New Jersey Lawyer & Attorney : Stark & Stark Law Firm : New Jersey Law Blog

On August 17, 2006, President Bush signed into law the Pension Protection Act of 2006 (the “PPA”).  The PPA establishes new funding requirements for defined benefit pensions and included reforms that affect cash balance pension plans, defined contribution plans, multiemployer plans and deferred compensation plans for executives and highly compensated employees.  However, as it relates to multiemployer plans such as union pension plans, most of the funding requirements for multiemployer plans that were in effect before enactment of the PPA remain in effect under the new law.  The PPA simply establishes new requirements for multiemployer plans that are in financial distress as a result of being significantly underfunded.  Essentially, the PPA abrogates certain anti-cutback rules and establishes a new set of rules for improving the funding of multiemployer plans that are deemed to be in “endangered”, “seriously endangered” or “critical” status.  These new requirements will remain in effect through 2014.
 

In general, ERISA prohibits reductions in accrued, vested benefits.  These ERISA provisions are commonly called “anti-cutback” rules.  The PPA changes the ERISA anti-cutback rules so that plans in critical status are permitted to reduce or eliminate early retirement subsidies and other “adjustable benefits” to help improve their funding status if this is agreed to by the bargaining parties.  Benefits payable at normal retirement age cannot be reduced, and plans are not permitted to cut any benefits of participants who retired before they were notified that the plan is in critical status.  Adjustable benefits include certain optional forms of benefit payment, disability benefits, early retirement benefits, joint and survivor annuities (if the survivor benefit exceeds 50%), and benefit increases adopted or effective less than five years before the plan entered critical status.
 

A multiemployer plan is considered to be in critical status if: (1) it is less than 65% funded and has a projected funding deficiency within five years or will be unable to pay benefits within seven years; (2) it has a projected funding deficiency within four years or will be unable to pay benefits within five years (regardless of its funded percentage); or (3) its liabilities for inactive participants are greater than its liabilities for active participants, its contributions are less than carrying costs, and a funding deficiency is projected within five years.  A plan in critical status has one year to develop a rehabilitation plan designed to reduce the amount of underfunding.  Pursuant to such a rehabilitation plan, the plan is permitted to reduce or eliminate early retirement subsidies to help improve their funding status.  In addition to giving plans the right to eliminate or reduce some benefit payment options and early retirement benefits for plan participants who have not yet retired, the law also establishes new disclosure requirements for multiemployer plans.
 

The plan must notify all affected parties within 30 days after a determination is made that the plan is in critical status.  Beginning 30 days after this notification, a 5% employer surcharge will apply to keep plan funding from deteriorating while the rehabilitation plan is being developed.  This surcharge increases to 10% in the second year and stays in effect until the rehabilitation plan has been approved.  During this period, increases in benefits and reductions in contributions are prohibited.  The surcharge is no longer required beginning on the effective date of a collective bargaining agreement that includes a rehabilitation plan.  A plan has 10 years to move out of critical status from the earlier of (1) two years after adoption of the rehabilitation plan or (2) the first plan year after the beginning of collective bargaining agreements covering 75% of active participants.  If the parties to the collective bargaining agreements fail to agree on a funding improvement plan, a default schedule will apply that assumes no increases in contributions — unless necessary to exit critical status — after benefit accruals and adjustable benefits have been reduced to the extent permitted by law.  A plan exits critical status if it no longer projects a funding deficiency within 10 years.

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Sometimes, controlling shareholders use the sale of corporate assets as a means to squeeze-out minority shareholders.  This is often performed by the majority transferring those assets to a new entity which is not owned by the minority shareholder.  New Jersey corporate law provides some level of protection for the minority shareholder if the transfer is not in the ordinary course of the company’s business.
 

The treatment of said transfers under the New Jersey Business Corporations Act depends on whether or not they are made in the “regular course of business.”  For example, if the sale or transfer is made in the regular course of the corporation’s business then “no approval of the shareholders is required.”  N.J.S.A. 14A:10-10. If, on the other hand, the transfer of corporate property is not in the usual and regular course of the corporation’s business then shareholder approval with specific notice requirements are required.  N.J.S.A. 14A:10-11.
 

The problem for minority shareholders lies in the vagueness of the distinction between transactions which are and are not within the ordinary course of the corporation’s business. Typically, the majority will assert that the proposed sale of assets is within the usual and regular course of its business.  The minority will assert it is not.
 

The seminal case in New Jersey interpreting this important distinction is Good v. Lackawanna Leather Co., 96 N.J. Super. 439 (Ch. Div. 1967). In Good, the Court considered whether or not the sale of almost all of the company’s assets without shareholder approval violated the statute. The Good Court held the “test to be applied is not the amount or value of the assets disposed of, but rather the nature of the transaction, i.e., is the sale in furtherance of the express objects of the corporation's existence.”  Id.  Obviously, the Court’s answer to that inquiry will depend on the specific facts of relating to the transfer of the corporation’s assets.

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A child is not automatically emancipated at age 18 or upon graduation from high school. A child is emancipated when he or she has moved “beyond the sphere of influence and responsibility exercised by a parent and obtains an independent status of his or her own.” Generally, emancipation occurs when a child completes his college education.

In most Marital Settlement Agreements, it is specifically acknowledged that a child attending college on a full time basis is not emancipated. As a result, child support continues, at a modified amount, and college education expenses are apportioned between the parents in accordance with their income and assets until the child graduates.

What if a child takes seven years to obtain a bachelor’s degree? What if a child has a full time job while attending college? What if a child has assets that could be used to help pay for college education? These questions have been answered in recent cases decided in New Jersey; however, keep in mind that all cases are fact sensitive and a different result may occur with a twist of just one fact.

In a  recent case,  the parties’ son was almost 24 years old, attended DeVry University (after a series of other colleges), had a job earning $22,600, lived in an apartment costing $1,260 a month and had taken out student loans to help pay for his college education costs, as well as his living expenses.

Upon his mother’s application to the Court to compel the father to continue paying child support as well as to contribute to the college education costs, the Trial Court determined that the son was emancipated and required the son to pay for his college tuition with loans. The Court also stated that if the son finished DeVry University in three years, the son could request that his father reimburse him for the father’s proportionate share of his college loans. The Court’s reasoning in emancipating the son and compelling him to take out loans for his education was to motivate him to finish college.

It is important to note here, that the parties’ Marital Settlement Agreement (MSA) stated that child support would continue until emancipation. Therefore, child support was terminated when the Court determined the son was emancipated. There was a separate provision in the MSA which governed the parties’ obligation to pay toward their child’s college education. On appeal, the Appellate Division agreed that the son was emancipated because he earned enough to support himself and moved beyond the sphere of influence. Therefore, child support was not required by either parent. However, the son’s emancipation did not eliminate the parents’ obligation to pay for his college education expenses pursuant to their Agreement.

In another recent case, the Court dealt with whether a child’s inheritance could be considered when fixing a parent’s support obligations which include college education. It was determined that a child’s assets may not be used to fulfill a support obligation of the parent. Therefore, in calculating child support, accounts in the child’s name, whether in trust or in custodianship, shall not be considered in setting a parent’s child support obligation. New Jersey Courts have included college education expenses as part of a child’s necessary support; therefore, it follows that a child’s assets should not be considered in apportioning college education expenses between the parents.

This is in direct contravention to the seminal case of Newburgh v. Arrigo in which the Supreme Court of New Jersey held that a court can consider a child’s assets (among many other considerations) when determining the parents’ proportionate share of college education expenses.

Many of these issues can be dealt with ahead of time through a carefully drafted Marital Settlement Agreement specifically dealing with emancipation and how it relates to college education expenses, as well as the effect a child’s income and assets has on the parents’ ultimate contribution to college.

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Thomas B. Lewis, Chair of Stark & Stark's Employment Group, was quoted in the February 18, 2011 Wall Street Journal article, US Trust Asks Employees to Confirm Broker Protocol Doesn't Apply. The article discusses a memo Bank of America sent to its U.S. Trust banking employees which asked them to acknowledge that they are not subject to an industry-wide agreement on how
brokers leave firms for new jobs. Mr. Lewis states, "the memo appears to include new rules and that it is a "questionable" assertion that U.S. Trust isn't a Protocol member."
 

Mr. Lewis was also quoted in the February 22, 2011 Wall Street Journal article, US Trust's 'Garden Leave' May Start Trend. The article is a follow up to the Febryary 18th article in which Mr. Lewis states, "Garden leave provisions apply to many senior executives. They haven't typically been applied to financial advisers until now, however, mainly because they cripple their ability to convince clients to stick with them during the transition. Sixty days is an eternity in the brokerage world."

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On February 18, 2011, Governor Chris Christie vetoed legislation (A2215) that would have required the New Jersey Economic Development Authority in consultation with the Department of Community Affairs “to establish and administer a program that makes low-interest loans available to a developer or redeveloper who constructs a new building or removes an existing building that, when completed, qualifies as a high performance green building.”  Although the Office of Legislative Services determined in the Legislative Fiscal Estimate for Assembly bill A2215 that this legislation would not have any impact on the State General Fund, apparently this did not serve to sway the Governor.

It remains to be seen as to whether the Legislature will try to overturn the Governor’s veto.  When the Legislature passed Assembly bill (A2215) on January 10th of this year, the Assembly (75-2-1) and the Senate (37-0) produced significantly more than the two-thirds majority required to overturn a Governor’s veto.  However, the Legislature may opt, instead, to include the low-interest loan program contemplated by A2215 into a larger balanced budget plan.  It appears from the press release posted by the Governor Christie’s Office on February 18th relating to his veto of this bill and 13 others, that the Governor might be more inclined to approve new financial incentives provided they paid for and accompanied by spending cuts.

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As we have discussed in previous posts, studies have shown that the ingredients contained in the birth control product NuvaRing® have been linked to various forms of severe side-effects including: heart attack, stroke, deep vein thrombosis (also known as DVT or blood clots), internal organ damage, myocardial infarction and pulmonary embolism.

In addition to state mass tort actions, similar matters are proceeding in the parallel federal multi-district litigation, which is currently before The Hon. Rodney W. Sippel, U.S.D.J. in the Eastern District of Missouri. A discovery schedule for the Phase 1 bellwether cases was issued, requiring completion of fact discovery by June 24, 2011, depositions of plaintiffs’ experts by October 24, 2011, and depositions of defendants’ experts by February 20, 2012. 

At Stark & Stark we pursue claims throughout the nation against drug manufacturers, so they can be held accountable when the drugs they market are proven to be defective or cause catastrophic injury to the people who use them. Contact Stark & Stark to speak with one of the Mass Tort/ Pharmaceutical Litigation attorneys, free of charge, who can help assess any claims that you might have against the manufacturers of NuvaRing®.

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Judge Martinotti, who presides over the NuvaRing® mass tort cases in the Superior Court of New Jersey – Bergen County, will hold a case management conference on March 11, 2011.  At this conference, the judge will hear Defendants’ motion to dismiss Millian v. Organon. Defendants claim the statute of limitations has expired and the action is barred.  Underlying the statute of limitations issue in this motion is a choice of law issue.  The Court will address whether to apply the statute of limitations of Virginia, the plaintiff’s home state where her injuries were diagnosed, or New Jersey, the state where the action is filed.  The Court’s decision will likely apply to the remaining matters filed in this mass tort.

As we have discussed in previous posts, studies have shown that the ingredients contained in the birth control product NuvaRing® have been linked to various forms of severe side-effects including: heart attack, stroke, deep vein thrombosis (also known as DVT or blood clots), internal organ damage, myocardial infarction and pulmonary embolism.

At Stark & Stark we pursue claims throughout the nation against drug manufacturers, so they can be held accountable when the drugs they market are proven to be defective or cause catastrophic injury to the people who use them. Contact Stark & Stark to speak with one of the Mass Tort/ Pharmaceutical Litigation attorneys, free of charge, who can help assess any claims that you might have against the manufacturers of NuvaRing®.

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On February 3, 2011, the Assembly Housing and Local Government Committee approved for consideration by the full New Jersey State Assembly a bill (A3125) that proposes to preempt municipalities from enacting ordinances that purport to regulate the installation of solar panels on residential property.  Specifically, this proposed legislation, which I like to refer to as the "solar ordinance preemption bill” supplements the Municipal Land Use Law to prohibit a municipality from adopting an ordinance that regulates the installation of photovoltaic solar energy systems under the following circumstances: “(1) in the case of a roof mounted system, [provided that] the panels, and all accessory equipment, extend 12 inches or less beyond the edge of the roofline or above the highest point of the roof surface or structure; or, (2) in the case of a surface level or ground mounted system, [provided that] the system consists of 10 or less photovoltaic panels and is situated more than 50 feet from the nearest property boundary line.”

In addition, Assembly a bill A3125 provides that a locality shall not require payment of any fee that exceeds processing costs for an application pertaining to the approval, installation or operation on residential property of any photovoltaic solar energy systems or any small wind energy systems (as such term is defined in N.J.S.A. 40:55D-66.12).

Although the future of Assembly bill A3125 remains uncertain, the State Legislature has clearly taken an interest in it.  In addition to the recent activity in the Assembly, the Senate actually passed Assembly bill A3125 (which it had substituted for Senate bill S2006) by a vote of 31-7 on June 28th of last year.  If adopted and approved by the Governor, this bill will facilitate the installation of solar facilities on residential properties and encourage homeowners to use renewable energy resources in New Jersey which, in turn, will promote the goals of the Energy Master Plan.

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Gary S. Forshner, Shareholder in Stark & Stark’s Real Estate, Zoning & Land Use Group, co-authored an article with William C. McNamara, Shareholder of Cowan, Gunteski & Co., P.A. for the February 2011 issue of New Jersey Business Magazine entitled, The Downturn in the Construction Industry Impacts Everyone.

The article discusses the impact the high unemployment rate, an increased number of foreclosures, and a reduction in spending, combined with a tight credit market, decline in housing starts, and a drop in the number of completed homes has had on the real estate and construction industries over the past several years. Mr. Forshner and Mr. McNamara also discuss the impact these factors have had on related industries such as suppliers, retailers, finance companies and insurance providers.

You can read the full article online here.

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Either party in a post-judgment divorce action may make an application to modify alimony based on a substantial change in circumstances. The party seeking modification has the burden of demonstrating a change in circumstance which would warrant relief. A reduction in income is the number one reason for a party to seek a modification of alimony. However, that change is only part of the calculus to be considered in determining whether alimony should be modified. The trial court must not only examine earnings of the parties but also how they have utilized their income and assets in the past.

If the parties borrowed money to maintain their standard of living during the marriage, then there may be no change in circumstances to support a modification of alimony if the paying party comes into Court stating that he has to borrow money to meet his alimony obligation.

In a recent case, the ex-Husband, who is an attorney, sought to reduce his alimony obligation because:

• his law firm was dissolving;
• the firm had been operating at a loss requiring he and his partners to borrow money from the firm’s line of credit;
• his income was reduced;
• he was paying a high interest rate on a loan; and
• he had recently opened his own firm

The Court found that these reasons were insufficient to meet the Husband’s burden of proving changed circumstances. The Husband offered no information to the Court regarding his personal income drawn from the firm’s credit line, and he did not present any facts showing a change in his standard of living other than downgrading from a Porsche to a BMW. The Court stated that since the Husband opened his own law firm and brought many of his clients with him, he was employed and had the potential of earning a similar salary as he had in the past. Therefore, the Husband’s request to reduce alimony was denied. 

It is important to note that when a self-employed party files for a reduction in alimony, the Courts are wary that such individuals are in a better position to present an unrealistic picture of their actual income to the Court than a W-2 wage earner. In any event, if the Husband in the above case had presented more financial information to support his position, the outcome may have been different.

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I wanted to take this opportunity to share what I believe is a very important and timely YouTube message that was created by the Independence Business Alliance, Philadelphia’s LGBT Chamber of Commerce. As an active member of this organization I have seen firsthand the truly inspired and positive work our group is doing in the community. 

The video is titled “It gets better” and it was produced in the hopes that it reaches LGBT youth and lets them know that each and every person has a story, and that it does in fact get better. It is hoped that the video will inspire and encourage people to be proud of who they are and keep persevering since life does get better.

While there are other “it gets better” videos out there we believe that showing real people from the local area is key to inspiring kids to hang on and reach out if they need help. Many of the videos from other campaigns have been made by sports stars, and celebrities, which is fabulous, but their message doesn’t always translate to the average student. This video hopes to show that there are regular people in their community who have been in their shoes and have made it.

You can find the video here or by searching for “IBA it gets better” on YouTube.

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Gary S. Forshner, Shareholder in Stark & Stark’s Real Estate, Zoning & Land Use Group, authored the article, A Construction Lien Law Primer, for the January 31, 2011 New Jersey Law Journal’s Real Estate, Title Insurance & Construction Law Supplement.

The Construction Lien Law provides a methodology for securing payment to contractors, subcontractors and material suppliers on construction jobs. The Construction Lien Law was adopted in 1993 and replaced the Mechanics Lien Law. A significant overhaul of the Construction Lien Law, proposed as Bill A-410, providing primarily procedural changes as to how construction liens are to be secured, and paid, was recommended by the Law Revision Commission after significant input by various stakeholder groups. The Bill passed the NJ Assembly 80-0 on June 21, 2010 and the NJ Senate 36-0 on November 22, 2010. The bill sits on the governor's desk where it expected to be signed into law. Amongst the numerous changes from prior law, the Bill includes updated provisions affecting landlord and tenant, homeowner associations, arbitration provisions, clarifications addressing ambiguities in the previous statute and issues that arose as a matter of case law in the intervening 17 years.

You can read the full article online here.
 

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The below article is a re-print of an article which was previously published in the June 2010 issue of Community Trends Magazine.
                   
The scenarios are predictable and common.  Faced with a request for alternate dispute resolution (“ADR”), the association’s property manager digs up the ADR policy to find it is full of legal terms and confusing procedures.  Often times, the ADR committee members do not know how to start or what is expected, and the property manager can spend hours preparing the ADR committee (the members of which will likely change before the next hearing).  A call goes out to the Association’s legal counsel to guide them through the process.  Scared of the procedures, both sides “lawyer up” and might as well be in litigation.  In all of these cases, ADR is an annoying, time-wasting, costly enterprise for the Association and, too often, a disappointment for the homeowner involved because it elevates the dispute and polarizes the parties.  It is time for community associations to implement practical ADR.  If they do, they will find the ADR process much less painful, both financially and emotionally.
 
What is Practical ADR?
Practical ADR is a policy of dispute resolution that is easy, economical, and efficient.  It is a common sense way to address disputes.  It empowers the parties to participate in finding solutions to an issue instead of battling it out to find an ultimate winner.  Practical ADR in community associations means do-it-yourself mediation. 

There are two basic types of ADR.  Mediation is a process in which a neutral third party, with no power to impose a decision, helps disputing parties to reach an agreement.  (See Black’s Law Dictionary.)  Arbitration, on the other hand, is a process which also uses a neutral third party but this third party, an arbitrator, has the power to render a decision after a hearing.  (Id.)  Both mediation and arbitration can be used for any type of dispute: from the very complex to the most basic.  But simple mediation best meets the needs of community associations by providing a quick and easy process that focuses, not on establishing who is right and wrong, but on how to resolve differences. Ultimately, this is what the law requires.  

New Jersey Law Requires ADR
The law in New Jersey is simple.  Community associations are required to “provide a fair and efficient procedure for the resolution of disputes between individual unit owners and the association, and between unit owners, which shall be readily available as an alternative to litigation.”  N.J.S.A. 45:22A-44(c); N.J.A.C. 5:26-8.2(c).  The New Jersey Condominium Act (“Condo Act”) has a similar requirement.  (See, N.J.S.A. 46:8B-14(k).)  The Condo Act also prohibits board members from serving as a mediator or arbitrator by stating: “A person other than an officer of the association, a member of the governing board or a unit owner involved in the dispute shall be made available to resolve the dispute.”  N.J.S.A. 46:8B-14(k).  This prohibition constitutes a basic aspect of fundamental fairness and should be adhered to by all community associations, not just condominiums. 

Because New Jersey law does not require any specific procedure for ADR, community associations should simply ensure they provide a fair process which also meets the requirements of the association’s governing documents. 

The Association’s Governing Documents May Have Specific ADR Requirements.
The governing documents for most community associations do not address ADR except to say that it must be provided.  In recent years, certain sponsors have been more specific with regard to ADR policies.  These sponsors, and their lawyers, may believe highly detailed ADR policies help community associations or protect homeowners; more often than not, they are a burden that increase costs to all and help nobody.  When the bylaws are very specific, practical ADR may not be possible without an amendment.  Fortunately, homeowners are likely to see the benefit of a well written practical ADR policy. 

Implementing Practical ADR
The first step in implementing practical ADR is to make a fresh start: with your attorney’s approval, toss out your association’s existing ADR policy.  The second step is to review the association’s governing documents to determine what specific processes are absolutely required, if any.  The third step is to develop a fundamentally fair policy utilizing simple mediation that adheres to the association’s obligations under the law and the governing documents.

Dos and Don’ts of Practical ADR       
DO understand what the law and the association’s governing documents require. The ADR policy must be formed around those basic requirements.  Use these as a framework.     

DON’T adopt a policy you do not understand and cannot reasonably follow.

DO have a clear, simple, written policy.  The ADR policy should describe notice and scheduling requirements, the hearing process, and what happens when the hearing is completed.  If, after an ADR hearing, you find the process is deficient in some way, revise the policy. 

DON’T let the lawyers litigate during ADR.  While a homeowner should be entitled to have a lawyer at his side during the ADR hearing, and the Association may want to do the same, the lawyers should allow the parties to mediate the dispute. 

DO keep the association’s lawyers informed.  While an association’s lawyers should always be kept informed about disputes, the lawyers need not be involved in every single ADR hearing.  
Disputes involving serious legal issues like housing discrimination, handicapped parking or access, violent or criminal acts, and threats of litigation should always be vetted by legal counsel before moving to ADR. 

DO consider using the board members as a valuable first step in resolving disputes.  While the Condominium Act does limit the participation of officers and board members in the dispute resolution process, the board can serve an important role.  Often a disgruntled homeowner will just want to vent or simply does not understand a policy; spending 15 minutes with the board may lead to resolution of the dispute.  Such a meeting will not discharge the Association’s obligation to provide ADR, however, so if a meeting with the board does not resolve the problem, ADR will still have to be offered. 

DON’T put the homeowners on trial.  Using a process with a finder of fact, such as an arbitrator or ADR panel inevitably leads to a mini trial.  When a “verdict” is at stake, the focus is on “winning” and not resolving the dispute.

DO focus on resolving the dispute through simple mediation.  Each party can present a position and support for that position.  The neutral mediator can talk to the parties separately and together and try to find common ground or areas of compromise.  If the dispute cannot be resolved after a fair and efficient procedure, the parties simply go their separate ways–sometimes the dispute fades away and sometimes it moves to litigation–but the obligation for ADR will have been properly discharged.

DON’T assume you need a professional mediator; dispute resolution is a fact of life and something we all do every day.  Professional mediators are an extremely valuable asset in many situations but they are not necessary for most community association ADR hearings.

DO set time limits and enforce them.  Practical ADR for a community association, unless very complicated, should rarely take more than an hour. 

DO start implementing practical ADR for your practical association now. 

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Welcome to that time of year when thoughts turn to spring. As a baseball fan, my thoughts turn to Spring Training, while as a divorce lawyer, they turn to taxes. Why, you may ask? Well, with tax filings due April 15th, there will be no small amount of questions as to such issues as, "are my support payments taxable? Are they tax deductible? What about the assets I received or gave to my ex-spouse? Who gets to claim the children? How am I permitted to file? Can I file separately from my spouse? Should I do so?

This list is not exhaustive but provides a basis for discussion concerning the interplay of divorce and taxes which any person contemplating or going through a divorce should know, as should their attorney. So, here are some basic “rules of the road":
 

1. Alimony paid in accordance with a properly drafted divorce agreement or Court Order is deductible to the person paying it and reportable as income to the recipient. Thus, if you are receiving alimony, you must set aside a sufficient portion to pay federal and state income taxes in order not to be unpleasantly surprised come tax time.
2. Child support is "tax neutral"; non-deductible to the payer or income to the payee.
3. A capital gain exclusion of $250,000 (single) and $500,000 (married) exists for the sale of a principal residence, defined as where you lived for any two of the past five years.  If after a separation, this rule tells us that the home must be sold within three years of departure for the exclusion to apply to the departing spouse.
4. Marital status for tax filing purposes is set on the last day of the year--December 31. If you are divorced before December 31, you must file as a single taxpayer or head of household if you qualify. If you are still married on December 31, you can file jointly or separately, although the latter is not recommended since the total combined tax liability is greater than in the case of joint filing.
5. If filing separately, the first to file's election of standard or itemized deductions requires the other filer to do the same. Ouch!
6. Joint tax return = joint liability despite what your divorce agreement or Judgment says. The IRS "innocent spouse" exceptions are very limited.
7. The custodial parent is entitled to claim the children as dependency exemptions unless otherwise agreed in writing.
8. Attorneys fees related to a divorce are not generally deductible, whether your own or paid to your spouse's lawyer. Tax advice related to the divorce is deductible, as are fees paid to determine or collect alimony.
9. If a person is obligated to pay child support and alimony but pays less than the monthly amount due, payments are first applied to satisfy the child support obligation (tax neutral) before alimony; see 1. above.

These are just some of the tax issues that permeate divorce cases. Others, such as when dealing with retirement plans, stock options, investments and private businesses are more complex. While intended to be helpful, my comments are not tax advice or legal advice and since tax rules, laws and regulations change frequently and may have changed by the time you read this article, working with qualified professionals is essential.

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On January 10, 2011, both houses of the New Jersey State Legislature overwhelmingly passed Senate bill S2126, as amended, which I am going to refer to as the "solar landfill bill.”  This new legislation affords developers the right to construct a solar or photovoltaic energy facility or structure on sites located in the Pinelands that contain a landfill or a closed resource extraction operation that operated pursuant to a resource extraction permit on or after December 31, 1985, provided that any such development shall be consistent with the Pinelands Comprehensive Management Plan and shall comply with the other requirements set forth in the bill.  Should Governor Christie approve Senate bill S2126, the Pinelands Commission would have up to 120 days to adopt rules and regulations that provide applicants with a process for obtaining approvals to develop these facilities and structures.
 

In addition to supplementing the Pinelands Protection Act, Senate Bill S2126 provides that under the Municipal Land Use Law a solar energy facility or structure on any landfill or closed resource
extraction operation shall be permitted within every municipality and that a wind energy generation facility or structure on any landfill or closed resource extraction operation shall be permitted within every municipality outside the Pinelands.
 

Senate bill S2126 presently sits on the Governor’s desk and awaits further action.  If this newly enacted piece of legislation is signed into law by Governor Christie, it will undoubtedly create new opportunities for the expansion and distribution of renewable energy resources in New Jersey.

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Panel of experts-moderated by TD's Schweiss provides insight, likely next steps for SEC studies
TD Ameritrade Institutional held its 2011 National Conference yesterday in San Diego, California, entitled, The Real Impact of Financial Regulatory Reform. The conference featured a panel of investment professionals who offered up differing views and opinions on how to implement new regulations for the SEC. Thomas D. Giachetti, Chair of Stark & Stark’s Securities Group, served as a featured panelist.

Mr. Giachetti stated, “Advisors are the bastard stepchildren of the SEC.”  By that, he meant that those on the Commission—both on the Commission level and the staff level—don’t understand the business models of RIAs who advise individual clients. As for the SEC’s SRO report, Giachetti (left) said he believed the best solution would be to create an entirely new self-regulatory organization to oversee all fiduciary advisors.

You can read a report on the full conference online here.

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In November 2010, U.S. District Judge David Herndon, who is overseeing the federal Yaz lawsuits, ordered three executives from Bayer to fly to the United States for their depositions. Joachim Marr, Hartmut Blode and Ilka Schellschmidt, who work at Bayer’s headquarters in Germany, were selected to represent the company regarding the pre-clinical and clinical development processes.
 

The location of the depositions had been a source of contention between the parties. Because German law does not provide for American-style depositions, defendants had suggested the depositions be held in Belgium. However, plaintiffs objected to the Belgium location, arguing that the cost of flying up to a dozen attorneys to Belgium would be cost prohibitive. Subsequently, defendants moved for a protective order, claiming that the executives would be away from their duties too long if forced to travel to the U.S. After considering arguments on both sides, Judge Herndon concluded that, "equities favor[ed] the depositions being held in the United States." 
 

However, it appears that cooperation between the parties has broken down over the last couple months.
 

On January 20, 2011, Judge Herndon advised that all depositions were being halted until he could write a new protocol for them and submit them to the state judges in California, Pennsylvania and New Jersey. During a hearing on an unrelated matter, Judge Herndon opined that the, “depositions ha[d] been anything but efficient.” Judge Herndon further opined that the depositions had wasted time and were uncooperative. However, Judge Herndon continued to express his intentions to include the state judges in his decisions.

If you feel you have experienced any side-effects from taking YAZ® or Yasmin® (or the generic brand, Ocella®), you can contact Stark & Stark and speak to one of the Mass Tort/Pharmaceutical Litigation attorneys, free of charge, who can help assess any claims that you might have against the YAZ®, Yasmin® or Ocella® manufacturers.

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Gary S. Forshner, Shareholder in Stark & Stark’s Real Estate, Zoning & Land Use Group, will present a seminar in conjunction with the New Jersey Institute for Continuing Legal Education. The seminar, entitled, Land Use Basics, will be held Wednesday June 22, 2011 from 9:00 AM – 4:00 PM at the Double Tree Hotel in Mt. Laurel, New Jersey. The seminar is presented in cooperation with the New Jersey State Bar Association’s Land Use Section and will provide an overview of the land use development approval process. Additionally, during the seminar, the presenters will review the basics of land use law, in order to enhance your understanding of land use law, and will offer valuable practice tips for appearing before local planning and zoning boards.

Registration and additional information is available online here.

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Amendments to a corporation’s Certificate of Incorporation may be used either alone or with other “squeeze out” techniques to oppress, eliminate or alter the minority shareholder’s rights.  For example, the New Jersey Business Corporation Act provides that a corporation may amend its Certificate of Incorporation to:   

• “exchange, classify, reclassify or cancel all or any party of its shares, whether issued or unissued,” N.J.S.A. 14A:9-1(f)
• “create new classes or series of shares having the rights and preferences superior or inferior to, or equal with, the shares of any class or series then authorized, whether issued or unissued”; N.J.S.A. 14A:9-1(j);
• “cancel or otherwise affect the right of the holders of any shares of any class or series to receive dividends which have accrued but have not been declared”; N.J.S.A. 14A:9-1(k); or
• “limit, deny or grant to shareholders of any class the preemptive right to acquire additional or treasury shares of the corporation whether then or thereafter authorized.”  N.J.S.A. 14A:9-1(p).    

Amendments to the Certificate of Incorporation may result in major negative changes to the way the corporation is governed. For example, the majority may seek an amendment which eliminates minority shareholders by making their stock redeemable and then seeking to redeem it.
   

Thankfully for minority shareholders, the New Jersey Business Corporation Act on its face offers some protections.  It requires that any amendment to the Certificate of Incorporation must be approved by the class of shareholders who will be affected by the change sought. N.J.S.A. 14A:9-2; N.J.S.A. 14A:9-3.  Notwithstanding the same, a minority shareholder could still be negatively  affected by an amendment to the Certificate of Incorporation if the majority controls a large enough percentage of the class.
 

Courts will sometimes block an amendment to the Certificate of Incorporation if they find that the amendment is unfair or is being used as a tool to act oppressively or illegally towards a minority shareholder. For example, in Whetsone v. Hossfeld Mfg. Co., 457 N.E.2d 380 (Minn. 1990), the Minnesota Supreme Court held that the majority shareholders vote to amend the Certificate of Incorporation whereby eliminating the minority’s veto rights allowed the minority to be brought out for “fair value.”

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