New Jersey Lawyers Blog

Published on: January 3, 2017

The Effect of the Automatic Stay in Bankruptcy: Benefits, Exceptions and Limitations

town-sign-96612__340-300x225 Bankruptcy provides relief to a debtor who may be struggling to keep a house, keep the lights on, or pay credit card or medical bills. The relief provided is in the form of an automatic stay, exemptions to protect your most essential assets, and a discharge of a portion of the debtor’s debts. It is important to determine to understand the benefits and limitations of the relief that bankruptcy provides before you make the decision to file for bankruptcy.

Benefits of an Automatic Stay.

The automatic stay is the first form of relief provided after a debtor files for bankruptcy. The stay stops almost all collection actions by creditors to allow the debtor time to reorganize, rehabilitate, and prepare for the fresh start that bankruptcy provides. The following are examples of the actions which a debtor’s creditors must cease as a result of the automatic stay:

Published on: December 28, 2016

The Consequences of “Liars Loans”

by Maurice W. McLaughlin

keys-1317391__340-300x279 Our transactional attorneys handle many types of commercial and real estate transactions, from closings on homes, office buildings, factories, to commercial transactions including the sale of all or part of a business. The overwhelming majority of these transactions require the purchaser to take out a loan to finance the purchase. Whether a buyer qualifies for the loan is one of the main contingencies in the transactions.

In many instances the purchasers will have already obtained financing before they talk to us about the transaction. However, once we are involved in the transaction one of the things we stress most, based on long experience, is that the application for the loan must be one hundred percent honest. Anything less than perfect honesty with the bank is a crime. The days when “Liars Loans” was acceptable are now over – in fact, that day existed only in fiction. Our transactional attorneys’ extensive experience in New Jersey real estate and business transactions has convinced us that honesty with the bank is the only way to go.

Federal law makes it a felony to “execute a scheme… to defraud a financial institution.” More particularly, the federal statute states that:

Published on: December 21, 2016

Fighting New Jersey’s Rule of Three

by Maurice W. McLaughlin

One of the prime methods of hiring, firing, promotion and discipline of public employees is New Jersey’s civil service. Attorneys from our firm represent employees in appeals from actions by their civil service employers. One of the most significant issues in the civil service hiring process our employment attorneys have encountered is when government employers exercise the “Rule of Three.”

New Jersey’s Constitution requires that hiring in the civil service system must be based on merit and fitness, and that a candidate’s merit and fitness be determined by a competitive examination. The system put in place by New Jersey’s Civil Service Act and the regulations drafted by New Jersey’s Civil Service Commission provide that impartial tests which examine a candidate’s competency are announced, qualified candidates take the test, and then the Civil Service Commission creates a list of “eligibles” from which the candidates must be hired. The highest scorers will receive the top spot on the list. Candidates are to be hired in accordance with their place on the list.

However, an exception applies to this process. Public employers may use the “Rule of Three” to pass over the highest scorer. In the recent case of In re Foglio, New Jersey’s Supreme Court had the chance to examine the Rule of Three. The first thing the Supreme Court did was to explain what the Rule of Three was all about. The Supreme Court explained: “Under the Rule of Three, after a list of at least three candidates is certified, the appointing authority has the discretion to select from among the top three candidates in filling a vacancy. The Rule of Three recognizes employment discretion and seeks to ensure that such discretion is not exercised in a way inconsistent with `merit’ considerations. While ensuring that competitive examinations winnow the field of candidates, the Rule of Three does not stand as ‘an immutable or total bar to the application of other important criteria” by a government employer’.”

Published on: December 20, 2016

Fair Labor Standards Act Regulations

by Maurice W. McLaughlin

Background: New Regulations Adopted

In 2014 the United State Department of Labor issued new regulations governing overtime exemptions. The regulations did not change the main overtime exemptions, but it did raise the salary threshold for them to apply.

Existing Exemptions

Published on: December 13, 2016

Changes to the Fair Labor Standards Act

by Pauline M.K. Young

dollar-1889027__340 The Fair Labor Standards Act (“FLSA”) is a federal statute enacted in 1938 with the goal of setting national standards for employees, including minimum wage, overtime requirements, child labor restrictions, and other protections. Our employment attorneys represent management and employers in litigation under FLSA violations and litigation about its state counterpart, the New Jersey Wage and Hour law. Our

Many changes have been made to the FLSA over the years to try to keep up with the changes in inflation the socioeconomic climate of the country. On March 13, 2014, President Obama published a Presidential Memorandum directing the DOL to review and revise the regulations protecting workers through minimum wage and overtime standards. In May of 2016, the United States Department of Labor (“DOL”) responded by updating the FLSA to extend overtime pay protections and minimum salaries – which would mark the first significant change in 40 years.

The rule sets a minimum salary requirement of $47,476 for salaried workers – which more than doubled the prior minimum of $23,660. Generally, employees are paid on an hourly basis and then paid one and a half times their regular hourly pay for all hours worked in excess of 40 hours per week. However, certain employees are “exempt” from the hourly pay and overtime requirements. Some of the most comment exemptions are for: professionals (lawyers, accountants, engineers, etc.) executives or administrators (managers, officers, etc.), and commissioned salespeople. For employees not being paid on commission, these exempt workers are generally paid an annual salary as opposed to an hourly wage.

Published on: December 12, 2016

Chapter 7 Bankruptcy: How to Protect Your House

by Robert Chewning, Esq.

debt-1157824__340 In a Chapter 7 bankruptcy, a trustee will be appointed to liquidate the assets of a debtor’s estate to satisfy the creditors of the debtor. Therefore, it is important to understand that if you file a Chapter 7 bankruptcy, all of your assets including your house may sold to satisfy your creditors. However, the Federal Bankruptcy Code, U.S. Code Title 11, provides ways for debtors to protect their most important and essential assets through a variety of exemptions. Our New Jersey bankruptcy attorneys use these exemptions to the full extent of the law to protect your assets while helping you lift the crushing burden of debt.

The Federal Bankruptcy exemptions are referenced in 11 U.S.C. 522(d)(1)-(11). These exemptions cover a variety of assets which you may own and want to protect from being sold by the trustee, ranging from your home to life insurance payments. However, these exemptions do not provide an absolute protection to your assets and are limited in their use.

Probably the most important asset and the one that people are most concerned with is their home. The Federal Bankruptcy Code provides for an exemption for your primary residence under 11 U.S.C. 522(d)(1), (5). The exemption provides protection up to $23,675 in New Jersey. This amount is doubled if you are filing jointly with your spouse for a total of $47,350. This exemption can be used to exempt a portion of the equity in your home.

Published on: December 8, 2016

Solid Waste Registration

by Maurice W. McLaughlin

hauler Businesses wishing to transport solid waste in New Jersey are required to strictly comply with the registration process governed by the New Jersey Department of Environmental Protection. Our attorneys help solid waste haulers in complying with these requirements, and obtaining approval to haul solid waste in New Jersey.

This is a brief overview of the solid waste registration and application process with the NJDEP.

Is it “Solid Waste?”

Published on: December 6, 2016

Issues Faced by New Jersey Solid Waste Haulers

by Maurice W. McLaughlin

eighteen-wheeler-614201__340 The transportation and disposal of solid waste in New Jersey is a heavily regulated industry. The statutory and regulatory framework of New Jersey sold waste law is complex. Attorneys from our firm have significant experience counseling and representing solid waste companies in all aspects of their businesses.

This regulatory complexity starts at the beginning of a solid waste hauler’s lifecycle. A business or person who wants to get into the business of hauling solid waste must make an A-901 application to the New Jersey Department of Environmental Protections, undergo a rigorous background investigation, and obtain a certificate of public convenience & necessity (CPCN). The operation of the business is also governed by a complex regulatory scheme, including the registration of vehicles, the types of waste which can be handled, and what can be done with it.

And, of course, a solid waste hauler is a business just like any other business. It will have the multitude of issues any business has. It will have disputes with its customers. It will have labor and employment problems. Competitors will try to take its business. The owners will have disputes between themselves. It will need to collect delinquent bills.

Published on: December 3, 2016

New Jersey’s Civil Service Appeals

by Maurice W. McLaughlin

council-of-state-535721__340 Our employment law attorneys represent government employees in New Jersey Civil Service appeals.

One of the most criticized but least understood areas of New Jersey employment law is the Civil Service System. Employers complain that New Jersey’s Civil Service System makes it too difficult to fire employees who are not carrying their weight. Employees, especially prospective employees, complain that civil service makes it too difficult to obtain jobs. However, the Civil Service System is there for an extremely important reason.

New Jersey – gasp – has a history of corruption and political patronage when it comes to awarding government jobs, and while the old civil service system helped, it did not eliminate it. After the long reign of Frank (“I am the law”) Hague in Jersey City, New Jersey said enough is enough. It held a constitutional convention, and the New Jersey Constitution of 1947 provided that civil service selections and appointments had to be based on merit, determined by test if possible. This was to take politics, corruption, nepotism and favoritism out of employment decisions so that merit was the only reason employees obtained or kept their jobs.

Published on: December 1, 2016

New Jersey Formation: Choosing the Optimal Structure: LLC or S Corporation?

by Jennifer C. Meusel

head-1825517__340 It is important to consider certain essential factors when choosing which type of business entity for your new business. In order to reach your goals and find the best fit for your company, you should consider protection from liability, taxation mechanisms, ease of formation, and your future requirements for raising capital. The two primary options for small businesses are the limited liability company (“LLC”) and the S Corporation (“S-Corp.”). The LLC is the structure most commonly used by small business owners, but it is important to review the S-Corp. before making your decision and forming your entity. Once you understand the similarities and differences between the two structures, you can review your business goals and needs to make an informed decision as to which type of entity you should form.

The Limited Liability Company

Under the New Jersey business law, the LLC provides liability protection similar to that of a corporation while retaining the taxation structure of a partnership. For tax purposes an LLC is a “disregarded entity”, the LLC issues a K-1 form to each member at the end of the tax year showing the distributions made to each member. This K-1 is used to prepare each member’s individual income tax returns. An LLC is quite flexible as to the forms of management which are permitted. It can be member-managed in that the members (owners) manage the business of the LLC; or manager-managed, in that an outside manager is hired to manage the business affairs of the LLC; or some combination of the two models. Additional flexibility is found in the LLC because profits and losses can be allocated in any way desired by the members, it does not have to be based on the amount of capital contributions contributed by each member. The operating agreement is the controlling document and it can be drafted to reflect the agreement of the members. The operating agreement can also reflect different voting rights among the various members and it can relax the strict recordkeeping rules of a corporation.