Business Law

Ask a business lLawyer. Get business law questions answered ASAP.

Ask a Lawyer,
Get an Answer ASAP!

This answer was rated:

Please note: I want to direct my question to someone that specializes…

Please note: I want to...
Please note: I want to direct my question to someone that specializes in contract-law.
Partners A and B want to open a medical facility.
Partner A and Partner B are 50/50 partners and set up a health management Co. (HMC) exclusively to manage said medical practice.
Partner B is a Dr. and Partner A is not.
The HMC funds the creation of the medical practice with over 200K (100K-each partner).
Partner A was responsible for all accounting (payroll, billing, payables etc) and HR issues.
Partner B is charged with all other facets of the medical practice such as:
1. Finding the space 2. Signing the lease (personal) 3. Acting as general contractor
4. Hiring contractors, staff (including Drs.) 5. Buying equipment and supplies 6. implementing a template for the running of the practice.
A pyramid is set up so the HMC provides all services (to run the practice) and receives management fees equal to all of the profits of the medical practice. The HMC then makes 50/50 distributions to Partner's A and B.
Partner A designates a Dr. as the "Owner-Dr." of the practice.
Recently Partner A sold their 50% of the HMC to a third party. Partner B subsequently bought this same 50% from this third party. Partner B is therefore the sole owner of the HMC. and continues to run the medical practice.
The problem has to do with the previously appointed "Owner-Dr."
Please note the "Owner-Dr." never materially participated in the practice! She never wrote a check, bought any supplies or treated any patients.
"Owner-Dr." and Partner A had several agreements in place.
A. Purchase Agreement- "Owner-Dr." bought the practice for $300 from the previous "Owner-Dr." Specifically it is stated that the seller "Owner-Dr." had a marketable interest which was not ownership interest.
B. Stock Pledge Agreement-Owner-Dr. pledges to grant a security interest to Partner A in order to secure owner's obligations under such guaranty. "Guaranteed Obligations" to the extent of the business collateral.
Management Service Agreement (MSA)-basically states that the practice is under the direct supervision of the medical director (Partner B). In addition, "the Practice shall pay the HMC a fee in the amount equal of the Practice Net Collections. There is also a Promissory Note secured by a lien on the practice assets which is held by the HMC.
_________________________________________________________________
Now, although Partner B owns the HMC, has de-facto total control of the Medical Practice and a pri***** *****en secured by the Practice Assets against "Owner-Dr., "Owner-Dr." is asking to be bought out. Frankly I don't think she is entitled to one red cent.
The agreements between her and Partner A (subsequently declared bankruptcy of their LLC entity) only states that she has a "marketable interest." This marketable interest is undefined. It has been suggested by a non-attorney that she only really owns the name of the Practice entity and not the business. What do you opine?
Show More
Show Less
Ask Your Own Business Law Question
Answered in 4 minutes by:
2/20/2015
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 57,043
Experience: 32 years of experience practicing law and a businessman.
Verified
Hi! My name is ***** ***** I look forward to helping you!
Can you provide me a bit more information. Do you have a copy of the agreement made between Partner A and this prior Dr. Owner? Thanks.
Ask Your Own Business Law Question
Customer reply replied 3 years ago

I guess you would be referring to the MSA which includes the Promissory Note.

Yes. And, any other agreements involving this doctor making this claim. Thank you!
Ask Your Own Business Law Question
Customer reply replied 3 years ago

How do I get these docs to you?

You should be able to attach them through this forum.
Ask Your Own Business Law Question
Customer reply replied 3 years ago

I'll try my best but I might just end up exploiting my ignorance. I'm a 20th century guy living in a 21st century world. Please be so kind as to pardon the delay as I attempt to comply.

No worries at all; I totally understand. I'm have to go to a previously schedule meeting for a couple of hours. Should you respond while I'm gone, I will address it immediately upon my return. Thank you in advance for your patience. I apologize for any inconvenience.
Ask Your Own Business Law Question
Customer reply replied 3 years ago

Can I expect a response today? I'd like very much to get back to the "Owner-Dr." concerning this matter. Thank you.

Yes...absolutely.
Ask Your Own Business Law Question
Hi there. Haven't received your document yet. I can review it as soon as I receive it. Thanks.
Ask Your Own Business Law Question
Customer reply replied 3 years ago

I need 5 more minutes. Will you wait to receive my docs? My kid is here to help me attach the docs.

No worries. :)
Ask Your Own Business Law Question
Customer reply replied 3 years ago

This website isn't allowing me to attach a PDF, do you have an address I can e-mail it to?

I got it! Let me take a look at it and I'll be back with you shortly!
Ask Your Own Business Law Question
Customer reply replied 3 years ago

There is more to it! I will attach them in the next post.

I actually only see one document. I would need to look all these agreements entered into between this "Owner-Dr." and Partner A had several agreements in place.
A. Purchase Agreement- "Owner-Dr." bought the practice for $300 from the previous "Owner-Dr." Specifically it is stated that the seller "Owner-Dr." had a marketable interest which was not ownership interest.
B. Stock Pledge Agreement-Owner-Dr. pledges to grant a security interest to Partner A in order to secure owner's obligations under such guaranty. "Guaranteed Obligations" to the extent of the business collateral.
Management Service Agreement (MSA)-basically states that the practice is under the direct supervision of the medical director (Partner B). In addition, "the Practice shall pay the HMC a fee in the amount equal of the Practice Net Collections. There is also a Promissory Note secured by a lien on the practice assets which is held by the HMC.
Perhaps it would be helpful if we talked by phone to cut through everything. I can offer that alternative through additional services offered by JustAnswer. Let me know if that would be helpful.
Ask Your Own Business Law Question
Customer reply replied 3 years ago

Attachment: 2015-02-20_224338_pyramid.pdf

This should have all of the documents in one place. The pyramid is on the last page.

I think it would be helpful if we talked by phone to cut through everything. I can offer that alternative through additional services offered by JustAnswer. Let me know if that would be helpful.
Ask Your Own Business Law Question
Customer reply replied 3 years ago

Quote me a fee.

You will receive it shortly.
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 57,043
Experience: 32 years of experience practicing law and a businessman.
Verified
Richard and 87 other Business Law Specialists are ready to help you
Ask your own question now
Thank you! Please see instructions below.
Ask Your Own Business Law Question
Customer reply replied 3 years ago

I have provided my first name and phone number in the private contact info area. I will be awaiting your call.

Thanks Henry. It was a pleasure!
Ask Your Own Business Law Question
Customer reply replied 3 years ago

Mr. Richard,

Would you please cite (from the agreements) exactly where "Owner-Dr." breached the contract? I'd like to specify those duties which she did not fulfill. Remember, she never materially participated in any facet of the business. Thank you. Henry

Good morning Henry. I will get that information to you a bit later this morning.
Ask Your Own Business Law Question
Customer reply replied 3 years ago

Thanks Fella,

I will keep an eye out for the information. Have a nice day. Henry

Thanks for your patience. :)
Ask Your Own Business Law Question
Assignment & Assumption Agreement - Section 3;
Stock Pledge Agreement - Section 1.1;
Management Services Agreement - Article II
Hope that helps!
Ask Your Own Business Law Question
Customer reply replied 3 years ago

Go onto gmail and log into the account I just created. The inbox contains only one e-mail with the attached document.

Username: Justasklawyer12345

Password: justasklawyer

Good morning Henry! I received your email and looked at your document. I have responded to you by email. Richard
Ask Your Own Business Law Question
Customer reply replied 3 years ago

Hi Rich,

Can you please get in touch? I have a problem?

Hi there. I'm in the Atlanta airport. How can I help?
Ask Your Own Business Law Question
Customer reply replied 3 years ago

Hi Rich,

It sounds as though this is not a good time. Can you get back to me by e-mail 2morow morning? Thanks

Sure...I did send you an email yesterday. Did you receive it?
Ask Your Own Business Law Question
Customer reply replied 3 years ago

No, I did not.

Did you receive a fax from me yesterday?

Are you planning on getting in touch 2morow morning?

Please advise.

I will reach out to you in the morning. I have an 8 AM meeting so it will be after that.
Ask Your Own Business Law Question
Good morning Henry. Please see below.
Ask Your Own Business Law Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a business lawyerLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Richard Your Own Question
Richard
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 57,043
57,043 Satisfied Customers
Experience: 32 years of experience practicing law and a businessman.

Richard is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Infolawyer

Infolawyer

Attorney

2,002 satisfied customers

Experienced lawyer

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

1,611 satisfied customers

Run my own successful business/contract law practice.

MShore Law

MShore Law

Attorney

1,233 satisfied customers

Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements

RGMacEsq

RGMacEsq

Attorney

778 satisfied customers

Licensed Texas General Practice Attorney

Barrister

Barrister

Attorney

678 satisfied customers

17 years practicing attorney, JD, BA, MBA

Ely

Ely

Attorney

604 satisfied customers

Counselor at Law.

J.Hazelbaker

J.Hazelbaker

Attorney

393 satisfied customers

Experienced and trained in the area of business law.

< Previous | Next >

Related Business Law Questions
I need financial help business. I do know how to run the
I need financial help for the business. I do know how to run the business. Do I have to make the people whom I know with good credit, a partner/member of the business or can I use them as an investor … read more
Lucy
Lucy
Juris Doctor
130 satisfied customers
Is there a legal business entity where I as a licensed
is there a legal business entity where I as a licensed Chiropractor can go into business with a non licensed private individual who would be funding the start up. I was considering a general partnersh… read more
Gerald, Esq
Gerald, Esq
Juris Doctor
138 satisfied customers
, I own 49% and my partner own 51%. I have a couple of questions 1.
, I own 49% and my partner own 51%. I have a couple of questions 1. Do I have any say with dealing with business issues? 2. Does he have the right not pay me my profit and losses because he is 51% own… read more
Richard
Richard
Attorney
Doctoral Degree
57,043 satisfied customers
I am a physician working at an urgent care center and am opening
I am a physician working at an urgent care center and am opening up a business that does hormone replacement therapy (completely unrelated to urgent care). I signed a noncompete that has a 10 mile, 1 … read more
Dimitry K., Esq.
Dimitry K., Esq.
Attorney
Doctoral Degree
1,611 satisfied customers
How are non physician corporate owned and managed urgent care
How are non physician corporate owned and managed urgent care clinics circumventing the corporate practice of medicine in Texas? There are several different corporations currently doing this.… read more
J. Warren
J. Warren
Attorney
Doctoral Degree
2,241 satisfied customers
hi. i hold a 50% interest in an LLC with one other person.
hi. i hold a 50% interest in an LLC with one other person. the LLC has one asset- an apartment complex. The other partner holds 50% interest as well. my partner executed a promissory note when we purc… read more
Law Pro
Law Pro
Doctoral Degree
19,000 satisfied customers
I am the owner of a sports and fitness Center. Last year I
I am the owner of a sports and fitness Center. Last year I created a verbal agreement with a sports chiropractor (Dr. Roni) to work mutually together on a patient population I originally had. The agre… read more
Dimitry K., Esq.
Dimitry K., Esq.
Attorney
Doctoral Degree
1,611 satisfied customers
Dispute related to: XXXXX XXXXX business purchase contract (fail
Dispute related to: XXXXX XXXXX business purchase contract (fail to disclose critical info) Misled/inflated revenue to allure buyer to sell business Healthcare false claim DEA (Drug enforcement agency… read more
rvlaw
rvlaw
Judge
Juris Doctor
3,203 satisfied customers
See end of my post for my question... Regarding an architectural
See end of my post for my question... Regarding an architectural corporation, see CAB Par. 5610.4 that does not allow an unlicensed individual to be part of the architectural corporation. Par. 5610.4 … read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,770 satisfied customers
How does dissolution of a partnership agreement work in a medical
How does dissolution of a partnership agreement work in a medical practice. There are only two partners of the corporation with 50% each ownership of the shares. If they cannot reach agreement for one… read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,770 satisfied customers
I have been asked to financially participate in a California
I have been asked to financially participate in a California Medical Organization. The doctor, a friend of mine, specializes in pain management and wants to set up a pain management clinic. He has ask… read more
Loren
Loren
578 satisfied customers
I run an LLC with 2 partners (51/49). I am the 51% owner
I run an LLC with 2 partners (51/49). I am the 51% owner and my partner is refusing to sign any personal guareentee's for the purchase of equipment. We are currently running with a 67% of libility for… read more
JBaxLaw
JBaxLaw
Attorney
Doctoral Degree
8,080 satisfied customers
Dr. Stevens had a successful practice as a chiropractor. She
Dr. Stevens had a successful practice as a chiropractor. She owned the small building where she operated her practice. Dr. Mercer, another chiropractor who was starting his own practice, approached Dr… read more
socrateaser
socrateaser
1,031 satisfied customers
I have a judgement against an apartment complex for $13,000.
I have a judgement against an apartment complex for $13,000. How can I find there bank account info to garnish?… read more
Law Pro
Law Pro
Doctoral Degree
19,000 satisfied customers
22) Which is true of a limited partnership A. The liability
22) Which is true of a limited partnership? A. The liability of all owners is limited to the amount of their contribution to the business. B. At least one of the partners must be a general partner wit… read more
Loren
Loren
578 satisfied customers
Background: My S-Corp, and my partners LLC-A have purchased
Background: My S-Corp, and my partner's LLC-A have purchased a small services company, and due to the Govt contract nature, my existing S-Corp had to be the official purchaser. We are forming a new LL… read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,770 satisfied customers
We are a group of consultants who are looking at ways to pool
We are a group of consultants who are looking at ways to pool marketing and administation expenses, but not billing revenues. Therefore, we are not considering a traditional partnership where revenues… read more
KUMI95
KUMI95
Attorney
Doctoral Degree
17 satisfied customers
I have a judgement against a small business and need to collect
I have a judgement against a small business and need to collect it. I liened the business bank account. An employee at the business called and complained that the bank had accidentally frozen the owne… read more
Law Pro
Law Pro
Doctoral Degree
19,000 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x