News

New state program to assist small business owners, tenants

Ansell Grimm August 3, 2020

A new state grant program will provide up to $10,000 in relief to eligible small businesses struggling due to the COVID-19 outbreak.

“We are committed to helping small businesses across our state survive this unprecedented crisis, Governor Phil Murphy said. “A stronger and fairer New Jersey starts from the bottom up.

The Small Business Lease – Emergency Assistance Grant Program will infuse much needed funding into local economies by assisting both small businesses and the landlords that they rent from.”

For more information about your eligibility contact Josh Bauchner at jb@62q.f7d.myftpupload.com or 973-247-9000.

For more information from the state about the program,

https://www.nj.gov/governor/news/news/562020/approved/20200723a.shtml

The Stay Stays in Medical Marijuana RFA Case

Ansell Grimm July 13, 2020

Since December of last year the New Jersey Department of Health (DOH) has been barred from moving forward in the request for application process for medical marijuana facilities after being sued for unfairly excluding some applicants due to allegedly corrupt PDF files submitted as part of their applications.

The applicants contend the alleged corruption of the documents was caused by the DOH’s own submission portal and should not cause the disqualification of their applications.

The DOH sought to lift the stay but the Appellate Division recently denied the request, according to a recent story in NJCannabis Insider by Justin Zaremba.

“Hopefully, the DOH will now focus on settling the appeal by scoring all applications on merit so as to best serve the state’s growing medical marijuana patient population rather than engaging in wasteful and dilatory motion practice,” Joshua Bauchner, a partner in Ansell Grimm & Aaron P.C. who represents several of the entities suing the DOH told NJCannabis Insider.

Zaremba’s full story is reprinted here with permission.

Court Rejects DOH Request to Dissolve Stay

Decision on Stay of 2019 RFA for Medical Marijuana Facilities Could Come Within Weeks

Ansell Grimm July 2, 2020

The next step in the long delayed 2019 RFA process for medical marijuana facilities in New Jersey could come as early as the middle of this month.

In June the state Department of Health filed a motion to dissolve a stay preventing 2019 applications from moving forward, a move, not surprisingly, opposed by those who requested the stay.

As Ansell Grimm & Aaron partner Joshua Bauchner, (who represents several clients who requested the stay in an attempt to remedy what they contend is their unfair exclusion from having their requests considered) told Justin Zaremba of NJCannabis Insider, “If the court stays the course (pun intended) then we are still awaiting oral argument which they may expedite, but is otherwise set for the fall.”

Zaremba’s full story, is reprinted here with permission.

Court to Decide on Stay for 2019 RFA Case as Early as Mid-July

New Jersey’s DOH Continues Court Fight for Problem It Could Solve Administratively

Ansell Grimm June 23, 2020

Justin Zaremba of NJ Cannabis Insider has covered the latest developments in the ongoing dispute between the New Jersey Department of Health and litigants claiming to be unfairly excluded from the state’s Medical Marijuana facility licensing program due to a corrupt PDFs.

NJDOH sought to dissolve the stay preventing the 2019 RFA process from moving forward while those appealing what they view as an unfair process caused by a failure on the DOH’s part continue to fight to have their applications receive a fair review.

Zaremba’s full story is available here:

Get ready to hurry up and wait for the next turn of the screw on the 2019 RFA case.

AGA Partner Bob Honecker to Lead 200 Club

Ansell Grimm June 18, 2020

Ansell Grimm & Aaron PC Partner Robert A Honecker Jr. has been named as the new President of the 200 Club of Monmouth County. Honecker succeeds former Lt. Gov. Kim Guadano as the leader of the organization which is dedicated to providing financial assistance to the families of public safety and rescue personnel in the county who are injured or die in the line of duty.

A full story on the Club’s reorganization meeting is available here:

Honecker named President of 200 Club

You can visit the organization on the web here:

Monmouth 200 Club

Client Alert: The Enforceability of Waivers From Automatic Bankruptcy Stays

Ansell Grimm June 16, 2020

In light of the COVID-19 pandemic, the risk of commercial tenants filing for bankruptcy protection has risen substantially. A concern for many commercial landlords is whether avenues exist for protecting their ability to initiate an action against tenants when they default on their lease obligations and file for bankruptcy protection.

Below is a syllabus of the lightly-developed case law addressing whether waivers from automatic bankruptcy stays are enforceable, and the means by which landlords and their tenants can enter into such agreements. It is important to note, however, that the courts have not ruled on many cases during the pandemic and applicable case law may be in flux.

Enforceability of Bankruptcy Stay Waivers Contained in Forbearance Agreements

Pursuant to an Executive Order issued by New York Governor Cuomo, a statewide eviction moratorium on residential and commercial evictions has been extended to August 20, 2020, for tenants who qualify for unemployment benefits or who are experiencing a “financial hardship” as a result of COVID-19. Landlords may serve rent demands, but cannot commence litigation against tenants, such as eviction actions. Similarly, New Jersey Governor Murphy issued an Executive Order setting a moratorium on residential evictions and foreclosures in New Jersey — though the New Jersey Executive Order contains language clarifying that commercial tenants are not subject to the moratorium. The New Jersey moratorium will last until two months after Governor Murphy declares an end to the COVID-19 health crisis, unless the Governor issues another Executive Order to end the moratorium sooner.

In light of the present circumstances, it may be advisable for commercial landlords to work with their tenants to enter into forbearance agreements (as opposed to lease amendments) containing a waiver from the automatic bankruptcy stay. The agreements should make clear that the tenant is in default, that the agreement is being entered into as a result of the default, and that the landlord is deferring/forgiving rent, and forbearing from eviction (or whatever the consideration may be) in exchange for a waiver of the automatic stay.

While the case can be made that pre-bankruptcy agreements with tenants via a lease amendment may be enforceable, the more secure means to accomplish this is in the form of a forbearance agreement. In In re Velez, the court rejected landlord’s attempt to enforce a general waiver to escape the automatic stay, distinguishing general waiver language in a lease amendment from a forbearance agreement “whereby the debtor specifically waived future protections of the automatic stay.” In re Valez, 601 B.R. 351, 364 (Bankr. M.D. Pa. 2019).

In In re Frye, 320 B.R. 786 (Bankr. D. Vt. 2005), the court set forth certain factors to be utilized in deciding whether relief from the stay should be granted. The court also noted that it considered additional factors in making the determination that a waiver is enforceable, including: (1) the sophistication of the parties; (2) the presence of counsel; (3) consideration for the waiver; (4) the length of waiver period; (5) the risks and concessions assumed by lender/landlord; (6) the effect on other stakeholders in the Bankruptcy; (7) any defenses to the waiver, such as mistake or fraud; (8) the impact of the waiver on the feasibility of Debtors’ plan; (9) whether enforcement of the waiver would promote public policy of out of court settlements; (10) prejudice to landlord/lender for non-enforcement; (11) the time gap and change in circumstances between date of waiver and bankruptcy filing; and (12) whether the landlord/lender would otherwise be entitled to relief from the automatic stay.

Conclusion

As many courts are closed and this is new territory, we expect the case law may evolve as litigations progress on this novel issue. Arguments for the enforcement of waivers from automatic bankruptcy stays may be successful, depending on new rulings as they are issued and the specific language in the forbearance agreement executed by landlords and tenants. Landlords and tenants alike are advised to consult with an attorney experienced in this area to determine viability of such plans and to protect their interests.

Bauchner Speaks With NJBiz About State’s failure on Medical Marijuana Facility Licensing

Ansell Grimm June 12, 2020

Ansell Grimm & Aaron PC partner Josh Bauchner recently spoke to NJBiz about the ongoing battle with New Jersey to address what multiple applicants for medical marijuana facility licenses say is a technical failure on the state’s part that lead to the unjust denial of their applications.

Bauchner, who represents a number of the denied applicants told NJBiz, “The DOH is arbitrarily eliminating candidates on [the file] corruption issue. Those may very well be the best candidates, so why should they be deleted? The most fair and equitable way to resolve the whole problem [is] to allow the appellants to file any documents that were corrupt with certification that they weren’t changed and to score everyone’s application on merit.”

For the full story, visit the NJBIZ website here:

Cannabis Conundrum

Client Alert: Legislative Changes to the Family Leave Act and the WARN Act

Ansell Grimm May 4, 2020

Earlier this month, the New Jersey Legislature made further changes to the state’s labor and employment laws in light of the COVID-19 pandemic. In particular, the Legislature amended the Family Leave Act and the Millville Dallas Airmotive Plant Job Loss Notification Act (commonly known as the “NJ WARN Act”). These changes directly impact the rights of both employers and employees throughout the state. A brief summary is provided below:

Family Leave Act

On April 14, 2020, Governor Phil Murphy signed Senate Bill S2374 (“S2374”) into law. Among other things, S2374 amended the New Jersey Family Leave Act to provide job-protected leave when the Governor has declared a state of emergency. In these circumstances, an employee who needs to care for a family member because of (1) an epidemic of a communicable disease, (2) a known or suspected exposure to a communicable disease, or (3) efforts to prevent the spread of a communicable disease to other members of the community is entitled to twelve (12) weeks of job-protected leave.

The Family Leave Act defines a “family member” to mean “a child, parent, parent-in-law, sibling, grandparent, grandchild, spouse, domestic partner, or one partner in a civil union couple, or any other individual related by blood to the employee, and any other individual that the employee shows to have a close association with the employee which is the equivalent of a family relationship.”

While the Family Leave Act normally allows an employer to deny leave to the highest-paid 5% of its employees, or the seven highest paid employees (whichever is greater), subject to certain conditions being met, this exemption is suspended when the Governor declares a state of emergency and the leave requested is for one of the three reasons set forth above. In addition, an employee may take intermittent leave for epidemic-related reasons without the employer’s consent so long as the employee (1) provides prior notice to the employer as soon as practicable and (2) makes a reasonable effort to not unduly disrupt the employer’s business operations.

The amendments to the New Jersey Family Leave Act contained within S2374 went into effect immediately and are retroactive to March 25, 2020.

NJ WARN Act

In 2019, the Legislature amended the NJ Warn Act to require that covered employers pay severance to employees that are terminated in connection with a covered event (the “2019 Amendment”). The 2019 Amendment was scheduled to become effective on July 19, 2020.

In light of the pandemic, the Governor signed S2353 into law on April 14, 2020. S2353 delays the effective date of the 2019 Amendment from July 19, 2020, until ninety (90) days following the termination of Executive Order 103 of 2020, wherein the Governor declared a state of emergency and a public health emergency. At the time of publication, the Governor has indicated Executive Order 103 will not be terminated before May 15, 2020 and, therefore, the 2019 Amendment to the NJ WARN Act will not go into effect until August 15, 2020, at the earliest.

S2353 also amended the definition of a “mass layoff” to exclude layoffs “made necessary because of a fire, natural disaster, national emergency, act of war, civil disorder[,] or industrial sabotage[.]” The definitional change is retroactive to March 9, 2020.

Trade Group Calls on Ansell.Law to Address Legal Concerns Relating to COVID-19

Ansell Grimm April 27, 2020

The unprecedented events and dynamic changes necessitated as a response to COVID-19 have left many businesses grasping for a way to get a handle on the current situation. The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) turned to Ansell Grimm & Aaron PC’s Joshua Bauchner and Rahool Patel to get some guidance.

The attorneys conducted a virtual discussion with the trade group addressing various issues and responding to members’ inquiries regarding the CARES Act, the Paycheck Protection Program (PPP), and insurance and landlord/tenant concerns.

The effort was well received and recently written up in the latest issue of Body Shop Business, the industry’s trade journal.

“Because of the many complicated requirements that must be met on the applications, I strongly recommend that members obtain the assistance of professionals like the people from Ansell Grimm & Aaron, PC rather than deal with it on their own,” AASP/NJ Executive Director Charles Bryant, told the publication.

The Ansell Grimm & Aaron COVID-19 Task Force will be conducting a free small business webinar on Thursday, April 30 at 11 a.m.

Topics will include:

New and pending legislation
PPP program
Lease obligations
Insurance claims
Employee concerns

To join the meeting via Zoom:

Meeting ID: 953 0659 1428

Password: 020438

Client Alert: The CARE Act – Paycheck Protection Plan Updates

Ansell Grimm April 24, 2020

On April 3, 2020, the federal government unveiled the Paycheck Protection Plan (PPP), an undertaking intended to assist small businesses through the COVID-19 pandemic by providing them loans, and at the same time, incentivizing keeping employees on the payroll.

What Businesses Qualify for Loans?

The loans are available from existing SBA lenders to businesses with 500 or fewer employees starting April 3, 2020, although businesses with more than 500 employees in particular industries are potentially eligible if they meet the SBA’s size standards for those industries. Included are sole proprietorships, independent contractors, self-employed individuals (although they only can apply for loans beginning April 10, 2020), and private non-profit organizations or 501(c)(19) veterans organizations affected by COVID-19. Additionally, small businesses in the hospitality and food industry with multiple locations also might be eligible if their individual locations employ less than 500 employees.

Loan Terms and Forgiveness

The PPP loans are on a first-come, first-served basis in an amount up to two months of the average monthly payroll costs for 2019 with a $10 million cap. The interest rate is fixed at 1% for a two year term with all loan payments deferred for 6 month, though interest will continue to accrue over this period. There is no collateral or personal guarantees required and neither the government nor the lenders will charge small businesses any fees. Other terms and conditions of loans continue to be worked out between lenders and the government so it is recommended that employers continue to follow updates. So long as employees remain on the payroll for eight (8) weeks and the loan proceeds are used for payroll, rent, mortgage interest, or utilities, the SBA will forgive the loans. However, due to the likelihood of high subscription, at least 75% of the forgiven amount must have been used for payroll. If employers decrease the number of full-time employees, or decrease salaries and wages by over 25% for any employee making less than $100,000 annually in 2019, the amount of loan forgiveness will be reduced.

Basically, there is no real downside to receiving a loan through this program, but employers should be diligent in keeping accurate records of how loan proceeds are being spent over the term of the loan; specifically, the amount of the loan being used for the various payroll costs.

What Records Should Employers Collect to Apply for a Loan?

In order to seek a loan, employers should obtain records of: (i) their complete 2019 payroll; (ii) their 2019 independent contractor costs; (iii) their payroll report as of February 15, 2019 or closest date thereafter; (iv) four 2019 quarterly 941 payroll returns; (v) twelve monthly payroll summaries by employee and company totals for April 2019 through March 2020; (vi) proof of health insurance premiums and retirement plan contributions paid by the company from April 2019 through March 2020; and (vii) a fully initialed and signed federal PPP loan application.

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The information provided in this alert was up-to-date at the time of publication, is provided for general purposes only and does not constitute legal advice, and the transmission and receipt of this information does not create or constitute an attorney-client relationship.

News

Family Leave Act

NJ WARN Act

What Businesses Qualify for Loans?

Loan Terms and Forgiveness

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