2016 News

  • Capital Strategies for Privately-Held Businesses

    By: Peter C. Sullivan
    Appropriate working capital is the oxygen of emerging and mid-sized companies; whether it comes from a traditional lending institution, from a wealthy friend or relative, from a network of angels, or from investors who find value in its products or services. Entrepreneurs and management should consider this post as an overview of critical components for raising capital.

    Business Plan

    Benjamin Franklin said, “[i]f you fail to plan, you are planning to fail.” Raising capital requires a great deal of planning. Companies need to detail all aspects of its operations, from its mission purpose, vision for future growth, product or service offerings to target audiences, production and distribution plans, and governance related structure and procedures. Today, investors are more sophisticated, and the number companies seeking capital is greater than ever; investors want detailed business plans to understand both a company’s visions and its intended use of investment proceeds.

    Capital Evaluation

    Once the business plan is complete, Companies can begin to determine the capital raise requirements. Capital needs serve an array of purposes; initial capital is used to launch a new business venture and to position a company for its next level of growth. Determining capital needs requires business acumen and a realistic snap shot of a company’s needs. Assume projects will cost more and take longer to accomplish, therefore, build in contingencies to account for anticipated hiccups. Investors understand that early stage businesses run on shoestring budgets; they also understand just as many fail –if not more – than succeed. So, if your projections realistically show a need for a $1M round of funding, don’t merely seek $500K, seek the full amount.

    Business Valuation

    Initially, you may not need to hire a professional valuation company; but, you will need to determine the potential value of your company in the market.  Valuation prior to capital infusion and post-infusion is beneficial to management and investors alike. Determining valuation is helpful in determining how much equity you will need to give up to realize the capital infusion required. For example, if you need to raise $750K, and your business is worth $5.5M, you can expect to give up around 13.6% of the company. If the company’s valuation is lower, and the raise remains the same, a larger equity stake in the company should be expected. Often times an owner’s valuation and an investor’s (or valuation firm’s) valuation are drastically different; it is because of this disparity that professional valuation firms are critical to appropriately value a business and offer equity.

    Debt versus Equity?

    Get comfortable with letting go of a certain amount of equity in your company. Big picture thinkers understand that the inclusion of equity financing and healthy debt financing make your company an attractive value proposition. Investors appreciate a “business mindset” from founders/owners; this healthy approach will pay dividends during growth.

    Debt is any form of a loan with intent to repay the lending party. In a traditional debt transaction, meaning debentures or promissory notes, the investor receives return of principal loaned plus an interest rate paid over the life cycle of the debt contract. In a convertible debt transaction, the investor possess an option to either receive repayment of principal and interest, or, convert the debt obligation into an equity security of the company.

    Equity transactions should always be documented. If your company issues shares, have appropriate agreements (subscription, shareholders, warrants, options, etc.) in place and uniformly use them. Treat your company as if it was as big as Google or Twitter, and keep good records and make sure each of your equity documents comport with other governing documents (Bylaws, Operating Agreement, Limited Partnership Agreement, etc.).


    Capital funding comes from a wide range of sources, from founders, friends, and family members who provide the initial seed capital to launch a new business venture. Traditional lending institution extension of credit or SBA financing, private placement offerings or brokerage firms, or even contacts with a company and its officers and directors can be other sources of seed capital. Your target audience and pool of investors with directly correlate with the capital raise, industry participation, and the problem the product or service solves.

    Securities Law Compliance

    Generally speaking, if you take money from someone else to use in your business, you have engaged in a securities transaction which is governed by both federal and state securities law. Good news is that emerging and mid-market companies can utilize certain exemptions to comply with both sets of regulations. However, all securities transactions, even exempt transactions, are subject to anti-fraud provisions of the federal securities law. This means that the company and its management will be responsible for false or misleading statements that the company or others on its behalf make regarding the issuer, the securities offered, or the offering itself, whether conveyed orally or in writing. Companies should always prepare for the time when the initial seed capital is exhausted. A company’s lawyer can assist and advise founders/owners with the private placement process including traditional private placement offerings, Rule 144 offerings and Regulation S offerings. Additionally, special attention should be given to the Jumpstart Our Business Startups (JOBS) Act of 2012, which legalized the offer and sale of small business securities by issuers via crowdfunding, and, Fixing America’s Surface Transportation Act (FAST Act), which created new exemptions from registration for resales of restricted securities and amends certain regulations to facilitate capital-raising by emerging growth companies.

  • Illinois Supreme Court Narrowly Interprets the Scope of the Illinois Snow and Ice Removal Act For Residential Property Owners

    By: Patrick E. Foppe, Lashly & Baer, P.C.
    The Illinois Supreme Court recently resolved a conflict as to the scope of the immunity provided under the Illinois Snow and Ice Removal Act (745 ILCS 75/0.01 et seq.). There had been a split among the appellate districts as to whether the immunity provided by the Act was limited to the consequences of snow removal efforts, or whether the immunity extended more broadly to negligence arising from a defective condition on the property. In the case, Murphy-Hylton v. Lieberman Management Services, Inc., the Supreme Court adopted the narrower view of the immunity, following closely to the words of the statute. The Supreme Court unanimously held that the Act provides immunity to residential property owners (including any “lessor, occupant or other person in charge of any residential property, or any agent of or other person engaged by any such party”) from claims of liability caused by icy sidewalks which result from negligent snow and ice removal efforts, “but it does not extend to immunize them from claims of liability from injuries allegedly caused by icy sidewalks which result from an otherwise negligent failure to maintain the premises.” The Act does not apply to owners of non-residential commercial premises.

  • Scrutiny Increases on Smaller HIPAA Breaches

    Monday, November 8, 2016 – Stuart J. Vogelsmeier published an article, “Scrutiny Increases on Smaller HIPAA Breaches” in the Fall 2016 issue of Gateway Gatherings, which is the newsletter of the Greater St. Louis Chapter of the Healthcare Financial Management Association. Visit the HFMA – St. Louis website to view Gateway Gatherings.

  • Lashly & Baer Team Members Support KidSmart

    The attorneys and team members of Lashly & Baer, P.C. recently visited Vogt Elementary in Ferguson, Missouri to deliver new school supplies with the KidSmart organization. The volunteers helped to deliver bags full of new school supplies, treats and spent time with the children talking to them about their path to becoming attorneys and helping them see their own potential. They also enjoyed helping them with a fun art project too.

    In addition to our sponsorship of the recent Wish Bag event, Lashly & Baer, P.C. also supported KidSmart with a “Push for Pencils” supply drive this fall.

    Lashly & Baer, P.C. believes that it is important to support organizations that help children in the communities where we live and serve. KidSmart’s mission is to ensure that children and their classrooms in the Greater Metropolitan Saint Louis Area have the basic tools for learning by transferring, at no cost, the community’s surplus supplies and merchandise into the hands of teachers for school children in need. To learn more about KidSmart visit http://www.kidsmartstl.org/.

    Pictured below are attorneys Peter C. Sullivan and Brian J. Malone along with team members Linda Clouse and Niki McCormick.

    IMG_8562 IMG_8568 IMG_8572 IMG_8578




  • Lashly & Baer, P.C. Attorneys Assist In Important Business Partnership Agreement

    Lashly & Baer, P.C. attorneys Stuart J. Vogelsmeier and Michael D. Regan represented Resource Optimization & Innovation in its negotiation with TPC, which resulted in TPC becoming a member of ROi’s group purchasing organization.

    TPC, a network of independent healthcare providers and regional purchasing coalition across Arkansas, Missouri and Texas, has signed an agreement with Resource Optimization & Innovation (ROi), a provider-owned supply chain organization, for access to ROi’s comprehensive cost management and supply chain services including strategic contracting and sourcing, utilization management, service line management, clinical and operational consulting, clinical and supply chain analytics, private label products and custom surgical packs. Through the multi-year agreement that begins December 1, 2016, ROi will serve as the preferred group purchasing organization (GPO) for TPC’s provider network.

    To read more details of their partnership, click here.

  • Kevin L. Fritz Named to the USLAW Network Executive Committee

    Lashly & Baer, P.C. would like to congratulate Kevin L. Fritz on his recent appointment on the 2016-2017 USLAW Network Board of Directors. Fritz has been a  long time member of the Board of Directors but this year he has been asked to join the Executive Committee as a Special Projects Director.  The appointments were recently announced during the USLAW Network’s annual member meeting in Colorado Springs, Colorado on September 22.

  • Small Business Monthly Names Lashly & Baer, P.C. a Best In Value 2016

    Small Business Monthly has recently selected Lashly & Baer, P.C. as on of their Best in Value 2016 businesses. Lashly & Baer, P.C. is one of only 26 businesses selected for this honor. The Best in Value 2016 list is featured in the October issue of Small Business Monthly.


  • Stuart J. Vogelsmeier Selected as a Best Lawyers in America 2017

    St. Louis, MO, United States — Lashly & Baer, P.C. is pleased to announce that Stuart J. Vogelsmeier, has been named for the first time to the 2017 Edition of The Best Lawyers in America, the oldest and most respected peer-review publication in the legal profession. Stuart has been recognized for his work in Health Care Law along with five other Lashly & Baer, P.C. attorneys.

    Lashly & Baer, P.C. would like to congratulate the following attorneys named to The Best Lawyers in America list:
    John Fox Arnold, Corporate Law
    Stephen L. Beimdiek, Personal Injury Litigation – Defendants
    Kenneth C. Brostron, Medical Malpractice Law – Defendants and Personal Injury Litigation – Defendants
    James C. Hetlage, Employment Law – Management
    Stuart Vogelsmeier, Health Care Law
    Richard D. Watters, Health Care Law

    Best Lawyers has published their list for over three decades, earning the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals. Lawyers on The Best Lawyers in America list are divided by geographic region and practice areas. They are reviewed by their peers on the basis of professional expertise, and undergo an authentication process to make sure they are in current practice and in good standing.

  • John Fox Arnold Named 2017 Best Lawyers® “Lawyer of the Year” in St. Louis

    St. Louis, MO, United States — Lashly & Baer, P.C. attorney John Fox Arnold was recently selected as 2017 “Lawyer of the Year” for Corporate Law in the St. Louis area.

    Only a single lawyer in each practice area and designated metropolitan area is honored as the “Lawyer of the Year,” making this accolade particularly significant. These lawyers are selected based on particularly impressive voting averages received during the peer-review assessments.

    Receiving this designation reflects the high level of respect a lawyer has earned among other leading lawyers in the same communities and the same practice areas for their abilities, their professionalism, and their integrity.

    Since it was first published in 1983, Best Lawyers has become universally regarded as the definitive guide to legal excellence.
    About John Fox Arnold
    John Fox Arnold has served as general counsel and special counsel to public agencies, represented firms engaged in the underwriting and public offering of securities, and has represented developers and owners during acquisition and construction of governmental, commercial and urban redevelopment projects. In addition, he has structured sales tax rebate, tax abatement and tax increment financing transactions, and served as counsel in tax-incentivized transactions. Mr. Arnold has served as bond counsel, special counsel and underwriter’s counsel for general obligation and revenue bond obligations. Billions of dollars have been invested in projects in which he has been engaged as counsel.

    John earned his LL.B. from the University of Missouri-Columbia School of Law and has been selected by his peers for inclusion in The Best Lawyers in America® 2016 in the field of Corporate Law each year since 2005 and is peer rated AV® PreeminentTM with Martindale Hubbell.

  • Kenneth C. Brostron and Wendy J. Wolf Successfully Defended Nephrologist

    Kenneth C. Brostron and Wendy J. Wolf successfully defended a Nephrologist in a seven day jury trial in St. Louis County. The plaintiffs sought over eleven million $11,000,000 for the death of their eighteen year old daughter alleging that the care resulted in hypoxemia, brain injury and ultimately death.

  • Eighth Circuit Holds that Individual Acting as a Pilot to an Oversize Load Can Be Held Negligent for Causing Accident

    The Eighth Circuit Court of Appeals in Brown v. Davis, 813 F.3d 1130 (8th Cir. 2016) recently held that an individual acting as the pilot of an oversize load had duty to stop traffic or take other cautionary measures before allowing oversize truck and trailer to cross narrow bridge.

    The wrongful death case was bought by the family of a man who was killed when a log skidder fell from a truck onto a car while crossing a bridge. The family argued that that the individual acting as the pilot of the oversize load, who was also the owner of the motor carrier, was negligent for failing to close the bridge to oncoming traffic. The Eighth Circuit concluded that the record was sufficient to prove that the truck passenger had a duty to take precautions against the risks involved in transporting a wide load over a narrow bridge since the practice was to call law enforcement to block the bridge or to block it themselves. Further, the court found evidence of the defendant’s failure to stop traffic and his misleading signal was sufficient to find that the defendant failed to use ordinary care, and sufficient evidence support the jury’s verdict finding that the defendant acted negligently and caused the man’s death. The case does not discuss whether any oversize load permits were at issue. Attached is a copy of Brown v. Davis.

  • Vogelsmeier Gives Presentations On Important Compliance Topics

    Attorney, Stuart J. Vogelsmeier spoke at the Illinois Critical Access Hospital Network’s Compliance Workshop in Springfield, Illinois on “Anti-Kickback and Stark Law Update” and “Perks and Freebies: Fun or Fraud” Click on the titles to view the presentations.

  • O’Brien Speaks on Retirement Plan Compliance

    Attorney, Rhonda A. O’Brien spoke to a group at the Retirement Plan Advisors’, 2016 Defined Contribution Retirement Plan Committee Seminar. Her session “Keeping Plan Documents Up to Date – Restatements and IRS Required Amendments” addressed the importance of plan compliance and making sure that your plan documents met current IRS requirements.  Please contact Rhonda or your Lashly & Baer, P.C. attorney for more information.


  • OIG Issues New Guidance on Permissive Exclusion

    Attorney, Stuart J. Vogelsmeier published an article, “OIG Issues New Guidance on Permissive Exclusion” in the Spring 2016 issue of Gateway Gatherings, which is the newsletter of the Greater St. Louis Chapter of the Healthcare Financial Management Association. Click here to download a copy of the article, or visit the HFMA – St. Louis website to view Gateway Gatherings.

  • Handling Marijuana Issues in Your Trucking Case

    Recently, Patrick E. Foppe wrote an article for DRI’s magazine For The Defense titled ““Handling Marijuana Issues in Your Trucking Case.” Marijuana is the second most prevalent psychoactive substance involved in driving under the influence cases. As legalization efforts continue, attorneys should prepare to handle more marijuana issues in trucking cases. To read more about this from their April 2016 issue, CLICK HERE.

  • Regan Represents Lender In Connection With Missouri’s PACE Program

    Lashly & Baer attorney, Michael D. Regan recently represented a lender in connection with a loan to provide funding pursuant to the Missouri Property Assessed Clean Energy (“PACE”) program.  PACE provides a framework for loans for clean-energy improvements that are repaid through a special property tax assessment.

  • Did You Know? Missouri Approved for Data Mining to Identify Medicaid Fraud

    Missouri is one of five states which the Office of Inspector General (OIG) of CMS has approved for funding the costs of data mining to identify Medicaid fraud through the screening and analysis of provider data.

    If you or your facility has been audited, investigated, or an action filed against you or your facility to recoup Medicaid funds, we can help. For more information, please contact Richard D. Watters at rdwatters@lashlybaer.com, or contact your Lashly & Baer attorney.

  • Richard D. Watters and the Senior Living Forum present Dementia Care: Symptoms, Treatment, Best Practices

    Lashly & Baer partner, Richard D. Watters, along with the Senior Living Forum Affiliated Partners, will be discussing information on managing dementia, with and without medication, and on how to change culture to provide meaning and purpose to residents.

    Learn how to define dementia, distinguish it from delirium, and manage its symptoms successfully with non-pharmacologic programs or medication alternatives to antipsychotics. Learn best-practices for medication utilization in the management of dementia. Also, learn how to change the culture of your organization to support resident choice and autonomy and to provide meaning and purpose for elder residents in a directed environment. Understand the role of leadership in supporting a resident directed culture. You will not want to miss this very timely seminar from experts in the industry as well as the opportunity to network with your peers!

    The discussion will be held on Tuesday, April 5, 2016 from 2:45pm to 6:00pm at the Frontenac Hilton – The Frontenac Room. If you would like to attend this informative discussion, please email Tiffany Maggard at tiffanym@heffins.com. Click here to view the event invitation.


  • St. Louis Business Journal – Coolest Office Spaces

    Recently our office was recognized by the St. Louis Business Journal as one of the city’s “Coolest Office Spaces.” The review of our space is below or a full PDF version is also available. Our office was also photographed for the article. Click on the slideshow to get an inside look at our building.

    Coolest office spaces: Drawing on tradition, history at Lashly & Baer

    For the Lashly & Baer office downtown, visitors have to enter through Corinthian columns at the front of the building adorned with a limestone façade.

    The law firm’s office manager Kara Brostron said the ancient Greece look is just the beginning of the unique features incorporated into the 27,000-square-foot building. The firm moved into the building in 1979, the year after it was remodeled. Brostron said several features are original to the structure that was formerly a bank.

    Among them are the “Trova sculpture and bank vault door below, she said. “The firm’s law library is currently in the vault and we have plans to remodel it in 2016 with a conference room and workrooms. No two offices are alike. There is a great deal of original walnut paneling some of which was reused in various offices.”

    In addition to the Corinthian columns, several other artistic features are included in Lashly & Baer’s setup. Brostron said an eagle is prominent on the top of the building along with a trompe l’oeil on the east wall that was designed and painted by Patrick Schuchard in the late 1980s.

    “The first thing that hits the visitors when they enter is exaggerated crown moldings with a Trova sculpture and large vault door through the well below,” she said. “The name of the Trova sculpture is ‘The Tree.’”


  • Vogelsmeier to Present at Upcoming Physicians Leadership Institute

    Stuart J. Vogelsmeier has committed to speak at the upcoming Physician Leadership Institute. The Physician Leadership Institute is a five-session, high intensity program that focuses on the business side of medical practice, with a specific slant toward developing leadership and management skills. Stuart will be speaking on the topic “Legal Issues that Impact your Practice.” His presentation will be during their February 27th session. For more information about these sessions, presented by the St. Louis Metropolitan Medical Society, please visit their site or view the event flyer.

  • FMCSA Proposes New Rule for Determining Safety Fitness of Motor Carriers

    The Federal Motor Carrier Safety Administration (FMCSA) announced on January 15, 2016, a rulemaking proposal to modify how the agency determines safety ratings of motor carriers. The proposed rule would significantly change FMCSA’s safety fitness rating methodology by integrating on-road safety data from inspections, along with the results of carrier investigations and crash reports, to determine a motor carrier’s overall safety fitness on a monthly basis.

    The proposed rule would replace the current three-tier federal rating system of “satisfactory–conditional–unsatisfactory” for federally regulated commercial motor carriers (in place since 1982) with a single determination of “unfit,” which would require the carrier to either improve its operations or cease operations.

    Once in place, the proposed rule will supposedly allow FMCSA to assess the safety fitness of approximately 75,000 companies a month. By comparison, the agency currently investigates approximately 15,000 motor carriers annually.

    The proposed methodology would determine when a carrier is not fit to operate commercial motor vehicles in or affecting interstate commerce based on:

    The proposed rule purports to incorporate data sufficiency standards and would require that a significant pattern of non-compliance be documented in order for a carrier to fail a BASIC.

    When assessing roadside inspection data results, the proposal uses a minimum of 11 inspections with violations in a single BASIC within a 24-month period before a motor carrier could be eligible to be identified as “unfit.” If a carrier’s individual performance meets or exceeds the failure standards in the rule, it would then fail that BASIC. Evidently, the failure standard will be fixed by the rule. A carrier’s status in relation to that fixed measure would purportedly not be affected by other carriers’ performance.

    Failure of a BASIC based on either crash data or compliance with drug and alcohol requirements would only occur following a comprehensive investigation.

    You are encouraged to review the notice of proposed rulemaking, to share it with your clients, and to submit comments. The public comment period will be open for 60 days. FMCSA will also be providing a reply comment period allowing for an additional 30 days for commenters to respond to the initial comments.

    For more information on FMCSA’s Safety Fitness Determination proposed rule, including a full copy of the notice of proposed rulemaking, visit www.fmcsa.dot.gov/sfd.

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