Recent Blog Posts

• State of Incorporation May Be Extremely Important to the Internal Affairs of A Corporation Prospective corporations are free to incorporate in any state, regardless of where the corporation plans to physically operate or transact business.  It is of no consequence that the corporate organizers or shareholders reside in the state where the corporation chooses to incorporate. Moreover, it is of no consequence that the corporation actually operate or conduct business in the state of incorporation.  Despite the same, the state of incorporation may be extremely important to the internal affairs of the corporation. The exclusive right of regulation is known as the “Internal Affairs Doctrine.” That is because, corporate law is state law.   Until recently, American Courts have uniformly expressed their reluctance to entertain controversies arising from the “internal affairs” of corporations incorporated in other states. Previously, it was generally accepted doctrine that State Courts will not interfere in the management of the internal affairs ....
• Settlement in Slimquick/Liquid Hoodia Class Action Stark & Stark is representing a group of plaintiffs in a class action arising from the sale of several weight loss products in the United States including, Liquid Hoodia, Slimquick and NV products. If you, or someone you know, has purchased these products in the United States for personal use and not for resale between January 1, 2003 and August 5, 2011, you could receive a cash payment from a class action settlement.   A hearing is scheduled for November 2011 – at that time, if the Court approves the proposed settlement, anyone who purchased the products could be entitled to a cash refund. In order to obtain your refund, you must submit a claim form by October 24, 2011. For more information and to submit a claim form, visit: www.WellNXUSASettlement.com. If you know of someone who has taken these products, we encourage you to share this information with them as well. If you would like to discuss this matter in more detail, please feel free to contact us at 609.895.7324. ....
• SEC Issues New Performance Fee Rule Effective September 19, 2011, the Securities and Exchange Commission amended Rule 205-3 of the Investment Advisers Act of 1940 (“Advisers Act”) which generally prohibits an investment adviser from entering into, extending, renewing or performing any investment advisory services for compensation based on a share of capital gains or capital appreciation of, the funds of a client (“performance fees”). Rule 205-3 of the Advisers Act exempts an investment adviser from the prohibition against charging performance fees in certain circumstances, including when the client is a “qualified client”.    The amended Rule 205-3 allows an investment advisor to charge performance fees if the client has at least $1 million (raised from $750,000) in assets under the management with the investment advisor immediately after engagement for advisory services or if the investment advisor believes, immediately prior to being engaged, that the client has a net worth ....
• SEC Defines "Family Office" Recently the SEC approved a new rule to define the term “family Office.” Pursuant to the SEC’s new definition, a “Family Office” is a firm: 1) whose only clients are family clients; 2) and is wholly owned by family clients and controlled by family members and/or family entities; and 3) does not hold itself out to the public as an investment adviser.   Under the rule, family members include all lineal descendants of a common ancestor (who may be living or deceased) as well as current and former spouses or spouse equivalents of those descendants, provided that the common ancestor is not more than ten (10) generations removed from the youngest generation of family members. Furthermore, the rule accepts all children by adoption and current and former stepchildren as family members.     Included in the definition of family clients are family members (as defined above) and all of the following individuals and/or entities: 1) key employees of the ....
• Trademark Infringement in Keyword Advertising Craig S. Hilliard, Shareholder in Stark & Stark Intellectual Property Group, co-authored the article, Trademark Infringement in Keyword Advertising, for the September 26, 2011 edition of The New Jersey Law Journal. The article discusses the challenges electronic media poses for the interpretation of the Lanham Act.  It presents situations where marks are used in non-traditional ways.  In particular, the use of keyword advertising, where words are linked to advertisements in a web page, may stretch the limits of the Lanham Act.  Recently, a Second Circuit decision in Rescuecom Corp. v. Google, Inc., redefined a “use in commerce”, one of the basic criteria required to prove trademark infringement.  This article will address the changes in the Second Circuit’s position on keyword advertising, and how its position compares to other Circuits.   ....
• Stark & Stark Attorney Featured on WHYY's Newsworks Tonight Program Noah A. Schwartz, member of Stark & Stark’s Business & Corporate Group in the firm’s Marlton, New Jersey office, will be featured on this evenings edition of WHYY’s Newsworks Tonight. The program will air from 6:00 – 6:30 PM on station 90.9 FM. Mr. Schwartz joins host Maiken Scott as they discuss a common issue facing many families after the death of a loved one: do we have to pay bill collectors looking for money after our family member has passed away? Mr. Schwartz discusses special considerations offered after the loss of a spouse, child and parent. **Updated September 28, 2011 - 8:40 AM** In case you missed last night's edition of Newsworks Tonight with Mr. Schwartz, you can listen to the full program online here. ....
• Stark & Stark Shareholder Comments on Possible Ashton Kutcher Federal Investigation Paul A. Lieberman, Shareholder in Stark & Stark's Securities Group, was quoted in the August 20, 2011 New York Post article, Ashton's Hard Sell With Feds. Recently, Ashton Kutcher’s comments regarding several internet based social media companies has come under scrutiny after Kutcher authored an article for Details magazine in which he praises Tinychat, Fourquare, Arbnb and several other companies, while failing to disclose the fact that he is an investor in the companies. Now the Federal Trade Commission and the Securities Exchange Commission are questioning if this move warrants a federal investigation. In the article, Mr. Lieberman states, “He's getting close to the line, if not crossing it, in terms of SEC regulations on insider trading." ....
• Strategies to Develop a Social Media Policy for Your Business Adam J. Siegelheim, Shareholder in Stark & Stark’s Franchise Group, authored the article, Strategies to Develop a Social Media Policy for Your Business, for the July 2011 edition of Mercer Business Magazine. In the article, Mr. Siegelheim the importance of businesses implementing a social media plan in order to avoid negative publicity through social media outlets. Mr. Siegelheim states that companies who do not proactively manage their brand through social media channels risk their online reputation being placed in the hands of disgruntled customers and employees. You can read the full article online here.   ....
• Under the Consumer Fraud Act, a Spiritual Loss Is Not an Ascertainable Loss A recent published case with a unique set of circumstances serves as a reminder that for a plaintiff to prevail and secure treble damages under the Consumer Fraud Act (CFA), not only must the plaintiff show that the defendant committed unlawful conduct, that plaintiff must also be able to demonstrate that he suffered an ascertainable loss.    The plaintiffs in Gupta v. Asha Enterprises, LLC, __ N.J. Super.__ (App.Div. 2011) had unquestionably been quite specific when they ordered vegetable samosas from the defendant Indian restaurant for take-out; they were being purchased for a group of individuals who were strict vegetarians. When the time came for the plaintiffs to pick up their order, they were handed a tray indicating the samosas were, in fact, vegetarian, and were reassured of the “vegetarian nature of the food.”   Notwithstanding their abundance of care, plaintiffs were served and began to consume meat-filled samosas. The Indian restaurant was ....
• Homeowners Who Act as General Contractors Are Still Protected Under the Consumer Fraud Act Home improvement contractors hoping to avoid liability under the Consumer Fraud Act (CFA) have one fewer argument in their arsenal; the Appellate Division has held that homeowners who act as general contractors of their own home improvement projects may still resort to the protections of the CFA. In Murnane v. Finch Landscaping, LLC, ___ N.J. Super. ___ (App. Div. 2011), the Appellate Division considered the viability of a CFA claim brought by a homeowner who had contracted with several contractors to design and construct a patio at his home. During construction of the patio, several changes were made to the written contract with one of the contractors, though none of these changes were put into writing. When the job was complete, that contractor invoiced the homeowner for additional amounts not reflected in the original contract. The homeowner refused payment and brought an action in the Special Civil Part alleging breach of contract and violations of the CFA.   Later realizing ....
• Succession Planning: A Business Necessity Allen M. Silk, Chair of Stark & Stark’s Business & Corporate Group, authored the article, Succession Planning: A Business Necessity, for the June 2011 issue of Mercer Business Magazine. In the article, Mr. Silk discusses why every business owner should have a succession plan in place, the need for buy-sell agreements, the different methods used when valuing a business, and tips for creating a successful business succession plan. You can read the full article online here. (PDF)   ....
• New Jersey Supreme Court Holds That Individuals May Be Held Personally Liable for Regulatory Violations of the Consumer Fraud Act On July 7, 2011, the New Jersey Supreme Court expanded the reach of the Consumer Fraud Act (CFA), arguably already the most extensive of consumer protection laws in the United States, and held that under certain circumstances, owners and employees of a corporation may be individually liable for regulatory violations of CFA undertaken by them through the corporate entity.   In Allen v. V and A Bros., Inc., ___ N.J. ___ (2011), the New Jersey Supreme Court had before it William and Vivian Allen, homeowners who had contracted with V and A Brothers, Inc. to landscape their property and to construct a retaining wall in preparation for the installation of a pool. At no time was the parties’ agreement reduced to writing. When construction of the pool did not proceed as initially contemplated, V and A Brothers modified their plan and moved the location of the retaining wall and increased its height. V and A Brothers did not obtain the Allens’ consent for the change in design, ....
• Stark & Stark Attorney Facilitates Deal With Local Business Owner to Expand into China Adam J. Siegelhem, member of Stark & Stark’s Franchise Group, was mentioned in the June 1, 2011 US 1 Newspaper article, Thomas Sweet Scoops Up The Chinese Market. The article discusses there recent licensing deal for the Princeton ice cream maker, Thomas Sweet, to expand into China.   Mr. Siegelheim has worked with Marco Cucchi, Owner of Thomas Sweet in Princeton, New Jersey, in discussions of expanding his business into more New Jersey towns, the tri-state area, and other parts of the U.S.  Mr. Siegelheim assisted in finalizing the deal, which took place April 14, 2011 in the Stark & Stark Lawrenceville, New Jersey office.   You can read the full story detailing the expansion into China online here. ....
• Conflicting Loyalties: When corporate counsel should not represent a shareholder Scott I. Unger, Shareholder in Stark & Stark’s Shareholder & Partner Dispute Group, authored the article, Conflicting Loyalties: When corporate counsel should not represent a shareholder, for the May 23, 2011 New Jersey Law Journal Complex Litigation & E-Discovery Supplement. The article discusses the ethical mine field of general outside counsel representing one shareholder over another in a minority oppression case. Mr. Unger states that, often times, the general counsel will be retained by one shareholder to represent them in the minority oppression case, and sometimes, that choice could result in serious ethical problems. According to Mr. Unger, “General outside counsel should consider referring litigation between the shareholders to another attorney because of the potential for ethical issues. The article will touch on various Rules of Professional Conduct which needs to be considered before general outside counsel takes sides in a minority oppression ....
• Is a Commercial Landlord Who Secured a Personal Guaranty to Ensure Performance Under a Lease Protected in a Holdover Situation? The Appellate Division has recently upheld summary judgment in favor of a guarantor who had executed a personal guaranty for rent due under a lease, finding that the specific language of the guaranty, read in conjunction with the language of the lease, rendered the guaranty inapplicable in a holdover situation. In Montpen SC, L.L.C. v Mathews Art, Inc., d/b/a/ Art Wholesalers, Ltd., A-5036-09T3 (March 30, 2011), the Appellate Division had before it a situation where a tenant’s business had been purchased by a third party and its lease assigned to the purchaser. Fearing that the purchaser, a shell company, would be judgment proof in the event of default, the landlord required that the principal of the purchaser execute a personal guaranty to secure the landlord’s consent to the assignment of lease and agreement of an extension of the lease. Notwithstanding the landlord’s exercise of caution, the landlord was not careful enough. The lease specifically addressed a ....
• Appellate Division Reaffirms Absence of Strict Compliance Requirements for Notices to Quit on Commercial Landlords In a recent decision, 350 Main Street, LLC v. Ren Guan Li d/b/a Sun Hing Restaurant, A-3265-09T4 (March 21, 2011), the Superior Court of New Jersey, Appellate Division, examined whether the strict compliance requirements regarding notice under New Jersey’s Anti-Eviction Act (N.J.S.A. 2A:18-61.1a) were applicable to the statute governing non-residential evictions (N.J.S.A. 2A:18-53). In answering this question in the negative, the Appellate Division examined various case precedents as well as the express language of both statutes.    In reaching its conclusion the Appellate Division noted that the Anti-Eviction Act expressly states that notice must be given to the residential tenant, “prior to the institution of the action [for possession].” Conversely, the statute governing non-residential evictions contains no such express language requiring notice before the commencement of suit. Thus, the Appellate Division held, “We find nothing in the plain ....
• Protect your Identity: Exercise your Right of Publicity Have you ever wondered what you’re worth?  No, not your “net worth” (i.e. the cumulative value of your assets less any debts or liabilities), but the commercial value of your name, identity, image or likeness.  Yes, you have a right of publicity: the right to control the use of your name, picture, voice, image or likeness, and to prevent another from using the same for commercial benefit without your consent.                                        New Jersey, like most states, recognizes this right of publicity.  The right of publicity “signifies the right of an individual, especially a public figure or celebrity, to control the commercial value and exploitation of his name and picture or likeness and to prevent others from unfairly appropriating this value for commercial benefit.”  Hart ....
• Postings on Social Networking Sites are Discoverable You are more than likely one of the 500 million active users on Facebook who willingly choose to share your comments, pictures, and status updates with friends and family.  It is easy to lose sight of the gross reality that our “second self,” or our presence on the Internet, is anything but private.   The belief that one retains a privacy interest in their social networking accounts is being dispelled by a recent decision in the Pennsylvania Court of Common Pleas of Jefferson County.    In McMillen v. Hummingbird Speedway, Inc., a personal injury action, the defendant questioned in a set of interrogatories whether the plaintiff belonged to any social networking sites and to provide plaintiff’s usernames, login names, and passwords. McMillen v. Hummingbird Speedway, Inc., No. 113-2010 CD (C.P. Jefferson, Sept. 9, 2010).  Upon reviewing the public portion of plaintiff’s Facebook account, the defendant discovered comments relating to ....
• Proposed Bill Seeks to Limit Consumer Fraud Claims to Consumers Only, Not Businesses Despite years of judicial expansion, the New Jersey Consumer Fraud Act (CFA) may soon see its remedial and expansive reach significantly curtailed. This curtailment comes in the form of proposed Bill A-3333, which was introduced in the New Jersey Assembly early in the last quarter of 2010. The primary changes proposed to the CFA are: (1) discretionary, as opposed to mandatory treble damages for violations of the CFA; (2) a reduction or cap on the amount of Attorneys’ fees that can be awarded; and (3) explicit non-applicability of the CFA to businesses.  While the Bill seeks to cap the amount of attorney’s fees and bestow upon courts of this State more discretion in awarding treble damages, the Bill does not alter or amend the provisions of the CFA mandating a refund and awarding attorneys’ fees where an unlawful practice is shown to have occurred. See, Cox v. Sears Roebuck & Co., 138 N.J. 2, 24 (1994) (award of attorneys fees required where “plaintiff ....
• Stark & Stark Shareholder to Present "Nuts & Bolts of Small Businesses" NJICLE Seminar Jeffrey Weiner, Shareholder and member of Stark & Stark’s Business & Corporate Group, will present a seminar in conjunction with the New Jersey Institute for Continuing Legal Education (NJICLE) entitled, Nuts & Bolts of Small Business. The seminar will take place Saturday February 5, 2011 from 9:00 AM -12:00 PM at the Westin Mount Laurel Hotel in Mount Laurel, New Jersey. The seminar will discuss what attorneys need to know when counseling clients on setting up small businesses. The seminar will cover topics such as what entity your client's should choose (sole proprietorship, LLC, corporation, etc.), a discussion on formation issues (treatment of service providers, transfers of equity, conversions, etc.), and  an overview of operating, shareholder and partnership agreements. For additional information or to register for the seminar, please visit the NJICLE’s website. ....
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