Category: News

A three-judge panel for the Third Circuit affirmed in part and reversed in part Delaware Bankruptcy Judge Mary F. Walrath’s decisions denying the Debtor, Hertz’s, noteholders’ post-petition claims for interest at the contract rate and make-whole premiums. Writing for the majority, Judge Thomas L. Ambro found that the noteholders had a right to contractual post-petition interest and make-whole premiums as a result of Hertz being “solvent.” Unless overturned on appeal, Hertz must now pay its noteholders more than $270 million in premiums and post-petition interest. The decision follows similar rulings from the Fifth Circuit in Ultra Petroleum and the Ninth Circuit in PG&E, supporting the pre-Bankruptcy Code “solvent-debtor exception” to the general prohibition on unmatured interest.

In the Bankruptcy Court in Delaware, Judge Walrath found in favor of Hertz on the interest rate issue and determined that as an unimpaired class of creditors to a solvent debtor, they were entitled to the post-petition legal rate of interest pursuant to Sections 1129 (a)(7)(A)(ii) and 726(a)(5) of the Bankruptcy Code. She also found that the “economic substance” of the make-whole was interest, and therefore would be disallowed per Section 502(b)(2).

Judge Ambro’s majority opinion, which was joined by Judge Cheryl A. Krause (in a three-judge panel), focused on whether the Bankruptcy Code gave debtors “leverage to deny their unsecured noteholders more than a quarter billion dollars of interest they promised to pay pre-bankruptcy” while “giving lower priority equity holders four times that amount” under their Chapter 11 plan. The Court here felt that although the make-whole claims would be disallowed as the “economic equivalent” of interest under section 502(b)(2) of the Bankruptcy Code in an insolvent case, the absolute priority rule required debtors to pay contractual post-petition interest and make whole claims in full before making distributions to equity holders in a solvent case.

Judge Ambro noted that if Hertz was allowed to “cancel more than a quarter billion dollars” of obligations owed to the noteholders and distribute a “massive gift” to shareholders, that would “impermissibly ‘depart’” from the Bankruptcy Code’s “basic priority rules,” citing the U.S. Supreme Court’s 2017 Jevic decision. Judge Ambro also cited the opinions issued in Ultra and PG&E as support for this conclusion. The Fifth Circuit required the debtors to pay make-whole premiums and contract-rate post-petition interest (including default interest) in order to be classified as unimpaired, and the Ninth Circuit ruled that unimpaired creditors were entitled to post-petition interest at the contractual or default state law rate. Despite the fact that Judge Ambro disagreed with Judge Walrath on the “solvent debtor” exception, he agreed that the 2022/2024 early redemption premium was not triggered because the notes matured by their terms when Hertz filed bankruptcy. Although the ruling allows Hertz to redeem the notes without a fee well before their stated maturity, Judge Ambro suggests that this result is “not absurd” and the “commercially sophisticated” noteholders agreed to the terms that “compel” the result.

Judge Ambro also affirmed the bankruptcy court’s determination that the 2026/2028 notes redemption premiums are subject to disallowance under section 502(b)(2). The majority opinion traces the “two common” make whole analyses and concludes that the make-whole claims are unmatured interest under “both” of the “definitional” and economic equivalency tests. Nevertheless, Judge Ambro invoked the absolute priority rule to conclude that the debtors must pay the 2026/2028 premiums despite section 502(b)(2) and post-petition interest at the contract rate. Prior to Jevic, Judge Ambro explains, the Third Circuit “saw the absolute priority rule as a procedural protection that applied only when § 1129(b) is invoked,” but in Jevic the Supreme Court extended the absolute priority rule to apply “everywhere.” Consequently, Judge Ambro concluded that the Bankruptcy Code “entitles every creditor—not just the dissenting impaired creditors who can invoke § 1129(b)—to treatment consistent with absolute priority absent a clear statement to the contrary.”  The majority says this result flows from Jevic’s “condemnation of ‘backdoor means’ to defeat the absolute priority rule.” The Court refused to leave a “back door wide open” in solvent debtor cases that would allow plan proponents to “force creditors to accept a ‘priority-violating’ distribution.”

Judge Ambro concludes that full payment of post-petition interest at contract rates is the appropriate remedy to satisfy the absolute priority rule, even though the rule only “imposes” post-petition interest at an “equitable rate.” Although the appellate court would ordinarily remand the matter to the bankruptcy court to evaluate equitable considerations and set the post-petition interest rate, Judge Ambro felt that it would be “profoundly unfair to scrimp” after junior equity holders already received more substantial distributions “more than three years ago.”

In the dissent, Judge David J. Porter aligned himself with the dissenting opinions in the Ultra and PG&E cases, which recognized that the Bankruptcy Code “plainly disallows” claims for unmatured interest—including post-petition interest and make whole premiums—despite the fact Hertz was solvent. Judge Porter rejects the majority’s reliance on Jevic because Section 502(b)(2) “expressly disempowers” courts from allowing claims for post-petition interest and make whole premiums.

Caveat: As the Third Circuit made clear, payment of the contract rate of interest is not guaranteed, as equitable considerations may weigh against awarding an unsecured creditor its contract rate of interest.

To discuss the issues raised here or any other issues involving creditors’ rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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On August 16, 2024, Spector Gadon Rosen Vinci P.C. won an appeal on the highly disputed issue of when a statute of limitations accrues in copyright cases. In Michael Grecco Prods., Inc. v. RADesign, Inc., 23-1078 (2d Cir. Aug. 16, 2024), SGRV and its attorney, Senior Litigation Counsel Bruce Bellingham, represented the fashion and celebrity photographer, Michael Grecco. The case turned on efforts to undermine the rule that, due to the difficulty of monitoring the universe of publications, the three-year statute of limitations for copyright claims accrues when an author discovers, or should have discovered, an infringement (the “discovery rule”). But, over the last five years, some federal district courts have sought to rein in artists’ claims against commercial infringers by presuming that “sophisticated” authors – those who have previously sued to enforce their copyrights – “should have” discovered any unlicensed copying within three years of its occurrence. In effect, the “injury rule” of claim accrual was applied.

Grecco alleged that the Ruthie Davis brand of women’s footwear (priced from $300-$900 per pair), pirated on its website Grecco’s images of the model Amber Rose wearing Ruthie Davis shoes. The images, published by Inked magazine in August 2017, were republished within days by Ruthie Davis without a license. Grecco pleaded that he discovered the infringement in January 2021 and sued in October 2021, more than four years after the infringement, but less than one year after discovery. A district court in the Southern District of New York granted Ruthie Davis’s motion to dismiss finding that it was “not credible” that Grecco could not have discovered the infringement within three years of the occurrence because his Complaint alleged that he actively enforces his copyrights. The Second Circuit Court of Appeals reversed. It reaffirmed that the “discovery rule” was the only rule of accrual in copyright cases; holding that the sophistication of the plaintiff was irrelevant at the pleading stage; and it stressed that, to state a claim, a copyright plaintiff need not anticipate and rebut any potential affirmative defense including the statute of limitations. It also held that the time when a copyright plaintiff “should have” discovered an infringement was a question of fact not subject to any presumption because the defendant must prove that defense.

For two decades, Spector Gadon Rosen Vinci P.C. has actively assisted artists by offering pro bono legal services to clients referred by the Philadelphia Volunteer Lawyers for the Arts.

Bruce Bellingham’s legal work is divided between commercial litigation with an emphasis on dispositive motions and appellate advocacy; copyright infringement work and representation of artists, arts organizations, and content creators; and business advice and contract work generally for small to medium sized firms and individuals. He has been elected a Super Lawyer by his peers in the field of intellectual property (copyright) in the years 2015-2024.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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Spector Gadon Rosen Vinci P.C. Employment Law Group Chair  Alan B. Epstein, Employment Law Group Member Jennifer Myers Chalal, and Environmental Law Group Chair Kermit Rader have been selected to the 31st Edition of The Best Lawyers in America list for the year 2025. Epstein was selected for his professional excellence in individual employment litigation, and both he and Chalal were selected regarding their professional excellence in labor and employment litigation. Rader was selected regarding his professional excellence in Environmental Law.

As the oldest and most respected peer-review publication in the legal profession, clients and legal professionals widely regard recognition in Best Lawyers in America as a significant honor. For over forty years, Best Lawyers in America has gained a reputation as a truly unbiased source of legal referrals. Epstein, Chalal, and Rader were chosen for this honor following an exhaustive peer review process in which the nation’s leading lawyers confidentially evaluate their professional peers.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States of America and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas, and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious International College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its Past President. He holds an AV rating from Martindale Hubbell, has been selected as one of the Best Lawyers in America in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by Philadelphia’s The Legal Intelligencer and Marquis Who’s Who. He was named in 2019 as an Influencer of Law by the Philadelphia Inquirer. He has been named a top 100 Super Lawyer in Philadelphia and Pennsylvania, most recently in 2023, and has also been selected as one of the nation’s 500 Leading Plaintiff Employment and Civil Rights Lawyers (2018, 2019, 2020, 2021, 2022, 2023), 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon. In 2020, Mr. Epstein was selected as a Labor and Employment Star by Benchmark Litigation. In 2022, Mr. Epstein was awarded the honor of a spot on Lawdragon‘s Hall of Fame. He is an active member of the National Employment Lawyers Association, and has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania and as a national leader and Inn President in the American Inns of Court movement. He is currently an active member of the Philadelphia, Pennsylvania and American Bar Associations.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Jennifer Myers Chalal concentrates her practice in the area of employment law handling all types of employment law matters including discrimination claims under Title VII, the ADA, the ADEA, the PHRA, and the NJ Law Against Discrimination, retaliation claims, wrongful discharge claims, wage and hour claims, FMLA claims, ERISA claims, breach of contract claims, non-compete claims, and claims involving workplace torts. She also handles ADA accessibility suits and denials of public accommodations for businesses especially in the hospitality industry. She provides advice to businesses regarding employment matters, conducts workplace investigations for businesses presented with complaints of sexual harassment or other forms of discrimination, prepares employment handbooks, and provides workplace seminars regarding discrimination laws. Her litigation practice extends throughout Pennsylvania and New Jersey in both Federal and State Court.

With a diverse client base in his environmental practice, ranging from a variety of manufacturers to commercial and residential developers to a natural gas supplier, Kermit Rader assists his clients with government monitored and voluntary remediation including Brownfield development and Superfund projects, helps them to comply with government regulations and defend enforcement actions, advises them on environmental issues in real estate transactions and litigates environmental claims. In his oil and gas practice, he represents landowners in leasing and pipeline agreements, ensuring that gas companies operating in Pennsylvania’s Marcellus Shale region are in compliance with leases and applicable regulations.

Recognized in 2005-2010 by Chambers USA as one of “America’s Leading Lawyers-Environmental Law,” and in 2011 by Best Lawyers in America, Mr. Rader is a prolific author and speaker on environmental issues. He was an adjunct professor at the Temple University Beasley School of Law. He serves on the Board of Directors of the “Institute of Hazardous Materials Management” and was the former co-chair of the Environmental Law Committee of the Philadelphia Bar Association. He is a member of the Natural Resources Section of the American Bar Association.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been selected as one of the 500 Leading Plaintiff Employment and Civil Rights Lawyers by Lawdragon in its 2024 list of the nation’s best plaintiff employment and civil rights attorneys.

Epstein has been selected for this honor by Lawdragon for the past seven years, since the category was created in 2018. The 500 honorees are chosen in Lawdragon’s research-driven, journalistic process that vets the views of peers and competitors, and recognizes large wins. Practitioners who were recognized have been securing positive results for workers for 10 years to more than 50 years. Epstein was one of only 13 Philadelphia lawyers chosen for this nationwide distinction, and of those 13, Epstein is one of two with a place in the Lawdragon Hall of Fame.

The Lawdragon Hall of Fame, whose recent members include the late U.S. Supreme Court Associate Justice Ruth Bader Ginsburg, Associate Justice Stephen G. Breyer, and U.S. Attorney General Merrick B. Garland, and local, leading luminaries, including attorney Tom Kline, recognizes past members of the Lawdragon 500 and other outstanding lawyers who have made remarkable contributions as leaders, litigators, dealmakers, power brokers, judges and innovators.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its past President. He holds an AV rating from Martindale Hubbell, has been named as one of the Best Lawyers in America in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who. He has been consistently named a top 100 Super Lawyer in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon, in addition to being named to the Lawdragon Hall of Fame (2022). He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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In response to new developments regarding the ongoing litigation being handled by Shareholder and Director George M. Vinci Jr. and Senior Litigation Counsel David B. Picker, Law 360 has recently published an article regarding Mr. Vinci’s appearance before the full Delaware Supreme Court in the Margolis Edelstein/GMG Insurance Agency case, in which Spector Gadon Rosen Vinci P.C. represents Margolis Edelstein.

Mr. Vinci’s argument before the high court was quoted extensively in the article regarding his perspective on the ongoing litigation. He argued that GMG Insurance’s purported negligence wasn’t the reason they settled an underlying dispute for $1.2 million, and therefore, the malpractice suit against Margolis Edelstein should not be revived.

During oral arguments before the full high court, Mr. Vinci informed the justices that the idea that the firm’s representation was the proximate cause of the settlement was not demonstrated by GMG Insurance Agency.

Vinci remarked, “My whole argument is based upon causation, because as Your Honors know, negligence alone doesn’t establish liability… You need to establish causation, that is, that the negligence of the defendant was the proximate cause of the injury. What was the injury in this case? The injury in this case is the settlement.”

The case centers around legal services Margolis Edelstein provided to GMG and its former employee, Howard Wilson. GMG argued that Wilson was left in a vulnerable litigation position causing him to agree to an unfavorable $1.2 million settlement.

Last year, a Delaware Superior Court ruled that GMG did not prove Margolis Edelstein was at fault for the insurer’s settlement. GMG appealed this decision to the Delaware Supreme Court, asserting that a jury was the proper body to determine the fault of Margolis in Wilson’s interpretation of and actions based on the testimony provided by Margolis Edelstein.

George M. Vinci, Jr. is Shareholder and Director of Spector Gadon Rosen Vinci P.C., a Member of the Executive Committee, and Chairman of the Insurance Coverage & Casualty Litigation and Professional Liability & Malpractice Litigation practice groups. Mr. Vinci focuses his practice on civil litigation with a strong emphasis on professional malpractice, hospitality, employment, and insurance disputes.

Mr. Vinci’s litigation experience involves cases throughout the United States. Recently he obtained one of the highest verdicts in the Commonwealth of Kentucky, one hundred million dollars ($100,000,000), in a fraud case against Grant Thornton. The case involved the sale of an abusive tax shelter. (William J. Yung et al v. Grant Thornton, LLP, et al., Kenton Cir. Ct., Fourth Division,  Commw. Of Kentucky, Case No. 07-CI-04647.) He was involved in a groundbreaking election fraud case (Marks v. Stinson) in the U.S. District Court for the Eastern District of Pennsylvania, which was aired on Court TV.

Mr. Vinci has successfully handled a wide variety of complex commercial litigation matters including tortious interference, civil RICO, FDCPA, Class Action Wage and Hour disputes and bankruptcy litigation. He also represents a large number of Long Term Care facilities in Florida.

Mr. Vinci is a member of the American Bar Association, the Pennsylvania Bar Association, the Professional Liability Underwriting Society and DRI. He served for six years as a panel member with the Disciplinary Board of the Supreme Court of Pennsylvania. Mr. Vinci has consistently been selected as a Pennsylvania Super Lawyer. In 2019, he was recognized with the Professional Excellence Award from The Legal Intelligencer, the oldest law journal in the United States, in the category of Distinguished Leaders. Mr. Vinci was also a recipient of the Philadelphia Business Journal’s 2019 Best of the Bar Award.  In 2021, he was one of only 30 attorneys nationwide to be named an Insurance Law Trailblazer by the National Law Journal.

Combining careful analysis with clarity and forcefulness of expression, while never losing sight of clients’ practical needs, David B. Picker has broad experience representing plaintiffs and defendants in both trial and appellate courts in a wide range of commercial litigation matters, including contracts, commercial fraud, creditors’ rights, bankruptcy, professional malpractice, real estate, letter of credit, copyright, trademark, unfair competition, and trust and estate matters. Mr. Picker regularly serves as an arbitrator for the Court of Common Pleas of Philadelphia.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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On June 10, 2024, the United States District Court for the Eastern District of Pennsylvania granted a motion by Spector Gadon Rosen Vinci P.C. of Counsel Brooke C. Madonna and Senior Litigation Counsel Bruce Bellingham, awarding summary judgment in favor of their client in the case styled Tammaro v. County of Chester, Pocopson Home, 2:21-cv-03811 (2021). The case concerned Federal Nursing Home Reform Amendment claims against Pocopson Home, a municipal skilled nursing facility in which a resident suffering from dementia-related food disorder died after choking on soft food. Despite a Department of Health investigation finding that a negligence complaint against Pocopson was unsubstantiated, the decedent’s executor brought suit under 42 U.S. C. § 1983, claiming that the County Commissioners, as “final policymakers,” deprived the decedent of her civil rights “under color of state law” by deliberate indifference to a custom or policy of failing to train the Pocopson staff. The plaintiff executor moved to amend her complaint to name the Pocopson’s Administrator and Nursing Director as “final policy makers” after the depositions had been taken. Pocopson opposed the motion to amend, and the Court denied plaintiff’s motion.

Hon. Judge Kai Scott granted summary judgment in favor of the County Commissioners because the plaintiff had no evidence that the Commissioners were on notice of any alleged deficiencies in the training of Pocopson’s staff. The Court agreed with the County’s argument that the plaintiff had no evidence that the Commissioners were aware of, or indifferent to, alleged unconstitutional practices at Pocopson. He also found that the plaintiff’s fallback argument that Pocopson’s managers were the true “final policymakers” was made too late and was precluded by a prior ruling that amendment would be futile as, under Pennsylvania law, the managers of a municipal facility reported to the County Commissioners who were the true final policymakers. The upshot was that all claims against Pocopson failed.

As Of Counsel at the firm, Brooke C. Madonna has gained experience in trial and appellate work in both state and federal courts in Pennsylvania, New Jersey and Florida. Ms. Madonna practices commercial litigation with a primary focus in employment law including sexual harassment, Family Medical Leave Act, Americans with Disabilities Act and all forms of discrimination. Ms. Madonna also regularly represents individuals and businesses in cases involving real estate, construction, fraud, collection and casualty defense.

Bruce Bellingham’s legal work is divided between commercial litigation with an emphasis on dispositive motions and appellate advocacy; copyright infringement work and representation of artists, arts organizations, and content creators; and business advice and contract work generally for small to medium sized firms and individuals. He has been elected a Super Lawyer by his peers in the field of intellectual property (copyright) in the years 2015-2024.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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SGRV Shareholder and Director George M. Vinci, Jr. and Senior Litigation Counsel David B. Picker were provided excellent coverage by Law360 regarding their ongoing work in the notable Margolis Edelstein/GMG Insurance Agency case in addition to being featured in biographical profiles.

In anticipation of an upcoming oral argument before the Delaware Supreme Court scheduled for July, Law360 published a short feature covering the basics of the ongoing case which sees Margolis Edelstein, our client, defending themselves against accusations of malpractice from GMG Insurance Agency.

The case centers around legal services Margolis Edelstein provided to GMG and its former employee, Howard Wilson. GMG argued that Wilson was left in a vulnerable litigation position causing him to agree to an unfavorable $1.2 million settlement.

Last year, a Delaware Superior Court ruled that GMG did not prove Margolis Edelstein was at fault for the insurer’s settlement. GMG appealed this decision to the Delaware Supreme Court, asserting that a jury was the proper body to determine the fault of Margolis in Wilson’s interpretation of and actions based on the testimony provided by Margolis Edelstein.

George M. Vinci, Jr. is Shareholder and Director of Spector Gadon Rosen Vinci P.C., a Member of the Executive Committee, and Chairman of the Insurance Coverage & Casualty Litigation and Professional Liability & Malpractice Litigation practice groups. Mr. Vinci focuses his practice on civil litigation with a strong emphasis on professional malpractice, hospitality, employment, and insurance disputes.

Mr. Vinci’s litigation experience involves cases throughout the United States. Recently he obtained one of the highest verdicts in the Commonwealth of Kentucky, one hundred million dollars ($100,000,000), in a fraud case against Grant Thornton. The case involved the sale of an abusive tax shelter. (William J. Yung et al v. Grant Thornton, LLP, et al., Kenton Cir. Ct., Fourth Division,  Commw. Of Kentucky, Case No. 07-CI-04647.) He was involved in a groundbreaking election fraud case (Marks v. Stinson) in the U.S. District Court for the Eastern District of Pennsylvania, which was aired on Court TV.

Mr. Vinci has successfully handled a wide variety of complex commercial litigation matters including tortious interference, civil RICO, FDCPA, Class Action Wage and Hour disputes and bankruptcy litigation. He also represents a large number of Long Term Care facilities in Florida.

Mr. Vinci is a member of the American Bar Association, the Pennsylvania Bar Association, the Professional Liability Underwriting Society and DRI. He served for six years as a panel member with the Disciplinary Board of the Supreme Court of Pennsylvania. Mr. Vinci has consistently been selected as a Pennsylvania Super Lawyer. In 2019, he was recognized with the Professional Excellence Award from The Legal Intelligencer, the oldest law journal in the United States, in the category of Distinguished Leaders. Mr. Vinci was also a recipient of the Philadelphia Business Journal’s 2019 Best of the Bar Award.  In 2021, he was one of only 30 attorneys nationwide to be named an Insurance Law Trailblazer by the National Law Journal.

Combining careful analysis with clarity and forcefulness of expression, while never losing sight of clients’ practical needs, David B. Picker has broad experience representing plaintiffs and defendants in both trial and appellate courts in a wide range of commercial litigation matters, including contracts, commercial fraud, creditors’ rights, bankruptcy, professional malpractice, real estate, letter of credit, copyright, trademark, unfair competition, and trust and estate matters. Mr. Picker regularly serves as an arbitrator for the Court of Common Pleas of Philadelphia.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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Spector Gadon Rosen Vinci P.C. Employment Law Member Alan B. Epstein recently received coverage by Law360 for a notable case against the University of Pennsylvania, which he has been handling with assistance from Associate Adam A. Filbert.

The article provides an overview of the important facts with regards to the ongoing case. We provided an overview of the latest developments in a recent post on our website.

Epstein was featured in the article as refuting the University of Pennsylvania’s motion to reconsider a late PA federal judge’s recent ruling allowing the defamation case of our client, a former Penn professor, against the school to move forward. Epstein and Filbert represent former University of Pennsylvania Professor Janet Monge.

Alan B. Epstein is the Chair of Spector Gadon Rosen Vinci’s Employment Law Practice Group and concentrates his practice in civil litigation representation in the areas of employment rights, civil rights, and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, Boards and Board Members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and Directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists, and architects, as well as insurance, real estate, and security brokers.

Adam A. Filbert focuses his practice primarily on Employment Law and Commercial litigation. He has accumulated a diverse array of experiences, including those from his time spent with SGRV previously through Drexel University’s Thomas R. Kline School of Law’s Co-Op program.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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In addition to being selected as a 2024 Pennsylvania Super Lawyer, another consecutive year in which she was named to the annual list, Spector Gadon Rosen Vinci Employment Law Group Member Jennifer Myers Chalal received the honors of being listed as one of the Top 50 Women in the practice of law in Pennsylvania.

While a Super Lawyers’ listing alone is an achievement worthy of praise (no more than five percent of the lawyers in Pennsylvania are selected by Super Lawyers), to be specially ranked within the distinction of Top 50 Women is a coveted accolade. The list is assembled from the women lawyers who ranked at the top of the 2024 PA Super Lawyers listings.

Jennifer Myers Chalal concentrates her practice in the area of employment law handling all types of employment law matters including discrimination claims under Title VII, the ADA, the ADEA, the PHRA, and the NJ Law Against Discrimination, retaliation claims, wrongful discharge claims, wage and hour claims, FMLA claims, ERISA claims, breach of contract claims, non-compete claims, and claims involving workplace torts. She also handles ADA accessibility suits and denials of public accommodations for businesses especially in the hospitality industry. She provides advice to businesses regarding employment matters, conducts workplace investigations for businesses presented with complaints of sexual harassment or other forms of discrimination, prepares employment handbooks, and provides workplace seminars regarding discrimination laws. Her litigation practice extends throughout Pennsylvania and New Jersey in both Federal and State Court.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. The result is a credible, comprehensive, and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in their practice of law. For more information about Super Lawyers, go to SuperLawyers.com.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. Employment Law Chair Alan B. Epstein and Associate Adam Filbert secured a favorable ruling in the U.S. District Court for the Eastern District of Pennsylvania on May 14, allowing the defamation case of our client, a former University of Pennsylvania professor, against the school to move forward. The decision was met with excellent coverage provided by both Law360 and The Legal Intelligencer.

Judge Gene E. K. Pratter said Penn leaders embraced “cancel culture” when they chastised then-anthropology professor Janet Monge for handling remains from the 1985 MOVE house bombing in Philadelphia.

Judge Pratter’s remarks came in her ruling greenlighting Monge’s claims that former Penn President Amy Gutmann and former Provost Wendell Pritchett defamed her by emailing a statement criticizing her for using the remains in an online anthropology course. The judge denied Penn’s motion to dismiss the claims that it defamed Monge through its reaction to accusations that she acted unethically in her handling of remains.

Judge Pratter ruled that Monge made plausible allegations that Penn acted out of actual malice when it issued the statement.

Alan B. Epstein is the Chair of Spector Gadon Rosen Vinci’s Employment Law Practice Group and concentrates his practice in civil litigation representation in the areas of employment rights, civil rights, and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, Boards and Board Members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and Directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists, and architects, as well as insurance, real estate, and security brokers.

Adam A. Filbert focuses his practice primarily on Employment Law and Commercial litigation. He has accumulated a diverse array of experiences, including those from his time spent with SGRV previously through Drexel University’s Thomas R. Kline School of Law’s Co-Op program.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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Spector Gadon Rosen Vinci P.C. is proud to announce that 12 of the firm’s attorneys have been selected to the 2024 Pennsylvania Super Lawyers list, including one named to the Top 50 Women Pennsylvania Super Lawyers List, and one named to the Pennsylvania Rising Stars list.

Super Lawyers is an annual list of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. Selection for Super Lawyers includes peer nominations, a blue-ribbon panel review process, and independent research on candidates. Super Lawyers selects no more than five percent of the lawyers in Pennsylvania. The recipients are Chairman Paul R. Rosen; Shareholder and Director George M. Vinci Jr.; Managing Member Daniel J. Dugan; Employment Law Group Chair Alan B. Epstein; Estates & Trusts Group Chair Alan J. Mittelman; Bankruptcy & Creditors Rights Group Chair Leslie Beth Baskin; Employment Law Group Member Jennifer Myers Chalal (Top 50 Women Pennsylvania Lawyers); Corporate Law Group Member Stanley P. Jaskiewicz; Commercial Litigation and Real Estate & Real Estate Litigation Group Member Andrew J. DeFalco; Commercial Litigation Group Member Neal R. Troum; Senior Litigation Counsel Bruce Bellingham; and Employment Law Group and Commercial Litigation Associate Adam Filbert (Rising Star).

The Rising Stars list consists of the state’s top young lawyers. Candidates must be 40 years old or younger or have practiced for 10 years or less.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. The result is a credible, comprehensive, and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in their practice of law. For more information about Super Lawyers, go to SuperLawyers.com.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. Member Nancy Abrams, with the assistance of SGRV Associate Kristen Over, was successful in obtaining an order granting the motion to dismiss they filed in Kirkpatrick Price, Inc. v. Clone Systems, Inc. Her client Clone, which operates solely in Pennsylvania, had entered into a contract with Kirkpatrick, which is located in Florida, that Kirkpatrick alleged Clone had breached. Ms. Abrams argued that the contract specifically provided that all services Clone provided to Kirkpatrick were to be performed in Pennsylvania and that Clone did not do business in Florida or have sufficient contacts with Florida for the courts there to have personal jurisdiction over Clone.

After a deposition of Clone’s representative was taken, Kirkpatrick filed an Amended Complaint and Ms. Abrams filed a second motion to dismiss. The motion was fully briefed by both sides and argued by Ms. Over, after which the court agreed that it did not have jurisdiction over Clone and dismissed the case.

For more than 40 years, Nancy Abrams has concentrated her legal practice in the areas of labor and employment law. She has significant experience in traditional labor and employment-related issues involving private industry and the nursing home industry and has worked with many management teams in the manufacturing, health care, and service industries.

Kristen Over focuses her practice on civil litigation and criminal defense. She represents nursing homes, assisted living facilities, and healthcare providers in complex litigation, represents insurance companies and businesses in labor and employment issues, and defends individuals against allegations of criminal law violations.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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The U.S. Department of Labor has issued a new overtime rule raising the minimum salary threshold for exempt employees.

Currently, to qualify for an exemption from overtime as an “executive,” “administrative” or “professional” employee, an employee must be paid on a salary basis and must earn at least $35,568 annually ($684 per week). Effective July 1, 2024, the annual salary threshold will increase to $43,888 ($844 per week). That threshold will increase again effective January 1, 2025, to $58,656 annually ($1,128 per week). The annual salary of employees who are treated as exempt and whose annual salary falls below the new minimums must be increased to the minimum salary level or the affected employees must be paid overtime for any hours they work over forty in a week.

The final rule also includes an automatic adjustment mechanism to review and update the minimum salary level every three years. The minimum salary for the highly compensated employee exemption was also increased from $107,432 to $151,164.

While litigation challenging the rule could delay its implementation, employers should review the salaries of those employees they treat as exempt from overtime to make sure that their annual salaries will meet the new, higher threshold and, if they do not, will need to decide whether to increase the employees’ annual salary or pay them overtime.

If you need assistance reviewing your pay practices or if you have any questions regarding this new rule, please contact Nancy Abrams at nabrams@sgrvlaw.com or Jennifer Myers Chalal at jmyers@sgrvlaw.com.

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The Federal Trade Commission has issued a proposed final rule that would ban most new noncompete clauses in employment agreements and would make all existing noncompete clauses in employment agreements unenforceable except for those made in connection with the bona fide sale of a business and those covering senior executives.

The FTC defines “senior executive” as an employee who earns more than $151,164 annually and who is in a “policy-making position.” The rule defines a “noncompete clause” as any contractual provision that prohibits an employee or former employee from working for a competing employer or starting a competing business within a certain geographic area and period of time after the employee’s employment ends.

The rule also invalidates agreements that require employees to pay back the employer for training costs if the employee’s employment terminates within a specified period of time.

The final rule does not explicitly invalidate other covenants, including non-solicitation, non-servicing, non-recruitment, and nondisclosure clauses. In addition, the rule only preempts state laws that are less protective of employee rights than the federal law.

The rule is scheduled to go into effect 120 days following its publication in the Federal Register but could be blocked by expected legal challenges. The U.S. Chamber of Commerce has already said that it would sue the FTC to block the rule. If the rule does go into effect, only those noncompete agreements that are entered into as part of the sale of a business would remain enforceable.

If you need assistance reviewing existing employee agreements for your business, or if you have any questions regarding this new rule, please contact Nancy Abrams at nabrams@sgrvlaw.com or Jennifer Myers Chalal at jmyers@sgrvlaw.com.

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Spector Gadon Rosen Vinci P.C. Member Jennifer Myers Chalal has been appointed as a Hearing Committee Member serving the Disciplinary Board of the Supreme Court of Pennsylvania for a three-year term beginning July 1, 2024.

Hearing Committee Members serve the Board as volunteers in their respective districts to conduct hearings and act as a formal reviewing body to determine if a case might move forward in pursuit of a particular course of discipline.

Chalal concentrates her practice in the area of employment law handling all types of employment law matters including discrimination claims under Title VII, the ADA, the ADEA, the PHRA, and the NJ Law Against Discrimination, retaliation claims, wrongful discharge claims, wage and hour claims, FMLA claims, breach of contract claims, non-compete claims, and claims involving workplace torts. She also handles ADA accessibility suits and denials of public accommodations for businesses, especially in the hospitality industry. She provides advice to businesses regarding employment matters, conducts workplace investigations for businesses presented with complaints of sexual harassment or other forms of discrimination, prepares employment handbooks, and provides workplace seminars regarding discrimination laws. Her litigation practice extends throughout Pennsylvania and New Jersey in both Federal and State Court.

Chalal received a J.D. with honors from Temple University School of Law. She is a Phi Beta Kappa graduate from Hofstra University where she received a B.A. degree, magna cum laude, with High Honors in Speech Communication. Following graduation from Temple University School of Law, she served as a Judicial Law Clerk for the Honorable Sandra Mazer Moss (ret) of the Court of Common Pleas of Philadelphia.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

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On January 22, 2024, the U.S. Supreme Court denied a request from a group of sexual abuse victims of the Boy Scouts of America (BSA) to temporarily stay a $2.46 billion bankruptcy settlement contained in their plan wherein they argued that the settlement unlawfully bars them from suing groups that ran local scouting programs. These victims are 144 people out of more than 82,000 who filed claims against the BSA and argued that the Court should halt the settlement while it considers a similar legal dispute in the Perdue Pharma case in which the issue was argued before the U.S. Supreme Court in December 2023. The BSA filed for Chapter 11 bankruptcy in 2020 after they spent more than $150 million to settle lawsuits arising from claims of sexual abuse. In 2022, the bankruptcy court approved BSA’s Chapter 11 plan of reorganization which provided, inter alia, for the re-emergence of the BSA and created a fund to pay the victims.

At the crux of the argument in both the Perdue Pharma and BSAmatters are provisions of the settlements that prohibit victims from suing third parties for damages. In the case of Purdue Pharma, the Sackler family who ran the pharmaceutical firm that manufactured the opioid Oxycontin agreed to pay $6 billion in exchange for being shielded from future civil lawsuits. Some victims of the opioid crisis say the Sacklers shouldn’t be able to avoid those costly lawsuits for damages.

Under the BSA Plan, these victims do not want to be precluded from suing independent councils that ran local scouting programs and third-party organizations (i.e., churches and civic groups) that supported those programs. Those third-party groups contributed more than $2.4 billion to a BSA settlement trust for victims and under the agreement are shielded from future civil lawsuits. As you can see from the above, the argument is akin to the Perdue Pharma matter where victims there argue that the Sackler family should not be shielded from independent lawsuits against them despite the settlements in the bankruptcy.

Opponents of such Chapter 11 Plans argue that courts are generally not authorized to block such lawsuits. Advocates of such Plans argue that without the protections for third-party groups, major bankruptcy deals like the ones for Purdue and the BSA would never take effect. It is believed that the U.S. Supreme Court will decide the Perdue Pharmacase in late spring or early summer 2024. Stay tuned for this important decision.

To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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Spector Gadon Rosen Vinci P.C. Attorney Brooke C. Madonna secured a favorable ruling for her clients, winning an injunction hearing in the ongoing case The CondoShop LLC and TCS Black Label Realty LLC v. Ryan Serhant, Serhant Pennsylvania LLC, Andrea Desy Edrei, Michael Skokowski and Kailey Bondiskey. Ms. Maddona represented Defendants Edrei, Skokowski and Bondiskey.

In March of 2023, Edrei ceased to be an agent with TCS Black Label Realty LLC, although she remained an owner in Black Label. As the TCS Black Label Realty LLC Operating Agreement expressly permitted, Edrei was entitled to open a competing venture. She opened Societe Select LLC, and in April 2023 she and her team consisting of Skowkowski, Bondiskey, and former Black Label agents, who too were dissatisfied with Black Label, followed Edrei to work with Serhant. In April 2023, the Plaintiffs filed a Complaint seeking $10 million along with an Emergency Motion for Injunctive Relief against the Defendants, claiming that Ryan Serhant, along with Andrea Desy Edrei, entered into a scheme to “plunder its clients, intellectual property, confidential information, and personnel while crippling its ability to operate.”  The Plaintiffs sought limited discovery, including depositions of the parties.

The Plaintiffs were seeking, inter alia, the return of their alleged confidential and proprietary documents including client lists and marketing material and to enforce noncompetition agreements against Skokowski and Bondiskey. On February 21, 2023, a hearing seeking injunctive relief was argued before the Honorable Paula A. Patrick. The Court denied the Plaintiffs’ Motion after argument of counsel without requiring any additional witness testimony.

Brooke C. Madonna has been with Spector Gadon Rosen Vinci P.C. since 1992. As Of Counsel at the firm, Ms. Madonna has gained experience in trial and appellate work in both state and federal courts in Pennsylvania, New Jersey and Florida. Ms. Madonna practices commercial litigation with a primary focus in employment law including sexual harassment, Family Medical Leave Act, Americans with Disabilities Act and all forms of discrimination. Ms. Madonna also regularly represents individuals and businesses in cases involving real estate, construction, fraud, collection and casualty defense.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports, and tax law.

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SGRV Attorney David Picker’s client, JP Oil Group, was granted Summary Judgment in the recent  Supreme Court of the State of New York, Appellate Division of the Fourth Judicial Department case of JP Oil Group V. Sadruddin M. Lakhani and Amir Perani.

Mr. Picker’s client, a motor fuel wholesaler, sued the individual guarantors of a fuel supply agreement on which the guarantors’ company had defaulted. On a motion to dismiss, he first dismissed the counterclaims and affirmative defenses of fraudulent inducement and mutual mistake. Then, Mr. Picker moved for summary judgment. Despite the defendants’ repeated attempts to relitigate the matter, the trial court in New York granted Mr. Picker’s motion last May, awarding his client a significant sum. The defendants then took an appeal to the Appellate Division, Fourth Department, which Mr. Picker opposed and argued over Zoom on December 5, 2023. On February 9, 2024, the five-justice panel of the Appellate Division unanimously affirmed the trial court’s summary judgment in his client’s favor.

JP Oil - Affirming Summary Judgment for JP Oil

Combining careful analysis with clarity and forcefulness of expression, while never losing sight of clients’ practical needs, David B. Picker has broad experience representing plaintiffs and defendants in both trial and appellate courts in a wide range of commercial litigation matters, including contracts, commercial fraud, creditors’ rights, bankruptcy, professional malpractice, real estate, letter of credit, copyright, trademark, unfair competition, and trust and estate matters. Mr. Picker regularly serves as an arbitrator for the Court of Common Pleas of Philadelphia.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports, and tax law.

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Spector Gadon Rosen Vinci LLP Member Karen Rich, Esq., has been selected by ALM as an Honoree of the 2024 Florida Legal Awards under the category of “ESG Impact”.

The “ESG Impact” category honors law firms and individuals who demonstrate social responsibility through client-focused efforts, pro bono work, charitable drives, special projects, or other avenues.

Ms. Rich is passionate about her belief in social responsibility through numerous outlets. This commitment to giving back to the community is one of the cornerstones of SGRV’s mission. Intrinsic to SGRV is the client-focused volunteer work the firm has performed to benefit elder care residents and the nursing homes it represents. Over the years, SGRV LLP employees, led by Ms. Rich, have donated hundreds of items to local nursing home residents. The firm has also served as a liaison between teen volunteers and nursing home clients to facilitate donations of clothing and other dry goods geared toward improving the lives and well-being of nursing home residents.

The Ali Spears Foundation is one of many organizations that have benefitted from the charitable work of SGRV LLP. Under the guidance of Ms. Rich, who serves on the foundation’s board of directors, the firm has supported this local pediatric cancer foundation at their annual charity golf tournament as a hole sponsor since the tournament’s inception.

SGRV LLP’s charitable impact extends far beyond the Tampa Bay region and has recently reached orphans and vulnerable children in Kazakhstan who benefited from a local clothing drive for which the firm’s Florida office served as a hub for donations.

In December, the firm organized a donation drive benefiting local nursing home residents. With our continued efforts throughout the year, SGRV has made a positive impact on populations who need our help the most.

SGRV LLP keeps a pulse on the needs of members of the Tampa Bay community facing hardships. When preparing for a donation drive benefiting our nursing home clients, SGRV reached out to our clients to inquire about the items that would best serve the nursing home patients and quickly learned that the needs of the patients were not only different from what we expected but also varied from location to location. Based on the information that we received, we pivoted from our initial action plan so that we could collect items that would be most beneficial to the most vulnerable. For example, the firm would never have expected that fanny packs were needed for nursing home residents; and now, since we asked, over 100 local nursing home were gifted fanny packs on Christmas morning, allowing them to carry small personal belongings when they ambulate with assistive devices such as walkers and wheelchairs. Other nursing home residents in different demographic areas preferred clothing items, lotions, and room décor. By inquiring and listening, SGRV was able to achieve the goal of the donation drive: providing items to nursing home residents that they want and need. Furthermore, by incentivizing volunteerism through paid time-off, we support annual buy-in and advance a collegial experience.

As a former criminal prosecutor, Karen Rich’s extensive trial experience has enabled her to achieve successful results for her clients in her Civil Practice in which she has focused in the areas of Health Care Law and Employment law for over two decades.

In the area of Health Care Law, Ms. Rich passionately defends Long Term Care facilities and Assisted Living Facilities in complex legal matters such as professional negligence, wrongful death, and violation of resident’s rights from pre-suit through arbitration and/or jury trial. Her clients appreciate her vast knowledge of the medical and nursing issues that are common to nursing home and assisted living facility residents and her ability to promptly evaluate claims, fashion defenses and mitigate damages. Ms. Rich has been particularly successful in shielding her clients from financial worth discovery by aggressively defending Motions for Leave to Amend to Add a Claim for Punitive Damages and zealously challenging expert opinions proffered by the Plaintiff. Ms. Rich passionately defends clients with personal jurisdictional defenses to prevent them from being sued in an improper venue.

In the area of employment law, Ms. Rich routinely defends claims discrimination (based on race, national origin, gender, disability, and age), retaliation, sexual harassment, and unpaid overtime charges before the Florida Department of Human Relations, EEOC, Department of Labor and in various State and Federal Courts. Her detailed and persuasive Position Statements have resulted in the dismissal of dozens of Charges of Discrimination and Ms. Rich has achieved successful results in numerous arbitration proceedings as well as defense verdict issued by a jury in a Whistle Blower lawsuit. She also represents employers in union grievances through mediation and arbitration.

Through the Insurance practice, Ms. Rich defends claims of professional negligence, legal malpractice as well as personal injury in slip and fall and negligent security/supervision matters.

As a former prosecutor for the Office of the State Attorney in both the 13th Judicial Circuit and the 10th Judicial Circuit, Ms. Rich has extensive trial and courtroom experience in juvenile, misdemeanor, and felony divisions.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports, and tax law.

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The Third Circuit has reversed a February 2023 Delaware Bankruptcy Court ruling and decided that an Independent Examiner is appropriate in the FTX bankruptcy matter. The three-judge panel sided with the U.S. Trustee’s Office in its position that the appointment of an examiner was necessary for a case of this size, and that the Bankruptcy Court erred last February when it decided that the appointment was discretionary and thus denied the request. The FTX bankruptcy was commenced in Delaware in November 2022 amid allegations of widespread fraud. FTX was a company led by convicted Sam Bankman-Fried and was involved in the cryptocurrency industry.

The U.S. Trustee, in appealing the Bankruptcy Court’s ruling, argued that the Bankruptcy Code required the appointment of an examiner at its request in any Chapter 11 involving fixed, liquidated, unsecured debts—other than debts for goods, services or taxes, or owing to an insider—exceeding $5 million. Further, the U.S. Trustee expressed the need for the appointment of an examiner to investigate fraud and mismanagement that it believed occurred at FTX before its collapse, saying that it was “too important” to leave to its creditors and current management. In the appeal, FTX’s counsel argued that an examiner was unnecessary, saying that new management brought in after its November 2022 collapse had produced “substantial” reports on its finances and that multiple government agencies were involved and pursuing their own investigations. Further, FTX counsel noted its concern that such a probe could cost $100 million. This concern was met by the argument that there were allegations of misappropriation of $10 billion of customer assets.

The Third Circuit agreed with the U.S. Trustee in reversing the lower court ruling, saying the law states the court “shall” appoint an examiner under these circumstances and that the appointment here was mandatory. Judge Restrepo, writing for the Third Circuit, said that there was value to having a fully independent investigation, as concerns were raised about FTX’s bankruptcy counsel’s pre-bankruptcy role as an FTX adviser and the possibility that officers and employees who engaged in wrongdoing before the bankruptcy are still with the company. The Court was also concerned that “the collapse of FTX caused catastrophic losses for its worldwide investors but also raised implications for the evolving and volatile cryptocurrency industry.” The Court also said that, unlike FTX, the examiner will be required to make their report public, which it said was appropriate considering the “catastrophic” losses of FTX’s investors and the implications its collapse has for the cryptocurrency industry as a whole. Per Judge Restrepo, “sometimes highly complex cases give rise to straightforward issues on appeal. Such is the case here.”

To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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Several SGRV staff gathered on January 15, 2024 to honor the legacy of Dr. Martin Luther King, Jr. through a day of service. Executive Director of Administration Mark Tarasiewicz, Communications Associate Michael Vinci, IT Director Stan Tyszka, Paralegal Alex Caramuche, and Receptionist Oliver Trout came together on a frigid January morning to joyously serve their community.

The group partook in a cleanup of the Wissahickon Valley Park in Philadelphia, a vital watershed and recreational space for the city. The activity was sponsored by the nonprofit Friends of the Wissahickon, which is committed to the maintenance and upkeep of the park. There, they took up their clippers and saws and went to work clearing out some overgrowth of invasive plant species. It was a valiant effort indeed, and everyone was pleasantly surprised at the amount of overgrowth that managed to be cleared out and the profound difference it made in the park’s appearance.

In addition to those that went to help clean up the park, a number of SGRV staff participated in MLK Day through their own service activities in addition to educational discussions and program viewings with friends and family regarding Dr. King’s legacy.

The SGRV Florida office held an MLK service activity working with the Ali Spears Foundation to raise money for pediatric cancer by hosting a luminary fundraiser. Participants honored loved ones with a personalized message that was displayed on a luminary bag in St. Petersburg’s First Central Tower lobby.

The MLK Day of Service is a nationwide effort taken up by Americans annually to give back to their communities in the spirit of Dr. King’s commitment to service. As Dr. King once stated, “Not everybody can be famous but everybody can be great, because greatness is determined by service.”

Instead of a day off, Many companies and firms across America, including SGRV, approach MLK day as a “day on,” allowing employees to give back to their communities for a day in lieu of just coming into the office.

As we reflect on the importance of days like this, we remember to continue teaching the lessons of Dr. King through our words and actions for not just one day, but throughout the year.

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Formerly a Member of Spector Gadon Rosen Vinci LLP, Hon. Cory L. Chandler was recently inducted into the 13th Judicial Court of Hillsborough County as a judge. In attendance at the ceremony were Members of the firm based out of SGRV’s Florida offices alongside Executive Committee Members.

Hon. Chandler brings with him a wealth of legal experience garnered over a distinguished career. During his time with SGRV, Hon. Chandler focused his practice on civil litigation and federal criminal defense. He represented nursing homes and healthcare providers in complex abuse allegations, represented insurance companies and businesses in labor and employment issues, and defended individuals against allegations of white-collar crime.

His recent accomplishments include obtaining acquittals of a client on a federal indictment. Hon. Chandler has extensive trial experience, having served as lead attorney in more than 60 civil and criminal jury trials. He has represented some of the nation’s largest insurance companies in automobile, products liability, and premises liability cases.

Hon. Chandler was selected by the Magistrate Judges of the United States District Court for the Middle District of Florida to the Criminal Justice Act Panel from which he was routinely appointed to represent individuals charged with federal crimes. He formerly worked in the Office of the State Attorney as a felony prosecutor where he honed his trial skills.

He graduated from the South Texas College of Law where he was a Langdell Scholar and earned his undergraduate degree from the Florida State University.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. Member Neal R. Troum was elevated to his new position with much fanfare during the firm’s annual holiday celebrations. The firm’s Executive Committee collectively reached and agreed upon this decision and joyfully announced it before SGRV attorneys and staff. Such an important elevation of an attorney to this position should not come as a surprise to those who are familiar with the outstanding work Mr. Troum has performed alongside SGRV’s top litigators in various high-profile cases.

Mr. Troum has provided unprecedented assistance to the firm and its endeavors since joining SGRV originally as Counsel. As a result of numerous successful verdicts and settlements made in favor of his clients, in addition to having claimed the title of a Pennsylvania Super Lawyer, Mr. Troum has proven himself to be an attorney worthy of the title of Member, and a valuable asset to the firm. SGRV looks forward to the victories and prestige his efforts will continue to bring to the firm.

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Mr. Troum smiles alongside Shareholder and Director George M. Vinci, Jr, Chairman Paul R. Rosen, and Executive Committee Member Daniel J. Dugan.

One of Mr. Troum’s recent successes with SGRV came out of the case of Jones v. 21st Century Insurance Company, et al., No. 16-CA-7089, 13th Judicial Circuit, Hillsborough County, Florida, in which SGRV Shareholder and Director George M. Vinci, Jr. and Mr. Troum‘s diligence and tireless work ethic helped secure the entrance of the court into summary judgment for Defendants Jessica Lanifero and Kubicki Draper, P.A., granting the motion filed by Vinci and Troum.

Another of Mr. Troum’s triumphs was also made alongside SGRV Shareholder and Director George M. Vinci, Jr. The two obtained an amazing result for their clients in the adversary bankruptcy litigation proceeding Lightsway Litigation Services LLC v. Wimar Tahoe Corporation, et al., Bankr. D.Del. Adv No. 10-50289. Filed in 2010, the Lightsway adversary action did not go to trial for twelve years. The case was tried before the Hon. Mary Walrath, United States Bankruptcy Judge, over ten days in November and December 2022. On August 17, 2023, Judge Walrath issued her Opinion and Order soundly rejecting Plaintiff’s claims of mismanagement. the Court entered judgment in favor of the Defendants and against Plaintiff. In a case where the stakes could not have been higher, Messrs. Vinci and Troum successfully defended their clients against complicated commercial claims and obtained defense judgments in this long-suffering litigation.

Neal R. Troum is a Member of the firm’s Philadelphia Commercial Litigation department. He is a seasoned litigator, whose experience includes securities litigation, complex adversary bankruptcy litigation, insurance defense, products liability, banking and commercial paper, and general contract and tort disputes. He previously worked at Sprague & Sprague and Stradley Ronon Stevens & Young in Philadelphia.

Mr. Troum has written extensively on the Federal Arbitration Act and other topics. He is an adjunct professor at Temple University Beasley School of Law, where he teaches Arbitration Law and Procedure, and he authored BNA Bloomberg’s litigation reference materials on the Federal Arbitration Act.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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For the third year in a row, the attorneys and staff of Spector Gadon Rosen Vinci P.C. were eager to help bring the spirit of the holidays to two families in need through the Philadelphia Ronald McDonald House’s “Family to Family” program. Thanks to this generous program, the Ronald McDonald House has helped countless families experience the joy of the season.

The holidays can be an unnecessarily stressful time for families facing difficulties like childhood illness. The Ronald McDonald House’s “Family to Family” program seeks to ease this stress and provide their resident families with the holiday cheer they deserve. The program pairs families staying at the house with individuals, groups, and businesses to supply the families with everything on their wish lists and more for the holiday season.

Member Heather Eichenbaum, accompanied by Communications Associate Michael Vinci, played Santa for the day and dropped off two large bags full of presents of all kinds — toys, clothes, gift cards, and so much more.

Many staff and attorneys selflessly contributed to brightening the holidays for the families, with Ms. Eichenbaum providing for one of them completely on her own. Thanks to them, we were able to make this holiday season another one to remember for these local families in need.

You can learn more about the Ronald McDonald House and the incredible things they do for families in need here.

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There has been much commentary on the issue of whether an option in a contract is executory or not. Recently, In re Le Yang (22-00075, S.D. Ind. Oct. 23, 2023), Debtor sold an option to purchase a 70% interest in real property for almost $55,000. Upon the exercise of the option, the purchaser would then pay another $157,000. The option was recorded along with a mortgage in favor of the buyer, but the option had not been exercised before the bankruptcy filing. Debtor filed a motion to reject the option as an executory contract under 11 U.S.C Section 365(a) arguing that both parties to the contract had remaining unperformed obligations.

 Judge Moberly of the Bankruptcy Court in the Southern District of Indiana stated that the Seventh Circuit adopted the well-known and widely approved definition of an executory contract known as Countryman (as have the Third Circuit and other Circuits) whereby an executory contract is one where the obligations of both parties are so far unperformed that a failure by either to complete performance would constitute a material breach excusing performance by the other. Here, the Judge held that the option would be an executory contract if, “at the time of filing [,] each party has material unperformed obligations.” She went on to say that she was not persuaded that the holder of the option had “a remaining obligation to elect on the option” and that the option holder had no material obligations to perform on the filing date of the bankruptcy. She further said that the holder’s “future obligations are contingent upon it actually exercising the option.” If the holder were never to exercise the option, she said that “nothing happens” and neither party would have committed a breach.

Contrary to Debtor’s contention that the holder of the option would be obliged to remove the recordings in the land records if the holder were never to exercise the option, Judge Moberly did not view the obligation as “material.” She said that “[m]ost agreements have some degree of unperformed obligations on both sides, [but] this does not render all agreements executory under § 365.”

There has been much commentary on this issue, including whether bankruptcy or state law should apply (here, if a state law analysis was performed, it has been argued that the result would have been the same), and whether the Section 365 rights are “avoiding” powers, which is often found not to be but merely a breach.

To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or to lbaskin@sgrvlaw.com.

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Spector Gadon Rosen Vinci P.C. Executive Committee Member Daniel J. Dugan, with the help of Member Leslie Beth Baskin and Associate Adam A. Filbert, secured a favorable ruling for their client, Edward S. Baim in a November 16, 2023 decision by the U.S. Third Circuit Court of Appeals.

The three-judge panel upheld the favorable ruling from the trial court declaring that Mr. Baim had acted entirely properly in refusing to sell four Mcdonalds restaurants in Pennsylvania to the defendants, Joel and Michael Dukart pursuant to an agreement of sale Baim had entered into with them.

Baim had previously given Grant and George Skylass a right of first refusal permitting them to match any bona fide offer to Baim for the four McDonalds restaurants. Mr. Baim was contractually bound to sell to the Skylasses once they matched Dukart’s offer, and he did so.

After the Dukarts challenged the sale, claiming it violated their agreement with him—and threatened to sue Baim in Delaware—Dugan, Baskin, and Filbert immediately filed a complaint in the Eastern District of Pennsylvania seeking a declaratory judgment that he had acted entirely properly. Both the trial court and the appeals court agreed.

U.S. Circuit Judge Stephanos Bibas wrote in his opinion that,

“The parties wanted an agreement firm enough that the Dukarts would buy the four Philadelphia McDonalds’s if the Skylasses did not. But they also wanted an escape hatch from the Dukarts’ contract if the Skylasses exercised their right of first refusal…”

The Third Circuit confirmed the merits of Baim’s position in all respects, as did the trial court, and rejected Dukarts’ arguments that Bahad had somehow acted improperly.

Daniel J. Dugan has been in practice since 1977, with the firm since 1982, and a member of the firm since 1987. He is a managing partner and also a member of the firm’s Executive Committee. He concentrates his practice in trials and appeals involving all manner of commercial and business disputes, and he has extensive experience litigating before state and federal courts nationwide, including bankruptcy courts and Orphans court.

Mr. Dugan regularly represents individuals, families, and businesses in all types of disputes. In addition to the sampling of cases described above, he has advised clients on and litigated cases involving intellectual property, breaches of contract, lender liability, commercial real estate matters (lease violations, title disputes, and mortgage foreclosures), construction disputes, employment (such as wrongful termination, age, sex and race discrimination claims and enforcement of restrictive covenants), civil rights, bankruptcy litigation, estate litigation, unfair competition, and securities law fraud. He has been regularly selected as a Super Lawyer since 2010.

Leslie Beth Baskin has handled a wide array of commercial, transactional, and bankruptcy-related matters including several high-profile cases in the region. She has also represented a diverse group of clients, including banks, real estate enterprises, healthcare providers, small businesses, and individuals experiencing financial problems. Ms. Baskin also served as a Chapter 7 Trustee on the Panel of Interim Trustees for the US Bankruptcy Court for the Eastern District of Pennsylvania.

Ms. Baskin is currently on the Board of Directors of the Consumer Bankruptcy Assistance Project (CBAP) and was its Chair for two years. She was Chair of the Eastern District of Pennsylvania Bankruptcy Conference. Her peers have elected her as a Pennsylvania Super Lawyer for many years and also won the 2005 Award for Outstanding Volunteer for CBAP. She is also one of the founding members of the Greater Philadelphia Chapter of the International Women’s Insolvency and Restructuring Confederation (IWIRC) and was its chair for a two-year term. She is currently serving as secretary.

Adam A. Filbert focuses his practice primarily on Employment Law and Commercial litigation. He has accumulated a diverse array of experiences, including those from his time spent with SGRV previously through Drexel University’s Thomas R. Kline School of Law’s Co-Op program.

Some of Mr. Filbert’s previous work experiences outside of SGRV include time spent as a Legal Intern for Chief Judge Juan R. Sanchez of the Eastern District of Pennsylvania, and as a Legal Intern with the Pennsylvania Attorney General Bureau of Consumer Protection, where he primarily worked on large multi-state litigation cases and investigations.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports, and tax law.

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The Federal Reentry Court Program chose to honor the Consumer Bankruptcy Assistance Project (CBAP), of which Member Leslie Beth Baskin is a part, with a Certificate of Appreciation at its most recent graduation ceremony. Ms. Baskin was an active participant in this Reentry Court Program.

This was done as part of a Federal Reentry Court program for Philadelphia residents on supervised release. Every two weeks, up to 20 participants appear before a federal magistrate judge to report on their progress. The participants are also intensively supervised by the U.S. Probation Officer assigned to Reentry court. The Court and Federal Probation Office assist with education, training, employment, and other needs and impose graduated sanctions when necessary. After participants successfully complete 52 weeks of the program, they are eligible for a reduction of their supervised release period up to one year.

The graduation ceremony was held last week in the ceremonial courtroom at the federal courthouse and included the participants, their families, the reentry team, and the sentencing judges. For successfully completing the program, the judges then officially signed the order to reduce the participant’s supervision by one year.

CBAP volunteers regularly meet with the participants and provide individualized financial education. Topics that arose this past summer included building credit, budgeting, and whether or not to take out a car loan.

The Reentry Team has continuously expressed their appreciation for CBAP and Ms. Baskin’s recognition at the graduation is an example of the excellence both in and out of the office that SGRV attorneys strive to attain.

Ms. Baskin has handled a wide array of commercial, transactional, and bankruptcy-related matters including several high-profile cases in the region. She has also represented a diverse group of clients, including banks, real estate enterprises, healthcare providers, small businesses, and individuals experiencing financial problems. Ms. Baskin also served as a Chapter 7 Trustee on the Panel of Interim Trustees for the US Bankruptcy Court for the Eastern District of Pennsylvania.

Ms. Baskin is currently on the Board of Directors of the Consumer Bankruptcy Assistance Project (CBAP) and was its Chair for two years. She was Chair of the Eastern District of Pennsylvania Bankruptcy Conference. Her peers have elected her as a Pennsylvania Super Lawyer for many years and also won the 2005 Award for Outstanding Volunteer for CBAP. She is also one of the founding members of the Greater Philadelphia Chapter of the International Women’s Insolvency and Restructuring Confederation (IWIRC) and was its chair for a two-year term. She is currently serving as secretary.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports, and tax law.

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The U.S. Supreme Court has agreed to hear an appeal of a Fourth Circuit ruling involving an issue prevalent in many mass tort cases as to whether an insurer has standing to object to a Chapter 11 Plan when the insurer’s interests are not affected. Herein, the Fourth Circuit ruled that the insurer did not have such standing. See Truck Insurance Exchange vs. Kaiser Gypsum Company, Inc., U.S. No. 22-1079. See also In re Kaiser Gypsum Co., 60 F. 4th 73 (4th Cir. 2023).

The Plan proposed by the Debtor, Kaiser Gypsum, channeled all current and future uninsured asbestos and environmental claims into a bankruptcy trust (the “Trust”) per 11 USC Section 524 (g) and required these claimants to make disclosures of claims they may have made against other asbestos trusts which in turn would allow the Trust to audit such other claims to prevent fraud or duplication. The Bankruptcy Trust had a $49 million fund. The Plan then channeled claims covered by insurance to the tort system to collect per the insurance coverage without the concomitant disclosures. The Bankruptcy Court confirmed the Plan which ruling was affirmed by the District Court. The primary insurer appealed this ruling to the Fourth Circuit.

The Insurer filed an appeal asserting, inter alia, that: (1) the Plan altered its rights by barring it from raising in future cases that Debtor’s conduct violated its duties under the insurance contracts, and that (2) the Plan encouraged fraud as it did not impose on any future tort suits the insurer’s desired fraud prevention measures or disclosure requirements. These objections also rested on the premise that the Plan violated Debtor’s policies and that Debtor failed to act in good faith when they proposed a “two tier” standard based upon whether the claim was insured or not, thus resulting in disparate monitoring of claims. The Fourth Circuit rejected all of these arguments and opined that any “cooperation clause” was not applicable in the Plan process and found that the Plan was “insurance neutral” (and therefore the insurer lacked statutory authority or standing under the Bankruptcy Code to challenge the merits of the Plan). Put another way, the Fourth Circuit felt that the Plan did not take away any of the Insurer’s rights to defend itself against a claim (even if groundless or fraudulent) in the ordinary course of its business. 

In light of the many asbestos and tort bankruptcies which involve insurance issues, the decision here is highly anticipated and will resolve the split in the Circuits (note that the Third Circuit allows the insurer such standing to object).

To discuss the issues raises here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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The U.S. Supreme Court has granted a petition for a writ of certiorari to determine whether Chapter 11 debtors should receive refunds for their overpayment of fees to the United States Trustee’s Office (see Office of the U.S. Trustee v. John Q. Hammons Fall 2006 LLC, 22-1238 (Sup. Ct.)). At stake is the possible return of approximately $326 million in fees from the U.S. Trustee’s Office to these debtors.

These fees emanated from a 2018 increase in fees, which Chapter 11 debtors paid to the U.S. Trustee’s Office. The issue came to a head when six bankruptcy districts in North Carolina and Alabama failed to match the fee hike for most of 2018. This failure caused a major disparity and created a circuit court split. Congress remedied this in 2020 which required the Alabama and North Carolina Debtors to pay the same fees as the rest of the country but failed to address fees which had already been paid.

Previously, in Siegel v. Fitzgerald, 142 S. Ct. 1770 (Sup. Ct. June 6, 2022), the Court unanimously held that the 2018 increase in fees paid by Chapter 11 debtors to the U.S. Trustee System was unconstitutional because it was not immediately applicable in the two states with Bankruptcy Administrators rather than U.S. Trustees. But the Siegel court did not resolve the issue of identifying the proper relief.

Herein, the U.S. government posits that relief in the future will be sufficient in that the Court has ruled that fees must be uniform throughout the country hereinafter. In the alternative, the government asks that Courts rule that someone should retroactively collect underpayments from the debtors in Bankruptcy Administrator districts.

The preeminent bankruptcy commentator, Bill Rochelle, has echoed the sentiment of many bankruptcy practitioners that the grant of certiorari was unexpected as there was no split of circuits as the four circuit courts (Ninth, Tenth, Second and Eleventh Circuits) that considered the issue already ruled that Chapter 11 debtors are entitled to refunds. Rochelle believes that the decision was less surprising when “one realizes that the Court grants certiorari more than half the time when the government is the petitioner.” Rochelle also notes that there will be a true practical significance to the U.S. Supreme Court’s decision in the Tenth Circuit case of John Q. Hammons Fall 2006 LLC v. U.S. Trustee, in that, if the Supreme Court upholds the Tenth Circuit in Hammons Fall, the outcome in other cases such as one currently pending in Washington D.C. in the Court of Federal Claims (Acadiana Management Group LLC v. US, 19-496 ( Ct. Cl.)) may result in refunds for all debtors who overpaid, even those who have not sued for refunds on their own.

I will keep you posted as to all future developments on this issue. To discuss the issues raised herein or any other issues involving creditors’ rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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Spector Gadon Rosen Vinci P.C. Shareholder and Director George M. Vinci, Jr. and Of Counsel Neal R. Troum recently obtained an amazing result for their clients in the adversary bankruptcy litigation proceeding Lightsway Litigation Services LLC v. Wimar Tahoe Corporation, et al., Bankr. D.Del. Adv No. 10-50289.

The Lightsway litigation resulted from the 2008 bankruptcy filing of the Tropicana Atlantic City casino. In re Tropicana Entertainment, et al., Bankr. D.Del. No. 08-10-856. The Lightsway plaintiff as successor to the unsecured creditors in the bankruptcy, brought claims against the two entities that had managed the Tropicana casino and a number of related casinos, Wimar Tahoe Corporation (“Wimar”) and Columbia Sussex Corporation (“CSC”). Lightsway brought claims against Wimar and CSC for an alleged breach of the management agreements between CSC or Wimar, on the one hand, and the casino entities, on the other; along with claims for breach of the covenant of good faith and fair dealing as well. Lightsway primarily relied upon the Atlantic City Casino Control Commission’s decision to deny Wimar a Casino License, and its accompanying decision, in support of its claim of mismanagement. Lightsway was claiming damages in excess of a half billion dollars. Lightsway originally brought additional claims against additional defendants which were dismissed on a motion to dismiss, only Lightsway’s contract and covenant claims against Wimar and CSC survived motions to dismiss.

Filed in 2010, the Lightsway adversary action did not go to trial for twelve years. The case was tried before the Hon. Mary Walrath, United States Bankruptcy Judge, over ten days in November and December 2022. On August 17, 2023, Judge Walrath issued her Opinion and Order soundly rejecting Plaintiff’s claims of mismanagement. She found, in a nutshell, that “Plaintiff has not met its burden of proving a breach of contract or breach of the duty of good faith and fair dealing by the Defendants or the amount of any damages suffered . . . as a result of each of the Defendants’ actions.”

Accordingly, the Court entered judgment in favor of the Defendants and against Plaintiff.

In a case where the stakes could not have been higher, Messrs. Vinci and Troum successfully defended their clients against complicated commercial claims and obtained defense judgments in this long-suffering litigation.

George M. Vinci, Jr. is Shareholder and Director of Spector Gadon Rosen Vinci P.C., a Member of the Executive Committee, and Chairman of the Insurance Coverage & Casualty Litigation and Professional Liability & Malpractice Litigation practice groups. Mr. Vinci focuses his practice on civil litigation with a strong emphasis on professional malpractice, hospitality, employment, and insurance disputes.

Mr. Vinci’s litigation experience involves cases throughout the United States. Recently he obtained one of the highest verdicts in the Commonwealth of Kentucky, one hundred million dollars ($100,000,000), in a fraud case against Grant Thornton. The case involved the sale of an abusive tax shelter. (William J. Yung et al v. Grant Thornton, LLP, et al., Kenton Cir. Ct., Fourth Division,  Commw. Of Kentucky, Case No. 07-CI-04647.) He was involved in a groundbreaking election fraud case (Marks v. Stinson) in the U.S. District Court for the Eastern District of Pennsylvania, which was aired on Court TV.

Mr. Vinci has successfully handled a wide variety of complex commercial litigation matters including tortious interference, civil RICO, FDCPA, Class Action Wage and Hour disputes and bankruptcy litigation. He also represents a large number of Long Term Care facilities in Florida.

Mr. Vinci is a member of the American Bar Association, the Pennsylvania Bar Association, the Professional Liability Underwriting Society and DRI. He served for six years as a panel member with the Disciplinary Board of the Supreme Court of Pennsylvania. Mr. Vinci has consistently been selected as a Pennsylvania Super Lawyer. In 2019, he was recognized with the Professional Excellence Award from The Legal Intelligencer, the oldest law journal in the United States, in the category of Distinguished Leaders. Mr. Vinci was also a recipient of the Philadelphia Business Journal’s 2019 Best of the Bar Award.  In 2021, he was one of only 30 attorneys nationwide to be named an Insurance Law Trailblazer by the National Law Journal.

Neal R. Troum is Of Counsel in the firm’s Philadelphia Commercial Litigation department. He is a seasoned litigator, whose experience includes securities litigation, complex adversary bankruptcy litigation, insurance defense, products liability, banking and commercial paper, and general contract and tort disputes. He previously worked at Sprague & Sprague and Stradley Ronon Stevens & Young in Philadelphia.

Mr. Troum has written extensively on the Federal Arbitration Act and other topics. He is an adjunct professor at Temple University Beasley School of Law, where he teaches Arbitration Law and Procedure, and he authored BNA Bloomberg’s litigation reference materials on the Federal Arbitration Act.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. (SGRV) has been selected to the first-annual Watch List, a new supplement created by The Legal Intelligencer highlighting a list of small to midsized Pennsylvania law firms composed of less than 250 attorneys, that should, in The Legal’s opinion, be on everybody’s radar. SGRV was selected this year under the category of “Notable Clients/Verdicts.” The listing reads:

“On Our Watch List due to the significance and implications of the summary judgment granted on behalf of Client, effectively dismissing a years’ old malpractice suit.

Spector Gadon Rosen Vinci P.C is proud of its significant state trial court decision recently accomplished through the joint efforts of the firm’s Shareholder and Director George M. Vinci Jr. and Senior Litigation Counsel David B. Picker, who obtained an award of Summary Judgment on behalf of their client, dismissing a legal malpractice case filed against them by an insurance agency in the Superior Court of Delaware. This marks yet another landmark decision reached by the attorneys of SGRV, a firm that has a history of obtaining notable verdicts in favor of their clients, such as a $100 million verdict garnered by Mr. Vinci in 2019 in a fraud case against Grant Thorton, one of the highest verdicts in Kentucky history. SGRV’s approach is distinctive, employing creative strategies and tactics designed to achieve the client’s ultimate objectives. SGRV not only practices the art of law, but they also support the arts and artists through the Spector Gadon Rosen Vinci Foundation (SGRVF). Recipients of the SGRVF’s ATTY award include author Harper Lee and actor Richard Prosky. As the firm enters its 50th year, we look forward to continued strategic growth and excellence in client service.”

View The Legal Intelligencer’s 2023 Watch List here

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been selected to the 29th Edition of The Best Lawyers in America list for the year 2024. Epstein was selected regarding his professional excellence in individual employment law and labor and employment litigation.

As the oldest and most respected peer-review publication in the legal profession, clients and legal professionals widely regard recognition in Best Lawyers as a significant honor. For over forty years, Best Lawyers has gained a reputation as a truly unbiased source of legal referrals. Epstein was chosen for this honor following an exhaustive peer review process in which the nation’s leading lawyers confidentially evaluate their professional peers.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas, and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious International College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its Past President. He holds an AV rating from Martindale Hubbell, has been selected as one of the Best Lawyers in America in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by Philadelphia’s The Legal Intelligencer and Marquis Who’s Who. He was named in 2019 as an Influencer of Law by the Philadelphia Inquirer. He has been named a top 100 Super Lawyer in Philadelphia and Pennsylvania, most recently in 2023, and has also been selected as one of the nation’s 500 Leading Plaintiff Employment and Civil Rights Lawyers (2018, 2019, 2020, 2021, 2022, 2023), 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon. In 2020, Mr. Epstein was selected as a Labor and Employment Star by Benchmark Litigation. In 2022, Mr. Epstein was awarded the honor of a spot on Lawdragon‘s Hall of Fame. He is an active member of the National Employment Lawyers Association, and has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania and as a national leader and Inn President in the American Inns of Court movement. He is currently an active member of the Philadelphia, Pennsylvania and American Bar Associations.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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The United States Supreme Court last week put on hold a proposed Chapter 11 bankruptcy plan for Purdue Pharma that would reserve billions of dollars allotted to pay victims and their families who suffered under the opioid crisis, which also (and controversially) is a plan that would give “immunity” to the payor of the funds, the Sackler family, who owns the company, to settle thousands of lawsuits filed by the states, hospitals, and victims. The Supreme Court will hear the argument in December 2023. Purdue Pharma filed for Chapter 11 relief in 2019 due to all of the debts arising from the lawsuits alleging that OxyContin fostered the opioid epidemic and caused more than 600,000 overdose deaths.

In a brief unsigned order, the Supreme Court granted the Justice Department’s request to temporarily block the Chapter 11 Plan which was approved by the bankruptcy court in 2021 and then affirmed by the Circuit Court. The Justice Department is challenging whether Sackler family members — who personally did not file for bankruptcy — can be protected from litigation over their role in the nation’s gargantuan opioid crisis. The Supreme Court has agreed to review the case and consider whether the U.S. bankruptcy code authorizes such agreements.

The appeal to the Supreme Court comes more than two months after the U.S. Court of Appeals sustained the approval by the bankruptcy court of the plan, saying the Sacklers being shielded from lawsuits was needed to “ensure the fair distribution” of the settlement money. Under the negotiated deal, the Sacklers would pay up to $6 billion over nearly two decades to help alleviate the crisis. The settlement plan could ultimately be worth more than $10 billion, Purdue Pharma has said.

The Justice Department argues in its filing to the high court that shielding the Sacklers is “an abuse of the bankruptcy system,” and that allowing the appellate court’s decision to stand would leave in place “a road map for wealthy corporations and individuals to misuse the bankruptcy system” to avoid liability from lawsuits.

There are very broad implications for the decision that the Supreme Court will hand down. A ruling by the Supreme Court to block the use of “non-consensual third-party releases” (which allow for the release of non-debtor third parties in exchange for their payment of proceeds to use to fund a bankruptcy plan) would likely jeopardize the Pharma bankruptcy settlement and have future implications in the funding and settlement of mass tort litigation in bankruptcy proceedings.

To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been selected as one of the 500 Leading Plaintiff Employment and Civil Rights Lawyers by Lawdragon in its 2023 list of the nation’s best plaintiff employment and civil rights attorneys.

Epstein has been selected for this honor by Lawdragon for the past six years, since the category was created in 2018. The 500 honorees are chosen in Lawdragon’s research-driven, journalistic process that vets the views of peers and competitors, and recognizes large wins. Practitioners who were recognized have been securing positive results for workers for 10 years to more than 50 years. Epstein was one of only 13 Philadelphia lawyers chosen for this nationwide distinction.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its past President. He holds an AV rating from Martindale Hubbell, has been named as one of the Best Lawyers in America in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who. He has been consistently named a top 100 Super Lawyer in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon, in addition to being named to the Lawdragon Hall of Fame (2022). He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Who hasn’t sent a typo when texting?

I plead guilty. Texting is quick, but sometimes (perhaps often) I don’t see my mistake until just after I have sent it. And it’s not just me – errors are so common that many people include comical explanations in their signature blocks. https://www.linkedin.com/pulse/excuse-my-typo-signature-lines-collection-pravash-pujari/

But joking aside, not only do grammarians criticize sloppy texting

(https://contentbureau.com/resources/copywriting-tips/excuse-your-typos-no-i-wont-actually), but business websites also point out the “IRL” risks from using texts for important messages.  https://www.inman.com/next/sent-from-my-iphone-please-excuse-any-typos-and-5-other-text-bombs-youre-making/

But aren’t text typos just an inevitable – and harmless – risk of modern life, like a misaddressed email was, all the way back in 2005?

A recent Canadian court did not see it that way – and held an emoji sender liable for a $62K contract, based on his “thumbs up” emoji. https://www.businessinsider.com/judge-ruled-thumbs-up-emoji-can-represent-legally-binding-agreement-2023-7

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(Although the case was decided under Canadian law, the contract formation principles should be familiar to any first-year contracts law student in this country.)

A “thumbs up” emoji (https://emojiguide.com/people-body/thumbs-up/) was a commodities buyer’s response to a request from a business colleague to “please confirm flax contract”. In court, the buyer claimed that he only wanted to confirm receipt of the contract, rather than acceptance. But the seller – and the court – treated it as a binding acceptance of an offer to sell, a familiar contracts law analysis.

To me, the crucial fact for the court was not just the use of an emoji text to form the contract, but also the parties’ “pattern” of conduct, in other commodities deals, over a period of time. The court explicitly equated the emoji to the parties’ prior verbal exchanges such as “ok”, “yup” or “looks good” – which neither party disputed had actually created contracts. As the court described it, these were  “uncontradicted proof of the manner in which the parties conducted their business”.

In a world where seemingly everyone texts, at all times and for all purposes, “this Court cannot (nor should it) attempt to stem the tide of technology and common usage – this appears to be the new reality in Canadian society and courts will have to be ready to meet the new challenges that may arise from the use of emojis and the like”.

As a result, that quick thumbs-up emoji response cost the sender $61,498.09, plus interest and costs.

As a business attorney, I know from long experience that a sad tale such as this will not stop clients from doing business in the way they prefer – and I can’t deny seeing “ok”, “yup” and “looks good” in our clients’ messages. But I can let them know the potential cost of such business shortcuts. I just hope that I can convince them that what works well for setting a tee time should not be the way to make expensive contracts – especially when a simple, “old fashioned” phone call, or even a Stone Age email, can eliminate any uncertainty, and risk.

For further information, please contact Stanley Jaskiewicz, Esquire, of our Business Law department at sjaskiewicz@sgrvlaw.com, or 215-241-8866.

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The Pregnancy Workers Fairness Act (PWFA), signed into law last December went into effect on June 27, 2023. Pursuant to the PWFA, employers with 15 or more employees must grant a “reasonable accommodation” for an employee’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the employer can show that the accommodation will cause the employer an “undue hardship.”

While the full scope of what a “reasonable accommodation” can include has not been defined, the Equal Employment Opportunity Commission (EEOC) notes that it could include the ability to sit during a work shift; drink water at the workstation; receive appropriately sized uniforms and safety apparel; receive additional break time to use the bathroom, eat and rest; take leave or time off for medical appointments or to recover from childbirth; and be excused from strenuous activities and/or activities that involve exposure to compounds that are not safe for a pregnant woman. Unlike a reasonable accommodation under the Americans with Disabilities Act (ADA), an employer could be required to eliminate an essential function of the employee’s job temporarily.

The PWFA also prohibits covered employers from:

  • Requiring an employee to accept an accommodation without a discussion about the accommodation between the employee and the employer.
  • Denying a job or other employment opportunity to a qualified employee or applicant based on the person’s need for a reasonable accommodation.
  • Requiring an employee to take leave if another reasonable accommodation can be provided that would allow the employee to continue working.
  • Retaliating against an individual for reporting or opposing unlawful discrimination under the PWFA or participating in a proceeding relating to the PWFA.
  • Otherwise interfering with any individual’s rights under the PWFA.

Complaints that an employer has violated the PWFA will be received and processed by the EEOC. A violation will carry the same penalties as a violation of the ADA.

If you have any questions regarding how the PWFA applies to your business, or if you have any questions regarding the requirements of the PWFA, please contact Nancy Abrams at nabrams@sgrvlaw.com or Jennifer Chalal at jchalal@sgrvlaw.com.

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On May 25, 2023, the U.S. Supreme Court unanimously ruled that if a state seizes and sells real property to recoup unpaid taxes and then retains more proceeds than the taxes which were owed, this action violates the Takings Clause of the Fifth Amendment.

This decision resolves a split in the Circuits and reverses a holding from the Eighth Circuit. Now, when a municipality forecloses on real estate and receives more than the taxes which are due, the excess must be remitted to the taxpayer.

In this case, a 94-year-old woman failed to pay her taxes when she moved from her home to an assisted living facility. At the time, she owed approximately $15,000 in taxes ($2,000 in actual taxes and $13,000 in interest and penalty). The property sold for $40,000 and the excess over the taxes due and owing was not remitted to the taxpayer. The basis for the state’s keeping the excess funds was supposedly grounded in state (Minnesota) law.

In his Opinion, Chief Justice Roberts opined that “history and precedent” said otherwise. He further stated that the fact that the government cannot take more than they are owed traces back to “Runnymede in 1215” as a result of King John precluding the taking of such excess. This decision was also grounded in the fact that the Takings Clause was enacted to preclude the government from forcing people alone to “bear public burdens, which, in all fairness and justice would be borne by the public as a whole.” Chief Justice Roberts reversed the Eighth Circuit, stating that the homeowner “plausibly” alleged a taking under the Fifth Amendment since the state made “an exception for itself, and only for taxes on real property”.

The state may not extinguish a property interest that it recognizes everywhere else to avoid paying just compensation when it is the one doing the taking. Further, Chief Justice Roberts stated that “the taxpayer must render unto Caesar what is Caesar’s, but no more”.

Justices Gorsuch and Jackson authored a concurring opinion that discusses a separate basis for the ruling based upon the Eighth Amendment’s prohibition against excessive fines.

To discuss the issues raised here or any other issues involving creditors’ rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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Spector Gadon Rosen Vinci attorney Jennifer Myers Chalal has received three notable distinctions from Super Lawyers.

In addition to her selection as a 2023 Pennsylvania Super Lawyer, another consecutive year in which she was named to the annual list, Ms. Chalal received the honors of being listed as one of the Top 100 Attorneys in the city of Philadelphia, and as one of the Top 50 Women in the practice of law in Pennsylvania.

While a Super Lawyers’ listing alone is an achievement worthy of praise (no more than five percent of the lawyers in Pennsylvania are selected by Super Lawyers), to receive three in a single year is a coveted accolade.

Jennifer Myers Chalal concentrates her practice in the area of employment law handling all types of employment law matters including discrimination claims under Title VII, the ADA, the ADEA, the PHRA, and the NJ Law Against Discrimination, retaliation claims, wrongful discharge claims, wage and hour claims, FMLA claims, ERISA claims, breach of contract claims, non-compete claims, and claims involving workplace torts. She also handles ADA accessibility suits and denials of public accommodations for businesses especially in the hospitality industry. She provides advice to businesses regarding employment matters, conducts workplace investigations for businesses presented with complaints of sexual harassment or other forms of discrimination, prepares employment handbooks, and provides workplace seminars regarding discrimination laws. Her litigation practice extends throughout Pennsylvania and New Jersey in both Federal and State Court.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. The result is a credible, comprehensive, and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in their practice of law. For more information about Super Lawyers, go to SuperLawyers.com.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Florida Gov. Ron DeSantis has appointed Spector Gadon Rosen Vinci P.C. Attorney Cory Chandler to serve as a Judge on the Hillsborough County Court.

“We are proud and excited to learn that Cory Chandler has been appointed by Governor Ron DeSantis to serve as a judge on the Hillsborough County Court.”, said SGRV Shareholder and Director George M. Vinci, Jr. “I can think of no one more deserving of this honor. The Hillsborough County Court will be adding a judge to the bench with the legal acumen, good judgment, and sense of fairness that will benefit all citizens of the state of Florida.”

Mr. Chandler brings with him a wealth of legal experience garnered over a distinguished career, including a J.D. from the South Texas College of Law. Mr. Chandler has an extensive professional background, having served in various legal roles. At SGRV, Mr. Chandler focuses his practice in civil litigation and federal criminal defense. He represents nursing homes and healthcare providers in complex abuse allegations, represents insurance companies and businesses in labor and employment issues, and defends individuals against allegations of white-collar crime. His recent accomplishments include obtaining acquittals of a client on a federal indictment. Mr. Chandler has extensive trial experience having served as lead attorney in more than 60 civil and criminal jury trials. He has represented some of the nation’s largest insurance companies in automobile, products liability, and premises liability cases.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports, and tax law.

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Every year, Spector Gadon Rosen Vinci P.C. is proud to congratulate a number of our best attorneys for receiving the honor of being a Super Lawyer, and 2023 is no different.

11 attorneys from SGRV have been selected for the prestigious 2023 Pennsylvania Super Lawyers list. No more than five percent of the lawyers in Pennsylvania are selected by Super Lawyers.

The recipients are Chairman Paul R. Rosen; Shareholder and Director George M. Vinci Jr.; Managing Member Daniel J. Dugan; Employment Law Group Chair Alan B. Epstein; Estates & Trusts Group Chair Alan J. Mittleman; Bankruptcy and Creditors Rights Group Chair Leslie Beth Baskin; Corporate Law Group Member Stanley P. Jaskiewicz; Employment Law Group Member Jennifer Myers Chalal; Senior Litigation Counsel Bruce Bellingham; Commercial Litigation and Real Estate & Real Estate Litigation Law Group Member Andrew J. DeFalco; and Banking & Financial Services and Commercial Litigation Group Counsel Neal R. Troum.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. The result is a credible, comprehensive, and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in their practice of law. For more information about Super Lawyers, go to SuperLawyers.com.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. attorney Stanley P. Jaskiewicz recently spoke to a group of Boy Scouts from Troop 303 on “The Constitutional Rights and Obligations of a U.S. Citizen”, a requirement for the Scouts to earn the rank of First Class Scout.

Jaskiewicz highlighted similarities between the Scout Law and Scout Oath on the one hand, and the principles of the Constitutions of the U.S. and Pennsylvania on the other hand.

He led the Scouts in a discussion of their constitutional rights and responsibilities by helping them identify examples of both in their everyday lives.

Jaskiewicz, a Member of Spector Gadon Rosen Vinci P.C. and of its Corporate Law Group, is the parent of an Eagle Scout, and the Chartered Organization Representative from Corpus Christi Parish for both Troop and Pack 303, as well as a merit badge counselor.

He regularly publishes articles in the American Bar Association’s Voice of Experience, for which he also serves as a member of its editorial board.

Jaskiewicz has also been active in local and national advocacy groups for persons with disabilities for many years.  He was recognized for his efforts by The Legal Clinic for the Disabled, Inc., in 2007 with its White Hat Award, and by Timothy School in 2019 with its Paul Quinn Award.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports, and tax law.

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SGRV Associate Adam A. Filbert, Esq., has been selected by ALM as a “Lawyer on the Fast Track” as part of the 2023 Pennsylvania Legal Awards.

The category “Lawyers on the Fast Track” honors the next generation of leading lawyers in the Pennsylvania legal industry, recognizing the freshest faces making waves in their respective practices.

Since joining SGRV in 2021, Mr. Filbert has become an invaluable asset to the firm. Under the guidance of our leading attorneys and through his own personal efforts, he has proven to hold a passion for his work, as evidenced by him receiving this prized accolade.

Adam, alongside his fellow recipients, is to be recognized at a celebration hosted by ALM on June 14, 2023, at the Loews Hotel in Philadelphia, located at 1200 Market St. More information on the event is available at the event site.

Each year, The Pennsylvania Legal Awards allow attorneys statewide to showcase their mastery over their practices, celebrating their achievements and excellence, and honoring those who have left a profound mark on the legal community in both Pennsylvania and beyond through their steadfast dedication to the profession.

Mr. Filbert focuses his practice primarily on Employment Law and Commercial litigation. He has accumulated a diverse array of experiences, including those from his time spent with SGRV previously through Drexel University’s Thomas R. Kline School of Law’s Co-Op program.

Some of Mr. Filbert’s previous work experiences outside of SGRV include time spent as a Legal Intern for Chief Judge Juan R. Sanchez of the Eastern District of Pennsylvania, and as a Legal Intern with the Pennsylvania Attorney General Bureau of Consumer Protection, where he primarily worked on large multi-state litigation cases and investigations.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security, and telecommunications.

The firm’s practice areas include high-stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports, and tax law.

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Pennsylvania’s Act 122 updated our corporate laws at the end of 2022. Much of the 123-page, single-spaced collection of “omnibus amendments” reads like a detailed proofreading job, cleaning up glitches in the codification of our corporate laws.

However, there are some noteworthy substantive changes, primarily affecting nonpublic firms.

 

The change most visible to the business community will be the annual report filing required beginning in 2024. Entities that must file this report include corporations (both business and nonprofit), partnerships (limited and LLPs), LLCs, business trusts, and certain other “associations”.

This annual filing (and the associated $7 fee) replaces the $70 “decennial report” previously required every ten years (in the absence of any other corporate filings), which was repealed effective in January 2023.

Corporate law geeks should pay attention to several new provisions:

  • Allowing entities to override otherwise applicable fiduciary limitations.
  • Confirming that certain fiduciary duties exist only in favor of the entity, and not of creditors or a shareholder.
  • Confirming that a shareholder is subject to bylaws, whether or not they know what they may say.
  • Allowing corporations (but not LLCs or partnerships) to limit litigation over “internal corporate claims” to a particular Pennsylvania court (provided that such court has “jurisdiction”, the legal right to decide such a claim).
  • Codifying rules for the personal liability of officers.
  • Confirming the effectiveness of share transfer restrictions to protect an election, or to satisfy a statutory or regulatory requirement.

Many provisions confirm that internet technology may be used for corporate meetings, acceding to the Pandemic’s reality.

Act 122 formally validates the common practice of signing contracts using a fictitious name, registered or unregistered (rather than with the formal name registered in Harrisburg). However, a firm still can’t file a lawsuit using an unregistered fictitious name – the court filing must use a firm’s formal name or a registered fictitious name.

The new law’s text is at 2022 Act 122 – PA General Assembly (state.pa.us).

The Secretary of State’s press release on the new annual report requirement is at Annual Reports in Pennsylvania (pa.gov).

For further information about Act 122’s changes, or Pennsylvania corporate law generally, please contact Stanley Jaskiewicz, Esquire, of our Business Law department at sjaskiewicz@sgrvlaw.com, or 215-241-8866.

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On February 22, 2023, the U.S. Supreme Court decided Bartenwerfer v. Buckley, No. 21-908, and affirmed the Ninth Circuit in holding that 11 U.S.C. § 523(a)(2)(A), which bars debtors from discharging debts obtained by fraud, holding that it applies to debtors who are liable for fraud even though they did not personally commit the underlying relevant actions.

Kate Bartenwerfer (“Kate”) jointly purchased a home with her business partner, David Bartenwerfer (David”). They worked to remodel the home and sold it at a large profit. David performed most of the remodeling services and Kate was largely uninvolved in those actions. When the remodeling was finished, Kate and David (hereinafter may be referred to as the “Sellers”) sold the house to Kieran Buckley (“Buckley”), and as part of the sale process they certified that they disclosed all material facts related to the property. After the sale was consummated, Buckley noticed that many substantial defects were concealed from her prior to the sale and commenced a suit alleging misrepresentation and secured a judgment against both of the Sellers for the remodel for breach of contract, negligence, and nondisclosure of material facts.

The Sellers then jointly filed for bankruptcy in an attempt to discharge Buckley’s judgment. The Bankruptcy Court concluded that the judgment against Kate was non-dischargeable under section 523(a)(2)(A), which bars the discharge of “any debt . . . (2) for money, property, [or] services . . . obtained by . . . (A) false pretenses, a false representation, or actual fraud,” because David’s knowing concealment of the home’s defects could be imputed to Kate. The Bankruptcy Appellate Panel reversed in part and remanded for determination of whether Kate had specific knowledge of David’s fraud. On remand, the Bankruptcy Court concluded that Kate lacked any information regarding David’s fraud and therefore the judgment against her could be discharged. The Ninth Circuit reversed, holding that a debtor who is liable for a partner’s fraud cannot discharge that debt in bankruptcy, even if there is no evidence of that debtor’s responsibility or blame.

An appeal was taken up to the U.S. Supreme Court, which held that the text of section 523(a)(2)(A) precluded Kate from discharging the judgment debt insofar as the debt emanated from “the sale proceeds obtained by David’s fraudulent misrepresentations, it is a debt ‘for money . . . obtained by . . . false pretenses, a false representation, or actual fraud.’” In so concluding, the Supreme Court recognized that the statute does not concern itself with who committed the fraud — if debt results from someone’s fraud, it is non-dischargeable under section 523(a)(2)(A).

Further, the Supreme Court analyzed precedent interpreting a prior version of the statute — where it held two innocent partners were prohibited from discharging debts arising out of the fraud of another partner — and Congress’s decision to enact a new version of the statute echoing the Court’s holding. The Supreme Court stated that when Congress enacts a statute, it is presumed to be aware of the Court’s precedents and that the presumption is especially strong when Congress changes the statutory text to embrace one of the Court’s prior holdings or interpretations of the statute.

The Court also did not accept Kate’s argument that “[p]recluding faultless debtors from discharging liabilities run up by their associates” is inconsistent with Congress’s policy of giving debtors a fresh start. The Supreme Court stated that Congress struck a careful balance between debtors and creditors under the bankruptcy code, which the Court is not at liberty to rewrite. This decision resolves a circuit split as to whether these types of debts are dischargeable.

To discuss the issues raised here or any other issues involving creditors’ rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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On, January 31, 2023, Bankruptcy Judge Goldblatt issued a comprehensive opinion discussing Mareva injunctions which generally prohibit the defendant from transferring its assets when a plaintiff has only asserted a “legal claim” against the defendant/debtor and before a judgment is actually entered. The court also discussed how the U.S. Supreme Court opinion in the Grupo case (as discussed below) controlled his decision. See Miller v. Mott (In Re Team Systems Int., LLC).

In this highly contentious bankruptcy, Debtor was a small business government contractor whose work was done solely by its members and had no independent employees. The Chapter 7 trustee (the case was originally filed as a Chapter 11 but converted to a Chapter 7) initiated a fraudulent conveyance complaint (“Complaint”) against numerous defendants/insiders, their family members, and entities which they owned in an attempt to recover property worth in excess of $14 million. Per the Complaint, the trustee sought: (a) recovery of these conveyances; (b) the imposition of a preliminary injunction to prevent the alienation of 3 specific properties; (c) the enjoining of the transfer of other real estate and other assets; and (d) an accounting.

During the course of the litigation and the bankruptcy in general, it came to light that not only were there substantial prepetition transfers to insiders and that the insiders had taken steps to conceal the existence of these transfers, but that Debtor’s business records had been fabricated by the insiders to conceal substantial transfers to themselves. For example, some of the transfers were for the insiders’ purchase of multimillion dollar homes, expensive cars, etc., yet were listed by debtors on their business records as “payments to contractors” to lawyers for their legal services. Further, it appeared that some of the transfers of substantial sums of money were whited out on Debtor’s bank records in an effort to conceal these transactions.

The Court performed a thorough analysis under the U.S. Supreme Court decision in Grupo Mexicano de Desarrolla SA v. Alliance Bond Fund Inc., 527 U.S. 308 (1999), which held that a federal court may not freeze a defendant’s assets when a plaintiff only asserts a legal “claim” against the defendants as they only have a claim in general and not one against any particular asset. Importantly though, the Grupo court did not rule out the availability of an injunction when the Plaintiff seeks “equitable relief”.

In the case herein, the Court found that the trustee’s requests including one for an asset freeze was “equitable” in nature and therefore permissible. As aforestated, despite the fact that the Complaint was one for the return of fraudulent transfers (generally an action sounding in “law”), the trustee also requested a preliminary injunction to freeze certain assets. In deciding that Trustee’s request to “freeze cash” was a bit more troublesome, this Court still granted the relief as the Complaint also called for an accounting of the disposition of cash due to the incomplete business records and the uncertainty about the end result of the transferred funds. It appears that the Court’s granting of the trustee’s requested relief hinged on the “equitable exception” in the Grupo decision and thus concluded that it had the authority to impose the asset freeze here. Note that this Court also delved into an analysis of the U.S. Supreme Court case of Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989), which discusses the availability of the requested relief where the trustee seeks the freezing of debtor’s cash. Herein, the trustee’s requests (albeit with a somewhat more limited scope than originally requested) were permitted since in addition to seeking to recover the value of the transferred cash as a fraudulent conveyance it also included a claim for an accounting in the disposition of that cash, which is categorized as equitable relief.

This opinion provides an extremely well-reasoned and analytical approach detailing the burdens which must be met and the scope in requesting an asset freeze of Debtor’s property.

To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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A number of SGRV attorneys and staff gathered on January 16, 2023 to honor the legacy of Dr. Martin Luther King, Jr. through a day of service. Executive Director of Administration Mark Tarasiewicz, Communications Associate Michael Vinci, attorneys Joseph Devine and David Picker, IT Director Stan Tyszka, and Drexel Co-Op Jacob Jaeger came together on a cold, but pleasant and sunny January morning to joyously serve their community.

The group partook in a cleanup of the Wissahickon Valley Park in Philadelphia, a vital watershed and recreational space for the city. The activity was sponsored by the nonprofit Friends of the Wissahickon, which is committed to the maintenance and upkeep of the park. There, they took up their trash pickers and went to work cleaning up some of the park’s most littered areas, restoring them to their pristine, natural state. It was a valiant effort indeed, and everyone was pleasantly surprised at the amount of litter that managed to be collected and the profound difference it made on the appearance of the park.

In addition to those that went to help clean up the park, a number of SGRV staff participated in MLK Day through their own service activities in addition to educational discussions and program viewings with friends and family regarding Dr. King’s legacy.

The MLK Day of Service is a nationwide effort taken up by Americans every year to give back to their communities in the spirit of Dr. King’s commitment to service. As Dr. King once stated, “Not everybody can be famous but everybody can be great, because greatness is determined by service.”

Instead of a day off, Many companies and firms across America, including SGRV, approach MLK day as a “day on,” allowing employees to give back to their communities for a day in lieu of just coming into the office.

As we reflect on the importance of days like this, we remember to continue teaching the lessons of Dr. King through our words and actions for not just one day, but throughout the year.

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For the second year in a row, the attorneys and staff of Spector Gadon Rosen Vinci P.C. were eager to help bring the spirit of the holidays to a family in need through the Philadelphia Ronald McDonald House’s “Family to Family” program. Thanks to this generous program, the Ronald McDonald house has helped countless families experience the joy of the season.

The holidays can be a unnecessarily stressful time for families facing difficulties like childhood illness. The Ronald McDonald House’s “Family to Family” program seeks to ease this stress and provide their resident families with the holiday cheer they deserve. The program pairs families staying at the house with individuals, groups, and businesses to supply the families with everything on their wish lists and more for the holiday season.

Member Jennifer Myers Chalal and Associate Adam A. Filbert, accompanied by Communications Associate Michael Vinci played Santa for the day and dropped off three large bags full of presents of all kinds — toys, clothes, gift cards, and so much more.

Many staff and attorneys selflessly contributed to brightening the holidays for the family. Thanks to them, we were able to make this holiday season another one to remember for a local family in need.

You can learn more about the Ronald McDonald house and the incredible things they do for families in need here.

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Attorneys who represent privately held clients have always had to be cautious that information about their clients would not be leaked to the public. Clients want to keep those details confidential, because they are confidential — not (usually) to hide assets, or avoid disclosure obligations (whether legally, or not). (I have to add the qualifier “usually,” because sometimes that is exactly why lawyers are hired — and when ethics counsel gets a seat at the table.)

In most cases, however, clients simply want counsel to protect their personal assets against creditors, or to achieve the best tax results. However, the Financial Crimes Enforcement Network (“FinCEN”) recently finalized rules (https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements) under 2020’s Corporate Transparency Act (“CTA”) that could complicate such routine planning. That law mandated reporting of ownership of firms not subject to other reporting or regulation.

As one major newspaper headlined, “US Shell Companies Won’t Be Able to Remain Anonymous.”(Formally, the CTA is found in Sections 6401 to 6403 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Pub.L. No. 116-283 (H.R. 6395), 134 Stat. 338, 116th Cong. 2d Sess.) The CTA is contrary to typical disclosure laws, which regulate publicly traded firms. Instead, the CTA requires reporting by privately held firms. Its goals were to combat money laundering, financing of terrorism, and tax evasion. In Washington-speak, it was intended “to protect the U.S. financial system from illicit use and impede malign actors from abusing legal entities, like shell companies, to conceal proceeds of corrupt and criminal acts (which) abuses undermine U.S. national security, economic fairness, and the integrity of the U.S. financial system.”

Cutting through the jargon, the CTA tries to identify “beneficial ownership”— the human beings behind the corporate entities, to get to those who have “substantial,” actual control of a business — to be able to prosecute them for any abuses that may occur. To enforce the CTA, Congress put the reporting obligation on the law firms — and their paralegals — who file typical formation papers. (If Congress were subject to the same full disclosure rules, perhaps the CTA should have been called the “Rat Out Your Clients” Act.) How will law firms resolve ethical conflicts, between the duty of confidentiality, and the CTA disclosure mandate? Will this just be another reason to bill clients?

The law’s creators cited European legal concepts of a higher duty to the public. Fortunately, the CTA has many exemptions, generally involving those who already report information to a government agency. There are also exemptions for shell companies, and for large existing firms of 20 or more employees which pay taxes and have gross sales of $5 million or more. Of course, what rule designed to cut through legal ways of hiding ownership information would be complete without even more rules?

FinCEN’s “final” (late September 2022), rule announced several future additional rules. One will regulate access to the sensitive database that CTA reporting will create. Another will clarify financial institutions’ existing duty to vet their clients. The new rules provide affected firms time to comply — but not much. Firms in existence on the January 1, 2024, effective date will have one year to file their initial reports, by January 1, 2025. However, firms created after January 1, 2024, must make their initial report within 30 days of creation.Moreover, CTA reports will be confidential — as they should be. Not only will they contain identifying information, such as names and addresses. They will also have such critical nonpublic information as social security numbers and EINs, or a driver’s license.

Although January 1, 2025, seems a long way off, it is not too early to start planning your firm’s CTA reporting. In particular, if you must report, think about whether your ownership structure can be adjusted before that date.

For further information about the CTA or the proposed regulations, please contact Stanley Jaskiewicz of our Corporate Law Department at sjaskiewicz@sgrvlaw.com, or 215-241-8866.

Copyright 2022 Stanley P. Jaskiewicz, Esquire

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In the recent case of Jones v. 21st Century Insurance Company, et al., No. 16-CA-7089, 13th Judicial Circuit, Hillsborough County, Florida, Spector Gadon Rosen Vinci P.C. Shareholder and Director George M. Vinci, Jr. and Of Counsel Neal R. Troum‘s diligence and tireless work ethic helped secure the entrance of the court into summary judgement.

The court entered summary judgment for Defendants Jessica Lanifero and Kubicki Draper, P.A., granting the motion filed by their attorneys, SGRV’s George M. Vinci, Jr., and Neal R. Troum. In Jones, judgment had been entered on a jury verdict for approximately $3 million against the original plaintiff, Damil Belizaire, following a car accident in which he was at fault. Belizaire subsequently brought suit against his insurer and his attorneys (Lanifero and Kubicki Draper), claiming the case against him should have settled under an offer of judgment. (After Belizaire filed for bankruptcy, Jones as trustee was substituted in as plaintiff.) The Jones court held that (i) the offer of judgment at issue was ambiguous and unenforceable under Florida law, and (ii) Plaintiff could not demonstrate proximate cause – and thus, Lanifero and Kubicki Draper could not as a matter of law have committed malpractice by not counseling Belizaire to accept the settlement offer.

George M. Vinci, Jr. is Shareholder and Director of Spector Gadon Rosen Vinci P.C., a Member of the Executive Committee, and Chairman of the Insurance Coverage & Casualty Litigation and Professional Liability & Malpractice Litigation practice groups. Mr. Vinci focuses his practice on civil litigation with a strong emphasis on professional malpractice, hospitality, employment, and insurance disputes.

Mr. Vinci’s litigation experience involves cases throughout the United States. Recently he obtained one of the highest verdicts in the Commonwealth of Kentucky, one hundred million dollars ($100,000,000), in a fraud case against Grant Thornton. The case involved the sale of an abusive tax shelter. (William J. Yung et al v. Grant Thornton, LLP, et al., Kenton Cir. Ct., Fourth Division,  Commw. Of Kentucky, Case No. 07-CI-04647.) He was involved in a groundbreaking election fraud case (Marks v. Stinson) in the U.S. District Court for the Eastern District of Pennsylvania, which was aired on Court TV.

Mr. Vinci has successfully handled a wide variety of complex commercial litigation matters including tortious interference, civil RICO, FDCPA, Class Action Wage and Hour disputes and bankruptcy litigation. He also represents a large number of Long Term Care facilities in Florida.

Mr. Vinci is a member of the American Bar Association, the Pennsylvania Bar Association, the Professional Liability Underwriting Society and DRI. He served for six years as a panel member with the Disciplinary Board of the Supreme Court of Pennsylvania. Mr. Vinci has consistently been selected as a Pennsylvania Super Lawyer. In 2019, he was recognized with the Professional Excellence Award from The Legal Intelligencer, the oldest law journal in the United States, in the category of Distinguished Leaders. Mr. Vinci was also a recipient of the Philadelphia Business Journal’s 2019 Best of the Bar Award.  In 2021, he was one of only 30 attorneys nationwide to be named an Insurance Law Trailblazer by the National Law Journal.

Neal R. Troum is Of Counsel in the firm’s Philadelphia Commercial Litigation department. He is a seasoned litigator, whose experience includes securities litigation, complex adversary bankruptcy litigation, insurance defense, products liability, banking and commercial paper, and general contract and tort disputes. He previously worked at Sprague & Sprague and Stradley Ronon Stevens & Young in Philadelphia.

Mr. Troum has written extensively on the Federal Arbitration Act and other topics. He is an adjunct professor at Temple University Beasley School of Law, where he teaches Arbitration Law and Procedure, and he authored BNA Bloomberg’s litigation reference materials on the Federal Arbitration Act.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Alan B. Epstein, Chair of the Employment Law Group of the Philadelphia-based law firm of Spector Gadon Rosen Vinci P.C., has been selected as a Benchmark Litigation Labor and Employment Star for 2022. Benchmark Litigation provides analysis of commercial and financial litigators and law firms in the United States. Epstein was chosen based on factors including recent representative cases, philanthropic work, involvement in professional organizations, and work background.

Focused exclusively on the U.S. litigation market, Benchmark Litigation identifies leading U.S. attorneys and firms at the local and national levels. Rankings and editorials are based on interviews with the nation’s leading private practice lawyers and in-house counsel. Firms and individuals cannot pay to be recommended in the guide.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights, and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, Boards and Board Members regarding adherence to state and federal regulations.  He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for corporate entities, corporate officers and Directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists, and architects, as well as insurance, real estate and security brokers.

Epstein has received a number of recent accolades. He was named in 2019 as an Influencer of Law by the Philadelphia Inquirer. He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Plaintiff Employment Lawyers (2018), 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon™. He is an active member of the National Employment Lawyers Association, and has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania and as a national leader and Inn President in the American Inns of Court movement.  Epstein was most recently selected as a 2020 Pennsylvania Super Lawyer.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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In a recent case, SGRV Attorneys Alan B. Epstein and Jennifer Myers Chalal received a U.S. District Court (EDPA) judgment in excess of a quarter million dollars in favor of their client, Plaintiff Aaron Lett, who was previously employed by the Southeastern Pennsylvania Transportation Authority (SEPTA) as an operator in its Victory Division and was a member of Defendant International Association of Sheet Metal, Air, Rail and Transportation Workers, Transportation Division, Local 1594 (“SMART” or the “Union”).

Plaintiff alleged that his former Union had aided and abetted SEPTA in violation of the Pennsylvania Human Relations Act (“PHRA”) by discriminating against him on the basis of his disability, chronic kidney disease requiring dialysis, by failing to provide him with a reasonable accommodation that would allow him to receive dialysis while continuing to fulfill his duties as a bus driver. Plaintiff also asserted that the Union aided and abetted SEPTA in not engaging in the interactive process to determine a reasonable accommodation that would allow him to keep his job as a bus driver. Plaintiff filed an action for disability discrimination and retaliation against SEPTA along with his aiding and abetting claim against SMART but settled with SEPTA prior to the trial. A non-jury trial was held before the Honorable Karen Marston who found that SMART aided and abetted Septa in discriminating against Plaintiff by failing to accommodate his disability and awarded Plaintiff at total sum of $283,604.97.

Alan B. Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

Jennifer Myers Chalal concentrates her practice in the area of employment law handling all types of employment law matters including discrimination claims under Title VII, the ADA, the ADEA, the PHRA, and the NJ Law Against Discrimination, retaliation claims, wrongful discharge claims, wage and hour claims, FMLA claims, ERISA claims, breach of contract claims, non-compete claims, and claims involving workplace torts. She also handles ADA accessibility suits and denials of public accommodations for businesses especially in the hospitality industry. She provides advice to businesses regarding employment matters, conducts workplace investigations for businesses presented with complaints of sexual harassment or other forms of discrimination, prepares employment handbooks, and provides workplace seminars regarding discrimination laws. Her litigation practice extends throughout Pennsylvania and New Jersey in both Federal and State Court.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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For all the attention crypto assets such as Bitcoin have received in the financial press, can a bank lend against them? They are, after all, a valuable asset. Some advisors even treat crypto as its own asset class, and a key part of a diversified portfolio.

But what are crypto assets, for collateral purposes?

Can a lender foreclose on them as easily as more traditional collateral, such as real estate, or investment securities? Of course, a lender must be willing to make such a loan — crypto’s values are certainly volatile. In other words, the collateral value could fall below the loan balance without warning — or the lender could demand several times the amount of the loan in security. The lender could also ask for additional less volatile, traditional forms of collateral, such as real estate, or receivables.

However, help is on the way for the bank lender facing this question (although that help may be on the proverbial slow boat).

That is not unusual — prior revisions of the Uniform Commercial Code to address technology developments took some time (and a major 2018 proposal was approved in only one state). The Uniform Law Commission, which writes model rules for states, has proposed amendments to the laws governing collateral to include “emerging technologies” — including virtual currencies, distributed ledger technologies, and artificial intelligence. UCC, 2022 Amendments to – Uniform Law Commission (uniformlaws.org)

For technical reasons, crypto assets are not “money” (which a lender must possess for it to serve as collateral). Many practitioners instead lump them into the “general intangibles” catch-all — a far cry from fungible “money.” Therefore, rather than shoehorn crypto assets into the existing structure of the Uniform Commercial Code, the proposed law adds a separate chapter for “digital assets,” formally named “controllable electronic records.” The details of the proposal are complex, but have a business-oriented goal — to “preserve the availability of existing transaction patterns.”

In plain English, the proposed law will adopt key concepts of current secured lending to the practicalities of crypto assets. The proposed rules define such fundamentals as the ability to transfer crypto assets free of liens, and how to take an interest free of third-party claims (key concerns for lenders and buyers).

Until laws are amended to provide some clarity, lenders may consider lending against investment accounts — a familiar asset class — holding crypto assets, rather than against the crypto assets themselves. Lenders will likely also await regulatory guidance on how to value these assets. See https://www.federalreserve.gov/supervisionreg/srletters/SR2206.htmfor the Fed’s August 16, 2022, guidance for banks on “Engagement in Crypto-Asset-Related Activities by Federal Reserve-Supervised Banking Organizations.”

Spoiler alert — the Fed is not a fan.

Instead, it required “A supervised banking organization should notify its lead supervisory point of contact at the Federal Reserve prior to engaging in any crypto-asset-related activity.” (Emphasis added.) The release then catalogs a lengthy list of risks bankers must assess for “relevant supervisory feedback, as appropriate, in a timely manner.”

The FDIC urged similar caution in April. https://www.fdic.gov/news/financial-institution-letters/2022/fil22016.html; https://www.fdic.gov/news/financial-institution-letters/2022/fil22016.html#letter

The OCC had issued its own skeptical warning in late 2021, updating its earlier guidance. https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-121.htmlhttps://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2021/int1179.pdf

In fact, the three regulators — the Fed, the OCC and the FDIC — announced in November, “Throughout 2022, the agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organizations are legally permissible, and expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations.” https://www.occ.gov/news-issuances/news-releases/2021/nr-ia-2021-120a.pdf

As the banking regulators all emphasized, lenders must understand the risks crypto poses, as with any other type of nontraditional collateral. Not only may you face challenges in foreclosing, but its value may fluctuate so much that your regulators may be skeptical about it — much less your CPA.

However, for those comfortable with those risks, and who can become comfortable about regulatory concerns, crypto lending may be a Gold Rush for the 21st century. In fact, one local bank has even expanded its lending ability through a deal involving crypto currency participations — but with limits. According to the bank, “We’re not going to put cryptocurrency on our books. We’re not going to take cryptocurrency as collateral. We’re not going to do anything on the blockchain. We’re not going to do anything with smart contracts.”

https://www.bizjournals.com/philadelphia/news/2022/08/22/bucks-county-bank-become-first-u-s.html?utm_source=st&utm_medium=en&utm_campaign=OT&utm_content=pl&ana=e_pl_OT&j=28810368&senddate=2022-08-22 (Subscription Required)

For further information on lending secured by atypical collateral, please contact Stanley P. Jaskiewicz, a member of our Business Law Department. sjaskiewicz@sgrvlaw.com; 215-241-8866.

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Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been selected to the 29th Edition of The Best Lawyers in America© list for the year 2023. Epstein was selected regarding his professional excellence in individual employment law and labor and employment litigation.

As the oldest and most respected peer review publication in the legal profession, recognition in Best Lawyers is widely regarded by both clients and legal professionals as a significant honor. For over forty years, Best Lawyers has gained a reputation as a truly unbiased source of legal referrals. Epstein was chosen for this honor following an exhaustive peer review process in which the nation’s leading lawyers confidentially evaluate their professional peers.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its Past President.  He holds an AV rating from Martindale Hubbell™, has been named as one of the Best Lawyers in America™ in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who.  He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon™.   He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. attorney Alan B. Epstein has been featured on the front page of a recent issue of the Legal Intelligencer for coverage of a high-profile defamation lawsuit filed by the anthropologist and former Penn Museum curator Janet Monge against the University of Pennsylvania and some 20+ other defendants. Monge was the subject of media reports alleging she mishandled the remains of 1985 MOVE bombing victims.

Epstein represents Monge, and he is quoted extensively in the story. The case was recently removed to Federal Court.

Legal Intelligencer 080322

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as a Past President of that organization.  He holds an AV rating from Martindale Hubbell™, has been named as one of the Best Lawyers in America™ in the publication of that name for more than 10 years. He has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who. He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania. He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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On July 12, the Equal Employment Opportunity Commission (EEOC) issued new guidance to assure that the measures employers implement to protect their employees from Covid-19 comply with federal anti-discrimination laws, particularly the Americans With Disabilities Act. In the new guidelines the EEOC makes clear that, going forward, employers will need to assess whether current pandemic circumstances and individual workplace circumstances justify viral screening testing of employees to prevent workplace transmission of Covid-19. In other words, an employer may require an employee to submit to Covid-19 testing if the employer can show testing is job-related and consistent with business necessity.
In making the decision whether or not to require Covid-19 testing, the EEOC suggests that employers consider the level of community transmission, the vaccination status of employees, the accuracy and speed of processing for different types of Covid-19 viral tests, the degree to which breakthrough infections are possible for employees who are “up to date” on vaccinations, the ease of transmissibility of the current variant(s), the possible severity of illness from the current variant, what types of contacts employees may have with others in the workplace or elsewhere that they are required to work (e.g., working with medically vulnerable individuals), and the potential impact on operations if an employee enters the workplace with Covid-19. The EEOC also suggests that employers check the latest guidance from the CDC, FDA and state and local health authorities to determine whether screening testing is appropriate for their employees.
As a practical matter, Employers can require employees who are coming into a worksite to be tested if they have Covid-19 symptoms, have been diagnosed with Covid-19, or have been exposed to someone who has been diagnosed with Covid-19. If an employee tests positive, they can exclude that employee from the workplace during the mandatory quarantine. Employers can also require that any employee who is returning to the workplace after having been diagnosed with Covid-19 provide a doctor’s note or a negative Covid-19 test before they can return to the workplace.
Employers can also require applicants to produce a negative Covid-19 test as long as the requirement is applied consistently for all applicants who will work in the employer’s workplace.
If you need assistance creating a Covid-19 testing policy for your business, or if you have any questions regarding these mandates, please contact Nancy Abrams at nabrams@sgrvlaw.com or Jennifer Myers Chalal at jchalal@sgrvlaw.com.
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Alan B. Epstein, Chair of the Employment Law Group at the Philadelphia-based law firm of Spector Gadon Rosen Vinci P.C. (SGRV), has been selected to the Lawdragon™ Hall of Fame, the firm has announced. The distinction, whose recent members include the late U.S. Supreme Court Associate Justice Ruth Bader Ginsburg, Associate Justice Stephen G. Breyer, and U.S. Attorney General Merrick B. Garland, and local, leading luminaries, including attorney Tom Kline, recognizes past members of the Lawdragon 500 and other outstanding lawyers who have made remarkable contributions as leaders, litigators, dealmakers, power brokers, judges and innovators.

The Lawdragon™ Hall of Fame listings are chosen through a thorough selection process of the nation’s greatest corporate litigators, plaintiff powerhouses, and innovators with unsurpassed dedication to their legal practice. Only the best of the best are given the honor of a place in the Hall of Fame. While the list is ever growing since its creation in 2015, rarely do more than 100 lawyers nationwide annually receive the accolade of a Hall of Fame position.

In addition to his Hall of Fame selection, Mr. Epstein was selected as a 2022 Lawdragon™ 500 Leading Plaintiff Employment & Civil Rights Lawyer. Epstein has been selected for this honor for the past five years, since the category was created in 2018. The 500 honorees are chosen in Lawdragon™’s research-driven, journalistic process that vets the views of peers and competitors, and recognizes large wins. Practitioners who were recognized have been securing positive results for workers for 10 years to more than 50 years. Epstein was one of only 11 Philadelphia lawyers chosen for this nationwide distinction. He also has in the past been selected by Lawdragon™ as one of the nation’s Leading Lawyers and also as a Lawdragon™ Leading Litigation Lawyer.

“Alan continues to push the boundaries of what it means to be an Employment and Civil Rights attorney. His accolades have raised our firm to the next level,” noted SGRV Chairman Paul R. Rosen.

SGRV Shareholder and Director George M. Vinci Jr. added that “Alan’s dedication to his craft is an inspiration for us all. Few things can make me more proud than to have him as a member of SGRV.”

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as a Past President of that organization.  He holds an AV rating from Martindale Hubbell™, has been named as one of the Best Lawyers in America™ in the publication of that name for more than 10 years. He has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who. He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania. He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Every year, Spector Gadon Rosen Vinci P.C. is proud to congratulate a number of our best attorneys for receiving the honor of being a Super Lawyer, and 2022 is no different.

Ten attorneys from SGRV have been selected to the prestigious 2022 Pennsylvania Super Lawyers list. No more than five percent of the lawyers in Pennsylvania are selected by Super Lawyers.

The recipients are Chairman Paul R. Rosen; Shareholder and Director George M. Vinci Jr.; Managing Member Daniel J. Dugan; Employment Law Group Chair Alan B. Epstein; Estates & Trusts Group Chair Alan J. Mittleman; Bankruptcy and Creditors Rights Group Chair Leslie Beth Baskin; Corporate Law Group Member Stanley P. Jaskiewicz; Employment Law Group Member Jennifer Myers Chalal; Commercial Litigation, Health Care Law & Litigation and Insurance Coverage & Casualty Litigation Group Member Matthew R. Shindell; and Senior Litigation Counsel Bruce Bellingham.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in their practice of law. For more information about Super Lawyers, go to SuperLawyers.com.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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In our society, ownership usually beats other claims to property. As lawyers learn in first year Property class, “a thief can’t convey good title.”

But in business, sometimes ownership doesn’t matter.

In one common situation, an undisputed owner will lose its property, to someone it may never have known about. How can this happen? More importantly, as a business owner, how can you avoid it? This risk arises when property is consigned to another firm, rather than sold. Consignment allows a seller to obtain possession of property for resale, without having to pay for it. Sellers sometimes prefer consignment, because of the naïve perception that retaining the title is safer than selling to a customer with less than stellar credit – a “poor man’s” form of security, without the legal fees.

I suspect that most people think of pawn shops and upscale resale boutiques when they hear “consignment”.

However, even before the Pandemic’s challenges, some businesses relied on consignments as a way to reduce their firm’s cash flow needs. For example, I worked with one client that financed inventory acquisition for its manufacturing process by accepting it on consignment, rather than purchasing it. Rather than pay upfront for inventory, such firms pay for it only as it is used after they have the cash from a sale. This transfers the carrying costs and risk of financing, from an intermediate buyer to the original seller. If the intermediate seller doesn’t find a buyer, the original seller – who still owns the inventory – can, in theory, take it back, and try to sell it elsewhere.

But that takes time and money, including shipping costs.

As a legal matter, firms supplying inventory to such firms must understand that commercial rules in all states require extremely specific steps to protect the owner’s interest. If the owner of the property doesn’t follow the procedures of the Uniform Commercial Code on consignments, secured creditors of the intermediate buyer will have a better claim to the inventory than its owner.

In simple terms, the intermediate buyer’s lender can foreclose on inventory that its buyer doesn’t own, as illogical as that seems. The owner that supplied it to the buyer can complain, but will lose – unless it took two simple steps before shipping the inventory:

  • File a UCC-1 Financing Statement against the recipient of the inventory (the “consignee”, in legal jargon), identifying the transaction as a “consignment” (a check box on the form). The consignee no longer must sign the UCC-1, but you, as a supplier of the goods, should demand that it sign an “authorization” for you to file against the consignee that receives your goods.
  • In writing, notify the recipient’s secured creditors that the consignee will receive your inventory. (You must pay for a public records search to identify them.)

Again, you must do both of these, before the recipient receives any inventory, to protect your ownership of your consigned goods. If you miss a detail, the law makes your ownership of the consigned inventory irrelevant.

Even though the recipient hasn’t paid you for it – remember, you shipped on consignment – your ownership is legally meaningless. The recipient’s creditors can seize that inventory on foreclosure to satisfy the recipient’s debt, without any obligation to pay you for them, even though you were (not “are”) the owner of those goods. You still have a claim against the recipient to recover the goods’ value, but good luck. If the recipient’s lender has begun a foreclosure, you have to decide whether suing for the value of the inventory you “owned” (again, past tense) would just be throwing good money after bad.

If all of this sounds complex, congratulations! You are correct – secured credit involving consigned goods is not something anyone should try at home. As a practical matter, don’t let a lender force you to incur significant legal fees, by encouraging you to be able to borrow more, by including consigned goods in your borrowing base. The lender may believe – perhaps sincerely, but wrongly – that it is as easy as filing a UCC-1. In fact, you will probably have to pay your lender’s additional legal fees under the typical “borrower pays all lender expenses” provision of your loan agreement.

Instead, consult with counsel to understand the legal cost of consigning inventory, rather than selling it. Then balance that expense against the benefit of the additional borrowing availability from such added collateral, and the carrying cost of continuing to own those consigned goods until the recipient actually sells them, and can pay you for them.

In other words, there is a reason most boilerplate asset-based loan agreements exclude consigned goods in the possession of a third party (the recipient of the goods) from the consignor’s borrowing base. A typical lender may see inventory onsite, without realizing that its borrower does not own it (and can’t use it as collateral). The business moral of the story is simple: call your counsel before incurring costs on a new business arrangement, whether as a supplier or lender. If you don’t, the cliché, “you snooze, you lose” will become “you own, you lose” – and you will pay your counsel for the privilege of doing so.

For further information on this issue, or on writing your form agreements to protect your business and assets in everyday transactions, please contact Stanley Jaskiewicz (https://www.sgrvlaw.com/attorney/stanley-p-jaskiewicz/) at 215-241-8866, or sjaskiewicz@sgrvlaw.com for a no-cost initial consultation.

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Effective April 1, 2022, certain dollar amounts will be adjusted under the Bankruptcy Code to reflect the changes in the Consumer Price Index. In many instances, these adjustments are very important as they can make a difference between whether a Debtor can preserve its assets or not. Some of the changes are as follows:

Pursuant to 11 USC Section 522: under 522(d)(1), the aggregate amount which a debtor can exempt in value of its residence has increased from $25,150 to $27,900; under 522(d)(2), the aggregate amount which each debtor can exempt in a motor vehicle has increased from $4,000 to $4,450; under 522(d)(3), the aggregate amount a debtor can exempt in household goods furnishings, etc. has increased from $13,400 to $14,875; under 522(d)(4), the aggregate amount a debtor can exempt in jewelry has increased from $1,700 to $1,875; under 522(d)(5), the aggregate amount a debtor can exempt in any property of $1,325, plus up to $12,575 of any unused portion of allowed exemption of the residence under (d)(1) has increased to $1,475 and $13,950 respectively; under 522(d)(6), the aggregate amount which a debtor can exempt for tools of a trade, books, etc. has increased from $2,525 to $2,800; under 522(d)(8), the aggregate amount which a debtor can exempt for accrued dividend or interest or loan value in any unmatured life insurance contract has increased from $13,400 to $14,875; and under 522(d)(11)(D), the aggregate amount of debtor’s interest on account of personal bodily injury has increased from $25,150 to $27,900.

Further, other Bankruptcy Code Sections have been adjusted as follows: the maximum aggregate value of assets of the debtor in an individual retirement account has increased from $1,362,800 to $1,512,350 (Section 522(n)); the state homestead exemption, limit for interest acquired less than or equal to 1,215 days before filing has increased from $170,350 to $189,050 (Section 522(p)); and the state homestead exemption, limit under certain circumstances has also increased from $170,350 to $189,050 (Section 522(q)).

Finally, under Chapter 13 cases, some of the adjustments are as follows: under Sections 1322 (b) and (d), each time $750 appears, the sum has been adjusted to $825; and under Section 1326 (b)(3) the payments to a Chapter 7 trustee has been adjusted to a flat $25 only.

Again, please note that the above represents a non-exclusive list of adjustments which become effective as of April 1, 2022. To discuss these adjustments or any other issues regarding creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at lbaskin@sgrvlaw.com or 215-241-8926.

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Delaware Bankruptcy Judge John Dorsey issued a 103 page opinion in In re Mallinckrodt PLC., Case No. 20-12522-JTD (Bankr. D.Del. Feb.3, 2022, Docket #6347) wherein he confirmed a Chapter 11 Plan which included non-consensual third-party releases and applied the Third Circuit position as articulated in Millenium Lab Holding II, LLC, 945 F.3d 126 (3d Cir. 2019).
Mallinckrodt (“Debtor”) filed for Bankruptcy in October 2020 having approximately $5.3 billion in debt in order to settle the multitude of lawsuits brought by local and state governments and private citizens claiming that it had inappropriately and deceptively marketed opioids. Debtor was in the global pharmaceutical industry and manufactured and sold pharmaceutical products including opioids. On February 3, 2022, the Chapter 11 was confirmed over objections of a few creditors. In confirming the Plan, the Court acknowledged that it did not follow the reasoning in recent Second and Fourth Circuit decisions respectively in In re Perdue Pharma, L.P. 2021 WL 5979108 (SDNY De. 16 2021) or Mahwah Bergen Retail Group, Inc.(fka  Ascena Retail Group, Inc). but instead applied the Third Circuit standards.
The Plan provided four different types of releases which included: (a) releases made by the Debtors; (b) releases made by non-debtor third parties where certain claimants were given a chance to “opt out” of third-party releases; (c) non-consensual releases by opioid claimants; and (d) releases by the Debtors and affiliates of the opioid claimants. Although the Plan was (ultimately) overwhelmingly supported by the creditors, the US Trustee, the SEC and Rhode Island were objectors to different releases. The US Trustee and Rhode Island argued that the releases were “vastly overbroad, releasing persons and entities that did not contribute anything of value to the reorganization”. The US Trustee also argued that this Court lacked jurisdiction to approve the releases and that the creditors due process rights would be violated. The Court ultimately overruled the objections holding that it did have the jurisdictional authority to do so as the releases were integral to the success of the Chapter 11 plan and without the releases the Plan would fail. The Court also found that the two standards set forth in the Third Circuit case of In re Continental, 203 F3d 203 (2000) were met and insofar as it was unclear from the evidence produced that there were any material claims for liability against the non-debtors that were being waived, the non-consensual third-party releases were both “necessary to the reorganization” and “fair”.
Concerning the issue of “necessity,” the Court found that the releases were an integral part of the settlements embodying them, and therefore a necessary part of the Plan. Regarding the release to the non-debtors (third parties) they too were necessary because they were involved to such a degree with Debtor’s business that litigation against them would be a drain on the Debtor’s finances. As to the second prong of “fairness” vis-à-vis the opioid claimants, the settlements were negotiated at arms-length with a large group of sophisticated parties representing diverse interests and substantial consideration was provided in exchange for the releases via a well-funded trust to which the opioid claimants could look to for compensation. The Court emphasized the nature of the case as there were more than 3000 lawsuits regarding opioids and the releases would remove the continued issue of litigation and ensure recoveries to the opioid claimants. The Court then noted that since this case is occurring during an “extraordinary” time during the height of the opioid crisis, time was of the essence to resolve these claims.
In this opinion, the Court was clearly looking at the practical side of the Plan—without its confirmation there would be continued and extensive litigation which would not benefit the claimants, thereby increasing the estate’s legal fees and consequently reducing any recovery to the opioid claimants.
Note that the current Bankruptcy Code is basically silent as to whether non-consensual third party releases are permitted. Often, Debtors rely on 11 US.C. §1123(b)(6) to support these releases. With that said, the closest we had to allowance of such releases is in 11 U.S.C. §524(g). In October 1994, Section 524(g) was added to the Bankruptcy Code to “clarify” the ability to use third party releases as a result of the Johns Mansville bankruptcy proceeding, in that instance a release from future holders of future asbestos demands. (Discussion of Section 524(g) is for another day as this section did not clarify all of the nuances and issues which have arisen since then).
Due to the conflict amongst the Circuits regarding non-consensual releases, the issue will have to be addressed with some clarity by the Supreme Court or legislation. The nonconsensual releases have become the cornerstone of some of the biggest Chapter 11 Plans and can play an enormous role in Plan viability.
To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.
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On January 14 2022, Judge Silverstein of the Bankruptcy Court for the District of Delaware issued a very thoughtful opinion, Wolfson v. DeVos, et al. (In re Wolfson), 19-11618, LSS (Adv. No. 19-50717), regarding the dischargeability of student loans for a disabled debtor who relied on the financial assistance of his parents. Debtor commenced his Chapter 7 in 2019 and brought an adversary proceeding to determine if his student loans were dischargeable pursuant to 11 U.S.C Section 523(a)(8), as imposing an “undue hardship” to repay. The adversary proceeding trial (“Trial”) was held on December 7, 2020. Contrary to counterarguments of the Defendants, the Court found that Debtor met his burden as required under the Brunner case (U.S. v. Brunner, 831 F2d 395 (2d Cir.1987)), which holding was later adopted by the Third Circuit. Note that there is a clear split in the Circuits as to the fairness of the Brunner standard.

The specific facts regarding Debtor were critical to the Court’s determination. Debtor was in his mid-thirties, not married and had no children. He had epilepsy. He graduated from Penn State in 2010 and held down part-time jobs while in college. From 2010-2016, Debtor had 30 job interviews with no real success. From 2014-2016, he was the full-time caretaker for his grandmother and then sporadically worked thereafter. In 2017, while working for a home renovation company he also did part time work as a driver. In August 2019, while working as a driver (Uber/Lyft), he suffered a grand mal seizure and totaled his car. Since then, he has been unemployable. He applied for more than 200 jobs over the next 10 months post- car accident with no success. Debtor moved back in with his father thereafter. He relied upon his father for financial support and had no health insurance for years.

In 2005, Debtor signed, inter alia, two Master Promissory Notes to finance college and then obtained a Federal Family Educational Loan which provided for repayment over a 10-year period after a 6-month grace period after graduation from college. As of the date of the Trial, the loan was due and owing. Other educational loans were also due and owing as of the date of the Trial (totaling almost $100,000.00). With the above history of illness and inability to work, he had a poor credit rating and could not repay the loan debt. Although his father made some of the minimum payments allowed under the loan, he could no longer do so.

The harsh three prong test for debtors under Brunner to allow for discharge are: (1) that the debtor cannot maintain a minimal standard of living for himself and dependents if forced to repay the loans based upon current income and expenses; (2) that the debtor’s financial situation is likely to remain the same for a large part of the repayment period; and (3) that the debtor has made a good faith effort to repay the student loans. The Court herein determined that it would not consider the parental support (referenced as the “third party charity”) as income for Brunner income testing purposes as there was no guarantee that debtor could rely upon receiving these voluntary gifts of funds from his father. Further, the Court found that Debtor’s long-standing, expansive and largely futile efforts since graduation in trying to find a job (1-2 hours per day on internet job boards) were important considerations weighing in his favor.

Defendants herein contended that the Debtor had not met his burden on any of the three Brunner elements. For example, they contended that only spending 1-2 hours per day looking for jobs was “barely looking for work.” The Court responded to this argument by saying that it was clear that Debtor was not avoiding work and that he was not “holding out” for a job. In fact, Debtor testified that he would take any job and that this has been “his way for about 5 years.” The record also showed that he had personally never made a payment on the student loans as he was never in a position to do so, and this convinced the Court that his continual search for gainful employment was enough to demonstrate his good faith. The Court noted the split in the jurisdictions as to the strict standards imposed upon a debtor as to proving “undue hardship” under by Brunner. The Court found the following as critical factors in concluding that this debt was dischargeable: Debtor was substantially supported by his family for his entire adult life (father gave him $1000-$2000/month) and that even without repaying these loans, his income was not sufficient to maintain a minimal standard of living, and more importantly since his family had no obligation to give him any money, this “support” is NOT income but rather “familial charity” which could cease at any moment. Based upon the foregoing, the first prong of Brunner is met. Brunner’s second prong as to whether his inability to pay will persist during the repayment period was clearly net. Herein, the repayment period had expired. This prong also requires an analysis as to whether “additional circumstances” exist indicating that Debtor cannot maintain a minimal standard of living if forced to repay the loans during the repayment period. The Court concluded that Debtor met the second test (also noting a paucity of caselaw on the issue of ability to repay when the repayment period has run). Finally, the third prong (good faith effort to repay the loans) encompasses the standard that Debtor did not willfully or negligently cause his own default, and that the default is due to factors outside of his control. Herein, Debtor has never been in a position to make loan payments and has shown good faith efforts to maximize his income and reduce expenses. The record at Trial made it clear that his low income will most likely be persistent for his lifetime, for which he cannot be faulted.

The Court went on to discuss the “policy considerations” of her decision. The “fresh start” policy behind discharging debts was a fairly strong factor. Debtor continues to struggle to make ends meet and has tried to turn the situation around, but to no avail or as the Court put it, this was “not for want of a work ethic.” Therefore, the Court determined that Debtor meets the burden that this debt should be discharged based upon the undue hardship upon him.

To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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The Martin Luther King Jr. Day of Service is a Time-honored tradition cherished by many across the country, from students to CEO’s. Helping our local communities grow and flourish to the best of their abilities has the power to open one’s heart and see the world and its people as the late Martin Luther King Jr. saw them, with compassion.

SGRV is no stranger to service and community engagement, so many of our staff were eager to get out and make a difference on this past day of service. While the Philadelphia office had planned an outing to Bartram’s Garden, a community garden in Southwest Philadelphia, this was unfortunately cancelled due to inclement weather. The attorneys and staff of the Philadelphia office instead partook in their own personal service projects.

The weather situation fared much better in sunny Florida, where SGRV attorneys and staff gathered together at the Trinity Café in Tampa. Trinity Café is a free, full service restaurant for those in need of a healthy and hearty meal. 365 days a year, chefs prepare fresh, nutritious dishes for guests. SGRV assumed the roles of restaurant “wait staff”, and enjoyed their time waiting, hosting, and busing tables in addition other various tasks. They also assisted in their drive-thru meal service for guests.

We thank everyone who took part this year, and look forward to an even more involved 2023!

King
The bustling kitchen at Trinity Cafe as SGRV attorneys and staff prepared to serve hot meals to guests.
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SGRV’s Leslie Beth Baskin will speak at the upcoming Tenth Annual International Women’s Insolvency and Restructuring Confederation’s At The Shore Conference, taking place at the Hard Rock Hotel & Casino in Atlantic City, NJ, from March 3-4, 2022.

The International Women’s Insolvency & Restructuring Confederation (IWIRC), is a global community creating opportunities through education, mentoring and networking. IWIRC’s mission is to promote the success of women in the insolvency and restructuring profession. The “At the Shore Conference” is a time-honored tradition.

The conference will involve a number of panels, activities, and networking opportunities. Ms. Baskin will speak on a panel titled “Putting Your Best Case Forward: Best Practices for Evidentiary Hearings and Bankruptcy Trials.”

Ms. Baskin is one of the founding members of the Greater Philadelphia Chapter of the IWIRC and was its chair for a two-year term. She is currently serving as secretary.

As a Member of Spector Gadon Rosen Vinci P.C., Chair of the Creditors Rights and Bankruptcy Section of the Business Services Group with over 35 years of experience, Ms. Baskin represents creditors and debtors in non-bankruptcy work-outs and in consumer and commercial bankruptcy proceedings. She is also a seasoned commercial litigator.

Ms. Baskin has handled a wide array of commercial, transactional, and bankruptcy-related matters including several high profile cases in the region. She recently served as both Chapter 11 and Chapter 7 Trustee for a three-year period in the high profile case of the Legal Coverage Group whose principal embezzled $35 million from the Company. She also has represented Peter Nero and the Philly Pops in the Philadelphia Orchestra Bankruptcy, and numerous debtors/creditors in healthcare Chapter 11 proceedings. She has also represented a diverse group of clients, including banks, real estate enterprises, healthcare providers, small businesses and individuals experiencing financial problems.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. was overjoyed to help provide some holiday cheer to two families in need this year through the Philadelphia Ronald McDonald House’s “Family to Family” program. Thanks to this generous program, the Ronald McDonald house has helped countless families experience the joy of the season.

The holidays can be a unnecessarily stressful time for families facing difficulties like childhood illness. The Ronald McDonald House’s “Family to Family” program seeks to ease this stress and provide their resident families with the holiday cheer they deserve. The program pairs families staying at the house with individuals, groups, and businesses to supply the families with everything on their wish lists, and more for the holiday season.

Associates Dana A. Bernstein and Evan N. Saltzman, accompanied by Communications Associate Michael Vinci, dropped off three large boxes full of presents of all kinds— toys, clothes, gift cards, and so much more.

Many staff and attorneys selflessly contributed to brightening the holidays for one of the families, and attorney Heather Eichenbaum took up the task of providing gifts to an entire separate family on her own, and we commend her generosity.

We give endless thanks to our generous attorneys and staff, thanks to whom we were able to make this holiday season one to remember for not just one, but two families!

You can learn more about the Ronald McDonald house, and the incredible things they do for families in need, here.

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On Thursday, December 16, 2021, Spector Gadon Rosen Vinci attorneys and staff gathered together for an evening of food, drinks, and holiday merriment.

The gathering was hosted at The Dandelion restaurant, located at 124 S. 18th Street in Philadelphia.

After an evening of delicious food and sweets, SGRV Chairman Paul Rosen spoke about the dedication and diligence of one of SGRV’s longest-serving staff, controller Fred Firmani.

Firmani has served SGRV for over 15 years, and has been nothing but a blessing to our accounting department. Things have always run smooth as butter with him in the office. He will be missed dearly, but we are enthusiastic for him as he begins a new, exciting chapter in his life.

As we wish him a happy retirement, we look forward to the future with gratitude for the past.

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Since the 1990s the Exemption from Federal Gift and Estate Tax has increased steadily. At one point the Exemption only was $675,000 and you had to either use it at death or lose it. Over the years, the Exemption has jumped periodically until it reached its current level of $11.7 Million and it is scheduled to increase to $12.07 Million on January 1, 2022. Also, we no longer have a “use it or lose it” Exemption. Now the surviving spouse gets to use the “unused” Exemption of the first spouse to die. These changes created new paradigms in estate planning. In fact, many taxpayers with over $20 Million in assets no longer feel they have to do estate tax planning.

In addition to the high Exemption, a number of very powerful estate planning tools are available to taxpayers. GRATs, gifts of non-controlling interests in family partnerships and LLCs at a discount, sales of businesses and other assets to grantor trusts that are exempt from the capital gains tax, gifts to grantor trusts and SLATs (spousal limited access trusts) have made it possible to shift wealth and income tax efficiently to children and grandchildren. But now Congress has threatened to eliminate most of this planning and lower the Exemption dramatically.

Not surprisingly this threat from Congress created a rush to modify estate plans and take action before the proposed changes in the tax law became effective. In the tax bills still being debated by Congress, it was announced that the bill would include the following:

  1. Lower the Exemption to around $6 Million from $11.7 Million
  2. Change the rules for Grantor Trusts with the result that the value of new Grantor Trusts would be included in the grantor’s tax estate at death and that additions to “grandfathered” Grantor Trusts would result in a portion of the trust being included in the grantor’s estate.
  3. The proposed changes in the Grantor Trust rules would effectively end or make much, much more complicated GRATs, Irrevocable Life Insurance Trusts, sales to Grantor Trusts, SLATs and gifts to Grantor Trusts.
  4. The proposed changes also would eliminate the discounts on sales or gifts of non-controlling interests in family partnerships or LLCs.

In effect, nearly every major estate planning tool would be either ended or made less effective. No wonder estate planners and taxpayers were hyper as we approached the end of the year.

And then just like that, all of the changes were deleted from the proposed tax bill. Yes, I said ALL OF THE CHANGES WERE DELETED FROM THE PROPOSED TAX BILL. What a sense of deja-vu! This has happened before. Every few years, the Exemption (by statute) was supposed to revert back to a lower level unless Congress agreed to extend the law. It would take an act of Congress to extend the Exemption at its then current level. Taxpayers would line up to make gifts or enter into transactions to “beat” the reversion of the Exemption to a lower level (the “Sunset” clause in Congressional lingo). And then, just as the higher Exemption was about to expire, Congress came through and not only extended the Exemption but increased it to a higher level. BUT always for a limited time period at the end of which it would revert again to a lower level. So we have been through this exercise before.

So, is this time any different? Honestly, it is impossible to know at this time. The heat does appear to be off for the time being. Taxpayers and estate planners can continue doing business “as usual” for now. But for how long?

First, one knows that there is serious intent by many members of Congress to raise money from high net worth taxpayers. These are precisely the people who would be hurt by the changes that had been proposed (but now withdrawn).

Second, there still is the huge human infrastructure bill pending in Congress which may be very difficult to pay for if passed.

Third, the current $11.7 Million Exemption has a planned “Sunset” date of January 1, 2026. So even if Congress does nothing this time, we could still wind up with a reduced Exemption of $6 Million in 2026. So we are not out of the woods by any means for the estate tax change which would affect most taxpayers.

Fourth, there still are pending some income and retirement plan changes that need Senate approval to become law. They are designed to increase taxes on very high net worth taxpayers. If passed without change, there will be (i) a 5% surtax on Modified Adjusted Incomes above $10 Million, (ii) a 3% additional surtax on taxpayers with MAGI above $25 Million, (iii) the Net Investment Income Tax will be broadened and (iv) limitation on IRAs and Roth IRAs for very high income taxpayers. Essentially, very high income taxpayers are being asked to foot the bill for the new legislation. But, it appears that even these tax increases will not be enough to pay for the bill.

So what does it all mean? I think one can conclude that Congress wants to spend more money but cannot figure out how to pay for it. High income taxpayers are a target and can expect more tax proposals designed to raise more taxes and the estate and gift tax surely will be a target. I think we can expect the Exemption to decrease. I also think that there will be changes to the Grantor Trust rules which will be better designed than the first set that were proposed. The first set were a shotgun approach that captured some very mainstream planning techniques which were used by more than just very high net worth families.

If your net worth is in the vicinity of $6 Million ($12 Million for a married couple), you are not likely to be affected by future changes. However, if your net worth exceeds these amounts, you should begin thinking about how to lessen the impact of estate taxes on your family and your business. The estate tax and gift tax rates currently are 40% (plus state inheritance tax depending upon where one lives). These tax rates used to be as high as 60% over the last 30 years. They could be increased for large estates. And if Congress does nothing between now and 2026, then the Exemption will decline by around one-half to somewhere around $6 Million per spouse on January 1, 2026.=

According to the Tax Policy Center, there only were 4,100 estate tax returns filed for people who died in 2020 and only 1,900 of them resulted in an estate tax payable. That is less than 0.1% of the 2.8 Million people expected to die in 2020. Facing facts, not many people need to worry about the estate tax any longer. Those who do are not a very big constituency. I think one can bet that there will be changes for the worse in regard to estate and gift taxation.

In conclusion, Congress did us a favor by eliminating all of the proposed harmful tax changes in 2021. We now have time to be more deliberate in our planning, but the clock is ticking. It will be January 1, 2026 before we know it.

Alan Mittelman and Dana Bernstein are ready to review your situation and help you plan a strategy. Alan’s email is amitt@sgrvlaw.com and Dana’s email is dbernstein@sgrvlaw.com. We look forward to hearing from you.

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We at SGRV have a long-held tradition of giving back to our Philadelphia community. As shown in the Philadelphia Inquirer article below, our attorneys hold true to this commitment. SGRV’s Jared Solomon, of Counsel and his staff recently played an important role in welcoming Afghan refugees to their new home in Northeast Philadelphia.

Through the ages, Philadelphia has long been a city that presents open arms to the poor and persecuted. SGRV is at the helm of ensuring this tradition lives on into the future.

 

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The proposed tax law being discussed in the news has some very serious tax consequences for what are called “grantor trusts.” All estate planners and insurance advisors are trying to assess the impact if the proposed changes to grantor trust taxation are passed. All insurance trusts are “grantor trusts.” You don’t need to know what a grantor trust is to understand the problem. There are many types of grantor trusts which create big loopholes in the law and which many people think are abusive, but insurance trusts are not abusive. They are just good planning!

Under the proposal, all insurance trusts that do not have their own independent source to pay premiums are in trouble. What this means is that if the settlor(s) give money to their trusts to pay the insurance premiums each year, then a portion of the death benefit will be brought back into the settlor’s estate when he or she dies. The same will be true if a settlor adds tax-free annual exclusion gifts to a trust after the law becomes effective. The percentage brought back into the settlor’s estate will be based upon the amount of premiums paid on the policy before the new law takes effect compared to the total premiums paid after the law becomes effective. This change will upset countless estate plans and is one reason I think there is a good chance it will be removed from the tax bill. But one cannot be sure.

If the grantor trust changes do pass, then we will have to find an alternative way for the settlor to pay the insurance premiums. Making an annual gift to the trust, the most common method of paying the premium, no longer will work. The main alternatives to deal with this problem appear to be: (i) changing the payments the settlor makes for the insurance from gifts to loans to the trust, (ii) transferring assets this year into the trusts that own the insurance so that the trusts have annual income that can be used to pay premiums (next year may be too late), (iii) borrowing the premium or making withdrawals from the policies if there is enough cash value in the policies to pay the premiums or (iv) have the trustee distribute the policy to the beneficiaries. This will take careful analysis because a mistake may be very costly.

I still think that this was an “inadvertent” mistake that may be cleaned up and removed from the tax bill. But maybe it was part of the plan, if there really is a “plan.” If you or your spouse created a trust that owns life insurance, you urgently will need to review your options before you put any new money into the trust.

AND just as important, Congress is contemplating lowering the exemption from Estate and Gift Taxes from over $11 million to about $6 million. If you are married and have assets that exceed $12 million, or if you are single and have assets that exceed $6 million, you may still be able to “lock in” the higher exemptions, but you must act quickly.

Alan Mittelman and Dana Bernstein are ready to review your situation and help you plan a strategy. Alan’s email is amitt@sgrvlaw.com and Dana’s email is dbernstein@sgrvlaw.com. We look forward to hearing from you.

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When Debtor, Ms. Aleckna (“Aleckna”), filed for Chapter 13 bankruptcy relief, she had completed her university coursework but still owed California Coast University (“CCU”) $6,300 in tuition. While her bankruptcy was pending, Aleckna asked CCU to forward to her a copy of her transcript. CCU responded that they would only provide an “incomplete” transcript which did not include a graduation date, explaining that a “financial hold” had been placed on her account. CCU then filed a Complaint to Determine the Dischargeability of this Debt (“Complaint”) to which Aleckna filed a counterclaim against CCU. She argued that CCU had willfully violated the automatic stay (per 11 U.S.C. Section 362(k)) imposed as a result of the bankruptcy filing by refusing to give her a complete and certified transcript and by engaging in “collection actions” in trying to collect the unpaid tuition while her bankruptcy was pending. CCU then tried to withdraw its Complaint, but the Bankruptcy Court refused the request and held a trial regarding whether CCU’s actions were a willful violation of the automatic stay. The Court found in Aleckna’s favor concluding that CCU was attempting to collect a pre-petition debt during the pendency of the Chapter 13. The Bankruptcy Court held that Aleckna was entitled to receive her full transcript and failure to do so was akin to not supplying a transcript at all. They also, inter alia, awarded actual damages ($230.16) and attorneys fees ($100,000) because the CCU’s violation was “willful”.

CCU appealed this ruling to the District Court, arguing that its violation could not have been “willful” under the Third Circuit’s decision in In re University Medical Center, 973 F.2d 1065 (3d Cir.1992) as the case law was “unsettled” as to the obligation to provide a complete transcript, which could have provided them with a limited defense to the claim of a “willful” violation. The District Court affirmed the Bankruptcy Court ruling, and CCU then appealed to the Third Circuit, which also affirmed.

The Third Circuit held, in a precedential opinion (See In Re Aleckna (No. 20-1309, Sept. 9, 2021)), that University Medical remains good law and provides a mechanism by which one can challenge a finding of willfulness. The Court then found that CCU failed to show that the law regarding the transcript issue was “sufficiently unsettled” within the meaning of University Medical, and that CCU failed to establish a defense under this case law. Therefore, the violation of the stay was deemed to be willful. The Third Circuit was also very careful in pointing out that even a “good faith” defense by a creditor in that it did not believe its actions violated the automatic stay is not a defense to willfulness. Rather, willfulness is separate and distinct from good faith.

CCU next argued that the District Court erred in awarding damages and attorneys fees because there was no affirmative injury in this case. Section 362(k)(1) provides that “an individual injured by any willful violation of a stay shall recover actual damages, including costs and attorneys fees, and, in appropriate circumstances, may recover punitive damages.” Herein, the Third Circuit concluded that the injuries for which Aleckna was compensated through the lower Court’s award were cognizable under Section 362. As stated above, Aleckna was awarded: (1) $230.16 for the time she took off from work to attend trial; (2) her litigation attorneys fees (for fees associated with attempts to get her transcript and the litigation costs); (3) three copies of her certified transcript containing a graduation date; (4) a diploma; and (5) the pre-litigation attorneys fees she incurred while attempting to obtain her complete transcript. Even if the financial harm to a student is arguably small, the Third Circuit held that her failure to receive a complete transcript without court intervention constituted a cognizable injury under Section 362. Furthermore, the fact that CCU did not provide a compelling explanation as to why the attorneys fees did not constitute a financial injury on their own was fatal to their argument. Finally, the Third Circuit observed that the automatic stay is designed to protect “both financial and non-financial interests”.

Therefore, the Third Circuit held that the District Court did not err in concluding that Aleckna had been injured by the university’s violation and that the award of damages and attorneys fees was appropriate.

To discuss the issues raised here or any other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or at lbaskin@sgrvlaw.com.

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Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been selected as one of the 500 Leading Plaintiff Employment and Civil Rights Lawyers by Lawdragon™ in its 2021 list of the nation’s best plaintiff employment and civil rights attorneys.

Epstein has been selected for this honor for the past four years, since the category was created in 2018. The 500 honorees are chosen in Lawdragon™’s research-driven, journalistic process that vets the views of peers and competitors, and recognizes large wins. Practitioners who were recognized have been securing positive results for workers for 10 years to more than 50 years.  Epstein was one of only 11 Philadelphia lawyers chosen for this nationwide distinction.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its Past President.  He holds an AV rating from Martindale Hubbell™, has been named as one of the Best Lawyers in America™ in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who. He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon™. He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Adam A. Filbert has joined the team at Spector Gadon Rosen Vinci P.C. as a Law Clerk. He is the youngest addition to the SGRV family, attesting to his exceptional skills. His presence brings a breath of fresh air to the firm through his new ideas and perspectives on a variety of topics.

Mr. Filbert has accumulated a diverse array of experiences, including those from his time spent with SGRV previously through Drexel University’s Thomas R. Kline School of Law’s Co-Op program.

Some of Mr. Filbert’s previous work experiences outside of SGRV include time spent as a Legal Intern for Chief Judge Juan R. Sanchez of the Eastern District of Pennsylvania, and as a Legal Intern with the Pennsylvania Attorney General Bureau of Consumer Protection, where he primarily worked on large multi-state litigation cases and investigations.

Mr. Filbert was actively involved in many extra-curricular activities during his time as a law student, including his work with client intake for the SeniorLAW Center in Philadelphia. He also served on Drexel University’s Thomas R. Kline School of Law’s Cybersecurity group, as part of their writing group. In addition, he was a staff editor on Drexel’s Law Review, as well as legal editor for the Pennsylvania Nonprofit Corporations Act Treatise.

Filbert will be focusing his practice primarily on Employment Law and Commercial litigation. He will be working closely with the esteemed Alan B. Epstein on a variety of projects.

Mr. Filbert holds  a J.D., Cum Laude, from Drexel University’s Thomas R. Kline School of Law with a Concentration in Business and Entrepreneurship law, and a B.S. in Digital Communications with a Concentration in Business Technology.

Filbert is an avid outdoorsman. In his free time, he enjoys hiking and exploring nature, in addition to playing lacrosse and cooking.

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SGRV attorneys, staff, friends, and family gathered together on Friday, August 20 to celebrate everyone involved with the firm’s hard work and dedication. Steel Pier was the place to be on Friday as a seafood buffet tantalized taste buds and rides and activities brought out everyone’s inner child.

The event was made possible by SGRV’s friendship and ongoing collaboration with Steel Pier as a valued client. This year’s event, returning after a year in hiatus during the 2020 lockdowns, was a welcome return to an annual tradition, and one of the most successful so far- with a new menu and large turnout. In addition to the festivities, a raffle was held, featuring a number of varied prizes, after which most attendees did not leave empty-handed.

Friends, family, and loved ones came together to keep spirits high, and words from both SGRV Chairman Paul R. Rosen, and Shareholder and Director George M. Vinci Jr. set an optimistic tone for the future. Vinci expressed how, at the onset of the COVID-19 pandemic and lockdown, he was unsure how the firm would continue to grow and expand in the face of such circumstances. Regardless of these trials and tribulations, Vinci affirmed that SGRV had emerged stronger and more resilient than ever imagined.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

 

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Spector Gadon Rosen Vinci helped sponsor a fun day of golf and giving at the Inaugural Annual Ali Spears Charity Golf Tournament. The event took place on Friday, August 20, 2021 at the Westchase Golf Club in Tampa, Florida.

Activities abounded throughout the day: putting and hole-in-one contests, prizes, raffles, a silent auction, and much more helped attract a large and enthusiastic crowd to enjoy a day to help support a worthy cause.

The Ali Spears Foundation is a 501(c)(3) non-profit charitable organization. Their mission is to help families dealing with pediatric cancer overcome hardship, empower the community by raising awareness for pediatric cancer, and help find a cure for pediatric cancer by donating funds to research.

The foundation takes part in a variety of fundraising activities included but not limited to an Annual New Year’s Day golf cart parade, farmers market sales, and other fundraising activities organized and facilitated by teens.

The major beneficiaries of the Ali Spears foundation are hospitalized children who receive gifts and toys, as well as funding for pediatric cancer research at Johns Hopkins All Children’s Hospital, with more beneficiaries to come in the future.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

 

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Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been selected to the 28th Edition of The Best Lawyers in America© list for the year 2022. Epstein was selected regarding his professional excellence in individual employment law and labor and employment litigation.

As the oldest and most respected peer review publication in the legal profession, recognition in Best Lawyers is widely regarded by both clients and legal professionals as a significant honor. For over forty years, Best Lawyers has gained a reputation as a truly unbiased source of legal referrals. Epstein was chosen for this honor following an exhaustive peer review process in which the nation’s leading lawyers confidentially evaluate their professional peers.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its Past President.  He holds an AV rating from Martindale Hubbell™, has been named as one of the Best Lawyers in America™ in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who.  He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon™.   He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Bankers and SBA staffers may soon have that hangover, of their own making. I am speaking, of course, about the Paycheck Protection Program debt hangover – 11.7 million loans created to be forgiven. Everyone knows that forgiveness is hard – hard to request, and, often, even harder to grant – especially when big money is involved. But who could have imagined the challenges of walking away from $400 billion in bank debt?

(Actually, the total amount began as $800 billion, before loans already wiped off the books.)

To try to chip away at that mountain of, literally, debt, the Small Business Administration recently created its “direct forgiveness” portal (https://dfussbaforgiveness.zendesk.com/hc/en-us), for loans under $150,000.00 – over 90% of all PPP loans. That sheer volume has, reportedly, delayed completion of bank forgiveness approvals – 11.7 million separate applications must be filed, reviewed and processed.

To try to break the backlog, the Small Business Administration recently created a new portal (open on August 4, 2021) for “direct” forgiveness by the SBA, rather than by the bank lender. To avoid the appearance of cutting into lender/borrower relationships, the SBA quickly clarified that it will not take “over the forgiveness decision responsibility from the lender.”

Instead, according to the SBA, “Lenders retain responsibility for making the loan forgiveness decision. SBA is simply providing a proven, user-friendly platform on which borrowers may submit their forgiveness applications and lenders will submit their forgiveness decisions to SBA.”

If so, why go to the expense of reinventing the loan forgiveness wheel – and adding a new step to what has been a convoluted process?

Lenders must also choose to “opt in” to the portal, presumably to avoid the cost of creating their own review process – a procedure lenders already do every day, for all loans. Veterans of the PPP scramble in 2020 may also question the characterization of the SBA software as “proven.” Moreover, many lenders may have already incurred costs to build their own forgiveness software. In fact, the 60-day deadline for lenders to process forgiveness applications, and constantly changing program rules (including predictions of expedited procedures), may even have led some lenders to delay the start of processing of their own forgiveness applications.

Why incur unrecoverable costs today, that may be avoidable tomorrow, under the next attempt at simplification? Whatever the reason, many lenders have already declined to participate in the SBA’s direct forgiveness procedure, in favor of their own portals. From a lender perspective, direct forgiveness also eliminates a major incentive to participate in the PPP program – new customer relationships. A bank can’t promote its fee-based services if the customer deals only with the SBA, rather than with a bank relationship officer. Keeping the forgiveness process “in-house,” in contrast, preserves that relationship-building opportunity, in the context of a success experience for the PPP borrower (loan forgiveness).

Lenders must also monitor the new SBA portal for information about the loan status. Without affirmative SBA reporting of loan status, however, bank auditors and compliance officers must regularly check the forgiveness portal before issuing routine financial statements or reports – a lender headache, especially for smaller PPP loans with little or no margin to recover monitoring and forgiveness expenses. If those loans were marginally profitable before this direct forgiveness program, how much more so will they be with these additional expenses? Regardless whose software is used, of course it will work, seamlessly – doesn’t all software perform as intended, out of the box? Perhaps the banks that have “opted out” of the SBA portal don’t want to risk their reputation with borrowers on the quality of the SBA’s new software code (or the SBA’s “real time” quality control of it).

SBA Associate Administrator Patrick Kelley well stated what may be bank lenders’ frustration:

Give it over to the government and get your life back. All of us want to be done with forgiveness — borrowers, lenders, government — by the fall, across the board. So this is the final push that will hopefully put PPP in the rearview mirror for the borrowers, for the lenders and for the agency.

Will we soon have to do it all over again, if a portal is created for larger PPP loans? Or for the required lender verification of borrower revenue loss eligibility for Second Draw PPP loans? To continue the “hangover” metaphor, perhaps the new portal is just the proverbial “hair of the dog” – let’s just get the PPP loans off society’s books, and let banks return to “real” loans.

To discuss this or other issues involving the Paycheck Protection Program, please contact Stanley P. Jaskiewicz or the SGRV Corporate Group at 215-241-8866.

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Judge Poslusny of the Bankruptcy Court for the District of New Jersey recently issued an opinion wherein he held that a Debtor may cure post-petition arrears in a modified Chapter 13 Plan as long as all other provisions of the Bankruptcy Code are met. Consistent with Section 1325, the Court held that the Amended Chapter 13 Plan was feasible and that the Debtor was able to make her newly proposed payments within the modified Chapter 13 Plan.

Briefly, Debtor’s original Chapter 13 Plan was confirmed and she was making timely payments thereunder. Debtor was paying her pre-petition mortgage arrears within the Plan and post-petition mortgage payments outside of the Plan.  She then defaulted on her post-petition mortgage payments and the Lender filed a motion for relief from the automatic stay, which the parties resolved. Thereafter, Debtor again defaulted on her mortgage payments and a certification of default was filed by the Lender seeking relief from the stay provisions of 11 USC Section 363. That too was resolved. Upon the third post-confirmation default, the Lender again proceeded to seek relief. It should be noted that the defaults were mainly caused by Debtor’s husband’s unemployment and the economic ramifications of this circumstance on the family and related COVID-19 hurdles. Debtor filed a response to Lender’s relief motion incorporating these circumstances and asserted that she intended to make not only her pre-petition but also post-petition mortgage payments under a Modified Chapter 13 Plan seeking to incorporate the post-petition mortgage arrears in the Plan and extend the length of the Plan to 73 months.

The Court addressed whether the requirements of Sections 1322(b)(5), 1325 and 1329(a) of the Bankruptcy Code were met. The Court, noting a split in the Circuits on this issue, found that Section 1322 allows for the curing post-petition arrears within a Plan. Further, the Court considered the terms of the CARES Act of 2020, which allows debtors who experience a “material hardship due, directly or indirectly” from COVID-19 to extend the length of a Chapter 13 Plan to up to 84 months. Here, Debtor met her burden to show her financial hardship and that the requested increase to a total of 73 months for the plan payments was within the purview of the CARES Act and was reasonable. In so finding, the Court determined that the Amended Chapter 13 Plan complied with the requirements of good faith, feasibility and reasonableness. Therefore, the Court confirmed the modified Chapter 13 Plan and denied the Lender’s motion for relief from the stay.

I highly recommend reading this opinion (In Re Catherine E. Smith, BKY. Case No. 18-2383 – docket # 59) for the Court’s thoughtful analysis of this issue.

To discuss this and other issues involving creditors rights and bankruptcy, please contact Leslie Beth Baskin at 215-241-8926 or lbaskin@sgrvlaw.com.

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Despite our progress on reducing infections and deaths from COVID-19, we still seem stuck with one aspect of the Pandemic: ever changing rules. (I wrote about 2020’s challenges at https://www.sgrvlaw.com/the-paycheck-protection-program-what-a-long-strange-trip-its-been/.)

In today’s race to “get back to normal”, however, businesses again face the same frenetic pace of change – but now at the same time as they try to recover from the shutdown. In recent days, businesses and nonprofits had to digest new rules for schools (https://www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare/index.html), employee safety (Federal Register :: Occupational Exposure to COVID-19; Emergency Temporary Standard), and, of course, the ever-changing mask mandates (Pennsylvania’s universal mask mandate lifts Monday, but businesses can still require them – Philadelphia Business Journal (bizjournals.com)), all in real time – and the list could go on.

Businesses must also balance whether it is worth trying to get any of the massive amount of relief money that is still available (Small-business COVID-19 stimulus funds: What’s still available? (inquirer.com)), against the risk of criminal prosecution if the funds may later be deemed not “necessary”, with 20 – 20 hindsight.

(That choice just became easier with the Small Business Administration’s abandonment of its “loan necessity” questionnaire.  SBA officially drops PPP Loan Necessity Questionnaire requirement – Journal of Accountancy)

But all this talk about “normal” seems more than a bit surreal. After all, the virus is still here.  It is even surging in some parts of the country. People are still getting sick – and dying. Businesses must still devote time to try to keep up with all the rule changes. If all those burdens were not enough, PPP loan forgiveness deadlines are looming, albeit with promises of even easier procedures. SBA preps new PPP loan forgiveness portal for small businesses – Philadelphia Business Journal (bizjournals.com)

Unlike in 2020, however, at a personal level we now have safe and effective vaccines to protect us – for those who choose to be vaccinated. Some are skeptical about their safety, and prefer to “wait and see” – or even to risk avoiding vaccination totally.  Moreover, many are not yet eligible for a shot.  Children, in particular, and those with compromised immunity (such as transplant recipients) remain at risk. (The tests leading to the vaccines’ approval did not include children, although trials are ongoing.)

From an even broader perspective, there are not enough doses for much of the world. Calls for booster shots seem like first world privilege (https://en.wikipedia.org/wiki/First_World_privilege) to those who are still waiting for their first or second shot. And the vaccinated in the first world should care about this – quite a lot, actually. The virus doesn’t care where a potential victim lives.  A mutation in an unvaccinated person in Africa or South America could lead to an infection in the US or Europe that mutates to bypass the vaccines’ protection.

In short, according to Yale infectious disease physician Dr. Jaimie Meyer:

Even though we very much want this pandemic to be over … the fact that some people, including children, aren’t vaccinated means we’re still vulnerable. … While it might be exhausting to continue to take precautions, especially for unvaccinated kids, that becomes increasingly important.

Looking ahead, therefore, businesses’ desire to be done with virus and virus precautions, and get back to business – will not simply “make it so”, despite all our progress so far (with apologies to Captain Jean-Luc Picard). Although skipping protections – eating out without a mask, or attending a concert – may be less risky today than it was in 2020, business compliance costs and burdens have not gone away.

In the face of that reality, perhaps Nirvana’s “Feels Like Teen Spirit” offers a better soundtrack for 2021 than my high school anthem in the title of this alert: “I feel stupid and contagious.”

Copyright 2021 Stanley P. Jaskiewicz, Esquire

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Spector Gadon Rosen Vinci P.C. Managing Member Daniel J. Dugan has been named as one of Pennsylvania’s Most Effective Dealmakers by The Legal Intelligencer, the oldest law journal in the United States. Dugan is one of just six attorneys statewide to be selected for the honor as part of the 2021 Pennsylvania Legal Awards.

Dugan was honored for his selection at a dinner reception on Thursday, June 24, 2021, at the Crystal Tea Room in Philadelphia. Here, Dugan received his award, along with praise from his friends, family, and colleagues.

Dugan smiles for the camera with his award in-hand.

Dugan successfully closed a multi-million-dollar deal to preserve the future of one of southeastern Pennsylvania’s most historic and preeminent country club resorts following a sheriff sale action that formalized lender ownership of the 115-acre property.

The sale disposed of any outstanding claims and debts, and removed any liens, against Lulu Country Club in Glenside, Pennsylvania, formalizing ownership of the property by lender LT-Lulu LP, represented by Dugan.

The underlying real estate tied to the club did not sell at a December 2020 auction arranged by the Montgomery County Sheriff’s Office, for which a $14.98 million minimum bid price was set — the amount of debt on the property.  No bids were made to buy it at the auction. The matter was precedential in that it was the first time the Montgomery County Sheriff’s Office sought to hold its property sales online.

As a result of Dugan’s creative structuring of the sale, Lulu JJR LLC now has a 20-year lease on the property and will continue its role overseeing management of the club and its operations.

In addition, Dugan has excelled in successfully negotiating other recent high-stakes deals.

Dugan negotiated the successful resolution of a $10 million-plus claim for life insurance proceeds on behalf of a client whose wife drowned in the Ganges River in India. The claims involved numerous insurance companies and the litigation was in both state and federal courts in Philadelphia and required the taking of numerous depositions in India. After obtaining a verdict in favor of his client in federal court, Dugan negotiated a successful settlement with the remaining insurers in state court.

Dugan also received a summary judgment in favor of a local bank for nearly $10 million against an individual and several companies he controlled arising out of fraudulent loans to finance millions of dollars of equipment leases, a check kiting scheme, and violations of the federal RICO Act.

Dugan is distinguished by his ability to achieve his clients’ goals by creatively structuring the best terms to ensure a winning deal.

A member of the firm’s Executive Committee, Dugan concentrates his practice in trials and appeals involving all manner of commercial and business disputes representing corporate entities, families and individuals.  He has extensive experience litigating before state and federal courts nationwide, including bankruptcy courts and Orphans Court.

Dugan has been in practice since 1977, with Spector Gadon Rosen Vinci since 1982, and a member of the firm since 1987.  He is managing member and also a member of the firm’s Executive Committee.  He concentrates his practice in trials and appeals involving all manner of commercial and business disputes, and he has extensive experience litigating before state and federal courts nationwide, including bankruptcy courts and Orphans Court.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Effective January 1, 2020, after a failed attempt to raise the minimum weekly salary for exempt employees to $913 ($47,476 annually), the U.S. Department of Labor issued new regulations increasing the minimum weekly salary for exempt employees from $455 per week to $684 ($35,568 annually).  In October 2019, the Pennsylvania Department of Labor (PA DOL) issued Regulations that also raised the minimum weekly salary for exempt employees under the Pennsylvania Minimum Wage Act to $684 per week, but unlike the federal Regulations, the PA DOL Regulations also provided for additional increases.

On October 3, 2021, the minimum weekly salary for exempt executive, administrative and professional employees in Pennsylvania will rise to $780 per week ($40,560 per year).  On October 3, 2022, the minimum weekly salary for exempt employees in Pennsylvania will rise again to $875 per week ($45,500 per year).  On October 3, 2023, the annual salary threshold will be set at a “rate equal to the weighted average 10th percentile wages for Pennsylvania workers who work in exempt executive, administrative or professional classifications as determined by the Department with advice and consultation by the Minimum Wage Advisory Board and based on an annual wage survey of all worker classifications conducted by the Department.”  The salary threshold will then be increased every three years thereafter (October 2026, October 2029, etc.) based on the same formula used to determine the minimum weekly salary in October 2023.

Because the PA DOL Regulations require a higher salary than the federal regulations, employers will have to meet the PA minimum salary if they wish to treat their executive, administrative or professional employees as “Exempt.”  Employees whose pay does not equal or exceed the increased minimum weekly salary must be treated as “Non-exempt,” and will have to track the number of hours they work each week and be paid time and a half for all hours they work over 40 in a workweek.

As the minimum weekly salary for exempt employees goes above the federal minimum week salary, it is expected that the PA DOL will increase its enforcement efforts. All employers need to review their compensation structure and job descriptions to determine whether or not the employees they are treating as exempt under the administrative, executive or professional exemptions will meet the new minimum salary threshold and other requirements for those exemptions, and either adjust employee salaries or prepare to treat employees whose salaries fall below the new threshold as non-exempt for overtime purposes.

If you have any questions or would like additional information, please contact Nancy Abrams at nabrams@sgrvlaw.com or 215-241-8894.

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In May 2021, the Third Circuit issued an opinion regarding the 2018 bankruptcy of the Harvey Weinstein Company, LLC (TWC), crystalizing what factors are required to prove that a contract is “executory” under § 365 of the Bankruptcy Code (the “Code”).

Section 365 of the Code provides for the assumption or rejection of a contract or unexpired lease under certain specific circumstances. If a Debtor wishes to assume (or continue) or reject (or breach) a contract, it is required to, inter alia, “cure or provide adequate assurance that it will cure any defaults under that executory contract” and “put it in the same place as if the bankruptcy never happened.” See 11 U.S.C. 365(b)(1). If a Debtor has “assumed” the executory contract in the bankruptcy proceeding, it has the ability to later “assign” that contract to a non-debtor entity. This often occurs in a bankruptcy proceeding when the assets of that Debtor are being sold under an Asset Purchase Agreement to a third party.

The issue as to whether a contract is executory or non-executory has significant ramifications for how it is treated in a bankruptcy sale of assets.  This very issue as to what an executory contract is was decided in this case by Judge Ambro of the Third Circuit.

By way of background, TWC and affiliates (the “Debtors”) filed for Chapter 11 protection in March 2018. A compelling (but not primary) reason for the bankruptcy filing was the ever-growing number of sexual misconduct allegations against its principal and then-Hollywood mogul, Harvey Weinstein, which caused its business to plummet. The bankruptcy’s main goal, though, was to facilitate the sale of most of TWC’s assets to the predecessor-in-interest of Spyglass Media Group, LLC (“Spyglass”) and to get court approval of its asset purchase agreement with Spyglass pursuant to § 363 of the Bankruptcy Code. Among the assets in Debtors’ bankruptcy estate was a contract with Bruce Cohen (“Cohen”), who produced the movie Silver Linings Playbook, which movie had been released in November 2012. A part of TWC’s contract with Bruce Cohen (the “Cohen Agreement”) included a provision that assured that Cohen will receive certain future compensation equal to roughly 5% of the net profits of Silver Linings Playbook. Debtors sold the Cohen Agreement, amongst myriad other assets, to Spyglass in a § 363 sale (the “Sale”). At the time of the Sale, TWC owed Cohen approximately $400,000 in unpaid contingent compensation.

At issue before the Third Circuit was whether the Cohen Agreement was “executory” at the time of the Sale. If so, then Cohen would be entitled to the cure amount of $400,000. If not, then Cohen would not be owed any of the unpaid contingent compensation (but would remain entitled to future contingent compensation). The Third Circuit found that the Cohen Agreement was not executory, thereby affirming the decisions in the lower courts.

The Third Circuit follows the “Countryman test” for determining whether a contract is executory or non-executory. Under this test, an executory contract is defined as “a contract under which the obligations of both the bankrupt and the other party to the contract are so far unperformed that the failure of either to complete performance would constitute a material breach excusing performance of the other.” Spyglass Media Group, LLC v. Cohen (In re Weinstein Company Holdings, LLC), Nos. 20-1750 and 20-1751, slip op., pages 10–11 (3d Cir. May 21, 2021) (quoting Vern Countryman, Executory Contracts in Bankruptcy: Part I, 57 Minn. L. Rev. 439, 460 (1973)). A contract is also not executory under § 365 “unless both parties have unperformed obligations that would constitute material breach if not performed” and such obligations are owed “when the bankruptcy petition is filed.” Id., at page 11 (quoting In re Columbia Gas Sys. Inc., 50 F.3d 233, 239–40 (3d Cir. 1995)). What makes a breach “material” is a question of state law. See id. In reliance on the above principles, the Third Circuit succinctly enunciated the test for executory contracts: “[T]he test for an executory contract is whether, under the relevant state law governing the contract, each side has at least one material unperformed obligation as of the bankruptcy petition date.” Id. (emphasis added).

To further clarify this caveat to the Countryman rule, the Third Circuit analogized the need to perform material obligations to assets and liabilities of the bankruptcy estate. “[T]he performance the nonbankrupt owes the debtor constitutes an asset, and the performance the debtor owes the nonbankrupt is a liability.” Id. In reliance on the above framework, the Court explained that “a contract where the debtor fully performed all material obligations, but the nonbankrupt counterparty has not, cannot be executory; that contract can be viewed as just an asset of the estate with no liability.” Id., at pages 11–12. “On the other extreme, where the counterparty performed but the debtor has not, the contract is also not executory because it is only a liability for the estate.” Id., at page 12. The Court further explained that “only where a contract has at least one material unperformed obligation on each side—that is, where there can be uncertainty if the contract is a net asset or liability for the debtor—[does the Court] invite the debtor’s business judgment on whether the contract should be assumed or rejected.” Id.

As explained above, in the context of a § 363 sale, in order for an executory contract to be assumed and subsequently assigned to the buyer of a debtor’s assets, the debtor must first cure or provide adequate assurance that it will cure any defaults to such executory contract. If, however, the contract being purchased by the buyer in a § 363 sale is not executory, the debtor has no obligation to cure. Put plainly, “if the contract is not executory, it can be sold to a § 363 buyer like any other liability or asset.” Id., at page 13. “In the case of a non-executory contract where only the debtor has material obligations left to perform, the contract is a liability of the estate, and if the buyer wants to buy it, the buyer is voluntarily assuming that liability.” Id. This results in the buyer being burdened only by a go-forward need to “fulfill obligations under the contract it bought after the sale closes, just as it would with any other asset or liability.” Id., at page 14.

Applying this test, the Third Circuit concluded that the Cohen Agreement was non-executory because, although failure to pay contingent compensation to Cohen would result in a material breach, Cohen as counterparty does not maintain any outstanding obligations the non-performance of which would result in material breach under New York law (the applicable state law) or by the terms of the Cohen Agreement. See id., at page 25. This is true since as the Third Circuit indicated, Cohen’s remaining obligations (i.e., to refrain from pursuing injunctive relief over intellectual property he does not own) were ancillary and immaterial and did not avoid NY’s “substantial performance rule.” The Court articulated that parties could contract around a state’s default contract rule regarding substantial performance (which is key in defining what sorts of breaches are material), and that, by crafting provisions that take the contract outside of such state rules, parties can “override the Bankruptcy Code’s intended protections for the debtor.” Id. However, the Court cautioned that contracting around a state’s default substantial performance rule “can only be accomplished clearly and unambiguously in the text of the agreement.” Herein, the Third Circuit concluded that ”[n]o provision in the contract clearly and unambiguously overrode New York’s default substantial performance rule that obligations are immaterial if they do not go to the root and purpose of the transaction,” and that, therefore, the Cohen Agreement was subject to New York’s substantial performance rule and commensurate definition for material breach. Id., at page 25. The Third Circuit did recognize though that the parties could have contracted around a state’s default contract rule regarding substantial performance and by doing so could override the Code’s intended protections for a Debtor.

Despite Cohen not being entitled to any cure amount under § 365, the Court did indicate that the amount owed to Cohen before closing of the Sale can still be asserted as an unsecured claim to be paid on a pro rata basis with other unsecured creditors (including the victims of Weinstein’s sexual abuse), provided such claim is timely. The Third Circuit also stated that although Spyglass did not owe Cohen the unpaid pre-sale amount, Spyglass nonetheless had to comply with post-closing obligations coming due under the Cohen Agreement. Finally, the Court opined that “(t)his pill is bitter to swallow, but bankruptcy inevitably creates harsh results for some players.”

As an aside, this ruling can have severe implications for the likes of Bradley Cooper (Philadelphia native), Jennifer Lawrence (Oscar winner for the movie) and others who are trying to collect unpaid royalties.

To discuss issues regarding creditors rights and bankruptcy, please contact Leslie Beth Baskin at 215-241-8926 or lbaskin@sgrvlaw.com.

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Spector Gadon Rosen Vinci P.C. has announced that the firm will fully resume in-office operations on Tuesday, June 1, when attorneys and staff will return to their in-office, pre-pandemic work schedules.  The firm has been seamlessly servicing the needs of its clients throughout the COVID-19 pandemic. The firm will welcome its employees back with a “Homecoming” appreciation luncheon on June 1.

SGRV is concluding its pandemic remote work option and hybrid schedules for attorneys and staff which have been in place since June 15, 2020, following the lifting of governmental stay-at-home orders.

Last month, SGRV announced a policy strongly urging all employees to become fully vaccinated.  Since that time, the firm has achieved nearly a 100 percent vaccination rate.

The policy states, “In accordance with [the firm’s] duty to provide and maintain a safe workplace, we are adopting this policy to safeguard the health of our employees and their families; our clients and visitors; and the community at large from COVID-19, which may be reduced by vaccinations. This policy will comply with all laws and is based on guidance from the Centers for Disease Control and Prevention (CDC) and state and local health authorities, as applicable.”

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Alan B. Epstein, Chair of the Employment Law Group of Spector Gadon Rosen Vinci P.C., has been featured in a Lawyer Limelight profile by Lawdragon™.

Lawyer Limelight highlights the journeys taken by some of the biggest movers and shakers in today’s legal industry, providing an up-close and personal look at where they came from, where they are today, and where they are going. Epstein’s profile takes a look at some of the biggest moments in both his career and personal life that have contributed to his success.

Epstein concentrates his practice in civil litigation representation in the areas of employment rights, civil rights and constitutional torts and the provision of transactional advice in all areas of corporate governance, including personalized advice to corporate officers, boards and board members regarding adherence to state and federal regulations. He is frequently called upon to provide transactional advice to, negotiate employment contracts and severance agreements on behalf of, and litigate matters for, corporate entities, corporate officers and directors, and licensed professionals (and their entities), including lawyers, doctors, bankers, accountants, pharmacists and architects, as well as insurance, real estate and security brokers.

Epstein has litigated complex claims before courts throughout the United States and has been admitted to practice in cases pending before numerous state and federal trial and appellate courts and administrative agencies in Pennsylvania, California, Delaware, Illinois, Louisiana, Maryland, New Jersey, New York, Texas and Washington as well as the United States Supreme Court. He is a frequent lecturer in his areas of concentration across the United States, and has served as an expert witness in state and federal courts regarding employment law and the professional and ethical responsibilities of lawyers.

He is a Fellow in the prestigious international College of Labor and Employment Lawyers and has served on its Board of Governors as an officer (Secretary, Treasurer, Vice President and then President) since 2011. He continues to serve on the College’s Board as its Past President.  He holds an AV rating from Martindale Hubbell™, has been named as one of the Best Lawyers in America™ in the publication of that name for more than 10 years, and has been awarded Lifetime Achievement Awards by the Philadelphia’s The Legal Intelligencer and Marquis Who’s Who.  He has been named a top 100 Superlawyer™ in Philadelphia and Pennsylvania and has also been selected as one of the nation’s 500 Leading Lawyers (2010), Top 500 Plaintiff’s Lawyers (2009), and Top 500 Litigators (2006) by Lawdragon™.   He has served as a volunteer mentor and Panel Coordinator for the Employment Litigation Panel of the United States District Court for the Eastern District of Pennsylvania, and as a national leader and Inn President in the American Inns of Court movement.

In the context of significant litigation in the employment law area, Epstein is well known for his participation in high-profile litigation for individuals and corporate entities (including his representation of a young, HIV-positive attorney against a prestigious Philadelphia law firm that received national attention because of the daily televising of the trial by Court TV and CNN and the award-winning film “Philadelphia” starring Tom Hanks and Denzel Washington) and for his frequent representation of local and national sports figures, broadcast personalities, and officers and directors of large national corporations.

Epstein was also the founder and President/CEO of JUDICATE, The National Private Court System, a publicly held company coordinating private dispute resolution services through approximately 700 former judges throughout the United States and its territories. In the area of alternative dispute resolution, he has additionally lectured and served as a mediator and arbitrator by private appointment and through certification by state and federal courts.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. Managing Member Daniel J. Dugan has been named as one of Pennsylvania’s Most Effective Dealmakers by The Legal Intelligencer, the oldest law journal in the United States.  Dugan is one of just six attorneys statewide to be selected for the honor as part of the 2021 Pennsylvania Legal Awards.

Dugan successfully closed a multi-million-dollar deal to preserve the future of one of southeastern Pennsylvania’s most historic and preeminent country club resorts following a sheriff sale action that formalized lender ownership of the 115-acre property.

The sale disposed of any outstanding claims and debts, and removed any liens, against Lulu Country Club in Glenside, Pennsylvania, formalizing ownership of the property by lender LT-Lulu LP, represented by Dugan.

The underlying real estate tied to the club did not sell at a December 2020 auction arranged by the Montgomery County Sheriff’s Office, for which a $14.98 million minimum bid price was set — the amount of debt on the property.  No bids were made to buy it at the auction. The matter was precedential in that it was the first time the Montgomery County Sheriff’s Office sought to hold its property sales online.

As a result of Dugan’s creative structuring of the sale, Lulu JJR LLC now has a 20-year lease on the property and will continue its role overseeing management of the club and its operations.

In addition, Dugan has excelled in successfully negotiating other recent high-stakes deals.

Dugan negotiated the successful resolution of a $10 million-plus claim for life insurance proceeds on behalf of a client whose wife drowned in the Ganges River in India. The claims involved numerous insurance companies and the litigation was in both state and federal courts in Philadelphia and required the taking of numerous depositions in India. After obtaining a verdict in favor of his client in federal court, Dugan negotiated a successful settlement with the remaining insurers in state court.

Dugan also received a summary judgment in favor of a local bank for nearly $10 million against an individual and several companies he controlled arising out of fraudulent loans to finance millions of dollars of equipment leases, a check kiting scheme, and violations of the federal RICO Act.

An awards dinner reception will take place at 7 p.m. on Thursday, June 24, 2021, at the Crystal Tea Room, 100 E. Penn Square, in Philadelphia.

Dugan is distinguished by his ability to achieve his clients’ goals by creatively structuring the best terms to ensure a winning deal.

A member of the firm’s Executive Committee, Dugan concentrates his practice in trials and appeals involving all manner of commercial and business disputes representing corporate entities, families and individuals.  He has extensive experience litigating before state and federal courts nationwide, including bankruptcy courts and Orphans Court.

Dugan has been in practice since 1977, with Spector Gadon Rosen Vinci since 1982, and a member of the firm since 1987.  He is managing member and also a member of the firm’s Executive Committee.  He concentrates his practice in trials and appeals involving all manner of commercial and business disputes, and he has extensive experience litigating before state and federal courts nationwide, including bankruptcy courts and Orphans Court.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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As we informed you on April 28, Federal tax credits are available through September 30, 2021 for employers who voluntarily give employees paid time off for COVID-related leave or to get a COVID-19 vaccine. Philadelphia employers can take advantage of this tax credit when they comply with the City’s Pandemic Sick Leave Ordinance.

Effective March 29, 2021, Employers who are located within the City of Philadelphia and have 50 or more employees must provide up to 80 hours of paid sick leave to employees for specific COVID-19 reasons, including

  • Care for self or family member showing symptoms of COVID-19.
  • Care for self or family member exposed to COVID-19 in order to self- isolate.
  • Childcare or school closure.
  • In order to receive a vaccine or recover from injury, disability or illness related to vaccination.

This paid sick leave must be provided outside of and prior to using the eligible employee’s existing accrued paid time off for certain employees. Covered employers whose existing leave policies provide 160 hours or more of paid time off in 2021 that is not specifically designated as sick leave but can be used for the same purposes under the same conditions as required by this law are not required to provide additional paid sick leave. The Ordinance will remain in effect for the duration of the COVID-19 pandemic.

Eligible employees must be employed for 90 days or more in order to receive this paid sick. The law covers full time employees, part time employees, and union employees. However, this law does not cover seasonal or temp employees, state or federal employees and independent contractors (1099 employees).

If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.

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On April 26, 2021, the Equal Employment Opportunity Commission announced that it is opening the 2019 and 2020 EEO-1 Component 1 Data Collection and issued a July 19, 2021 deadline for filing the Data Collection for both years. Due to the Covid-19 pandemic, on May 8, 2020, the EEOC delayed the opening of the 2019 EEO-1 Component 1 Data Collection.

The EEO-1 Component 1 report is a mandatory annual data collection applicable to all private employers with 100 or more employees and federal contractors with 50 or more employees meeting certain criteria. It requires the submission of demographic workforce data by eligible employers including data by race/ethnicity, sex and job categories.  The 2019 and 2020 EEO-1 Component 1 Reports can be filed through the online form on the EEO-1 Component 1 Online Filing System at EEOCdata.org/eeo1/signin beginning on April 26, 2021 or through the data file upload on the EEO-1 Component 1 Online Filing System at EEOCdata.org/eeo1 beginning May 26, 2021. If you are an eligible employer and have not received a 2019 and 2020 EEO-1 Component 1 notification letter via U.S. mail, you should contact the EEOC’s Filer Support Team at FilerSupport@eeocdata.org for assistance so you can create a user account.

If you have any questions regarding the foregoing, please contact any of the following attorneys in our Employment Law Group: Alan Epstein at aepstein@sgrvlaw.com, Jennifer Chalal at jchalal@sgrvlaw.com or Nancy Abrams nabrams@sgrvlaw.com.

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As part of the American Rescue Plan, “small” employers who voluntarily provide paid time off for Covid-related illnesses, quarantine, or childcare, can continue to claim a tax credit equal to the value of the paid time off granted through September 30, 2021. On April 21, President Biden extended the availability of that employer tax credit to paid time off an employer provides to its employees so they can get a COVID-19 vaccine. The tax credit will be funded through the existing American Rescue Plan and may be claimed through the same procedure used for claiming a tax credit for voluntarily provided paid sick leave. Like the prior tax credit provisions, the credit is available to employers with 500 or fewer employees and will remain in effect from April 1, 2021 through September 30, 2021.

If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.

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On March 15,2021, the Third Circuit held that a “stalking horse” bidder in a failed transaction may still be entitled to assert an administrative claim in the bankruptcy notwithstanding the fact that its “termination fee” was disallowed by the Court. In In re Energy Future Holdings Corp., 2021 U.S. App. LEXIS 7400, (3d Cir. 2021), the Debtors opted to terminate a merger agreement with NextEra Energy, Inc. ( “Bidder”) since the Bidder, which was a “stalking horse bidder”, failed to get the required regulatory approvals needed to meet its requirements under a Merger Agreement. The Delaware Bankruptcy Court denied the Bidder’s request for allowance and payment of its $275 million termination fee, which denial was subsequently affirmed by the Third Circuit in 2018. In the Third Circuit opinion, it recognized that the fee could be allowed as an administrative expense per 11U.S.C. Section 503(b)(1)(A) as it would foster competitive bidding in such a transaction.

Thereafter, the Bidder filed an application for allowance of an administrative claim which would allow for Debtor’s payment of all costs it incurred during its attempts to consummate the proposed merger. In this matter, the request for allowance of the administrative claim was for $60 million for such costs. Certain creditors filed a Motion to Dismiss and Motion for Summary Judgement, and the Bankruptcy Court granted both motions resulting in the denial of an allowed administrative claim and finding that the Bidder did not engage in any action to promote competitive bidding, but rather it forced the Debtor to seek other options at far less value. Thus, it found that the Bidder did not meet the standards as required for an allowed administrative clam under the Bankruptcy Code. This ruling was appealed to the District Court where it was affirmed. An appeal was taken to the Third Circuit.

The Third Circuit reversed the denial of the administrative claim and found that there existed a material issue of genuine fact as to the scope of the cost and expense provision in the Merger Agreement, and remanded the matter to District Court to vacate its orders with further remand to Bankruptcy Court. It found that the Merger Agreement itself allowed for recovery of the expenses per 503(b)(1)(A) and was addressed in the Debtor’s Chapter 11 Plan. The Third Circuit found that the Bidder plausibly alleged the requirements under Section 503(b)(1)(A), that the costs were actual, necessary costs and expended to preserve the estate. It further found that the Bidder had to make a showing (upon remand to Bankruptcy Court) that the benefit it provided to the estate exceeded any associated increased costs to the estate, which may include additional interest expenses while various appeals were being pursued.  In doing so, the Third Circuit confirms that there is an alternate remedy for stalking horse bidders to seek reimbursement for out of pocket expenses, notwithstanding the fact that there may be no entitlement to a break-up fee.

Practice Note- A potential purchaser must memorialize, in a merger or similar agreement, its ability to seek an administrative claim in trying to consummate a failed transaction. The flip side to this position is that Debtors may be able to avoid paying any such claim if it specifically puts in the controlling documents that if a termination fee is not allowed, the Bidder is precluded from requesting an administrative claim under Section 503(b)(1)(A).

To discuss this topic or any issues relating to creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at lbaskin@sgrvlaw.com or 215-241-8926.

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On March 19, 2021, the Third Circuit, in In Re: Orexigen TherapeuticsInc., No. 20-1136, 2021 WL 1046485 (3d Cir. March 19, 2021) issued a unanimous and precedential opinion adopting the analysis set forth by Bankruptcy Judge Shannon in In Re: SemCrude L.P., 399 B.R. 388 (Bankr. D.Del. 2009) wherein the Court disallowed what is known as “triangular setoffs,” opining that they lack “mutuality” as required by Bankruptcy Code Section 553(a), and therefore are unenforceable. Here, although an issue of first impression in the Third Circuit, this ruling follows most of the other courts that have decided this issue, including three other Circuit Courts.

In this case, the Debtor owed a subsidiary (“Subsidiary”) of one of its creditors $9.1 million. That same creditor (“Creditor”) had owed the Debtor approximately $7 million. The issue to be decided was whether the creditor who had a right under non-bankruptcy law to set-off these amounts, had a right of setoff in the bankruptcy proceeding. This concept is generally known as a “triangular setoff.” Put another way, if the Bankruptcy Court allowed this right of setoff, the Creditor would owe nothing to the Debtor and the Debtor would owe the Subsidiary $2 million.

The Bankruptcy Court found that setoff was improper, opining that Bankruptcy Code Section 553(a)’s requirement of mutuality is immutable.  The District Court affirmed and the ruling was appealed to the Third Circuit. The Third Circuit, adopting the “sound analysis” presented by the Bankruptcy Court, found that the language of the statute imposed a distinct limitation on any exercise of setoff rights to a debtor’s claim against the creditor and that creditor’s claim against the Debtor. It was articulated that Congress intended for “mutuality” to mean only the debts between the same two parties. The concept of “mutuality” does not include anything except for a bilateral arrangement and that the triangular setoffs are not mutual, and that there can be no contractual exception to the mutuality requirement. The Third Circuit stated that allowing anything beyond this scope would fly in the face of a fundamental principle underlying the Bankruptcy Code which, inter alia, tries to maximize all returns to the creditors themselves. They stated that mutuality is literally tied to the identity of a particular creditor that owes an offsetting debt, declaring that this right is personal and that there is no way around the language of Section 553.

Interestingly though, in dicta, the Third Circuit did hint that there are measures which could be adopted by a number of market participants which could include the use of “joint and several” arrangements in tri-party structures.

To discuss this topic or any other issues relating to creditors rights and bankruptcy, please contact Leslie Beth Baskin, Esquire at 215-241-8926 or lbaskin@sgrvlaw.com.

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As Covid-19 vaccines become more readily available and more adults become eligible to receive them, places of business are welcoming their employees back into the workplace. At the same time, employers are considering whether or not to require that employees get vaccinated before they return to the workplace, or whether or not to require them to get vaccinated to remain in the workplace.

According to guidance from the Equal Employment Opportunity Commission (“EEOC”), employers may require that employees get vaccinated before returning to or remaining in the workplace, as long as they provide an accommodation for employees who cannot get vaccines because of a disability or a sincerely held religious belief. Employers who wish to impose a vaccine requirement should inform employees of the requirement and should state the documentation required to support a request for an exemption from the requirement. A request for an exemption should be treated as any other request for a reasonable accommodation, and an accommodation should be granted if an alternative to the vaccine is reasonably available, but no accommodation need be granted if no reasonable alternative can be made.

Employers who do require employees to be vaccinated may require that employees provide proof that they have been vaccinated. As vaccinated individuals are routinely provided with a CDC vaccine card, this requirement should not be onerous. The proof of vaccination and any documents supporting a need for an accommodation should be treated as any other documents containing employee health information and should be maintained in a confidential manner.

Many employers are not requiring that their employees get vaccinated, but strongly encourage their employees to get vaccinated and provide an incentive if they do so. This should be considered as an alternative to requiring vaccines.

Family First Act Leave

The mandate in the Families First Coronavirus Response Act (“Families First Act”) requiring employers to provide two weeks’ paid sick leave for employees who tested positive for COVID-19, showed symptoms of COVID-19 or had to quarantine because they were exposed to COVID-19, and up to ten weeks’ paid family leave for employees who had to provide childcare for a child under the age of 18 expired on December 31, 2020. However, employers may still choose to provide the type of paid sick and family leave required under the Families First Act. If they do so, they may still take a credit against any federal payroll taxes for the amount paid to employees for those leaves for wages paid during the period beginning April 1, 2021, and ending on September 30, 2021, in the same manner they took tax credits under the Families First Act.

If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.

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The American Rescue Plan Act of 2021 (“ARPA”), signed by President Biden on March 11, 2021, includes a number of provisions designed to assist workers impacted by the COVID-19 pandemic. Among them is a new COBRA premium subsidy that pays for 100 percent of the applicable COBRA premium for eligible individuals with respect to coverage periods beginning April 1, 2021 and ending Sept. 30, 2021.

Employees are eligible for this assistance if they (1) become COBRA eligible during the Premium Assistance Period, (2) are currently enrolled in COBRA, or (3) are within their COBRA continuation period (generally 18 months) but did not elect or previously dropped COBRA coverage. Employees who were eligible for but did not elect COBRA coverage must do so within 60 days of the date they are notified of their right to subsidized payments. The subsidy only applies to employees (and their beneficiaries) who lose their coverage because of the employee’s involuntary termination or a reduction in the employee’s hours. The subsidy will not be provided to employees who voluntarily terminate their employment or to employees who are not eligible for COBRA because their employment was terminated for gross misconduct.

Written notification regarding the availability of the COBRA premium subsidy must be provided to all employees who are or will be eligible for COBRA coverage on April 1, 2021 within 60 days of April 1, 2021. This notice requirement may be satisfied by amending the employer’s current COBRA notice or by supplementing the current notice with a separate notice, and must include:

  • The forms necessary for establishing eligibility for premium assistance;
  • The name, address, and telephone number necessary to contact the plan administrator and any other person with relevant information regarding the premium subsidy;
  • A description of the special 60-day election period;
  • A description of the qualified beneficiaries’ obligation to inform the plan administrator if the qualified beneficiary becomes disqualified from coverage (i.e., gets another job that provides health care coverage);
  • A description, displayed in a prominent manner, of a qualified beneficiary’s right to a subsidized premium and any conditions on the beneficiary’s entitlement to the subsidized premium; and
  • A description of the qualified beneficiary’s option to enroll in different coverage, if permitted by the employer.

The employer must also provide notification of the expiration of the subsidy period no more than 45 days or less than 15 days before the subsidy period will expire.

Most employers will be reimbursed for the premium subsidy by a new tax credit that applies against the employer’s share of the Medicare hospital insurance tax. The credit is a dollar-for-dollar reimbursement of the qualified employee or beneficiary COBRA premiums that were waived pursuant to the ARPA subsidy. To the extent that the credit amount exceeds the employer’s Medicare hospital insurance payroll tax, the excess amount may be claimed as a tax credit. ARPA also includes a provision indicating that the credit may be advanced, pursuant to forms and instructions to be developed by the IRS.

If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.

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For many businesses, the COVID-19 pandemic has drastically and negatively affected their security due to issues arising from permitting or directing many, if not all, of their employees to work remotely from home or elsewhere to avoid virus transmission.

In this work structure, technology has become more important than ever. Unfortunately, all too often remote activity is not a ‘cyber-safe’ working environment since remote-working individuals do not often enjoy the inherent protections afforded them at their place of business.

Some of the major factors contributing to critical cyber security threats in a remote work environment include:

  • Bring Your Own Device (“BYOD”) policies for phones, tablets and laptops. Businesses can meet this issue effectively for employees by instituting Corporate Owned Personally Enabled (“COPE”) policies.
  • Human error, prevalent before COVID-19, is greater now as a cyber security issue. Human error can be addressed in many ways including time-outs in key information systems and automated controls.
  • Remote-working employees untrained in enhanced cyber security issues.
  • Increased activity of cyber criminals targeting less secure remote systems and usage.

What can you do to help your business combat increased, COVID-enhanced cyber security risks? Begin with the importance of risk assessment as a necessary first step in dealing with cyber and COVID-19 exposures.

Your risk assessment must be thorough and comprehensive, price effective and have a rapid turnaround. This is particularly important now with the exposures changing rapidly in scope, kind and numbers.

To be useful to your business, any thorough assessment report must include recommended remediations and check lists. For flexibility, the process yielding a report should be algorithm-based. A full report should be ready for you in a matter of days, not weeks or months.

An effective process will assist underwriters in placing the right coverage and assist claims folks in determining if a claim is covered, all of which will likely save you a lot of time and expense.

An informed and well-crafted process will allow you to make informed decisions as to whether to fix, ignore or transfer given exposures.

If you have any questions regarding the foregoing, please contact Edward M. Dunham Jr. at (215) 241-8802 or edunham@sgrvlaw.com

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On March 27, 2020, the CARES ACT was passed by Congress in response to the COVID-19 crisis. Under the CARES ACT, the SBA offered loans under the Paycheck Protection Program (“PPP”). On February 22, 2021, the Administration issued a fact sheet (“Fact Sheet”) outlining reforms that will, inter alia, provide more PPP loans for the smallest of businesses that did not previously receive a PPP loan. The goal is to assist these businesses in surviving the COVID-19 crisis and help them reopen.
Amongst other things, the Fact Sheet outlined how the Administration will:
1. Help sole proprietors, independent contractors, and self-employed individuals receive more financial support.
This is in recognition of the fact that these businesses are owned by women and people of color and that they have been greatly excluded from the PPP because of how PPP loans are calculated. The Administration will revise the calculation for these applicants so that they will receive more relief. It will also set aside $1 billion for businesses in this category without employees that are located in low- and moderate-income areas.
2. Eliminate the exclusion of small business owners with prior non-fraud felony convictions from PPP eligibility.
Under the current rules, a business is ineligible for a PPP loan if it is at least 20 percent owned by an individual who has either:
         A. an arrest or conviction for a felony related to financial assistance fraud within the previous five years; or
        B. any other felony within the previous year. It will also eliminate the second restriction (the one-year look-back) unless the individual is incarcerated at the time of the PPP loan application.
3. Eliminate the exclusion of small business owners who are delinquent on their federal student loans from PPP eligibility because the exclusion disproportionately impacts people of color.
4. Ensure access for non-citizen small business owners who are not lawful US residents by clarifying that they may use Individual Taxpayer Identification Numbers (“ITINs”) to apply for a PPP loan.
The current PPP rules did not provide clear guidance for ITIN holders like Green Card holders or those in the US on a visa. To address this inconsistency, the SBA will issue clear guidance whereby otherwise eligible applicants cannot be denied access to the PPP because they use ITINs to pay their taxes.

The Fact Sheet also states that the Administration will take the following steps:

1. Promote transparency and accountability by improving the PPP loan application to encourage self-reporting of demographic data and better illustrate the impact of the PPP across various population segments
2. Improve the Emergency Relief Digital Front Door by updating the SBA websites to help applicants find resources about relief options and completing applications more easily.
3. Continue to conduct extensive stakeholder outreach to learn more about challenges and opportunities with the current emergency relief programs.
4. Enhance the current lender engagement model. The SBA is launching a new initiative to deepen its relationships with lenders and give lenders more opportunity to ask questions, provide recommendations, and help resolve open questions and concerns in a more streamlined way.
The facts stated above are a sampling of the changes and are an attempt to make PPP loans more accessible to a wide range of needy businesses during this continued crisis.
To discuss this topic or issues relating to business, PPP loans or creditors and debtors rights in bankruptcy, please contact Leslie Beth Baskin at 215-241–8926 or at lbaskin@sgrvlaw.com.
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Spector Gadon Rosen Vinci P.C. Shareholder and Director George M. Vinci Jr. has been named to the National Law Journal’s inaugural list of Insurance Law Trailblazers. This list honors individuals who have changed the practice of insurance law through the use of innovative legal strategies. The Trailblazer series spotlights professionals who are agents of change in their respective practice areas.

Vinci recently secured a landmark $100 million award against Grant Thornton for its marketing of an abusive tax shelter. He argued the public must be protected, and ultimately, such pervasive fraud must be punished. The ruling sent an important message to help prevent such conduct from ever occurring again, establishing courts in Kentucky will recognize a 4:1 punitive damages ratio.

Vinci is Shareholder and Director of Spector Gadon Rosen Vinci P.C., a Member of the Executive Committee and Chairman of the Insurance and Professional Liability Practice Groups. He focuses his practice on civil litigation with a strong emphasis on professional malpractice, commercial, employment, and insurance coverage disputes.

Vinci is a member of the American Bar Association, the Professional Liability Underwriting Society and DRI. He served for six years as a panel member with the Disciplinary Board of the Supreme Court of Pennsylvania. Vinci has consistently been selected as a Pennsylvania Super Lawyer. In 2019, he was recognized with the Professional Excellence Award from The Legal Intelligencer, the oldest law journal in the United States, in the category of Distinguished Leaders. Mr. Vinci was also a recipient of the Philadelphia Business Journal’s 2019 Best of the Bar Award.

The National Law Journal is an American law journal, daily legal news website and legal analysis content-aggregating database. The organization offers hourly legal news updates and analysis of recent court decisions, regulatory changes and legislative actions and includes a combination of original content and content submitted by various professionals in the legal and business communities.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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SGRV attorneys Joseph J. Devine and Peter D. Cripps successfully handled the sale of their client, Emphasys Technologies, to Ocorian as Legal Counsel of Spector Gadon Rosen Vinci P.C. This acquisition marks Ocarion’s entry into the U.S. market.

Ocorian is a team of  global specialists in fund, corporate, capital market and private client services specializing in tax reporting and calculation agency services to asset-backed transactions. The deal, which was agreed on March 4, 2021, is expected to complete later this month.

Emphasys Technologies provides capital markets services, modeling asset-backed transactions and related tax returns, as well as specializing in tax reporting and calculation agency services to asset-backed transactions.

Chairman and CEO of Ocorian, Frederik Van Tuyll responded to this development, noting “The acquisition of Emphasys Technologies is hugely significant for us as it gives us presence in the US, which is one of our key strategic priorities. We are fully committed to providing outstanding client service and building long term relationships and are delighted that Emphasys share our approach and values.”

Emphasys Technologies CEO’s Jeff Stone and David Anthony will continue to lead their business, saying “This is tremendously exciting for our clients and colleagues. Our clients will benefit from…the broader opportunities that come with being part of a large, multinational enterprise.”

Peter D. Cripps is Chair of the Mergers & Acquisitions and Securities Law practice groups at SGRV. Prior to joining the Philadelphia office, Mr. Cripps practiced for 16 years in the Philadelphia office of Dechert LLP. While at Dechert, he was a partner in the Corporate & Securities and Mergers & Acquisitions practice groups.

Joseph J. Devine is Chair of the SGRV Corporate Law Group. He devotes much of his practice to representing entrepreneurs and growth businesses in a variety of industries.  In his 30 years of practice, he has represented public and privately held companies, as well as investors, in a wide range of corporate and business transactional matters, including mergers and acquisitions, equity and debt offerings, securities law compliance, credit facilities, private equity and venture capital, and governance.

Spector Gadon Rosen Vinci P.C. has represented clients nationally and internationally for nearly 50 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters. The firm has offices in Philadelphia, New Jersey, Florida, and New York.

The firm represents businesses, corporate boards, and highly placed individuals. Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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A change in administrations is normally accompanied by changes to employment-related laws that reflect the viewpoint and policy of the President.

On January 20, President Joe Biden’s first day in office, the White House asked all federal agencies to freeze proposed regulations and those with pending effective dates so the president’s appointees would “have the opportunity to review any new or pending rule.” In response, during the past month, the Equal Employment Opportunity Commission (“EEOC”), National Labor Relations Board (“NLRB”), and United States Department of Labor (“DOL”) all announced that they are withdrawing or postponing the implementation of Rules, Proposed Rules and Opinion Letters that were issued during the previous administration.

Equal Employment Opportunity Commission

The EEOC left in place the final rule on its voluntary conciliation program, which took effect on February 16. The program offers employers and employees an alternative to litigation for resolving workplace discrimination complaints, and the final rule provides more information to employers during the conciliation process. The EEOC has indicated that all future conciliations will be conducted in accordance with the new Rule. However, the EEOC did freeze two proposed Rules.

On January 7, 2020, the EEOC published a final Rule ending the practice of paying federal workers who are union representatives for the work time they spend handling discrimination complaints. The Rule was frozen on January 20 so a determination could be made whether the Rule would deprive federal workers of valuable resources on how to navigate the EEOC complaint process.

The EEOC also froze a new Rule regarding employer-sponsored wellness programs. Under the proposed Rule, employers could comply with the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”) only if they offer no more than a minimal incentive to encourage participation in wellness programs outside of the group health plan that collect employee health data, finding that allowing too high of an incentive would make employees feel coerced to disclose protected medical information to receive a reward or avoid a penalty. The EEOC is sure to issue new guidance in this area.

The National Labor Relations Board

On February 1, acting NLRB general counsel, Peter Sung Ohr, announced that he was rescinding 10 memos that he considered inconsistent with the National Labor Relations Act’s (NLRA’s) purpose.

The June 6, 2018, memo on employee handbooks from former NLRB General Counsel Peter Robb outlined three categories of rules: rules that are generally lawful, provisions warranting individualized scrutiny and rules that are lawful. Most of the rules mentioned in the memo were deemed to usually be lawful. Ohr said the June 6, 2018 memo was being rescinded because it was no longer necessary given the number of NLRB cases (in addition to 18 Advice Memoranda) interpreting the landmark NLRB decision in Boeing.

Ohr also rescinded a Robb memo that required NLRB staff to tell whistleblowers that they could face federal charges or be disciplined by their employer if they gave the NLRB video or audio that had been obtained illegally. However, Ohr stated that Regions should continue to not accept recordings that violate the Federal Wiretap Act and to apprise individuals who proffer recorded evidence when it may violate state law.

Other rescinded memos included a pair that lowered the bar for prosecuting unions, plus two others that increased the level of detail unions had to include in financial notices and called for imposing new rules on the collection of member dues and nonmember fees. Ohr also withdrew a memo seeking new limitations on union-employer neutrality agreements.

The NLRB policy changes implemented by Ohr in these areas will probably remain as the newly appointed General Counsel, Jennifer Abruzzo, is a former Special Counsel for Strategic Initiatives for the Communications Workers of America.

Department of Labor

The DOL froze rules and revoked recently issued opinion letters on paying tipped employees and classifying workers as independent contractors that were slated to take effect in March.

In the revoked letter, the DOL discussed rules for “nontraditional” tip pools, which include tipped servers and nontipped employees such as hosts and hostesses. The frozen final Rule set forth criteria for allowing tipped and nontipped employees to share in tip pools. Notably, eligible employers would have to pay all participants in the tip pool the full minimum wage instead of taking a tip credit. Additionally, the final Rule would have prohibited management from keeping any portion of employees’ tips regardless of whether the employer takes a tip credit.

Two additional opinion letters addressed whether certain workers can be classified as independent contractors under the FLSA or if they are actually employees. One opinion letter focused on whether a motor carrier can order tractor-trailer truck drivers to implement legally required safety measures without jeopardizing the drivers’ independent-contractor status. The other letter addressed whether distributors of a manufacturer’s food products are employees or independent contractors under the FLSA.

The DOL analyzed the facts of each letter under a final Rule that was scheduled to take effect on March 8. The rule would apply an economic-reality test to determine employment classification, primarily considering the nature and degree of control over the work and the worker’s opportunity for profit or loss based on initiative and investment. Three other factors would serve as guideposts in determining employment status:

·    The amount of skill required for the work.

·    The degree of permanence of the working relationship between the worker and the potential employer.

·    Whether the work is part of an integrated unit of production (or the individual works under circumstances analogous to a production line).

The rule is now on hold pending review from the current administration.

We will keep you updated on these issues and other changes implemented by the new administration. If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.

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Are you still waiting for a holiday package sent by USPS? On Sunday, January 24, 2021, I received a gift-wrapped box that had been “in transit” since December 7, 2020 – bearing a mailing label, “Expected delivery December 10”. It contained a “one of a kind”, surprise gift from a long-time friend, which could not have easily been replaced if lost.

But at least my package showed up.

As the Philadelphia Inquirer reported, “Still waiting for packages that were mailed in December? It could be a while.” Similar problems were reported across the nation.  See, for example,

Although many attributed the delays, at first, to an increased volume of holiday packages and voting by mail, the continued lag points to a persistent problem, much bigger then a frustrating gift giving concern. Even worse, consider how much of “every day life” is disrupted by late mail, for individuals and businesses;

  • Bills and bill payments are late. (Fortunately, some utilities like PECO have suspended late fees.)
  • Prescriptions by mail are late, risking health problems.

(Since I take several medicines following major surgery, I have developed a great relationship with my local pharmacist. who always fills them on time.)

  • Doctors and other businesses that mail bills each month must receive timely payment, to avoid cash droughts.
  • Taxpayers must receive their W-2’s and 1099’s to file on time.

Charities in particular face great practical problems, especially during “tax season”.

Although they must provide confirmations to donors by a fixed deadline, email can efficiently solve that problem. But not all donors use or want email – many prefer handing a traditional paper receipt to their tax preparer. Moreover, many nonprofits may simply not have collected email contacts, particularly smaller charities, or faith based organizations. Of course, businesses can impose late fees, but no one wants to discourage an otherwise good customer – especially when the delay was not the customer’s fault.  (I even received one bill several days after the grace period had expired.)

Fortunately, I successfully disputed several such late charges.  But I can’t count on doing that every month.  And no business can afford to haggle over every routine bill. From a creditor perspective, delayed delivery of bills doesn’t excuse a customer’s late payment.  Such delays are outside the creditor’s control, and sellers’ cash flow depends on timely payment of receivables. Some credit card firms temporarily suspended all late fees – a windfall for the habitually late (and loss of a lucrative revenue source).

So what can an ordinary business do? The answer seems obvious, if painful: plan for inevitable delays in both the bills you send, and your clients’ payment of them. Apply the same approach to every bill your firm receives.  Every payable is someone else’s receivable.

The steps to do this are certainly not typical for business payments.  They will also take more time, effort and expense – perhaps a lot more. But your relationships with your vendors, customers and credit bureau are worth the effort.

  • Set up online or ACH payments, rather than mailed checks.
  • Schedule credit card payments of regular bills, or pay by phone.
  • Alert delinquent accounts by phone – the customer may have mailed payment on time, and be unaware of the delay.
  • Schedule automatic monthly withdrawals from your checking account in the exact amount of each bill – and be sure to fund the account in advance.
  • Monitor your balances online, regularly, and bill and pay online.
  • Plan for the loss of float in your account when you pay automatically.

You must make sure funds are immediately available to avoid overdraft fees or bounced checks, especially if you have large bills.

Finally, don’t blame the USPS for your problems – it has enough troubles of its own handling its increased workload.  The Pandemic has accelerated the shift from in-person shopping to online buying – and shipping. In addition, although the USPS may be an easy target for your anger, that won’t solve your problem. Instead, channel your energy and attention to taking control of your own finances and credit status in our “new normal” of delayed mail – a great idea for personal management, even had we never experienced the Pandemic.

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On January 14, 2021, the U.S. Supreme Court in City of Chicago vs. Fulton reversed a Seventh Circuit ruling that the City of Chicago violated the automatic stay created by car owners’ bankruptcy filings, when the City refused to immediately return the cars after the bankruptcy filing that had been impounded pre-bankruptcy for parking or traffic violations. Put another way, if a creditor is in possession of assets they seized prior to the bankruptcy filing, they do not necessarily have to return the repossessed property.

This unanimous ruling by the Supreme Court “resolves” a dispute among the federal appellate courts on a very discrete issue under Section 362(a) of the Bankruptcy Code.

The Third, Tenth, and District of Columbia Circuits had determined that creditors who maintained possession of seized property are NOT violating the automatic stay. Contrary to those Circuits, the Second, Seventh, Eighth, Ninth, and Eleventh Circuits found that holding on to seized property is a prohibited “act to exercise control over property” of the bankruptcy estate and therefore violative of the stay.

Justice Alito delivered the unanimous opinion of the Court. He wrote that the “most natural reading” of the Bankruptcy Code is that it “prohibits affirmative acts that would disturb the status quo of estate property as of the time when the bankruptcy petition was filed.” He further stated that the act of merely retaining possession of the repossessed property does not violate the automatic stay.

Justice Sotomayor, in her concurring opinion, highlighted the fact that the Justices did not decide whether other sub-sections of Section 362 may still require a creditor to return repossessed debtor property if the creditor is holding it for the purpose of extracting payment. She wrote her concurring opinion to emphasize that despite this ruling, the Court is not deciding whether and when Section 362’s other provisions may require a creditor to return property to the bankruptcy estate or debtor. See 362(a)(4) and (6). She also pointed out that this Opinion did not provide guidance as to how bankruptcy courts should actually enforce the creditor’s separate obligation to deliver property back under other sections of the Bankruptcy Code, including Section 542. Importantly, Justice Sotomayor articulated her social concerns as to how low-income communities are disproportionately burdened in this regard, as well as communities of color. She points out how many debtors who are affected by this problem rely on their cars to go to and from work and that in order to get their car back, they must rely on procedures in bankruptcy court which are extremely slow (proceedings to enforce turnover of property under Section 542) and how it is up to the legislatures to address this issue.

This opinion is a “must read” especially for consumer practitioners who represent not only creditors but debtors concerning the ability to retrieve repossessed property. Importantly, the Supreme Court in this opinion did not rule on whether debtors could achieve their desired results by invoking other provisions of Section 362 or 542, leaving the door open to other possible avenues of recourse.

To discuss this topic or issues relating to creditors rights and bankruptcy, please contact Leslie Beth Baskin at 215-241-8926 or at lbaskin@sgrvlaw.com 

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We are a “get’er done” society. We embrace challenges – and applaud those who complete them promptly. Nothing exemplifies that attitude more than creating not one, but two COVID-19 vaccines, in less than a year. Another example has been funding relief for America’s businesses shuttered by the Pandemic.

From the $2.2 trillion CARES Act funding quickly passed in April, to the tentative deal for “just” $900 billion in the pending bill, our leaders have acted quickly to try to help our citizens and businesses get back on their feet, after a knockout punch no one saw coming.

But sometimes done is not “better than perfect”?

The aphorism about the benefits of completing a task, rather than obsessing over the failure to “dot i’s and cross t’s”, falls down when the “i’s and t’s” turn out to be just as important in the long run as the completed task.

The 5,593 page Consolidated Appropriations Act 2021 left out liability protection for employers, schools and businesses, despite many calls for such relief. A similar liability limit bill was vetoed in my state, Pennsylvania, for protecting even firms that ignored public safety requirements. Why should such concerns matter so much, when balanced against the overwhelming demand for speedy relief, both financial and legal?

Consider the tragedies of Pennsylvania meat plant employees, who died of COVID-19 early in the Pandemic, and of their employers who were sued for failing to prevent their deaths. Other similar cases have been reported, particularly for health care workers. While the facts will be determined in the litigation, the allegations are predictable. The employers claim that employees were infected even though they had protective equipment. If the employers complied with all applicable safety rules, at the time, what more could they have done?

Why should an employer pay for an illness it couldn’t prevent, even though it tried, using all of the public health guidance available? Of course, those rules have evolved as science has learned more about the virus. But no one wants to hold employers to a standard they couldn’t have known at the time of the alleged violation.

Or do they?

Whether due to adverse publicity, a genuine desire to compensate the family of a fallen employee, or a cold, liability carrier’s cost benefit analysis of the expense of settlement against the slow burn of legal fees, counsel for an injured or deceased employee will often invest in lengthy litigation, in search of a large award.

It is easy to understand why the possibility of future lawsuits became less pressing to lawmakers than the actual needs of individuals and businesses alike for cash, whether to pay bills, or simply to stay alive in the hope for a “new post-vaccine normal”. Yet the cost of defending claims for harm allegedly caused by COVID-19, both spurious and legitimate, could be overwhelming – especially after businesses have already invested heavily in personal protective equipment and facilities modifications to try to stop the spread of the disease.

Moreover, keeping up with the flood of safety guidance from many sources during the Pandemic, especially as it has evolved with understanding of the virus, has been a challenge for those focusing on that question, much less for a business owner struggling to stay open and pay employees.

From a different perspective, will anyone remember the cash stimulus benefits after paying legal fees to defend claims from injured or deceased employees? If the philosophy of our relief efforts has been “no questions asked” compensation for businesses harmed by the virus, should funding for its human victims perhaps have been included as well?  After all, our society does compensate some harms without fault, such as auto accidents (in some states), or injuries caused by vaccines.

Such a compensation system would not multiply the tragedy of an employee death from COVID-19 to include the collapse of the firm that could not prevent it, especially if the employer tried to protect its employees under all safety guidelines.

(Of course, employers which cavalierly ignore safety rules should not get any liability protection.)

To paraphrase Martin Luther King, no one is healed until we are all healed, individuals and businesses alike. When Congress returns in January, balanced COVID-19 liability limitation should be as high on its agenda as stimulus checks for individuals.

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