Recent Blog Posts

• Linens-N-Things Bankruptcy
  Three Critical Issues for SuppliersOn May 2, 2008, Linens-N-Things and its affiliated entities filed for Chapter 11 bankruptcy protection in the District of Delaware. Linens-N-Things has a number of different suppliers that are effected by this bankruptcy filing. Following are three (3) very important issues that suppliers should know about to ensure their rights in the bankruptcy proceeding. RECLAMATIONCertain suppliers have the right to reclaim goods that they have shipped a bankrupt debtor. A creditor may attempt reclamation of their goods sold in the ordinary course under Bankruptcy Code § 546 (c). However a supplier must move quickly on their right to reclaim any of these goods that are lost. The supplier must make a demand in writing for reclamation of the goods no later than 45 days after delivery. If the 45 day period has not expired as of the date of the filing of the bankruptcy petition, the supplier will be provided an additional 20 days to demand reclamation of the ....
• Five Things You Should Know About Bankruptcy
  Bankruptcy filings increased in February 2008 by 18% from January, and by 28% from a year earlier. In fact, February was the busiest month for filings since Congress overhauled bankruptcy law in October 2005 with the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA").  This increase in filings also increases the chance that you will be faced with bankruptcy issues. Some of the revisions contained in BAPCPA that you may encounter are set forth below. Pre-Petition Shipments Of Goods. BAPCPA created substantial additional rights for suppliers that sold goods to a debtor prior to the bankruptcy filing.  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 ....
• Stark & Stark Attorney to Present at 10th Annual William H. Gindin Bankruptcy Bench Bar Conference
  Timothy P. Duggan, Shareholder and Chair of Stark & Stark's Bankruptcy & Creditor's Rights Group will present at this year's 10th Annual William H. Gindin Bankruptcy Bench Bar Conference and will discuss the sale of assets in bankruptcy cases. The conference will take place Friday May 2, 2008 at the Bunswick Hilton, in New Brunswick, New Jersey. Additional information, registration forms and CLE credit information can be found here. ....
• Enforcing Liens on Real Estate Projects
  Jeffrey S. Posta, Shareholder and member of Stark & Stark's Bankruptcy & Creditor's Rights Group authored the article, Enforcing Liens on Real Estate Projects: Creditors must be diligent to protect their rights, for the January 14, 2008 edition of the New Jersey Law Journal. The article discusses the dramatic decrease in home sales over the past few years and the consequential downturn in homebuilding. The increased number of companies subsequently filing for bankruptcy, slashing prices, and selling assets only indicates that those still in the business need to be more aware of what the short, or possibly, long-term effects of a decrease in homebuilding can mean for their business. You can read the full article here. ....
• What to Do When You Receive A Bankruptcy Preference Demand Letter
  Many businesses are receiving “preference” demand letters directing the return of money received from bankrupt debtors. Among the more notable bankruptcy cases in New Jersey from where such preference demands may arise include: Best Manufacturing Group, New Jersey Affordable Homes, Rockaway Bedding, Marcal Paper Mills, Kara Homes, Elliot Building Group and Ash Holdings. Although this may seem an odd demand - return money for perfectly delivered goods or services -  the practice of recovering “preferences” in bankruptcy is allowed under the Bankruptcy Code.  However, before you go writing a check to return hard earned money, you should consult with a bankruptcy attorney to find out if the transaction qualifies for defenses, as well as your best possible negotiating position.    What is Preference?A potential preference is a payment received from a debtor, made within 90 days of the bankruptcy filing.  Bankruptcy Code section 547(b) ....
• Timothy Duggan Featured on The American Law Journal
  Timothy P. Duggan, Chair and Shareholder of Stark & Stark's Bankruptcy & Creditor's Rights Group, will be a guest on the November 12, 2007 episode of The American Law Journal. The show will air tonight at 8:00 PM on WFMZ-TV CHANNEL 69. The episode will feature Mr. Duggan, and weekly host Christopher Naughton, Esq., as they discuss bankruptcy filings and the recent increase in foreclosures. Mr. Duggan will focus on the important issues creditors will face due to the recent increase in foreclosures, how the increase can impact their company, and what this will mean for the future of their business. ....
• A new battle of Waterloo is under way
  Timothy P. Duggan, Shareholder and member of Stark & Starks Bankruptchy & Creditor's Rights group was quoted in the October 12, 2007 Star Ledger article, A new battle of Waterloo is under way. You can read the full article here. ....
• Recall forces NJ meat firm to close doors
  Timothy P. Duggan, Chair of Stark & Stark's Bankruptcy & Creditor's Rights Group, was quoted in the article, Recall forces NJ meat firm to close doors, in the October 6, 2007 issue of the Star Ledger. You can read the full article here.  ....
• Domino-Like Bankruptcies Offer Lessons
  Timothy P. Duggan, Shareholder and Chair of Stark & Stark's Bankruptcy and Creditor's Rights Group was quoted in the article Domino-Like Bankruptcies Offer Lessons, in the September 17, 2007edition of NJ Biz. You can read the full article here. ....
• Tenants Allowed to Maintain Almost "No Deductible" For Commercial Insurance Coverage
  When was the last time you reviewed the insurance provision of your tenant’s commercial lease?  Do you know if the lease prohibits a high deductible for the tenant? It is probably a good time to take a look at the lease in light of the New Jersey Appellate Division’s decision on August 20, 2007 in Boston Market Corporation f/k/a Golden Restaurant Operations, Inc.  v. Myrus Hack, docket No. A-0182-05T20182-05T2 27-2-8272 (unpublished). The Appellate Court held that a commercial tenant was not in default under a lease because it’s maintained insurance with an extremely high deductible. The Appellate Court characterized this issue as: “The simple question posed here is whether or not the insurance arrangements made by [plaintiff] comply with the lease provisions respecting the tenant’s insurance obligation.”  The lease did not expressly prohibit insurance with a high deductible. The Appellate Court focused on whether the insurance ....
• Landlord's Beware: Fair Debt Collection Practices Act Applies to Eviction Actions
  SEQ CHAPTER \h \r 1 Recently, the Appellate Division of the State of New Jersey in Hodges v. Feinstein, Raiss, Kelin & Booker, LLC declared that law firms that regularly file summary dispossess action (aka “evictions”) for non-payment of rent are subject to the Fair Debt Collection Practices Act (“FDCPA”). Additionally, the Appellate Division held residential evictions for failure to pay rent must now be made by verified complaint.  This decision is very important for landlords and their attorneys since failure to comply with the FDCPA’s collection procedures could subject the landlord and the law firm to attorneys fees, costs and damages. Hodges involved two sisters, Renita Hodges and Rochelle Hodges. The sisters resided in separate apartments in Newark’s Sotnas Garden Apartments operated by the Sasil Corporation. The rent was subsidized by the United States Department of Housing and Urban Development, ....
• Construction Liens- The Nub of the Matter
  For those who work on construction jobs, getting paid is certainly far better than the alternative. Creditors with a lien are in a much better position to be paid, particularly if a bankruptcy filing enters the equation. It is critical, therefore, for creditors to understand their rights under New Jersey law.The New Jersey Construction Lien Law (the “Lien Law”) replaced the old Mechanic's Lien Law in 1994. Neither of these laws is applicable to public projects. The new Lien Law (N.J.S.A. 2A:44A-1 et seq.) eliminated the filing of a Mechanic's Notice of Intent. Instead, it is necessary to file certain information within 90 days following the date of the last work, services, materials or equipment provided with the Clerk of the county in which the property is located.A lien claim may only be filed if there is a written contract between the lien claimant and its customer (whether it be the owner, contractor or subcontractor). A lien claimant will lose any rights that it may ....
• 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 ....
• Rockaway Bedding Bankruptcy - How Does the New Bankruptcy Law Impact The Company and Their Landlords?
  Earlier today Rockaway Bedding filed for bankruptcy protection in the United States Bankruptcy Court located in Newark, New Jersey.  Rockaway bedding has numerous retail locations throughout the tri-state area and is seeking to reorganize its affairs.  The company will undoubtedly see the affects of the recent changes to the bankruptcy code and although seemingly subtle at first glance, the amendments to the bankruptcy law have shifted the balance of power in favor of landlords. Under the prior law, a debtor was required to make a decision on whether to assume or reject a commercial lease within 60 days of filing for bankruptcy protection. The bankruptcy court retained discretion to extend the time period indefinitely, often times until the end of the bankruptcy case (which could take several years). Under the new law, the initial 60 day time period has been extended to 120 days. However, the court may only grant one extension for an additional 90 ....
• Bankrupt Real Estate Tycoon Owes Large Debt
  Timothy Duggan, Chair of the Bankruptcy & Creditor's Rights group, was quoted in Creditors Peg Dwek Debts at $400M in the February 18 Asbury Park Press. You can read the story here. ....
• Annuities Included in Bankruptcy Estate
  Timothy Duggan, Chair of the Bankruptcy & Creditor's Rights Group, authored You Can't Always "Trust" an Annuity for the January 15, 2007 edition of the New Jersey Law Journal.  The article discussed a recent case where annunities that did not qualify as trusts were included in a bankruptcy estate.You can read the article here. ....
• New Jersey Legal Update - Podcast # 49
  This week's New Jersey Legal Update podcast will discuss the new bankruptcy code and how it affects creditors and franchisors. This podcast will address the creditor's treatment under the debtor's plan, the creditor's rights for reclamation of goods, and the debtor's assignment or rejection of the franchise agreement. This week's New Jersey Legal Update is presented by Thomas Onder, a member of Stark & Stark’s Franchise and Creditor's Rights Groups. You can download the New Jersey Legal Update Podcast # 49 here. (7.8 MB) Technorati Tags: New Jersey : Podcast : Franchise : Creditor's Rights ....
• State of the Bankruptcy Court
  Timothy Duggan, Chair of the Bankruptcy & Creditor's Rights Group, authored State of the Bankruptcy Court, What Will 2006 Bring, and Tips for Avoiding Bankruptcy for the July 2006 issue of Mercer Business magazine.In the article, he discusses the effects of the changes to the U.S. Bankruptcy Code in 2005 and what businesses considering bankruptcy can expect in the future.  You can read the article here.Technorati Tags: New Jersey : Bankruptcy  ....
• New Jersey Legal Update - Podcast # 32
  This week's New Jersey Legal Update is presented by Timothy Duggan, Chair of the Firm's Bankruptcy & Creditor's Rights Group. This week's update discusses defending against preference actions in bankruptcy proceedings and offers insight as to things businesses who receive 547, 548 and 550 demands from trustees need to consider prior to refunding payments from bankrupt customers. You can download the New Jersey Legal Update Podcast # 32 here.(13MB) Technorati Tags: New Jersey : Podcast : Bankruptcy : Creditor : Preference Claim : Preference Demand : Unsecured Trade Creditor : Trustee : Insolvency ....
• Another Blow to Asbestos Bankruptcies
  Timothy P. Duggan, Shareholder and Chair of Stark & Stark's Bankruptcy & Creditor's Rights group, authored the article Another Blow to Asbestos Bankruptcies: Third Circuit finds asbestos plan violates the Absolute Priority Rule for the March 6, 2006 edition of the New Jersey Law Journal. You can read the full article here. ....