investment advisory Archives - Milton and Cross

How Poor Lease Documentation Cost a Landlord Millions – And How You Can Avoid the Same Mistake

Posted on March 14, 2025March 14, 2025 by admin in investment advisory, Leases and Tenancy, Legal Nuances+, real estate

When Mr. Ade rented out his three-bedroom apartment in Lekki to Lekan Olunade. He trusted his tenant’s word over a formal lease agreement. A simple handshake sealed the deal—no formal Tenancy agreement, no written terms, just a verbal understanding.

Fast forward two years, and he found himself locked in a legal battle. The tenant refused to vacate, claimed he had “rights” to the property, and because there was no solid lease document, Mr. Ade had no legal ground to stand on. The case dragged on for months, costing him lost rent and legal fees running into millions.

Don’t be like Mr. Ade. Properly documenting a property lease isn’t just paperwork—it’s your financial security. Here’s how to do it right.

Get Everything in Writing – No Assumptions

A lease agreement isn’t just a formality—it’s a contract that defines your rights and protects your property. Ensure it covers:
✅ Who the parties are (full legal names)
✅ Property details (address, condition, and permitted use)
✅ Rent structure (amount, due date, payment terms)
✅ Security deposit (amount, conditions for deductions and refunds)
✅ Exit strategy (lease renewal, termination, eviction process)

Verify Before You Sign the Lease

A bad tenant can cost you more than an empty property. Always:
✔️ Request valid ID and proof of income
✔️ Check rental history and references
✔️ Conduct a background check

Document the Property’s Condition before the Transaction

Before handing over the keys, take clear photos and have both parties sign a checklist of the property’s state—this protects you from disputes over damages.

Sign, Seal, and Store the Tenancy agreement properly

Have both parties sign and keep copies of the lease. If required by law, get it notarized or registered. Also, store all payment receipts and communication records—these could save you in court.

Make It Legal, Make It Foolproof

A handshake won’t hold up in court, but a well-drafted lease agreement will. Protect your property, your finances, and your peace of mind—document your lease the right way.

Want a rock-solid lease agreement? Talk to us today.

HOW TO INVEST IN CO-WORKING SPACES

Posted on June 15, 2023June 15, 2023 by admin in investment advisory, real estate, transaction advisory

Investing in co-working spaces can be a lucrative opportunity given the growing demand for flexible office solutions. Co-working spaces present an exciting opportunity, but it’s important to approach it with the same level of diligence and caution as any other investment. Here are some considerations to keep in mind before making a decision:

Differences between Great and Terrible Co-Working Spaces

Great Co-Working Spaces:

Productive Environment: Great co-working spaces provide a productive atmosphere that promotes focus and concentration. They have designated work areas, comfortable seating, and a quiet ambience, enabling members to work efficiently.
Amenities and Facilities: These spaces offer various amenities and facilities to enhance the working experience. They may include high-speed internet, conference rooms, private offices, printing and scanning services, on-site cafes or refreshment areas, and even fitness facilities.
Community and Networking Opportunities: Great spaces foster a sense of community among their members. They organize networking events, workshops, and social activities, providing opportunities for collaboration, knowledge-sharing, and professional growth.
Flexibility and Customization: They offer flexible membership options, allowing individuals or teams to choose the duration and type of space they need. Great co-working spaces may have open desks, dedicated desks, private offices, or meeting rooms, accommodating various work preferences.
Supportive Staff: The staff in great co-working spaces are friendly, professional, and readily available to assist members with any queries or concerns. They maintain the space, ensure a smooth operational flow, and often organize community events to encourage interaction.

Terrible Co-Working Spaces:

Poor Infrastructure: Terrible co-working spaces may have outdated or unreliable infrastructure, such as slow internet connections, malfunctioning equipment, or uncomfortable furniture. These factors can hamper productivity and create frustration among members.
Lack of Privacy and Distractions: Inadequate space planning and layout can result in a lack of privacy and excessive noise, making it difficult for individuals to concentrate. This can be a major drawback for those who require a quiet and focused work environment.
Limited Amenities and Services: Terrible co-working spaces may lack essential amenities or charge extra fees for basic services. This could include limited access to meeting rooms, inadequate kitchen facilities, or unreliable support staff.
Lack of Community Engagement: In contrast to great co-working spaces, terrible ones may lack a sense of community and fail to foster networking opportunities. The absence of organized events, workshops, or collaborative initiatives can make the space feel isolated and less engaging.
Inflexible Contracts: Terrible co-working spaces often have rigid and inflexible membership contracts, leaving individuals or teams locked into long-term commitments even if their needs change. This lack of flexibility can be inconvenient and restrict a member’s ability to adapt their workspace as required.

Overall, great co-working spaces prioritize a conducive work environment, a sense of community, and flexibility, while terrible co-working spaces may fall short in these areas, leading to a less satisfying and productive experience for their members.

Before you invest

Research the Market: Start by researching the co-working industry and understanding the current trends, market demand, and competition. Look into market reports, industry publications, and news articles to gather insights.
Define your Investment Strategy: Determine your investment goals, whether you want to invest directly in a co-working space or through a real estate investment trust (REIT). Consider factors such as location, target market, amenities, and pricing models.
Evaluate Potential Locations: Identify potential locations for your co-working investment. Look for areas with high demand, proximity to transportation hubs, business districts, or areas with a thriving startup and freelance community. Consider factors like population density, accessibility, and local business climate.
Conduct Due Diligence: Perform thorough due diligence on the co-working space you are considering investing in. Assess factors like the financial health of the company, occupancy rates, lease terms, management team, and growth projections. Engage professional advisors, such as lawyers and accountants, to assist with the evaluation.
Understand the Business Model: Gain a comprehensive understanding of the co-working space’s business model. Evaluate the pricing structure, membership plans, and value-added services offered. Assess how the company differentiates itself from competitors and how it plans to sustain profitability.
Analyze Financials: Review the financial statements, including revenue, expenses, and profitability of the co-working space. Assess the stability of the revenue streams, the ability to cover operating costs and the potential for future growth. Evaluate the pricing strategy and whether it is aligned with the market demand.
Assess Risk Management: Consider the risks associated with investing in co-working spaces, such as economic downturns, changing work trends, competition, and lease obligations. Evaluate the risk mitigation strategies employed by the co-working space, such as diversification, tenant retention programs, and contingency plans.
Seek Professional Advice: Consult with professionals who specialize in real estate investment or commercial property management. They can provide insights into the local market, and legal requirements, and help you navigate the investment process.

After you Launch your space

Network and Partnerships: Build relationships with industry professionals, co-working space operators, and potential partners. Attend industry events, join networking groups, and engage with stakeholders to gain valuable insights and potential investment opportunities.
Monitor and Adapt: Once you invest in a co-working space, actively monitor its performance and adapt as needed. Stay updated with market trends, adjust pricing strategies, and explore opportunities for expansion or diversification to maximize returns.

Remember, investing in co-working spaces carries risks, so it’s crucial to conduct thorough research and due diligence before making any investment decisions. Our Real Estate team is always available to provide support in this regard.

Company Liquidation – Pros and Cons

Posted on July 23, 2021July 28, 2021 by admin in Capital, corporate finance, Corporate Governance, corruption, Development, insolvency, investment advisory, Personal Finance, Police and Security

On one hand, company liquidation definitely comes with some advantages, especially when it comes to your current situation.

Leases are cancelled

Terms on lease and hire purchase agreements are generally terminated at the date of liquidation, meaning that no further payments need to be made. If any arrears are owed, the company leasing the goods may be able to claim from the insolvency practitioners along with other creditors. It is worth noting here that personal guarantees are often given upon signing a property lease agreement; you should check your documentation carefully so you know whether you are likely to be made personally responsible for the remainder of the lease.

Avoid court processes

By voluntarily choosing to liquidate the company, you can avoid being petitioned through the courts and be able to demonstrate to the public that liquidation was a company choice rather than a result of hostile creditor action.

Staff can claim redundancy pay

Members of staff will be made redundant by the liquidator, and if eligible, they can start their claim for redundancy pay and other statutory entitlements. If monies realized from the sale of company assets are not sufficient to cover redundancy payments, staff have an alternative route by which to claim what is owed. The National Insurance Trust Fund(NSITF) pays out for redundancy, unpaid wages and holiday pay should the company not be able to do so using its own funds.

Legal action is halted

Any legal action against the company is stopped when the company is in liquidation. Again, as long as you have no personal liability for a company debt, creditors will be unable to take action against you.

Having identified some of the advantages of this type of liquidation, let us now look at the main disadvantages of the process.

Personal liability for debts

Becoming personally liable for company debts can happen if a director has made a personal guarantee against debts of the business. A creditor can enforce the debt if they are unable to reach an agreement for repayment.

If it comes to light that the company has been liquidated quickly, with the sole purpose of avoiding debt repayment, directors may be held personally liable for company debts due to their improper actions.

All assets will be sold

All existing assets will be sold off in order to provide a dividend to creditors where possible, and for the insolvency practitioner to collect their fee.

Staff will be made redundant

As liquidation bring about the end of a company, any staff employed by the business will be made redundant and be forced to look for employment elsewhere. However, depending on their length of service with the business, they may be able to claim statutory redundancy pay following their dismissal.

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A History of Insolvency Law

Posted on March 5, 2018 by admin in Capital, corporate finance, Development, insolvency, International Investment, investment advisory, mergers and acquisitions, Uncategorized

Early insolvency law was dominated by punitive approaches and it was not until the early eighteenth century that notions of rehabilitation gained force. Insolvency was seen as an offence little less criminal than a felony and was punishable by detention in person at the creditor’s pleasure in debtors prisons. The prevalent view was that it was not justifiable for any person other than a trader to ‘encumber himself with debts of any considerable value’

Prior to this revolution, common law offered no collective procedure for administering an insolvent’s estate. A creditor could seize either the body of a debtor or his effects – but not both. Creditors, moreover, had to act individually, there being no machinery for sharing expenses.

The idea that creditors might act collectively was recognised in 1542 with the enactment of the first English Bankruptcy Act which dealt with absconding debtors and empowered any aggrieved party to seize the debtor’s property, sell it and distribute the proceeds among other creditors ‘according to the quantity of their debts.

During the 19th century, attitudes towards trade credit and risk of default changed. This was due to the rise of joint stock companies and the resulting de-personalisation of business and credit.

The key statute was the Joint Stock Companies Act 1844 which established the company as a distinct legal entity, although it retained unlimited liability for the shareholders. the modern limited liability company emerged in 1855, to be followed seven years later by the first modern company law statute containing detailed winding-up provisions.

The House of Lords in Salomon’s case confirmed that a duly formed company was a separate legal person from its members and that consequently even a one-man company’s debts were self contained and distinct. However, every insolvent business went into liquidation or receivership automatically. It was the kiss of death for them and the creator of unemployment.

An insolvency system was later created to administer the range of new procedures be introduced as alternatives to outright bankruptcy or winding up, which would deal with individual cases on their merits. These involved recommendations that private insolvency practitioners should be professionally regulated to ensure adequate standards of competence and integrity; that creditors be given a greater voice in the choice of the liquidator; and that new penalties and constraints be placed on errant directors. This represented a movement towards stricter control of errant directors but also in favour of an increasing emphasis on rehabilitation of the company.

The rationale behind the culture of business rescues was expressed by Sir Kenneth Cork as follows: “When a business becomes insolvent it provides an occasion for a change of ownership from incompetent hands to people who not only have the wherewithal but also hopefully the competence, the imagination and the energy to save the business”.

The current attitude towards insolvency is to carry out much more work on corporate problems before any insolvency procedure is entered into. This places a new emphasis on managing insolvency risks proactively rather than after troubles have become crises.

In this series, we will explore the life cycle of insolvency from financial distress and default, to corporate failure and business rescue. We will also investigate different approaches to managing insolvency, along with their strengths and weaknesses.

Training Bonds: How do they work

Posted on November 20, 2017 by admin in Capital, Corporate Governance, entrepreneurship, International Investment, investment advisory, leadership, Personal Finance, rule of law, Small Businesses, Uncategorized

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Captain Dan is a pilot who was formerly in the employment of Highland Airways Ltd. A year before his resignation, the company expended substantial amounts of money in sponsoring 2 specialised trainings for Captain Dan in order to improve his skills and increase the number of planes he could fly.

The terms and conditions for sponsoring the trainings were contained in two training bonds which required Captain Dan to remain in the employment of the Company for 36 months and 12 months respectively. Captain Dan thereafter attended the trainings and acquired licences and qualifications as a result, which made him a desirable candidate for several .

However, contrary to the terms of the training bonds, Captain Dan resigned from the employment of the Company and repudiated the training bonds. He argued that the training bonds were void and unenforceable because they constituted a restraint of trade and an unfair labour practice. The company on the other hand, is of the opinion that the training bonds were freely entered into by the parties and were necessary for the protection of the Company’s business interests. It was further argued that training bonds are not contracts in restraint of trade and are enforceable in Nigeria and other jurisdictions.

This compelled the company to seek legal advice on their right against Captain Dan. Having recourse to international best practice in other jurisdictions, the position of the law is that training bonds are contracts in restraint of trade, but are enforceable if they are considered to be reasonable. The test of reasonableness is whether the restraint is necessary for the protection of the parties’ interest and is not contrary to public policy.

Where the bond is deemed reasonable, the parties can adopt the practice in other jurisdictions where the amount an employer is allowed to recover following a breach of a training bond is limited to the pro-rated cost of the training for the remaining period of the bonding period before the employee breached it. This position of the law provides comfort to employers who incur considerable expenses in providing training for its employees that such investment will be protected by the courts. Arguably, it will also reduce the tendency of employees to flagrantly breach their contractual obligations due to the lure of better offers of employment from their employer’s competitors.

Employers are therefore advised to seek legal advice before drafting their training bonds to be certain that they would pass the test of reasonableness.If a training bond is deemed unreasonably lengthy or restrictive, such as to place the employee in a state of indentured servitude to the employee, the courts may void the legal effect of such an agreement, even though it was freely entered into by the parties.

Should an Employee who was not issued with an Employment letter give a written Notice to Resign?

Posted on November 15, 2017 by admin in Capital, entrepreneurship, investment advisory, Personal Finance, rule of law, Small Businesses, strategy, succession, transaction advisory, Uncategorized, wealth

Amaka started working as an analyst in a commodities brokerage located in Victoria Island. Shortly before her employment, the Human Resources manager had resigned due to a dispute with the senior management. Due to this state of affairs, Amaka was not issued with an employment letter by the company and this state of affairs continued unremedied for the next year as the company searched for another Human Resources manager.

Amaka being a hard worker, was not bothered by the non-issuance of an employment letter, believing that she would prove her worth to the company over time. Moreover, she had been jobless for 2 years after the completion of her national youth service, and she was not going to let a simple matter as the non issuance of an employment letter prevent her from enjoying the fruits of such a juicy job.

Fast forward, and Amaka had worked punishing hours for 3 years under a continuously tense environment worsened by her nasty boss who had been pursuing a vendetta against her for not accepting his lascivious overtures. He had promised to ruin her career and make life difficult for her whilst she remained under his employment. Despite consistently delivering stellar work, she was repeatedly given low grades during performance appraisals and consequently denied promotions. Amaka felt like a slave and was treated almost like one.

A few months later, Amaka received an offer from another investment bank, with considerably better terms of service and benefits. She promptly turned in her 2 weeks notice of resignation and patiently waited for her salary at the end of the month. On the 30th day of the month, she received a letter from the Managing Director informing her that her resignation had been rejected on the grounds that it was company policy that employees were to give 1 (One) clear month’s notice or forfeit their monthly salary in lieu of notice. The letter was delivered by her boss with a malicious smirk on his toad-like face.

Amaka was incensed!!! This was a travesty, and she was not going to allow it. She promptly sought out legal advice on her options against the company.

The position of the law is that an employee has the right to resign with immediate effect, and the rejection of his resignation is tantamount to forced labour, and also against the time-honoured labour law principle that an employer cannot force himself on an unwilling employee. Employees are considered to have given notice of their intention to resign if they unambiguously inform their employers that they will terminate the contract on a certain date.

Furthermore, the Labour Act states that an employer must give an employee a written contract within 3 months of the commencement of the employment. The Labour Act also makes it unlawful for an employer to deduct the salary of employee by way of penalty, except in situations where the employer suffers a loss as a result of the misconduct of the employee.

From the facts there was a failure of Amaka’s employers to provide her with an employment agreement stipulating the terms of her employment, including the process for terminating the employment relationship. The necessary conclusion is that the attempt by the company to withhold her salary on the grounds of non-adherence to company policy falls flat on the failure of the company to comply with the provisions of the Labour Act. The absence of an express requirement for 1 month notice implies that the employment relationship could be terminated at will. Consequently Amaka’s resignation is valid at law, and she can enforce her right to the withheld salary against the company by a suit at the National industrial Court.

Investing in Renovating and Selling homes

Posted on October 18, 2017 by admin in Capital, corporate finance, Development, estate planning, International Investment, investment advisory, Personal Finance, real estate, Small Businesses, strategy, succession, transaction advisory, Uncategorized, upscale, wealth

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Balogun is a banker approaching his 55th birthday. After a 30 year career as a banker, and seeing several people make their fortunes in real estate, he has decided to become a real estate investor.

His plan is to invest in underpriced property, with the objective of renovating the buildings and selling the individual units at a higher value than the amount at which he purchased the property. Balogun is interested in understanding the risks and opportunities of this business and he comes to us for advice.

Some things to note:

Using this strategy, you purchase a building that needs fixing up for N2,750,000 and then you invest N500,000 in improvements (paint, landscaping, appliances, decorator items, and so on) and you also invest the amount of sweat equity that suits your skills and wallet. You now have one of the nicer homes in the neighborhood, and 2 years later you can sell this home for a net price of N4,000,000 after your transaction costs.

small_1376440841-og_living_after — After

Be sure to buy a home in need of that special TLC in a great neighborhood. With most properties, the long-term appreciation is what drives your returns. Consider keeping homes you buy and improve as long-term investment properties.
before

After
This strategy is clearly not for everyone interested in making money from real estate investments. It is not advisable if you’re unwilling or reluctant to live through redecorating, minor remodeling, or major construction;

You may not be experienced or comfortable enough with identifying undervalued property and improving it; so always make sure you get a professional opinion on each property .

You should either have the budget to hire a professional contractor to do the work, or you should have the free time or the home improvement skills needed to enhance the value of a home.
You also need a financial cushion to withstand a significant downturn in your local real estate market, as this investment can be very cost intensive.
Mange your risks as much as possible!!! Make sure you do deep due diligence on the property in order to ensure that you have good title to transfer to a third party, especially since it may not make financial sense to perfect your title if you are not going to hold the property for a long period.

Why Lawyers Make Good Early-Stage Startup Hires

Posted on September 12, 2017 by admin in Compliance, Corporate Governance, entrepreneurship, International Investment, investment advisory, mergers and acquisitions, real estate, rule of law, Small Businesses, strategy, transaction advisory, Uncategorized, upscale, wealth

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By Daniel Doktori and Sarah Reed (culled From hbr.org)

It’s a startup shibboleth that entrepreneurship and formal education don’t mix. For icons such as Mark Zuckerberg and Bill Gates, so goes the lore, finishing a bachelor’s degree would have only stifled the creativity that fueled their companies to stratospheric success. PayPal founder Peter Thiel offers a $100,000 fellowship to “young people who want to build new things instead of sitting in a classroom.” Graduate degrees are thought to merely exacerbate the problem of too much thinking, too little doing. And while high-profile efforts by top business schools to teach and promote entrepreneurship have lessened the stigma around the MBA, the law degree continues to occupy a unique place of villainy among the startup set. After all, YouTube, Uber, and Airbnb, among many others, were founded on ideas that challenged, if not broke, laws and regulations. When it comes to a tech startup, lawyers are a bug, not a feature. Right?

Maybe not. Lawyers can add value in the obvious ways, helping to avoid early mistakes like issuing stock too late in the game, when the company has grown in value and the employees can no longer take advantage of favorable tax treatment. But more importantly, a lawyer on the early team can contribute to a thriving company culture by asking the right questions at the right times, providing perspective on crucial transactions, and getting smart fast on issues where the rest of the team lacks expertise.

Lawyers help startups deal with common transactions and avoid costly mistakes.

Issuing equity to the early team often triggers time-sensitive filings with the IRS. Successfully commercializing a product depends upon clean and clear lines of intellectual property ownership. Raising outside financing requires compliance with complex securities laws. A misstep on any of these items could mean an early exit for a startup company (and not the good kind). A corporate lawyer with a few years of relevant training can help navigate these and other common set-up requirements.

Moreover, lawyers, particularly corporate transactional lawyers, have repeated exposure to the types of deals — and the associated risks — that a startup will face. The dynamics between a CEO and the investors on her board are a function of the legal arrangements articulated in the financing agreements. The relationship between a company and its customers stems from a license agreement governing how users may interact with a product. Partnering with a larger company in a similar industry can, in the best case, open new markets or, in the worst, box a company into a corner, severely limiting options for growth and eventual acquisition. Lawyers understand these transactions and the perspectives of the negotiators involved.

And when the complexity of the particular deal exceeds the expertise of the lawyer on the team, she can play the savvy procurer of legal services, knowing how to target efforts and limit costs. Such experience comes in handy in managing other third-party service providers such as bankers, accountants, and consultants.

While these benefits are valuable, however, they don’t in and of themselves justify a startup hiring a full-time in-house lawyer. Early stage companies — at least those with founders sufficiently experienced or savvy to recognize that they walk a road pitted with legal potholes — tend to manage such standard risks by hiring outside counsel. And while the costs associated with that outside attorney often rank among the highest in a startup’s budget, they do not typically rise to the level of a full-time annual salary. To justify her presence among the first dozen employees, a lawyer must add something beyond legal knowledge to the equation.

Lawyers are trained to ask the right questions at the right times.

Counterintuitively, lawyers can add the strategic absence of knowledge. President Harry Truman famously longed for a “one-handed economist” when presented with the equivocating analysis of his advisers, but executives in politics and business need to understand opposing viewpoints in order to make informed decisions. Legal education and training includes a strong emphasis on questioning assumptions and probing for further information.

Rather than crippling the company through risk aversion and overanalysis, however, having a lawyer on the early team contributes to a data-driven, analytic culture of thoughtful decision making. Further, lawyers are trained as advisers and service providers. They can ask questions, explore options, and execute on answers, but they don’t expect to make the final call. This comfort with playing a supporting role helps avoid the egocentrism that can cripple any organization, particularly a nascent one.

The lawyer’s craft sometimes can be boiled down to a willingness to immerse herself within the “fine print,” offering to read what no one else will on account of complexity, length, or sheer dryness. Trained to ensure that even simple advice is backed by evidence, lawyers read closely to the point of comprehension as a matter of professional responsibility. Such a skill enables a lawyer to take responsibility for a wider variety of important matters. Fledgling startups inevitably have to rely on analysis over experience. Lawyers fit well in such situations.

Not every lawyer is well suited for the gig, however. A lawyer with the qualifications outlined above needs a tolerance for risk. For one thing, she must be willing to give up her plush office and lucrative salary for a computer station at a long table and compensation in the form of prayers, otherwise known as stock options. Her professional risk tolerance must follow suit. An essential attribute of a business attorney is providing “risk-adjusted” advice, and the level of tolerable risk for a startup generally far exceeds that for a Fortune 500 company. Lawyers at startups need to recognize that a workable answer today is often preferable to the perfect answer tomorrow; hand-wringers need not apply.

But risk tolerance must be accompanied by a stiff spine in situations where the company’s momentum (and the CEO’s vision) hurtles on a collision course with the law or the company’s outstanding commitments. In these cases, a willingness to speak up is one of the many things lawyers can bring to the table.

Daniel Doktori is the Chief of Staff and General Counsel at Credly, a digital credential service provider. He previously represented startup companies at WilmerHale, a law firm.

Sarah Reed is the Chief Operating Officer and General Counsel of MPM Capital, a venture capital firm that invests in early-stage life sciences companies. Previously, she was the general counsel of Charles River Ventures, an early-stage technology venture capital firm.

Managing Creditor Risk through Inter-Creditor Agreements

Posted on August 18, 2017 by admin in Capital, Development, entrepreneurship, International Investment, investment advisory, real estate, Small Businesses, strategy, transaction advisory, Uncategorized, upscale, wealth

James is the CEO of HOC Global Logistics, a company which provides shipping solutions to large organisations. Having become tired of leasing cargo ships from large vessel owners, the company desires to purchase its own ships which they can use and also lease to 3rd parties. James approaches Lakeside Bank for a Term Loan to finance the $50 million transaction.

The Bank after reviewing the loan proposal filed by HOC Logistics, informed James that the transaction was larger than Lakeside bank could comfortable handle. However they are able to loan him $20 million on the security of the purchased ship. James accepts the terms and applies for loans from Cityscape Capital Ltd , HSCB, Shanghai Bank and Union Finance Ltd. The individual loans have different terms, interest rates and security interests. The complexity of the transaction is so mind boggling that James sets up an appointment with his Lawyers to advise him on how to manage the relationships between the multiple creditors in such a manner as to enable the company satisfy all its loan liabilities. He is advised to structure and negotiate an intercreditor agreement among the several creditors, thereby ensuring he has a more convenient financing process.

An intercreditor agreement seeks to govern the relationship between a range of creditors providing finance to the same borrower. An intercreditor agreement entered into by senior and junior creditors can be expected to rank the senior and junior security, subordinate the debt of the junior creditors to that of the senior creditors, restrict the junior creditors’ rights of enforcement for a specified standstill period and impose payment freezes on the junior debt in prescribed default situations.

In highly leveraged transactions such as leveraged buyouts and certain acquisition finance transactions, funding may be structured into a number of different tranches of lenders who stipulate slightly different lending terms and interest rates for the funds they advance. Senior lenders and mezzanine lenders usually take security over the assets of the borrower, over shares acquired and over the target group’s assets. In addition, guarantees will be given by the borrower and may also be given by the target group.

The senior creditors tend to have a stronger negotiating position than do the junior creditors, so it is usual practice for the senior bank lenders and mezzanine lenders to appoint a single security agent (or security trustee) to hold the security package on trust for the benefit of all the secured creditors. The intercreditor agreement contains provisions dealing with enforcement of the security, usually requiring the junior creditors (the mezzanine lenders) to desist from enforcement for the standstill period so as to leave the way clear for the senior creditors (the senior lenders and any hedge counterparties) to instruct the security agent as to when and how to enforce their right to the secured assets.

How can you transfer your music copyrights?

Posted on August 1, 2017 by admin in corporate finance, entertainment, entrepreneurship, International Investment, investment advisory, Personal Finance, real estate, rule of law, Uncategorized

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Wale is a music producer. Recently he composed music for a hit track which enjoyed substantial airplay for over 6 months. Consequent upon the success of his track, he was approached by an international music corporation, who requested him to transfer his copyright in the music to the company in return for a one off payment of $200,000 and royalties capped at 5% of global sales for the next 2 years. They assured him that he would enjoy more concert appearances with the allied revenue streams. Wale is confused and requires advice on his legal rights.

Of all the forms of copyright protected works, music is perhaps the most restricted and licensed. Since music was first broadcast on radio, a vast mechanism for licensing music has emerged from the opposing forces of the recording industry and the radio and TV broadcasting industries.

Copyright ownership can be transferred like any other form of property. Copyright is transmissible by assignment, by testamentary disposition, operation of law, as personal or moveable property. however, to give legal effect to that transmission there must be a written agreement signed by the assignor. Any grant by the copyright owner binds every successor in title except a bona-fide purchaser for value without notice (actual or constructive).

This doesn’t however mean that a copyright cannot be transferred verbally, as it is trite law that a verbal agreement to which both parties have agreed all the terms (i.e. has reached completion) is legally binding. It follows then that a verbal agreement to assign, provided there is no dispute as to the terms of the assignment between the assignor and assignee, is valid and copyright is transmissible by operation of basic contract. It is however advisable that the parties sign a confirmatory assignment agreement which refers retrospectively to the earlier assignment.

The transfer could be partial or total, where the rights owner can transfer all of the exclusive rights his or her grants. In partial assignment, a music author may transfer his reproduction, translation and adaptation rights to a publisher. He may also decide to split his rights between different persons.

Copyright assignment agreements can be limited in terms of duration or territory. The author of a literary work could, for example, assign their right to reproduce it in the UK, Nigeria, Ghana and the Gambia for 4 years.

Copyright assignment agreements can be reversionary, in other words, the rights can revert back to the assignor on the occurrence of an uncertain event, such as an unremedied breach of contract. This protects the assignor from the loss of their rights in the event of the occurrence of certain events which may be vitiate the transfer contract.

The transfer of copyrights contains some knotty issues, which could become highly problematic if not properly managed. When faced with a decision on copyrights, it is best that you seek advice from a qualified legal practitioner, so as to ensure that you take the best steps in the circumstances.

Milton & Cross Solicitors provides advice to entertainers, rights owners, rights administrators and merchandisers. We help them make informed decisions that facilitate high value transactions. Contact us for a free consultation.