The Modern Entrepreneur

Whether you are well versed in litigation, or the complexities of our legal system or not, having a general understanding of the legal implications surrounding your business or industry is extremely important. The litigious society and governmental regulatory environment we are experiencing today is more impactful and visible than any other time in our history. The list of potential legal issues and liabilities for any small business owner has never been more significant, and impacts the way companies are run and structured. The entertainment industry is experiencing growth, but is becoming more and more complicated, with distribution issues, social networking issues, etc. all related to copyrights, trademarks, patents, and licensing. These legal issues have always been around, but they have become complex and economically impactful with the evolution and growth of technology, media, and society. One other industry under serious legal scrutiny is the financial institutions and the regulations of funds and banks, because the recent financial crisis has finally revealed the serious fraud issues that have become common practice over the past decade.
Being a diligent and vigilant entrepreneur in this environment requires you to stay apprised of the legal issues and changes within your industry. Doing so can help minimize risk and liability, and be able to grow and adapt your company without any shocks or surprises which could bring it crashing down over night.
Whether you have major legal resources, friends as lawyers, or neither, being ignorant to the legal and political landscape is just bad business sense. Regardless of resources or not, todays technologically connected, globalized society, there are ample amounts of free legal resources online to make sure you are up to date. Recently I have been listening to legal podcasts online, which have increased my awareness and knowledge of the legal issues surrounding the Entertainment and financial industries.
There are an abundance of materials, from online legal platforms such as leagalzoom.com, to government websites, to free podcasts available on individual websites or Itunes. I utilized the podcasts which were both available free online and on Itunes, these podcast last anywhere from 20 minutes to an hour. I utilized the Entertainment Law Podcast by Gordon P. Firemark, the Trademark & Copyright Law forum by Thomson Compumark, and the Clayton UTZ podcast which deals with hedge funds legal issues.
Gordon P. Firemark is a well renound Entertainment Lawyer, who uses his podcast platform to engage a variety of issues across the entertainment industry, utilizing news, legal cases, and special guests for insights and analysis. In his episode Law update 20 on May 11, 2011 titled Tattoos and Topiaries, there was a variety of interesting examples and insights. This episode talked about the Bratz dolls property rights, copyright infringements for the movie Alien vs Predators and more. Perhaps the most interesting example deals with the copyright infringement case involving Mike Tysons tattoo artist Victor Whitmill and the use of his design in the second rendition of the Hangover. These stories and examples really give you a good idea of the scope of protection required in todays legal environment.
The second podcast I utilized was the podcast titled : “Technology agreements that work”. This podcast really gave me a good in depth analysis, regarding the evaluations, drafting, negotiations, and enforcement of complex technology agreements. This really applies to all businesses, but technology agreements can involve many people and have many contingencies which are important so that you business can produce assets instead of liabilities.
The third podcast was one produced by and Australian Law firm Clayton Utz, in a series of podcasts that discuss the issues surrounding insolvent hedge funds and equity funds around the world. Podcast 3: “Riding the wave of insolvency, narrated by Jennifer Ball a partner in the firm, addresses the major issues with certain funds around the world, utilizing legal and business experts around the world. In this they highlight the importance of certain regulations that need to be changed, as well as the major issues of locating and distributing funds, which have become increasingly adept at hiding and allocating their funds in offshore accounts around the world.

There are plenty of resources out there, both free and costly, regardless, ignorance is not bliss when it comes to lawsuits and your business. The idea is that it is necessary to stay up to date on your knowledge of the evolving legal landscape, and keeping your personal life and business in line with such expectations and ideals.

Funding any entrepreneurial venture has become increasingly litigious and complicated, especially with the credit markets and banks tightening their lending policies since the Financial meltdown of 2008. Hedge funds and private equity firms have had to pick up some of the slack, where credit is dry, such firms look for opportunities to capitalize with favorable deals and the use of leverage. Leverage and high demands of return by investment firms has led to many more contracts becoming increasingly more specific and complex among Financiers, Business partners, project contractors, etc. Such complex agreements, along with the volatility and uncertainties throughout the investment industry is making for and even for difficult time when disputes reach the courtroom.
Many hedge funds and equity firms run things properly and ethically and do not create any problems within the industry. Some are powerful enough and have enough capital to create seismic shift throughout the markets. Some are just run by crooks and swindlers who feel they can do as they please with investor’s funds. Those few rotten funds, run by shady executive have brought quite a bit of attention and shame recently, whether it has been by defrauding longtime investors of their life savings in a ponzi scheme, inflating their books, offshore tax shelters, or downright not living up to their contracts or agreements.
A few of these cases provide examples of how you should and should not handle such legal situations. I feel in many cases, lawsuits can be avoided, obviously by being open and ethical, but if a lawsuit is threatened, you should do everything within your power to make sure it gets worked on outside of court to limit the negative press toward your firm or business. In the case of the Aramid Entertainment fund manager David Molner this has not worked. David Molner and one of his top Movie investors are now embroiled in a serious lawsuit which has been filed in both New York and L.A. because other investors are now concerned, with the funds value being depressed by hidden offshore accounts and shareholder suspicion which has limited the funds effectiveness to conduct normal business.
Another example of this, is the lawsuit between Shawn Carter (Jay-z) and Highland Capital management, a hedge fund out of Dallas, Texas. The firm secured a loan of around $52,000,000 dollars to buy and renovate a Boutique Hotel in the Chelsea district of New York. Highland Capital defaulted on the loan as they lost funds and could not live up to their bargain, effectively sabotaging Jay-z’s plans for the hotel, and the money already invested in to the project! Yes it is understandable if for outside factors that you default, however this company has a history of holding investors hostage and not delivering on contracted agreements.
All hedge funds need to operate more openly and ethically, by creating a comforting and straight forward environment for successful investing. Some firms have shown their inability to do this, and their complete disregard for the clients money they manage. If you want to have a successful investment company it is imperative that you conduct business in a manner that is productive and transparent, not secretive and shady.