Selling your Construction Business

Yep, it is that time of the business cycle to discuss how to go about selling your business.....this will handled through a series of blogs. The blogs will include and cover:

1. Creating the steps for selling your business.

2. Why one should use or not use an investment banker?

3. Where is my purchaser?

4. Should I use a non-disclosure agreement?

5. Is there a need for a Letter of Intent?

6. How long does it take to complete a transaction?

7. When do I bring in an attorney?

8. What team should I create to help in the acquisition?

9. What is the need or necessity for talking to an insurance company?

10. How do I deal with the tax issues?

11. Is there a good way to deal with the "deal" agreement?

12. What is due diligence and why is it important to me?

13. Closing and what to do in the event my sale does not close!

Stay tuned for the next few weeks of blogs from the MidwestConstructionLaw.Com

Lien rights for equipment users in Missouri

The Missouri legislature passed legislation allowing the "reasonable rental value" of machinery or equipment to be the basis of a lien against real estate. The threshold value of $5,000.00 must be achieved and a notice within five days prior to the rendering of the service must as well be provided to the owner.

I think Private Equity's interest in buying construction companies is eroding.....

A good article by Kevin Short is listed below: Exit Planning Statistics Article Private Equity a Driving Force behind M&A By Kevin M. Short, Clayton Capital Partners Private Equity Groups (PEGs) continue to drive the vigorous pace of Merger & Acquisition (M&A) activity witnessed in the first quarter of 2007 into the second. According to the 2Q07 Leveraged Buyout Review from Standard & Poor’s, Private Equity Groups (PEGs) produced a record $161 billion in new deals, compared to only $34 billion in the second quarter of 2006. The M&A activity has primarily been fueled by hefty fund reserves as more than $700 billion in capital is currently being held by U.S. private equity firms alone. Additional contributors to the flurry of activity include low interest rates and the availability of inexpensive debt. Disclaimer: The information contained in this article is general in nature and is not legal advice. For information regarding your particular situation, contact an attorney or tax adviser. This newsletter is believed to provide accurate and authoritative information related to the subject matter. The accuracy of the information is not guaranteed and is provided with the understanding that none of the providers of this newsletter, including Business Enterprise Institute, Inc., is rendering legal, accounting or tax advice. In specific cases, clients should consult their legal, accounting or tax advisor's. Circular 230 Disclosure: Pursuant to recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. However, from my recent experience I think the "bloom is off the rose"....most private equity folks seem to be running pulling back...the time for selling out maybe going away for this business cycle.

P3.....Public\Private Contracting

For the foreseeable future it would appear that all governmental entities are going to have to find alternative sources of revenue for their projects, as many governmental coffers have been tapped and there is a hesitancy to ask for more tax revenue.

It is now up to contractors and developers to figure out how to deal with these issues. How? Bringing private money sources into government projects. In Missouri this is a real world issue with our bridges; we have hundred of bridges to be rebuilt but the money does not exist in the state budget to deal with the same. Through local sources this issue is being addressed and resolved. But what will it take to apply the same financing principles to all governmental projects? Stay tuned...plans are being developed.

How to tell an employee from an independent contractor in Illinois?

A new act in Illinois makes it very simple and should be noted by all employers everywhere....if you are unsure as to what constitutes an employee for tax purposes and your companies general liability obligations..................bottom line - this law is effective January 1, 2008 and must be read if you are doing business in the "Land of Lincoln"!

Immigration reform

I attach an update of information from the federal government regarding additional laws regarding illegal aliens....note the increase in the scrutiny of employers regarding the compliance with immigration regulations including the increase in fines to employers!!!!!

WORKSITE ENFORCEMENT

10.   Today, The Department Of Homeland Security Issued A "No-Match" Regulation That Will Help Employers Ensure Their Workers Are Legal And Help The Government Identify And Crack Down On Employers Who Knowingly Hire Illegal Workers.  In cases in which an employer has a significant number of employees with inaccurate personal identity information, the Social Security Administration will send the employer a "No-Match" letter.  The regulation clarifies that employers may be held liable if they ignore the "No Match" problems by failing to take specified steps within 90 days of receiving the letter.

11.   In The Coming Months, The Administration Will Publish A Regulation That Will Reduce The Number Of Documents That Employers Must Accept To Confirm The Identity And Work Eligibility Of Their Employees.  Presently, no fewer than 29 categories of documents can be used to establish identity and work eligibility.  Employers have little capacity to verify the authenticity of these documents, and the sheer quantity of accepted documents is an invitation to fraud.  This regulation will reduce unlawful employment by weeding out insecure documents now used often for identity fraud.     

12.   As A Civil Counterpart To The Administration's Strategy Of Using Criminal Investigations To Deter Illegal Employment, The Department Of Homeland Security Will Raise The Civil Fines Imposed On Employers Who Knowingly Hire Illegal Immigrants By Approximately 25 Percent.  Efforts to secure the border will fail unless the "magnet" that attracts illegals is turned off.  Unfortunately, the fines for relying on illegal workers are so modest that some companies treat them as little more than a cost of doing business.  DHS will use existing authority to update civil fines for inflation in order to boost fines by about 25 percent, as much as is allowed under current law.

13.   The Administration Will Continue To Expand Criminal Investigations Against Employers Who Knowingly Hire Large Numbers Of Illegal Aliens.  Arrests by U.S. Immigration and Customs Enforcement for criminal violations have increased from 24 in FY 1999 to a record 716 in FY 2006.  There have been 742 criminal arrests since the beginning of FY 2007 (through July 31), and there is anecdotal evidence that companies are taking notice and adjusting their business practices to follow the law.

14.   The Administration Will Commence a Rulemaking Process To Require All Federal Contractors And Vendors To Use E-Verify, The Federal Electronic Employment Verification System, To Ensure That Their Employees Are Authorized To Work In The United States.  The Federal government ought to lead by example.  As there are more than 200,000 companies doing Federal business, this will significantly expand use of E-Verify, and make it more difficult for illegal immigrants to obtain jobs through fraud.

15.   The Administration Will Help States Make Greater Use Of E-Verify.  Some States already mandate the use of E-Verify by some or all of their hiring agencies, and other States are considering similar requirements.  The Administration will assist such efforts through outreach and offers of technical assistance.

16.   The Administration Will Bolster E-Verify By Expanding The Data Sources It Can Check.  This will make it easier to catch individuals who commit identity theft.  New sources of data will include cross-checks of visa and passport information.

17.   The Administration Will Seek Voluntary State Partners Willing To Share Their Department Of Motor Vehicles Photos And Records With E-Verify.  Agreements to allow E-Verify access to the repository of photographs in state DMV databases will help prevent illegal immigrants from using fraudulent driver’s licenses to obtain employment.  Such agreements will also lay the groundwork for further expansion of the electronic employment eligibility verification system.

STREAMLINING EXISTING GUEST-WORKER PROGRAMS

18.   The Department Of Labor (DOL) Will Reform The H-2A Agricultural Seasonal Worker Program.  No sector of the American economy requires a legal flow of foreign workers more than agriculture, which has begun to experience severe labor shortages as our Southern border has tightened.  The President has therefore directed DOL to review the regulations implementing the H-2A program and to institute changes that will provide farmers with an orderly and timely flow of legal workers, while protecting the rights of laborers.

19.   The Department Of Labor Will Issue Regulations Streamlining The H-2B Program For Non-Agricultural Seasonal Workers.  Because businesses in seasonal industries such as landscaping and hospitality frequently have a difficult time locating temporary workers, the H-2B program has proven quite popular.  Some employers report significant processing delays, however.  DOL's proposed rule will speed processing by moving from a government-certified system to an employer-attestation system akin to the PERM system that has reduced backlogs in other areas. 

20.   The Department Of Homeland Security Will Extend The Visa Term For Professional Workers From Canada And Mexico To Attract More Of These Talented Workers To The United States.  The United States must compete for foreign professional workers, and those who elect to lend their talents to the U.S. economy should be welcomed with open arms, not given a bureaucratic runaround. Yet the roughly 65,000 workers who enter the United States each year on the TN visa must go to the trouble of renewing their visa every year. This regulation will extend the TN visa duration to three years – the same term as other popular professional visas.

21.   The Department Of Homeland Security And The Department Of Labor Will Study And Report On Potential Administrative Reforms To Visa Programs For Highly Skilled Workers.

EPA attacks Golf! (Sounds like a grade B movie out of Hollywood)

The firm's action report, Kate Whitby has located this "afront" to golfers everywhere......another contractor is subject to claims by the EPA.

(

Kansas City

,

Kan.

, Aug. 15, 2007) - EPA has ordered The Links at Columbia L.P. of

Columbia

,

Mo.

, to take immediate actions to reduce sediment-laden runoff from the Links at

Columbia

site.  EPA intends to seek civil penalties for the violations. 

This construction site will include a nine-hole golf course and a 64-building apartment complex.  The permit holder for the site is The Links at Columbia L.P., a subsidiary of Lindsey Construction and Lindsey Management, a large Arkansas-based property management firm for multifamily housing.  The firm manages over 100 apartment communities and 33 golf courses throughout nine states.

Storm-water runoff from this site discharges into Hominy Branch, a tributary of Hinkson Creek, which has been formally designated as an impaired waterway.  Hinkson Creek was historically popular for recreational use, but increased agricultural and urban runoff during the last decade caused the water quality of Hinkson Creek to deteriorate.

EPA inspected this construction site in May 2007.  The Agency found that the developer failed to: implement and maintain practices that minimize runoff, abide by its storm-water pollution prevention plan, and conduct site inspections.  EPA determined that the construction site lacked proper erosion controls, leading to runoff of sediment into the Hinkson Creek watershed in violation of the state discharge permit and federal storm-water requirements.

The Links of Columbia had been inspected by Missouri Department of Natural Resources and

Columbia

.  The state inspections in July 2006 and April 2007 determined that the site was in noncompliance and resulted in a letter of warning and a notice of violation.

Urban storm-water runoff from construction sites is a significant environmental concern.  Construction activity generally increases erosion and runoff, which can choke streams and lakes with sediment.  Sediment-laden runoff destroys spawning beds, suffocates fish eggs, decreases oxygen levels in streams, and blocks sunlight that is essential for the growth of beneficial water grasses.

Storm-water runoff can also carry high levels of pollutants such as oil and grease, suspended solids, nutrients, and heavy metals.  Polluted storm-water runoff is a leading cause of impairment to the nearly 40 percent of surveyed

U.S.

water bodies that do not meet water quality standards.

The enforcement actions are part of a national effort by EPA to reduce the damage to water bodies caused by erosion at large construction sites.  EPA intends for these actions to result in greater compliance and improved water quality by sending a clear message to the construction industry about the importance of controlling storm-water runoff.

 

# # #

Learn more at: http://cfpub.epa.gov/npdes/stormwater/const.cfm

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