Under the laws of most states, the decision to sell a company requires the approval of owners holding at least a majority of the outstanding stock of the company and sometimes an even higher percentage. For this purpose, the “sale of a company” typically includes a sale of its assets outside the ordinary course of business and a merger or consolidation with another entity that results in a change of control. Even if the required percentage of ownership interests in the company is held by a few, even a single stockholder, the company, acting through its board of directors, still has a fiduciary duty to provide the other owners with certain information. In general terms, a fiduciary duty is a duty imposed by law that requires that a person act fairly and in good faith with the persons entitled to rely upon the fiduciary. This duty includes, but is not limited to, full and fair disclosure of relevant facts necessary to permit the owners to make an informed business decision.

In his latest advisory, PLDO Partner William F. Miller, explains what information should be provided to shareholders and why the failure of the company to comply with its obligations to minority owners may adversely impact the closing of a transaction or result in post-closing litigation. If you have questions on this issue or other business matters, please contact Attorney Miller at 508- 420-7159 or email wmiller@pldolaw.com. To download Attorney Miller's advisory, Company Obligations to its Stockholders on a Sale or Merger of the Company, please click here.

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PERSPECTIVE INTO SOUTH FLORIDA’S BUSINESS & COMMERCIAL REAL ESTATE

If one were to look around South Florida during the past year or so, you might notice that many finance and high-tech companies have relocated to the area from places such as New York and California. Some examples of this migration include the following: Candex, a financial technology company, headquartered in Tel Aviv, Israel, moved from San Francisco to South Florida; Colony Capital, an L.A.-based investment firm moved its corporate HQ to Boca Raton in early 2021, and Elliott Management Corp., a $41B-asset hedge fund moved its corporate HQ from NYC to West Palm Beach. Many similar types of businesses have either relocated or opened satellite offices in South Florida in recent months.

South Florida now is number one in the nation in terms of the emerging number of startups—especially in the Miami metro area. Perhaps this growth may be attributed to the area’s business and tax-friendly environment, vast social and professional networks, quality of life, and local research universities. However, this phenomenon should come as no surprise to long-time residents or frequent visitors to the Sunshine State. In fact, many people may not realize that the IBM personal computer (PC), initially released in 1981, was invented in Boca Raton.

In the late 1960’s, IBM purchased 550 acres west of what is now I-95, south of Yamato Rd., and east of Military Trail. IBM was the first company to build an industrial site in what was then described as “the scrubland of the west”—a far cry from what Boca Raton looks like today. The original site eventually grew from 620,000 square feet to 3.6 million square feet in more than 40 buildings. The Boca Raton plant was part of IBM’s General Systems Division responsible for developing, manufacturing, and marketing low-to-moderate priced computers and business systems. The complex became both a research facility and manufacturing plant. The facility began with 400 employees, eventually peaking at over 10,000 employees in 1985, and has remained at approximately 1,500 employees since the late 1980’s.

The rapid growth and success of IBM in Boca Raton brought other high-tech companies to the area, increasing employment opportunities, and fueling the transformation of Boca Raton from resort town, to business center. Prospective employees were more than happy to work in Boca Raton, which had gained a reputation for being a place of exciting and revolutionary work. IBM’s choice of Boca Raton for its facility was intentional, to keep its PC development team as far away as possible from the bureaucracy of its NY corporate HQ. One might argue that the current influx of high-tech companies to South Florida are coming here for the very same reasons. While South Florida may not have previously achieved its goal of becoming “Silicon Beach,” there is no doubt that IBM and its related businesses left their imprint upon South Florida. At one time, this area was considered a hotbed of technology, and perhaps history is bound to repeat itself again.

If you are a business owner looking for information on relocating to South Florida or forming a new start-up company in the area, please contact PLDO Partner Drew B. Sherman in our Boca Raton office at 561-362-2022 or email dsherman@pldolaw.com.

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On November 7, the Providence Journal published a commentary by PLDO Partner Brian J. Lamoureux, who writes and speaks extensively on social and digital media, offering thoughtful reflections of social media’s impact on society in the context of Facebook’s recently changed corporate identity to “Meta.” The article is below.

Pop quiz: Who said this in 2012? “We limit the amount of technology our children use at home.”

Believe it or not, Apple co-founder Steve Jobs said this to a reporter when he was asked whether his children used Apple’s new iPad. When I first read this quote, I wondered what Mr. Jobs knew about the product he created that we didn’t? How could the creator of a device push it into the global marketplace but forbid his children to use it at home?

Mr. Jobs was no outlier, either. Bill Gates implemented a limit on his daughter’s screen time when she developed an unhealthy attachment to a video game. And, many Silicon Valley tech executives send their children to Waldorf schools where screens are verboten and learning is done through mud, string, touch, pen, and paper.

Fast forward 10 years to today: Facebook recently announced that it is changing its name to Meta, which the company claims better fits its overall brand and focus, including developing the so-called “metaverse.” Devoting some 10,000 workers to this effort, Facebook promises that the metaverse will be a virtual-reality based world that will allow us to don goggles, sit around a virtual conference table with our peers, and then go to a virtual coffee shop to meetup with a virtual friend. Just when you thought we (and our children) are already spending too much time in front of screens, we now get to strap those screens to our faces, sit on a comfortable chair for hours on end, and even more effectively ignore the real humans in the next room.

No, thank you. One of the privileges of nearing 50 years old is that you have license to engage in the time-honored tradition of decrying the continued downfall of civilization. Against that backdrop, I offer the following questions for your consideration: Has your relationship with screens or devices helped or hindered your real relationships over the last decade? Do you wish you spent more or less time in front of your screens? What’s the name of your neighbor two houses down? When’s the last time you went for a walk with a loved one?

Et tu, Brian? Yes, I ask those questions not to shame but because I also struggle with screentime. I will reserve full judgment about the metaverse once I see how it’s developed and what safeguards are put in place. But, if history is any guide, I worry that the metaverse will be developed in a way that offends our dignity as humans, and will be another source of profit at the expense of our privacy, health, mental well-being, and relationships.

I am also concerned about the impact this virtual movement will have on our bodies and, in turn, our souls and hearts. Science has proven that human touch is critical to our well-being and establishing (and nurturing) our relationships. Perhaps Michelangelo put it best: “To touch is to give life.” Indeed, researchers know that humans need the magic of presence and touch to fully identify the love, compassion, and gratitude of others. If you don’t believe this, simply recall the early days of the pandemic where we deeply lamented our loss of sharing communal and family space with others at the dinner table, restaurant, or church pew.

Finally, remember that one of Facebook’s initial slogans was “Move Fast and Break Things.” Things sure are moving fast. What will break next?

If you have questions and would like to contact Attorney Lamoureux, he can be reached at 401-824-5100 or email bjl@pldolaw.com. To download a PDF of the commentary, please click here.

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STAY INFORMED – PLDO COVID-19 RESOURCE LIBRARY

PLDO’s team of attorneys continue to add updates and advisories regarding the pandemic and its impact on families, businesses and organizations. To access our COVID-19 Resource Library, click here.

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