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Recent Blog Posts
Understanding Fraud in Virginia: A Guide to Fraud Claims, Defenses, and Legal Complexities
At Fox & Moghul, we pride ourselves on being Virginia’s premier fraud litigation attorneys, with extensive experience in business fraud, real estate fraud, and consumer fraud cases. Fraud claims are notoriously difficult to prove, and many lawyers fail to grasp the nuances of actual vs. constructive fraud, reasonable reliance, and fraudulent concealment under Virginia law. This comprehensive guide explains the legal elements of fraud, case law precedents, and common pitfalls that could derail your claim.
1. What Is Fraud Under Virginia Law?
Fraud is a deceptive act or misrepresentation made with the intent to induce another party to act to their detriment. Fraud is not the same as breach of contract; it requires an intentional or reckless misrepresentation that results in actual harm.
2. Actual Fraud vs. Constructive Fraud
There are two types of fraud recognized under Virginia law:
Defenses to Defamation in Virginia: Exploring Privileges and Legal Protections
At Fox & Moghul, our Virginia defamation attorneys are highly skilled in navigating the complex landscape of defamation defenses. If you have been accused of defamation or are considering legal action, it is crucial to understand the available defenses under Virginia defamation law. This guide explores key legal privileges, truth as a defense, and statutory protections that may apply in defamation cases.
1. Truth or Substantial Truth as a Defense to Defamation
A. The Legal Standard: Truth as a Complete Defense
"Falsity is the sine qua non of a libel claim." — Brian v. Richardson, 87 N.Y.2d 46, 51 (1995)
Under Virginia defamation law, truth or substantial truth is an absolute defense to a defamation claim. Even if a statement damages a person’s reputation, if it is true, there is no defamation.
The motive behind a statement is irrelevant—even if the statement was made with malice, the truth remains a defense.
Navigating Virginia Defamation Law: A Comprehensive Guide for Protecting Your Reputation
A person who served as president for two charitable organizations that were well-known to the public because of their fundraising efforts (Chapin v. Knight‑Ridder, Inc., 993 F. 2d 1087 (4TH Cir. 1993);At Fox & Moghul, our Virginia defamation lawyers have extensive experience handling complex defamation cases, whether they involve spoken words, written publications, or defamatory statements broadcasted through social media or news outlets. If you have been the victim of false statements that have harmed your reputation, understanding Virginia defamation law is crucial in taking legal action.
This blog provides a detailed overview of defamation law, including key legal principles, case precedents, and what you need to prove to win your case.
1. What Is Defamation?
"In Virginia, as in other states, the law of defamation historically has protected a basic interest. The individual's right to personal security includes his uninterrupted entitlement to enjoyment of his reputation."— Gazette Inc. v. Harris, 229 Va. 1 (1985)
Am I Personally Liable for the Debts of My LLC, Partnership, Corporation or Other Business?
The answer to this depends on the factors discussed below. For today’s business owners, entrepreneurs and investors, personal guarantees requiring them to put their entire personal wealth at risk are an unpleasant fact of business life. This article provides some guidance on how to navigate this issue with the help of an example. In short, it depends on whether you undertook personal liability for the debts of the business.
Sample Personal Liability Clause in Commercial Contracts.
Let’s take the following example: Little Tran wants to open a restaurant in Fairfax Virginia. He opens a corporation, Little Tran Restaurant LLC, and signs a lease for his new business. At no point before signing on the dotted line did Little Tran think that he was incurring personal liability for the corporation’s debt in the event that the company failed to pay the hefty monthly rent. The key terms of the contract are as follows:
Signature Block:
Key Factors To Consider When Buying A Franchise Business
Buying a franchise business is a significant investment and can be an excellent opportunity to enter the world of entrepreneurship with the backing of an established brand. However, purchasing a franchise requires careful evaluation of many factors to ensure you’re making a smart and informed decision. At Fox & Moghul, we’ve helped clients navigate the complexities of franchise agreements, ensuring that their rights are protected, and that they are set up for long-term success.
In this blog, we’ll explore the key factors to consider when buying a franchise, from evaluating the franchise’s financial health to understanding the terms of the franchise agreement.
1. Understand the Franchise Business Model
Before diving into the specifics of a particular franchise, it’s essential to understand the franchise business model. A franchise business allows a franchisee to operate a business under the brand and operational framework of an established franchisor. In exchange for paying an initial franchise fee and ongoing royalties, the franchisee receives the right to use the franchisor’s trademark, business systems, and marketing support.
Deconstructing Asset Vs Stock Purchases
When you are buying or selling a business, it is crucial for you to give considered thought to the structure of the purchase/sale. This chart provides the breakdown of major differences between asset and stock purchases and sales. If you have any specific inquiries in this regard, please contact Fox & Moghul at 703-652-5506 to schedule a consultation.
| Criteria | Asset Purchase | Stock Purchase |
| Definition | The buyer purchases specific assets and liabilities of the business, rather than the entire entity. | The buyer acquires the ownership of the company by purchasing its stock or equity interests. |
| Ownership Transfer | Only the assets and liabilities specifically outlined in the purchase agreement are transferred to the buyer. | Ownership of the entire business entity, including all assets and liabilities, is transferred. |
Asset Protection Considerations for Virginia Landlords With Several Rental Properties
As a landlord in Virginia with multiple rental properties, protecting your assets is paramount. Effective asset protection strategies can shield your investments from potential liabilities, ensuring long-term financial stability. Here are key considerations:
1. Renting Through Segregated LLC
Forming a Limited Liability Company (LLC) for each of your rental properties is a critical step in asset protection. An LLC separates your personal assets from your business liabilities, reducing the risk of personal financial loss in the event of a lawsuit. Ensure your LLCs have well-drafted operating agreements to clearly define ownership, management, and operational procedures. Place each property in a separate LLC to isolate liability and protect other assets from claims. This strategy ensures that a legal issue with one property does not jeopardize your entire portfolio.
2. Implementing Friendly Lien Structures
A friendly lien is an innovative way to protect your rental property assets. This strategy involves creating two separate LLCs: one holding LLC and one operating LLC. The holding LLC issues a loan to the operating LLC, secured by the rental property. By filing a UCC-1 financing statement, you establish a lien that deters external creditors from targeting your assets. This arrangement creates a legal hurdle for potential creditors, making your assets less attractive for litigation.
The Friendly Lien: A Creative Asset Protection Strategy With LLCs
At Fox & Moghul, we get frequent calls from real estate investors looking for the "best" asset protection strategy.
Well, here is one for the creative types.
The Friendly Lien, a clever and innovative approach to asset protection, takes advantage of the legal structure and versatility of Limited Liability Companies (LLCs). This strategy employs the use of two separate LLCs: a holding LLC, which serves as a financing entity, and an operating LLC, which conducts the day-to-day business activities and holds the assets. By creating a loan arrangement between these two LLCs and securing it with a lien, the assets held by the operating LLC are made less appealing to potential creditors.
The Mechanics of the Friendly Lien
The Friendly Lien strategy begins with the establishment of two separate LLCs. The first, a holding LLC, is created to serve as a financing entity. This LLC will provide a loan to the second, an operating LLC, which will hold the assets and conduct the daily business operations.
When Can You Sue Your Business Partner for Harming Your Business – Understanding Direct vs. Derivative Suits
Fox & Moghul receives many queries every day regarding disputes between business partners. In a Limited Liability Company (LLC) in Virginia, each member and manager owes fiduciary duties to the entity to further its best interests. These duties include the duty of loyalty and the duty of care. In simple terms, fiduciary duties require business partners to act in the best interest of the LLC and its members.
This blog post will explain with examples when a business partner in an LLC has breached their fiduciary duty under Virginia law, and it will provide specific case law and statutory citations for a better understanding of the concept.
Understanding and recognizing breaches of fiduciary duty in an LLC is crucial for maintaining a successful business relationship among partners. If you believe a business partner has breached their fiduciary duty in your Virginia LLC, it's essential to consult with an experienced attorney who can help you navigate the complexities of the law and protect your interests. In conclusion, a business partner in an LLC may breach their fiduciary duty by misappropriating funds, engaging in self-dealing, or failing to exercise the duty of care. By being aware of these duties and ensuring they are upheld, LLC members can help maintain a successful and harmonious business partnership.
What Is "Substantial Economic Effect" In LLC Operating Agreements?
As more and more investors resort to LLCs to structure their business ventures, particularly in real estate, the requirement for a carefully formulated Operating Agreement is vital. Yet, one often sees inexperienced lawyers and investors fall victim to templated Operating Agreements full of nonsensical, boilerplate language.
One such critical concept often misunderstood or ignored is "substantial economic effect," a key principle of tax law that determines how LLCs allocate profits and losses to their members. Failing to address this can result in significant financial and legal implications for the members of the LLC. This blog explores what substantial economic effect means, how to identify and correct flaws in typical LLC Operating Agreements, and how ignoring these principles can leave members, particularly real estate investors, at a disadvantage.
What is Substantial Economic Effect?
Substantial economic effect refers to the Internal Revenue Service (IRS) standard that governs whether the allocation of profits, losses, and distributions in an LLC is valid for tax purposes. To comply with this standard, the allocations must reflect real economic consequences for the members, not just paper entries. You can read the exact guidance by the IRS on this issue here and here. The key elements of substantial economic effect are:
