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CPI’s big win against Vivint / New Form Agreement / schedule your ISC meetings 
March 7, 2023
          Fire alarm companies are often asked to sell fire alarm equipment to electricians [could be other alarm companies too] which the electrician installs.  Once installed the fire alarm company is called in to program the fire alarm system.  This is referred to as Parts and Smarts Agreement.  A Fire Alarm Parts and Smarts Agreement is now available as a Standardize Form
CPI’s big win against Vivint  
          CPI won their lawsuit against Vivint for deceptive sales practices; a judgment was entered on February 17, 2023 reportedly for $189 million dollars.  Big win for the industry, as well, as it sets a high penalty for allowing this kind of behavior from their sales force.  We have experienced similar deceptive selling practices in our own market, from Vivint and other companies who utilize similar tactics.
          The win was reported in Security System News on February 17, 2023.  Here is the on-line link: 
CPI Security wins lawsuit against Vivint Smart Home for deceptive sales (
          Vivint was recently purchased by NRG Energy. What happens when a judgement like this one is reached after a company is purchased?  NRG would have known about the pending litigation, and may have protected itself at time of purchase.  This was turned out to be a very expensive lawsuit, and if Vivint is unable to resolve with an agreement for much smaller award, would NRG be on the hook for the difference?
Vince Raia, President
EMC Security
Suwanee, GA 30024
          NRG purchased Vivint for $2.8 billion dollars, so what’s another $189 million among friends?   Probably enough to strain any friendship.  Rest assured the pending lawsuit was considered when the sale took place [or some lawyers are looking at a massive malpractice claim].  I’m not clear on whether this was an asset purchase or stock purchase; either way I am sure the pending lawsuit was consider though if a reserve was created the parties may not have anticipated the size of the damage award.
          Keep in mind that Vivint may have some insurance to cover the damages.  It was paid $2.8 billion and it should have satisfied it’s debt before distributing to shareholders.  Reserves are established for pending law suits.
          This is relevant to everyone considering selling or buying because the issue of transferee liability always comes up in a buy-sell transaction.  There is statutory liability but that is typically for seller’s unpaid taxes.  Bulk sale laws make buyers liable for seller’s debts if notice to creditors is not given.  When consideration paid is inadequate, or in some cases no consideration at all, transferee liability usually follows. 
          In a stock transaction there is no need for analysis of above issues because the entity owing the debt doesn’t change; different stockholders do not change an entity’s assets or liabilities.  The new stockholders merely step into the shoes of the selling shareholders or in the case of an LLC, members. 
          Keep in mind that this case is likely not over yet because NGR, Vivint’s new owner, announced it intends to appeal the jury award.  Generally I like when a defendant appeals because typically the defendant is required to post a bond securing the judgment amount pending the appeal in order to prevent the Plaintiff from issuing enforcement proceedings to collect on the judgment.
          At this point it’s a pretty good bet that CPI is going to collect on this judgment if the award is affirmed on appeal.
          What’s more of a mystery is whether Vivint and other alarm companies engaged in similar sale practices that got Vivint in this mess learned anything.  Will  this huge monetary award deter illicit sales practices?

ISC West group and private meetings

         Private meetings and discussion groups forming - call today to participate.  I am going to schedule group discussion meetings and private meetings.  To reserve a spot at a group or private meeting please contact Stacy Spector,Esq. 1 516 747 6700 x 304 or, K&K’s Concierge Program coordinator [you don’t have to be a Concierge Client to reserve a spot].  Topics, private meetings and schedule are TBD.
          I will be available for private meetings and consultation.  I will also coordinate and attend, if you like, private meetings with some of those who will be participating in group discussion meetings. 
          Anyone who wants to lead a group discussion or have ideas for a discussion should contact me to be included in the schedule.
          The following are some of the group meetings I am planning [and will coordinate private meetings with these industry experts]
    Still time for lenders, brokers, consultants, central stations and other vendors to sign up schedule private or group meetings. We will coordinate. Call Stacy today 1 516 747 6700 x 304

  *  What buyers look for and how they evaluate your business.  
  *  How lenders view your company and decide on financing your business or your acquisition. 
*  How the value of your alarm RMR is calculated and how non-RMR is calculated.   Discuss multiples and what your company is worth
  *  What you should expect from your central station 
  *  Employee Retention Credit:  meet with tax expert to discuss if you’re eligible
  *  Alarm contracts:  which ones you need and which ones you should have.  Group or private meeting with Ken Kirschenbaum
  *  Buy-Sell deals:  Thinking about or ready to sell?  Meet with Ken Kirschenbaum to discuss best ways to increase value and get ready to sell or buy.
  *  AIN buying group.  Meet with Stan Matysiak in group or privately, time well spent
  *  How to engage alarm Brokers:  discuss options and what to expect
  *  E&O coverage: What's available; what do you need; where to get it

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301