A Night at the Movies
Filed Under: Videos of Interest
Tags: Videos of Interest
Check out the trailer for this movie, Extraordinary Measures. It’s about a dad who risks everything to form a bio-tech company focused on developing a life-saving drug to cure his kids fatal illness. It demonstrates that when you are an entrepreneur and have passion attached to what you do, nothing can stop you!
Comments (0)Delaware LLC Agreements – Get it in Writing!
Filed Under: INC Knowledge, Limited Liability Company
Tags: Limited Liability Company, LLC Agreement
Back in October, 2009 we discussed how the LLC is owned, operated and maintained in a post titled 101 on an LLC Agreement. Many clients have come to us with questions and are curious about the fact that Delaware LLC law provides for an oral LLC agreement.
The Delaware Supreme Court recently issued a decision that effectively requires all limited liability company agreements (“LLC Agreements”) for Delaware LLCs to be in writing. The decision holds that LLC Agreements are subject to Delaware’s Statute of Frauds, which requires certain types of contracts to be in writing in order to be enforceable. This decision appears to contradict the express language of Section 18-101 of the Delaware Limited Liability Company Act (the “Act”), which states that a limited liability company agreement may be “written, oral or implied”
Although clients typically commit an agreement to writing, some small or relatively newly formed LLCs operate pursuant to an oral understanding or implied course of dealing among the members. For example, members of an LLC may have orally agreed upon or may have simply accepted over time a certain distribution of profits and losses, or assumed that voting rights were distributed among the members in a certain way.
A member seeking to assert his or her rights in court, however, could not rely upon the oral agreement or implied understanding as an LLC Agreement governing the operations of the entity, despite the language of the Act.
This decision reinforces the importance of putting an LLC Agreement in writing as early as possible, and having all members sign the agreement. Business partners or investors in the first stages of an exciting business opportunity often do not foresee (or do not consider) the possibility of a later disagreement and the potential need to assert their respective rights, but putting the terms governing the operations of an LLC in writing at an early stage protects the interests of everyone involved.
Comments (1)Toyota and Tylenol
Filed Under: Essays
Tags: George Merlis, Media, Media Training, News
If corporate crises were a game, the Toyota safety recall would be a Superbowl contender.
Toyota Motors is a company that heavily promotes its engineering innovation, production quality and service reliability. In a haymaker blow to Toyota’s reputation, the company suspended production and sales of eight of its most popular models — including America’s (previously) best-selling car, the Camry. And now Toyota is recalling millions of already-sold cars worldwide to fix a potentially life-threatening problem: unintended acceleration.
(Disclosure: I have a personal stake in this story: I own a second-generation Toyota Prius.)
This week Toyota began shipping parts to dealers across the country to correct an accelerator problem that could lead to cases of disastrous unintended acceleration. The Toyota problem is so serious the automaker stopped production and sales on eight of its top-selling models — including the Camry, the best-selling car in the U.S. The scope of the problem is staggering: I’ve seen stories on the web sites of European, Japanese, South African, Canadian and Israeli newspapers. Toyotas sold in China have also been implicated.
I always judge a company’s handling of a crisis by what I call the Tylenol Standard. Back in 1982, Extra-Strength Tylenol capsules were the best-selling over-the-counter pain reliever in the United States. Then, seven people in the Chicago area died; they had all been taking the drug. J & J jumped into action with an approach that is taught in business schools to this day. The company suspended all production of Tylenol immediately. It recalled the 31 million bottles of Tylenol then on store shelves, destroying all the medication that was returned. It launched a rigorous inspection of all its manufacturing facilities. And, Johnson & Johnson made top officials readily available to the media where their story was: “We don’t know how this happened. We will find out and correct it. Meanwhile, do not use any of our products that you have at home; return them immediately, and report any adverse effects from our medication that you have already taken.”
The company’s response was fast, comforting and took a page from the Harry Truman adage: “The buck stops here.”
As it turned out, the buck did not stop at Johnson & Johnson. The Tylenol deaths were murders, not the result of accidental contamination. Someone had tampered with some Extra-Strength Tylenol boxes in drug stores around Chicago. The killer opened the packaging and the bottles, inserted potassium cyanide into the capsules and then resealed everything and put the product back on the shelves. Police and FBI theorized the killer had a specific target in mind but killed others in order to make his intended victim look like a random casualty in a series of accidental poisonings-by-contamination. (The case remains unsolved to this day, possibly because the intended victim never took the contaminated drug.)
Within a year, Extra-Strength Tylenol had regained its position as the country’s top-selling pain killer. Unfortunately, the Toyota brass must have cut class in business school the day they taught the 1982 Tylenol lesson.
Toyota was late to the table with an admission that there was, indeed, a problem and slow with information to the media (and through the media to the millions of Toyota owners worldwide). This sowed the seeds of confusion and resulted in a serious erosion of trust in the company.
Toyota’s worldwide president, Akio Toyoda, grandson of the company’s founder, made no statements to the media and no apologies to customers until a crew from NHK, the Japanese TV network cornered him at the World Economic Summit in Davos the last week of January. This reclusive behavior despite the fact that the issue has gained massive media attention since last August when an off-duty California Highway Patrol officer and three family members burned to death after crashing a runaway Lexus they had borrowed from a dealer in San Diego. The company’s U.S. president, Jim Lentz, was also noticeably absent from the media until February 1, when it was time to announce the fix. Then he began a media blitz explaining the problem and the repair, a belated attempt to restore Toyota’s battered image.
But wait, there’s more, as the infomercials say. If you look at the list of cars being recalled for the accelerator fix (below) you’ll notice that the Lexus in which Highway Patrol officer Mark Saylor died — a 2009 ES — is not on it. That’s because those cars — and many other Toyota-made cars, including my Prius — were subject to an earlier recall, back in November, 2009. In that recall, the Lexus accelerator pedals were shortened so they could not be trapped under the floor mat — the ostensible cause of Officer Saylor’s accident. (For the Prius, I was just told to remove the mat — which I had already done. It still sits in my trunk awaiting the promised “permanent fix.”
But at the same time as the mat matter was being handled, Toyota was aware that for six years both the company and the National Highway Traffic Safety Administration has been looking into multiple cases of unintended acceleration and that the mats were unlikely culprits in all of them. In its autumn response, Toyota tried to sweep the more basic accelerator problem under the floor mat problem. In fact, in November, Toyota put out a press release misrepresenting the NHTSA’s conclusions about the floor mats and had to issue another press release correcting the first one. But neither press release acknowledged that unintended acceleration might have been caused by anything other than misplaced or mismatched floor mats.
So there were two problems and initially Toyota tried to conflate the simpler problem (the mats) with the more serious problem (the accelerator mechanism). The mat recall affected 3.8 million vehicles and despite the fact that NHTSA told Toyota that mat removal was at best an interim solution, no long-term solutions has been reached for many of those recalled cars. The faulty accelerator affects 4.6 million vehicles, some of which were previously involved in the mat recall (with the attendant danger that owners who addressed the mat problem will now think the entire problem solved.)
Here is a list of the cars in the current Toyota recall.
• 2009-2010 RAV4
• 2009-2010 Corolla
• 2009-2010 Matrix
• 2005-2010 Avalon
• 2007-2010 Camry
• 2010 Highlander
• 2007-2010 Tundra
• 2008-2010 Sequoia
Comments (1)LLC vs Corporation Video
Filed Under: Videos of Interest
Tags: Corporation, Limited Liability Company, Videos of Interest
Check out our newest video on LLCs vs Corporations!
Comments (0)Quote of the Day
The world wants you to be a faceless, replaceable cog in the vast machinery of production–but if you choose, and you work at it, you can become the sort of person we really need, an indispensable linchpin, a person who matters. The marketplace needs and embraces artists, creatives, initiators, challengers and movers. You have that skill, the challenge is unearthing it. - Seth Godin
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