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 L E G A L   B R I E F
 
March 2013
Newsletter Archive
IN THIS ISSUE
Client Advisory #1
Client Advisory #2
Employment
Corporate
Intellectual Property Update
Wills, Trusts & Estates Update
Negotiating Update
Firm News
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Campolo, Middleton & McCormick, LLP, is a full-service business law firm that represents clients in a wide variety of legal matters including litigation and appeals; corporate and technology; real estate development and zoning; wills, trusts and estates; labor and employment; personal injury matters including the defense of general liability, construction, premises liability and transportation cases.
 
3340 Veterans Highway Suite 400
Bohemia, NY 11716
p 631-738-9100
f  631-738-0659

  
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Disclaimer
The information contained in this newsletter is provided for informational purposes only, and should not be construed as legal advice on any subject matter. The Firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship. No recipients of information from this newsletter, clients or otherwise, should act or refrain from acting on the basis of any information included in this newsletter without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this newsletter contains general information and may not reflect current legal developments. The Firm disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this newsletter.
 

Client Advisory #1



SBA Proposes Reducing Requirements to Exhaust Other Resources before Obtaining SBA Loans
by David Hoeppner, Esq. 

 

The U.S. Small Business Association (SBA) has proposed to revise its lending rules for loan programs. The goal of these regulation changes is to expand the accessibility of SBA loan programs and to increase the number of Hoeppner #2 businesses taking advantage of government-guaranteed loans by giving borrowers greater access to capital. The proposed changes are an attempt by both Congress and the administration to expand the SBA's reach by making more existing businesses eligible for the agency's programs, to streamline the loan application process and to strengthen the oversight of the agency.

The proposed changes will affect 7(a) and 504 loans, two of the SBA's most popular loan programs. The 7(a) loan program helps startup and existing small businesses acquire financing for a variety of general business purposes. The 504 loan program provides access to long-term, fixed asset financing for land, buildings or equipment.

Most significantly, the SBA is considering eliminating the agency's "personal resources test" for borrowers. This rule requires investors with at least a 20 percent stake in a loan applicant to obtain a maximum level of personal finance resources before the company can get a 7(a) or 504 loan.
 
To read more click here >>

   

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Client Advisory #2



FEMA Extends Deadline for  Sandy Disaster Assistance Application to March 29th
  
The Federal Emergency Management Agency, at the request of the State of New York, has approved a 30-dayFEMA Logo2  extension for survivors to register for federal disaster assistance in order to best serve Hurricane Sandy survivors in New York.  The new registration deadline in New York is March 29, 2013, which is also the deadline to complete and return low-interest SBA disaster loan applications to the U.S. Small Business Administration.
  
To read more click here >>

   

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Employment



Recent Decision Denies Injunctive Relief for Company Against Former Employee
by Jeffrey Basso, Esq. 

 

One of the major concerns that many business owners deal with on a regular basis is protecting their confidential information (i.e. trade secrets, customer lists, pricing information, contracts, proprietary information, intellectual Basso property, etc.) in the event an employee leaves the company for a competing business. Many businesses have employees sign written non-compete, non-disclosure and/or non-solicitation agreements to put protections in place in advance of such a scenario. Of course, there are also situations in which no agreement is in place with an employee who then bolts for a competitor while taking along his or her former employer's confidential information to the new company.

A recent decision in Suffolk County Supreme Court (Whelan, J.) dated February 7, 2013 dealt with the latter scenario described above in which no agreement was in place between the company and the employee. In RBR Melville Contractors, LLC v. Feehan, et al., the Court faced a motion from the plaintiff company seeking preliminary injunctive relief against its former employee as well as the company started by the employee to compete with his former employer.

Plaintiff, RBR Melville Contractors, LLC ("RBR") is engaged in the snow removal business at commercial premises and multi-unit residential communities. RBR's former employee, Feehan, had worked for RBR for ten years, with the last six of those years working as RBR's sales manager. As sales manager, RBR alleged that Feehan regularly communicated with RBR's customers and had access to customer lists, contracts, pricing lists and other confidential information and even had his personal phone number and e-mail address listed on RBR's business cards. RBR alleged that Feehan abruptly resigned in July 2012, approximately one month after Feehan formed his own company, Professional Snow Management, LLC ("PSM"). RBR alleged that when Feehan resigned from RBR, he took with him RBR's confidential information to use for PSM, which was a direct competitor. 

To read more click here >>

   

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Corporate



LLC Dissolution: Recent Decision Highlights the Perils of Not Planning for a Business Divorce
by Hayley Morgan 

 

Too often, close friends and family members enter into business relationships with little or no consideration as to what will happen if the venture does not work out as planned. At the time of entering into the business Hayley Morgan relationship, individuals are typically focused on the endless potential that can come from the venture and often do not think about what might happen if things do not go as planned, nor do they want to have that uncomfortable discussion concerning how business disputes will be resolved down the road. As unpleasant as such discussions may be at the time, a recent decision demonstrates why planning for a business divorce at the onset can provide much needed rights and remedies for LLC members seeking to redress harms caused by fellow members.

A recent decision from the Supreme Court in Kings County highlights the importance of careful drafting and consideration of an LLC operating agreement. In Mizrahi v. Cohen, two brothers-in-law formed an LLC to own a commercial building, wherein both the plaintiff and defendant would rent space for their respective businesses, in addition to renting space to unrelated tenants. Apparently the defendant failed to pay rent to the LLC and refused to contribute to the upkeep of the building, including payments on the mortgage. In an earlier decision the court granted plaintiff's petition for dissolution while reserving decision on how to liquidate the assets of the LLC. The plaintiff sought to buy out the defendant, while the defendant sought appointment of a receiver and a public auction of the real property. The court ordered an accounting and appraisal of the real estate and the results revealed that the LLC was essentially bankrupt, that the plaintiff had approximately four times the equity in the LLC as possessed by the defendant, and that by liquidating the LLC in a public auction as requested by the defendant, both members would lose their entire investment.

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Intellectual Property Update 



Copyright Claim Dismissed for Lack of Specificity
by Eryn Y. Deblois, Esq.
  
A recent decision from the Southern District of New York demonstrates the importance of pleading sufficient factual allegations in a copyright infringement case. In Kane LLC v. Scholastic Corp., Case No. 12-cv-3890, 2013 WL 709276 Deblois (S.D.N.Y. Feb. 27, 2013), the Court dismissed plaintiff's copyright claim because it did not specify which works were at issue, which acts constituted infringement, and the time period that the infringement occurred.

Plaintiff was a stock photograph agency that licensed certain copyrighted photographs to defendant. The parties entered into a licensing agreement which granted defendant the right to use the photographs under certain limited terms. In the complaint, plaintiff alleged that defendant used the photographs without permission or beyond the scope of the licensing agreement. Plaintiff listed the works in the complaint, but indicated that the list was not exhaustive. Defendant moved to dismiss the complaint.

The Court granted the motion to dismiss on the grounds that the complaint did not specify which works were at issue and did not allege the acts that constituted infringement. Specifically, the Court noted that it was unclear whether the copyright registration numbers contained in the complaint corresponded to the list.
 
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Wills, Trusts & Estates Update



Planning for One!
by Martin Glass, Esq.

In some ways, estate planning for a single person can be more challenging for an estate planning attorney than planning for a couple. When a couple puts together an estate plan, the easiest and most natural thing to do is to Glass entrust one another with all of the fiduciary responsibilities in the event of one spouse's disability or death. Among these responsibilities are the execution of each other's health care proxy, power of attorney, access to medical records in end-of-life scenarios and the administration of the estate.

The ease in dealing with these issues for couples is that the surviving spouse is most often the closest emotionally and geographically to the deceased and their assets. Spouses are uniquely qualified to speak for each other, because over the years they hopefully have had discussions concerning end-of-life scenarios with each other. Moreover, the surviving spouse is more likely to have been included in the financial decision making throughout the marriage, making the surviving spouse the best person to continue making the financial decisions beyond the marriage.

Those who never married and those who have been widowed do not have the luxury of entrusting emergency or end-of-life responsibilities to their spouse. These responsibilities typically fall to other members of the immediate family, such as children or siblings. In my experience, if there are children, the burden of these responsibilities tends to fall on the daughter. If not her, then the child in closest physical proximity to the surviving parent. Hopefully that child has had discussions with both parents and knows their wishes, no matter which one ends up the surviving parent.

To read more click here >>

 

Negotiating Update 



Negotiating Strategies for Buying a Home (Part 2)
by Joseph N. Campolo, Esq.

Negotiating Strategies for Buying a Home (Part 1) was published last month. It covered tips for buying, strategies and negotiating. To read last month's post click here.
Campolo3 
Real Life Example
THE MARKET: A seller's market
WHO: Hannah, a first-time homebuyer who had been going to open houses for months.
THE HOUSE: One day she drove down a side street and spotted a for sale sign on a house that wasn't advertised in that Sunday's paper. She knew the instant she walked in the door that she wanted the house.
THE AGENT: Hannah was not working with an agent. She sat down with the seller's agent and drew up a full price offer with standard contingencies.
THE OUTCOME: Could she have paid less? Maybe. Did she feel burned? No. Her homework told her this was an unusually good property priced to sell.

Negotiating in a Balanced Market
A balanced market feels less like a pressure cooker because there is a more equal supply of homes and buyers. Since neither side is feeling market urgency, personal priorities reign. Expect the back-and-forth counteroffer phase to take longer than it does in either a buyer's or seller's market. After several rounds of paperwork, buyer and seller might agree to do a 50-50 split of their differences on price, terms, and personal property.

To read more click here >>

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Firm News


    CM&M to Host Breakfast Seminar on April 25th

  

In light of the upcoming changes to the patent laws, Campolo, Middleton & McCormick is proud to announce Technology that we have expanded our Intellectual Property services to help you protect your company's IP. We now offer a full-range of intellectual property services and cordially invite you to an IP Breakfast Seminar hosted by our Intellectual Property Group attorneys to learn about the new developments and how to protect your business. The event will take place on Thursday, April 25, 2013 from 8:30 - 10:00 am at the Holiday Inn located at 3845 Veterans Memorial Highway, Ronkonkoma, NY 11779.

To reserve your seat click here
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       Campolo Quoted in LIBN on Agape World

 

Managing Partner Joe Campolo, Esq. was quoted in a Long Campolo3 Island Business News article on March 8th entitled  "Agape World trustee in deal with MF Global." Representing several Agape victims, Campolo shares his clients' frustration as the hunt to recover assets for victims of Long Island's largest Ponzi scheme continues.

 

 To read more click here >>

     


 

David Hoeppner is CM&M Associate of the Year

 

We congratulate David Hoeppner, Esq. on being named Campolo, Middleton & McCormick's Associate of the Year. He has been recognized for his dedication to the growth of the firm, his legal work and his clients.

 


 

David Hoeppner Teaching at Hofstra Law School  

 

CM&M attorney David Hoepper, Esq. is teaching as an adjunct professor at Hofstra Law School this semester, and Hoeppner #2 is also participating in their new law clinic which is offering free legal assistance to local small businesses as they recover from the effects of Superstorm Sandy. David assists second and third-year law students as they offer transactional (non-litigation) legal assistance on a wide range of legal issues that have arisen in Sandy's wake. Small businesses interested in these services, including nonprofits and community groups, should contact Kathleen Conti at 516-463-5934 or [email protected]

 

For more information or to apply click here >>

 

 




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Campolo, Middleton & McCormick, LLP
3340 Veterans Highway, Suite 400
Bohemia, NY 11716
p 631-738-9100 | f 631-738-0659
[email protected] | www.cmmllp.com