An Ounce of Prevention is Worth a Pound of Cure

Let’s be honest – commercial litigation can be very costly! All too often clients come to us after they have embarked on a commercial transaction without the guidance of competent legal counsel. In an attempt to avoid legal fees, they decided that they really didn’t need a lawyer to help with the deal. Then, the deal hits a snag and they come to us asking for advice as to their rights in resolving the dispute. They then learn that, because they did not have the assistance of counsel, they find themselves in a disadvantageous position or embroiled in costly litigation.

This scenario repeats itself over and over again. Regardless of how simple you might believe the transaction to be, or how amicable the negotiations appear to be, it is always a prudent investment to engage the assistance of counsel in the preparation of the agreement memorializing a transaction. This applies to situations involving the simple purchase of a home to the complex acquisition of a business.

Here are four of the significant reasons why we advise clients to engage us before the deal is inked and not just after the impasse or problem arises. First, commercial law is complex. In fact, recognizing this complexity the New Jersey court system recently established a statewide Complex Business Litigation Program. Even the savviest business person cannot consider all of the legal nuances that might come into play. Second, the attorney is looking out for your best interests and is not simply looking to “make a deal happen.” Third, the attorney is generally more aware of adverse conditions that may affect the transaction. Fourth, special circumstances should not be overlooked or handled without care.

If you have, however, embarked upon this path without counsel and a problem does arise, do not compound the error by failing to immediately seek the advice of a qualified commercial litigation attorney. The odds are that you will only place yourself or your business in a worse position by attempting to handle matters yourself. Often an experienced litigator can assist in finding a business solution to the issue rather than full-blown litigation.

When Accidents Happen

When accidents happen (ELK).jpg

In my years of practice, I have addressed the issue of when accidents – whether due to car accidents, strokes, or other debilitating illnesses – happen unexpectedly. I have seen firsthand what difficulties this causes families.

While many people do prepare for end of life planning – i.e. a Last Will and Testament – often times people do not consider whether an accident or illness could occur and render them incapable of making decisions on their own behalf. Just like one should consider and prepare for what they want to occur upon passing, people should prepare themselves for when the unexpected happens. In this respect, a document known as a Power of Attorney is an extremely useful tool in providing another person with the ability to act on your behalf. This ensures your family’s operations will continue to run smoothly even in the face of injury or illness.

A Power of Attorney can be drafted narrowly or more broadly. This means that individual has the ability to provide broad authority or narrow authority to their “attorney in fact” to act on their behalf. Thus, when an accident or illness occurs, dependent upon what the Power of Attorney actually says, your affairs can continue seamlessly. While you may not be able to act on your own behalf, another person can.

In the event that a Power of Attorney is not in place at the time of injury or illness and you do not have the capacity to make decisions on your own behalf, your loved ones will need to institute formal guardianship proceedings to act on your behalf – a process which can be time consuming, expensive and avoidable.

Erika-Leigh Kelley, Esq.

MY FAVORITE (AND LEAST FAVORITE) WORDS

Web-Favorite-and-least-favorite-words (SS).jpgA few weeks ago I read an article regarding an author’s take on the very best word in our language. According to that author that word is “sure.” He went on at great length, to explain just why “sure” is so lovely. “Sure” communicates a light and airy sense of agreement and a complete absence of attitude, conditional or begrudging consent, drama or ambiguity – “Sure, I’ll do it,” “Sure, I’ll be there.” Meaning, of course, “Yes, you can depend on me – no big deal.” “I’m there for you.” “Sure” creates and nurtures relationships grounded in cooperation and generosity. “Sure” is the antithesis of “No – you first”, or “No way.”

And since reading that article I’ve come to embrace and love the sound of “Sure.” And my increased usage of that word has helped me to nurture relationships and gain a better outlook on life.

Lately I have been trying to identify some of my least favorite words. Here are my three candidates:

1. “Perfect.” Usually used in the context of an unreasonable expectation that the user has come to believe that he or she is entitled to a “perfect” day – often used to describe one’s subjective fantasy of what one’s birthday or wedding should be. Insisting upon the attainment of a “perfect” anything is often the prescription for a very unhappy moment when “the perfect” fails to arrive. It has been said that the perfect is the enemy of the good – meaning – that through hard work and good luck we can hopefully achieve a good result – but rarely will it be perfect. Even during our best moments in life, the dog gets sick and soils the carpet, we have a flat tire at an importune moment, a relatively new suit gets torn, etc. Stuff happens. And stuff happens on a daily basis. We need to expect it. We don’t get “perfect”.

2. “Apology.” We hear constantly from our elected officials, from our business partners and from our family members – “I am insulted, I insist upon an apology.” Well, your hurt feelings may – or may not – be legitimate. Your relationships may need to be revisited and healed. But you ain’t getting an apology. And if you continue to insist upon “an apology,” you’re not providing space for your partner – your adversary, your business associates, or your family member – to work through his/her issues with you as well. And when both of you want “an apology” the process of reconciliation, healing and closure becomes more problematic. Forget the apology stuff. Grow up. Move on.

3. “Deserve.” I have seen a growing use of this word in advertisements for various products and services – as in -“You deserve the very best of ________” – you can fill in the blanks. Yes, sometimes people get “what they deserve” – which is often going to prison as an aftermath of their wrongful actions. But we rarely “deserve” good things. This leads me to a related topic – the need to keep our expectations of other folks reasonable and relatively low. Other people will rarely give us what we – using only our imperfect and subjective vantage points – believe we justly deserve. But if we continue to keep our expectations relatively low, maybe, just maybe, sometimes we will get more and better than we initially anticipated. And for that joyous, albeit infrequent occurrence, we should be grateful.

So what is your favorite word? What are your least favorite words? Think about it – not only is it fun to share our thoughts, but this exercise in and of itself may reveal some inner truths. And for that we should also be grateful.

Steven D. Scherzer, Esq.

The Special Role of the Special Fiscal Agent

By Mark Soifer, Esq.

Let’s say you are, or think you will soon be, litigating a claim against the officers and directors of your closely held corporation for mismanagement or fraud. Or you are a minority member or shareholder of an LLC or Corporation whose reasonable expectations of your role in the company have been frustrated by the controlling members of the company. Or you have evidence of inadequate accounting practices or questionable self-dealing by the officers or directors of the company. The point is you feel you have been the victim of minority shareholder oppression, but you want the business to continue to thrive while you litigate your claims. What can you do? You do not want to disrupt the business by seeking the appointment of a custodial receiver. Instead, to avoid injuring the business and its relations with the public, you need a less drastic remedy. One effective approach may be to seek the appointment of “a special fiscal agent.” This “ingenious equitable” device can afford your business some measure of protection while at the same time minimizing interference with normal operations.1

But what can special fiscal agents do and how long can they continue to do it? The fiscal agent’s role is primarily “investigative and protective.” For example, the fiscal agent may be empowered to review all disbursements proposed to be made by the company and report any questionable ones to the parties who can then bring them to the attention of the court for relief. The fiscal agent can also advise the court as to the status of the company and its prospects for survival. The fiscal agent can protect the assets and oversee the operations of the company. The fiscal agent may also act as a mediator to resolve disputes and thus avoid more costly applications to the court. 2 (The fiscal agent, however, may not act in an adjudicative or decision-making role.)3

For example, in a case we are handling, our client holds an equitable mortgage on a sightseeing boat. The boat was operating, but the mortgage was not being paid. We successfully sought the appointment of a special fiscal agent to oversee the boat’s operation, collect the revenues, and recommend what disbursements should be made, including payment of the client’s mortgage before distributing any income to the owner of the boat.4

The appointment of a special fiscal agent is limited in its duration. In another case, the fiscal agent had been appointed to manage rental properties owned by the litigants as tenants in common and had held the position for eight years. The court held that the fiscal agent’s function must be limited not only with respect to the fiscal agent’s role, but also the duration of that role. The exercise of the fiscal agent’s duties is limited to the pendency of the litigation.5

In conclusion, whenever the need arises to monitor the revenues or expenses of a company, prevent suspicious wrongful behavior, or prevent inequitable self-dealing, the appointment of a special fiscal agent should be considered because of the great flexibility this remedy possesses while at the same time avoiding more stringent measures.

Mark Soifer IMG_0819.jpg

Based in Atlantic City, Mark Soifer, Esq. is a partner at Cooper Levenson with more than 30 years of experience litigating commercial and business disputes.

1 Roach v Margulies, 42 N.J. Super 243 (App Div 1956)

2 Guidebook to Chancery Practice in New Jersey (6th Ed 2005) at 104.

3 Advance Residential Communities, 2009 N.J. Super., Unpub. LEXIS 2042 (App Div 2009)

4 Barrus v Barrus, CPM-C-000053-16 (Ch.Div)

5 Kassover v Kassover, 312 N.J. Super 96 (App. Div. 1998)

Business Disputes and Litigation: Don’t Wait for a Crisis

It is vital to promptly recognize warning signs that your partner or customer has become a potential adversary before litigation commences. Time is of the essence from the instant you sense a dispute is forthcoming. Discreetly gather all
pertinent paperwork. Do not discuss or disclose intentions and strategies.
Understand that every tidbit you share – with anyone may be exposed in discovery or in a deposition.

Ask your adversary to put his demands in writing. You may be closer to negotiating an amicable solution than you imagine. Even if you are very far apart, written demands will clarify his or her position and identify the issues. You should defer putting your position in writing until after you retain your attorney.

Business Disputes and Litigation.pdf

New Jersey Outlook: Governor’s AC Proposal has Mulitple Precedents in State’s History

In a time when the 24-hour news cycle and reality television compete for our attention, political discourse often exhibits the performance values that media moguls envy. Beyond the clash of policy and personality, however, lie the most fundamental questions of political governance.

Political power in our society is generally not exercised by fiat. Our political system requires an institutional framework for the assertion of power. This provides stability and, optimally, the substance and appearance of legitimacy and efficiency. These are challenging objectives and the effort to achieve them demands our attention. The recent proposal by New Jersey Governor Chris Christie to “take over” the casino district in Atlantic City is such an exercise in power.

The success of Atlantic City, despite the ongoing downturn of nearly four years, is well appreciated by the business and political communities. From the industry’s strategic perspective most recently, there are two central questions: How to emulate the success of Las Vegas’ appeal to overnight clientele and, more recently, how to contend with the emergence of rival (and adjacent) gaming venues?

New Jersey Outlook – Governor’s AC Proposl has Multiple Precedents in State’s History.pdf

A Ten-Step Program for Hiring a Litigation Attorney

I. Recognize The Signs
Nowadays, people are more likely to file a lawsuit. Moreover, the dire economic
problems that many people face today have increased the number of people willing to become defendants in lawsuits by intentionally refusing to make payments, failing to deliver goods and services, or neglecting to properly perform contractual obligations. Learn to recognize when a dispute will likely result in litigation. Be practical, realistic, savvy – and trust your instincts. Do not jeopardize your interests by failing to recognize the warning signs.

II. Pull Up The Draw Bridge
As soon as you hear that bell go off in your head and decide that you are at risk for litigation, pull up the draw bridge. Acknowledge that your customer has
become an adversary. Be prepared to defend your interests by taking decisive action in a timely fashion.

Ten Step Program for Hiring a Litigation Attorney (KevThornton).pdf

Filing Charges for Theft of Service: Probably a Very Bad Idea

A customer comes to your marina or shop asking you to repair his engine or boat. You get a signed work order and make all the necessary repairs. However, the customer never pays and leaves the boat in your yard. Or he pays part of the bill, you allow him to have his boat back – but he later refuses to pay the balance due. A friend suggests that you go to the local police station to file a Summons in the Municipal Court under New Jersey’s criminal statute of theft of services.

For a person to be found guilty of the offense of theft of services, it must be proven beyond a reasonable doubt that the customer used deception or threats to obtain the valuable services. This means that your case might be very weak if the situation can be interpreted as a dispute.

If the customer is found guilty of theft of services the judge may require him to pay a fine which goes to the State (which does not help your bottom line) and might impose a jail sentence (if the value is high enough). In some cases, the judge might order restitution as well.

Filing Charges for Theft of Services.pdf