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Selling Your Business? How to Uncover the Value of Your Business and Your Actual Net Worth Post Sale

By Stuart M. Brown, Partner and Co-Chair, Commercial Transactions, Brown Moskowitz & Kallen, P.C.
And
Richard A. Fortune, LUTCF, Financial Services Executive and Financial Advisor, The Fortune Group, Barnum Financial Group

You’ve dedicated your career and your life, and often the lives of your family members, to building and maintaining a successful business. Now, you’ve reached a point where you would like to sell the business, relax and reap the rewards of your years of hard work, or perhaps, dive into a new entrepreneurial venture. In either case, two things are true: it is vital for you to determine the accurate value of the business and to understand what your actual income and net worth will be upon the sale of the business so you can maintain the lifestyle you aspire to live in your next chapter.Read More

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Aug 10, 2023
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The Importance of Due Diligence in Large and Small Merger and Acquisition Transactions

By Justin Escher Alpert

Due diligence is an art. It is a coordinated dance between skilled practitioners in creatively bringing Mergers and Acquisitions transactions together.

In a large public transaction, bankers and lawyers on each side will throw dozens of young associates on a project to develop disclosure schedules that are cross-checked over-and-over again. Money is no object in a $50 billion dollar transaction, but peel it back by several orders of magnitude, and whether your transaction is worth $500,000, $5 million, or $50 million, the due diligence process is still vitally important.

The buyer will obviously want an idea of what exactly it is buying, whether it be assets or securities. For the seller, the due diligence process is important to develop the disclosure schedules that will keep the seller’s representations and warranties in the purchase agreement accurate. In a good and complete due diligence process, it shouldn’t surprise the seller to discover things that it did not know about itself.

Due diligence is never perfect and you don’t know in advance what you will find. In a recent strategic acquisition, a large family business purchased a simple cash-flow generating company which the sole proprietor basically ran out of his head for thirty years. Contracts were mostly oral in an industry based on old school ties and firm handshakes. The due diligence process had to make the buyer comfortable with what it was getting, with representations and warranties that would match its understanding.

In another strategic acquisition, the buyer definitively told his attorneys to just paper the contracts because he knew that the seller had run a good business for years. Of course, the due diligence process would continually turn up issues which would then need to be resolved by the parties and their professional advisors. Your professional advisors are there to ask good questions, spot issues, and protect your interests as you make informed decisions.

It is not always just the seller who is forced through the due diligence introspection. If the seller is taking an earn-out over time or rolling-over part of the purchase price into buyer equity, it is important to know that the buyer will be able to continue operating as a going concern. A proper due diligence of the buyer becomes important. If the buyer is just a shell company, guaranties may be needed from a parent entity.

In all of these scenarios, getting beyond the terms of a letter of intent and into the details is vitally-important. In the corporate mating ritual, issues arise and the professional intermediaries are in a position to sort them out in a manner that crafts a common sense understanding, guiding a transaction towards closing. On larger transactions, it is not uncommon to hear from sellers that the due diligence process is “like drinking from a firehose.” There can be a tremendous amount of work that needs to be done (and that’s in addition to running the company). A smaller transaction does not necessarily scale down and may require much of the same efforts. For a buyer in a large institutional transaction, due diligence is just a cost of doing business. However, in a smaller acquisition, a life’s savings may be at stake. In either case, good adversarial process is the best way to check issues and resolve potential conflicts.

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Mar 30, 2023
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New Jersey Division of Consumer Expands Scope of Telemedicine to Include Management of Patients with Chronic Pain and Those Who Qualify for Medical Marijuana

By Richard A. West, Esq.

New Jersey Division of Consumer Affairs Expands Access to Telemedicine Services, Including for Chronic Pain Patients and Patients Who Qualify for Medical Marijuana

The State of New Jersey continues to increase access to telehealth services during the COVID-19 pandemic. Earlier this month, the Division of Consumer Affairs announced expansion of telemedicine protocols, including for patients in treatment for chronic pain and those qualifying for medical marijuana therapy.

An Administrative Order, effective immediately, signed by the Acting Director of the Division, has temporarily waived various regulatory requirements for in-person medical evaluations when providers prescribe controlled dangerous substances (“CDS”) in the treatment of chronic pain or authorize medical marijuana. The action is the latest effort the Division has made in response to Governor Murphy’s March 20th directive to enable broad access to telehealth and telemedicine with the goal of reducing the spread of the COVID-19 virus.

From the Division news release: “New Jersey health care practices are again offering in-person services, but telehealth remains an important option for patients and providers,” said Attorney General Gurbir S. Grewal. “Today, we are making it easier for patients to choose telehealth services for any reason, including to avoid an in-person visit due to the continuing risk of COVID-19. Doctors who use telemedicine to prescribe CDS or authorize medical marijuana will be held to the same professional standards as for in-person visits and must comply with all of the important safeguards we have adopted to prevent diversion and misuse.”

The Executive Order allows health care professionals to utilize a telemedicine encounter to satisfy existing requirements for patient physical examinations before authorizing medical marijuana or prescribing, dispensing, or administering CDS. The Order is consistent with guidance from the federal Drug Enforcement Agency (“DEA”), which issued a temporary waiver permitting practitioners to prescribe a Schedule II CDS via telemedicine without an initial in-person examination, provided the prescription is issued for an approved medical purpose. Telemedicine communications are conducted using real-time, audio-visual, two-way interactive system and remain consistent with the required standard of care. Under New Jersey state law, health care professionals are required to discuss the risks and benefits of opioid medications and alternatives, to check the Prescription Monitoring Program, and to adhere to the five-day limit for the treatment of acute pain and the need to tailor subsequent prescribing to the patient’s current needs.

Quoting the Division’s press release: “This action temporarily removes barriers to providing patients with the medications they need to treat chronic pain and other diseases during the COVID-19 crisis,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “This will ensure that those in need of vital prescriptions are able to get them, without unnecessarily putting themselves, fellow patients, and their healthcare providers at risk of exposure to COVID-19.”

The Order further allows health care professionals to use telemedicine encounters to conduct patient assessments and treatment plan reviews when continuously prescribing CDS for the management of chronic pain. Health care professionals remain obligated to document the results of patient assessments and treatment plan reviews in the patient record.

Finally, the Order also allows physicians to use telemedicine encounters to satisfy regulatory requirements for the issuance of a certification for the use of medical marijuana. Physicians may conduct a comprehensive medical history and an evaluation via telemedicine to make a diagnosis and manage the treatment of a qualifying condition. The telemedicine encounter must be conducted using an audio-visual, real-time, two-way interactive communication system, and remain consistent with normative care standards. A subsequent authorization for medical marijuana may also be provided via telemedicine if the physician determines that an in-person visit is not required, consistent with the standard of care.

The Order will remain in effect, unless expressly revoked or superseded by a subsequent Administrative Order issued by the Director of the Division of Consumer Affairs, until whichever of the following occurs first: (1) the end of the state of emergency or public health emergency declared by the Governor in Executive Order 103, whichever is later; or (2) the end of the telemedicine allowance designated by the United States Secretary of Health and Human Services on March 16, 2020, based upon the public health emergency declared by the Secretary on January 31, 2020.

The official Administrative Order can be viewed here:

https://www.nj.gov/oag/newsreleases20/AO-Telemedicine-Prescribing.pdf

BMK has been advising licensed professionals in recent months with to regard to myriad issues arising from the COVID-19 crisis. Should you have a question, please contact Brown Moskowitz & Kallen partner Richard A. West at (973) 376-0909 ext. 1126 or mobile: (973) 229-7928.

This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

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Aug 31, 2020
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Executive Order #142: Governor Murphy Signs Executive Order Permitting Resumption of Non-Essential Construction, Curbside Pickup at Non-Essential Retail Businesses and Gatherings in Cars

On May 18, 2020 (the “Effective Date”), Governor Murphy’s Executive Order #142 (the “Order”) permits, inter alia, the resumption of non-essential construction, curbside pickup at non-essential retail businesses and gatherings in cars.

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May 15, 2020
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A Look at Alternative Lenders for Business Capital During the COVID-19 Crisis

By Nicholas B. Jalowski, Managing Director, CTP, CMC
Cambridge Financial Services, LLC

In today’s economic cessation, many companies are experiencing difficulties in getting their banks to help fund them through the COVID-19 crisis and beyond. Commercial banks are regulated institutions and are characteristically risk adverse. They are entrusted with public money and structured to avoid losses on their loans.

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May 13, 2020
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