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At the outset of a joint venture, many real estate investors don’t focus on the inevitable question – what could possibly go wrong?

At the recent Real Estate Bar Association for Massachusetts (REBA) 2008 Spring Conference Attorney Mark Furman, chairman of the litigation department of Tarlow, Breed, Hart & Rodgers, P.C., outlined not only what can go wrong, but also how to approach the resolution of disputes among co-venturers.

Disputes or claims that arise out of joint ownership agreements run the gamut. Common areas of discord include: self dealing, usurping corporate opportunities, entitlement to compensation or fees not fairly allocated, the right to work in a venture, mismanagement, unequal treatment, or exclusion from information, participation, and decision-making.

Under Massachusetts law, joint venture parties have the same fiduciary duties as partners, owing each other the duty of utmost good faith and loyalty, particularly in regard to minority shareholders. Co-venturers may not act out of self-interest or avarice in violation of their duty of loyalty to their partners and the business.

In matters involving business policy, majority shareholders have the initial burden of demonstrating a legitimate business purpose for the action taken. This includes majority shareholders exercising discretion in declaring or withholding dividends, deciding whether to merge or consolidate, establishing the salaries of corporate officers, dismissing directors with or without cause, and hiring and firing corporate employees. The minority shareholders then have the burden of demonstrating that the same legitimate objective could have been achieved through an alternative course of action less harmful to the minority’s interest. The Courts then weigh the legitimate business purpose against the practicability of a less harmful alternative. The Courts also consider the reasonable expectation of the parties.

In situations involving corporate opportunities and self-dealing, the burden is on those who benefit from the venture to prove that the decision was fair to the corporation. An agreement among owners should minimize claims. If it is a joint venture, the scope of the venture should be narrowly defined.

Although Massachusetts courts have indicated that the fiduciary duties owed between joint venturers can be modified or limited by contract, there has been a reluctance to allow for the total elimination of fiduciary duties. Statutory provisions also exist under Massachusetts law that can be used to limit or eliminate the personal liability of a manager or member of a Limited Liability Corporation (LLC) or limit the liability of a director of a business corporation.

Massachusetts courts will apply the law of the state of incorporation to claims concerning the internal affairs of a corporation, including claims for breach of fiduciary duty. The scope of fiduciary duties can vary from state to state, and the statute of limitations, burdens of proof, and available remedies may also differ.

Some claims may only be brought as derivative claims on behalf of a company. A derivative action must be brought to recover for breach of duties owed to the corporation. Because a derivative action is brought on the grounds of breach of duty owed to the corporation, any recovery will benefit the corporation. Claims that the majority has been paid excessive compensation must be brought as derivative claims. Direct claims for breach of duty owed to a shareholder may be brought directly by the aggrieved minority shareholder. Direct claims include those challenging the termination of employment and certain “freeze out” techniques.

In Massachusetts, breach of fiduciary duty through diversion of corporate opportunities and self dealing is usually subject to a three year statute of limitations while certain other contractual claims may be subject to a six year statute of limitations. The statute of limitations may be extended by virtue of the Plaintiff not having knowledge of the wrongdoing, fraudulent concealment, or in derivative actions, the adverse domination of the corporation by the alleged wrongdoers.

The court has broad equitable powers to fashion remedies where there has been a breach of fiduciary duty. Courts attempt to restore as nearly as possible the wronged party to the position they would have been in had there not been wrongdoing. Remedies should neither grant the minority a windfall nor excessively penalize the majority. The remedy should be consistent with the reasonable expectations of the parties.

Massachusetts statutory remedies are determined by provisions of the Limited Liability Company Act, the Uniform Partnership Act, the Limited Partnership Act, and the Business Corporations Act.

Tarlow, Breed, Hart & Rodgers, P.C.

Formed in 1991, Tarlow, Breed, Hart & Rodgers, P.C. is committed to providing high quality, comprehensive legal services to its clients. Featuring a breadth and depth of experience and perspective usually found only at larger law firms, Tarlow, Breed, Hart & Rodgers, P.C. offers sophisticated legal counsel to entrepreneurs, businesses, individuals, families, and institutions.

The firm’s areas of expertise include litigation and dispute resolution, corporate law, employment matters, mergers and acquisitions, estate planning, taxation, real estate, bankruptcy, and municipal law.

The expertise and collegiality of the firm’s fifty plus members, associates, and support staff has consistently resulted in the building of lasting relationships of trust and confidence.

The offices of Tarlow, Breed, Hart & Rodgers, P.C. are located at 101 Huntington Avenue, Prudential Center, in Boston, MA 02199. For additional information, or to arrange for a consultation, please call 1-617-218-2000, e-mail info@tbhr-law.com, or visit www.tbhr-law.com.

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IMFF Cinedays M, taking place in Skopje through September 7, celebrates the past, present and future of the music and film. The Festival’s focus is on music-related content, including feature films, documentaries and short films submissions that have an emphasis on music – rock, jazz, blues, soul, reggae, punk, pop, reggae …. old and new. River View Players based in Harlem open a new performance series on September that will present readings of plays (featuring DuEwa Frazier, Lit Noire Publishing), short stories, poetry, music and films every Sunday from 4 to 6 in the back room of Cafe Largo. Free food tastings will be offered from the Cafe on this occasion, and the event is free and open to the public.  indieWIRE presents filmmaker Alan Ball and actress Summer Bishil in a discussion of their new film, ‘Towelhead,’ at the Apple Store, SoHo, September 8. “The Down-Low on Distribution” is a seminar on September 10 in Los Angeles attempting to decode the different distribution deals so that you can get the best rights in your agreement. New York Television Festival which has featured acclaimed independent pilots that were purchased by networks such as NBC Universal, A&E, and the like, will feature an “Industry Day” session in which industry leaders participate in a number of panel discussions, when it runs September 12-17.

At this year’s Boston Film Festival a program of shorts, documentaries and feature films premieres during the festival’s run from September 12-19,  and  evening  receptions are hosted by regarded chefs and restaurateurs providing the ideal scene for filmmakers and talent to network as well as sponsors to entertain. The IBC 208 Conference and Exhibition, September 12-28 in Amsterdam, addresses personalised content over the web; future broadcast businesses and the changing audience; the “digital dividend” and the battle for bandwidth; production and protection of all types of content, and other areas. At “Fund Your Film Workshop With Stu Pollard,” key elements of an independent film business plan, including structure, layout and research and a primer on private equity financing for truly independent projects, will be reviewed when the one-day session meets September 13 in Dallas. Independent Film Week, formerly know as the IFP Market, is still a gathering for industry professionals where pitch meetings search for new talent, and cash, product donations and services are awarded to participants. The Temecula Valley International Film & Music Festival’s social calendar starts with Opening Night Festivities on September 17, followed by daily and nightly filmmaker/musician receptions, industry workshops, a Lifetime and Career Achievement Awards Black Tie Gala, a Sunday morning Hot Air Balloon Ride, a Closing Night Wrap party (September 21) and Best of Fest special screening presentations and more. The NBC Universal Women Writers Workshop, September 18-25 in Toronto, will target intermediate women screenwriters who have a treatment or first draft, and will work toward the development of their next draft of a feature script. It will focus on script development and building on concepts introduced in the Feature Film Writing Program emerging module.

Screenwriting and the Business of Hollywood, will be conducted September 19 and 20 from Rock Island, by Act One Seminars, intensive, practical workshops for aspiring and professional writers and entrepreneurs who are serious about their Christian faith and who dream of creating culture that respects and enriches a global audience. SWAMP and TALA present the Business of Film Conference 2008, a September 20 event at Rice University Media Center focusing on the business of making movies with professionals from the film, legal and financial worlds that address a wide range of topics, including budgeting for film, funding resources, music rights, distribution and more. The Film, Stage and Showbiz Expo will allow participants to showcase their film/video/movie reel for Producers and Production Companies at a private screening area all day at the Expo, and Telsey + Company will conduct an open talent search for some of the hit Broadway shows they represent at the one-day event, September 21, in New York. In Gene Autry, Oklahoma, the Gene Autry Oklahoma Museum celebrates the legacy of the singing cowboys with its Film & Music Festival. It’s a gathering of cowboy and country singers, cowboy poets and storytellers, Western film stars and look-alikes, and it happens from September 24-28. The 17-day New York Film Festival gets underway September 26 in New York, with its program of emerging and international filmmakers. Black Entertainment Magazine in conjunction with Talents Connection hosts the September 27 Business, Arts & Entertainment Conference in Los Angeles, with slated workshop sessions on “Surviving Hollywood,” and “Getting your children in commercials,” and a premiere screening of soon to be released BEM film ‘True Riches’.

The above events are only a sample of what is fully listed. Complete details are on the “Media, Entertainment and Performing Arts Industry News and Events” page. Video and podcast versions of this news summary are also available at popular video sites around the Web like MySpace, YouTube, Bit Torrent, as well as on The Actor’s Checklist podcast blog, a great place to get your iPhone, ipod or Apple TV download from. The Free Home Video Showcase serves as an archive for all past video presentations. This month on video you will see trailers and sample clips of ‘True Riches’ a collaborative production of Talents Connection, and BEM Films, slated for a premiere screening at the Business, Arts & Entertainment Conference, September 27 at LA Convention Center. Strange comedy from The Pimps Horror House™ TV show Cleveland. The creative duo of H.G. Robert and Wayland Anderson, that form DANCEWORDZ, a production company that writes, choreographs and stages shows for professional companies and art programs. The Actor’s Checklist now lets you check the latest musical artists song releases on Apple’s iTunes, updated on an hourly basis.

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The third place of the Eastern Conference in the regular season, the Orlando Magic, dethroned the current NBA champions the Boston Celtics by winning the seventh game of the series 101- 82 this past Sunday.

The Magic played an incredible game as visitors, having an aggressive defense and shooting 13 of 21 from the three-point line. On the other hand, the Celtics seemed out of gas and played an unusual game at home, shooting poorly from the field goal for a 39.2% as well at the three-point line for just 25%. The Celtics fans were shocked about the low performance of the current NBA champions and how bad they looked during the game, but it was just too much magic for them.

Since the beginning of the game, the Orlando got an early lead with just 5:02 remaining with a score of 22-9. However, the Celtics tried to cut the lead and finished the first quarter losing 27-17. In the second quarter, things got rough for the NBA Champions who even though they were trying to come back in the game, the Magic did not let them to come closer that easy and took a lead up to 15 points. Nevertheless, the Celtics had a good run that gave them hope, cutting the score 45-38 at halftime.

Entering the second half of the game, it seemed that Coach Rivers had a great talk with his players, who came to the game more aggressive and with more desire than ever. The Celtics were down only four points with 6:36 remaining in the third quarter by a great shot of Ray Allen. But after that play, Orlando’s shooting guard J.J. Redick, made a three point shot and increased the lead again to 7 points. The quarter finished with a score of 66-61 to Orlando.

At the last quarter, Turkoglu and Howard took dominated the game for the Magic; the Turk made 10 points during that quarter and Howard had the control of the boards. Ray Allen tried to help his team but it was too much for him to handle alone. At the end with a great run of 13-0, Orlando closed the game and dethroned the NBA champion at home with a final score of 101-82.

The best scorers for the Orlando Magic were Hedo Turkoglu with 25 points, 12 assists and 5 rebounds, Rashard Lewis with 19 points and 5 rebounds, Mickael Pietrus with 17 points, Rafer Alston 15 points and 4 assists and finally Dwight Howard with 12 points, 16 rebounds and 5 blocks. Whereas for the Celtics the best scorers were Ray Allen with 23 points, Paul Pierce with 16 points, Glen Davis with 13 points and 4 rebounds, Rajon Rondo with 10 points and 10 assists and Kendrick Perkins with 8 points and 15 rebounds.

With this incredible triumph, the Orlando Magic is hoping for a great performance on this Eastern Conference Finals against the Cleveland Cavaliers, who is a favorite contender to win the NBA Championship this year. However the Magic also knows its team has great players and great coaches that can take the team to the next level and get to the NBA Finals. 

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According to Matthew Marotta, President of Datacraft Solutions,
“If American manufacturers labor costs were free, administrative
costs would still make them the high cost competitor.” Joining
Marotta at the AME Boston 2005 Annual Conference is Kevin
Sumstine, former director of Corporate Purchasing, Planning, and
Logistics for dj Orthopedics. The two Lean manufacturing leaders
will address, “Best of Breed Lean Electronic Supply Chain Best
Practices.”

This presentation will highlight the latest technology for
utilizing electronic kanban within the factory floor as well as
with customers and suppliers. Electronic kanban systems combined
with unique scheduling tools, dramatically reduces inventory
levels, increases turns, enhances supplier/customer
relationships and improves the accuracy of manufacturing
schedules. This presentation focuses on implementations of these
systems at a number of lean and non-lean companies and will show
the dramatic results obtained.

Datacraft Solutions’ mission is to be the Lean Manufacturer’s
indispensable partner in building trusted and efficient
inventory replenishment networks. Marotta clearly states, “Where
the right amount of defect free product is delivered to the
right place at the right time in the right quantity at the
lowest possible cost.”

The Association for Manufacturing Excellence (AME) is
facilitating communities of like minded companies who are
dedicated to implementing Best Practices within their Kanban /
Consumption based replenishment process. Datacraft Solutions
provides a best of breed kanban automation system via the web
with services focused around Kiazen events that enable our
partners of all sizes to gain a global competitive advantage
when implementing a mission critical process within their
organization.

Sumstine has a professional experience has been in
Manufacturing, Purchasing and Planning functions within both
Pharmaceutical and Medical Device Industries. He has had
responsibilities for Continuous Improvement Programs targeting
operational improvement activities, company-wide cost savings
programs and supply chain management enhancements.

For more information about the Association for Manufacturing
(AME) Excellence Boston conference visit

http://ame.org/Events/2005/Boston/

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