“We’re honored to be recognized once again by Chambers and Partners,” said Darryl J. Horowitt, Founding Partner. “This reflects our team’s commitment to providing top-tier legal services tailored to the unique needs of our clients and the complex matters we help them navigate.”

Employees may daydream about quitting. Business owners daydream about exiting.

Studies show that up to 90% of business owners expect to sell or exit in the next decade. Unfortunately, nearly 80% have no written plan nor consulted an advisor about it. Whether you want to sell, pass your business to family, or wind it down, thoughtful planning can transform your company from a burden into your greatest asset.

This guide outlines three common exit paths and how experienced legal counsel helps you protect your wealth, legacy, and long‑term goals.

Option 1: Selling Your Business

Selling your business can provide liquidity, diversification, and relief from operational pressures. But a successful sale begins with preparation, and most deals fall apart because owners wait too long to plan.

The first consideration here is what price to sell your business. To determine the price, owners often rely on professionals who value businesses (valuation experts), many of whom are affiliated with accounting practices, or investment bankers (for larger transactions). These professionals will help you determine the “fair market value” (“FMV”), which reflects what a willing buyer would pay a willing seller in an open market, with both having reasonable knowledge and no pressure to transact.

One method buyers use to determine FMV is “Seller’s Discretionary Earnings” (“SDE”): net income plus owner salary, benefits, and discretionary expenses.

A more formal process includes a valuation expert using a more complex report that includes an evaluation of the following approaches:

• Income approach: The value is determined based on the income generated by the company over a period of time by evaluating earnings before interest, taxes, and amortization (“EBITA”), or earnings before interest, taxes, depreciation, and amortization (“EBITDA”).
• Market approach: A comparison is made of what other similar companies in similar markets are selling for based on available information.

• Book value: The company’s “book value”, the value of the physical assets and accounts of the seller, is valued.

The valuation expert then compares the information from each approach and arrives as the FMV, which is generally a multiple of EBITA/EBITDA. Because book value only values the “hard assets” of a business, it is not frequently used but valuation experts consider it to compare the book value with a valuation using SDE or EBITA/EBITDA.

Preparing for sale typically includes:

• Cleaning and organizing 3 to 5 years of financials
• Reviewing leases, permits, contracts, and corporate records
• Identifying discretionary expenses added back to SDE
• Streamlining operations and reducing dependency on the owner

Once you are able to determine the price for your business, you must consider how you want to structure your sale.  Most small and mid‑sized transactions occur as asset purchases or stock purchases. Each carries different tax, liability, and practical implications.

The next consideration is how the purchase is financed. In many deals under $10M in aggregate purchase price, the seller may finance some portion of the purchase price by requiring a down payment and requiring the buyer to sign a promissory note for the balance or the seller accepting shares of the buyer that are worth the balance due. Many transactions are financed by loans obtained by the buyer or the buyer using capital available to it from stock sales.

Seller-financed transactions require proper collateral and protections.  If the buyer defaults, your security interest may determine whether you recover value.

The deal process includes:

1. Entering into non-disclosure agreement (“NDA”), often first, before sharing any financials to assure confidentiality for information to be shared, including that the seller is interested in selling;
2. Negotiating and signing a “Letter of Intent” (“LOI”) that provides an outline of the terms for the proposed sale, so the parties agree on the basic terms before a more formal agreement is signed;
3. The buyer performing “due diligence”, or reviewing your financial and operational records, disclosures on pending litigation, review of existing and possible future contracts, etc.;
4. The parties negotiating and drafting a definitive purchase agreement; and
5. Closing the transaction and post‑closing transition where the new owners take over.

You may stay on for a 3 to 12-month transition period, often compensated separately. Your attorney helps structure the transaction, evaluate terms, negotiate protections, and ensure a smooth transition.

Option 2: Family Business Succession Planning

Succession planning requires both financial strategy and family diplomacy. A successor must be willing, capable, and properly trained. A clear transition plan avoids confusion, resentment, and unintended inequities.

A common challenge arises when one child is active in the family business and another is not. In these cases, owners often equalize inheritance using life insurance or non‑business assets while transferring control of the business to the active child.

Even if a sale is not imminent, consider:

• Leadership development and training timelines
• Governance structures (boards, advisors, voting rights)
• Tax and estate planning implications
• Contingency plans for incapacity or sudden exit

If there is no one ready to take over, it may be wiser to plan for an eventual sale rather than forcing a family member into a role that does not fit.

Option 3: Winding Up and Dissolution

Sometimes the best decision is to close the business rather than sell it. Unexpected headwinds, undercapitalization, or significant liabilities can make dissolution a more responsible choice.

A formal dissolution generally requires:

• Filing dissolution documents with the Secretary of State
• Notifying creditors and resolving claims
• Completing tax filings and employment obligations
• Liquidating and distributing remaining assets
• Canceling permits, licenses, and registrations

An attorney can help prioritize creditor payments, negotiate where appropriate, and reduce the risk of personal exposure during the wind‑down.

Final Thoughts

Whether your timeline is one year or ten, beginning the exit conversation early gives you more options, greater leverage, and better outcomes.

A strategic, well-planned exit can turn your business into your greatest asset, one that secures your retirement, rewards your employees, and preserves your legacy. A poorly executed exit can do the opposite. Thus, if you are starting to think seriously about selling, transitioning, or winding down your business, consulting with an attorney who handles business sales can clarify your options and help you move forward with confidence.

The transactions department of Coleman & Horowitt, LLP represents businesses and their owners in the creation, maintenance, dissolution, and sale of businesses, including mergers and acquisitions, documentation of business and real estate transactions, and business succession planning. If you have questions regarding this article, contact the author, Nicholas F. Phillips, or Michael Dowling, the head of the transactions department at nphillips@ch-law.com and mdowling@ch-law.com or (559) 248-4820.

© 2026 Coleman & Horowitt, LLP

About the author:

Nicholas (“Nick”) F. Phillips is a business attorney in the transactions department of Coleman & Horowitt, LLP with more than a decade of experience advising closely held companies on corporate governance, succession planning, mergers and acquisitions, and strategic exits. He is a graduate of Brown University and received his law degree from the University of Illinois (Urbana-Champaign) College of Law. Nick is fluent in Mandarin and speaks Japanese. He can be reached at nphillips@ch-law.com or (559) 248-4820.

About the Firm:

Established in 1994, Coleman & Horowitt, LLP is a state-wide law firm focused on delivering responsive and value-driven service and preventive law. With offices in Fresno, Los Angeles, Bakersfield, and Orange County, the firm represents businesses and their owners in matters involving transactions, litigation, employment, construction, agriculture & environmental regulation, intellectual property, real estate, estate planning and probate. The Firm has been recognized as a “Top Law Firm” (Martindale Hubbell) and a “Go-To” Law Firm (Corporate Counsel). From six offices in California, and the Firm’s membership in Primerus, a national and international society of highly rated law firms (www.primerus.com), the Firm has helped individuals and businesses solve their most difficult legal problems. For more information, see www.ch-law.com and www.Primerus.com.

Disclaimer: This article is intended to provide the reader with general information regarding current legal issues. It is not to be construed as specific legal advice or as a substitute for the need to seek competent legal advice on specific legal matters. This publication is not meant to serve as a solicitation of business. To the extent that this may be considered as advertising, then it is expressly identified as such.

     California's construction remedy statutes change frequently as lawmakers respond to industry concerns. Traditionally, contractors facing payment disputes on private projects could record mechanics liens, sue for breach of contract, or pursue limited statutory remedies. Two new California laws from the 2025 legislative session will significantly expand contractors' remedies for payment and retention disputes on private construction projects. Both take effect January 1, 2026, and apply to contracts signed after that date. This article explains these important changes for owners, general contractors, and subcontractors.

The Private Works Change Order Fair Payment Act (SB 440)

Why This Matters

Who Is Covered

Lower Retention Limits (SB 61)

What You Need to Do Now

Final Thoughts

By: Gregory J. Norys and Caz C. Ashjian

Employees are entitled to a 10-minute rest break every 4 hours of work (not to exceed 15 minutes) and a 30-minute meal break after the fifth hour worked, with a second meal break after an additional 5 hours of work (assuming the employee works overtime).  Employers are liable to employees for premium pay (time and one-half) if they are prevented from taking meal and rest breaks.

What makes it challenging for employers is that employees do not have a duty to report missed or interrupted meal or rest periods to their employers.  Even though employees owe a duty of loyalty to their employer, the duty does not extend to reporting missed or interrupted meal or rest periods.  In fact, the California Supreme Court has long held that the employer bears the non-delegable duty to ensure that employees are provided the opportunity for compliant breaks.  The responsibility is on the employer to make breaks available.  (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4^th 1004.)

It is thus important to know an employer’s duty and employee’s responsibility, which are:

• Employer's duty: Employers have an affirmative, non-delegable duty to provide the opportunity for a compliant meal and rest break.  This means employers must:
  • Notify employees when they are entitled to receive a meal or rest break.
  • Relieve employees of all duties during meal or breaks.
  • Relinquish control over the employees’ activities during breaks.
  • Not interrupt employees during their break.
  • Not impede, discourage, or pressure employees into skipping breaks.
• Employee's responsibility: While employees have the right to a break, they are not obligated to take it. If they voluntarily choose to skip a break without any employer pressure, the employer is not liable for a missed break premium.  However, California law makes it clear that the burden of proof is on the employer to demonstrate that a legally compliant break was made available and the employee voluntarily waived it. 

The difficulty is how employers can know about missed breaks.  Unfortunately, the employer's liability does not hinge on an employee's proactive notification.  Instead, the employer's record-keeping obligations create a system for tracking break compliance.

• Time records: Employers are required to keep accurate time records showing the start and end times of meal periods.  This recordkeeping should include meal and rest periods even though the employees are compensated for rest periods.
• Rebuttable presumption: If an employee's timecard shows a missed, short, or late meal period, there is a legal presumption that the employer violated break laws.
• Employer must overcome the presumption: To avoid paying a premium, the employer must present evidence to prove that it offered a compliant break and the employee's decision to miss or shorten it was completely voluntary and uncoerced.  This can be difficult to prove, especially with faded memories or if a supervisor is no longer with the company.

So, what can an employer do to reduce exposure to claims for missed meal and rest breaks? It is recommended that because employers bear the burden of proof, they should adopt a proactive approach to managing and documenting breaks including:

• Written policies: Prepare clear, written policies regarding meal and rest breaks.  These should be distributed to all employees that make it clear when employees can take their rest and meal breaks.
• Manager training: Train managers to understand and enforce break policies correctly and not discourage or interrupt employees.
• Prompt payment of premiums: If a break violation occurs for a business-related reason (i.e., the employee was needed for work), employers should promptly pay the one-hour premium to the employee.
• Affirmative attestations: Some employers use timekeeping systems that prompt employees to attest each shift that they were provided all meal and rest breaks or note if they voluntarily chose to waive or skip one.  This creates a record to counter the legal presumption of a violation. Here is an example your company can use for such an attestation:

"I understand that the Company provides a paid rest period of fifteen (15) minutes for each four (4) hour work period or major fraction thereof and that rest periods must be taken as close to the middle of each work period as possible.  During an eight (8) hour workday I am required to take two (2) 10-minute rest periods (not to exceed 15 minutes).  If I work less than three and one-half (3½) hours per day, I will not receive a rest period.  In addition, I understand that I must take an unpaid meal period of at least thirty (30) minutes if I work more than five (5) hours in a day, unless an exception is authorized in writing.  I hereby acknowledge: (1) I am signing this declaration voluntarily and free from duress; (2) this time sheet fully and accurately reports all the time that I have worked during the covered pay period; (3) I have been provided the opportunity to take all the rest periods and meal periods that I was legally entitled to on each work day within the pay period covered by this time sheet; (4) I have been completely relieved of all duties during an unpaid meal period of at least thirty (30) minutes each work day within the pay period covered by this time sheet; (5) if I did not take a meal or rest period on any given workday, it was my own voluntary choice to do so; and (6) I reported to the Administrator each occasion when I was not provided a rest or meal period that was not voluntarily waived, so I could be properly compensated.”

At minimum, an employee should attest to the following:

“I hereby acknowledge: (1) I am signing this declaration voluntarily and free from duress; (2) this time sheet fully and accurately reports all the time that I have worked during the covered pay period; (3) I have been provided the opportunity to take all the rest periods and meal periods that I was legally entitled to on each work day within the pay period covered by this time sheet; (4) I have been completely relieved of all duties during an unpaid meal period of at least thirty (30) minutes each work day within the pay period covered by this time sheet; (5) if I did not take a meal or rest period on any given workday, it was my own voluntary choice to do so; and (6) I reported to the Administrator each occasion when I was not provided a rest or meal period that was not voluntarily waived, so I could be properly compensated.”

It is important for employers to implement procedures to minimize their potential exposure.  Class Action lawsuits seeking to recover premium pay for missed meal and rest breaks for all employees are very common.  These lawsuits assume if one employee is not paid properly, all employees were not paid properly for missed meal and rest breaks. Further, public agencies are investigating claims of unpaid meal and rest breaks as wage theft.  As such, if your policies and procedures are not up to date, now is the time to revise them – and make sure you regularly review your employee’s time records carefully to make sure they are taking their breaks.

The labor and employment practice group at Coleman & Horowitt, LLP regularly represents employers in all facets of employment law.  If you have questions about the above or your companies needs, contact Gregory J. Norys, head of the firm’s labor and employment practice group at gnorys@ch-law.com or (559) 248-4820.

About the authors:

Gregory J. Norys is the managing partner and head of the labor and employment practice group at Coleman & Horowitt, LLP.  From a background in production management, managing hundreds of employees, Greg represents employers in counseling, preparation of policies and procedures, training, wage and hour, PAGA, discrimination and class action litigation. Greg is a graduate of California State University, Fresno and received his J.D. from San Joaquin College of Law.  Greg has been recognized as a Northern California Rising Star® from Super Lawyers®.  He can be reached at gnorys@ch-law.com or (559) 248-4820.

Caz C. Ashjian is an associate in the litigation department of Coleman & Horowitt, LLP, where he works out of the firm’s Fresno, Visalia and Bakersfield offices.  Caz represents clients in business, construction, employment and collection litigation.  He is a graduate of the University of Utah and received his J.D. at the Michigan State University College of Law.  He can be reached at cashjian@ch-law.com or (559) 248-4820.

© Coleman & Horowitt, LLP, 2025

About the Firm:

Established in 1994, Coleman & Horowitt, LLP is a state-wide law firm focused on delivering responsive and value-driven service and preventive law. The Firm represents businesses and their owners in matters involving transactions, litigation, agriculture & environmental regulation and litigation, intellectual property, real estate, estate planning and probate. Attorneys at the firm also serve as mediators, arbitrators, and discovery referees.

The Firm has been recognized as a “Preeminent Law Firm” by Martindale Hubbell, a “Go-To” Law Firm (Corporate Counsel) and listed in the Chambers California Spotlight for commercial litigation (Fresno). From six offices in California, and the Firm’s membership in Primerus, a national and international society of highly rated law firms (www.primerus.com), the Firm has helped individuals and businesses solve their most difficult legal problems. For more information, see www.ch-law.com and www.Primerus.com.

Disclaimer: This article is intended to provide the reader with general information regarding current legal issues.  It is not to be construed as specific legal advice or as a substitute for the need to seek competent legal advice on specific legal matters.  This publication is not meant to serve as a solicitation of business.  To the extent that this may be considered as advertising, then it is expressly identified as such.

A Day Dedicated to Our Clients

This tournament is one of our favorite annual traditions; a chance for us to step away from the office, spend quality time with our clients, and express our appreciation for the trust you place in our firm. We are grateful for the relationships we’ve built over the years and always look forward to celebrating those partnerships in a fun and relaxed environment.

Tournament Highlights

Special Thank Yous

What Are California’s Usury Laws?

Who is Subject to California Usury Laws?

What Are Common Usury Exemptions In California?

What Happens If You Violate California’s Usury Laws?

About the Author:

-Darryl J. Horowitt

-David J. Weiland

-Sherrie M. Flynn

-C. Fredrick Meine, III

-Sheryl D. Noel

Eliot S. Nahigian

-Robert K. Ashley

David J. Weiland and Steven C. Clark favorably resolved a trade secret action.  In the action, former employees of our client took confidential business information relating to customers and pricing before they left our client’s employment and used it to bid against our client after they started their own company to compete against our client. After denying taking or using the information and refusing to settle, a settlement was reached after a forensic review of the defendants’ computers proved they took the information.

Darryl J. Horowitt and Caz C. Ashjian favorably resolved a breach of contract action.  In the action, our client provided medical supplies to a regional medical group which did not pay for the supplies. After mediation was unsuccessful, Caz continued to negotiate until a settlement was reached without the expense of significant discovery or trial.

Michael P. Dowling and Nicholas F. Phillips incorporated a brewery in Fresno and drafted equipment lease, stock option, and corporate governance documents necessary to reopen the brewery which had been a success for nearly a decade before closing during the Covid pandemic when the owner experienced a sudden and debilitating medical condition.

David J. Weiland and Nicholas F. Phillips assisted a client with the drafting of a plan of dissolution for winding up and dissolving his construction company so he could retire out of state with greater peace of mind.

Michael P. Dowling and Nicholas F. Phillips assisted a client with assuming ownership of a car dealership from his (recently deceased) father pursuant to a family business succession plan.

Sherrie M. Flynn and Aisha O. Otori settled a trademark infringement action.  In the matter, our clients, a music producer/distributer and two musicians who were partners in a band, filed an action for false and deceptive advertising under the Lanham Act and for rectification of trademark registrations to show that the two musician-clients were co-owners of the band’s trademarks.  The former leader of the band had registered the trademarks solely in his name and was attempting to prevent our clients from using the trademarks.   Defendants (the former leader, his producer/distributer, and related individuals) counterclaimed for trademark infringement and misappropriation.  The settlement included dismissal of the counterclaim, assignment of the trademark registrations to show our musician-clients as co-owners, and payment of $250,000 to each of our two musician-clients.

Eliot S. Nahigian and Nicholas F. Phillips represented the successor trustee of a decedent’s trust in negotiating a $600,000 reduction in building code violations imposed by a municipality.

Gregory J. Norys and Nicholas F. Phillips favorably resolved a partnership dispute. In the action, our client was a partner in a restaurant that he managed. The other partners terminated his employment and denied he was a partner, but he was nevertheless ready to offer the other partners a significant sum to buy them out. The parties participated in an early mediation where we negotiated a settlement in which our client was able to buy out the other partners for significantly less than he was willing to offer with favorable terms and he now owns the restaurant.

Gregory J. Norys and Nicholas F. Phillips settled a contract dispute with an HR and payroll SaaS company. In the matter, our client, a nonprofit, hired the opposing party but was unhappy with its services. The opposing party demanded a full buyout and retained the initial deposit.  A settlement was reached for less than defense costs with a further agreement for the opposing party to delete all confidential information provided by our client.

Judith M. Sasaki and Gregory J. Norys obtained a favorable settlement in a wrongful termination and wage case. In the action, one of our client’s former managers claimed he was constructively terminated in violation of public policy after he complained about safety issues.  After a particularly probing deposition laid bare the plaintiff’s claims, and after plaintiff’s counsel claimed the action would not settle unless a significant amount was paid, a settlement was reached for nuisance value.

Darryl J. Horowitt and Justin K. Romig successfully resolved several breach of contract actions for the same client. In the actions, our client provided fuel to several gas stations, which did not pay for the fuel.  Our client’s prior counsel was unable to move the matters toward resolution. The firm took over as trial attorneys and, once involved, prepared the matters for trial, including the first matter that was to start less than four months after coming into the action.  Several of the matters were resolved at mediation with our client recovering most of what they sought.

Darryl J. Horowitt, C. Fredrick Meine III, and Justin K. Romig resolved a long-running construction defect matter. In the action, our client reroofed several buildings in their apartment complex.  The roofs prematurely failed, requiring reroofing. Suit was filed to recover the costs of repair and after several delays caused by material shortages due to Covid, the roofs were replaced and a settlement was reached at mediation favorable to our client.

If you would like more information on any of these results, which are not meant as a representation of the results that might be achieved in other cases, please contact us at info@ch-law.com.