Blog

FORREST FIRM SPONSORS 2012 DURHAM CHAMBER ANNUAL MEETING

February 9, 2012 Leave a Comment

The Forrest Firm, P.C. is pleased to announce its sponsorship of the 2012 Greater Durham Chamber of Commerce Annual Meeting.

This year’s meeting will be held at the Sheraton Imperial Hotel and Convention Center at 4700 Emperor Boulevard in Durham. The theme for the 2012 Annual Meeting, “Running with the Bulls,” reflects the excitement at the Chamber and among the business community at large for the city’s business prospects for the year ahead. The luncheon will take place on Tuesday, February 14, from 11:30 am to 1:30 pm.

The meeting will highlight the 2011 collaborative accomplishments of the Chamber and the business community it serves, as well as provide a preview for upcoming events and strategies for the continued growth of Durham business.

“We are very excited about the new year at the Chamber,” stated James Forrest, principal and founder of the Forrest Firm and a member of the Durham Chamber’s Board of Directors. “We’ve seen this great team, under Casey Steinbacher’s thoughtful leadership, match its skills and expertise with entrepreneurial executives at a host of companies looking to grow, and more importantly, grow here in Durham. I have no doubt that the Chamber will continue to help businesses leverage all of the resources that Durham has to offer businesses, whether they are young start-ups or mature companies looking to relocate.”

For more information on attending “Running with the Bulls,” the 2012 Annual Meeting of the Greater Durham Chamber of Commerce, please visit the Chamber website or call Mable Rogers at 919-328-8731.

LITTLE-KNOWN VETERANS BENEFIT HELPS SENIORS TO PAY FOR LONG-TERM CARE

February 2, 2012 Leave a Comment

By Dori Wiggen

Guest blogger Dori J. Wiggen is a partner with Wiggen Law Group PLLC in Durham, North Carolina.

I’ll never forget my first meeting with Jimmy and his wife, Alice. Jimmy, a veteran of World War II, had a recent illness that caused him to need around the clock care. Alice had been caring for Jimmy with some help from the couple’s oldest daughter, Kathy. However, it had reached the point where Alice could no longer handle Jimmy’s care by herself. Although Kathy was helping, her work schedule only permitted Kathy to help at night and on weekends.

My husband and I sat for hours in the couple’s living room while they talked about their children, Jimmy’s passion for golf, and each and every dog the couple had ever loved. We laughed and exchanged stories about our “fur-babies”. While we talked, Jimmy told me how worried he was about Alice. He could see how tired she was and wished they could find a way to pay for home health care. He didn’t want to use all of their savings on his care because he wanted to make sure Alice was taken care of if anything should happen to him. That’s when I told Jimmy and Alice about a benefit offered by the Department of Veterans Affairs that could pay Jimmy as much as $2,019 per month, so the couple could hire a caregiver for Jimmy.

The benefit is called Improved Pension, and it provides financial assistance to qualified veterans and their surviving spouses. This pension is a benefit that veterans earn due to their service to our country, but few have ever heard about it. It helps cover the cost of qualified un-reimbursed medical expenses, including in-home care, assisted living facility care, and nursing home care.

In order to qualify for this benefit, the veteran or the veteran’s surviving spouse must meet certain basic requirements.

Basic Criteria to Qualify

• Veteran must have served at least 1 day during a qualified war period

• Veteran must have served at least 90 days of active duty

• Veteran received a better than dishonorable discharge

• Claimant (Veteran or Surviving Spouse) is over the age of 65 OR permanently or totally disabled

• Claimant (if not the Veteran) is a surviving spouse of a qualified veteran and did not remarry

• Claimant needs assistance with daily living requirements

• Claimant’s monthly medical expenses equals or exceeds their monthly income

The VA pension can significantly improve the quality of life for veterans and their surviving spouses. The current maximum pension amounts are shown below:

Maximum VA Pension Amounts

Single Qualified Veteran:

Basic Improved Pension $1,021/month
Pension with Housebound $1,248/month
Pension with Aid and Attendance $1,703/month

Qualified Veteran with Spouse:

Basic Improved Pension $1,337/month
Pension with Housebound $1,564/month
Pension with Aid and Attendance $2,019 /month

Surviving Spouse (Death Pension):

Basic Improved Pension $684/month
Pension with Housebound $837/month
Pension with Aid and Attendance $1,094/month

Where to Get Assistance

The VA requires that anyone who assists a veteran or family member with the preparation of a claim for benefits be accredited by and through the VA before they can legally provide assistance. To check a person’s VA accreditation, go to this link and type in the person’s name for confirmation.

There are many financial services professionals, attorneys and other individuals who are accredited with the VA. Some organizations offer free presentations about VA benefits and will prepare your claim at no charge. However, I recommend veterans and their spouses use caution. Often, prior to the claim for benefits, veterans or their spouses may be sold financial products that are inappropriate for seniors. In some cases, the purchase of these products can have disastrous consequences if the senior later needs Medicaid to pay for his or her nursing home care.

By law, no one can charge for the preparation of a claim for benefits. Attorneys and accountants charge for advice on the legal and tax consequences of various long-term care planning strategies. Financial professionals either charge a fee for investment advice or receive a commission related to the sale of financial products. It is recommended that before any course of action is chosen, the senior seek the advice of a VA Accredited Elder Law Attorney. An accredited VA planning attorney takes a comprehensive approach, ensuring the client is protected from potential financial hardships, including unintended tax consequences or Medicaid penalties. In many instances, the senior’s financial planner, accountant and attorney work together as a team to ensure the senior’s interests are protected.

About Dori Wiggen

Dori J. Wiggen is a partner with Wiggen Law Group PLLC in Durham, North Carolina. A trusted advisor to clients of the Forrest Firm, Ms. Wiggen focuses her practice in the areas of Estate Planning, Probate, Elder Law, Medicaid, Veterans Benefits, and Special Needs Planning. An accredited attorney with the United States Department of Veterans Affairs, Dori currently serves on the Executive Council for the Elder Law Section of the North Carolina Bar Association and as a Director on the Board of the NC Chapter of the National Academy of Elder Law Attorneys.

FORREST NAMED TO SECOND STINT ON DURHAM CHAMBER BOARD

January 26, 2012 Leave a Comment

The Greater Durham Chamber of Commerce has elected James R. Forrest to a second term on its Board of Directors.

Forrest, the founder and principal of the Forrest Firm, P. C., was named to a board seat along with Charlene Foley of Blue Cross and Blue Shield of North Carolina, Isaac Green of Piedmont Investment Advisors, Aaron Houghton of iContact, and Steven Pearson of IBM. The term of service will run from January 2012 through December of 2014.

“I am honored to receive a second term on the Chamber’s Board of Directors,” stated Forrest. “The Chamber has been a key contributor to my firm’s success over the last year. I’ve seen first-hand, countless times, how the Chamber connects people who need each other’s expertise and services to reach their respective professional goals. My goal as a board member for 2012 remains the same as it’s always been—to help others see the power of the Chamber and help them, through sponsoring and leading events, to take full advantage of the networking and educational opportunities that the Chamber consistently provides.”

The Greater Durham Chamber of Commerce provides a variety of services to its member businesses, including networking events, educational services, and social activities, all with an intense focus on economic development for the Durham business community.

MARKET UPDATE: LEASING OFFICE SPACE IN THE RALEIGH-DURHAM, NC AREA

January 19, 2012 Leave a Comment

By Blair Graham

Guest blogger Blair Graham is a commercial real estate advisor with the Raleigh, NC office of Grubb & Ellis|Thomas Linderman Graham.

As a commercial real estate broker, whether I’m at a cocktail party or in a meeting with a client, one of the questions I always get asked is “what is happening in the market?” There is little doubt that my clients are looking for me to respond not only with insight gleaned from recent experience, but also with objective market data.

An advantage of working with a large commercial real estate services company is the depth of up-to-date market research. Locally, Grubb & Ellis|Thomas Linderman Graham tracks all the commercial office, industrial, and retail space for lease in the Raleigh, Durham, Chapel Hill, RTP, Morrisville, and Cary markets and publishes this information in quarterly market reports.

To put this in perspective, the combined size of each of those sectors of our market total over 132,000,000 square feet (SF) of commercial space in the Triangle, which breaks down as follows:

Office Space: 44,014,976 SF
Industrial (Flex/Warehouse) Space: 44,015,736 SF
Retail Space: 41,370,788 SF

One of the most important metrics we follow to understand the health of the market is vacancy. To answer the question as to what is happening specifically in the office market, I turn first to vacancy rates for office space.

Understanding Vacancy

According to some brokers, historically the market has demonstrated that equilibrium for vacancy in the Raleigh-Durham office market is approximately 10 percent. Among other things, this takes into account functionally obsolete space as well as unique properties in the market that only cater to a small subset of potential tenants.

With that being said, at the end of the 3^rd Quarter 2011, overall office vacancy for the collective Raleigh, Durham, Chapel Hill, RTP, Morrisville, and Cary markets was hovering around 20.3 percent. While that number is historically high, one must take a deeper look inside the data to truly understand what is happening.

Flight to Quality

With vacancy rates increasing over the last two years and asking rental rates falling, tenants have systematically leveraged these market opportunities to move up from Class B and Class C office space to Class A space. Consequently, Class A office vacancy rates have fallen to 17.2 percent while Class B office vacancy rates have ballooned to 26.5 percent.

Absence of New Construction

Over the last couple of years new construction of commercial properties available for lease has almost completely dried up. This will prove to be a significant factor as the economy improves and companies begin growing again. If you subscribe to basic economic theory, the increase for demand of office space, coupled with the stagnation of new supply, should lead to higher rent rates in the future.

What Does All of This Actually Mean for Me as a Tenant?

Opportunity! While the office market has been soft for a sustained period of time, now is the time to lock in a long-term lease before a contraction in supply (especially in Class A space) leads to increased rental rates. We are already seeing one of the Triangle’s largest landlords, Highwoods Properties, raising rental rates in select Triangle properties, and many other local landlords are cutting back on tenant concession packages (free rent, moving allowances, and large tenant improvement allowances).

Silver Lining for Entrepreneurs

Given the fact that landlords are anticipating that rental rates are going to be increasing in the coming years landlords are more open to short-term leases (one to three years) today than they have been in recent years. However, this is much more palatable for a landlord if a tenant is willing to take a space “as-is” or with minimal out-of-pocket costs for the landlord (such as limiting tenant improvements to the space, i.e. not moving walls in the space and/or building additional private offices). This exact situation has played out regularly for many of the startups and high growth technology companies I represent. This definitely presents a great opportunity for entrepreneurs looking to take down their first space.

About Blair Graham

Blair Graham is a commercial real estate advisor with the Raleigh, NC office of Grubb & Ellis|Thomas Linderman Graham. In his advisory role, Blair focuses exclusively on tenant representation and corporate services. Blair utilizes his unique background as a commercial real estate attorney, coupled with experience in finance, to zealously advocate for his clients and effectively serve their interests. Blair helps tenants and buyers understand their options in the market and can leverage his diverse skill set to negotiate deals that can generate savings to the bottom line. We have seen the quality of his work first-hand with our clients at the Forrest Firm, and count him as a trusted partner.

FORREST NAMED TO BUSINESS NORTH CAROLINA MAGAZINE’S “LEGAL ELITE”

January 12, 2012 4 Comments

Business North Carolina has named James R. Forrest, founder and principal of the Forrest Firm in Durham, North Carolina, to its 2012 listings of the state’s “Legal Elite.”

For its annual ranking of the best practicing lawyers in North Carolina, Business North Carolina surveyed over 20,000 attorneys across the Tar Heel State. At the conclusion of the survey, the magazine’s editors selected about three percent of the state’s attorneys for inclusion in the rankings.

According to Business North Carolina magazine, the “Legal Elite” represents “the lawyers their peers think are the best practitioners in their respective fields.” The magazine places a premium on listing the best attorneys—not the best-known or most influential—as a measurement of their legal expertise and proficiency in the law.

The Legal Elite will feature in this month’s edition of Business North Carolina magazine.

FOUR TIPS FOR BUYING OR SELLING REAL ESTATE RELATED TO YOUR BUSINESS

January 5, 2012 Leave a Comment

by James Forrest

Buying or selling real estate in connection with your business can be a complicated and intimidating process. Obtaining appropriate counsel from a business attorney can protect you in several ways and also give you some needed peace of mind.

Below are a few items to consider closely as you make your way through a real estate transaction:

Types of Deeds

Deeds are recorded at the closing of a transaction, resulting in the title to the property being transferred from seller to buyer. There are several different types of deeds that convey property between a buyer and a seller, including general warranty deeds, limited warranty deeds, and quit claim deeds. Each of these types of deeds offer different warranties from the seller to the buyer, and usually the type of deed to be recorded at closing is usually determined/referenced in the purchase and sale agreement.

If you’re selling property, the most advantageous deed to utilize is a quit claim deed, as quit claim deeds generally contain no warranties from the seller to the buyer. If you are buying property, a general warranty deed is most advantageous (as these deeds provide robust warranties from the seller). The idea here is that you, as the seller, want to offer as few warranties as possible. If you’re buying, you’d obviously rather place more warranty obligations on the seller. Keep in mind that general warranty deeds are usually only given in residential transactions. Standard practice in commercial transactions is a limited or special warranty deed (i.e., a middle ground between general warranty and quit claim deeds).

Representations in the Purchase and Sale Agreement

Representations, like warranties associated with the deed, are subject to negotiation when buying or selling real estate for your business. Representations are statements made by the seller that give the buyer comfort regarding some area of sensitivity. Often buyers will ask for representations concerning seller’s good title to the property, good condition of the property, no environmental contamination, etc. Ideally, if you’re selling a commercial property, you want to make as few representations as possible to the buyer in the contract, and depending on the leverage of the parties, sometimes sellers do sell real property with virtually no representations. In these circumstances, the buyer is left to investigate the property during the due diligence period to its reasonable satisfaction.

Contingencies

Buyers and sellers need to protect themselves during corporate real estate transactions. There are many variables that need to play out during the course of a commercial real estate transaction—appraisals, inspections, financing approval, corporate executive/board approval, etc. It is common for the seller and buyer to negotiate certain contingencies that need to be satisfied in order for both parties to be obligated to proceed with the transaction. In other words, this is a way to preserve a party’s right to walk away from the deal if certain things don’t come to fruition.

Closing

Buying and selling commercial real estate can be very stressful, time-consuming, and costly – however, hopefully all of these variables are ameliorated if you have a great broker and business attorney on your team.

A MOMENT OF GRATITUDE

December 23, 2011 Leave a Comment

Clients, Partners, and Friends,

I’d like to take just a moment to wish all of you a joyous holiday season. It’s the time of year when we all take a little break to enjoy our loved ones while wrapping up the year’s work.

Though it’s a hectic time, I wanted to make sure that you all know how much you mean to me and the Forrest Firm. Each of you have played a special role in helping make 2011 a success. Many companies have made the Forrest Firm their business counsel of choice since the firm’s inception in January, and I am profoundly grateful for the overwhelming support of clients, referral sources, mentors, friends and family.

I am even more enthusiastic about the success of the companies the Forrest Firm represents. Growing (and/or surviving) in this economy is no easy task and I am encouraged about where our region is headed based on the tenacity I’ve seen from my clients over the last year. Many of you experienced record growth, others stayed right on track with your business plans, and some of you, fortunately, weathered recession and industry pressures to live to fight another day.

Just know that as you pause to take time with your families and friends, I am personally grateful for you and continue to wish you nothing but the greatest success. Here’s to a fantastic 2012.

Happy Holidays,

James Forrest

FIVE THINGS YOU NEED TO CONSIDER BEFORE OPENING A BUSINESS

December 20, 2011 Leave a Comment

by James Forrest

Opening a business can be one of the most exciting times of your life—I know because I’ve done it myself! Launching my own law firm has certainly been one of the most invigorating and satisfying things I’ve undertaken. I’ve also had the privilege of helping startups, entrepreneurs, and young businesses launch and grow for the past 10 years. Based on that experience, I’ve certainly learned that you have to simultaneously think big picture and details for a successful launch.

I can’t cover everything you need to know before opening a business in one post, but I can give you five key things you should absolutely consider at the onset of your venture (some touching on legal, and some more business-focused):

Choosing a Business Entity

One of your more obvious initial decisions when opening a business is that of choosing a business entity. As we detailed in Business Essentials: Choosing Your Business Entity, there are both legal and financial considerations when you consider your choice of entity when opening a business.

As an owner, you must give yourself proper protection from liability when opening a business, and most corporate structures offer the protection of limited liability. Entrepreneurs must balance the need for liability protection with a business entity that offers the most cost-effective returns from a tax standpoint as well.

Proper Template Contracts

Also of paramount importance when opening a business is having a proper set of contracts in place to protect your business and help to drive its development. In Business Essentials: The Contracts Audit, we stressed the importance of putting in place a set of contracts, including customer contracts, vendor contracts, non-disclosure and confidentiality agreements, employment agreements, independent contractor/subcontractor agreements, and reseller/marketing/agent agreements, as applicable, when you are first opening a business.

Having a proper set of contracts in place helps you, as an owner, to manage risk and control liability. You essentially start from an optimal legal position with all third parties that your business may contract with.

Pursuing a Location

A third consideration for many of you is what type of location to pursue when opening a business (if any). Only a few of you will actually purchase real estate when you are first opening a business, so we often explore the ins-and-outs of leasing real property (see Fundamentals of Corporate Law: Real Property Leases) with our start-up clients.

It’s important that you explore lease pricing and terms, as this is often the most expensive cost that you must overcome when opening a business. With each transaction, we want to ensure, to the best of our ability, your legal and financial well-being. To this end, we negotiate, in the most favorable terms possible, the rent pricing, terms, and options for renewal.

Of equal importance, we also makes sure to provide a very clear picture of your obligations and liabilities should unfortunate situations arise. When you are first opening a business and signing a lease, you should really consider how issues like changing building codes, maintenance and repair problems, and events like casualty or eminent domain can potentially impact your bottom line.

Building a Core Professional Advisory Team

Fourth on my list (and this could easily have come first), is building a core professional advisory team when you are opening a business. You need to have strong team consisting of an attorney, banker, accountant, and insurance agent (and sometimes others depending on the nature of the business).

In an ideal situation, each of these advisors will take on some piece of risk management while you are focusing on opening a business and bringing in revenue. I view the attorney’s role as that of a risk management quarterback, taking on many issues directly while also deferring properly to the accountants, bankers, and insurance agents. You want professionals that intimately know your business and are willing to work with the other key members of the advisory team to provide holistic (and not isolated) advice.

Gaining Access to Capital

Finally, another key consideration for entrepreneurs opening a business is having access to capital. You may turn to traditional financing outlets, such as commercial banking institutions, to procure loans and leases for equipment as well as operating lines of credit.

Banks, however, do shy away from many types of businesses until they are firmly established, so you may turn to alternative financing sources, such as venture capitalists and individual investors, often called angel investors, when opening a business. These types of financing sources usually require an equity stake in the new business in return for their investment, which opens up a host of opportunities requiring firm legal counsel.

While this is not an exhaustive list of all the issues you must consider when opening a business, these considerations represent some of the most important issues you must address to start you business on firm footing and position yourself for success.

RALEIGH-DURHAM–THE BEST PLACE TO LIVE AND WORK

December 15, 2011 Leave a Comment

It’s been our opinion for quite some time that you can’t beat the Raleigh-Durham, NC area as a place to live and launch your new business. Thankfully, we’re not alone. Here are a few objective sources that tout the strengths of the Triangle as a leading destination for entrepreneurs and executives looking to start or relocate their companies.

A recent survey by Bloomberg Businessweek ranked Raleigh number one—that’s right, NUMBER ONE—in its Best Places to Live Rankings. The survey used quality of life metrics like school performance, amount of green spaces, and cultural amenities—all key factors in attracting top talent for young businesses.

When you couple these factors with a host of thriving industry sectors, including technology and life sciences, Raleigh stacks up as a formidable competitor to the bigger cities like New York, Boston and San Francisco.

A 2008 Kiplinger’s survey of the Best Cities to Live, Work, and Play echoes these points. The magazine rated American cities based on strength of the economy, abundance of jobs, and an “abundance of fun things to do.” Raleigh came in at number two on the list, much to the initial shock of the folks at Kiplinger’s—we are not surprised at all.

And Durham, long seen as Raleigh’s little brother in the area, has really come of age in recent years, attracting venture capital interest with its thriving creative class. Evidence of this emergence has seen validation in CNN Money’s 2008 rankings of the Top 100 Places to Live and Launch, where Durham comes in at a robust number 12.

We have seen a cohesive effort from groups like the Greater Durham Chamber of Commerce, Downtown Durham, Inc., and the Research Triangle Foundation in luring entrepreneurs to chase their dreams here.

A 2010 survey of by Bloomberg Businessweek is perhaps an even more compelling selling point for Durham as an entrepreneurial destination. In their Best Cities for Riding Out a Recession, the magazine cited Durham’s diversity of industries, with strong showings in the healthcare, education, professional, scientific, and technology sectors.

These two great cities have a lot in common, benefiting from their three Fountains of Youth—the University of North Carolina at Chapel Hill, Duke University, and North Carolina State University. All of these top institutions generate a steady flow of talented professionals who will continue to broaden the industry sector dominance that this region has bootstrapped itself upon for the last four decades.

WHAT YOU NEED TO KNOW TO PROTECT YOUR BUSINESS WITH A NON-COMPETE CONTRACT

November 17, 2011 Leave a Comment

You can’t afford to lose market share, clients or employees. No one can afford to have the core drivers of his or her business taken away by someone that you’ve invested time, money and energy into developing.

If you don’t have a comprehensive non-compete contract in place with your employees or business partners that protects your business, consider yourself at risk.

Non-compete contracts prohibit a third party from competing against your business after the relationship has been terminated. These types of contracts are based on three concepts: (a) competition being restricted during a certain period of time, (b) competition being restricted within a certain industry or business, and (c) competition being restricted within a certain geographic region.

As legal counsel for businesses primarily located in Raleigh and Durham, NC, I’m asked routinely by my clients to advise on non-compete contracts. The general consensus of my clients is that these types of contracts are “difficult to enforce” or “not enforceable.” Under North Carolina law, however, there are clear examples of courts enforcing non-compete contracts when drafted appropriately.

In addition, and this can’t be emphasized enough–non-compete contracts can serve as a significant practical deterrent for those that may consider competing with your business. Simply having a reasonable non-compete contract as part of your normal hiring process or company formation process, can send a clear message. You plan to protect the value that you’ve built over the years. You plan to protect your business from an employee or business partner that may be tempted to undercut your pricing and compete with you in the market.

You should work with your business attorney to outline a comprehensive scope of prohibited activities for these third parties. Such an outline may reveal that you need other documents in addition to a non-compete contract, such as a Non-Disclosure Agreement or a Non-Solicitation Agreement. These types of restrictions can usually be worked into one comprehensive agreement.

Finally, in order to have an enforceable non-compete contract, you must ensure that the party you are contracting with is receiving some form of consideration.

Consideration is a very simple concept that a lot of business owners and executives fail to understand at their peril. In a nutshell, the third party has to receive something of value in exchange for executing and delivering the non-competition agreement to you or your company.

Most of my clients incorporate a non-compete contract into their hiring process. In that situation, the third party is clearly receiving something of value. If you’ve missed that window, consider implementing a non-compete contract when bonuses and/or promotions are given.

Overall, spending relatively small amounts of money on non-compete contracts on the front end usually saves thousands of dollars (and in some cases, millions of dollars) in lost revenue and legal fees.