Recent Articles in Alternative Dispute Resolution from LexMonitor

The Breastfeeding Employee

Thu, 11 Mar 2010 15:20:41 GMT

Do breastfeeding employees have any protection under the laws? That was the question I wanted an answer to after learning from other women that some employers were not supportive of their decision to continue breastfeeding upon return to work. The employers of the women I talked to did not refuse to allow the women to pump at work, but did not make it easy for them either. Many of the women did not have regular breaks or a private and convenient place to express their breast milk.

Unfortunately, as of 2009 approximately 15 states have enacted laws that protect a lactating employee. Iowa is not one of those states. Of the states with laws, none provide a lactating employee any time, other than their normal breaks, in which to pump and only a few require the employer to provide a lactation area. I would argue that such laws do not effectively provide any protection to a lactating employee. Without adequate time and a private area, many women would abandon the idea of continuing to breastfeed their children.

With all the benefits that breastfeeding provides for both mother and child, it would be beneficial for employers to support mothers who wish to continue breastfeeding upon their return to work. I am lucky to work for an employer that has supported my decision to continue breastfeeding upon my return to work. For those of you with employers that may not prohibit you from pumping at work, but do not necessarily encourage you, talk to your employer before the issue arises. Perhaps your employer has never been faced with the issue or the issue has never been discussed. Employers, think about this issue prior to a request from an employer. Think about whether you can create a private place for a lactating worker or provide such employer with additional time in which to pump. Thinking about it now may reduce future problems.

Stark & Stark Shareholder Presents Seminar on New Jersey's Community Associations, Solar Energy and Legal Issues

Thu, 11 Mar 2010 13:00:18 GMT

David J. Byrne, Shareholder and Co-Chairperson of Stark & Stark's Community Association Group presented materials related to legal issues connected with community associations and solar energy, during a seminar entitled "Community Associations, Solar Energy & Legal Issues".

The presentation was part of Wentworth Property Management's Solar Symposium, held at the Renaissance @ Manchester Association on February 18, 2010. Mr. Byrne focused his presentation on the rights and limitations of boards in relation to solar power. He discussed the fiduciary duties of community associations, the interpretations of restrictive covenants and the enforcement of rules, all in connection with solar power.

You can download the full presentation online here. (13.4 MB)

HAFA - Will Short Sales Be the Trick to Stop the Foreclosure Flood?

Thu, 11 Mar 2010 02:08:10 GMT

Realizing that the "fixes" put in place by the federal Home Affordable Modification Program ("HAMP") have been an abysmal failure, the Obama Administration and the Treasury Department have reached for a new arrow in their quiver. Beginning April 5, 2010 the new Home Affordable Foreclosure Alternative program ("HAFA") will attempt to assist hundreds of thousands of the delinquent homeowners who could not be rescued under the HAMP program by allowing them to shed their homes through the short sale process.

Traditionally, a short sale is when the proceeds from the sale of a home are insufficient to fully pay off all outstanding debts and encumbrances recorded against the property. In these situations, the selling homeowners can either bring funds to the closing to make up the difference, or obtain approval from their mortgage lenders to accept a reduced amount to satisfy their outstanding loans.

Under HAFA, the lender must offer a short sale in writing to the homeowner within 30 days after the homeowner either is found ineligible for mortgage modification under HAMP or has been ruled unable to sustain payments under a trial plan. Under the new plan, a lender will use real estate agents to determine the value of the encumbered home and this figure will be the lender’s minimum to accept for a short sale. This figure will not be shared with the homeowner, but if an offer comes in that is equal to or greater than this amount, the lender must accept it and proceed with the short sale.

Under this new program the primary lender will receive $1000 if the short sale is completed. A lender holding a secondary lien could get up to $3000 of the short sale proceeds, or can attempt a short sale outside the program if it does not agree to share. In addition, the selling homeowner will get $1500 in "relocation assistance".

While HAFA will attempt to make short sales easier and a more likely alternative to foreclosure, short sales require significant time and patience by all parties involved. Luckily, with the seemingly continuous delay of the foreclosure process by the New Jersey courts, one thing that delinquent homeowners seem to have is time.

At the beginning of foreclosure crisis lenders shunned short sales and would regularly refuse to participate in the process. However with the failure of other federal programs to effectively turn the tide of the foreclosure flood, it may now be time for short sales to see their moment in the sun. For condominium and homeowner associations ("Associations"), HAFA may mean fewer empty foreclosed homes waiting to be sold by uninterested and unmotivated lenders. Another direct benefit of the HAFA program for Associations is that the common assessment liens recorded against the homeowners’ units must be paid in full for the short sale to be completed. This will provide Associations significant leverage to ensure that unpaid common assessments are recovered.

Will Short Sales Be the Trick to Stop the Foreclosure Flood?

Thu, 11 Mar 2010 02:08:10 GMT

Mediating The Healthcare Reform Debate

Tue, 09 Mar 2010 15:04:00 GMT

Even before watching the bipartisan healthcare summit on February 25th, I began to think about how I would mediate the divide between the Obama/Reid/Pelosi reform proposal and the position staked out by the Rupublican leadership. Without knowing it, I was not alone in imagining a mediated solution to this conflict. Mediator Christopher Annunziata wrote in his CKA Mediation and Arbitration Blog that If Anyone Needs a Mediator, It's These People:

"Both sides need to move from their entrenched positions and discuss real options, not just talking points prepared by pointy headed people in Ivory Towers or tucked inside the Beltway. Having a mediator involved would be very useful."

A week later, Mediator Lee Jay Berman posted at Eye On Conflict that Real Political Reform Requires Adding a Neutral To the Mix:

"What makes mediation work is the introduction of a neutral third party. Having an unbiased person at the table can bring big picture perspective into the room when all others are mired in the fog of their power games and can't or won't see another approach...A real neutral, who wouldn't be a politician campaigning for reelection, would turn off the cameras, close the door, and encourage everyone to disclose his or her needs, pressures and underlying interests in the privacy and confidentiality of the mediation process."

Leaving aside all of the ways in which the healthcare reform debate does not resemble the setting required for effective mediation, I began to imagine what I would do if thrust into a room with a commitment from both sides to mediate in good faith. Having reviewed the parties' respective positions on numerous, individual proposals for reform, I first thought that there must be a way to parse and compromise among these proposals to reach a mutually acceptable outcome. But the more I thought about it, the clearer it became that such an effort would fail. I had an intuitive sense of why it would fail, but I struggled to explain that result in terms familiar to traditional mediation theory. In fact, I started a blog post on this subject, but put it aside, unfinished.

Shortly after that, I read a description of the Frank Sander Lecture to be given by Professor Lawrence Susskind as the opening plenary of the ABA Dispute Resolution Section's Annual Spring Conference on April 8th: "Values and Identity Conflicts: Proposing a New Dispute Resolution Doctrine." The summary, which appears in the ABA Section of Dispute Resolution's February Just Resolutions Enews (members only), turned on the light bulb in my head.

As the description of Professor Susskind's lecture puts it:

"Sometimes...disputes are more about values and identities than about interests; when this happens, traditional mediation tactics may not work."

* * *

"We define values-based disputes as those in which the parties' values and identities are so important to the dispute that they interfere with the parties' ability to settle interest-based issues, or in more severe circumstances, even to proceed with the process of dispute resolution.

* * *

Values-based disputes, thus, present special challenges for a mediator. These include: the usual interest -based techniques may lead to superficial agreements that do not really satisfy the parties' most important concerns (and, thus, may not be durable). This is especially likely when parties conceal their values and identities and initially act as if disputes are really about interests" (emphasis added).

This is exactly the problem in the healthcare reform debate. For one side, the values associated with providing high quality healthcare insurance coverage to everyone in America are central to that party's identity, and transcend all of the policy details and budgetary considerations that might be viewed as "interests." For the other side, the values associated with maintaining individual responsibility and promoting smaller government are paramount.

To really address these differences in values, Democrats would have to acknowledge that, in the end, it doesn't matter how much their healthcare reform will cost, because in their view it assures a fundamental right, and the country will just have to figure out how to pay for it somehow, someday. Not a message suitable for anyone seeking reelection in the current environment. Similarly, Republicans would have to acknowledge that it would not be a bad result if millions of people had no prospect of enjoying high quality healthcare insurance coverage, and instead had to rely on the "safety net" of Medicaid, charity care, and hospital emergency rooms until they could work their way out if it. No great sound bites to campaign on there, either. This is why the proponents on both sides of this public debate speak only in terms of the regulatory nuts and bolts, dollars and cents and parliamentary machinations that continue to make our heads spin.

I don't know how Professor Susskind's lecture will suggest the mediator should approach this dispute. My guess is that after getting the parties to acknowledge their core values, the mediator would need to facilitate a discussion in which each side accepts those aspects of the other's values that it can agree with, and then builds upon those shared beliefs. Even when values are not shared, each side can be urged to at least respect the other's values, and adopt a willingness to permit the other side to pursue those values in fashioning a mutual resolution to the conflict. I know this probably will not happen in Washington, but the thought process is instructive, and you never know who might be listening to Professor Susskind on April 8th.

Live Interview from the Franchise Expo South - How to Fund Your Franchise

Tue, 09 Mar 2010 13:17:34 GMT

This installment of the New Jersey Legal Update podcast is an interview with Adam J. Siegelheim, member of Stark & Stark's Franchise group, and Larry Carnell, Vice President of Business Development for BeneTrends, Inc., at the International Franchise Association's 2010 Franchise Expo South in Miami, Florida.

Mr. Siegelheim and Mr. Carnell how to access capital in order to fund your franchise. Mr. Siegelheim and Mr. Carnell discuss the benefits of using your retirement fund as a way to fund your franchise.

You can download the full podcast here.

Courts in the United States Have Consolidated NuvaRing® Lawsuits on Both the State and Federal Levels

Fri, 05 Mar 2010 17:52:11 GMT

As we have discussed in previous posts, pending lawsuits against the manufacturers of NuvaRing®, state that the birth control product has led to severe side-effects such as: heart attack, stroke, deep vein thrombosis (also known as DVT or blood clots), internal organ damage, myocardial infarction and pulmonary embolism.

Courts in the United States have consolidated the NuvaRing® lawsuits on both the State (Mass Tort) and federal (MultiDistrict Litigation or “MDL”) levels. The Mass Tort is presided over by Judge Brian R. Martinotti, in the New Jersey Superior Court - Bergen County. The MDL is presided over by Judge Rodney W. Sippel, in the United States District Court - Eastern District of Missouri. Both judges often collaborate in an effort to assimilate the cases pending in each court. In fact, during the March 3, 2010, Mass Tort case management conference, Judge Martinotti adopted an order recently entered by Judge Sippel, which will permit counsel to coordinate discovery in all cases pending in both the Mass Tort and MDL.

If you, or someone you know, has been injured as a result of taking NuvaRing® contact Stark & Stark’s Mass Tort/Pharmaceutical Litigation Team 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®.

Helping and Protecting Condominiums Deal With the New Lending-Related Rules of the Federal Housing Administration (FHA)

Thu, 04 Mar 2010 21:24:26 GMT

The FHA insures loans made by FHA-approved lenders all across the country. In fact, 30% of all mortgages in the United States are insured by the FHA. The availability of this insurance enables lenders to make loans and extend credit to a broader class of borrower, allowing owners within a condominium to market their homes to more potential buyers. The FHA will insure only certain loans - those that meet FHA requirements. As of February 1, 2010, the FHA may insure loans made with respect to condominiums only in condominiums that have been certified by the FHA. These new rules do not relate to homeowners associations. Condominiums that are currently certified must be recertified every two (2) years. The new FHA rules apply to condominiums in New Jersey, New York, Pennsylvania together with all of the other 47 states.

FHA certification will likely make the sale and purchase of homes within a condominium easier. There are arguments available to owners by which a condominium may have a fiduciary duty to seek FHA certification. The condominium's approved status will be published, and FHA will be free to insure loans there. To the extent that management or your board would like to secure FHA certification, Stark & Stark's Community Association, and Condominium & Co-Op, Groups are ready to discuss the relevant issues, and prepare and file the applications. If you would like additional information, or to hear more about the FHA, condominiums and/or the certification process, please contact David J. Byrne or A. Christopher Florio.

Stark & Stark Shareholder Presents Seminar on condominiums and the new guidelines of the FHA, Fannie Mae and Freddie Mac

Thu, 04 Mar 2010 13:09:00 GMT

David J. Byrne, Shareholder and Co-Chairperson of Stark & Stark's Community Association Group presented materials related to lending-related guidelines and condominiums, during a seminar entitled "FHA, Fannie Mae & Freddie Mac: New Guidelines Impacting Your Association".

The presentation was made to the Pennsylvania and Delaware Valley Chapter of the Community Association Institute on February 18, 2010, in Mt. Laurel, New Jersey. Mr. Byrne focused his presentation on the new guidelines issues by the Federal Housing Administration ("FHA"), the Federal National Mortgage Agency ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac") in relation to loans made in condominiums. He explained the new guidelines, outlined the eligibility rules and discussed the requirements connected with FHA, Fannie Mae and Freddi Mac lending.

You can download the full presentation online here. (26.8 MB)

Proposed Law would Force Condominium Boards to Take the Lowest Bid

Wed, 03 Mar 2010 13:02:20 GMT

A law pending in the New Jersey State Assembly would, if adopted, regulate condominium and homeowner association's hiring of vendors and would also address how to deal with potential conflicts of interest.

Assemblyman Peter Biondi introduced a bill in January 2010 in which he stated that with the quasi governmental powers provided to associations should come standards of "fairness and due process." The bill provides that associations should be held to similar standards of transparency and fairness.

As to the bidding requirements, Assemblyman Biondi is proposing to enact rules which would force associations to:

Obtain three quotes for any contract for services or materials whenever the amount payable by the association is over $10,000 in any 12 month period.
Use sealed bids with required specifications , to be opened only a publicly announced meeting for any contract that exceeds $25,000.
Award all contracts to the vendor that provided the lowest quote or bid, unless the board determines, for good cause, that accepting the bid would be detrimental to the best interests of the residents.

Interestingly, any association with fewer than 30 units can, by resolution, waive any of these provisions.

Although community associations are similar in many ways to government, the last thing any association wants to do is model itself after any level of government. Government agencies are often marred by corruption, red tape, cost overruns and unnecessary levels of bureaucracy; things that most associations in New Jersey try to avoid. On its face, obtaining three bids sounds like a reasonable and prudent business practice. However, Board members are entirely capable of determining how many bids to obtain for a particular project or service, and obtaining three is hardly a panacea for problems that result from hiring the wrong contractor. Moreover, obtaining three quotes may be impossible, for example, for an association that pursuant to the master deed must hire a property management company within 5 miles of the association, and only 2 fit that description.

However, when you get to section 3, the real problem is revealed. Forcing associations to hire the cheapest vendor guarantees problems. The old axiom, "you get what you pay for" has proven true over and over again. Think about how well this formula has worked for the government. The least expensive contractor has given us shoddily built schools, bridges and government buildings. Why should associations model this behavior? In fact, some governments have completely scrapped this program. New York City and Camden both ended their lowest bidder programs (allowing for consideration of experience, completeness of the quotation, references, etc.) with shocking results: construction quality got better.

If an individual association wants to enact such a rule, it is obviously free to do so, but the mechanism to prevent problems is already in place. First, the governing documents of many associations require the approval of 2/3 of the homeowners to approve assessments related to work in a certain dollar amount. Second, the system of goverenence itself ensures that if the Board makes a habit of hiring the first contractor to provide a bid, or is hiring friends and relatives who do shoddy work, then the unit owners have the right to vote them out of office during the next election. Like most legislation, this proposed law is likely a reaction to one or two troublesome boards who made poor decisions, prompting an Assemblyman to react in such a way that will saddle all associations with unnecessary requirements which are likely to cause more problems than they cure.

As for dealing with conflicts of interest, Assemblyman Biondi is proposing that:

No member of the board or management can have an interest in any business which is in conflict with the proper discharge of their duties, including having a direct interest in any contracts for work or materials used by the association or any fees paid to a broker, architect, etc.;
No board members or managers can use their position to obtain any unwarranted privileges for any person;
No board members or managers can act in his or her capacity in any matter in which he or she, a related person, or any other person residing in his or her household or the household of a related person, or any business organization in which any of such persons has an interest, has a direct or indirect financial or personal involvement that might reasonably be expected to impair the objectivity or independence of judgment of the board member, employee or property manager.

Like most legislation, these may be obvious and proper rules to have.... until they are applied to the real world. As with any law or rule, there are always unintended consequences. If a Board Member's brother owns a painting business and can do a quality job for 15% less than the competition, shouldn't the Association be permitted to hire that person, provided the Board Member in question discloses this fact to his fellow board members? Arguably, under section 3 of the proposed legislation, the board wouldn't even be permitted to consider hiring this contractor. But under the existing Nonprofit Corporations Act, which applies to associations, such a contract would not be void solely due to the fact that a trustee has an interest in the contract or transaction, as long as the interest is fully disclosed to the entire board before they vote on the issue. N.J.S.A. 15A:6-7. The proposed legislation would obviously conflict with the Nonprofit Corporations Act, causing further confusion for board members and homeowners.

The legislature is trying to get boards and associations to act in a proper and more efficient manner, but the real way to accomplish this is to become active in your association. Vote, attend meetings, provide feedback and be involved. If the majority of unit owners are involved in the process, then the Board will be responsible for their decisions, they will consider multiple points of view and incompetent or untrustworthy board members will be voted out of office. That way, each Association can make decisions that best fit their particular situation and are less likely to have unnecessary rules forced upon them.

Pay Doctors Less And They Will Work Less

Wed, 03 Mar 2010 13:00:00 GMT

Really? A recent article in The Washington Post by Carla K. Johnson points out that doctors have steadily cut their work hours over the last decade, largely in response to a decline in pay for doctors' services.

"It's not that doctors are terrible slackers. Average hours dropped from about 55 to 51 hours per week from 1996 to 2008, according to the analysis, appearing in Wednesday's Journal of the American Medical Association.

That's the equivalent of losing 36,000 doctors in a decade, according to the researchers."

Is it just me, or does this headline belong with that group of newspaper clippings routinely deadpanned by Jay Leno, e.g.: "Obesity Study Blames Overeating," or "Police Raid Gun Shop - Find Weapons."

I suspect the same headline would occur if the circumstances applied to lawyers, teachers, auto mechanics, construction workers or anyone else used to being paid for what they do. As our leaders in Washington debate the various ways to pay doctors even less, keep this headline in mind when planning your next negotiation.

[Image: "A Very Difficult Case," c. 1905]

A Primer on Green Leases: Special considerations that permeate the negotiation process

Tue, 02 Mar 2010 13:11:23 GMT

Vincent J. Mangini, Shareholder in Stark & Stark's Real Estate, Zoning & Land Use Group, authored the article A Primer on Green Leases: Special considerations that permeate the negotiation process for the March 1, 2010 edition of the New Jersey Law Journal.

Mr. Mangini discusses how the introduction of green building principles and the heightened interest in energy efficiency and cost savings has begun to influence the negotiation and operation of commercial leases and the build-out of tenant improvements. The article presents a summary and analysis of the issues that landlords and tenants should be aware of and what they need to build into their due diligence when dealing with a high-performance building.

You can read the full article online here. (PDF)

Stark & Stark Shareholder Comments on Protocol Overhaul

Mon, 01 Mar 2010 13:40:34 GMT

Thomas B. Lewis, Chair of Stark & Stark's Employment Group, was quoted in the February 26, 2010 Registered Rep article, Some Predict Broker Protocol Overhaul. The article addresses the possibility of an overhaul to the Protocol for Broker Recruiting in the wake of increased lawsuits and constant movement of advisors as they switch firms. When the protocol was first created, it was an exclusive pact between three wirehouse firms put in place to prevent expensive litigation every time an advisor switches firms. Today, there are approximately 420 signatories to the agreement, and recently, some firms are adding letters to clarify their participation in the protocol.

Mr. Lewis states that it could become very unruly if each company began including its own letters and sets its own rules as to compliance or noncompliance with the protocol. Mr. Lewis believes that the protocol will become ineffective at that point, and something has to be done as to the clarification letters because there is no telling where it may stop.

You can read the full article online here. (PDF)

New Jersey State Supreme Court Grants Mass Tort Designation to YAZ®, Yasmin® and Ocella® Cases

Mon, 01 Mar 2010 13:27:34 GMT

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

On February 9, 2010, the New Jersey State Supreme Court granted Mass Tort designation to YAZ®, Yasmin® and Ocella® cases, pursuant to the application made under Rule 4:38A. Accordingly, all pending and future New Jersey state court actions arising out of the use of the oral contraceptives YAZ®, Yasmin® and Ocella® are designated as a mass tort for centralized case management purposes. Any and all such complaints that have been filed in the various counties and that are under or are awaiting case management and/or discovery shall be transferred from the county of venue to Superior Court, Law Division, Bergen County, and assigned to Judge Brian R. Martinotti, J.S.C.

If you, or someone you know, has been injured as a result of taking these medications, contact Stark & Stark’s Mass Tort/Pharmaceutical Litigation Team. 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 YAZ®, Yasmin® or Ocella® manufacturers.

LegalZoom and DIY Legal Documentation Need Their Own Lawyers

Sat, 27 Feb 2010 14:38:03 GMT

The popular legal document production website, LegalZoom, is "zooming" to the court based upon a class action lawsuit in Missouri. The Plaintiff's in the suit are claiming that LegalZoom is engaging in the unauthorized practice of law.

While some people may see attempts by attorneys to knock LegalZoom out of business in order to protect the attorney's "ground", the reality is that if there are any issues that come out of the documents created by LegalZoom, the attorneys are likely to make much more money in fees in cleaning up the mess than they would have in drafting the documents in the first place. Most clients are surprised at the relatively reasonable cost we charge for the same "document preparation" that these DIY companies provide. Is it as cheap as LegalZoom? No. Do you get what you pay for?

There are plenty examples of people performing their own surgeries, but there is a reason that physicians go through years of school and training and are subject to regulations. Similarly, whether you like attorneys or not, there is a reason they too go through years of school, training and subject to regulations.

Don't you have a little more comfort in knowing that the critical legal documents are done accurately? Plus, if there is a question later on, having that initial relationship with an attorney will help with dealing with any problems.

Iowa Supreme Court Rules on Recovery of Damages from Real Estate Sale

Fri, 26 Feb 2010 17:13:21 GMT

In an opinion released by the Iowa Supreme Court today, the Court found that a suit for breach on a covenant of title requires that the coventor be giving notice of the underlying claim before they are obligated to pay. In this case, Gaede's purchased land from Stansberry. After the sale was completed and the Gaede's took possession, the city approached the new owners, Gaede, and claimed that part of the property they purchased was actually a city street and they needed to "get off" the city property. A "quiet title" action ensued (quiet title is where a party attempts to establish the true owner of the land) and the Gaedes lost the battle. Unfortuantely, the Gaedes spent nearly $24,000 for a property valued at about one-half that figure.

After their loss, the Gaedes went to the seller, Stansberry, and asserted that as Stansberry had given them a warranty deed, they should stand behind their warranty and make the Gaedes whole and compensate them for their damages. Stansberry was not given notice of the proceedings by the city. As a result of that failure to be given notice of those prior proceedings and to defend title in that trial, the Iowa Supreme Court ruled that before a party is liable for the cost, they must be given notice of the challenge and have the opportunity to defend the title.

Buy-Sell Agreements for Small Businesses - The "Business Pre-Nup"

Fri, 26 Feb 2010 14:04:23 GMT

It seems like business formation activity is starting to pick up as people are starting to not only thaw out from the winter but also thaw out from the "economic ice storm". Part of the process of any business formation involves consideration not only of creating the company but also terminating the relationship. Much like a premarital agreement predetermines how assets are split at divorce or at death, a "buy sell" agreement will determine how the business will continue or dissolve in the event of a death of an owner, disability of an owner, bankruptcy of an owner, the divorce of an owner or a dispute by the owners. None of these issues are typically on the near horizon when the process is starting, so it is easy to forget about them. However, most small businesses will end at some point. Better to start the planning now before too much is invested and when relationships are strong.

In looking at the issues, here is a brief outline of some items to consider as the business owner formulates a plan.

Triggering Events
- Death
- Disability (consider length of necessary disability)
- Divorce by one owner (ex-wife digging through company financials?)
- Bankruptcy by an owner (bankruptcy trustee involved in company?)
- Desire of one party to get out of the company

Valuation Issues
- Annually have the owners determine the value of shares by unanimous agreement or by appraisal or by some formula using company financials.
- Professional appraisal at time of triggering event
- “Texas Shootout” – one party submits price that they would either be willing to buy OR sell. Other party has option to either buy OR sell for that price.
- Can use combination of valuation issues with different triggering events.

Funding Issues - Upon a triggering event, how will the departing member be paid for his or her shares.
- Insurance (life insurance, disability insurance, business continuation insurance)
- Installment payments
- Cash reserves of Company

Company redemption vs. Cross purchase
- Determining whether the company will redeem the company shares or whether the other owners will be making the purchase (who buys the owner out - company or other owners?).
- This decision affects the valuation of the company and a shareholder’s basis in the company.

This outline is simply a starting list to get the thought process moving. The final provisions can either be placed in the formation documents, or a separate "buy sell" agreement. The drafting of such a document can be very complex and you should consult an experience attorney to assist with the drafting of such a document. Implementing the "business pre-nup" now will hopefully help smooth out the process later.

Hot Topics in Family Law: College Expenses, Inherited Funds, Out of State Relocation & Medical Expenses

Fri, 26 Feb 2010 13:09:02 GMT

In this installment of Legal Lines, Stark & Stark Divorce attorney, Corrine Evanochko, addresses various questions that family law practitioners are most commonly asked. This discussion will surely knock a couple of questions off of your list if you are contemplating or know someone who is considering pursuing a divorce in New Jersey.

•    College Contribution – Is it really mandatory?
•    Inherited Funds – Subject to Equitable Distribution?
•    Out of State Relocation
•    Unreimbursed Medical Expenses

If you have any additional questions, feel free to contact the Stark & Stark Divorce Group at 1-877-678-Divorce.

Legal Lines - Episode 6 from Stark & Stark on Vimeo.

Live Interview from the 2010 International Franchise Association Convention

Fri, 26 Feb 2010 13:05:34 GMT

This installment of the New Jersey Legal Update podcast is an interview with Adam J. Siegelheim, member of Stark & Stark's Franchise group, and Greg Nathan, Managing Director for Franchise Relationship Institute, at the 2010 International Franchise Association Convention in San Antonio, Texas.

Mr. Siegelheim and Mr. Nathan discuss the differences between the franchise industry in the United States and Australia. Specifically, they discuss the pros and cons of focusing on unit sales versus focusing on franchisee follow-up and relationship building.

You can download the full podcast here.

Applying Conflict Resolution Skills in Health Care PART III: Focus on Interests, Not Positions

karl@karlbayer.com (Karl Bayer) — Fri, 26 Feb 2010 12:00:20 GMT

By Holly Hayes Bovio Our health care conflict resolution series began with Part I, applying the “principled negotiation” method to health care (post available here) and followed with Part II, examining a case study of “Separating the People from the Problem” (post available here). In this post, let’s take an example of a physician and a hospital [...]

By Holly Hayes Bovio

Our health care conflict resolution series began with Part I, applying the “principled negotiation” method to health care (post available here) and followed with Part II, examining a case study of “Separating the People from the Problem” (post available here).

In this post, let’s take an example of a physician and a hospital group negotiating to buy the physician’s practice to see how “positional bargaining” results in failure to find a solution.

Physician: I need you to buy my practice for $X and I will not take weekend call. If you don’t want to buy my practice, my partners and I can take it down the road to hospital Y.

Hospital Representative: We are willing to offer you $Z for your practice and we must have a weekend call rotation as part of the deal.

Physician: You don’t care about me or my practice, this discussion is over.

Wise solutions acknowledge interests, not positions. The basic problem with the physician and the hospital representative is not that one is buying and one is selling, the conflict is between their interests or their concerns, fears, needs and desires related to the negotiation. What are some tools to help reconcile interests rather than merely seeking to compromise positions?

In Getting to Yes, Roger Fisher and William Ury describe techniques for identifying interests so that options can be developed that meet both party’s interests.

Ask “Why?” – put yourself in their shoes.
Ask “Why Not?” — why doesn’t the other side agree with us?
Realize each side has multiple interests – the physician wants a secure income for his family, he wants time with his family so he does not want to always be on call.
Realize the most powerful interests are basic human needs – security, economic well-being, control over one’s life, a sense of belonging, recognition.
Talk about interests – make your interests come alive for the other side. The hospital representative can talk about ways to include the physician in decision-making at the hospital and about what the hospital needs in terms of income to make a profit to reinvest in its people and physical plant.

Using these techniques, let’s see how the conversation between the physician and the hospital representative is more productive:

Physician: I need you to buy my practice for $X and I will not take weekend call. If you don’t want to buy my practice, my partners and I can take it down the road to hospital Y.

Hospital Representative: I understand you have spent your time and your own income to build such a successful practice. You have been a great partner for us for five years. Can you help me understand how you arrived at the $X figure and talk a little about the call issue?

Physician: We recently bought an MRI and quite a bit of other costly equipment that would be included in the purchase price. I have spoken with some other physician practices and this price seems fair. I just want to be fairly compensated for the value my partners and I have brought to this practice over the past five years. In terms of call, I want time with my family on the weekends. I am afraid that if one of my partners leaves, I will have to take both my call and their call and who knows when a new physician could be recruited. I want control over my life.

Hospital Rep: Would it be alright with you if we had both your accountant and my CFO take a look at the practice financials? There are also some industry standards we could apply to the purchase price. As for call, you make a very good point about how much call would be needed. Of course, my problem is that I need to provide certain coverage or the hospital cannot provide certain services and those patients will go down the road. This is a problem across the country and I know many hospitals have begun to pay very high prices to provide call for certain specialties. I wonder if you would consider being part of our medical staff executive committee as part of a purchase package? This would not guarantee you no call, but it would give you a chance to help make policy about how we move forward. If we can reach agreement on purchasing your practice, it will take both of us to make the best decisions for a successful partnership.

Physician: Yes, I can agree to those next steps. I am starting to feel a level of comfort that I will be treated fairly.

As the two parties talked about their interests by asking questions and realizing that the most powerful interests are basic human needs, they both came closer to the purpose of negotiating — serving their interests and finding an acceptable solution.

Part IV in our series will explore more on this topic – “how to invent options for mutual gain”. We welcome any comments you have about conflict you have experienced in health care and lessons you have learned.

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Holly Hayes Bovio is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at: holly@karlbayer.com.