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New Jersey Appellate Division Upholds Decision in Favor of BMK Client; Court Affirms “Pay-When-Able” Loan Agreements as Enforceable

Friends and family members routinely loan each other money — at times considerable sums of money — for working capital or for other needs on the basis that the trusted borrower will repay the loan as soon as he or she is able to do so. A recent New Jersey Appellate Division decision has affirmed that these informal loans are enforceable in New Jersey.

Brown Moskowitz & Kallen’s Kenneth L. Moskowitz and Michele-Lee Shapiro recently represented a lender who made a pay-when-able loan in a very substantial amount to a close friend who was in desperate need of funds to keep his diverse business interests afloat. In August 2023, on plaintiff-lender’s action to enforce repayment of the loan, a Bergen County Superior Court entered Final Judgment in favor of the plaintiff. The trial court held that pay-when-able loans are legally enforceable in New Jersey and that the plaintiff’s cause of action accrued when the defendant admitted to plaintiff his ability to repay the loan. The trial court’s 63-page opinion was replete with findings that the defendant’s testimony was not credible, and the court rejected all of defendants’ arguments seeking to avoid repayment of the loan.

On November 19, 2024, the New Jersey Appellate Division affirmed the Superior Court’s decision in a unanimous opinion, holding that pay-when-able loans are “valid and enforceable in New Jersey.” The appellate court affirmed the trial court’s enforcement of plaintiff’s pay-when-able loan.

Should you have any questions concerning pay-when-able loans or other business disputes, we would be happy to speak with you at any time.


Kenneth L. Moskowitz is the Chair of the Litigation Department at BMK, and Michele-Lee Shapiro is Senior Counsel in the firm’s litigation group. Ken and Michele-Lee represent clients in a broad range of business disputes in state and federal courts, as well as in arbitration.

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Nov 22, 2024
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Benjamin L. Roth Joins Brown Moskowitz & Kallen as Associate Attorney

Benjamin L. Roth has joined Brown Moskowitz & Kallen, P.C. as an associate attorney. At BMK, Mr. Roth is engaged in a diverse practice offering counsel related to business formation, organization and capitalization, as well as with respect to certain litigation matters for clients of varying sizes across many industries.

In the BMK corporate business practice group, he is involved in client matters that encompass every stage of the business life cycle. This includes structuring partnerships and joint ventures, assisting in the resolution of shareholder issues, and the preparation of documentation related to mergers and acquisitions. He is also active in BMK’s litigation and dispute resolution practice, working on an array of matters.

Before joining BMK, Benjamin Roth held Associate Attorney posts with two other New Jersey law firms, earning experience in insurance fraud, intellectual property infringement, and commercial litigation. He earned a Bachelor of Arts cum laude from Binghamton University, with concentrations in English and Philosophy, Politics, & Law before graduating from Fordham University School of Law. He is admitted to practice in the State of New Jersey.

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Nov 20, 2024
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BMK Represents Music Education Industry Company in Strategic Sale to P.E.-Backed Acquirer

Brown Moskowitz & Kallen, P.C. recently served as lead counsel to a prominent provider of musical instruments to primary and secondary school students (the “Company”) in an all-cash sale to a private equity-backed strategic acquirer.  The incumbent management will be providing transition services to the acquirer.

The transaction, which equips the Company with expanded operating capital to further grow both its regional and national market penetration and cross-pollinate its sales opportunities with the acquirer’s customer base, was completed on an accelerated schedule to capitalize on certain strategic dates. The transaction began in earnest in early July 2024 and closed on August 13, 2024.

The BMK team was comprised of Stuart Brown and Norman Kallen, Partners and Co-Chairs of the BMK Commercial Transactions practice group, as well as Karen Hirschfield and Linda Brower.

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Oct 01, 2024
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BMK Represents Strong Man Safety Products in Strategic Sale to Affiliate of PearlWeave Netting Corporation

BMK Represents Strong Man Safety Products in Strategic Sale to Affiliate of PearlWeave Netting Corporation

Brown Moskowitz & Kallen, P.C. recently represented New Jersey-based Strong Man Safety Products, a provider of debris netting, weather enclosures, fall protection and containment products, in a strategic sale to Strongman, LLC, a newly formed affiliate of New York-based PearlWeave Safety Netting.

“Strong Man Safety Products is a family-owned business that seized the opportunity to sell the company to another respected entity in the safety netting industry,” said Stuart Brown, Partner and Co-Chair of Commercial Transactions at BMK.

Elaine Kinder, Owner and CEO of Strongman commented, “The attorneys at BMK were both knowledgeable and sensitive to my concerns. They provided the expert advice necessary to complete the transaction.”

In addition to Stuart Brown, the BMK team included Keith Marlowe, Partner, real estate; Karen Hirshfield, corporate counsel; and Wanda Chin Monahan, environmental counsel.

BMK represents sellers across diverse industries in middle market M&A transactions. The BMK Commercial Transactions group frequently serves as lead counsel in M&A deals, assembling all legal subject matter experts to execute transactions that optimize seller interests and align with market growth, succession, and legacy aspirations.

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May 29, 2024
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Four Key Points to a Successful Business Sale

By Stuart M. Brown, Partner and Co-Chair, Commercial Transactions

So you’re thinking about selling your business. You decided that it is “time.” You are emotionally ready. You are financially ready. Great!

Working with sellers like you, here are four (yes, just four) points to consider before you go any further:

  • Create a deal team… you will need an experienced accountant, attorney, intermediary and financial planner. Experience is key, but do NOT settle for experience. Make sure that you have a good gut feeling for the person/firm. A good gut feeling includes being able to communicate easily and feel like you are on the same page as your advisors.
  • You will sell on your company’s past performance; however, the purchaser will buy based on what it views as future opportunities. So be realistic in your goal for a sale price. Be as introspective as possible (aka, don’t believe your own sales pitch because buyers will poke holes).
  • No one can guarantee you anything in addition to what you receive at the closing table. There are multiple ways to characterize sale price:
    • Cash at closing (which is most preferrable)
    • Deferred payments (you, as the seller, take back “paper,” a promissory note which is a contract from the buyer to pay you at a later date)
    • Contingent payments (these payments are predicated on an event occurring such as gross revenue or EBITDA targets post-closing, a concept referred to as an “earnout”)
    • Rollover equity (this means that you, as the seller “partner” with the buyer because you either retain a certain amount of your company’s equity or you get equity in the buyer in lieu of cash).

Be careful when it comes to structuring the payment of the sale price. The question that I often ask clients is would you rather sell your business to me if I offer you $50 million or to Sally if she offers you $7 million? The answer is obvious, right? Clearly, my offer is better. Oh, did I fail to mention that Sally is paying you $7 million at closing but I’m paying you $1 million at closing and $1 million a year for the next 49 years? Still think my offer is better?

  • If your transaction was a Broadway show, you should be in the starring role as the “reluctant seller.” Do NOT be anxious, meaning you should not purchase that red Ferrari until the deal closes. You have maximum leverage early in the negotiation process. Use your leverage, but don’t be a pig… remember, ultimately, pigs get slaughtered.

Each one of these points is worthy of a much longer discussion. Hopefully, you will choose a deal team that can properly advise you and manage your expectations. By the way, deals take time — don’t expect to close in 60 days. It rarely happens. So, enjoy the journey because the destination is within reach of the patient and thoughtful seller. Good luck!

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Jan 10, 2024
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Brown Moskowitz & Kallen Represents A&R Bulk-Pak in Sale to NOVA Infrastructure

FOR IMMEDIATE RELEASE

Brown Moskowitz & Kallen Represents A&R Bulk-Pak in Sale to NOVA Infrastructure

South Carolina-Based Packaging and Logistics Company for Petrochemical Industry Elevates Service to Global Chemical Industry through Acquisition by NOVA  

Chatham, New Jersey December 2023 — Brown Moskowitz & Kallen, P.C. (BMK) recently represented Moncks Corner, South Carolina-based A&R Bulk-Pak (A&R), a leading provider of contract packaging, transloading, warehousing and other vital supply chain services to the petrochemicals industry in its acquisition by NOVA Infrastructure, a middle market infrastructure investment firm that invests in the environmental services, transportation, energy/energy transition and communications sectors in North America.

Over the past decade, the Port of Charleston has evolved into one of the most active export hubs for the North American chemicals industry, with A&R among the leading suppliers of essential supply chain solutions. A&R operates a 240,000-square-foot warehouse at the port with two high-speed automatic packaging lines, rail access to the CSX main line and onsite storage for more than 120 railcars. The facility engages in transloading and packaging of polyethylene pellets for leading chemical producers and trading houses. The sale to NOVA enables A&R to accelerate its growth in serving global chemical providers.

As part of the acquisition by NOVA, A&R has entered into a strategic partnership agreement with Harbor Logistics, a portfolio company within NOVA. Harbor provides transportation, logistics and warehousing services in Charleston. Harbor, A&R and NOVA are now long-term partners operating in concert to deliver comprehensive supply chain solutions throughout North America.

“The acquisition by NOVA and aligned agreement with Harbor Logistics offers significant strategic expansion opportunities to A&R,” said Norman D. Kallen, Partner and Co-Chair of the Brown Moskowitz & Kallen Commercial Transactions Group, who served as lead M&A counsel for A&R. “This transaction involved structuring several creative solutions that enable NOVA to leverage A&R’s dominant position at the Port of Charleston while providing a pathway for A&R to penetrate the global chemical industry marketplace and offer elevated supply chain solutions with NOVA-owned Harbor Logistics.”

Mr. Kallen was joined in the transaction by Justin Escher-Alpert, Senior Counsel of Brown Moskowitz & Kallen. A&R was advised by Michael Givner of IMG Business Advisors. Additional legal counsel was provided to A&R by Joshua Laff of The Law Office of Joshua F. Laff.

NOVA Infrastructure & Harbor Logistics were advised by Scudder Law Firm, P.C., L.L.O. and Jones Day.

 

About Brown Moskowitz and Kallen, P.C. 

Brown Moskowitz & Kallen, P.C. is a New Jersey-based law firm serving privately held businesses locally, nationally, and internationally. BMK provides comprehensive counsel at every stage of the business life cycle with practice areas in commercial transactions, finance, litigation/dispute resolution, real estate, land use, technology, tax, trusts and estates. For more information, visit https://bmk-law.com/

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Dec 21, 2023
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BMK’s Stuart Brown Featured in EisnerAmper Middle Market M&A Series

BMK’s Stuart Brown, Partner and Co-Chair of the Commercial Transactions practice, is once again featured in Eisner Amper’s Solutions In Sight Middle Market M&A Video Series. This time, EisnerAmper tax partner Jordan Amin, Scott Daspin, Director of Investment Banking at Triad Securities, and Stuart discussed the emotional aspects of selling a business. The trio addresses the emotions sellers commonly experience amidst a business sale and the ripple effect the process has on personal and professional relationships. Topics covered in the video include:

  • Determining when one is emotionally ready to sell a business
  • Why an M&A transaction is a team sport and why the seller relies on the team to navigate both the numbers and the emotional touchstones inherent in every transaction
  • Protecting one’s mindset throughout the process
  • Managing family expectations during and after a sale
  • Feeling confident in the buyer to steward the business post-sale
  • Preparing for life after the closing and avoiding “seller’s remorse”

Bottom line: M&A transactions are not just about the numbers. Emotions inform whether a sale is deemed successful just as much as the financial outcome. To view Stuart’s discussion with Jordan and Scott, please visit https://www.eisneramper.com/insights/solutions-insight/solution-sessions-videos/middle-market-merger-acquisition-video-1223/

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Dec 21, 2023
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The Corporate Transparency Act and New Disclosure Requirements

CLIENT ALERT

By The Corporate Group at Brown Moskowitz & Kallen, P.C.

The Corporate Transparency Act and New Disclosure Requirements

A new federal law, taking effect January 1, 2024, imposes new disclosure requirements on privately held companies. The Corporate Transparency Act (the “Act”) takes aim primarily at smaller companies in industries that are not highly regulated. The Act — part of the U.S. Anti-Money Laundering Act of 2020 — is intended to penetrate multiple layers of entities to identify, and thus deter, illegal activities, including terrorist financing, money laundering, and tax fraud.

Who Reports

Businesses that meet the definition of a “reporting company” are required to report certain information about the entity and its beneficial owners via the U.S Treasury Department’s Financial Crimes Enforcement Network (FinCen) secure website. The data will be available to U.S. law enforcement and other government agencies, including the IRS, and select financial services companies, but not the public.

Definition of “Reporting Company”

There are two types of reporting companies under the Act: A domestic entity formed or registered by filing a document with the office of the secretary of state, or any applicable office, under the law of a state or Indian tribe and a foreign entity formed under the law of a foreign country and registered to do business in any U.S. state or U.S. tribal jurisdiction. Unless an exemption applies, discussed below, EVERY business formed in the U.S. or doing business in the U.S. is subject to reporting under the Act – including corporations, limited liability companies, and most limited partnerships. Most trusts are likely excluded since they are not created by filing with a state authority.

Exemptions from Reporting

There are 23 exempt categories of business entities. A full list can be found in the reference guide posted by FinCEN on its website: Beneficial Ownership Information Reporting | FinCEN.gov. The more common exemptions cover public companies, “large operating companies,” public accounting firms, regulated insurance companies, registered investment companies and advisers, registered venture capital fund advisers, banks, securities brokers and dealers, exchanges, regulated public utilities, tax-exempt non-profits and trusts, subsidiaries of exempt entities, and “inactive entities.” The exemption for “large operating companies” requires constant monitoring of employee levels and revenues. The law defines this entity as one that (i) employs more than 20 employees full-time in the U.S. (no aggregation), (ii) has filed U.S. income tax returns for the prior year reflecting more than $5 million in aggregate gross receipts or sales from U.S. sources, and (iii) operates a physical office in the U.S.

Data to Report

Reporting companies must report data about the entity, beneficial owner information (“BOI”), and, for entities formed on or after January 1, 2024, company applicant information. Information to be reported about a reporting company includes the entity’s legal name, trade names, DBAs, address, federal Tax ID number and the jurisdiction of formation or registration. The law describes a “beneficial owner” as an individual who, directly or indirectly, exercises substantial control over a reporting company or owns (directly or indirectly) or controls at least 25% of the ownership interest therein. The information to be reported includes legal name, birthdate, residential street address, and the identifying number from and a copy of ID such as a non-expired driver’s license or passport. A “company applicant” is the person who “directly files” the document that creates the reporting company (e.g., the certificate of formation) or who is primarily responsible for directing such filing. The same personal information that is reported for beneficial owners is to be reported for up to two company applicants. Reporting companies must collect, store, and report personally identifiable information (“PII”) securely or risk penalties under the Act.

Filing Deadlines

The Chart below lists the filing deadline for initial reporting by reporting companies. Reporting companies must report any changes in BOI to FinCEN within 30 days after a change occurs.

Date Formed or Registered in U.S.

  • Formed or registered before January 1, 2024
  • Formed or registered on or after January 1, 2024, but prior to January 1, 2025
  • Formed or registered on or after January 1, 2025

Filing Deadline

  • January 1, 2025
  • Within 90 calendar days of receiving actual or public notice of the effective date of creation or registration
  • Within 30 calendar days of receiving actual or public notice of the effective date of creation or registration

Civil and Criminal Penalties for Noncompliance

The penalties for providing false or fraudulent information or failing to submit a complete initial or updated report are fines of $500 per day up to a maximum of $10,000, imprisonment for up to two years, or both. Penalties for the unauthorized disclosure or use of BOI are fines of $500 per day up to a maximum of $250,000 and imprisonment for up to five years for the knowing unauthorized disclosure or use of BOI. The prompt correction of inaccurate information (within 90 days of becoming aware) may avoid penalties.

BMK is Ready to Help Your Business Navigate the CTA

Contact us today at (973) 376-0909 if you would like help analyzing whether your business is a reporting company under the CTA. We can answer your questions about the CTA and advise the next steps your business should take regarding (i) updating of contracts, company documents and deal agreements, (ii) creating or updating company internal policies/procedures, and (iii) implementing internal systems for collecting and reporting data securely. Accurate data collection and reporting with a process for ensuring the security of PII are key to staying compliant with the Act.


Disclaimer: Any legal advice regarding the application of the Act and reporting obligations requires a new Firm engagement. BMK’s existing client engagements do not contemplate legal advice or analysis regarding compliance with or reporting obligations under the Act. 

©Copyright 2023, Brown Moskowitz & Kallen, P.C. All rights reserved. This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

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Dec 11, 2023
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Kenneth L. Moskowitz Recognized as a 2024 SuperLawyer®

Brown Moskowitz & Kallen Co-Founder, Partner and Chair of the Litigation and Dispute Resolution practice, Kenneth L. Moskowitz, has been recognized as a 2024 SuperLawyer® by Thomson Reuters. The SuperLawyers® designation is a highly coveted peer recognition of professional achievement by the legal community.

An attorney can only obtain a SuperLawyers® designation via nomination by their peers in a research-driven, multi-phase patented process. The annually published list comprises a comprehensive directory of the top five percent of attorneys in New Jersey.

You can read Ken’s SuperLawyers® profile here: https://profiles.superlawyers.com/new-jersey/chatham/lawyer/kenneth-l-moskowitz/4323a70a-1608-4f13-b417-365e5118c975.html

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Nov 30, 2023
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Brown Moskowitz & Kallen, P.C. Represents Finelli Consulting Engineers, Inc. in Sale to Universal Technical Resource Services, Inc.

Brown Moskowitz & Kallen, P.C. recently represented Finelli Consulting Engineers, Inc. (Finelli) of Washington Township, Warren County, New Jersey in connection with its sale to Universal Technical Resource Services, Inc. (UTRS), an international provider of leading-edge scientific, engineering and information technology and communications  The Finelli acquisition will enable UTRS to expand its civil engineering offerings throughout Northern New Jersey and Eastern Pennsylvania, where its existing RKR Hess Civil Division currently operates. The RKR Hess Division focuses on civil and environmental engineering, surveying and wetland services for municipalities and private clients.

The transaction includes the purchase of substantially all Finelli assets and retains the firm’s staff, which will continue to operate from its Washington Township location.

The Brown Moskowitz & Kallen team included Stuart M. Brown, Partner and Co-Chair of the Commercial Transactions practice as lead counsel, along with Keith E. Marlowe, Partner, Real Estate, and Justin Escher Alpert, Senior Counsel. Accounting services were provided by Mitchell Sharpe and Jenny Sharpe of SKC & Co.

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Jul 25, 2023
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