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Cleveland Business & Commercial Law Blog

Developer looking to build new apartments in Avenue District

Pending approval from the Cleveland City Planning Commission, Zaremba Inc. plans to build 108 new apartment units in downtown. The nine-building development project would create 59 one-bedroom apartments and 49 two-bedroom apartments in the Avenue District. The units would range in size from 600 to 1,100 square feet and include a mix of townhouse-style homes and flats. Seventy-seven new parking spaces would also be included in the real estate development project.

An apartment broker for Marcus & Millichap questioned the feasibility of Zaremba's development plans. He commented that the Superior Avenue location has always been questionable because it is somewhat isolated. In 2007, a development project in the Avenue District that was meant to become a several-block neighborhood only sold five condos before going into foreclosure.

Preparing a proper joint venture agreement can help avoid trouble

Cleveland business owners may be interested in an article detailing some of the positive and negative aspects of going into business with another. These joint ventures have risks that can be mitigated by using proper contractual agreements.

Joining up with another company in order to achieve a business goal can hold a lot of promise for success. Working together, the companies can leverage each others' strengths and minimize weaknesses. However, if the joint venturers fail to properly plan for when things go wrong, this can lead to legal battles down the road. Additionally, when one party has superior bargaining power when negotiating the partnership, this can lead to an unbalanced business relationship.

Hewlett-Packard shareholder dispute dismissed by federal court

Ohio business owners may be interested in the latest news on a lawsuit filed by shareholders against tech giant Hewlett-Packard. The claim against the company has been dismissed despite the shareholders' second chance at filing.

In August 2013, a group of HP shareholders led by a New York-based retirement fund filed a lawsuit against the tech company in a northern California federal court. They alleged that the actions of HP's former CEO were a breach of the company's Standards of Business Conduct, which dictated their commitment to ethical business practices. However, the federal judge dismissed the case without prejudice, instructing the shareholders to refile with a more specific claim. On June 25, the shareholders' claims were dismissed once again. This time, though the complaint contained more specific facts, the judge found that they did not rise to the level of securities fraud.

SEC takes on Ohio Ponzi scheme

On May 29, the Securities and Exchange Commission filed a lawsuit against a group of several individuals involved with a Ponzi scheme in Ohio. An Akron-based group, KGTA Petroleum, was reportedly comprised of residents from the northeast area who employed a scheme to fraudulently obtain approximately $21 million from 50 victims. The SEC filed a lawsuit with the U.S District Court for the Northern District of Ohio in an effort to recover restitution for investors and request civil penalties against the defendants.

KGTA, seven individuals and two consulting businesses are named as defendants in the suit. Each of the consulting businesses is owned by one of the defendants individually named in the lawsuit. The SEC claims that two of the defendants created KGTA, a fake corporation that claimed to buy oil and other fuel at a discount and resold it for significant profit. The lawsuit claims the defendants said there would be no exposure to market risk and that the investors would receive a 2 to 4 percent return in each month.

Security companies reach settlement in patent dispute

A settlement has been reached in the patent dispute between SecureBuy, LLC, and Ohio-based CardinalCommerce Corporation. In November 2013, SecureBuy initiated a lawsuit against Cardinal in a federal court that contested the latter's patents with the U.S. Patent and Trademark Office. Both organizations deal in online security. SecureBuy, a security firm with an emphasis on safeguarding online purchases, has since acknowledged the validity of Cardinal's patents and withdrawn its litigation. The issue concerned Cardinal's inventions concerning the Universal Merchant Platform and its role in authenticating payments on the Internet.

Although sources did not disclose the terms of the settlement, both companies expressed satisfaction with the agreement. The CEO of SecureBuy stated that the company is looking forward to more productive business relations with Cardinal in the future, while the CEO of Cardinal emphasized his satisfaction that the company's investment in its intellectual property has been affirmed. CardinalCommerce maintains its headquarters in Mentor.

New laws limit townships' authority for economic development

Townships in Ohio that want to expand their economic development zones or make new ones will be subject to new requirements in 2014 due to House Bill 289. People involved with business planning might interested to learn that townships will no longer be able to create joint economic development zones starting January 1, 2015. Existing JEDZs will not be effected. If any townships or municipal corporations wish to make significant amendments to existing zones, such as increasing tax rates, they must do before the end of 2014. New zones should also be formed by the end of the year.

The main supporter of House Bill 289, Rep. Kirk Schuring, said that JEDZs were originally formed to foster cooperation between local governments and to encourage economic development. However, some local governments have been using the JEDZs an a way to levy taxes without employees or employers being able to oppose them, according to Rep. Schuring. The bill requires amendments and new JEDZs to have plans that detail the way income tax collections are to be used. A minimum of half the taxes must be devoted to things like improvements to facilities and services.

Medical marijuana dispensaries sued for trademark infringement

Ohio business owners may be interested in reading about the latest news involving a trademark infringement lawsuit brought by The Hershey Company in two states. The Hershey Company filed a lawsuit against Seattle Conscious Care Cooperative, a company that sells snacks and sweets containing marijuana. The other federal lawsuit filed by Hershey was in Colorado, the other state to have recently legalized the recreational use of marijuana.

The products that Hershey names in the lawsuit were Reefer's Cups and Mr. Dankbar. The manufacturers of the products are said to have purposely used Hershey branding as a way of attracting more customers and getting more revenue. An employee of Seattle Conscious Care Cooperative noted that it did not make the products but that it was simply selling products that they obtained from a vendor. The employee also noted that the two products in question had already sold out months before.

Ohio's Proctor & Gamble sues teeth-whitening strip manufacturer

In most cases, competition in the marketplace benefits Ohio consumers, who are able to find the best products for the best prices. Nevertheless, some companies uses business litigation to keep competitors out of the market. For this reason, the court closely examines patent infringement cases to ensure that companies are not unfairly excluding competitors from the marketplace.

Ohio-based consumer goods giant Proctor & Gamble, or P&G, has filed suit against a smaller New Jersey company over the production of teeth-whitening strips. Clio USA produces its own teeth-whitening strips and recently began distributing them to Target stores nationwide, where they were sold for about 30 percent less than the P&G product, Crest Whitestrips. The lower-cost whitestrips reportedly sold well at Target.

Model alleges breach of contract to the tune of $500,000

For many people, contracts are more than just agreements; they are a way of doing business. Many individuals and companies in Cleveland rely on contracts in order to make money. If one party backs out of their obligations, they may be held responsible for breach of contract. As one recent incident illustrates, the action can be costly.

A Columbus photographer is on the receiving end of a lawsuit that alleges fraudulent breach of contract. In the suit, a professional model from Northeast Ohio alleges that the photographer sold her pictures to entities that promote adult-oriented content and services, such as stripping services, sexual products and prostitution.

Small-business owners in Ohio say local economies could be better

The economic climate at the federal, state, and local levels affects small business owners in Ohio, and some geographic areas of the United States have recovered more quickly from the economic recession than others. For people who are involved in business planning, it can be helpful to consider the impact of the geographic area in which they operate.

According to a recent survey conducted by U.S. Bank, about 69 percent of Ohio small-business owners think that the local economy has room for improvement. When the survey asked respondents to compare the economic health of their region compared to the national economy, just 14 percent of Ohio business owners said that their area was doing better than the nation as a whole. Survey respondents pointed to the new federal health care law, high taxes, low wages, and unemployment as their top concerns.

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