Category Archives: Blog

What are the Pipeline Easement Rates in Texas?


Oct 18 2018

By:   Alejandro L. Padua,  Attorney

Head of Eminent Domain and Condemnation Practice

Padua Law Firm, PLLC

Pipeline Easement Rates in Texas

If a pipeline company has contacted you about installing and operating a pipeline across your property, there are many factors to consider before negotiating and granting the pipeline easement or right of way agreement. An easement generally gives the pipeline company a legal property interest in your property for a specific purpose, usually the construction, operation, and maintenance of the pipeline. Although not the only important term, a primary concern is the monetary compensation the company is offering you in exchange for the easement.  The going rate of a pipeline easement in Texas reflects many factors, each of which you should be aware of and incorporate into your analysis..

  1. Location – Location – Location: Very similar to the age old saying in the context of real estate investment, the location of your property is very important in your analysis. The county in which your property is located is one of the first considerations in determining the price of the pipeline easement.  Furthermore, the location of your particular property within the county where it is located is also of primary importance.  Similar transactions in your county should be analyzed and  researched to ensure that the pipeline easement payment is an accurate reflection of the market.  Please note, however, that even though pipeline easements are routinely bought and sold on the open market like any other real property transactions, many Courts around the country have rejected the price per rod of a pipeline easement as well as the price per linear foot of a pipeline easement valuation methods.    Because of this counter-intuitive law, litigation involving pipeline rights of way are many times focused on different valuation methods and arguments that only experienced counsel, with the help of retained expert appraisers, land planners, and engineers, can properly prosecute in Court.
  2. Size of the Pipeline Easement: Generally, the more land (usually measured in linear feet, rods, acres, or square feet) the pipeline company wants to use, the more it will have to pay you. In the typical market for transactions of utility easements between pipeline and utility companies, the easements or right of ways are valued on a per rod or per linear-foot basis. Unfortunately, not all pipeline companies use these customary valuation standards and as stated above, Courts have also rejected that valuation method.
  3. Current and Proposed Future Uses of Your Property: The current use of your property has a direct correlation with your property’s value. For example,  depending on whether it is commercial retail space, industrial, utility easement or corridor, farming, ranching, housing, etc., the value of your property, and therefore an easement thereon, will depend on this particular use. The value of an easement could also increase if your property could be developed into a particular use in the reasonably foreseeable future.
  4. Product and Pressure of the pipeline: The type of product (i.e. crude oil, natural gas, natural gas liquids, etc.) and pressure of the pipeline are directly correlated to the safety of the pipeline. Generally, the higher the pressure and/or more toxic the product that will be flowing through the pipeline, the higher the cost of the easement. Be sure to ask the pipeline company for this information, as it may not provide it voluntarily.
  5. Macroeconomic Market Conditions of the Energy Industry: Though the energy sector is known for its boom and bust market cycles, usually the pipeline company seeking to condemn a right of way on your land is usually in good economic standing. You should make sure that the pipeline easement rate offered to you properly reflects favorable energy market conditions and corresponding pipeline activity if they are present.
  6. Effect of the Easement on the Rest of Your Property: When only part of your land is subject to the easement, it is known as a partial taking. The industry standard for calculating the value owed to you as the property owner is to determine the difference between the market value of all your property before the taking and the market value of the remaining property after the taking. This analysis also includes an analysis as to whether the construction of the pipeline will interfere with any of the activities currently allowed on the property, whether there will be a loss of agriculture on the land, and/or whether there will be any above-ground appurtenances such as compressors or valve sites. Another important factor to consider is the targeting of your property for future utility lines, as it is more attractive for another pipeline or utility company to lay a new line on property with already-existing utility lines. In sum, the more the remainder of your property is negatively affected by the Easement, the more the pipeline company should compensate you.
  7. Legal Terms of the Right-of-Way Agreement or Pipeline Easement: The legal terms of the right-of-way agreement are a vital point of negotiation for pipeline easement payments. Though it may seem tedious and not as important as the compensation or price per rod paid, carefully reading through all provisions of the agreement will save you from future conflict with the pipeline company, protecting the value of your property, and generally assure your interests are permanently protected. Read through this legal guide on important provisions of a pipeline easement agreement to make sure your bases are covered.
  8. Competency of Your Legal Counsel: If you decide to engage legal counsel to negotiate a favorable rate for a pipeline easement on your property, be sure to research and engage attorneys who have experience and success negotiating with pipeline companies because this is usually a big factor. The pipeline easement attorneys at Padua Law Firm, PLLC have fought for numerous property owners across Texas and have a track record of significantly increasing compensation from pipeline companies as well as permanently protecting the property rights via the legal terms of the agreements. Our attorneys are well connected to other real estate professionals, appraisers, land planners, and engineers who know how to fairly and accurately value property and fight for the compensation you deserve.

Ultimately, determining the rate for a pipeline easement is property-specific, easement-specific, pipeline-specific, and involves the consideration of several factors.  The process can become a complicated. The pipeline company, because it is in their best interest, will inevitably fight to keep the rate as low as possible, while you as the property owner must do the opposite. Don’t let the pipeline company’s experience and usually superior bargaining power undermine the value of your property. A prudent landowner should contact an attorney experienced in easement negotiations before executing a pipeline easement agreement.  If you would like professional counsel to help you negotiate the best pipeline easement rates on your property, contact Padua Law Firm for a free consultation at 713-840-1411 or email at info@padualaw.com.

Startup Companies Mistakes to Avoid and Tips to Keep In Mind


Jun 01 2018

It’s hard to believe that companies such as Uber, Amazon, and Netflix began their incredibly successful journeys as startups. Many other services Americans use on a frequent basis probably began as startups, too—Postmates, Dropbox, and Slack, to name a few. These companies are examples of strategic funding and marketing decisions made with the advice of great corporate lawyers that eventually led to the creation of large corporations.

Startup companies obviously have the potential to grow into largely profitable publicly held companies. However, many startups fail to appreciate the legal issues that can make or break them. If you are thinking about getting into the startup industry or are currently involved in one, be sure to consult with an experienced corporate and securities lawyer to advise you on conforming to the many legal requirements the industry presents.

Navigating the Path to Becoming a Successful Startup

Whether you are new to the startup industry or a startup guru, there are several legal issues you should keep an eye out for. Being proactive in assessing these issues will set your company on the right path to becoming profitable and marketable.

  •  Selecting the Right Type of Legal Entity from Early in the Company’s Development

Corporate formation is one of the most important steps in ensuring a startup’s success. The company and its founders need to assess their goals and choose the type of legal entity that best helps to further those goals. Further, the type of entity that is chosen must be able to insulate founders from personal liability and allow the business to issue equity compensation or receive venture capital funding. These are among the many factors that must be taken into consideration when deciding which legal entity is best suited for the startup from a legal, tax, and investment perspective.

  • Agreeing on and Properly Documenting Founders’ Roles and Responsibilities

Startups are often founded by a close group of colleagues, family, or friends. However, a casual nature of conducting business should be avoided. Each role and relationship within the company should be formalized in writing, including each person’s title and responsibilities. Decision-making protocols, dispute resolution mechanisms, and ownership and exit strategies should also be put into effect in policies and handbooks, as well as maintaining a company minute book with written resolutions that have been signed off on.

  • Complying with Securities Law when Raising Capital

Again, do not let the seemingly casual nature of a startup get you in trouble with securities laws. Federal and state securities laws and regulations are difficult to comprehend and failure to abide by them can lead to the downfall of any startup. Capital-raising and finding suitable investors for your particular business are both critical to the success of your startup and involve securities laws. An experienced securities attorney will identify any potential securities issues that your startup may face, and address them accordingly.

  • Properly Structure any Equity Plan for the Benefit of Executives and Employees of the Company

Establishing equity and incentive plans carries legal implications and tax consequences that must be adequately addressed. Some of the issues to consider in this area include how much equity should be designated for employees, and the consequences of an equity plan for future investors. These actions also implicate securities laws, meaning that a startup company is best advised to keep abreast of these issues through the advice of a corporate lawyer.

  • Properly document Customer, Supplier, Employee, and Other Key Third-Party Relationships

It is best practice to create forms and agreements that properly memorialize arrangements with customers, suppliers, and employees. Also important are well-drafted commercial contracts, which should include provisions that address indemnification and limitation of liability.

Successful Startups have Great Lawyers

The success of your startup company depends on a myriad of factors. Don’t let the legal and regulatory issues that arise in the startup formation process keep your company from reaching its full potential. The most effective way to navigate the many legal issues and requirements is to consult an experienced corporate and securities law attorney who can identify and address any potential issues and opportunities for growth. Taking this proactive measure will serve to further your startup’s goals and create a solid business foundation.

Bitcoin and Cryptocurrencies – Great Opportunity or Risky Business?


Apr 03 2018

Chances are that you have heard the terms “Bitcoin,” “Ethereum,” “virtual tokens,” or “cryptocurrency” at some point within the last couple of years. Someone has probably even told you to invest in them. Or maybe you’re an entrepreneur that wants to jump on this new wave of alternative capital raising for your venture. But first, what are they?
Cryptocurrency

Cryptocurrency is a form of digital currency that essentially removes the middle-man—banks and the government—from currency transactions. This new form of “money” boasts its unique level of security, drawing on the cryptography element of this trend.

Cryptography is the process of turning basic information into a complex code, making the information hard to access, steal, or alter. These codes, or algorithms, are used to create and control cryptocurrencies and their transactions. Through a system called “blockchain”, users are able to use these complex algorithms to keep records of balances and transactions and publicly verify their exchange of cryptocurrency.

Unlike conventional forms of currency, cryptocurrency exists in limited circulation, making it more valuable. As opposed to working on an inflationary model, crypto coins are deflationary, meaning that the number of coins in circulation will remain the same, but the value of the coins increases. Though cryptocurrency has not reached a point of payment ubiquity, it has a high investment appeal, which you should approach with caution.

Why is Cryptocurrency Becoming Popular?

As noted, cryptocurrencies offer a range of benefits in comparison to conventional currencies, including:

  • The ability to make transfers without an intermediary and without geographic limitation.
  • Finality of settlement.
  • Lower transaction costs compared to other forms of payment.
  • The ability to publicly verify transactions.
  • Personal anonymity and the absence of government regulation or oversight.

The benefits make it seem way too hard to pass up whether you want to invest or offer Initial Coin Offering (ICO). But, not so fast. The government is keeping a close eye on these transactions because they have been used to take advantage of many and are risky.

Dangers to Watch Out For

If you are considering investing in any coin offerings or cryptocurrencies, beware of the following risk factors:

  1. Minimized investor protections in the cryptocurrency and ICO markets, which can lead to more opportunity for fraud and manipulation.
  2. Unregistered ICOs may violate federal securities laws.
  3. The SEC has yet to approve listing and trading any exchange-traded products that hold cryptocurrencies or other assets related to cryptocurrencies.
  4. Amplified risk due to the cross-border nature of the cryptocurrency and ICO markets.

Hire Legal Counsel to Protect Your Investment or Help You Make your ICO Compliant

Because most offers and sales of digital assets are subject to the requirements of the federal securities laws, issuers must register offers and sales of digital assets unless a valid exemption applies. If the offerings are unregistered, issuers could potentially be liable for violations of the securities laws. If you want to raise capital or invest in coins or cryptocurrency offerings, make sure you obtain the proper information and legal guidance from a corporate lawyer experienced in startups, blockchain law and federal securities laws.

Securities exchanges that provide for trading in these securities must also register unless they are exempt. The facts and circumstances of each case, including the economic realities of the transaction, will be considered to determine whether a particular transaction involves the offer or sale of a security.

The ease, independence, and anonymity of cryptocurrencies and ICOs clearly come with strings attached. The many legal and regulatory hurdles and requirements are not easy to navigate, and failure to appreciate them can jeopardize your investment in this innovative market. Before investing in virtual assets and becoming a market participant, be sure to consult a lawyer with corporate experience to advise you on protecting your investment and ensuring it conforms with securities laws. Contact Padua Law Firm today at 713-840-1411.

Piercing the Corporate Veil – Minimizing Your Risk


Feb 26 2018

One of our roles as corporate lawyers is to use the business organizations code and applicable case law to protect our clients with the principles of limited liability. Indeed, that is why our various corporate forms exist – to shield shareholders and owners from personal liability for obligations of the corporate entities. However, in certain cases, the law must also protect people from those who try to take advantage of legal formalities to perpetrate fraud on another person or business. That is to say, a corporation or other corporate form should not be misused as an unfair device to achieve an inequitable result or perpetrate fraud.

For these reasons, the Supreme Court of Texas has identified instances where the corporate fiction can be disregarded. In Castleberry v. Branscum, our state Supreme Court allowed “piercing the corporate veil” when the corporate form is being used as a sham to perpetrate a fraud, as an alter ego of another corporation, or as a means of evading an existing legal obligation, achieve a monopoly, circumvent a statute, or justify a wrong. When a court pierces the corporate veil, it disregards the corporation, and holds its shareholders liable by imposing a type of vicarious liability for an underlying cause of action.

Shortly after the Supreme Court’s decision, there was push-back from the corporate world, and our legislature in Texas decided to limit the ability to pierce the corporate veil, focusing on cases with the presence of actual fraud. Still, it is important for honest entrepreneurs and founders of corporations and other business entities to minimize the risk that a court will impose liability by piercing its veil.

Below are a few ways to minimize such risk:

  1. Adequately capitalize and insure your business entity.
  2. Avoid using a corporation as a mere conduit or shell.
  3. Ensure that an owner does not exercise excessive control over a corporation.
  4. Comply with all corporate formalities.
  5. Keep separate books and records between a corporation and its shareholders.

While these principles hold true with LLCs as well, courts have also applied less weight to the control factor for LLCs compared to corporations. If you are an entrepreneur and have been using business organizations, our firm can help you navigate the sometimes-murky waters of veil piercing.

At Padua Law Firm PLLC, our corporate practice group has counseled a wide variety of small and medium sized businesses in their corporate structures, formations, asset protection, and related corporate matters and formalities.   Call us today to schedule a free consultation to discuss your case.

Important Notice to Property Owners Along Buffalo Bayou And The West Fork Of The San Jacinto River


Sep 13 2017

Important Notice to Property Owners Along Buffalo Bayou And The West Fork Of The San Jacinto River Who Were Damaged By Flooding – You Have Potential Inverse Condemnation Claims

If your home or business property was flooded (or the flooding levels and duration was significantly increased) due to the flood water releases from the Addicks and Barker reservoirs or the Lake Conroe Dam, you may be entitled to financial compensation from the responsible and appropriate governmental body.  Such financial compensation can be obtained through claims of “inverse condemnation” against such governmental bodies including:  the Federal Government, Harris County Flood Control District, the City of Houston, and the San Jacinto River Valley Authority, among others.

For Many Flooded Property Owners, Your Only Option May be to Pursue an Inverse Condemnation Claim.   We offer Free Case Consultations and Contingency Fee (No Fees Unless You Recover) Legal Representation.           

Call us at (713) 840-1411.

addicks-barker reservoir and its surrounding area

What is Inverse Condemnation?

The 5th Amendment of the United States Constitution and Article I, Section 17 of the Texas Constitution protect property owners from damages or “takings” of their property by requiring just compensation for their losses. Typically, the government or other private companies with eminent domain authority (such as utility or pipeline companies) take direct action to acquire property from private owners by negotiating a purchase or initiating the eminent domain proceedings whereby the fair value of the property being taken is agreed upon or decided through formal or informal proceedings, and such value is paid to the property owners.   In an “Inverse Condemnation,” the condemning authorities first “take” or damage property without compensating property owners.  A property owner in this situation is then forced to file an “inverse condemnation” lawsuit against the government or other condemning entity.   This is usually done through an experienced inverse condemnation attorney.

Eligibility to Recover Damages with an Inverse Condemnation Lawsuit

Eligibility for Inverse Condemnation lawsuit described above depends on many factors and must comprehensively be analyzed by experienced eminent domain attorneys.  The 2 major groups that may be entitled to compensation are those that suffered flooding resulting from the following controlled releases:

Addicks and Barker Reservoirs and Flood Water Releases

If your home or investment property is located downstream of the Addicks and Barker reservoirs along the applicable portions of Buffalo Bayou, AND sustained flood damage commencing on or after Monday August 28th, (or the flooding significantly increased on or after such date) then you may be eligible for compensation.

If your property is located upstream of the Addicks and Barker reservoirs, AND sustained flood damage from Hurricane Harvey, then you may be eligible for compensation.

Lake Conroe Dam and San Jacinto River Valley Authority Flood Water Releases

If your home or investment property is located downstream of the Lake Conroe Dam along the applicable portions of the San Jacinto River, AND sustained flood damage commencing after the deliberate and intentional release of water from Lake Conroe (or the flooding significantly increased after such release) by the San Jacinto River Valley Authority, then you may be eligible for compensation.

I Heard About a Class Action Lawsuit Filed.  Should I Join An Inverse Condemnation Class Action Lawsuit?

We believe that each potential claim of each individual client whose property has been damaged is unique and requires an independent legal analysis to properly answer this question.  While it is true that many law firms in the Houston area have filed class action lawsuits in both State and Federal Courts, you are under no obligation and absolutely no rush to join a class action lawsuit.   Furthermore, depending on the facts of your particular case, the proposed class action lawsuit, and the jurisdiction each was filed in, your case may be better litigated individually.  In other words, you get your own lawsuit.

CONTACT AN INVERSE CONDEMNATION LAW FIRM – WE ARE AVAILABLE TO PROVIDE MORE INFORMATION AND REVIEW YOUR CASE — CALL 713-840-1411 OR EMAIL US.

In short, the best course of action, is to contact an experienced inverse condemnation lawyer that will take a personalized and thorough legal analysis of your case.  We are available to provide more information regarding these matters and collaborate with various well-respected property and engineering experts as well as other law firms throughout the Houston area.

Raising Capital Through a Private Placement of Equity Securities


May 01 2016

When an entrepreneur is starting a new business and needs to secure financing, one viable option is to raise money from investors.  Such private financing may be undertaken through a private placement.

Since you are essentially selling a portion of your company to one or more investors, you are subject to strict federal and state securities regulations. The Securities Act requires all offerings of equity to investors to be registered with the Securities and Exchange Commission (SEC) unless the offering can fall under an exemption.

The federal securities laws for both public and private offerings are based on the premise that investors in securities are best protected by the disclosure of all relevant information regarding the securities and the issuer. The underlying principle is that the issuer must disclose to investors anything material that a reasonable investor would want to know prior to making a decision to invest.

The Regulation D exemption for private offerings allows an entity selling stock, LLC units, partnership interests or other similar securities to avoid registering the sale of such securities with the SEC as long as the specific requirements are strictly followed.

Such private offerings, while exempt from registration, involve the drafting of an important disclosure document, also known as the “private placement memorandum” or PPM. The PPM should include a description of the business, the basic terms of the sale of securities, the projected return to investors, a business plan, and specific disclosures required under applicable federal and state securities laws depending on the nature of the private offering. Disclosure requirements may differ from state to state, depending on the state of residence of the investor.

Failure to properly include the above-listed items and other disclosures may subject the issuer to serious liability, including being forced to buy back the securities from the investor, as well as damages.

Also important is tracking each distributed copy of the PPM, including name and residential address of each recipient. This is because there are rules prohibiting general solicitation of investors.

To assure compliance with applicable law, an entrepreneur wishing to raise private capital should retain an experienced attorney to draft the PPM and provide guidance throughout the financing process. Padua Law Firm helps clients navigate the private placement process and minimize risk of liability under securities laws. The firm has represented both issuers and investors in private placement transactions from industries as varied as restaurant and hospitality, hotel construction, multi-family real estate, oil & gas funds, health & wellness, and senior housing.

BB’s Cajun Café Secures Private Equity Financing for New Location


Mar 28 2016

Padua Law Firm represented BB’s Café in its private offering of equity securities for its new restaurant in Pearland Texas, its sixth location in the Houston, TX area.

The issuer for the private placement offering that closed and fully funded in March 2016 is Pearland Tex-Orleans, Ltd. The offering successfully raised equity capital from accredited investors who are supportive of the unique Tex-Cajun brand.  Pearland residents can expect to enjoy BB’s po-boys, seafood platters, and the signature Tex-Cajun Virgin poutine at the new location in the very near future.

BBs Cafe Texas

Seasoned restaurateurs, like longstanding PLF client BB’s Café, know the importance of hiring an experienced corporate attorney well-versed in private placements to help with all aspects of the capital raising process. First-time restaurateurs need to be wary to avoid common pitfalls and risks and should consult with an experienced attorney to make the private placement process as smooth as possible.