2020 Required Minimum Distributions from Retirement Accounts Have Been Waived

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) contains significant changes to the 2020 required minimum distribution rules applicable to IRAs, 401(k)s, 403(b)s, and other similar Qualified Retirement Plans (collectively “QRPs”).

The CARES Act waives required minimum distributions from IRAs and QRPs for calendar year 2020. This change can result in income tax savings for owners of traditional IRAs and QRPs that are affected by this change.

By way of background, required minimum distributions obligate certain IRA and QRP account owners to withdraw a minimum amount from these accounts each year. Until this year, required minimum distributions applied to owners of IRAs and QRPs who attained age 70 ½. The Setting Every Community Up for Retirement Enhancement Act of 2019, better known as the SECURE Act, increased the minimum age for required distributions to 72 starting in 2020.

From a tax perspective, minimizing the distributions from IRAs and QRPs defers the income taxation of those assets. Because required minimum distributions are not required for 2020, the tax that would have resulted from a 2020 distribution is avoided. Owners of Roth Accounts also benefit by allowing the distribution to grow tax-free for an additional year. This waiver also limits the adverse effects caused by the substantially higher value of stocks on December 31, 2019, which would have been used to compute the 2020 distributions.

For some account owners who already took distributions in 2020, the IRS recently provided additional relief by extending the time for making a 60-day rollover of a distribution already received. IRS Notice 2020-23 extended the deadline for time sensitive actions occurring between April 1 and July 15. This means that if you took a required minimum distribution on or after February 1, you now have until July 15^th to roll that distribution into an IRA or return the distribution if the account custodian permits it. You are permitted to roll 100% of the distribution even if taxes were withheld.

For individuals who took a distribution in January 2020, there is some relief available if you can demonstrate a coronavirus impact as defined by the CARES Act. However, there is no relief under current rules for individuals that took distributions in January 2020 who cannot demonstrate a coronavirus impact. It is possible that additional guidance will be forthcoming. We recommend continuing to monitor any new pronouncements from the IRS on the waiver and rollover of required minimum distributions.

This has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

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Two Months of Overnights May Not Definitively Mean Cohabitation, But It Should At Least Get You Discovery

As we have said before, the 2014 amendments to the alimony statute allegedly made it easier to terminate alimony if the recipient of the alimony was cohabiting.  The statute now provides that alimony may be terminated or suspended if cohabitation was proven.   The statute made clear that the parties didn’t even have to live together full time for their to be cohabitation and provided indicia of cohabitation that had been culled from prior case law that the court must consider:

(1) Intertwined finances such as joint bank accounts and other joint holdings or liabilities;
(2) Sharing or joint responsibility for living expenses;
(3) Recognition of the relationship in the couple’s social and family circle;
(4) Living together, the frequency of contact, the duration of the relationship, and other indicia of a mutually supportive
intimate personal relationship;
(5) Sharing household chores;
(6) Whether the recipient of alimony has received an enforceable promise of support from another person within the meaning of
subsection h. of [N.J.S.A.] 25:1-5; and
(7) All other relevant evidence.

Factors one and two are usually hard to prove, at least on an initial application, because one does not typically have access to the other person’s finance’s, absent an occasional lucky find in a “trash audit” conducted by a private investigator.  Moreover, like any other modification application, there is a two step process.  First, you need to make a prima facie showing that cohabitation exists in order to even get two the second step which is discovery, and then a hearing.   As noted in my blog on the Landau case from last year,  if you cannot make a prima facie showing, then you don’t ever get the discovery to bootstrap or prove the allegation of cohabitation.

Typically, you see these motions fail because there is not enough evidence, like in Landau.  You may have a few overnights proven by a private investigator, but not enough in a row, or the surveillance wasn’t for long enough.  Often, you see insufficient surveillance coupled with nominal anecdotal evidence, social media posts and the like.  But what happens when the the PI shows that the alleged cohabitation took place for two months straight.  Surely that would be enough, right?  Well, in the case of Wajda v. Wajda, an unreported (non-precedential) opinion released on April 23, 2020, the trial court said no.  However, the Appellate Division disagreed and said that the payor made a prima facie case.

In Wajda, the parties were divorced in February 2018.  Pursuant to their agreement, the husband was obligated pay limited duration alimony of $425 per week for twelve years with the alimony to
terminate in the event of the wife’s “remarriage or cohabitation” with another person.  In December 2018, the husband sought to terminate alimony based upon cohabitation or in the alternative, get discovery if the wife denied cohabitation.  Given Landau, the alternatively relief was perhaps inartfully drafted.  That said, motion was supported by 148 page private investigator report essentially provide that the alleged cohabitant stayed overnight at the wife’s home nearly every night from October 5 through December 12, 2018.   Moreover,  the report also indicated that alleged cohabitant remained in the home when the wife was not present and when the parties’ daughter was there, kept his car there, often drove the wife’s car, did some household chores, and kept his two dogs there.   In fact, the overnights and these facts were really not in dispute. Rather, the wife provided Certifications and some documents showing that the cohabitant maintained another home somewhere else and also, that he was at her home to convalesce from a surgery.  As note above, the trial judge denied the husband’s motion finding that he did not even make a prima facie showing.

As also noted above, the Appellate Division disagreed, holding:

In this case, it was undisputed that A.S. stayed overnight in defendant’s home nearly every night for almost two months. He kept his dogs there, as well as his car. The bank records defendant furnished demonstrated that A.S. was purchasing items and transacting bank business in the same town where defendant resided. A.S. remained in the home even when defendant left. The judge found that A.S. did not reside with defendant, but he did not find that A.S. resided elsewhere. The investigative report also demonstrated that A.S. and
defendant shared some social media connections. Certainly, without any discovery, plaintiff could not demonstrate that defendant and A.S. shared expenses or intertwined their finances.

We disagree with plaintiff’s assertion that he demonstrated cohabitation — that defendant and A.S. were in “a mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage[,]” N.J.S.A. 2A:34-23(n) — based solely on the documents filed by both sides. The question is whether plaintiff made a sufficient showing to warrant further discovery. We think he did.

We, therefore, remand the matter to the Family Part for further proceedings. Recognizing in the first instance that plaintiff is entitled to some discovery.  we leave the scope of the discovery to the sound discretion of the remand judge, and do not necessarily require at this point that he or she order a plenary hearing. Plaintiff or defendant are certainly free to make such a request after discovery is completed. Additionally, “[i]n an abundance of caution, we direct that this matter be remanded to a different judge . . . to avoid the appearance of bias or prejudice based upon the judge’s prior involvement[.]” Entress v. Entress, 376 N.J. Super. 125, 133 (App. Div. 2005).

As stated before, maybe the request in the motion was imprecise.  Maybe the motion seemed too soon for the trial judge as it was made less than 10 months after the divorce.  Who knows why the motion was initially denied given the undisputed facts here.  But while not precedential, this case is a good barometer of what is needed to at least get discovery.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

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The Executor Won’t Distribute an Estate – What Can I Do?

A common problem in many estates is the executor’s failure to promptly settle an estate or make distributions to the beneficiaries. Delays in settling an estate can have many causes, including inattention by an executor, failure to take action where required, and mismanagement. In some cases, the delays are a sign of more serious problems, such as self-dealing or an intent to deprive the beneficiaries of their inheritance.

If you are a beneficiary of an estate, you have a right to compel the executor to settle an estate and make distributions to you.

New Jersey law requires an executor to take action to settle an estate. N.J.S.A. 3B:10-28 provides that an executor “shall proceed expeditiously with the settlement and distribution of a decedent’s estate and do so without adjudication, order, or direction of a court….”

Similarly, N.J.S.A. 3B:10-23 holds that an executor “is under a duty to settle and distribute the estate of the decedent in accordance with the terms of [the will] and applicable law, and as expeditiously and efficiently as is consistent with the best interests of the estate.…”

An executor must undertake these responsibilities subject to a fiduciary duty to the estate. This includes a non-delegable duty to collect and preserve the estate. As the fiduciary of the estate, an executor owes a duty to act on behalf of the estate, and not for the executor’s personal interests. In the management of estate assets the executor must abide by the principle that an executor acts primarily in the interest the estate and its beneficiaries.

A beneficiary of the estate has legal rights to hold an executor to these standards. The beneficiary’s rights include seeking the removal of an executor from office, and court oversight of the estate administration, and sanctions. Often, without action by the beneficiaries the executor will continue to do little or nothing to administer an estate. It is important that action be taken to enforce these rights as quickly as possible. The longer the delays, the more likely waste and damage may affect an estate. The first step is to know your legal rights and the options that best fit your situation.

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Hair Cuttery Enters Chapter 11 Bankruptcy – Seeks to Trim 49 Locations

Government orders directing the shut-down of non-essential retailers, as a result of COVID-19, have forced another retail chain into bankruptcy. Creative Hairdressers, Inc. (“Creative”), the parent of Hair Cuttery, filed for Chapter 11 relief yesterday in the bankruptcy court for the District of Maryland. According to its first day filings, Creative is one of the largest independent, family owned chain of hair salons that provides comprehensive services for men and women.

At the time of the bankruptcy, Creative owned approximately 800 locations. It also had employed over 10,000 employees prior to its suspension of operations due to COVID-19. Creative was founded in 1974 by Dennis and Ann Ratner and operates in 15 states and the District of Columbia. It had approximately $440,000,000 in revenues for the fiscal year ending in September 2019.

While COVID-19 may have been the final push into Chapter 11, Creative acknowledges in its bankruptcy filings that it was subject to aggressive expansion campaigns of large competitors, which caused Creative to implement strategic initiatives over the last few years, including the closure of underperforming stores. Indeed, Creative retained advisors in the fall of 2019 to help formulate a restructuring plan, including securing accommodations from landlords.

According to papers filed with the bankruptcy court, prior to the Chapter 11 filing Creative entered into an Asset Purchase Agreement with HC Salon Holdings, a successor in interest to a bank group comprised of M&T Bank, Eagle Bank, and Burke and Herbert Bank. Through this Agreement, Creative believes its business will survive and thousands of salon jobs will be preserved.

Even with the proposed agreement with HC Salon Holdings, there will be wreckage in the wake of this bankruptcy case. Similar to other ongoing retail bankruptcy proceedings, Creative is already seeking to reject 49 leases and is seeking to temporarily cease making rent payments to landlords that have not consented to proposed rent deferrals. Whether the Court will allow and for how long such rent deferrals will be permitted, has not yet been decided.

Stark & Stark has been counsel to landlords and trade creditors in the Modell’s’ Sports Authority, Pier 1, Art Van’s Furniture, Fairway Market, Mattress Firm, Toys “R” Us, Payless, Eastern Outfitters (EMS Part 2), EMS, Golfsmith, RadioShack, General Wireless (RadioShack 2), Gander Mountain, A&P, Joyce Leslie, rue21, and Central Grocers Chapter 11 bankruptcy cases.

For more information on how Stark & Stark can assist you, please contact Joseph Lemkin, Shareholder, at (609) 791-7022 or jlemkin@stark-stark.com or Thomas Onder at (609) 219-7458 or tonder@stark-stark.com.

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Intestate Estate: Dying Without a Will

Although many of us have estate plans well in advance of the time that we pass, it is not uncommon for an individual to die without having a last will and testament. This can often happen if the person who passes is younger, the death happens at an unexpected time, or is due to an unexpected event. Under such circumstances, it may be discovered that the decedent did not have any estate plans, nor a last will and testament. As such, the question becomes how to distribute the decedent’s assets to any surviving heirs or family members.

When a person passes without having a last will and testament or any estate plans, this is referred to as an intestate estate. Under such circumstances, the relevant intestacy statute within the state of New Jersey, as well as essentially every other state in the nation, governs precisely how the decedent’s assets will be distributed.

With regard to assets that have beneficiary designations, these specific assets would pass pursuant to the beneficiary designations set forth in each particular asset. These may involve life insurance policies, retirement accounts, or investment accounts. If these type of assets do not have a beneficiary designation, then they would become part of the decedent’s estate. Another common asset that may pass outside of the decedent’s estate may be a parcel of property that the decedent owns, if he/she owns it with another party.

Assets of the decedent which pass through an estate are subject to the intestate statute as discussed above. This statute is fairly complex in nature, and thus, must be carefully reviewed in order to ensure compliance. Much of the statute depends upon whether the party who passed was married, had children, had surviving parents, or had surviving siblings.

In general, the decedent’s spouse and children would take precedence over all other potential heirs. The situation becomes more complex, however, if the decedent had children with more than one individual. Further, it can also become complex if the decedent did not have a surviving spouse or children, but has a combination of surviving parents and siblings.

Therefore, it is recommended, under these circumstances, that an attorney be retained to ensure proper compliance with the statute. Even under an intestate estate, an individual has to be appointed as an executor to administer the estate. The executor is tasked with the proper distribution of the estate, and thus, can be subject to liability if the intestate statute is not followed. For these reasons it is strongly suggested that an executor retain an attorney to ensure proper administration of an estate.

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Paycheck Protection Program Update: More Relief Money on the Way for Small Businesses

On April 21, 2020 the Senate passed the Paycheck Protection Program and Healthcare Enhancement Act to provide an additional $310 billion for the Small Business Administration (SBA) Paycheck Protection Program (PPP).

This bipartisan deal was needed to reopen the PPP that saw its funding depleted after three weeks from its opening. As of April 16^th, the SBA approved 1,661,367 loans for approximately $342 billion. Currently, the new deal sets aside $60 billion for small lenders and community banks. Another $60 billion will be added to the Economic Injury Disaster Loan (EIDL) program including $10 million allocated for EIDL grants.

The House is expected to vote on the legislation Thursday, April 23, 2020 before being sent to President Trump for signature.

If you have not submitted your PPP application, you should submit the application to your bank now, so your application can be processed once the SBA reopens the application portal.

If you have already submitted your PPP application, you should contact your bank to check your application status.

We will continue to update you as we learn more.

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Watch out for Coronavirus Scams

Like most trying times, the Coronavirus brings out the best and worst. Unfortunately, criminals are targeting the federal stimulus money that has been distributed to qualified Americans. According to the FBI, scammers are leveraging the COVID-19 pandemic to steal victim’s money and personal information. There has been an alarming surge in the number of scam phone calls, text messages, social media scams, and emails. The FBI is receiving between 3,000 and 4,000, complaints a day through its internet portal.

Scammers are falsely claiming that individuals must provide personal information to collect government money. Considering this is untrue, the government will not reach out to you, this includes calls, texts, and/or emails.

The IRS will deposit your check into the direct-deposit account you previously provided on your tax return or will mail a paper check to the address on your tax return. The “Get My Payment” tool can be accessed at this link. Individuals who were not required to file a 2018 or 2019 tax return can enter their information here to apply for their stimulus checks.

Please be on the lookout for emails claiming to be from the Centers for Disease Control and Prevention (CDC), or organizations claiming to offer information about the Coronavirus. According to the FBI, fraudsters are using links in emails to deliver malware to computers that can steal information or lock your computer in exchange for a ransom.

The FBI also cautioned Americans to be weary of websites and apps claiming to track COVID-19 cases. According to the FBI, criminals are using malicious websites to infect and lock devices until payment is received.

Stark & Stark encourages you to be extremely weary and careful. If you or a loved one is the target or victim of a scam, we encourage that you report it by contacting the National Center for Disaster Fraud Hotline at 866.720.5721 or via email at disaster@leo.gov

Please be safe, be weary, be careful, social distance, and stay home. Stark & Stark understands that we are all in this together. We are here when it matters most.

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Coronavirus is Likely to Affect Business Valuations in Business Divorce Litigation

As I’ve stated in previous blog postings, business divorce or oppression cases usually end with one side buying the other out. Hence, valuation of the subject company is often one of the central issues in the case. Clearly, the coronavirus has negatively impacted a lot of closely held companies. Coronavirus has and will likely affect the valuation of the small businesses that are often ripe for disputes between the shareholders, partners, or members.

It is presumed, under New Jersey law, that the date of the commencement of the action is the presumptive valuation date. Musto v. Vidas, 333 N.J. Super. 52, 59 (App. Div. 2000). Nevertheless, the Court may set the valuation date at any time the Court deems equitable. Torres v. Schripps, Inc., 342 N.J. 419, 437 (App. Div. 2001).

There have been several instances where courts have adjusted the date of valuation in the interests of fairness. For example, in Torres v. Schripps, the Appellate Divisions approved the trial judge’s shifting the valuation date because the “business had changed following the plaintiff’s departure” and the defendant testified he “did not know how to run the day-to-day operations of business.” supra, 342 N.J. Super. 437. The court determined that the plaintiff was blameless for losses suffered following his departure and it was unfair to ascribe losses to the plaintiff as a result of the defendant’s lack of experience in management of the company. Conversely in Hughes v. Sego International, Ltd., 192 N.J. Super 60, 66 (App. Div. 1983) the Appellate Division upheld the trial court adopting an earlier date of valuation because a “subsequent increase in value of [the stock] could not be attributed to Plaintiff’s efforts.

The case law interpreting the applicable shareholder/member divorce statutes grants courts the latitude to select a date of valuation which would grant the most equitable result, and to determine “fair value.” It is clear that none of the shareholders, partners, or members caused coronavirus. This is why I believe in pending business divorce cases, courts could (and probably should) consider Coronavirus’ long-term negative affect on the value of the company. This is, because to simply use the date of filing of the complaint may be not equitable (unfair).

I also believe that Coronavirus may also affect future business divorce litigation. While I look forward to re-reading this blog post after this crisis ends and we all resume our normal lives, it is clear that another pandemic may occur. As a result of the same, business valuation experts may consider the foreseeable risk of future pandemics as a factor when they value closely held companies. That is, because business valuation experts consider business risks when they value the subject company.

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Computer Related Offense Act Protects Individuals and Companies

If you are reading this blog post, it is extremely likely that you are reading it on a personal computer at home, on your office computer, on your smart phone, or on all of the above. It is without question that the invention of computers has changed our lives. What was impossible even five years ago is now considered “normal.” For example, I have written this very blog post while seamlessly working remotely from home because my law firm, Stark & Stark, has provided me with the tools and resources to do so. Thankfully, I am able to utilize this technology while my firm protects me and my colleagues from COVID-19.

Unfortunately, there is also a dark side to the increased use of computers, which gives rise to different legal issues. Cybercriminals pray upon various vulnerabilities within computer networks and user mistakes. Rogue employees have easy access to confidential information, accounts, and money.

Legislation, like New Jersey’s Computer Related Offense Act, N.J.S.A. 2A:38-1, et. seq., provides victims of cybercrime, employee misuse, destruction, or unauthorized taking of computer information or programs with the ability to sue wrongdoers. The Computer Related Offense Act protects against the taking of any data and creates a private cause of action against any actor (individual, corporation, entity, or group) who purposefully or knowingly accesses, alters, damages, takes, or destroys computer information.

Successful Computer Related Offense Act claimants may recover compensatory and punitive damages, as well as the costs of bringing the lawsuit, including reasonable attorney’s fees, costs associated with the investigation, and litigation. N.J.S.A. 2A:38A-3.

Individuals and businesses should take important steps to protect their computers and network, including:

1. establishing and keeping firewalls;
2. installing and updating antivirus software;
3. installing and updating antispyware technology;
4. keeping the operating system up-to-date;
5. creating and utilizing lengthy and complex passwords;
6. not carelessly downloading e-mail attachments; and
7. training employees to prevent cybercrime.

Unfortunately, those steps may not be enough to prevent the misuse, destruction, or unauthorized access to computer networks and data. Hence, legislation like New Jersey’s Computer Related Offense Act offers recourse to victims.

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TTAB Determines Color Drawstrings of Trash Bags Not to be Trademarks Due to Genericness and Functionality

 

While the issue of what color a trash bag handle is may not be the first topic you would expect to raise ire in the trademark industry, the world is an unpredictable place. Recently, Poly-America and API, two major manufacturers of trash bags in the United States, went up against each other over their competing trade dresses of colored trash bag drawstrings – Poly-America uses an orange drawstring, and API uses a gray colored drawstring.

Both competitors tried to cancel the other’s registration for their respective colors. In their petitions, the manufacturers contended that the other’s color was generic and/or functional and therefore cannot function as a trademark:

• Poly-America claimed that API’s trade dress (gray) “is a generic feature of drawstring trash bags and hence incapable of functioning as a trademark.”
• API claimed that Poly-America’s trade dress (orange) is functional, or in the alternative, generic and incapable of identifying and distinguishing goods.

This prismatic drama highlights several issues pertaining to the invalidation of trademarks on the basis of genericness and functionality.

What makes a mark a trademark?

Traditionally, a is a word, phrase, design, or some combination thereof that “identifies and distinguishes the source of one party’s goods from those of others.”

To serve as a trademark, an item must be distinctive. When conferring trademark status on a request, courts group potential marks into four different categories: arbitrary/fanciful, suggestive, descriptive, and generic. Generic marks have the least claim to trademark status because they offer little, if any, identifying ability.

Trademarks, however, are not limited to just phrases or designs. They can also include sounds, scents, and colors, as long as the feature serves as a source indicator; however, if a feature is purely functional, it cannot be registered as a trademark.

Claims of Genericness

In the case of API’s gray drawstring, the TTAB noted the commonality of gray drawstrings in the trash bag industry. In their cancellation claim against API’s registration, Poly-America submitted evidence of six different companies that used gray drawstrings on their trash bags. TTAB found this evidence “sufficient to establish that consumers are exposed to use of the color gray in trash bag drawstrings in the same general time period such that they would not perceive it as indicating source but rather, to the extent it is perceived at all, as a category or type of trade dress for the genus plastic trash bags.”

In short, the Board decided that in the unlikely event that someone noticed that their trash bag had a gray drawstring, it was a common enough color that they would not associate it with any particular manufacturer.

API’s own petition to cancel Poly-American’s orange drawstring trademark took a similar tactic, but with a twist. Because Poly-America sells bags (with the orange drawstring) at wholesale to a number of companies, who in turn sell them under a range of other brands, TTAB determined that “when a company sells to third parties for re-sale under the third parties’ marks rather than under the manufacturer’s mark, that circumstance cripples any attempt to show that consumers uniquely associate the mark with one source, i.e. the manufacturer.”

As such, TTAB declared that the orange used by Poly-American was a generic color for trash bag drawstrings because there are enough orange drawstring trash bags in the world, including Poly-American’s trash bags sold under varying marks, that consumers would not associate that particular color with Poly-American.

Functionality of Color

In addition to genericness, API claimed Poly-American’s orange drawstrings failed as a trademark due to functionality.  Applying case law as provided by Inwood, TTAB evaluated Poly-America’s use of the color orange for drawstrings by the following metrics: Is the feature essential to the use or purpose of the article? Does it affect cost or quality?  TTAB concluded that the orange drawstrings served a utilitarian purpose and were therefore primarily functional.

According to the Board: “The purpose of a trash bag is to hold trash. The purpose of the drawstring on a trash bag is to close the trash bag. One purpose of a vibrant contrasting color for the drawstring is to see it more easily to grab it and close the trash bag. Orange is at least one of a few superior colors for that purpose. We find that the color orange is functional for trash bag drawstrings.”

Consequently, the Board granted both applications to cancel.

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Left Behind by the #MeToo Movement: Female Prisoners

Garnering far less attention and, frankly, far less sympathy than the Hollywood and political headlines, there are the female victims trapped in the prison system. It has been over two years since a class action complaint was filed on behalf of thousands of potential female class members against the New Jersey Department of Corrections (“NJDOC”), over the intolerable conditions at the Edna Mahan Correctional Facility for Women (“EMCFW”), New Jersey’s only women’s prison.

There is little tenable argument as to the well-documented, pervasive hostile and discriminatory environment affecting the vulnerable female prisoner population at EMCFW. Notwithstanding, the NJDOC has successfully argued in the trial court that, technically, the class of prisoners at EMCFW somehow would not be able to prove that they were the subject of discrimination under the New Jersey Law Against Discrimination, N.J.S.A. 10:5-12 et seq., (the “LAD”). This has effectively tied the plaintiffs up in an appeal, which is now set to be heard in May.

The plaintiffs argue that this is precisely the type of case that the LAD was meant to address. The stated goal of the LAD, the first state anti-discrimination statute ever enacted, is nothing short of leading the nation in protecting the civil rights of each and every member of New Jersey society. It is difficult to think of a more vulnerable group deserving of protection under the LAD, than incarcerated women. Here, there is no reasonable dispute that the system meant to protect these women is inexorably broken, leading to an inescapable hostile environment of discrimination. The plaintiffs rightfully contend that, if nothing else, the LAD was certainly meant to apply to the women trapped in this environment.

Even while the appeal has been pending, the New Jersey legislature has made preliminary findings pursuant to a Joint Resolution creating a commission to study sexual assault, misconduct, and harassment in the state’s correctional facilities See 2018 Bill Text NJ S.J.R. 74. Again, as detailed in the plaintiffs’ complaint, this is all further set against the backdrop of decades of unchecked examples of rampant abuse of prisoners, indictment and conviction of numerous prison employees, and the reportedly related replacement of NJDOC’s Commissioner. It is hard to imagine that such an environment of discrimination and blatant sexual assault would have been permitted to exist, largely ignored, if EMCFW were a movie studio, a political campaign, a workplace or a school.

Even more recently, an investigation by the United States Department of Justice just confirmed what everyone has basically known all along. Some of the less graphic of those findings include:

• Sexual abuse of women prisoners by Edna Mahan correction officers and staff is severe and prevalent throughout the prison. A “culture of acceptance” of sexual abuse has persisted for many years and continues to the present. As observed by one state court in 2018, this “pervasive culture” has enabled Edna Mahan staff to abuse their authority by “preying on vulnerable women . . . for sexual gratification.”
• The incidents of sexual abuse follow similar patterns where officers and staff sexually assault and harass women who are vulnerable to sexual abuse and fear retaliation, violence, deprivation of privileges, or endure sexual abuse in exchange for food, medication, or contraband, in violation of the prisoners’ constitutional rights.
• During a period dating from October 2016 to April 2019 (a full year after we notified NJDOC of our investigation), seven Edna Mahan correction officers and one civilian employee were arrested, indicted, convicted, or pled guilty to charges related to sexual abuse of the prisoners they were assigned to supervise. Most of the incidents involve senior officers, who had worked at Edna Mahan for many years, and multiple victims. The Hunterdon County Prosecutor’s Office remains active pursuing these and other matters related to Edna Mahan.
• In addition to the seven correction officers and the civilian staff member who were criminally charged, NJDOC has fired or indefinitely suspended several other Edna Mahan employees since 2010 as a result of sexual abuse allegations. Others were permitted to resign.
• Officials at NJDOC and Edna Mahan have been on notice of incidents of staff sexual abuse of prisoners for years and have failed to adequately address the deficiencies that enabled the abuse to occur. By disregarding the obvious risks to prisoner safety, officials at Edna Mahan evinced a deliberate indifference to prisoners’ constitutional rights.
• While the criminal indictments of eight Edna Mahan staff between May 2016 and April 2019 focused attention on sexual abuse at Edna Mahan, the problems have existed for many years. In the 1990s and 2000s, at least eight other correction officers and other Edna Mahan staff members were charged with crimes relating to sexual abuse.

Despite all of this, the plaintiffs will doubtless continue to be denied their most basic rights in an unspeakably hostile environment, at least for the near future. Also doubtless is the fact that relatively little attention will be paid to one of our most desperate and at risk populations. Unfortunately, #MeToo is apparently not their movement.

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Governor Murphy to Sign Into Law Title 15 Amendment to Allow for Remote Member Meetings

Both houses of the Legislature have passed S2342, which allows non-profit corporations to hold member meetings remotely during this state of emergency, to the extent that the board adopts guidelines to establish procedures governing member meetings. The bill now awaits Governor Murphy’s signature, and it is expected that he will sign the bill into law.

A couple of weeks ago, I advised that the Governor signed into law S2290/A3861 that allowed for-profit corporations to hold shareholder meetings remotely. Doing so with non-profit corporations is a natural progression.

The bill, which will take effect immediately once signed into law, allows the following:

• Members will be able to take part in the meeting remotely (to the extent the boards allows such participation)
• Remote meetings will be able to be conducted in accordance with guidelines and procedures adopted by the board
• A member participating in a remote meeting will have the ability to vote remotely, so long as the association can:
  • verify each person participating is a member or proxy member;
  • provide each participating member the opportunity to hear or read the proceedings of the remote meeting as the meeting proceeds; and
  • assure that any vote or action is properly recorded.

This new law will allow associations to conduct its trustee elections as usual, even during this state of emergency. Be mindful to follow the Radburn requirements for election proceedings while utilizing remote meetings for board elections.

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Trust Protection for Gifts to Children and Grandchildren

Although there is near universal acceptance of the importance of gifting, the manner in which gifts are made can have a major impact for your beneficiaries. This is particularly true if the recipient is under 21 years of age, and it can be an acute issue if the recipient is a minor under the age of 18.

Outright gifts to children and grandchildren have their own drawbacks, including limited control over the gifts made, exposure to creditors, divorce, and other issues involving the beneficiary. For these reasons, trust options should be considered to afford greater protection and structure for your beneficiaries.

Outright Gifts and Custodial Accounts Have Significant Drawbacks

Gifting assets outright to a beneficiary exposes the gift to a number of risks. Outright gifts are subject to the beneficiary’s creditors and may be at increased risk in the event of a divorce. If the beneficiary dies and has an inadequate estate plan, unexpected beneficiaries could receive those assets, or other problems may arise.

When the gift recipient is a minor, a custodial account (or UTMA) offers some structure, but the flexibility of a custodial account comes with major drawbacks. In New Jersey, custodial accounts terminate upon the recipient turning 21, and in some instances when they turn 18. Upon termination, all assets held in the custodial account are given over to the recipient, including all investment and management decisions. Once this occurs, there is nothing stopping the recipient from squandering the custodial account or making poor investment decisions.

For example, suppose that annual exclusion gifts in the amount of $15,000 per year are placed into a custodial account beginning at age 9 and ending at age 18. Even if the gifts earn a 0% rate of return, the custodial account will still be holding $150,000. Upon the recipient turning 21, all $150,000 in the custodial account will be turned over to the recipient.

Another issue, and one frequently experienced, is the change of custodians upon the death or incapacity of the custodian before the recipient turns 21. The UTMA permits the primary custodian to name a successor if the primary custodian is no longer available. This option is not always exercised by the custodian, and may result in difficult and overly burdensome transitions to a successor custodian. Until the new custodian is accepted, the custodial account has no one to manage the investments or assets held in the account.

Trust Options for Gifts

Trust option should be considered in lieu of an outright gift, a transfer to a 529 Plan, or a transfer to a custodial account. Trust options include 2503(c) Minor’s Trusts and irrevocable gifting trusts. These trusts allow assets to be used for a wider variety of needs including medical expenses or the purchase of a first house, which are not allowed by a 529 Plan. They also provide more structure than a custodial account, and the trustee can continue to manage assets beyond age 21, if properly structured.

2503(c) Minor’s Trusts can be used for annual exclusion gifts made to recipients under age 21. These trusts are named for Internal Revenue Code Section 2503(c), which requires that the assets of the trust be applied for the minor who is a beneficiary of the trust with limited exceptions. The trust can only have one beneficiary who must be under the age of 21. Upon the beneficiary turning 21, the beneficiary must be afforded an opportunity to withdraw the assets of the trust. Any assets that are not so withdrawn can be retained in trust, and the trust converted into another form of irrevocable trust which allows for continued annual exclusion gifts to be made for the beneficiary.

2503(c) Trusts are managed by a trustee who is chosen by the person who creates the trust, usually the recipient’s parent or grandparent. This provides structure and a suitable person to manage the assets held in trust. If there is an issue with the primary trustee, an alternate trustee can be designated to assume control over the trust.

For those interested in more structure than that afforded by a 2503(c) Minor’s Trust, an irrevocable gift trust will make a sensible addition to their estate plan. Irrevocable gifting trusts can be used for annual exclusion gifts and are highly recommended for larger gifts that require a Gift Tax Return (Form 709). As with other forms of trusts, the person creating an irrevocable gifting trust appoints the trustees, and can name alternates if the primary trustee is unavailable for any reason. The trustees have broad authority to manage the assets for the recipient including discretion over distributions to the beneficiaries. Unlike 2503(c) Minor’s Trusts, irrevocable gifting trusts do not have to terminate or require unrestricted access to trust income or principal. In addition, irrevocable gifting trusts can provide enhanced asset protection, and afford the option of generation skipping planning for grandchildren and more remote descendants.

In conclusion, outright gifting has significant drawbacks and risks. Assets can be squandered, subjected to marital issues, or result in other unanticipated problems. Trust options, including 2503(c) Minor’s Trusts and irrevocable gifting trusts, exist to deal with these issues while allowing for annual exclusion gifts or larger transfers. Trusts provide enhanced protection and structure for gifted assets, while affording the trustee discretion to make distributions for the beneficiary

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Thoughts On Moving Cases Forward In Light of the Impact of Coronavirus

Prior to the current coronavirus pandemic and resulting shelter in place orders, in many counties, there was already serious backlogs.  What that means is that trial dates were hard to come by and even motions were scheduled to be heard months after they were filed.  While the courts are not currently closed, they aren’t exactly “open” and it is far from business as usual.  While some judges are being very active, if not proactive in managing their dockets, doing conferences and hearings via Zoom, Teams and or telephonically, others have completely shut down.  Today we learned of one judge that has adjourned all uncontested, default and Case Management Conferences until a future date even those things can be easily done remotely, if not “on the papers.”

The present situation has gone on for almost a month at this time and will, at best, go one for another 3-4 weeks if we are lucky, but it wouldn’t be crazy to see the current shelter in place/stay at home orders continue through May.  Essentially, the court could be adding several months of light activity or inactivity to an already burdened docket.  If New Jersey is anything like China, as I blogged about last week, there could be many new divorce filings not to mention domestic violence matters to adjudicate due to all of this staying at home.  This is not to mention all of the expected applications for modification and/or enforcement resulting from the layoffs and job loss caused by the pandemic, which I also blogged on last week.  Add to that, the people who were planning on filing for divorce before pandemic hit, and the usual array of pre and post judgment motion practice that would come up in the ordinary course.  Those people are going to file, if nothing else, the get themselves into the queue to have their issue resolved by a court eventually.

While I may have painted a dreary picture or what is or may become of the court system, that is not the only avenue for resolution for many, if not most of the issues issues that are out there.  While clearly, things like domestic violence and the actual granting of a judgment of divorce are within the sole province of the Court system, there are many things that can be done outside of the system (and there are some people that argue everything else should be done outside of the system but that discussion is for a blog of another day.)

We have talked many times in the past about mediation and arbitration.   While those tools are often used to try to resolve the entirety of a case, there is no reason why they cannot be used to resolve motions and other discreet issues.  Just like there are early settlement panels and sometimes, Blue Ribbon panels, within the court system, there is no reason that parties cannot privately hire one or more divorce lawyer (and perhaps even a forensic accountant), to serve as a blue ribbon panel to make settlement recommendations.  Many of the custody experts have a part of their practice that offers divorcing parents an alternative path to try to resolve their parenting/co-parenting/custody issues outside of litigation.  Even in complex financial cases where each party has a forensic accountant of their own, a third expert can be brought in to assist to reconcile the reports and/or provide an opinion on contested issues for purposes of settlement and/or future litigation.  Parties can agree to arbitrate all or part of their matters – even agreeing to an appellate arbitration process – if they are fearful of an arbitrator possibly making an incorrect decision.

The point is, parties are not stuck waiting for the courts to move forward.  Our group at Fox Rothschild has used many of the above methods in trying to resolve our own cases, both before and now during the pandemic.  In addition, many of us have completed mediation training, serve as early settlement panelists, serve as blue ribbon panelists and can serve as an arbitrator too.  In fact, if we expect to give some relief to the court system, both now and until it gets back to “normal”, whenever that may be, it makes sense to consider every available tool towards resolution.  And while all of these tools come with an added cost, what is the cost of delay, both on a financial and/or emotional level?

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

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Pending Legislation Limiting Collection

Although CAI-LAC has received word that both houses of the Legislature have pulled the collection moratorium bill  COVID-19 Financial Security for Consumers Act, from the bills to be heard today, it does not mean that the bill will not advance.

We believe it means the Legislature is aware how devastating the bill would be to community associations. However, it is still so important that you write to your legislators in your district to express your strong opposition to the bill.

If passed, the bill will have a devastating impact on community associations. In short, it’s intent is to provide an assessment collection moratorium on all “affected” by COVID-19, and not allow creditors or debt collectors seek collection.

Without clear definition of what it means to be “affected,” it is essentially giving an assessment holiday for all.

Please write to your legislator immediately to advise of the deleterious effect this bill will have on the ability to provide the services it must to its members. Your letter, or e-mail, to your legislator is important and considered when bills are considered.

There is no time to waste, you must act now. Click here for a list of contact information for all NJ state legislators.

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Is Now a Good Time to Make a Gift?

The recent decline in asset values may make gifting a more attractive estate planning technique for many individuals, particularly if you are considering gifts of stock or other non-cash assets. Gifting of assets to a trust for your children and grandchildren can be an important part of an estate plan, and one that should not be overlooked. The reduced value of many non-cash assets allows more of these assets to be placed into a trust without exceeding the annual gift tax exclusion amount or the Federal Gift Tax Exemption. If these assets later appreciate in value, the subsequent increases will further enhance the value of the gift to the beneficiaries.

Taxation of gifts made to a trust for the benefit of your children and grandchildren depends, in large part, on the value of the gift. Annual exclusion gifts[1] are transfers of assets or cash that do not exceed the annual gift tax exclusion – currently $15,000 per recipient per year. Most married couples can give up to $30,000 per recipient in any calendar year. Depending on the circumstances, many annual exclusion gifts do not require a Federal Gift Tax Return (Form 709) and are not considered taxable gifts. Annual exclusion gifts reduce the overall value of the donor’s estate, but do not reduce the Federal Estate Tax Exemption of the person making the gift.

Gifts in excess of the annual exclusion amount may still avoid Gift Taxes if the person making the gift applies his or her Gift Tax Exemption by filing IRS Form 709. The Gift Tax Exemption is unified with the Estate Tax Exemption, at $11.58 million in 2020. Gifts in excess of the annual exclusion ($15,000 per person per year) reduce the $11.58 million exemption for purposes of both the Gift Tax and the Estate Tax. For example, if a person makes taxable gifts of $1.0 million to a child in 2020, their lifetime Gift Tax and Estate Tax Exemption will be reduced to $10.58 million. If this person dies in 2020 when the applicable Estate Tax Exemption is $10.58 million then (in the absence of other prior taxable gifts) only estate assets in excess of this exemption amount will be subject to Estate Tax.

Management of the Gift and Estate Tax Exemptions is important given the uncertainty over future exemptions and tax rates. If no legislative action is taken, the current Estate and Gift Tax Exemption will conclude at the end 2025 and return to the 2010 Exemption amount of $5.0 million, plus indexing. Similarly, future elections or changes in law may result in a reduction to the Gift and Estate Exemption before 2025.

Proper use and budgeting of the exemption should also be considered because the Federal Estate Tax starts at 18% and rises to 40% of all amounts more than $1.0 million over the exemption. Like the exemption amount, these tax rates are subject to future elections and changes in the law. Historically, estate tax rates have been significantly higher than current income tax rates, and changes in the law could result in a return to higher tax rates overall.

If you are concerned that your estate may be taxable, the current decline in asset values may present an opportunity to transfer more of your estate into trust for your beneficiaries. These transfers can help lessen the impact of a reduction in the exemption amount, or an increase in the tax rates. The reduced value of stocks and other assets could provide an opportunity to leverage gifts to a trust and reduce the risk of future taxation. Transfers to trusts can enhance the value of these gifts by protecting them for your children and grandchildren.

 

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• [1] Some limitations may apply depending on the citizenship of the transferor and the recipient.

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Business Divorce Cases Often Involve Complex Non-Corporate Issues

Business break-up cases require a complex, interdisciplinary approach to solving problems associated with the fractured relationships between the owners of a closely held company. A business divorce attorney must have an in-depth knowledge of corporate, employment, contract, and business tort law. It is important when selecting an attorney to represent you or your company in a shareholder or member oppression case that you select someone who knows more than simply corporate divorce law.

Employment Issues

Business break-up cases often involve employment issues because the owners are usually also employees of the business. That employment relationship can trigger a host of legal issues such as: employment discrimination claims; wage and hour claims; and restrictive covenant litigation. Owners of closely held companies often assert that the termination of their employment was not only oppressive, but discriminatory.

In a previous blog posting, I addressed a New York case where a female shareholder successfully asserted that her mistreatment was due to being a woman, an Erie County, New York Supreme Court Justice found. That blog discusses how the allegations could have resulted in liability under State and federal anti-discrimination statutes.

Moreover, owners often execute restrictive covenants. There are various types of restrictive covenants. Some prohibit former employees from working in a similar industry for a reasonable period of time, within a reasonable geographical scope. Others prohibit former employees from soliciting customers or co-workers they worked with during the course of their employment. Another form of restrictive covenant prohibits a former employee from working with or for customers they worked with during the course of their employment. Clearly, if the departed owner signed one or multiple forms of a restrictive covenant, those issues will arise in the business divorce case.

Sometimes former employees will assert that they were not paid in accordance with state wage and hour laws. Those laws generally require employers to pay their employees for their work, pay a minimum wage, and in some cases pay employees overtime. An understanding of wage and hour law can be extremely important if those issues arise in an oppression case.

Business Torts

Often business tort issues will be included in a business break-up case. Owners/employees generally owe certain fiduciary duties to the company and the other owners. For example, if an owner decides to leave the company, they cannot start working for their new employer or start a new competing company until they correctly terminate their relationship/ownership. An owner or employee who does not follow the law would expose the terminating owner to business tort liability under the theory that they breached fiduciary duties.

Likewise, owners are usually prohibited from usurping opportunities from the company. Business divorce litigation often involves allegations that one or more of the owners failed to bring a contract or business opportunity to the company.

Business break-up cases often involve the misappropriation of trade secrets, as well as confidential and proprietary information. A business divorce lawyer should understand how to prosecute and defend those claims.

In summary, companies or individuals who are searching for the right attorney to represent them in an internal dispute relating to a closely held company should consider what experience and knowledge the lawyer has in these other related, important legal disciplines.

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Family Law and COVID-19: What Happens If a Restraining Order Is Issued Against You?

While restraining orders pursuant to the New Jersey Prevention of Domestic Violence Act exist to protect real victims from abusers, there have been occasions where restraining orders have been obtained with embellished or fabricated allegations. A purported victim may attempt to obtain a restraining order in order to gain an advantage in a custody litigation or to force the alleged abuser from the home. An alleged abuser would then have to defend themselves in court. The initial restraining order is deemed “temporary” and is subject to a subsequent hearing where a judge in the Superior Court of New Jersey will determine if a “final” restraining order should be issued.

It is essential that you have experienced counsel at these final restraining order hearings to set forth your evidence and provide for your defense. In most circumstances, final restraining orders in New Jersey are permanent and often have far reaching consequences beyond simply a restriction on contact between a purported victim and abuser. Final restraining orders show up on background checks, can have employment-related implications, and may play a role in custody disputes.

The outbreak of COVID-19 complicates these issues further because of its effect on the New Jersey judiciary. While the normal delay between the time a victim obtains the temporary restraining order and the hearing is 7 to 10 days, the court closings associated with COVID-19 have delayed scheduling substantially. Until the hearing is eventually scheduled, the temporary restraining order remains in full effect and may preclude the alleged abuser from seeing his or her children, or returning to their home for weeks or months.

While domestic violence restraining order trials are already complex and require careful consideration and preparation, these hearings are likely to become more complex as they are likely to be held virtually through platforms such as Zoom. This will cause challenges in presenting exhibits effectively, and in staying compliant with the Rules of Court and the prevailing law.

Effective and careful advocacy from experienced counsel is more critical in these situations than ever. Stark & Stark’s Family Law Department is here to help.

What happens if you are the victim of domestic violence during the COVID-19 pandemic?

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Family Law and COVID-19: Protections from Domestic Violence

New Jersey, like most of the United States, has been given “stay-at-home” orders designed to stop the spread of COVID-19 and protect the general public. However, to a victim of domestic violence who is trapped in perpetual proximity to their abuser, these “stay-at-home” orders actually equate to the notion of a lose-lose decision: Stay at home and be abused, or leave home and expose themselves to a deadly virus and a world that has largely closed its doors.

Serious domestic violence often leaves victims feeling helpless, but the additional restrictions and general anxiety from the current pandemic may be too much to bear. However, there are protections available to victims.

New Jersey has the Prevention of Domestic Violence Act, which allows a victim of domestic violence to obtain a restraining order preventing further contact, communication, and domestic violence from their abuser. A violation of a restraining order is a criminal act, subjecting the abuser to arrest, prosecution, jail time and other forms of penalty.

While it is currently difficult to gain access to the court system, all police departments in New Jersey have the capability of placing victims in contact with emergency judges who can issue temporary restraining orders and place necessary distance between victims and abusers. This can be done at the police station or by calling 911 and having the police officers facilitate the process from your location.

The initial restraining order against an abuser is deemed “temporary” and is subject to a subsequent hearing, where a judge in the Superior Court of New Jersey will determine if a “final” restraining order should be issued. In most circumstances, final restraining orders in New Jersey are permanent.

Normally, it takes 7 to 10 days from the time a victim obtains the temporary restraining order to the subsequent hearing. However, the court closings associated with COVID-19 have delayed scheduling substantially. Until the hearing is eventually scheduled, the temporary restraining order remains in full effect to protect the victim.

This delay can cause other issues associated with custody and parenting time issues in matters where the victim and abuser have children together. It may cause more complex issues if an abuser has a child from another relationship, who may otherwise have to relocate from their abusive household perhaps into a riskier situation that exposes them to contracting COVID-19.

While domestic violence restraining order trials are already complicated and require careful consideration and preparation, these hearings are likely to become more complex as they are likely to be held virtually through online platforms such as Zoom. This will cause legal challenges, such as being able to effectively present exhibits while remaining in compliance with the Rules of Court and the prevailing law.

In many cases, an abuser may be ordered to pay for the victim’s legal costs. If you find yourself in these types of situations, it is more critical now than ever to have effective and careful advocacy from experienced legal counsel. Stark & Stark’s Family Law Department is here to help.

What happens if a restraining order is issued against you?

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Coronavirus Stay at Home Requirements and the Enhanced Risk of Domestic Violence

There has been much news coverage about how China’s divorce filings spiked after their periods of quarantine and lock down ended including in articles and Bloomberg,   the Daily Mail and many other publications.  In fact, in response to our own stay at home orders/working from home/shut down of the courts in large part, in a bit of gallows humor, I have joked that this is the divorce lawyer’s silver lining of corona virus.  As I previously blogged, whether or not the pandemic leads to new divorces, it will likely lead to many motions to modify and/or enforce support orders.

Perhaps this phenomenon has something to do with the old expression “familiarity breeds contempt, the first recorded use of which was in Chaucer’s Tale of Melibee (c. 1386).   Obviously, it is more than that.  We are in unprecedented (that word again) times containing real fears of illness and death;  real sorrow from the loss of acquaintances, friends and family; real fears of economic pain that will no doubt hit everyone in one way or another, while cooped up in a home for day after day, week after week;  and the stress of having to home school your children and try to work from home at the same time.  In a time where even getting groceries now requires wearing a mask and one of the most valuable commodities is toilet paper (though some might say alcohol), despite the bad attempts at humor, there is no downplaying the real stress the people are under.

But sadly, marital discord and divorce are not the only side effects of the pandemic.  Domestic violence is too and I have seen numerous articles about this including an April 6, 2019 New York Times article by Amanda Taub entitled A New Covid-19 Crisis: Domestic Abuse Rises Worldwide.    Like a sledgehammer, her article starts:

Add another public health crisis to the toll of the new coronavirus: Mounting data suggests that domestic abuse is acting like an opportunistic infection, flourishing in the conditions created by the pandemic.

An article by Scott Neuman on NPR entitled, Global Lockdowns Resulting in ‘Horrifying Surge’ in Domestic Violence, U.N. Warns, states:

United Nations Secretary-General António Guterres, citing a sharp rise in domestic violence amid global coronavirus lockdowns, called on governments around the world to make addressing the issue a key part of their response to the pandemic.

Aside from the abuse, because people are with their abuser hour after hour, day after day, the ability to seek help or even confide in friends in family members is all that much more difficult. That said, victims should protect themselves and call the police if necessary to seek a restraining order.  There are also resources such as the New Jersey Domestic Violence Hotline (1 (800) 572-SAFE (7233)) available 24/7 and many others.  If a Temporary Restraining Order is granted, the Order can contain other provisions for temporary financial relief, parenting time, etc.  While there was and is a fear that false or flimsy domestic violence complaints could be made to get a leg up in a divorce proceeding where the parties remain in the same home, especially where final hearings were pushed off indefinitely, courts are starting to set up for virtual domestic violence hearings via Zoom.  Also, anecdotally, I have heard that court’s have been hearing emergency applications to, at the very least, address parenting time for a parent put out of a home on a Temporary Restraining Order.

In any event, even though these times are difficult, no one has to accept real domestic violence and resources exist to protect true victims in cases where domestic violence is occuring.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

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Small Business Emergency Assistance Loan Program

The New Jersey Economic Development Authority (NJEDA) has approved a series of aid packages for small/mid-size businesses in the amount of $75 million. The NJEDA programs focus on businesses that have been hit the hardest by COVID-19.

One of the NJEDA programs, the Small Business Emergency Assistance Loan Program is a $10 million program that will provide up to $100,000 towards working capital loans to businesses and eligible non-profits with less than $5 million in revenues.

The Small Business Emergency Assistance Loan applications will open April 13, 2020 at 9:00 a.m.

Completed applications will be considered on a first come, first serve rolling basis. Applications will be available through this link: https://cv.business.nj.gov

• Loan Terms
  • Up to $100,000 towards working capital loans to businesses and eligible non-profits;
  • 10 year term and amortization;
  • 0% interest rate for the first 5 years, then resetting to the NJEDA’s prevailing floor rate (capped at 3%) for the remaining five years;
  • Deferred repayments for 12 months;
  • No fees associated with the Small Business Emergency Loan Program for the first five years of the loan, including application fees, and then standard modification fees will apply.

• Eligible businesses:
  • Have a physical commercial location in the State of New Jersey  (home-based businesses are not eligible);
  • Have been in existence for at least one full year;
  • Have $5 million or less in annual revenue;
  • Can show a global debt service coverage ratio of 1.00 (as of December 31st, 2019);
  • Can demonstrate a negative impact on business due to the COVID-19 outbreak on or after March 9th, 2020 (including, but not limited to: reduction of business hours, complete closure of business, at least a 20% decline in revenue, employees unable to work, required to close by government, or disruption of supply chain);
  • Can provide CEO certification that you are making a best-effort to not lay off employees or will re-hire employees as soon as possible;
  • Are registered to do business in New Jersey and must certify that the company is in good tax standing with the State;
  • Are in good standing with the New Jersey Department of Labor and Workforce Development;
  • Non-profit organizations are eligible for this program; eligible non-profits must have status of 501(c)(3), 501(c)(4), 501(c)(7).

• The following businesses are not qualified (“Non-Eligible Businesses”):
  • Related to gambling or gaming activities;
  • Related to the purveyance of “adult” (i.e., pornographic, lewd, prurient, obscene) activities, services, products or materials (including nude or semi-nude performances or the sale of sexual aids or devices);
  • Auction or bankruptcy or fire or “lost-our-lease” or “going-out-of-business” or similar sale;
  • Traveling merchants;
  • Christmas tree sales or other outdoor storage;
  • Any other activity constituting a nuisance;
  • Illegal under the laws of the State of New Jersey.

 

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