Bowing to pressures from their shareholders, Chesapeake Energy Corp.’s directors have forced co-founder and CEO Aubrey McClendon to step down as chair, all over his personal financial dealings, including the taking of up to $1.1 billion in loans against his stakes in Chesapeake oil and gas wells. A Reuters investigation has found, McClendon also ran a lucrative business on the side: a $200 million hedge fund that traded in the same commodities Chesapeake produces. Is such behaviour to be tollerated and is it a breach of McClendon’s fiduciary duties as CEO and Chair of the Board of Directors?
a)Duty of Loyalty The duty of loyalty “requires an extreme measure of candor, unselfishness, and good faith on the part of the officer or director.” A corporate officer or director must act in good faith and must not allow his or her personal interest to prevail over the interest of the corporation. An officer or director is considered “interested” when he “makes a personal profit from a transaction by dealing with the corporation or usurps a corporate opportunity.”
b)Duty of Care Texas law imposes on corporate officers and directors a duty to exercise due care in the management of the corporation’s affairs. If they breach that duty, they are liable to the corporation for any loss it may suffer as a result of their neglect.
c)Duty of Full Disclosure The duty of full disclosure on all matters affecting the corporation, including disclosing when the officer or director will personal benefit for contracts or certain actions.
d)Duty of Obedience The duty of obedience “requires a director to avoid committing acts, i.e., acts beyond the scope of the powers of a corporation as defined by its charter or the laws of the state of incorporation.”
From first glance it looks as if McClendon did breach his fiduciary duty of Full Disclosure and Loyalty. It will be interesting to see what the shareholders think and whether a class action lawsuit is filed by them.
If a person dies in the State of Texas without a will, there several options for the person who decides to handle the estate. Choosing the correct option depends upon the assets involved and if the heirs are in agreement on certain matters.
If no formal administration of the estate is necessary, there are two options: 1. Small Estate Affidavit (estates of $50,000 or less); or 2. Proceeding to Determine Heirship. These are both pretty simple process that can be done relatively cheaply with the help of an attorney.
If a formal administration is necessary, then there are still two choices: 1. Independent Administration (if all heirs agree on the appointment of an IA); or 2. Dependent Administration (when all the heirs do not agree on the appointment of the administrator; more expensive route).
If either of these latter two options is chosen, then along with the administration filing/proceeding, the administrator will also need to file an Application to Determine the Heirs (and the appointment of an ad litem attorney to assist the Court in determining the heirs of the estate).
To determine which step is necessary, you should consult an estate planning attorney.
The inheritance rights of adopted children are protected when a parent dies without a will. Under the Texas Probate Code, a child adopted by the decedent is treated the same as a natural-born child. Therefore, the adopted child can inherit from his or her adopted parents and vice versa.
If the decedent allowed their child to be adopted, the child can still inherit from his or her natural parents. However, the natural parents cannot inherit from the child if the child dies without a will. This is an important consideration today when so many children are adopted.
Furthermore, under Section 162.507 of the Family Code, a person who is adopted as an adult, inherits from their adoptive parents but not their biological parents and vice versa.
Small business owners in the State of Texas are being inundated with costs which could put them out of business. One of those new costs, is the ever changing Texas’ Franchise Tax. The Texas franchise tax is a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas.
The revised franchise tax applies to partnerships (general, limited and limited liability), corporations, LLCs, business trusts, professional associations, business associations, joint ventures, incorporated political committees and other legal entities.
Who has to pay the Franchise Tax? Most business who make more than the $1,030,000 (the no-tax-due threshold) for January 2012 through January 2014 tax years. On January 1, 2014, the no-tax-due threshold is scheduled to be $600,000. Keep in mind that the no-tax-due threshold is calculated taking the lowest of three calculations:
- total revenue minus cost of goods sold;
- total revenue minus compensation; or
- total revenue times 70 percent.
On January 12, 2012, the Texas Supreme Court dismissed the Nestle case, In Re Nestle USA, Inc., Switchplace, LLC, and NSBMA, LP, challenging the revised franchise tax, the so-called “Margin Tax,” on constitutional grounds. On February 10, 2012, the Texas Supreme Court rejected a second challenge by Nestle Case to the Texas franchise tax http://www.supreme.courts.state.tx.us/historical/2012/feb/021012.htm.
So for now, small business owners will just have to suffer through trying to calculate and pay this complicated business tax.
Many people are surprised to learn that the largest employer in the United States is the small business owner. All the small business owners combined employ more than 52% of the employees. This means that more Americans work for a company with fewer than 100 workers (a small business) than for the large corporations with more than 500 workers.
Small businesses are very important to our economic recovery because they create two out of every three new jobs. Small businesses have played a vital role in helping our economy add more than 5.1 million new jobs since August 2003; they have helped keep America’s unemployment rate below the average decade rate of the 1960s, 1970s, 1980s and 1990s.
In times such as these, when our country is in economic crisis, small businesses continue to grow and create jobs, which I expect will continue to be the case. However, while small businesses adapt easier to change than large corporations, they can be put out of business by drastic economic changes. For example, when the price of gas rose a few years ago it was the small business that was hurt the most. Increases in the price of fuel have affected small businesses in the following areas: farming, cattle, restaurants, clothing, tourism, auto sales, auto parts, freight services, computers, prescription drugs, electrical, construction, hospitals, lodging and real estate, to name a few.
One of the main problems facing small businesses today is that Congress appears to be more focused on helping large corporations, rather than the small business owner. The President started his term wanting Congress to do several things to help the small business owner, such as pass responsible housing legislation, make health care more available and affordable, ensure our workforce is prepared for the jobs of the 21st Century and re-affirm the principles of freedom and choice that gave rise to the labor movement.
While these changes might help, the real problem is that very few changes have been made permanent. Small business owners plan over the long term, not short term. Congress appears more focused on helping the large corporation through tax incentives, bailouts of financial problems, and set asides for different Congressional districts that have limited benefit to the economy as a whole, than the small business owner.
For example, in 1953, Congress created the Small Business Administration to provide professional expertise and financial assistance to persons wishing to form or run small businesses. On average, the SBA makes about $12.3 million in loans to small businesses yearly, usually in the form of purchase money for buildings and equipment, or working capital. They also help small business procure more than $40 billion in federal contracts last year alone. However, the SBA had done this with an ever shrinking budget. Now Congress has set the SBA’s 2008 budget to include 191 earmarks totaling $69 million in funds, which are to be used for everything from small business incubators to renovation of a riverfront park in Charleston,W.Va. These funds should have been used for the survival of the small business owner.
The HUBZone program was developed by the SBA to help economically distressed areas, but funds for the program were going to fraudulent companies more than half the time. Corporations received millions of dollars in federal contracts under the guise of being located in low-income neighborhoods when actually they were not. Also, since 2003, more than a dozen federal investigations have found Fortune 500 firms were the actual recipients of billions of dollars in federal small business contracts. An entity created for the benefit of small business owners should be available for small business owners. The SBA needs to be more proactive in watching over the interest of the small business owner if they want to improve the economic situation in this country.
Congress and our president will need to make small business a priority if there is any hope in economic reform to pull our country out of this recession. This election year might have a huge impact on the survival of the small business owner unless the politicians wake up and realize how their actions are killing small businesses. Employees need to ensure they are informed before going to the polls in November, because their vote will likely affect their employers and eventually their jobs.
President Barack Obama announced a plan to accommodate religious employers outraged by a rule that would require them to cover birth control for women free of charge.
The administration announced in January that religious-affiliated employers had to cover birth control as preventative care for women. Churches and houses of worship were exempt, but all other affiliated organizations were ordered to comply by Aug. 2013.
Opponents of the measure, including Catholic cardinals and bishops and Republican leaders, responded with intense anger.
For more information, check out this article on Huffington Post. http://www.huffingtonpost.com/2012/02/10/obama-birth-control_n_1267677.html
Last night’s Powerball jackpot was over $325 million. If you won the jackpot or any other lottery jackpot, you might be thinking that you won’t ever have to worry about money again–right?
With good money management you–and your heirs–could live handsomely for many, many years. But from the moment that you claim that prize, you will be descended upon by vultures who want a hefty helping of those winnings. And if you didn’t have smart money habits up until now, you could easily turn out to be your own worst enemy by quickly squandering the fortune.
Forbes has written a wonderful article about the 10 things you should think about if you win! http://www.forbes.com/sites/deborahljacobs/2012/02/11/10-things-to-do-when-you-win-the-powerball/
Some people sell in order to eliminate future legal expense to Probate their estates. For the Small Interest Owner, the cost associated with transferring ownership can exceed the perpetual value of the royalty interest.
It is very important to understand cost or percentage depletion of a well when computing taxes. Some interest owners do not want to incur extra costs or out-of-pocket expense for the tax preparation and administration.
Some people feel it is cumbersome to try to keep track of royalty interest income and the taxes associated with the interest. This seems to be especially true for owners of small interests. By selling your interests now, you will no longer be required to pay property taxes, which can simplify your taxing preparation or taxing problems.
With energy prices at an all time high, this is an excellent time to convert royalty interest into cash and liquidate. The Cardinal Rule is, “Buy Low, Sell High”, with the oil and gas commodity markets at an all time historic high, there has never been a better time to sell.
There are various companies that will buy your interest, just make sure you go with a reputable one so you are not taken advantage of when selling.
Researchers at Case Western Reserve University have discovered that a drug currently used to treat cancer patients can reverse the cognitive deficits related to Alzheimer’s disease in mice, and what’s more, it accomplishes this feat in a remarkably short period of time.
The drug, called bexarotene, has been approved for the treatment of a type of skin cancer since 1999. In the new experiments with genetically engineered mice, the drug quickly cleared away the beta-amyloid plaques in the brain that are believed to cause cognitive deficits in Alzheimer’s disease.
This is not the first time that scientists have essentially cured Alzheimer’s in rodents. A decade ago, scientists got excited when a potential Alzheimer’s vaccine appeared to chew up nerve-destroying amyloid protein deposits in animal brains, but were equally disappointed when it failed to do the same in human patients.
As the baby boomers begin to age, the issue of abuse of the elderly has become a very important topic. In Texas, the law requires any person who believes that an elderly or adult with disabilities is being abused, neglected or exploited to report the circumstance to the Texas Department of Family and Protective Services (DFPS) Statewide Intake or to the Department of Aging and Disability services. Adult Protective Services (APS) has a hotline where abuse can be reported. APS: 1-800-647-7418. Once reported, APS will investigate allegations of abuse, neglect, and exploitation in facilities that care for adults including: private homes, adult foster homes, unlicensed room and board, state facilities and community centers that provide mental health and mental retardation services, home health agency staff, and exploitation in nursing homes when the alleged perpetrator is someone outside the facility. If there is abuse or neglect occurring, APS may take steps to notify the local courts that a Guardianship may be necessary.
Guardianship is a legal process used to provide protection for adults who are incapacitated. The Probate Code defines an incapacitated person as: “An adult individual who, because of a physical or mental condition, is substantially unable to provide food, clothing, or shelter to himself or herself, to care for the individual’s own physical health, or to manage the individual’s own financial affairs.” Usually these elderly have severe memory loss, dementia, and cognitive impairments that seriously jeopardize their health and well-being. Many of these elderly have experienced self-neglect, physical abuse or financial exploitation. A guardian is appointed only when it has been determined that the elderly lacks decision-making capacity and must have a surrogate decision-maker appointed to advocate for services and give informed consent for medical procedures.
Abuse of the elderly is not always easy to tell as many adults that are being subjected to abuse, neglect or exploited are embarrassed or unable to express that abuse is occurring. Therefore, it is important that people surround the elderly take notice of specific signs of abuse, such as : bruises, pressure marks, broken bones, abrasions, and burns which may be an indication of physical abuse, neglect, or mistreatment; unexplained withdrawal from normal activities, a sudden change in alertness, and unusual depression may be indicators of emotional abuse; bruises around the breasts or genital area can occur from sexual abuse; sudden changes in financial situations may be the result of exploitation; bedsores, unattended medical needs, poor hygiene, and unusual weight loss are indicators of possible neglect; behavior such as belittling, threats and other uses of power and control by spouses are indicators of verbal or emotional abuse; and strained or tense relationships, frequent arguments between the caregiver and elderly person are also signs.
If you know of someone who may be the subject of abuse, you can complete a Suggestion of Need for a Guardian and submit it to the Probate Court in your county. The Court will then investigate whether a guardianship is needed, and appoint someone using the priority given by the Texas Probate Code. The Court can skip over a person higher on the priority list if the court finds that person to be disqualified. A person is disqualified to be appointed guardian if he or she is a minor; a person whose conduct is notoriously bad; an incapacitated person; a person who has certain conflicts of interest with the ward; a person who, because of inexperience, lack of education, or other good reason, is incapable of properly and prudently managing and controlling the ward or the ward’s estate; a person found unsuitable by the court; a person specifically disqualified from serving as guardian by the ward prior to his or her incapacity in a properly executed designation of guardian; and a person who is not a resident of Texas and who has not designated an agent in Texas for service of process. Because of these priorities, it is important for an adult individual who is worried about his or her possible future incapacity to consider designating those persons he or she wishes to serve as guardian and those persons he or she wishes to disqualify from serving as guardian, especially if a non-relative is preferred.