Problems Prevented and Solved
COMMERCIAL LITIGATION MATTERS
DESIGN PROFESSIONAL AND CONSTRUCTION LAW MATTERS
EMPLOYMENT LAW MATTERS
PRODUCT LIABILITY MATTERS
PROFESSIONAL MALPRACTICE DEFENSE MATTERS
BUSINESS, REAL ESTATE, AND RELATED MATTERS
ESTATE PLANNING, TAX AND RELATED MATTERS
COMMERCIAL LITIGATION MATTERS
$37 million verdict in contractor/municipality dispute. Powell Trachtman represented a construction company engaged by a municipality to build a reservoir. During the construction, our client concluded that the reservoir design was unsafe and defective, and refused to continue. The municipality disagreed, it terminated our client without payment and, our client alleged, it "blackballed" our client in the industry. The proceedings were extremely contentious and, ultimately, we obtained a $37 million jury verdict on behalf of our client - including $25 million in civil rights damages.
Successful resolution of shareholder buy/sell claim. An employee / shareholder resigned from our client's employ. The parties were signatories to a buy/sell agreement that was over a decade old and had not been updated, creating various ambiguities. In addition, the employee/shareholder claimed that the buy/sell had been orally amended by all of the shareholders. Litigation ensued in federal court respecting the price our client would be obligated to pay for the employee / shareholder's stock. After taking the employee / shareholder's deposition and pursuing certain motions, we were able to resolve the case for less than one tenth of one percent of the employee / shareholder's original demand.
$2.5 million jury verdict in breach of contract case. Powell Trachtman represented a contract food service provider engaged by a customer to service approximately fifty facilities. Despite the fact that the client and its customer failed to finalize a written agreement respecting the financial terms of their arrangement, our client provided food services for a year, and then claimed that it had been underpaid, that it had lost future profits, and that it suffered other losses. Our client's customer contended that it had fully paid our client and met all of its obligations, and refused to make a meaningful settlement offer. We took the case through a two week jury trial in federal court, and obtained a $2.5 million verdict, all of which was collected.
Six-figure settlement for manufacturing firm against consultants. Powell Trachtman was retained to represent a manufacturing company that claimed it lost its bank financing as the result of incompetent services provided by a consultant. The consultant denied all liability and refused to make a settlement offer. The firm pressed the case and ultimately obtained a high six-figure settlement that saved the client's business.
Successful defense of developer claim against landowner. Powell Trachtman was retained by a landowner who had entered into an agreement of sale with a developer. The agreement had been sloppily drafted by a realtor. The client claimed that the agreement had terminated and that he was no longer obligated to sell the tract to the developer, with which the client had various disputes. The developer claimed that he had a continuing right to acquire the property, and filed a specific performance action. The firm took the case to trial, and defeated the developer's claim.
RICO claims dismissed on summary judgment. An insurance company retained us to represent it in a case brought against multiple defendants asserting a 'pay-to-play' conspiracy. The plaintiffs asserted claims based on RICO, breach of fiduciary duty, aiding and abetting breach of fiduciary duty and unjust enrichment, and sought $25 million and treble damages. The court granted the defendants' motion for summary judgment, and dismissed the case in its entirety.
Successful settlement on behalf of international recording artist. Powell Trachtman was retained to represent an international recording artist who was sued by a former agent, claiming breach of an agreement between the artist and former agent. The claim placed at risk the client's new and highly lucrative recording contract. The firm developed and implemented a strategy that resulted in a settlement on extremely favorable terms.
Six-figure settlement for professional services firm in accounting malpractice case. Powell Trachtman was retained by a national professional services firm to seek a recovery from an international accounting firm. The client claimed that the accounting firm had committed malpractice; the accounting firm denied all liability and refused to make a meaningful settlement offer. The firm aggressively pursued the case through depositions and expert reports and shortly before a scheduled arbitration obtained a high-six figure settlement.
Successful resolution of claim by business buyer against business seller. The buyer of a distribution business retained us after the sale was consummated. Our client contended that the seller's warranties about the business were inaccurate and that, as a result, it had dramatically overpaid for the business. We assembled the facts documenting our client's contentions, and designed and presented a two hour presentation to the seller and its counsel. As a result, we were able to negotiate a settlement resulting in our client saving over half of the purchase price it had originally agreed to pay, without incurring any litigation costs.
Defense verdict and recovery on counterclaim in breach of contract case. Powell Trachtman was retained to represent a client sued for breach of a services contract. At an early stage, we successfully enforced a contractual arbitration provision, thereby limited the adverse party's discovery rights and minimizing defense costs. We then worked with our client to develop a substantial counterclaim. After a three-day hearing, the arbitrator dismissed the claim against our client, awarded our client damages on its counterclaim, and awarded our client all of its attorneys' fees.
Successful representation in state license revocation action. Powell Trachtman was hired by a College to represent the College's interest in an action brought by a state agency to revoke the College's academic certification to train individuals as municipal police officers. We represented our client in both administrative proceedings and injunctive proceedings before the Commonwealth Court. Ultimately, we were able to negotiate a favorable settlement that resulted in the College's certification being reinstated.
Successful defense of unfair competition action. Powell Trachtman successfully defended a manufacturer's representative against claims of unfair competition and anti-trust violations asserted by a competitor. We resolved the claim without a trial, without any admission of liability, and without any payment being made to claimant.
Reinstatement of right to operate airport. Powell Trachtman successfully pursued a claim in federal court on behalf of the operator of airport against a municipal entity which had terminated our client's contract to operate airport. Our client was reinstated, and received a substantial cash payment.
DESIGN PROFESSIONAL AND CONSTRUCTION LAW MATTERS
Successful resolution of a deficient design claim for a designer and construction manager of a warehouse distribution facility. We represented the designer and construction manager of a warehouse distribution facility against a claim that a 150,000 square foot floor was deficient in its design and/or construction, requiring the entire floor to be replaced at a cost of $2.2 million. The case was litigated in an American Arbitration Association proceeding for seven days. We succeeded in disproving the fundamental bases of the claim, and the case was then settled for a nominal sum.
Successful settlement in favor of engineer on developer's claim. We were retained to defend an engineer which had been sued by a developer. The developer claimed that its proposed multi-use project was denied by a municipality due to design errors by the engineer. During trial, we settled the case for less than 10% of the developer's claimed damages, and we recovered a substantial payment for the engineer on account of its unpaid billings.
Successful settlement in favor of engineer on Kazakhstan project. We represented an engineer sued for an alleged, serious design error in a construction project in Kazakhstan. We were able to settle the case for an amount that represented less than 20% of the claimed damages, and as part of the settlement we protected the engineer from any personal payment obligation.
Successful settlement of action against architect in multi-phase condominium project. We successfully represented the architect-of- record in a multi-party action involving owner and general contractor claims totaling approximately $27,000,000 arising from the construction of the first phase of a multi-phase condominium and spa project with construction costs in excess of $100,000,000.
Establishment of new legal precedent permitting recovery of attorneys fees from state agencies. We successfully opposed PaDOT and Pa DEP concerning a planned state highway project that our client concluded would cause environmental damage. As a result of our litigation against the state agencies, the necessary permits and approvals for the project were cancelled. Following such successful efforts, we then established a new legal precedent in the Pennsylvania Supreme Court that allowed our client to recover from the state agencies our client's attorneys fees incurred in opposing those permits.
Successful resolution of claim against architectural firm involving design of concert hall. An internationally-acclaimed architectural firm retained Powell Trachtman to defend a $20 million errors and omission and delay/acceleration claim arising out of its efforts as project architect for a symphony concert hall. We favorably resolved all claims, and obtained a public statement of praise by the project owner for the architect's work.
Successful resolution of multi-million dollar hotel water intrusion/mold growth claim. We defended both the MEP engineering design firm and the interior designer of a multi-use facility against a multi-million dollar water intrusion and mold growth claim brought by the project's owner. Through our use of extensive and technically-detailed presentations in a multi-stage mediation process, we were able to resolve the claim in our clients' favor - one client made a very limited settlement contribution (far less than what had been anticipated), and the other made no settlement contribution at all.
Successful representation of highway design and engineering firms. Powell Trachtman represents numerous highway design and engineering firms in cases involving serious automobile and pedestrian accidents. In several recent cases, we successfully obtained pre-trial dismissals of engineering firms that were alleged to have improperly designed roadway improvements, and in another we obtained a dismissal during the trial through proof that the engineer's plans had been prepared in accordance with applicable design standards.
Successful resolution of a deficient design claim for a national engineering firm. Powell Trachtman represented a national engineering firm in a lawsuit by an owner of a distribution facility claiming deficient design in connection with a 1.3 million square foot concrete floor above the distribution facility. All of the contractors and their subcontractors were named as defendants/additional defendants in the case, and after a three-day mediation, and further intense negotiations thereafter, we successfully resolved the case for substantially less than had been reserved or anticipated.
Successful settlement in favor of architect on highway design claim. Powell Trachtman was retained to represent an architect in a death and catastrophic injury claim involving the design of a major highway. We successfully negotiated the release of the architect for less than 5% of the amounts paid by co-defendants.
Successful settlement in favor of engineer in airport case. Powell Trachtman represented an engineer in the successful resolution of a series of multi-million dollar law suits arising from the collapse of an aircraft de-icing boom during de-icing operations at the Philadelphia International Airport.
Successful settlement in favor or hardware manufacturer. Powell Trachtman represented a computer hardware manufacturer in a wrongful death action in which it was alleged that the plaintiff's decedent was killed when his head was crushed by the out-of-sequence operation of an overhead gantry. The case was settled on a highly favorable basis.
Case of first impression involving governmental immunity defense. Powell Trachtman represented architecture engineering firms that serve as township engineers and township code enforcement officers in a case involving tort claims asserted by a developer of a residential subdivision. The firm filed motions based on the defense of governmental immunity, and in a case of first impression, the Pennsylvania Commonwealth Court dismissed the claims against the clients and ruled that architecture and engineering firms are entitled to assert a governmental immunity defense in this context.
Successful defense in architectural malpractice claim involving medical facility. Powell Trachtman obtained a defense verdict in an arbitration involving the design of private surgical complex located in New Jersey. The arbitrator found that the firm's client, an architect, was not responsible for satisfying the accreditation requirements related to the design of facility since the architect was only requested to meet the less stringent local building code standards.
Successful settlement of architectural malpractice claim in roof collapse case. Powell Trachtman represented an architect in a suit arising from the collapse of the roof of a major product distribution warehouse that was alleged to have resulted in five million dollars in damages for the roof reconstruction, damaged inventory and related business losses. The suit was favorably resolved through mediation.
Defense of contractor in Philadelphia condominium cases. Powell Trachtman was retained to represent a contractor who had filed substantial mechanic's liens on two Philadelphia condominium projects. The firm obtained verdicts in favor of the contractor in two trials involving major issues involving the mechanic's lien process.
Defense of surveyor/engineer in failed land development. Powell Trachtman was retained by a surveyor/engineer that was sued for $750,000 by the developer of a failed residential development project. During a mediation, the firm successfully convinced the developer that the surveyor/engineer committed no wrongdoing, and that in any event the developer's claimed damages were overly speculative and not recoverable. The developer dismissed the claim without any payment from the firm's client.
Successful resolution on behalf of owner against bonding company. Powell Trachtman successfully negotiated the resolution of claims on behalf of the owner of multiple-building senior care complex against the bonding company of a defunct general contractor, and against multiple trade subcontractors, for defective work. We secured a substantial financial recovery for the owner, a release of the owner from the general contractor's payment claims, and the release of escrow funds being held by the municipality due to claims of uncompleted work.
Successful representation of inspector at utility renovation site. Powell Trachtman successfully represented the inspector at a multi-site utility renovation project against the claim of a construction worker who suffered serious bodily injury due to alleged safety violations. The claim was complicated by the fact that the primary contractor was defunct and lacked both liability insurance and worker's compensation insurance. We settled the case - our client made no contribution to the settlement and obtained reimbursement for a portion of its defense costs from co-defendants.
Successful representation of design professional in historic building damage claim. Powell Trachtman successfully defended a design professional against claims that our client's design and site-inspection services in conjunction with the construction of a new building caused an adjacent historic building to suffer structural cracks due to settlement. The case against our client was resolved before trial at a fraction of claimed damages.
EMPLOYMENT LAW MATTERS
Successful resolution of gender and race discrimination claim. Powell Trachtman was retained to represent a national manufacturer that had terminated a key, executive level employee for claimed incompetence. The employee asserted that the termination was based on gender and race discrimination. We filed eight pre-trial motions. The federal court granted all of them, effectively emasculating the plaintiff's claim. The case then settled for a nuisance payment -- a fraction of what the client had previously offered to settle the case.
Successful resolution of sexual harassment claim. A large insurance carrier retained Powell Trachtman to defend a major company and one of its senior officials against a sexual harassment and assault claim brought by a former employee. After an intensive investigation, we successfully discredited the plaintiff's claim during her deposition. Shortly thereafter, the case was settled for a small fraction of the plaintiff's original demand.
Successful defense of employee's pregnancy discrimination and family leave act claims. A Powell Trachtman client was sued for alleged pregnancy discrimination and family leave act claim. We filed a motion to dismiss in which we claimed that the employee's lawsuit was barred by an arbitration agreement. The court granted the motion and dismissed the complaint and, ultimately, the employee proceeded no further.
Defense verdict in whistleblower/wrongful termination claim. Powell Trachtman was retained to defend a corporation against whistleblower, wrongful termination and interference with prospective contractual relations claims brought by a former employee. After extensive discovery, we filed a motion for summary judgment. The court granted our motion, and dismissed the case in its entirety.
Successful enforcement of covenant not to compete. Powell Trachtman was retained to represent a company in circumstances where a key employee subject to a covenant not to compete and certain confidentiality requirements left the company and surreptitiously began a competitive enterprise. Suit was commenced, relief was obtained, and the matter was quickly resolved in accordance with the client's requirements.
Development of drug testing program. A Powell Trachtman client that provides products to the federal government retained us to review and revise its drug testing program so that it would satisfy all regulatory requirements without creating significant employee discontent. We created the program and helped the client implement it in a practical and productive way.
Representation of numerous companies in structuring reductions in force. Powell Trachtman has been retained by numerous companies which have been compelled by economic difficulties to implement layoffs, position eliminations, compensation reductions, and other cost-saving strategies. We have worked with these clients to successfully design strategies that minimize the likelihood of future employment discrimination actions by the affected employees, such as the development of objective employee-selection criteria and the creation of severance/release agreements.
Examples of "preventive law" advice provided to clients. We encourage our clients to use us to prevent, not just solve problems. Set forth below are only a few examples of the most recent issues we have helped our clients resolve before they ripened into claims:
- We reviewed and revised a client's leave policy, which unwittingly violated employee rights;
- We advised numerous clients on the complexities of dealing with employees who suffer physical or emotional issues that implicate conflicting provisions of the workers compensation laws, the FLMA, and the ADA;
- We advised numerous clients seeking to avoid FLSA violations through the proper classification of exempt and non-exempt employee;
- We counseled a client on the proper way to deal with suspicions concerning drug and alcohol use among employees and the development of testing policies and protocols for use in the client's workforce;
- We counseled a client seeking to change its workweek so that the client would not violate the FLSA and Pennsylvania Minimum Wage Act;
- We counseled various clients on the proper way to obtain third party medical verifications regarding employees who had asserted ADA and FMLA issues;
- We counseled numerous clients respecting the ADA and FMLA issues that may arise in respect to policy changes concerning the H1N1 virus;
- We handled numerous investigations concerning allegations of harassment and discrimination;
- We counseled various clients on their rights pertaining to employee use of social networking sites;
- We advised a client who employed an executive who claimed that certain aspects of his work duties compromised religious beliefs;
- We advised several clients on the issues pertaining to the conversion of employees to independent contractors.
PRODUCT LIABILITY MATTERS
Defense verdict in favor of lift manufacturer. Powell Trachtman was engaged to represent an aerial lift manufacturer after the lift operator died as the result of being pinned between the lift and a stationary piece of construction equipment. Plaintiff's settlement demands were in the multi-million dollar range. Powell Trachtman acted as lead counsel during a three week trial in Florida federal court. We cross examined plaintiff's expert over three days, culminating in the judge's observation that the expert was the "worst witness he had seen in seventeen years on the bench." A defense verdict was promptly returned in favor of our client.
Successful defense of electrical product manufacturer. We successfully represented an electrical product manufacturer in a suit filed by a worker claiming that sensor failures caused his career-ending personal injuries.
Successful defense of computer hardware manufacturer. We represented a computer hardware manufacturer in a wrongful death action in which it was alleged that the plaintiff's decedent was killed when his head was crushed by the out of sequence operation of an overhead gantry. The case was settled on a highly favorable basis.
Defense verdict, successful resolution in favor of manufacturer. Powell Trachtman was retained to defend the manufacturer of a boom supported aerial lift involved in an incident that resulted in one fatality and one disabling injury. The matter had been pending in state court for nine years before Powell Trachtman was retained. Within two weeks after our engagement, we finalized a defense strategy and listed the matter for trial. During the trial, which convened less than 90 days after our entry into the case, we successfully obtained the dismissal of the wrongful death case and settled the personal injury claim for less than one percent of the jury verdict and resulting settlement with the co-defendants.
PROFESSIONAL MALPRACTICE DEFENSE
Defense verdict for accounting firm in "deepening insolvency" case. Our client, an accounting firm, had provided financial statement and tax services to an e-commerce company that was subsequently forced into bankruptcy. The bankruptcy trustee then sued the accounting firm for damages in excess of $5 million, claiming that its negligence led to the "deepening insolvency" of the e-commerce company. This so-called "deepening insolvency" theory has, in recent years, plagued many accounting and law firms. Through a motion for summary judgment, we were able to defeat this claim and, in an extremely important decision, the dismissal was affirmed by the Third Circuit Court of Appeals, which significantly narrowed the reach of the "deepening insolvency" theory for future cases.
Defense of claims against university. Powell Trachtman was retained to represent a Pennsylvania university which was sued for millions of dollars as the result of a catastrophic injury suffered by a student participant during an athletic event. The firm conducted extensive discovery and ultimately convinced the plaintiff and a co-defendant that the university was not responsible for the injury. The university was released from the case without having to pay any damages.
Successful resolution of quadriplegia personal injury claim against college. Powell Trachtman represented a college sued by a former student who suffered partial quadriplegia while participating in a club-sponsored sports competition. We argued that the college satisfied its duty of care and, moreover, we were able to document through the use of sophisticated expert reports that even if the college had done what the former student contended it should have done, the same injuries would have resulted. We filed a motion for summary judgment, which was granted, and the case was dismissed.
BUSINESS, REAL ESTATE, AND RELATED MATTERS
Acquisition, financing and development of manufacturing facility. Powell Trachtman was engaged by a major manufacturer to handle the acquisition of a ten-acre industrial/commercial property using a multi-level financing facility which included not only term and mortgage loans, but international letters of credit and working capital. After the acquisition was completed, we successfully handled various tax assessment, land development, and environmental issues arising from the further development of the site
Negotiation of major commercial sublease. A major professional services firm retained Powell Trachtman to negotiate one of the first commercial subleases in a Center City Philadelphia office space. We successfully consummated the transaction, involving two full floors, totaling approximately 60,000 square feet.
Acquisition of industrial property requiring environmental remediation. A client retained us to handle the acquisition of an industrial property. The agreement required that the seller perform certain environmental remediation. When the seller could not complete all the remediation to the satisfaction of our client's lender, we devised a strategy in which the seller took back a 100% purchase money mortgage, with appropriate protections for our client, so our client could pursue the required municipal approvals pending refinancing when the seller fully performed. This strategy allowed our client to acquire the property and obtain the mandated municipal approvals on a fast track, it saved substantial costs, and it allowed our client to satisfy its business requirements on schedule.
Business sale involving significant tax and key employee issues. We represented a large distribution company in selling its business to a competitor, while leasing back commercial properties in two states, and retaining the sellers' key personnel through employment contracts. This transaction was a stock sale, but was structured as a "deemed" asset sale under applicable provisions of the Internal Revenue Code. This allowed the buyer to re-depreciate certain assets, thereby enabling our client to obtain a higher purchase price.
CEO employment contract negotiations. We represented a client in negotiations of his employment contract as Chief Executive Officer with a major company, and successfully designed a complex and ultimately lucrative stock option and bonus compensation plan that satisfied the needs of both the employer and the employee.
Creation of ESOP as part of founder's succession plan. We structured and drafted an Employee Stock Option Plan (ESOP) for a corporate client, and qualified it with the Internal Revenue Service. The ESOP not only created incentives through which key employees were retained, it also provided a means of succession planning for the founder of the firm, liquidity for the purchase of the founder's equity, and payment to the founder with tax deductible dollars.
Development of national entity/licensing strategy for architectural/engineering firm. We were engaged by a firm that provides engineering and architectural services throughout the country to develop a method through which it could comply with the regulatory patchwork of state professional licensing laws. We developed an entity structure that meets these goals while at the same time imposing the minimum level of administrative burdens.
Acquisition involving SBA financing. Powell Trachtman represented a client purchasing a new commercial building in a planned community, a portion of which was for its own use. The transaction involved primary and secondary acquisition loans, the latter of which was SBA insured, as well as the lease of the remainder of the building to commercial tenants. We successfully finalized all aspects of the transaction.
Successful resolution of state tax claim. Our clients had purchased a tax shelter which, subsequently, the IRS had discredited and invalidated. As a result, state tax authorities had imposed substantial penalties against our clients for non-payment of taxes on the sheltered income. We contested the assessment, and successfully eliminated all penalty assessments.
Negotiation of a multi-million dollar statewide strategic sourcing contract. Powell Trachtman was engaged by a medical service provider to negotiate and draft a multi-million dollar statewide strategic sourcing contract with the Commonwealth of Pennsylvania for the provision of doctors, psychiatrists, psychologists, nurses, and other health care professionals to state healthcare facilities throughout the Commonwealth. The contract not only allows the Commonwealth to have real-time management of its health care delivery system on a statewide basis to meet a wide range of patient needs but also allows the Commonwealth an annual savings of approximately $2.7 million. The contract has now become a model for other states.
Representation of manufacturing entity in asset-based lending transaction. Powell Trachtman was retained by a national manufacturing entity to negotiate and finalize a new lending relationship after the client's longtime bank refused to extend the client's credit facility. The transaction involved an eight figure credit facility including a real estate term loan and revolving credit arrangements with international letters of credit. The firm successfully consummated the deal within two weeks.
Purchase and financing of recreational facility. Powell Trachtman was retained to assist a partnership's effort to purchase the real estate and business of a tennis and swimming recreational facility. The firm developed and creatively negotiated favorable seller financed financial terms in view of the unavailability of financing from institutional lenders.
Representation of retail distributor in acquisition of store locations. Powell Trachtman was retained by a national retail manufacturer/distributor for the purpose of negotiating and finalizing an agreement involving the purchase and lease transfer of 12 retail stores.
Sale of distribution firm. Powell Trachtman was retained to negotiate the stock sale of a seafood distribution firm to a West Coast concern, including the transfer of certain liabilities and the takeover of a lease for the client's plant and distribution warehouse.
Representation of company in the negotiation and drafting of executive employment agreements. As part of an expansion plan, a manufacturing company hired two high-level executives and retained Powell Trachtman to negotiate and draft employment agreements that included tax-advantaged options and incentives, sophisticated change of control provisions, and complex profit sharing and bonus provision. The executives were represented by major New York law firms. We successfully completed the transactions.
Representation of sellers of vending firm. Powell Trachtman was retained to represent the owner of a vending company in a sale to an individual investor. In addition to the purchase and sale, the transaction was complicated by the need to negotiate and draft an arrangement whereby the owner continued to operate the company in exchange of a continuing "piece of the action" on terms and for a period suitable to the owner. The deal was successfully consummated.
Negotiation and finalization of software transfer transaction. A Powell Trachtman client made a deal with a software development company in which the development company was to create certain software for the exclusive use of the client. Various problems and issues developed which Powell Trachtman was retained to resolve. We did so, and then created a series of complex agreements that effectively enabled the client to utilize the software on an exclusive basis while at the same time allowing the development company to utilize certain components of the software for other purposes.
Negotiation and finalization of employment and software transfer deal. One of Powell Trachtman's clients had for many years worked with an independent contractor which designed and owned all of the rights to a software program that the client used in the key aspects of the client's operations. The client retained the firm to negotiate an arrangement in which the client would obtain all rights to software, and in which the client would hire the key software developer as an employee, subject to noncompetition and nonsolicitation covenants. The transaction was successfully completed.
ESTATE PLANNING AND RELATED MATTERS
Creative estate tax planning for the owner of a Subchapter S Corporation. The owner of a substantial S-Corporation with a healthy cash flow retained Powell Trachtman to create an estate plan. The owner wanted to divide the ownership of the company at his death among several trusts for his minor children. The problem was that the proper type of trust for the job, a Qualified SubChapter "S" Trust, mandated current income distributions, and the owner wanted to accumulate income inside the trusts. We devised a unique solution involving payment of the corporate income into a custodial account which, under Pennsylvania law, could survive until each minor's twenty-fifth birthday. The upshot was protection of the corporation's S-election and the minimization of tax liabilities, while ensuring that each minor's inheritance was professionally managed and secured.
Successful negotiation with the IRS to eliminate mounting interest and penalties for estate heirs. The executor of an estate retained us to disentangle an escalating nightmare. The decedent had owned a sole proprietorship whose business records were unintelligible and, even worse, the decedent had not filed current tax returns. The executor faced mounting IRS interest and penalties, and was unable to file the necessary income tax returns, estate and inheritance tax returns, and fiduciary income tax returns. We successfully worked with the IRS, completed all necessary returns to its satisfaction, eliminated the continuing interest and penalties, and completed the administration of the estate.
Updating estate planning documents reveals major flaws. A seriously ill client retained us to assist him in his effort to update his estate planning documents. As often occurs, our review revealed outdated provisions that would have seriously compromised the amount he would have been able to pass to his surviving spouse. Our client had created a trust for his surviving spouse in the amount of the maximum federal tax exemption that existed at the time his estate plan was completed. The client's will was created years ago, when the exemption was much less, making the risk of a 50% federal estate tax more imminent than the risk of overfunding a trust for his spouse. As the exemption increased over the years, however, the static funding formula in the trust became outdated. We found a way to meet our client's goals, eliminate the tax risks, and provide our client with the peace of mind he sought.
Creation of family limited partnership. Powell Trachtman was retained by family members to create a tax-advantaged and practical mechanism to insure that a valuable family property would remain within the family's ownership and control. The firm created a working family limited partnership that satisfied the diverse interests of all family members.
Creative estate planning for individual to minimize estate taxes. A Powell Trachtman client with a multi-million dollar estate sought the firm's advice respecting the minimization of estate taxes. The firm devised a unique and novel mechanism involving an intentionally defective grantor trust that will result in substantial tax savings.
Settlement of family estate dispute. Powell Trachtman defended a family member against the claims of siblings who were asserting improper conduct by our client in the handling of the personal and financial affairs of their elderly parent. The case was resolved by a negotiated settlement in which no finding of improper conduct was made against our client, and in which our client received the majority of the parent's disputed estate as compared to the combined total received by her three siblings.
