Publications

By Linda R. Brower, Senior Counsel, Commercial Transactions

In Part 1 of this Article, we addressed FinCEN guidance on whether and when a reporting company formed or registered prior to December 31, 2023, and still in existence on or after January 1, 2024, was required to make initial and update reports about the company and its beneficial owners. In Part 2, we discuss the filing requirements for reporting companies formed or registered on and after January 1, 2024, and whether FinCEN guidance issued on September 10, 2024, clarified a grey area about requiring an update report for “any change” but not requiring one for a change due to “termination and dissolution.” Again, for 2024 and Post-2024 reporting companies, as it did for Pre-2024 reporting companies, FinCEN differentiated between the filing requirements for initial and updated reports.

What became clear in September 2024 about the filing requirements for 2024 and Post-2024 reporting companies.

FinCEN issued new FAQ guidance on September 10. In the guidance, FinCEN seems to have clarified most dangling issues. With respect to filing initial reports, we already knew from the Act that a reporting company formed or registered at any time in 2024 has a 90-day reporting deadline (from the date of notice of formation or registration) and that reporting companies formed or registered on or after January 1, 2025, have a 30-day reporting deadline. But, for the first time, on September 10, FinCEN clarified that if a reporting company ceases to exist as a legal entity within the 30- or 90-day deadline (whichever applies) it, nevertheless, must still file an initial report by its reporting deadline. FinCEN FAQ C.14 issued September 10, 2024.

With respect to update reports, we already knew from FinCEN’s “Note” that reporting companies are excused from having to file update reports for a company’s “termination or dissolution.” Prior to September 10, FinCEN had not clarified whether the “termination or dissolution” status was the same or different from what FinCEN described as a company “ceasing to exist” in its July 2024 FAQ. In the September set of FAQs, we learned that FinCEN considers them equivalent. FinCEN FAQ C.13 issued September 10, 2024.

In FAQ C. 14, issued on September 10, 2024, FinCEN meaningfully, but only implicitly, elevated its prior standard of “termination and dissolution” to what it now refers to as a company “ceasing to exist” and gave examples. In September 2024, FinCEN clarified that the ultimate “change” — one resulting in the reporting company “ceasing to exist” — is not a reason to file an update report.

In the weeks since the September 10 guidance was issued, legal commentators and practitioners appear to have already accepted without question that there is no update required to report that a company has “ceased to exist” and that the standard is identical to a company’s termination or dissolution.

We believe, with only a kernel of lingering doubt however, that FinCEN clarified in the September FAQs that there remains a requirement to report “lesser” changes to previously-reported required information, such as interim changes in a reporting company’s beneficial ownership immediately, prior to dissolution or termination, as sometimes happens in finalizing liquidation events such as a merger, acquisition or business bankruptcy. Do such interim “changes,” short of a company achieving the “ceasing to exist” standard, still trigger the requirement to file an update report no later than 30 days after the date the change occurred?

BMK will continue to monitor FinCEN guidance updates and amendments to the Act for additional clarification of this, still possibly, unsettled issue. Until then, we believe that interim changes that do not rise to the level of a reporting company “ceasing to exist” should still be reported within the update deadlines. From a policy position, this result makes sense. Prior to termination or dissolution, FinCEN wants to know the beneficial ownership of a reporting company, even if it is immediately prior to the last moment of its “life.” However, FinCEN does not want its database cluttered with what would be meaningless notices about a reporting company’s actual demise.

If you have any questions regarding how this new FinCEN guidance affects your reporting compliance obligations, please contact the author or another member of the Corporate Group at Brown, Moskowitz & Kallen, P.C.

By Linda R. Brower, Senior Counsel, Commercial Transactions

As we have turned the page on summer and now make a mad dash through fall, the first major deadline under the Corporate Transparency Act (the Act) since its effective date (January 1, 2024), is quickly approaching: Companies subject to the Act and formed or registered prior to and still in existence on January 1, 2024, have until December 31, 2024, to file an initial report under the Act. The Act requires “reporting companies,” to file with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) information about the company and the individuals in “substantial control,” or that own 25 percent or more, of the equity unless an exemption applies. Disclosures under the Act are aimed at combatting financial crimes.

Reflecting on just a few of the many important questions related to the Act that have been raised by our clients since the Act’s implementation earlier this year, the question whether, if at all, and when, a reporting company has to file an initial report and under what circumstances it has to report changes in its ownership structure, up to and including the point of formally and irrevocably dissolving, is at the top of the list.

Because knowing the correct answer to these questions ensures that reporting companies avoid liability under civil fines and possible criminal imprisonment, we have created a two-part guide. In Part 1, we examine the filing requirements for an initial report and update reports for Pre-2024 reporting companies. In Part 2, the filing requirements for initial and update reports for 2024 and Post-2024 reporting companies are addressed, and so is FinCEN’s attempt to clarify what “changes” to a reporting company’s ownership trigger the filing of an update report.

What was clear prior to September 2024 about the filing requirements for Pre-2024 reporting companies.

With respect to filing initial reports. The Act mandates that a reporting company formed or registered on or before December 31, 2023, and in existence on January 1, 2024, is required to file its initial report any time on or before the December 31, 2024, reporting deadline. This is true no matter what — even if the company subsequently (on or after January 1, 2024) ceases to exist as a legal entity before December 31, 2024, or otherwise alters its ownership structure (as would a transitory entity only formed to facilitate a merger or other liquidation event). FinCEN FAQ C.12, C.13 (issued July 8, 2024).

Related to the first point, according to the Act, a company never becomes a reporting company, and is not required to file an initial report, if it ceases to exist as a legal entity on or before December 31, 2023. Pursuant to FinCEN guidance issued in mid-summer 2024 we knew that the term “ceased to exist” has a special meaning. FinCEN guidance made clear that a reporting company “ceases to exist” only after all the following occurs: it winds up its affairs (i.e., closes all bank accounts and fully liquidates its business), ceases to conduct business, and “entirely complete[s] the process of formally and irrevocably dissolving.” FinCEN FAQ C.13 issued July 8, 2024.

To meet the third requirement, the company must have complied with the state laws in which it was formed or registered by having filed for and received confirmation of dissolution (usually after payment of all final fees and taxes). An “administrative” suspension or dissolution that the states sometimes issue because a company failed to pay a filing or annual report fee do not satisfy the high standard that is needed for a company to complete the “formal and irrevocable dissolution” process.

With respect to filing update reports. Before September 2024, FinCEN guidance clarified that “any change” to previously-filed required information must be updated no later than 30 days after the date the change occurred. FinCEN’s Small Entity Compliance Guide, December 2023, Chapter 6.1 at page 45 (the Compliance Report). The Compliance Report provided examples of what constitutes changed information. FinCEN also added, without explanation, in a nondescript “Note” that “[t]here is no requirement to report a company’s termination or dissolution.” Compliance Report at page 46. So, as a result, we know that the “ultimate” kind of “change” –termination or dissolution — is exempt from filing an update report. To be clear, there is no place on the official FinCEN form to even report a company’s dissolution or termination.

After the July 8, 2024, FinCEN guidance, however, we were left hanging whether FinCEN considered the “termination or dissolution” standard referred to in the Compliance Report to be the equivalent of a reporting company having “ceased to exist.” On September 10, 2024, FinCEN issued additional guidance on this issue. This issue and others are addressed in Part 2.

If you have any questions regarding how this new FinCEN guidance affects your reporting compliance obligations, please contact the author or another member of the Corporate Group at Brown, Moskowitz & Kallen, P.C.

By Norman D. Kallen, Partner and Co-Chair of the Commercial Transactions Practice

To create a successful exit strategy via mergers and acquisitions, a collaborative alliance among legal advisors, investment bankers, and tax professionals is vital. These advisors, together with the principals of the target company, create the four legs of a stool that comprise the essential elements of an M&A transaction. This article will briefly elaborate on the distinct and indispensable roles played by each professional group, underscoring how their collective and coordinated efforts form a comprehensive approach to navigating the intricate challenges inherent in M&A transactions.

Investment bankers assume a pivotal role in shaping the financial contours of an M&A transaction. Their expertise in deal structuring and financial analysis are instrumental in maximizing the value derived from the sale. They (should) bring a deep understanding of a company’s financials, industry dynamics, and market trends. They create the strategic approach necessary to align the objectives of both buyers and sellers. Beyond financial engineering, they act as negotiators and intermediaries, managing relationships, facilitating negotiations, and ensuring mutually beneficial deal terms. It is exceptionally difficult for sellers to negotiate their own transaction. As a result, the investment banker’s strategic guidance, rooted in analysis of market conditions, valuation strategies, and potential synergies, contributes to a robust and tailored sale strategy. Collaboration with legal advisors ensures a complete approach addressing both financial and legal considerations.

Legal advisors, particularly those with specialized M&A experience, provide a crucial influence in shaping the framework of a company sale transaction. Their expertise spans a comprehensive understanding of regulations including antitrust, securities, and corporate governance, ensuring compliance throughout the transaction. Moreover, attorneys understand and are tasked with handling the legal aspects of due diligence. They conduct thorough reviews to identify potential legal risks, and ensure the buyer comprehensively understands the target company’s legal standing. Most importantly, they are essential in proactively working with the seller, prior to closing and throughout the M&A process, in attempting to minimize those risk elements that will impact the seller’s enterprise value. M&A attorneys adroitly navigate the delicate processes of crafting and negotiating contracts, bringing forth a wealth of knowledge in structuring agreements aligned with the deal’s strategic objectives.

Tax professionals, including accounting and legal professionals, bring a unique and critical expertise to M&A transactions, assisting and advising in structuring deals to minimize tax liabilities for both sellers and buyers. Their involvement is crucial as tax implications can significantly impact the overall financial outcome of the transaction — for all parties. Collaborating with legal counsels, investment bankers, and tax professionals contributes to the strategic planning of the deal by identifying opportunities for tax optimization. Mitigating tax risks is a vital function of tax professionals, involving comprehensive due diligence to assess tax implications, identify potential liabilities, and develop strategies for their resolution.

Last, but not least, is the owner of the seller and his/her key personnel who will be provided with knowledge of and participate in the transaction. These people include the owner’s chief financial officer or controller, who will tasked with providing financial and tax information to the buyer, and possibly, the seller’s HR professional, who will provide employee and benefits information and assist with the post-closing transition of personnel (and culture). Although there is always the need to keep the knowledge of the potential transaction “close to vest,” without certain key employees becoming part of the process, the burden on the business owner in running the business at the same time he/she is negotiating the transaction and responding to the buyer’s information requests can be suffocating.

The selection of professionals with specialized expertise in M&A transactions — legal advisors, investment bankers, and tax professionals — together with the owner and his/her key personnel, is pivotal for the success of a company sale transaction. Recognizing the collective value of engaging the right professionals becomes a strategic imperative as companies embark on the journey of selling. Knowledge of the M&A process brought to a transaction by qualified professionals along with their industry insights, and strategic guidance all enhance likelihood of a successful company exit, navigating its intricate path with dexterity and precision. Equally important, their experience brings calm to what otherwise is, generally, a very emotional exercise for the seller.

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By Keith E. Marlowe, Partner

A Company’s real property assets and leases are an inherent and financially critical factor in nearly all transactions involving the sale of the company (the “Target”); whether in the form of a sale of substantially all of the Target’s assets or a sale of the equity interests in the Target.  Often overlooked in the initial stages of a Target’s preparation for a transaction, it is important for the Target’s owners to focus on the following four issues:

• Will the business continue to be operated from the building(s) and real estate (the “Real Estate Assets”);
• Who owns the Real Estate Assets where the business is located (i.e., the Target, a party related to the Target or an independent third party):
• What, if any, environmental issues need to be addressed as federal and/or state law requirements may be applicable; and
• What are the tax consequences of the disposition of the Real Estate Assets and what, if any, planning opportunities may be available to defer the taxable gain, i.e. 1031 transactions.

The determination of whether the post-transaction operations of the Target will continue in the Real Estate Assets may impact whether or not the transaction is practical for the Target.  If the operations are not to be continued post-transaction in the Real Estate Assets, what is to be done with the Real Estate Assets?  Worse case scenarios if the operations are to be moved post-transaction, are that the owners of the Target end up owning vacant real estate or the owners end up having to remain obligated to third party landlords for rent that otherwise would have otherwise been funded by the Target.   If the operations are to be continued at the Real Estate Assets, it must be determined (i) what if any approvals and/or consents are required if the property is owned by a third-party landlord and (ii)  if the Real Estate Assets are owned by the Target, will the assets be part of the transaction or leased to the acquiror.  The terms of the on-going relationship needs to be addressed as part of the initial negotiation of the transaction’s terms.   If the assets are not part of the transaction and instead leased to the acquiror, will there be a fair market arms-length lease or a related-party arrangement.  One additional item to address is whether there will be a “commission/fee” paid on the portion of the consideration, if any, attributable to the real estate.

Regarding the issue of the ownership of the Real Estate Assets, the first item to address is who actually owns the Real Estate Assets. Generally, there are three alternatives: (i) the Real Estate Assets are owned by the Target; (ii) the Real Estate Assets are owned by a related party or (iii) the Real Estate Assets are owned by an independent third party.  In the case of item (ii), it must be determined if the ownership of the ownership of the Real Estate Assets is consistent with the ownership of the Target both as to the individual owners of the Real Estate Assets and the respective percentage interests; i.e.,  does owner A own 20% of the equity in the Target and either 15% or 25% in the owner of the Real Estate Assets.  If the latter scenario is the case, it needs to be determined whether all of the owners’ interests are aligned and if not, how are such non-alignments addressed in the entities’ respective organic documents.  In the case of item (iii), what if any approvals and/or consents need to be received from the third-party landlord.

Environmental issues need to be addressed as federal and state law requirements may be applicable.  First, is the transaction subject to any reporting requirements (federal or state); i.e. (as an example NJ has the “New Jersey Industrial Site Recovery Act (“ISRA”), which requires owners and/or operators of “industrial establishments” in New Jersey that cease operations or undergo a transfer of ownership or operational control to conduct an environmental review of and, if necessary, remediation of the industrial establishment prior to closing the transaction.  Second, is the Target subject to any on-going reporting requirements or does the Target have any permits that are necessary for the business and are the permits transferable/assignable.  Third, has the property previously been subject to a remediation or is it currently subject to on-going monitoring or reporting obligation(s).  If there are on-going monitoring or reporting obligations, it must be determined who will be responsible to meet such obligations post-closing.  Finally, the owners need to gather all prior environmental due diligence, reports, correspondences, etc. as part of the general due diligence process.

The tax consequences of the sale or disposition of the Real Estate Assets needs to be addressed as part of the overall tax analysis of the Transaction as planning opportunities may be available, i.e. 1031 transactions.  If a 1031 like kind transaction is considered, the parties need to reach out to their advisors immediately as the Internal Revenue Service rules are very specific and “unforgiving.”  Although beyond the scope of this article, the issues to be addressed would include:

• are the parties willing to part with the receipt of cash from the transaction in return for the current tax savings and having to reinvest the proceeds in other real property for a period of time;
• does the structure of the current ownership of the Real Estate Assets need to be adjusted and will there be tax consequences to such restructuring;
• the owner of the Real Property Assets needs to engage a “qualified intermediary” to take hold all of the consideration attributable to the real estate;
• potential replacement property or properties need to be identified
• individually addressing items on the settlement statement to minimize the amount of the consideration that may be subject to tax; and

the timing to identify any potential replacement property and the actual closing of the acquisition of the replacement property.

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

Envision working diligently in your business one day when the telephone rings. On the other end is a pleasant-sounding individual who compliments you on your business success, with an alarming amount of granular knowledge about you and your Company, and quickly expresses interest in acquiring your business.  Immediately, the bubble over your head reads “that new fill-in-the-blank sports car or yacht or vacation home is finally mine!” Not so fast!

Before embarking on a journey that may or may not be worthwhile, consider your options: (i) pursue it on your own, (ii) decline the offer, or (iii) defer the conversation until you speak with your trusted advisors in order to make an informed decision. As the saying goes, you begin the process of selling your business on the day you decide to start your business. You will be best served by addressing the offer with a well thought out plan, i.e., are you emotionally and financially ready to consider selling your Company? If not, don’t waste time. If you are, consider the next step – who will help you evaluate the offer and how do you proceed?

Surrounding yourself with the right professionals to form a deal team who will serve your interests well by minimizing wasted time and maximizing value is essential.  Your deal team should consist of your M&A attorney, an accountant with deal experience and an intermediary. You ask, I received an unsolicited offer so why would I need an intermediary? To answer a question with a question, do you know the market value of your Company?  Do you know if the proposed terms are reasonable given the current economic climate? Can you successfully negotiate the business terms of the transaction while running your Company (in effect, two full time jobs)?

To properly evaluate an unsolicited offer, you should find out what the “market” is willing to offer to you for your Company. To do so, it would be most efficient and expedient to engage an intermediary to provide the data. The intermediary can be engaged as a consultant or in the traditional sense as an exclusive transaction advisor. Bottom line: while you know your business and possibly some potential suitors, the only way to make an informed decision is after a thorough and careful review of the industry data.

The M&A markets are competitive and tricky. An unsolicited offer provides certain advantages to the suitor such as a non-competitive landscape and a potentially unsophisticated seller. In this case, “seller beware” is appropriate. While it is clearly an ego-boosting experience to receive an unsolicited offer, the sale of your Company may be the single most important business transaction of your life.  Approach it with care and a healthy amount of skepticism.

That said, unsolicited offers are not necessarily bad offers; however, they can present traps for the unindoctrinated and those who believe that they can sell their business entirely on their own. After all, how hard can it be? Turns out, it’s pretty hard! Here’s the takeaway — work with experienced advisors who know the M&A landscape as well as you know your business. Good luck!

by Norman D. Kallen, Partner, Brown Moskowitz & Kallen, P.C.

The COVID-19 pandemic brought to light a critical issue for which all small business owners should always have contingency plans: what should a sole business owner do to maintain business continuity in the event the owner becomes ill or otherwise disabled?

Sole proprietors, sole members of LLCs, sole shareholders of a corporation, self-employed individuals and independent contractors often are the only persons in their businesses authorized to conduct certain aspects of business activities on behalf of their entity or themselves. For example, these individuals may have sole authority to handle banking activities (sign checks, etc.), review and approve payment of payroll and accounts payable, review and approve invoices, and oversee policy related to accounts receivable. What if a sole member of an LLC is also the only officer of the company? Who steps into his or her shoes in the event of illness or other disability? Is there a mechanism for temporarily authorizing a trusted advisor, friend or family member to act on the owner’s behalf to handle any or all of the above-described activities?

The best way to provide for these types of circumstances is to plan in advance and prepare an agreement appointing a designated individual to undertake “running the business.” A power of attorney or a simple signatory authority document from a bank may be too broad or too narrow to meet the owner’s requirements. Moreover, if the business is operated in the form of an LLC or corporation, the only documentation that your bank may have for you to enter into is the authorization of an additional signatory on checks and loan matters. To that end, you may not wish to grant an employee, trusted advisor, friend or family member that authority immediately. Without some sort of agreement in place with either an employee, trusted advisor, friend or family member, you are placed at a disadvantage from a management perspective.

An owner should make a list of tasks that are essential to preserving the business in his or her absence. Next, the owner should very closely consider who he or she trusts to operate the financial aspects of the business. After these issues are clarified, the owner and the “stand-in” need to come to an agreement in writing regarding the duties, rights, liabilities, indemnification and the commencement or effective date for these duties and a date of termination of the agreement.

The agreement should explicitly set forth:

• The current duties of the business owner that would need to be continued in the event that the owner is unable to carry out those obligations;
• The full and proper legal name of the “stand-in”;
• The “trigger” circumstances under which the agreement will take effect;
• The exact list of undertakings of the “stand-in” which to a large extent would mirror 1. above;
• The grant of authority to the “stand-in” to execute the tasks set forth in the agreement such that a third party, including a bank, would be able to rely on the document as proper authorization for the “stand-in” to act;
• Allocation of risks – liabilities and indemnification; and
• Circumstances under which the business owner terminates the authority of the “stand-in”

Standard terms and conditions would also be included. It is important to have the document notarized, because it will, no doubt, be presented to banks or other institutions that require this formality.

The COVID-19 public health crisis was a wake-up call for all sole business owners and individual business entrepreneurs. The critical point is to consider and plan for illness and disability in any circumstance to ensure the continuity of your business in your absence.

If you would like more guidance, please contact Norman D. Kallen at Brown Moskowitz & Kallen, P.C. at (973) 376-0909, ext. 1114 or via email, nkallen@bmk-law.com

Succession planning is about actively listening to the needs and wants of business owners, discussing realistic goals based on experience and crafting a practical and achievable plan. Brown Moskowitz & Kallen recently advised River Edge, New Jersey-based leading landscape and hardscape company, Let It Grow, Inc. in the development of a succession plan that would sustain the legacy of its founder Paul T. Imbarrato.

Established in 1986, the Company is renowned for its expertise in the planning, execution and delivery of world-class design/build and landscape projects throughout the Northeast. With Mr. Imbarrato at the helm, Let It Grow has evolved into a leading regional firm serving prominent organizations such as Prudential, Unilever, Rutgers University, NJIT, and Westfield Garden State Plaza, among many others.

The succession plan was a collaborative effort developed over the course of several conversations involving Mr. Imbarrato, the Company’s incumbent accountant, an investment banker, a family office consultant, a benefits and insurance consultant and BMK. Ultimately, Mr. Imbarrato shared equity in Let It Grow with certain team members pursuant to a vesting schedule designed to motivate the recipients and ensure continuity of management. The succession plan also enables Let It Grow to remain independent while creating an incentive for the continuing recruitment of key industry talent. While Mr. Imbarrato is not ready to retire, his objective, in part, was to create a pathway for eventual retirement that does not require acquisition by private equity. Rather, Mr. Imbarrato wanted to ensure the Company’s sustainability for many years ahead.

“I was seeking a way to continue my firm’s legacy while enrolling my existing highly valued team in ownership of the Company,” said Mr. Imbarrato. “I take great pride in having built Let It Grow to the success it is today. I am now confident that success will continue in the hands of my employee owners even after I am no longer engaged in the day-to-day activities of the Company. BMK was instrumental in helping me transform my vision into a comprehensive and practical plan. ”

“The Let It Grow succession plan is a key example of how BMK listens to client needs and devises innovative solutions that align with their professional and personal desires,” said Stuart M. Brown, Partner and Co-Chair of the Commercial Transactions practice at BMK. “We knew Paul Imbarrato did not wish to sell his Company as his means of exiting the business he painstakingly created over several decades. He has great faith in his dedicated and talented employees. While no one can predict the future, Paul takes comfort knowing that he implemented a succession plan providing for continuity of management upon his retirement and establishing a means for the Company to continue to grow and thrive..”

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By Kenneth L. Moskowitz, Esq.

While the pressure to make deals or “book” work is certainly understandable, especially in the wake of the Covid-19 crisis and the on-going recovery, business owners and senior managers would be wise to resist the temptation to complete potentially problematic deals and, instead, should remain faithful to fundamental contracting principles.

As a threshold matter, contracting parties must be careful to complete all of the diligence necessary to ensure that the proposed “business deal” makes economic sense. As every business owner well knows, there simply is no substitute for such investigations, and shortcuts often lead to poor and regrettable deals or contracts.

Once being satisfied that a deal makes economic sense, contracting parties should take the time and maintain the discipline necessary to ensure that the deal made in principle is documented accurately, and that all of the material terms and conditions are clearly stated in the contract. Among other things, the contract must include a precise description of the subject goods, services and/or deliverables, as well as the schedule for such performance and for receipt of the required payments. Depending on the circumstances, the inclusion of an attorneys’ fee/cost of collection term, arbitration and/or choice of forum provisions may be prudent, if not necessary. Again, as business owners and their contract agents know, even what may appear to be a “good deal,” if not properly documented, can lead to a disastrous result.

Further, contracting parties should not be satisfied that the written agreement “more or less” memorializes the parties’ agreement, or take for granted that the other party to the contract has the same understanding and/or will faithfully discharge its contract responsibilities unless those duties are clearly and plainly recited. The hope or notion that once an ambiguous contract is signed the other party will perform as you expect, and/or that the other party can be counted on later to resolve contract ambiguities in good faith and on a fair and equitable terms consistent with your intent at the time of contracting, may not be realistic. The assumption of such risk — risk that may have been avoidable — would be regrettable and certainly could be costly.

Finally, while each potential contract negotiation has its own dynamics, fair and equitable contract terms should be negotiated, not dictated by one party. Even where one party to the contract is recognized to enjoy a superior bargaining position, the other party should resist a “take it or leave it” ultimatum that may leave it exposed. In that circumstance, the party in the inferior bargaining position should carefully consider pressing for the negotiation of those essential terms that are necessary to make the deal fair to both parties or, at the very least, “chipping away” to make the agreement more palatable.

Contract litigation is often the result of some failure in the negotiation and/or documentation of a business deal. Business litigation is time consuming, expensive and can have the detrimental effect of diverting the parties’ attention from the management and operation of their businesses. While the potential for litigation cannot be eliminated, completing the requisite diligence and exercising the needed discipline in the negotiation and documentation of the business deal or contract should reduce that risk.

©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.

Mr. Moskowitz is a former prosecutor and is a founding partner of Brown Moskowitz & Kallen, P.C., in Chatham New Jersey. He represents clients in diverse business disputes, commercial litigation, internal investigations, “corporate divorce” matters, insurance coverage litigation and other business-related disputes.

For further information, please feel free to contact Mr. Moskowitz by email at klm@bmk-law.com, or call him at 973-376-0909.

By Stuart M. Brown, Partner and  Norman D. Kallen, Partner

Brown Moskowitz & Kallen, P.C.

How should a business respond when it or its counterparty cannot fulfill obligations under an existing agreement or when entering into a new business relationship? There are myriad practical and legal answers to the question. Here, the focus is the application of the concept of force majeure in the context of contractual business relationships.Read More