Facing Bet-The-Company Litigation? Here’s What You Need To Know!

Although “bet-the-company” litigation is a relatively new term, this type of legal issue is not new. It refers to litigation that is so high-risk that it can cause a business to have to shut down if not successful. It could make a company unable to perform business or result in the loss of intellectual property, as well. Although these types of litigation cases are rare, every business should be prepared and know how to deal with them.

How does bet-the-company litigation start?

This type of case can start when a company wants to put a competitor out of business. Sometimes, very large companies will go after smaller businesses within their industry. Other times a company will go after its similar-sized rival. This behavior may seem nefarious, but if a business has done something to instigate litigation, the situation changes. This is true whether the business owner(s) knows what they have done or not.

What is so different about this type of litigation?

Unlike most commercial litigation, bet-the-company cases usually start strong, with the intent to get a lot out of the defendant. It can be difficult to defend yourself if this situation ever occurs and you are not prepared. Arbitration is not commonly used in this type of litigation, but it can be a useful method of solving issues if both parties agree to it.

Preparing for litigation

The best way to avoid litigation is to first do everything legally and stay in compliance with any laws, regulations, or contracts that apply to your company. The next is to be prepared for it. There are many steps you can and should take, depending on your specific business and industry, including the following.

1. Speak with an attorney early and often: A trusted business attorney can help position your company to help it avoid most legal battles. This includes everything from drafting contracts to separating assets to setting up a compliance program.
2. Get proper insurance: This will not prevent litigation, but it can provide financial protection in some situations.
3. Keep details and accurate records: Doing this can help you stay out of trouble, keep your business running smoothly, and help you with compliance.
4. Have solid procedures: Every business needs procedures and processes, including record retention procedures. By having these, and documenting them, you can help alleviate any doubt in the case that a legal case pertains to them.
5. Be honest and ethical: If you are honest and conduct business ethically, you will be less likely to have issues with litigation. This is true for business-to-business relationships as well as business to the client.

Have a dedicated attorney

The importance of having an attorney, even when you are not in a litigation case, cannot be overstated. An experienced business attorney will be able to help you with a variety of legal matters. By working with one (or a team) regularly, they will be able to represent you better in litigation because they will be more familiar with your business. If you do find yourself in litigation, it is very important to retain quality litigation counsel immediately.

Is your business facing litigation?

The team at Brown & Fortunato is ready to assist you. We have experienced and trusted Litigation and Corporate & Finance attorneys that are knowledgeable in handling a variety of legal matters. You can reach us at (833) 228-6300 or Send Us an Email for more information.