Boston Contracts Can Save a Company From a Costly Lawsuit

The Boston Herald has written recently about a lawsuit between shareholders of a bioplastics company and the company itself. Shareholders claim they were misled about a business that eventually went under.

Issues like these, whether between shareholders and the company or two different companies often come down to whether business contracts in Boston are written effectively. A well-worded and thought-out contract can save a company from embarrassing and costly litigation in the future.
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Boston business attorneys recognize that companies are often doing work at lightning speed. There are a number of angles to cover and many things to consider. If a business overlooks language in a contract, it can be devastating.

A potential merger or large business deal can become more like a burden than a triumphant victory for a company if the wording of the details isn’t done properly. This is why an experienced lawyer should be called in to advise the business on what steps to take in order to avoid serious legal problems.

According to the Boston Herald story, a securities fraud lawsuit has been filed as a potential class-action lawsuit against the company. At issue is why a proposed merger between Metabolix and agribusiness company Archer Daniels Midland Co. fell apart last month because of financial returns that were deemed “uncertain.”

The move by ADM caused the Metabolix stock price to drop 45 percent and caused the company to restructure its business plan and incur millions of dollars in charges to do so, the newspaper is reporting.

According to the newspaper account, the lawsuit claims that the company’s CEO and finance chief misled investors. At issue was whether a plastics company out of Iowa could meet production goals. The company leaders told investors the product would become commercially viable, but investors allege they knew it wouldn’t be.

When companies are considering mergers or large-scale business dealings, they must ensure that all aspects are considered. This includes the wording in a contract as well as other legal documents that may make or break the sale.

As shown in this situation, not only can the company suffer economic damages or be faced with a lawsuit for breach of contract, it can take a large hit in the stock price. Investors may be less likely to spend their money with the company if something like this happens.

The company must take all the steps necessary to ensure that their company is protected from potential future litigation. This comes down to how a contract is written and how well it is executed. Mergers and business opportunities are a big step, especially for a small business. But these business owners must take into consideration all aspects of the situation. Trust this type of situation to an experienced Boston business lawyer, who can help clear up these matters.

A Boston business law firm, The Brown Law Firm, LLC, has offices in Belmont and Boston. For a free and confidential consultation, call Attorney Graeme Brown at 617-489-0817 or contact us through this website.

More Blog Entries:

Boston Breach of Contract Lawsuit Can Be Used as Leverage in Dispute: January 31, 2012
Additional Resources:

Bioplastics firm sued after major deal fails, by Marie Szaniszlo, Boston Herald

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Boston Bar Assosiation