Recent Blog Posts

• Stark & Stark Attorney Featured on Legally Speaking
  Michael J. Fekete, member of Stark & Stark's Business & Corporate group, was a featured guest on the Camden County Bar Foundation's weekly television talk show Legally Speaking on Sunday November 9, 2009. Mr. Fekete discussed the New Jersey Home Improvement Law,  the Consumer Fraud Act and the Contractor's Registration Act. You can watch the full episode online here. ....
• Changes in Deferred Compensation Law Requires Compliance By January 1, 2009
  Section 409A was added to the Internal Revenue Code pursuant to the American Jobs Creation Act of 2004 in response to Congressional concerns about excessive executive compensation and executives’ ability to manipulate their compensation arrangements with the companies they manage. Section 409A requires that every deferred compensation plan or arrangement comply with certain strict guidelines. Plans or arrangements that are subject to Section 409A are required to be fully compliant with the final regulations under 409A by January 1, 2009.   What is “Deferred Compensation” Under 409A? What is so striking about Section 409A, it its application to almost every type of plan or arrangement in which compensation is paid in a year subsequent to the year in which the services were performed by the service provider (i.e. the executive). Compensation is deferred when the service provider first has a legally binding right to the payment of compensation. Because the ....
• Stark & Stark Attorney Featured on Camden County Bar Foundation's Legally Speaking
  Michael J. Fekete, member of Stark & Stark's Business & Corporate group, will be a featured guest on the Camden County Bar Foundation's weekly television talk show Legally Speaking. Mr. Fekete will discuss the New Jersey Home Improvement Law,  the Consumer Fraud Act and the Contractor's Registration Act. The show will air Saturday November 9, 2008 at 12:30 PM and Wednesday November 12, 2008 at 5:00 PM, on Comcast channel 190 (WPSJ-TV). ....
• Buying an Existing Business -- What to Consider
  Cary S. Kvitka, member of Stark & Stark's Business & Corporate and Franchise groups, authored the article Buying an Existing Business — What to Consider for the September 2008 issue of Mercer Business Magazine.   Mr. Kvitka discusses the risks associated when opening a business - whether it is your first business or you are an established business owner looking to expand into a new market. Mr. Kvitka advises business owners to make sure that the transaction is properly structured, that you’ve exhaustively investigated the target business, and that the contract for sale is properly drafted.   You can read the full article here (PDF). ....
• What To Include In Your Limited Liability Company's Operating Agreement
  In a limited liability company (LLC), if no operating agreement (the agreement between the members of the LLC) is in place, the limited liability company statute of the state where the LLC was formed controls the relationship between the members of the Company. It is important that the members cover as much as possible in the Operating Agreement, rather than relying on the default provisions in the LLC statute. One example of what can happen if there is no Operating Agreement (or the Operating Agreement is silent on a particular issue) is what happens if a member of a limited liability company (LLC) wants to resign. If the Company is a New Jersey LLC, if the Operating Agreement (the agreement between the members of the LLC) is silent, a member can resign by providing six months' notice to the Company and the other members, and is then entitled, within a reasonable time, to get paid the fair value of the resigning member's interest. If the Company is a Delaware LLC, if the Operating ....
• Claim of Undue Influence Resolved by Court Before Death of Testator
  A will is obviously prepared when a individual is still alive.  A will contest usually comes about after the individual dies.  However, a California Appellate Court has recently decided that when a conservator secures Court approval of an estate plan while the individual is still alive, any challenge to the will must be made at that time and not after the individual dies. In the case of Murphy v. Murphy, in the Court of Appeal of the State of California, First Appellate District, Docket No. A115177, a dispute arose between siblings after their father had a stroke and could no longer operate his business.  The son was concerned that his sister was exercising undue influence over the father, and, with Court approval, hired a conservator to wind down the business and deal with the father's assets.  At that time the son learned that his father's will left all assets to his sister and none to him. The conservator sought Court approval, through a ....
• Proper Registration of Fabric Dresses Sufficient to Defeat Fraud on the Copyright Office Claims
  Deposits with the copyright office of pictures depicting dress designs, as opposed to specimens of the actual fabric designs, are usually sufficient to protect those designs.  See Blue Fish Clothing, Inc. v. Kat Prints, 1991 WL 71113 at *3 (E.D.Pa. 1991) (Designs displayed in clothing catalogs properly registered); see, also, Winfield Collection, Ltd. v. Gemmy Industries, Corp., 147 Fed.Appx. 547 (6th Cir. 2005) (citing King Features Syndicate v. Fleischer, 299 F. 533 (2d Cir.1924); Geisel v. Poynter Prods. Inc., 295 F.Supp. 331 (S.D.N.Y. 1968); Fleischer Studios, Inc. v. Ralph A. Freundlich, Inc., 5 F.Supp. 808 (S.D.N.Y. 1934)) (copyright protection for two-dimensional photographs or drawings encompasses three-dimensional depictions that are substantially similar). A party seeking to establish fraud on the copyright office in order to rebut the presumption of copyright validity of a registered dress design, bears the heavy burden of proving deliberate misrepresentation (This same ....
• Patterns, Lace and Fabric Designs Incorporated Into Dresses are Copyrightable
  It is well established that utilitarian or useful articles, such as dresses or the functional components of dresses, are not the proper subjects of copyright registration and protection.  However, decorative patterns, lace and fabric designs incorporated into dresses “are considered ‘writings' for purposes of copyright law and are accordingly protectible.”  See Eve of Milady v. Impression Bridal, Inc., 957 F.Supp. 484, 489 (S.D.N.Y. 1997) (citing Knitwaves, Inc. v. Lollytogs Ltd, 71 F.3d 996, 1002 (2d Cir. 1995); Folio Impressions, Inc. v. Byer California, 937 F.2d 759, 763 (2d Cir.1991)).  Moreover, The level of originality and creativity in fabric designs that must be shown is minimal, only an “unmistakable dash of originality need be demonstrated, high standards of uniqueness in creativity are dispensed with.” Folio Impressions, 937 F.2d at 765 (citing Weissmann v. Freeman, 868 F.2d 1313, 1321 (2d Cir. 1989); Feist Publications, Inc. v. ....
• Regulatory Hammer Strikes Again
  Gerald Faber, Shareholder of Stark & Stark's Employment, Business & Corporate and Real Estate, Zoning & Land Use Groups authored the article Regulatory Hammer Strikes Again for the June 9, 2008 edition of the New Jersey Lawyer. The article discusses a company's need to have a clear understanding of the Construction Industry Independent Contractor Act (CIICA), as well as the need for employers to follow the requirements outlined in the Act. Mr. Faber discusses the need for an employer to exercise control over the methods and quality of a worker's performance in order to maintain a positive and productive employment relationship. You can read the full article here. (PDF) ....
• Contractors Be Warned: Don't Get Nailed
  Michael J. Fekete, member of Stark & Stark's Business & Corporate group, authored the article Contractors Be Warned: Don't Get Nailed for the May 5, 2008 edition of the New Jersey Law Journal. Mr. Fekete's article discusses how contractors can avoid potential liabilities by complying with the New Jersey Home Improvement Contractors Act. While compliance with the regulations alone will not protect a contractor from claims regarding workmanship, adhering to the regulations will reduce the chances that litigation will occur. You can read the full article here. ....
• How To Start A Business
  Cary S. Kvitka, member of Stark & Stark's Franchise and Business & Corporate groups, will present a seminar in association with SCORE of Princeton, Counselors to America's Small Business. SCORE offers free and confidential small business advice to help you build your business from idea to start-up to success. The seminar will focus on what you need to know when starting a business. Mr. Kvitka will discuss: The pros and cons of the three options: buying an existing business; purchasing a franchise; or building your own business. Intellectual property issues, such as trademark or copyright concerns. How to negotiate commercial leases and other vendor contracts. You can access additional information, and registration information, here. ....
• Ensuring the Benefit of the Bargain - Due Diligence for Business Acquisitions
  Before purchasing a business, the proposed buyer of company should request and review extensive documents about the target company’s ownership, function, income, assets, obligations and liabilities.  That process, called “due diligence” affords the buyer the last real chance understand exactly what he or she is buying.  The importance of conducting due diligence in an organized and exhaustive way cannot be overstated.  Failure to do so could lead the buyer to unknowingly purchase a company that is not viable under new ownership, or a company that is facing serious legal or financial issues. Therefore, to ensure the benefit of the bargain, the shrewd buyer should take full advantage of due diligence. Having represented clients in both local business and multinational corporate acquisitions, I’ve realized that the due diligence process for each is surprisingly similar. That is because no matter the size of the target company, buyers have universal ....
• Collecting Prejudgement Interest on Debts
  I am often asked by clients whether prejudgment interest can be obtained from debtors on unpaid claims. Prejudgment interest is usually awarded by the courts in New Jersey only when a written contract exists between the creditor and the debtor which includes a provision for the assessment of interest if payment is not received by the creditor in a timely manner. The written contract can be a simple as a purchase order or an invoice. However, some counties will not award prejudgment interest unless the contract is actually signed by the debtor.   Prejudgment interest may run on contract claims not as a matter of right but rather in accordance with equitable principles. Absent, however, unusual circumstances the prejudgment rate should be the same as that provided for by the rule governing post-judgment interest. The current post-judgment rate of interest for 2008 is 5.5%. This rate is adjusted on a yearly basis. Equitable principles do not apply to the same extent where the parties ....
• Buy-Sell Agreements in Closely Held Businesses
  Virtually all small closely held businesses should have an up-to-date Buy-Sell Agreement. A Buy-Sell Agreement should accomplish a number of important objectives for closely held company, including: (1) providing mechanism for the orderly transfer of the business; (2) establishing a valuation mechanism which avoids disputes between owners as well as possible disputes with the Internal Revenue Service; (3) reducing possible disputes between owners, an owner’s heirs, and possible unwanted business partners to whom an ownership interest in the company may otherwise be transferred; and (4) providing financial security to a deceased or disabled owner’s family. It is important that company’s Buy-Sell Agreement be reviewed periodically to make certain that it is properly customized to the needs of the specific company and its owners, as well as to make certain the agreement meets the requirements of current tax laws. Two of the most important areas of periodic review are the ....
• Rights of Suppliers under Bankruptcy Law
  In light of yesterday's bankruptcy filing by Rockaway Bedding, suppliers to the retail chain need to be aware of how to proceed in protecting themselves for the goods they have shipped but not yet been paid for. Section 503(b) of the Bankruptcy Code allows administrative-expense status to all claims for "the value of any goods" received in the ordinary course of business by a debtor within 20 days before the bankruptcy filing. The supplier must request administrative-expense status. By doing this, the supplier is in a better position than unsecured creditors to be paid, since a Chapter 11 plan of reorganization cannot be confirmed unless administrative claims are paid in cash on the effective date of the plan. Unsecured creditors typically receive only a fraction of their claims. Suppliers of goods have another method to be paid ahead of unsecured creditors. They may seek reclamation of goods sold to a debtor in the ordinary course of business under Section 546(c) of the ....
• The Enforceability of an E-Mail as an Agreement to Share or Transfer a Copyright
  Businesses and individuals often engage in negotiations with regard to any number of issues through the forum of e-mail.  Such negotiations pose a variety of risks because of the fact that the negotiations are in writing and could be used for purposes that the sender did not intend.  For instance, the sender of an e-mail should exercise caution during preliminary discussions to transfer or share rights in a copyright.  Even though the Copyright Act requires that any such agreement must be signed, there is a high probability that the Third Circuit would find that an e-mail satisfied such a requirement.       The Copyright Act, at 17 U.S.C. 204(a), provides: A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent. 17 U.S.C. 204(a).  No cases ....
• Restrictive Covenant Agreements For Franchises
  The growth and development of a business is generally dependent upon the efforts and dedication of its key employees. Such key employees can greatly contribute to the success of a business. Conversely, upon the termination of their employment, these same employees have the potential to negatively impact the company. Depending on his or her relationships with clients, a former employee can convince your company’s clients to leave the company and be serviced by the former employee’s new employer or company. The former employee can also solicit or encourage other key employees to leave the company.  To minimize disruption to the company’s operations and client relationships, a company can be proactive and have the key employee sign an agreement agreeing to certain restrictive covenants:  Confidentiality Agreements. While an employee of your company, the employee will likely become familiar with confidential and proprietary information ....
• Wal-Mart Settlement Saves Company Money
  Thomas Lewis, Chair of the Employment Litigation group, was quoted in Wal-Mart Mea Culpa Saves Company Legal Costs down the Road in Workforce Management magazine. Lewis commented on the settlement between WalMart and the Department of Labor concerning improper overtime compensation for thousands of workers. You can read the article here. ....
• Comparing LLC's and "S" Corporations for Emerging New Jersey Businesses
  For individuals starting a business, the form their business takes is important and hinges on their desire to protect their investment (limited liability), enjoy flexibility in management and administration, and the ability to maximize profit by paying taxes on earnings directly, rather than at the entity level and again individually on distribution. Before 1994, New Jersey businesses wanting limited liability without double taxation used “S’ corporations. After 1994, business owners could chose primarily between “S” corporations and the limited liability company (“LLC”). Before 1994, “S” corporations were preferred because of limited liability and flow-through taxation. For an “S” corporation to pay taxes through the shareholders directly, certain requirements are necessary. “S” corporations may only issue one class of common stock, other business entities and non-U.S. persons cannot be shareholders, and ....
• Franchise Emphasizes Careful Growth
  Adam Siegelheim, a member of the Franchise group, was quoted in One Chain's Groundwork for Growth in the January 8 Philadelphia Inquirer, which discussed the expansion of the New Jersey-based Saladworks franchise. You can read the story here. ....