Katzman & Katzman
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Your Banking Relationship: Why is it Important?

An individual’s or business entity’s relationship with a bank can be a critical component of a successful business operation. A banking relationship should be more than checks, charge card accounts, wire transfers, loans, lines of credit, and mortgages. A truly good banking relationship can assist in establishing relationships with new vendors, customers or other businesses in the same or similar types of businesses located in your area or other locations.

Choosing which bank is the important initial step. Pick a bank that is convenient for you and your business that offers the services you or your business are likely to need and use now and in the future.

Larger banks tend to offer more choices, but they tend to be less personal. It often is difficult to develop a long-term banking relationship with a specific banker due to frequent transfers of banking personnel. A smaller “community” bank, while typically offering fewer choices, tends to create better long-term working relationships with its customers.

The time to begin a banking relationship is now, especially if you do not have an immediate need. Getting to know a banker and having that banker get to know you and your business takes time to develop and cultivate. By starting to build a relationship now, you will begin creating a business relationship for the future when you have a specific need. Remember, it takes time to build mutual trust, so, the sooner you start the better.

A bank and its officers can be a valuable source to refer you and your business to others who may use the services or products you or your business provide. A referral or reference from a banker promotes an immediate level of trust That is far superior to a “cold call”.

Not every bank is a good fit for every business or individual. Do your homework in deciding which bank is the best fit for your banking relationship. And, remember a good banking relationship with one bank is a valuable asset. A good banking relationship with two banks is even better.

The attorneys of Katzman & Katzman, P.C. have represented banks and businesses for over forty years in Indianapolis and the Midwest. We have long established relationships with many banks in our area. We are ready, willing and able to work with and help you in selecting the right bank and starting your banking relationship.

Alvin J. Katzman, Managing Partner

KATZMAN & KATZMAN, P.C.


Succession Planning: Why Do It?

The primary reason for succession planning is to allow for an orderly transition of ownership, management, and control from present owners/managers to the next generation of owners/managers.

A properly orchestrated succession plan gives the present owner a tool to keep key personnel employed, as those key people won’t be worried about what the future holds. It “cements” their employment moving forward.

Form an Estate Planning point of view, a properly structured succession plan removes from the heirs the responsibility of deciding how a business will be conducted or who should run/purchase the business should a death or a disability occur suddenly and without any or limited advance notice.

The financial end of the transition can also be planned in advance which would provide a structure for the estate or spouse should a death occur. This becomes important, as often times the business being transitioned is a major portion of the estate of the present owner.

There is no “one type fits all” in succession planning. There are many creative ways to approach the succession plan, depending on the unique specific situation of each business. Creativity often times can overcome or work around obstacles that appear insurmountable.

Don’t put off working on a succession plan that will insure your business continues in the future and will provide financial protection and security for you and your family.

The attorneys at Katzman & Katzman, P.C. have for many years worked with businesses of all types in planning for the transition from one owner to the next. We would be pleased to meet with you and discuss the specifics of your situation. Please contact us when you would like to develop your succession plan.

Alvin J. Katzman, Managing Partner

KATZMAN & KATZMAN, P.C.


Litigation Avoidance

As Benjamin Franklin once stated, “an ounce of prevention is worth a pound of cure.” I’m not sure exactly what “ailment” he was thinking of at the time, but when you consider its meaning, this principle can be applied to darn near everything; and the law is no exception.

In the context of law, the “ailment” we frequently wish to avoid, is usually the one that has the most serious “symptoms” – which (moving beyond the metaphors) is usually litigation. Regardless of whether you are the plaintiff or a defendant, litigation can be costly, not just financially, but emotionally as well. Although there is no way to entirely avoid litigation, business and individuals can nevertheless take preventative steps to decrease the likelihood that they will later need to invest in obtaining a costly “cure.”

The following are a few general areas where an ounce of prevention could be worth a pound of cure:

(1) Know What You Are Agreeing To. If you are being asked to sign a contract or considering submitting one to someone else, make sure you understand EXACTLY what you are agreeing to and not agreeing to. Period. If you have any doubts, contact with your attorney. (see also, my previous post – Don’t Try This At Home).

(2) Employee Handbooks/Manuals. This is an area that is incredibly complex and which often involves not only state specific laws and regulations, but federal ones as well, and can often be industry specific. If your business has one or is considering putting such a document together for use, it is a good idea to consult with an employment law attorney.

(3) Get Help Before Things Get Out of Control. Saying something like, “Maybe that lawsuit will go away if I just don’t respond to it” is not a good idea. If you laugh, don’t; these words have oft been repeated by many who should know better, and wound up finding out the hard way. Don’t be one of them. If you get served with a lawsuit, it is a good idea to consult with your attorney as soon as possible. Conversely, if you are considering filing a lawsuit, it is also a good idea to consult with your attorney as soon as you believe you have a cause of action. Waiting or putting things off in either situation may result in an unintended waiver of your rights.

(4) Corporate Formation & Governance. In forming a new business, there are at least two people who you should consult with prior to filing any formal documents: (1) your CPA, and (2) your attorney. Most ( but not all) forms of business organizations provide some level of limited liability protection to its owners. However, if the business is not initially formed correctly, or is not governed or operated correctly, the limited liability protection generally afforded to that business organization can be by-passed or otherwise compromised, exposing the owners personally to the business’ liabilities. Further, there are various tax considerations that should be addressed before deciding on a particular organizational set-up. The process of starting up a new business venture should be exciting, but it should also be taken seriously, and all the formalities observed.

-Dan McAfee


Don't Try This At Home...

Utilizing a legal document you downloaded off the Internet for business or personal use is (whether you paid for it or not) a bit like deciding to go hunting for mushrooms to use in your dinner after watching a survivalist guy do it on TV. There may be a sense of pride in “doing it yourself,” or some dough saved in obtaining the “goods” rather than purchasing them, but any potential benefit that may be realized is drastically outweighed by the potential risks. Using a document pulled off of the Internet will obviously not cause organ failure and/or result in death (at least not directly), but it may cause the metaphorical death of your business or the failure of your intentions to be carried out in distributing your property to your children when you pass away - just to name a few.

The problem in both scenarios is, of course, that they involve actions (drafting a legal document or picking mushrooms to eat) that should be performed by someone who has been trained and is experienced in successfully performing that particular action. This may seem axiomatic, but the allure of cheap or free legal products and advice seems to overwhelm even the most rationale thinker at times.

Lawyers are trained to understand the needs of their clients, identify the issues that exist, apply the applicable laws, and formulate sound legal solutions. Legal matters are quite often fact specific, and if one does not have a solid understanding of what facts are important, or how all of the facts fit together and apply to the applicable laws in a particular jurisdiction, attempting to create a legal document based upon a look at one fact or one issue can result in unintended (and often unfavorable) outcomes. For example, the question of whether a particular contractual provision is enforceable may turn on something as simple as the inclusion or exclusion of just one word, or under what laws the parties intend to apply their contract, or the date on which the contract is signed. Furthermore, even if the document is enforceable, it may not provide the parties with all the rights they believed they were receiving.

Utilizing a document pulled from the Internet is not advisable because, while it may have been sufficient for someone else’s usage at some point in the past, a trained and experienced lawyer did not prepare it for you after careful consideration of all the facts and applicable laws specific to you. This is true even for the websites that sell (purportedly) state specific, form documents. If a licensed attorney did not draft the document specifically for you, it may not address all of your needs. Bottom line: if you need a legal document prepared, consult with your attorney, or at the very least have them review what you’ve prepared prior to using it to ensure it offers the intended protections. As the saying goes, “if something’s worth doing, it’s worth doing right.”


Business Laws That Set Indiana Apart

While there are plenty of federal laws that govern businesses in the United States, each state also has its own laws. Federal laws are in place for many aspects of business including employee rights, taxes, environmental protection, and more. Each state has laws that focus on certain aspects of business, and Indiana is no different.

The state of Indiana seems to put its focus in two main areas: antitrust laws and deceptive trade practice laws. Indiana is one of many states that allow private citizens to bring about antitrust lawsuits. Indiana’s antitrust laws discourage monopolies among businesses. Indiana is also quite strict on prohibiting false advertising as well as other deceptive trade practices with an emphasis on automobile odometer tampering.

The Hoosier State has put laws into practice to protect open markets by being strict on collusion between businesses to raise prices to unfair levels. Businesses are encouraged to participate in fair and open competition and to win over customers with their prices and service. These laws also prevent mergers and acquisitions that can give companies an unfair advantage. In Indiana, citizens are allowed to bring private antitrust lawsuits against a company as well as to recover attorney’s fees in the case of a successful suit.

Indiana’s deceptive trade practice laws protect consumers against false assertions about their products or services. This includes a wide variety of claims including the health benefits of vitamins or the service history of a used vehicle. Unfortunately, many people try to take advantage of others all in the name of making a quick buck. The state of Indiana’s consumer protection offices will investigate and prosecute scammers as well as providing information to consumers.

If you’ve been a victim of a business violating antitrust laws or deceptive trade practices, call the experienced attorneys at Katzman Katzman today at 866-557-8841.


Meet Alvin J. Katzman

If you’re looking for an experienced attorney who understands the laws in Indiana, look no further than Alvin J. Katzman. Mr. Katzman has been the managing senior partner at Katzman Katzman since 1989. His practice is primarily centered around corporate, banking, real estate, contract, and transactional business law issues.

Alvin J. Katzman graduated from Indiana University, earning his B.A. with distinction. He was a two-time Indiana Foundation Scholar and was named Outstanding Marketing Student for the Indiana University School of Business in addition to being selected for membership in the Beta Gamma Sigma.

Mr. Katzman received the White House fellowship in the office of Consumer Affairs. He also received a Presidential appointment to the United States Military Academy. He went on to earn his J.D. from Indiana University School of Law in 1976.

He received the highest rating an attorney can receive, an AV, by Martindale-Hubbel and his peers. Mr. Katzman has also been selected as a Distinguished Fellow by the Indianapolis Bar Foundation. He is proud to represent several lending institutions as well as business and individuals dealing in real estate, complex business, and corporate matters.

Mr. Katzman has lectured on foreclosure law, fair debt collection practices, the fundamentals of commercial lending, drafting effective loan commitment letters, and commercial loan documentation. He is also a member of the Indianapolis and Indiana Bar Associations and is admitted to the Indiana bar and the U.S. District Courts for the Northern and Southern Districts of Indiana.

Alvin works alongside senior partner DeeDee Katzman, partners Erin Mundy, Dan McAfee, and Jordyn McAfee, as well as associate Leah Lotfalian and Alan Goldstein, of counsel. If you’re looking for a great legal team in the Indianapolis area, contact Katzman Katzman today by calling 866-557-8841.


Steps Not to Overlook When Forming a Business

Starting your own business is quite exciting, but there are many steps in the process and some might get overlooked. Indiana supports local business owners and provides many resources for business owners. This basic overview of the steps needed to form your own business can help make sure you don’t forget anything important.

Choosing a Business Structure

Not all businesses do the same thing, and there are different ways businesses are classified. Your business can be an informal association or a formal association. An informal association is either a sole proprietorship or a general partnership. This depends on the amount of individuals who own the business.

There are many more types of formal associations including:

  • Corporations
  • S-Corporations
  • Limited Liability Companies
  • Nonprofit Corporations
  • Limited Partnerships
  • Limited Liability Partnerships

Contact your attorney for more information on which type is the best fit for the business you’d like to start. You’ll need to file organizational documents with the Business Services Division of the Secretary of State. You’ll also need to provide them with information about the business.

Naming Your Business

You’ll need to select an appropriate name for your business. Under Indiana law, your business name must be distinguishable from the names of other businesses of the same type according to the records of the Secretary of State’s office. You can check the availability of your business name online or by calling 317-232-6576. Don’t forget to choose a name that accurately describes your business to potential customers who don’t know what you do.

Continuing Responsibilities

Even after your business is formed, you’ll still need to do some things to maintain it. You’ll be required to file Business Entity Reports with a filing fee biennially. You’ll also be well served to have an attorney on retainer for any unexpected issues that may arise as a business owner.

Contact the qualified attorneys at Katzman Katzman for more information on starting a business in Indiana by calling 866-557-8841 today.


The Complications of Buying and Selling Commercial Property

If you’re interested in buying or selling commercial property, you’ll need to be educated on some of the essentials first. Unlike the sale of residential property, there are essentially no rules when buying or selling commercial property. Every detail is up for negotiation, but having a basic understanding of typical provisions in most CRE purchase agreements can help protect your interests.

A commercial property contract has many purposes including specifying each party’s rights, liabilities, and obligations. The document details all of the steps that must happen in order for the transaction to be closed. It also defines what property is being conveyed, real or otherwise. While it may seem like a 200-page contract is unnecessary, being thorough and complete can protect you in the case of a conflict.

The first draft of the contract is typically done by the seller’s attorney. It is then sent to the buyer who gives their input. From there both parties exchange revisions until they both accept the final document. These negotiations can be quite extensive, so having an experienced attorney is absolutely necessary.

You can already see that commercial real estate transactions are much more complicated than residential sales. There are still many more steps involved in the process including:

  • “Whereas” clauses
  • Description of property and “as-is” terms

Transfer documents:

  • Deeds
  • Assignments
  • Bills of Sale
  • Purchase price
  • Adjustments
  • Earnest deposit

Buyer’s contingencies:

  • Buyer financing
  • Title review
  • Survey
  • Inspections
  • Commercial tenant leases
  • Property-related contracts and expenses
  • Land use approvals
  • Environmental review

It’s easy to see that the average person looking to buy or sell commercial property needs assistance from a qualified attorney. The experienced attorneys at Katzman Katzman know that the law is complicated, but working us is not. We have more than 30 years of proven experience providing cost-effective and sound solutions to match the unique needs of businesses. Contact us today at 866-557-8841.


How Divorce Affects a Family-Owned Business

We know that divorce is tough for children to deal with, but have you considered the impact it could have on a family-owned business? If you have a family-owned business, you’ve likely put a lot of hard work into it over the years. A family business truly does become part of the family, so a divorce can certainly make things complicated.

If you get divorced from your spouse, it likely won’t be pleasant working with them as a business partner. You may also find yourself in the unenviable position of having to give up half of your business. The first thing you’ll want to do is contact an attorney. If you didn’t already have a lawyer for your business, you should get one before your divorce becomes final.

Unfortunately, some divorces between spouses who own a business together result in the business being liquidated. In this case, you might split the proceeds with your ex. A divorce media or judge may recommend this option, but it isn’t the most typical result.

A forensic accountant can determine how much your family business is worth. One thing to keep in mind is whether or not the business was started by only one spouse before the marriage occurred. In that case, a divorce might not impact the business. If the business increased in value over the course of the marriage, that value could be considered marital property.

There are ways you can protect your business in advance so that it survives in the case of divorce. You can start by getting a prenuptial agreement where you designate that any future businesses or any you’ve already started will be considered separate property. A postnuptial agreement can also protect your business, and a buy-sell agreement can be useful as well.

Navigating the ins and outs of how a divorce can affect a family-owned business is certainly challenging and you won’t want to go it alone. Contact Katzman Katzman in Indianapolis for assistance at 866-557-8841.


Comparing Commercial and Residential Real Estate Transactions

You might think that commercial and residential real estate transactions are quite similar, but that simply isn’t the case. While there are similarities, there are many differences, especially when it comes to closing the transaction.

Closings in residential real estate transactions are very systematic. The buyer provides the necessary documents that their lender requests before they are approved for a loan. After the loan is approved, a title search is performed and the purchase of title insurance is made.

The sales contract is reviewed and signed by all parties and the deed or mortgage is transferred to the lender. The buyer receives the keys to their new home once the closing costs are paid.

In the world of commercial closings, things are a bit different. There are usually more parties involved in the transaction. Typically, larger entities are involved which means more decision makers and a more challenging process.

Commercial real estate transactions can also include tenants and the assignment and assumption of leases. If an apartment building or complex is purchased, the buyer will have to take over the seller’s leasing obligations. In some cases, negotiations and new paperwork may be needed for tenants before the deal can be closed.

There are also different laws that govern closing costs and procedures for residential and commercial real estate transactions. Commercial real estate is less regulated which also means nearly every detail is up for negotiation.

For a residential real estate transaction, you’ll want to have a knowledgeable real estate agent and/or an attorney experienced in the matter to help you through the process. For commercial real estate transactions, an experienced attorney can help navigate you through the many steps involved.

Katzman Katzman can help get you through a commercial or residential real estate transaction smoothly. Give us a call today at 866-557-8841.


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