Employee handbooks or manuals are frequently used in corporate settings to provide an overview of employee responsibilities and rights, as well as certain company regulations. The purpose of these manuals is twofold: to ensure all employees are aware of their rights and obligations, and to protect the company in the event of labor lawsuits.

Continue Reading What to Include in Your Employee Handbook

Information gathered by the Federal Reserve Bank of New York’s Research and Statistics Group shed some light on the effects of the hurricanes of Fall 2017 on the economy of the U.S. Virgin Islands, including the statistic that the territory lost 4,500 jobs in the wake of the hurricanes.

Continue Reading Study: USVI Lost 4,500 Jobs After Hurricanes of Fall 2017

The process of converting an LLC to a corporation can vary depending on the circumstances of your business. There are three types of conversion available—which method you choose depends on where you primarily do business and whether you meet the requirements for each method.

Here’s an overview of each of them.

Continue Reading How to Convert an LLC to a Corporation

The United States Department of Labor’s Wage and Hour Division (WHD) recently paid a visit to St. Croix and St. Thomas to investigate some reported wage issues, as well as to offer compliance assistance with regard to recovery efforts still ongoing after Hurricanes Maria and Irma.

Continue Reading U.S. Department of Labor Investigating Wage Issues in the U.S. Virgin Islands

On May 21, 2018, the United States Supreme Court ruled that employers may require employees to enter arbitration agreements that waive their rights to seek class-action claims against the employer. The split, 5-4 decision was authored by Justice Neil Gorsuch, rejecting the position held by the National Labor Relations Board (NLRB) that any of these types of class-action waivers violated employees’ rights to engage in “concerted activities” with regard to terms and conditions of employment, a protection afforded by the National Labor Relations Act (NLRA).

Continue Reading Supreme Court Approves Use of Class-Action Waivers by Employers in Arbitration Agreements

A strong, concise business plan is crucial when starting a new business. Not only will it give you a roadmap for how you will grow your business in its early years, but it will also be useful for investors, who want to see that you have a well-thought-out venture that has a good chance of being viable and sustainable before they invest their money into it.

Continue Reading How to Write an Effective Business Plan

As a creditor, there’s always a chance you’ll receive an official notice in the mail at some point, alerting you that someone to whom you have loaned money has filed for bankruptcy. One of the primary reasons people file for bankruptcy is to discharge some of their debts.

 

You must act quickly if you are to protect the interests of your business. The following are some of the issues you should consider and the steps you should take when alerted that a client has filed for bankruptcy:

  • Attend creditors’ meetings: Have a representative attend the creditors’ meeting and debtor’s deposition. This gives you the chance to ask questions of the debtor while they are under oath and to take the debtor’s deposition. This can arm you with extremely valuable information that will assist you through the rest of the bankruptcy process. Attending the creditors meeting will also allow you to understand what led to the debtor’s bankruptcy filing, and, most importantly, the correct financial status of the debtor and priority of other creditors’ claims. Keep in mind that a bankruptcy filing does not necessarily mean that the debtor is completely insolvent. Oftentimes debtors have remaining assets that can be liquidated to satisfy debts, or the debtor may even be in a position to restructure or reorganize its operations and continue paying down their obligations.
  • File Notice of Appearance: When you file a Notice of Appearance with the bankruptcy court, you will be notified by the court about all of the debtor’s actions and appearances.
  • Proof of claim: As a creditor, you have the right to file a proof of claim to ensure you are included in the distribution of any funds that are not exempt. This could, for example, involve you sharing in any repayment plans created by the debtor.
  • Automatic stay relief: If you have an interest in property owned by or leased to the debtor filing for bankruptcy, you can file for relief from the automatic stay. Successfully doing so grants you the power to either begin or continue the foreclosure process, or recover property you had leased to the debtor.
  • Dismissal: If you have just cause to do so, you can seek to have the bankruptcy case dismissed entirely. Examples of scenarios in which the court will consider a dismissal include bad faith or qualification issues. This immediately returns both parties to their pre-bankruptcy standing and allows you more options in seeking the funds you are owed.
  • Review reports: You have the right as a creditor to review monthly reports under Chapter 11 bankruptcy that are sent to the U.S. Trustee after they’re filed with the bankruptcy court. These reports can provide some useful and illuminating information about the case.
  • Debt discharge objections: You can object to the discharge of any debts owed to you. You may also file a non-dischargeability complaint if any debts were incurred via fraud or false financial statements, or were incurred shortly before the debtor filed for bankruptcy. This complaint is due within 60 days after the creditors’ meeting.

For more information about how you can protect your interests when a debtor files for bankruptcy, contact an experienced U.S. Virgin Islands bankruptcy lawyer.

Nash Davis is an Associate Attorney in the Corporate, Tax and Estate Planning Practice Group at BoltNagi PC, a full service business law firm serving the U.S. Virgin Islands.

When planning your estate, you can carefully craft your power of attorney documents to suit your own needs. However, there’s always the potential your chosen agent will misuse the powers granted to them. Even if you trust that person implicitly, building some safeguards into your power of attorney document can be quite helpful and give you some extra peace of mind.

Here are a few examples of such safeguards you might consider adding to your financial power of attorney.

  • Have another party handle some accounting: If you lose capacity to handle your own financial affairs, there’s a chance your power of attorney will lose all oversight. Therefore, it can help to have another person watching financial transactions as a sort of backup in case you become incapacitated. This person can be a professional accountant, an attorney or simply a trusted friend or relative—the idea is to provide extra accountability and oversight when it comes to the use of your money.
  • Establish an inventory of assets: Having an inventory of your assets prepared before your agent starts managing your assets will give you a baseline for comparison in the future. Share this inventory with your trusted party who will also act as an oversight for accounting matters.
  • Impose limits on changes to beneficiaries: By limiting changes to beneficiaries, you’ll make sure your wishes remain honored and that your chosen agent does not abuse his or her power by, for example, removing beneficiary status from a person he or she does not like. This includes limiting changes to rights of survivorship in bank accounts, or changes to any beneficiary designations in wills, insurance policies, trusts, retirement accounts, annuities and investment portfolios.
  • Set the agent’s abilities and limits regarding gifts: As a general rule, your safest option is to prohibit your agent from making any types of gifts. But if you have had a pattern of giving throughout your life and want that to continue even during your incapacitation, you can set limits regarding gifting. Do so by identifying only the recipients you wish to receive gifts, or classes of recipients you will allow, and by placing limits on the frequency and amounts of these gifts.
  • Add safeguards for large transactions: You could, for example, have a pair of co-agents to share the responsibility of managing your finances, so long as they are able to work together. You might also consider adding an extra step for particularly large transactions, requiring approval in the form of a signature from this third party. Such transactions could include major investments or purchases of a home or vehicle.

It is important you choose an agent you can trust to be responsible with your finances, but even then, there are never any guarantees that your agent will not abuse his or her power. Talk to an estate planning attorney in the U.S. Virgin Islands to learn more about how you can protect your estate by adding some safeguards into your power of attorney.

Nash Davis is an Associate Attorney in the Corporate, Tax and Estate Planning Practice Group at BoltNagi PC, a full service business law firm serving the U.S. Virgin Islands.

Directors and officers of nonprofit organizations are often volunteers who receive no form of financial compensation. However, they still have a fiduciary duty to their organizations, and breaching that duty could result in them being personally liable for any damages they cause to the organization.

With this in mind, here are some of those legal duties owed by directors and officers to the nonprofit organizations they serve.

Acting in the best interest of the organization

This is the simplest duty these officers and directors have—they must always act in the best interest of the organization, and exercise reasonable care in performing all of their duties. The organization’s interests should be placed ahead of any other interests, including (and especially) their own.

Disclosing and avoiding potential conflicts of interest

It is extremely common for directors and officers of nonprofit organizations to have other interests outside of their organization. For example, a director might work for a commercial business that does some type of work with the nonprofit. In another example, a director could have an active role in another organization on the opposite side of certain policy members. These conflicts shouldn’t be a problem with regard to a director’s ability to serve on the nonprofit board, as long as those directors fully disclose those interests and are able to avoid potential conflicts.

The organization will still need to consider the possibility that a volunteer will be biased in certain types of decisions. It is the board’s right and responsibility to review these other interests and determine if there is a potential conflict and whether/how it can be mitigated.

Ability to be tight-lipped about organizational information

Directors of nonprofits have the duty to maintain the organization’s important information in confidence. This doesn’t only apply to information that has clearly been designated “confidential” by the organization, but also to any information the director would reasonably expect the organization would wish to keep confidential, even if it didn’t expressly designate that information as confidential.

Respecting various corporate opportunities

Directors have the duty to respect corporate opportunities as they arise. They are not allowed to appropriate any of these corporate opportunities, such as business prospects, ideas or investments related to the organization’s activities or programs. This tends to become a problem if corporate opportunities that arise for the nonprofit organization conflict with other interests held by the director outside of the organization.

This relates to the first duty discussed—that all directors must act in the best interest of the organization they serve. Standing in the way of corporate opportunities would certainly not constitute acting in the organization’s best interest.

For more information about the legal duties of directors and officers of nonprofit organizations, contact an experienced business planning attorney in the U.S. Virgin Islands.

Tom Bolt is Managing Attorney of BoltNagi PC, a full service business law firm located on St. Thomas, U.S. Virgin Islands.

There are some circumstances in which directors of nonprofit organizations can be held legally liable for acts they carried on behalf of the organization, or acts that could be construed as them representing the organization.

With the potential for legal liability constantly looming, it is imperative that the organization have a commitment at all levels to operating fully within the law. This will help prevent most cases in which legal liability would be an issue. Any time the law is unclear, directors (and the organization as a whole) should use a conservative approach and not attempt to press their luck regarding possible liability.

Here are some tips to help you avoid legal liability with your nonprofit organization.

  • A strong commitment to education: For your organization to stay in full legal compliance, you must commit to educating all directors (who are typically volunteers) of all the potential legal risks the organization faces. A good way to do this is to have orientation programs for all new directors that come aboard the organization. These programs should have sections that include information and training in various compliance challenges. Ongoing education can also help to provide reminders of these compliance issues and prevent any challenges from arising.
  • Constantly available legal counsel: You should have legal counsel that is always available to your organization and its directors. The organization’s attorney will monitor organizational policies and programs, as well as any external policies and regulations that could affect the organization. If issues that could lead to potential risk arise, the attorney can bring these issues to the attention of the directors.
  • Indemnified directors: Indemnification is a promise to pay for the legal defense (and any damages incurred) if the indemnified person is accused of legal wrongdoing while acting on the organization’s behalf, with the exception of cases involving gross negligence or fraud. By indemnifying directors, you help shield them from personal liability for organizational matters and give them a little extra incentive to act as directors in the first place.
  • Insurance: To give yourself a broader safety net, get liability insurance for your organization. These policies cover a wide range liability types, paying for any legal defense and resulting damages or settlements from claims of wrongdoing by the organization or its directors. Liability insurance has the added benefit of opening up potential new opportunities for the organization. Many businesses or organizations will not do business with nonprofits if they do not have liability insurance.

It’s important to take whatever steps possible to protect your volunteer directors from legal liability on behalf of the organization. To learn more about how you can shield your directors from legal liability, contact a knowledgeable attorney in the U.S. Virgin Islands.