|THIS ISSUE'S HEADLINES
Succession Planning and the Family Limited Partnership Solution
The Strong Presumption in Favor of Arbitrators' Awards
RSVP Requested: “Preventing Sexual Harassment in Your Organization” Seminar
SUCCESSION PLANNING AND THE FAMILY LIMITED PARTNERSHIP SOLUTION
Representing closely held family businesses often involves counselling the founders with regard to developing a succession plan that involves the children. The potential transfer of power and authority within a family business is one of the greatest concerns of the owners. “Having your cake and eating it too” is the general theme of the founder who does not want to squander family assets or give up control of the enterprise. One solution and consideration to this dilemma is transferring minority ownership and retaining control through the use of a family limited partnership (“FLP”).
An FLP is a type of planning vehicle in which most or all partners belong to a single family group. This strategy provides for asset protection as well as the transfer of ownership over time with the possibility of reducing estate taxes. The steps include the transfer of the business owner’s interest in exchange for general and limited partnership interests in the FLP with the owners retaining the general partnership interest which could be for as little as 1% of the assets. As the general partner, the owner retains the ability to operate the day-to-day business and make decisions.
In his latest business advisory, Succession Planning and the Family Limited Partnership Solution, Managing Principal Gary R. Pannone explains more about FLPs and why this type of planning may be considered valuable for taxes purposes, protection from creditors and for greater flexibility under certain family circumstances. For further information, please contact Attorney Pannone at 401-824-5100 or email firstname.lastname@example.org. Attorney Pannone is annually selected by his peers for inclusion in Best Lawyers in America® in Metropolitan/Providence. For the last two years, he has been recognized as “Lawyer of the Year” in his business practice areas.
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THE STRONG PRESUMPTION IN FAVOR OF ARBITRATORS' AWARDS
The Rhode Island Supreme Court once again adhered to its long-standing precedent that arbitration awards will not be overturned but for exceptional circumstances. In ABC Building Corporation d/b/a Advanced Building Concepts v. Ropolo Family, LLC, the plaintiff-general contractor demanded arbitration against the owner of a Newport restaurant where plaintiff performed construction work. The contract between the parties called for disputes to be decided by binding arbitration. The arbitrator issued an award in favor of plaintiff; thereafter the defendant moved to vacate this award, arguing that the arbitrator disregarded the clear and unambiguous language of the parties’ contract. The Court disagreed.
In confirming the award, the Rhode Island Supreme Court provided a comprehensive overview of a court’s limited role when reviewing arbitration awards. Despite some perceived flaws in the award, the Court determined that none of the narrow grounds for vacating the award existed. The Court also referenced the “strong public policy in favor of the finality of arbitration awards” and, that when reviewing awards, courts are to make “every reasonable presumption in favor of the award.” Finding that the award drew “its essence from the contract” between the parties, and also recognizing the “heavy burden” one bares to vacate an award, the Court had no trouble affirming the arbitrator’s award.
This decision provides a good reminder of the great deference that is afforded to arbitrators' awards in Rhode Island. When considering the inclusion of a binding arbitration provision in a contract, it is good practice to keep in mind the heavy burden of vacating a potentially unfavorable award. Furthermore, due to this heavy burden, one should be sure to negotiate the process by which an arbitrator will be selected, to ensure that a qualified arbitrator is chosen to decide any disputes that may arise. For more information regarding inclusion of arbitration clauses in contracts, please contact Attorney Patrick J. McBurney at 401-824-5100 or email email@example.com.
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RSVP REQUESTED: “PREVENTING SEXUAL HARASSMENT IN YOUR ORGANIZATION" SEMINAR SCHEDULED FOR MAY 23
To help organizations better address, prevent and manage workplace sexual harassment, PLDO and Starkweather & Shepley Insurance Brokerage Inc. are teaming up to present a free seminar, entitled “Sexual Harassment: Learn What You Should Know for Your Business in the #MeToo Era.” The seminar is scheduled for Wednesday, May 23, 2018 from 8:30 a.m. to 10 a.m. at the Crowne Plaza Grand Ballroom in Warwick, RI. Business owners, nonprofit executives and HR managers are encouraged to attend. Registration is required and sign-in begins at 8 a.m. Complimentary breakfast will be served. For more information and to register, visit seminar registration.
“Employers are dealing with complicated employee issues today,” said PLDO Principal William E. O’Gara, who leads the firm’s Employment Law and Litigation teams. “The explosion of headline news alleging sexual harassment and the #MeToo movement has caused employers to seek out more information to understand the legal standards of sexual harassment claims, how to develop organizational policies that are meaningful to employees and in compliance with the law, and most importantly, how to build a culture of respect in the workplace that encourages zero tolerance of sexual harassment. This seminar intends to help business owners, nonprofit executives and HR managers to do just that.”
Joining Attorney O’Gara on the seminar panel are Sean Cottrell, SVP, Human Services Leader at Starkweather & Shepley Insurance Brokerage, Inc., and Aimée DuVall Phelps, Ph.D., Director of the University of Rhode Island Schmidt Labor Research Center and Teaching Professor in the College of Business Administration. Topics to be covered include current trends and the law, filing and managing claims, policies and best practices, and investigating and reporting.
According to the recent study How Organizational Policies Influence Bystander Likelihood of Reporting Moderate and Severe Sexual Harassment at Work, zero-tolerance polices within an organization increase a bystander’s willingness to report sexual harassment. This is the first study to show the influence that a zero-tolerance policy versus a standard policy statement can have on a person’s willingness to report sexual harassment incidents that they witness. In addition, in a study published in the American Psychological Association Journal of Occupational Health Psychology, researchers found that employees who report being victims of sexual harassment can manifest anxiety and eating disorders, depression, drug and alcohol abuse, post-traumatic stress and lower levels of overall happiness.
To register for the May 23 event, please visit seminar registration or for help with your organization’s sexual harassment policies, please contact Attorney O’Gara at 401-855-2601 or email firstname.lastname@example.org. You can also watch Attorney O’Gara’s latest informational video on Achieving Zero Tolerance of Sexual Harassment in the Workplace.
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