Pierce & Mandell, P.C.

11 Beacon Street, Suite 800
Boston, Massachusetts 02108-3002

Phone: (617) 720-2444
Fax: (617) 720-3693

Pierce and Mandell PC Blog

RSS Grab PAM RSS

Pierce & Mandell’s Client Prevails in FAA Determination

Wednesday, October 31, 2018

By: Michael C. Fee

After a three year investigation, the FAA has concluded the Norwood Airport Commission unreasonably denied Pierce & Mandell client Boston Executive Helicopters access to the Norwood Airport, and improperly granted the existing fixed based operator exclusive rights in violation of Federal Grant Assurances 22 and 23.

By way of background, in 2008 the FAA determined that the Norwood Airport Commission engaged in economic discrimination by granting the fixed based operator (“FBO”) exclusive rights in violation of Title 49 of the United States Code (USC) §§ 47107(a), 40103(e) and Federal Grant Assurances 22 and 23. The FAA then issued a Corrective Action Plan directing the Airport Commission to, among other things, end the practice of awarding long-term leases of federally funded ramps which had the effect of granting the existing FBO control over a majority of Airport ramp space.

FlightLevel Norwood, LLC (“FlightLevel”) purchased the FBO at the Airport in 2009. Pierce & Mandell client Boston Executive Helicopters (“BEH”) has provided helicopter charter services at the Airport, and has requested permission and additional ramp space to expand its operations to include providing FBO services, since 2010.

In response to BEH’s requests for space and permitting approvals, the Airport Commission resisted and resorted to a pattern of obfuscation and disparate treatment. It demanded financial information, personal guarantees, and insurance coverage not required by the Airport’s minimum standards, or requested of other Airport tenants including FlightLevel.

BEH filed a Part 16 Complaint to the FAA in 2015, and on October 30, 2018 the FAA issued a Determination, finding that the Commission’s “delaying tactics, restrictions and excessive financial information requests” constituted a “continued pattern of delay to prevent BEH from completing the FBO permitting process.” The FAA concluded that the Town and the Commission’s actions constitute an unreasonable denial of access [to BEH] and unjust economic discrimination [against BEH].”

While holding the BEH at bay, the FAA also found that the Commission continued to bestow greater control of airport ramp space to FlightLevel by offering it new leases on a variety of federally funded ramps. Specifically, the Commission offered FlightLevel new lease terms for Lots A, B, and C at the Airport, notwithstanding BEH’s pending request for space for its FBO. The FAA concluded that the “Commission chose to ignore the letter, spirit and tenets of the previously ordered 2008 FAA Corrective Action Plan.” The FAA rejected the Commission’s excuse that the leases to FlightLevel were justified because it controlled abutting property. Such rationale “. . . is not justified, nor does it give first rights. . . It is camouflaging an exclusive right.”

The FAA went on to find that the Commission’s unfair treatment of BEH, and favorable treatment of FlightLevel violates Title 49 USC § 47107(a)(1) and related Federal Grant Assurance 23 (Exclusive Rights). The Commission’s subtle imposition of unreasonable restrictions on BEH, when combined with the favorable leasing practices toward FlightLevel, had the overall effect of solidifying FlightLevel’s position at the Airport to the detriment of BEH, and others. “The facts show that FlightLevel has a significant portion of the available property useful for FBO services, approximately 80%, and rather than curtailing FlightLevel’s grasp, the Airport expanded it.” This, in the judgment of the FAA, violates Federal Law and Grant Assurances prohibiting the grant of exclusive rights to a single operator.

The Director’s Order requires the Town and the Airport Commission to take immediate steps to promptly complete the FBO permitting process with BEH, discontinue leasing practices that provide exclusive rights to a single FBO, and rectify the unauthorized lease of Airport land to Verizon for non-aeronautical use. The Town and the Commission have 30 days to appeal.

The full text of the FAA Director’s Determination can be found at: https://documentcloud.adobe.com/link/track?uri=urn%3Aaaid%3Ascds%3AUS%3A9034a6d1-ad1b-4b79-8322-141aebf218fc

Pierce & Mandell shareholder Michael C. Fee represents Boston Executive Helicopters in the FAA proceeding and in related litigation. He can be reached at mfee@piercemandell.com.

Practice Transitions - Process and Substance

Monday, January 22, 2018
Pierce & William Mandell

When buyers and seller of dental, medical and other professional practices begin to think about practice sales, associate buy-ins, mergers or other major acquisition events, most of the focus is on the substantive terms. What is the value of the practice? What is being purchased and sold and what is the purchase price? How will the deal be structured and what are the tax consequences? Will there be major conditions involving financing, lease assignments or building or condo acquisition or purchase rights? What about any post-closing seller service commitments and/or restrictive covenants?

All such substantive terms are essential to practice transitions. But what should be given as much thought and consideration is the process of the transaction as well. How will the parties communicate? Who else will be involved and when and how will they be deployed? What are the steps and what is the sequencing of taking those steps?

If any step of the process is missing or rushed it can often lead to unnecessary delays, additional costs and even a break-down of the anticipated transaction.

The most important first step of the process for both buyer and seller is to identify the professionals needed and to line them up as early as possible. Buying or selling a professional practice is a major life cycle event for the solo or small practice owner. It is important to understand where you will need professional help and guidance and seek it out early so that you have advisors who exclusively represent your interests, who have specific experience with health and dental professionals, as the deal is forming to provide insight and guidance.

No transaction is like any other and a variety of different advisors may be needed during the process. Some sellers and buyers need transition consultants/brokers to find the right transaction counterpart. All buyers and sellers, no matter how large or small, need their own legal counsel and CPA/tax and financial advisor who are not conflicted and can give their client independent advice. Lender financed practice and/or real estate acquisitions warrant an early role for bank representatives. Other professionals that can play a crucial role in certain deals include insurance advisors, practice managers and technology experts.

There are different phases to every transaction but almost all practice transitions have three major phases: establishing the essential terms; drafting and negotiating binding legal documents; and, consummating the transaction or “closing”.

During the initial phase of establishing the essential terms, it is highly productive to first work on a simple initial written description of the material terms. This type of document can be called an offer letter, a memorandum of understanding or “MOU”, a letter of intent or “LOI” or term sheet, among other names. They are all basically the same thing: a short but comprehensive written recitation of the essential terms of the transaction. Having such a preliminary term document is very helpful and desirable. But, having your advisors in place at the start of the preliminary negotiations is vital, as these documents can be non-binding, binding or even both at the same time. It all depends on the language used in the document. Such a critical part of the transaction should not be pursued, and such a document should not be signed, without prior legal and financial/tax review. Buyers and sellers who wait until it is time to work on the actual legal agreements to retain their advisors often find out some important material terms were not addressed effectively leading to regrettable consequences.

After the initial negotiations lead to a preliminary transaction written summary, the parties will generally set forth a scheduled time frame to complete due diligence, negotiate and enter into formal binding legal agreements, satisfy closing conditions and close the transaction.

Due diligence involves the investigation and review of the financial, regulatory and liability facts of the other party. Financial review can begin even before the initial term sheet is created. Prior to any disclosure of financial and proprietary information to the other party it is customary and advisable to enter into a confidentiality or non-disclosure agreement, to protect the disclosing party and its information from improper re-disclosure and often to keep the existence of the negotiations themselves confidential. Many confidentiality agreements or “NDAs” are presented with hidden binding clauses, such as a “no shop” clause that prohibits a seller from talking to other parties about a practice sale, or a clause that may prematurely bind a buyer to a purchase. So legal review of any NDA or confidentiality agreement for all parties is very important.

Ultimately, every transaction will require binding agreements between buyer and seller setting out all of the terms and conditions of the transaction. Depending upon the nature of the sale these may include purchase agreements for assets, equity, goodwill and real estate. The main purchase agreements (often referred to as the “P&S”) should cover all aspects of the transaction: how the purchase price is to be allocated, if it is an asset or stock/equity purchase, what happens to names and phone numbers, the conditions of closing, including financing, and office leases, post-closing covenants, such as employment and non-compete of the seller, patient letters and practice management.

The P & S will generally include many other vital and binding agreements that will be negotiated at the same time as the P & S but will not be executed and become effective until the closing date. These can include, documents of transfer, patient record custody agreements, restrictive covenant agreements, assumption of leases and contracts, and new partnership agreements if there will be two or more owners going forward.

The final phase -- from execution of the binding purchase agreements to the closing -- will involve satisfaction of closing conditions, often involving third parties (e.g. lenders for financing; landlords for new or assigned leases; payers for credentialing; government agencies for regulatory approval in sales involving licensed facilities; and creditors for payoffs and release of liens).

Needless to say planning for the process of a practice transaction is as important as the substantive terms.

For assistance with the sale or purchase of professional practices, including dental and medical practices, William Mandell, Esq. can be contacted at bill@piercemandell.com, or 617-720-2444.

PIERCE and DOOLING WIN PRODUCT LIABILITY TRIAL ON MARTHA’S VINEYARD

Wednesday, December 14, 2016

Pierce & Mandell, Robert Pierce, Boston, MAPierce & Mandell, Curtis Dooling, Boston, MABob Pierce and Curt Dooling recently obtained a defense verdict on behalf of their client in a jury trial in Dukes County Superior Court on Martha’s Vineyard.

The plaintiff in the case sustained a serious eye injury, which eventually led to the loss of the plaintiff’s eye, when he was struck with a golf disc designed and manufactured by Pierce & Mandell’s client. The plaintiff claimed that the golf disc that struck and injured him was dangerously defective because of its design and because it lacked proper warnings alerting users to its dangers. The firm challenged the plaintiff’s credibility by showing that the plaintiff’s version of how he was injured was not credible based on witness testimony and relevant medical records. The firm also successfully argued that the golf disc was not dangerously defective.

The case was challenging due to the very serious injury that the plaintiff suffered, and the fact that the individual who threw the disc that struck the plaintiff was no longer living in the United States and was unable to testify at trial.  Rather, his deposition testimony was read to the jury.

The case was tried over 6 days, and the jury deliberated for approximately 7 hours. The jury determined that Pierce & Mandell’s client did not breach the warranty of merchantability and that the golf disc was not dangerously defective.

Bob Pierce has now achieved complete victory for his clients in the last eight jury cases that went to verdict.

Pierce & Mandell Proudly Continues its support of the Eddie Mandell Memorial Scholarship Fund

Tuesday, December 09, 2014

Pierce & Mandell is proud to continue its support of the Eddie Mandell
Memorial Scholarship Fund. To read about the latest efforts of the Scholarship Fund click here.


Enter your e-mail address below to receive updates on new blog posts!


Recent Posts


Archive


Tags