back-to-back.

There were some challenging issues of the deal which required special skills. For example, the seller company has several classes of shares and non-diluted shares.  Also, the seller company’s shareholders were non-US persons. Finally, the seller company has de facto subsidiaries, including an international subsidiary. All of these factors increased the deal’s complexity.

We represented the seller company and were working around the clock to meet the deadlines. In the end, both closings were successfully completed. Our client was satisfied with our help. Moreover, the client went the extra mile to acknowledge our work by rating us positively on Google. 

Mergers and acquisitions (M&A) require high-level skills that are not easily obtainable. Skills and experience from legal areas such as business transaction, taxation, IP, or even immigration may be called together in this type of work.

We are happy with the positive results and synergies created by this deal. Case after case shows that our commitment to client’s success is real and never fading. If you have M&A work, please contact us.

© 2021 Copyright by Lei Jiang LLC. All rights reserved.

Employment Law Uniformity Act: What Does it Mean for Ohio Businesses?

Ohio Gov. Mike Dewine signed H.B. 352 into law earlier this year and it went into effect April 15th, 2021. Also known as the Employment Law Uniformity Act, it will enact broad changes to how employment discrimination claims are handled in Ohio. The legislation is meant to improve the business climate in Ohio, as well as draw more investment into the state.

Major Changes

Smaller caseload- One big change that H.B. 352 implements is that plaintiffs with discrimination claims will first go to the Ohio Civil Rights Commission instead of going right to court. This will help lessen the burden the employer usually faces when having to deal with court battles and hearings with the Ohio Civil Rights Commission.

Statute of Limitations amended- Before H.B. 352, an employee had up to six years to pursue a civil claim for discrimination and 180 days to go before the Civil Rights Commission. Now, a two-year statute of limitations applies to all charges filed with the commission and civil lawsuits. The new law tolls the statute of limitations for civil lawsuits until the Civil Rights Commission completes its investigation. This will ease the recordkeeping burdens that businesses often carry and will create more reliable witnesses, as they will have a fresher memory of the event if it only happened within the last couple of years.

Affirmative defense- H.B. 352 codifies the federal Faragher-Ellerth Defense. According to Thomson Reuters Practical Law, this is an affirmative defense employers can use to defend against claims of hostile work environment harassment if: No tangible adverse employment action was taken against the plaintiff, the employer exercised reasonable care to prevent and promptly correct the harassing behavior and the plaintiff unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to otherwise avoid harm by, for example, not taking advantage of reporting procedures outlined in an anti-harassment policy.

What Does This Mean for Ohio Business Owner?

If you are a business owner, update your human resources department about the new law. If a former employee or current employee accuses you of discrimination, make sure to tell your IT department or employee to retain all communications and emails having to do with the subject of the lawsuit. Furthermore, make sure to hire experienced representation, like Lei Jiang Law Firm, as we are well versed in labor and employment disputes. If you have such an issue, please contact us at (440) 835-2271.

A SUCCESSFUL COMPLETION OF A WAGE CASE

After near a four-year litigation, a wage case in the US District Court Northern District of Ohio was recently settled to our client’s satisfaction. T. Wang v. China Wok, et al. Case number 3:17-cv-00691 was filed on April 3, 2017. Our firm represented Plaintiff Ms. Wang. The original complaint was subsequently amended and supplemented. Additional parties were added as defendants. Ms. Lei Jiang was the lead counsel in this case.

The case was at the final stage – waiting for the trial when it was settled. All discovery was completed, and summary motions were filed and determined by the court. Due to COVID, the trial was delayed. Unexpected delay eventually facilitated the settlement. This is a good result for all parties involved because there will be no appeals.

Labor and employment disputes are one of our areas. If you have such issue, please contact us.

© 2021 Copyright by Lei Jiang LLC. All rights reserved.

2020 Business Valuation – A Recent U.S. Case

The U.S. Department of Labor recently prevailed in a district court of Virginia case involving multiple Employee Stock Ownership Plan (ESOP) valuation issues.

The case involved allegations that the selling shareholder, who was also a fiduciary of the employee stock ownership plan, as well as the bank hired to represent the ESOP as an independent fiduciary, breached their fiduciary duties by allowing the plan to overpay for the shareholder’s stock.

The district court issued a lengthy ruling on the case which addressed multiple common valuation practices such as normalization adjustments, discounting, capitalization rates and proper look-back periods for the purposes of capitalization. For example, the Court found that

– The conclusion of value was strikingly close to an initial estimated value that had been floated by ESOP counsel and advisors at the inception of the transaction;

– The appraisal was performed on a controlling basis even though the seller/owner and his wife were still going to be two of three ESOP co-trustees and occupy two of three company director seats;

– Almost of all of the appraiser’s assumptions, including his capitalization rate, fluctuated significantly relative to previous appraisals that he had performed on the company and all in a direction towards a conclusion of higher value;

– The appraiser did not obtain financial projections or prepare his own and get management buy-in and the appraisal utilized only a capitalized cash flow method to the exclusion of a discounted cash flow method(discounted cash flow method); and

 — The ESOP trustee raised many concerns with the draft appraisal but did not follow through and then went ahead and agreed to a purchase price before reviewing the final appraisal.

This case remind us that (1)  much discussions were needed to justify the departure from previous yearly valuations and big rise of stock value, (2) an impartial review of the valuation results might have red flagged the flaws, (3)  the fiduciaries would have been wise to remember that fiduciary duties imposed by ERISA are “the highest known to the law” and any decisions made in fiduciary capacity should have been made with an “eye single to the interests of the participants and beneficiaries.” (4) a genuine negotiation with respect to the purchase price should be conducted.

Lei Jiang Law Firm handles many aspects of business transactions. For questions, please contact us. © 2020 Copyright by Lei Jiang LLC. All rights reserved.

Civil Litigation - Important Changes to Ohio Rules of Civil Procedures

Recent amendments to the Ohio Rules of Civil Procedure will unify the timeline of court proceedings throughout the state.  For example, Ohio now has uniform motion deadlines to streamline processes.  The amendments became effective July 1, 2018 and serve to eliminate confusion regarding deadlines and other requirements.

Here are some of the specifics. For Motions for Summary Judgment, all responses are due 28 days after service of the motion, and replies are due 14 days after service of the response.

For all other motions, responses are due 14 days after service of the motion, and replies are due 7 days after service of the response.

Motions for purposes of trial, such as a motion in limine, must be filed at least twenty-eight days prior to the trial, while motions for purposes of a hearing must be served no later than fourteen days prior to the hearing.  Importantly, Rule 6 allows courts to modify the summary judgment and motion deadlines for good cause.

Discovery rules are also updated due to advancements in technology. Rule 33, 34, and 36 now state that the discovery must serve an electric copy on a shareable medium in an editable format.  These changes should result in a more streamlined and effective system. 

For legal issues, please contact us.

© 2020 Copyright by Lei Jiang LLC. All rights reserved.

Civil Litigation in 2020

The Supreme Court of Ohio issued an order effectuating and expanding upon the emergency legislation Governor DeWine signed into law on March 27, 2020 in response to COVID-19, which tolled statutes of limitations, as well as litigation deadlines and timelines.  The Court’s order reflects the judicial branch’s reciprocation of H.B. 197 legislation and orders that all “time requirements” that are set to expire between March 9, 2020 and July 30, 2020 are tolled.  In effect, the order tolls all litigation deadlines that are due March 9 through July 30.

The order does allow for a court to supersede the tolling provision by issuing an order of its own on or after March 9, 2020.  Some courts, however, seem to be determined to press ahead due to concerns of unmanageable heavy case load down the road. Overall, the progress of civil cases is slowed in light of the pandemic.

Firmwide, we see no decrease of civil cases in 2020.  Five breach of contract cases alone came in before April 2020. Civil litigation is a big part of our practice. Our core substantive practice areas of corporate, business, real estate, international, and intellectual property often involve complex disputes that must be resolved in federal court. As a result, we have developed expertise capable of handling the most significant matters. 

In a civil litigation, we handle matters from pre-complaint investigation, through discovery, summary judgment, trial, and the appeals process. We are experienced yet small enough to ensure that client service remains at the forefront of every engagement. So, if you are burdened by business disputes, let us help you. For legal issues, please contact us.

© 2020 Copyright by Lei Jiang LLC. All rights reserved.

2020 Mergers and Acquisitions

Our firm, Lei Jiang LLC, started 2020 with a good volume of deals and mergers and acquisitions. We continue to handle variety of deals. In January, we successfully concluded an acquisition of a US college by a Canadian educational group. Then we put several deals together before COVID-19 spread in US. They included a recycling company’s expansion and acquisition and several restaurant acquisitions. Currently, we are in the midst of a Chinese metal company’s second phrase acquisition of a US company.

Even though COVID-19 pandemic slowed down M&A activity due to uncertainty in valuations and companies focusing on liquidity and cost efficiencies, we expect to see more activities in three categories taking place,

  1. Well-funded strategic buyers using this opportunity to build sizeable positions in targets and /or attempt takeovers of undervalued companies,
  2. Corporates selling or spinning off non-core assets to address liquidity, leverage and valuation issues,
  3. Investors contributing capital in exchange for significant equity stakes in businesses in need of a recapitalization or with liquidity constraints.

If anything can be learned from 2008-2009 financial crisis, we can expect a renewed use of equity as form of consideration for transactions among corporates. If you have any questions regarding M&A, please contact us. We specialize in international mergers and acquisitions and complex transactions.

For legal issues, please contact us.

© 2020 Copyright by Lei Jiang LLC. All rights reserved.

Another Successful Case in Federal District Court

On January 23, 2017, an order was delivered in a case captioned as IIP Cleveland Regeneration, LLC, et al. v. Zhenfen Huang, et. al., Case No 1:16 CV 2673, pending in the U.S. District Court for Northern District of Ohio. Our firm represented the defendants in this case.  After vigorous defending, the District Court dismissed plaintiffs’ complaint.  This results a total and complete victory for our clients.

This case had not lasted long. After plaintiffs filed their complaint, we immediately responded with a motion to dismiss.  This was because the complaint was poorly written, without any factual substance and legal basis. Plaintiffs then amended their complaint, significantly altered the initial landscape of the complaint, even added additional defendant in an effort to boost their case.  We quickly filed a second motion to dismiss.  In the end, legal fiction, no matter how voluminous it seemed, could not save plaintiffs’ ill-conceived complaint.  The district court agreed with us and dismissed this case.

Whether prosecuting or defending, we handle your case with uttermost care and best effort. If you or your company need a competent law firm to handle disputes or litigation, please contact us.

Mergers and acquisitions (M&A) 2016 year-end review

Overall trend. The mergers and acquisitions Lei Jiang LLC handled in 2016 are mostly global in nature, involving Asia Pacific companies as buyers and American companies as sellers. The dominant buyers are again Chinese companies. But we see different Chinese buyers, including Chinese private equity firms, publically listed companies, and even private owned companies. The traditional outbound M&A was dominated by Chinese state-owned enterprises. The new trend signaled a broader bases, bigger appetite, and increased capacity for Chinese companies to acquire U.S. companies.

Although this new array of buyers has very short track record of cross-regional M&A, they have showed some experience and are comfortable in the deal. From our dealing with these customers, we have discerned factors behind this buying spree. They are 1) to boost the growth rate of the company, 2) lack of domestic targets for acquisitions, and 3) ease of the restrictions on finance.

Implications for U.S. companies. U.S. companies should consider Chinese companies as legitimate partners and buyers if they want to fully utilize the value. First, Chinese companies normally pay higher premium in acquiring U.S. companies. They take into consideration of the long term development and potentials. Second, consistent with Chinese culture, Chinese buyers place high value on the relationship with the management before, during and after the transaction. Moreover, in the M&A we handled in 2016, all Chinese buyers have retained the management team and given generous compensations to the U.S. teams. Finally, according to Forbes, by the end of August 2016, China was so far the top acquirer of foreign companies. If the trend continued to the end of year, China would unseat the USA for the first time since 2006. Thus, U.S. companies simply cannot afford to ignore this group of acquirers.

Implications for Chinese/Asia Pacific companies. As mentioned, Chinese companies typically adopt a longer-time investment evaluation, causing them to pay a relatively higher premium. Moreover, paying premium to retain the target’s management team shows that Chinese companies are not familiar with the dynamics of the overseas market and are not capable of running the target initially. Still, cross-regional M&A can be a value enhancing strategy for Chinese companies. If it fits their long-term strategies, in the long run these companies will gain a competitive advantage in the global market.

Lei Jiang Law Firm has successfully concluded several M&A deals in 2016. Some are still in the process. We are proud to provide top-notch M&A services to our clients. Our team are skilled in cross-regional M&A. We understand the cultural difference, language nuance, and different regulatory requirements. We are here to make it happen.