Business Law

Case Studies

Successful Liquidation of a Troubled Company

Moss & Barnett represented Petters Aviation, LLC and related aviation companies formerly owned by Thomas J. Petters, the convicted perpetrator of a $3 billion Ponzi scheme, in Chapter 11 cases.

The financial manipulations related to the Ponzi scheme resulted in complicated intercompany relationships among Thomas Petters' numerous companies, which consisted of legitimate businesses and companies used to perpetrate the massive fraud.  Petters Aviation, LLC and its subsidiaries owned and leased aircraft, served as U.S. sales agent for an international aircraft manufacturer, and owned stock in the parent company of a regional airline.

We succeeded in establishing, through litigation where necessary, that Petters Aviation and its subsidiaries were not directly involved in the Ponzi scheme and that the company's assets should be applied to the legitimate business debts of the company.  Moss & Barnett also assisted in the formulation, confirmation, and successful execution of a plan of liquidation, including bringing actions for the recovery of preferences, which increased the recovery for legitimate business creditors.


Independent Contractor Classification Challenge

Moss & Barnett represented a financial services company that serves clients through a network of independent brokers.  The Minnesota Unemployment Insurance Division had found that a broker who had left the company was an employee and that all similarly situated workers were also employees.  Our attorneys gathered documents and prepared witnesses for a hearing that would determine whether the company’s operating model was valid.  The appellate division overturned the initial unfavorable determination and found that the individual and those who performed similar services did, in fact, meet the high threshold that our client used for qualifying independent contractor status.

A Sound and Sensible Business Transfer

Business owners were facing major challenges in transferring valuable businesses to the next generation, and they needed to avoid significant estate taxes and liquidity issues upon their deaths.  Moss & Barnett successfully transferred the enterprises without incurring any estate or gift taxes by using the following techniques: 

(1) converting the stock in the enterprises to voting and nonvoting stock;

(2) gifting a portion of the nonvoting stock to special trusts designed to reduce income taxes and provide protection for the benefit of the second generation; 

(3) selling a portion of the nonvoting stock to a specially designed trust that resulted in no income taxes payable on the gain resulting from the sale; and

(4) using significant discounts for lack of control and lack of marketability.

Preserving Wealth in Charitable Giving

Maintaining large amounts in IRAs or other retirement plans, which are subject to income taxes and estate taxes upon death, can result in as much as 75 percent of those savings being paid to federal and state governments.  One solution Moss & Barnett estate planning attorneys have devised for many clients with charitable wishes is to create their own private foundation.  The foundation is named as the beneficiary of the IRA or retirement plan proceeds, and all income and estate tax on those proceeds is eliminated.  Clients’ families then have the full benefit of managing all of the funds to accomplish their charitable objectives.

Keeping a House a Family Home

Frequently, clients have valuable and highly sentimental residential property, such as a lake home or second home in a warmer climate.  We have assisted many families by developing trusts, limited liability companies, or other ownership vehicles to maintain those second homes indefinitely.  One key planning technique is to provide for proper funding of the expenses of the home, to help assure continuing family harmony in the use and enjoyment of those properties.

Contracts Creating a Client Interactive Site

Moss & Barnett assisted in the development of contract documents required to create a client interactive site, which would allow our client’s personnel to collaborate and communicate with its clients.  

The site was designed to integrate, manage, and maintain customer information systems. These included the following elements:  marketing, sales, contracts, inventory, order management, purchasing, projects, billing, call center, and field service. Our client’s existing information systems were not integrated and therefore created data discrepancies. We assisted in creating the underlying documents to provide for an integrated information system. Our work included review and preparation of documents to create the required functionality, business rules, and liability protections.