Estates and Trusts
Choosing Mediation to Protect Families and Legacies
Why Mediation? Blood and money make for a tough mix. As an attorney with a decades-long trusts and estates practice, I’ve seen it all: siblings clinging to childhood grievances, children from a first marriage resenting a stepparent, new spouses competing with adult children, and half-siblings emerging after a parent’s death. Estate litigation is not only lengthy and emotionally exhausting, it’s also extremely expensive. By the time the legal dust settles, the parties have often spent more on attorney fees than they’ll receive from the estate. Worse yet, already strained family relationships are often left permanently fractured. Seeing the damage these disputes inflict on families is what led me to seek certification as a mediator. What Is Mediation? Mediation is a voluntary form of alternative dispute resolution where parties work together to resolve conflict with the help of a neutral third party—the mediator. The mediator doesn’t make decisions like a judge or jury. Instead, their role is to guide the parties toward a mutually acceptable agreement crafted on their own terms. Because the outcome is collaboratively reached, mediation often leads to less bitterness, fewer hard feelings, and more durable resolutions. How Does Mediation Work? The process begins with an initial meeting between the mediator and the parties. If attorneys are involved, the mediator may speak with them beforehand to gather background information. During the joint session, the mediator explains the process and invites each party to share a brief summary of the situation from their perspective. An agenda is then established. Each party is encouraged to listen respectfully to the other’s point of view. Following this, the mediator typically meets privately with each side to delve deeper into the issues, explore underlying tensions, and identify opportunities for resolution. This approach allows for creative settlements that courts may not be able to impose. Importantly, mediation is fully confidential. Nothing disclosed during the process is admissible in court should the mediation not result in a settlement. Why Choose Mediation? Cost-Effective: Mediation is significantly less expensive than litigation. While parties may still retain legal counsel, the process usually requires fewer billable hours and avoids extensive court procedures. Mediator fees are typically shared equally by the parties. Efficient: Court cases can drag on for months or even years. Mediation often resolves disputes in a matter of hours or days. Private: Unlike court proceedings, which generate public records, mediation is confidential and discreet. Flexible: The parties—not a judge or jury—control the outcome. This allows for creative, personalized solutions that reflect the unique dynamics of the family. Relationship-Preserving: By encouraging open communication and cooperation, mediation can help mend strained relationships and preserve family ties. Mediation offers a path forward that is more cost-effective, efficient, and humane than litigation. In the emotionally charged arena of estate disputes, it provides families with an opportunity not only to resolve their legal issues but also to do so in a way that promotes healing, dignity, and when possible, reconciliation.
June 5, 2025
Business
Effectively Representing Entrepreneurs: Bridging the Gap Between Business and Law
Entrepreneurs represent a unique type of client for attorneys. They thrive on uncertainty, they move fast, and they see opportunities where many others see red flags. They often have a much higher risk tolerance, and they are visionaries who challenge the status quo, not only in the markets they disrupt, but also in the regulatory or legal frameworks that often cannot keep pace with innovation. For attorneys representing entrepreneurs, there can be a clear challenge as they struggle to bridge the gap between the law and the entrepreneur’s fast-moving world. Therefore, it is critical to remember that when working with entrepreneurs, the law is not the only seat at the table. Their legal counsel is just one of many voices in the room involved in making strategic decisions. Law, finance, insurance, product development, and growth marketing must all come together to make sound decisions and to create a path forward. Attorneys must understand this broader context and be able to operate within it. When advising entrepreneurs, it's not enough to say no or shut down ideas due to high risk levels. It is better to determine their tolerance for risk and develop a structure to make it work. Entrepreneurs don’t want a gatekeeper. They want legal counsel who can help them navigate the complexities of their world. Innovation Often Outpaces Regulation We have all seen that innovation frequently moves faster than the law. Just look at the incredible developments in AI over the past few years and the regulatory efforts that have significantly lagged the innovation in this space. We now see a patchwork of regulations across this country and on an international level. This highlights the point that an entrepreneur doesn’t always have the luxury of waiting for full regulatory clarity. They need legal counsel who can advise them on the current regulatory environment and help them anticipate and prepare for what the future might hold. Manage Risk, Don’t Eliminate It Entrepreneurial lawyering does not mean ignoring risk. It means identifying and managing risk, as well as helping the client embrace it in a calculated way. The idea isn’t to stifle innovation or kill ideas, but instead to make the big ideas viable within some parameters. There must be a mindset of managing risk smartly as opposed to avoiding risk at all costs. When attorneys can help entrepreneurs to see the legal implications of their decisions without shutting them down, they create the kind of trust that defines a successful attorney-client relationship. The Importance of Understanding Business Entrepreneurs want legal counsel who speaks their language and understands the many moving parts that make up their world. To have a seat at the entrepreneur’s table, it is essential to fully understand how legal decisions will impact their business objectives. This requires attorneys to evolve beyond just providing traditional legal advice and to move from the singular role of legal advisor to the multifaceted role of business advisor, risk strategist, and trusted partner throughout the entrepreneurial journey. There will always be a gap that exists between business and the law, as legal frameworks and regulations serve as roadblocks to the next big ideas coming out of startups. But great attorneys build bridges, not walls. They don’t ignore the law, but instead help entrepreneurs to navigate it with clarity, creativity, and awareness.
June 2, 2025
Estates and Trusts
Protecting Legacy: Privacy and Estate Planning Tips for Athletes
Professional athletes face unique challenges when it comes to managing their personal, professional, and financial affairs. With significant public visibility, substantial income, a grueling training schedule, and a fast-paced lifestyle, athletes need to protect both their privacy and their legacy. Whether the athlete is just beginning their professional career or, like many of my clients, has already cemented their place into athletic history, effective estate planning and privacy protection can shield the new or long-established professional athlete from risk and exposure, providing long-term peace of mind. Why Privacy and Estate Planning Matter for Athletes There are many reasons why privacy is more of a priority for professional athletes than those in the general public. First and foremost, athletes experience intense media scrutiny. Interviews following each event, reporters covering their personal and family lives, bloggers commenting on their lifestyle, and their family members’ every move. This scrutiny often occurs “overnight” without providing the athlete and their family the opportunity to adjust and ease into this new level of inquisition. Added to the sudden celebrity, the athlete’s career span is generally shorter than the rest of us, which means that the bulk of their earnings is realized in a very short window of time. The lifestyle change happens swiftly, and the duration is generally limited. Because of this compressed time schedule, the athlete has a short runway to transition into their new life, leaving them particularly vulnerable to lawsuits, predatory actors and financial scams. In addition to the sudden shift in assets and scrutiny, an athlete’s family dynamics can also suffer the consequences. Whether it is because the newfound wealth and fame represents a departure from their former life, which they shared with friends and family members, or because those friends and family members feel entitled to share in the of the athlete’s earnings, there is immense pressure. Therefore, creating a thoughtful, discreet plan that safeguards the athlete’s earnings is essential. Establish a Comprehensive Estate Plan As this author has covered in other articles, an estate plan goes beyond a simple Last Will and Testament. It includes a structure that provides the opportunity to manage wealth and guard privacy during the athlete’s lifetime, through the end of their career, and thereafter protects their families upon the death of the athlete. A Last Will and Testament directs how assets will be distributed upon death and names guardians for minor children, but it is not private. Wills are “published” in the court and can be viewed by anyone. A Trust can take the place of a Will because it also directs the distribution of assets upon the athlete’s death, but it is not published in court. Instead, it is a private instrument that is managed by the athlete’s designated trustee upon their death. During the athlete’s life, the trust can also manage the athlete’s assets. Trusts can hold real estate, stocks, bonds, and even NIL rights, which hold value long after an athlete’s career is over. For many athletes, we take it a step further and establish certain trusts in states that provide an extra layer of privacy and creditor protection. Proactive Privacy Protection Privacy for athletes is not just about dodging the paparazzi; it is about controlling the narrative surrounding their professional and personal reputation, in addition to safeguarding their financial information. Establishing Corporate Structures. The use of Limited Liability Companies and other corporate structures can hold real estate interests, vehicles, and investments instead of holding those assets in the athlete’s personal name. Those corporate interests can then be “funded” into a trust instrument, as explained above. Securing their Digital Footprint. The digital footprint is a new facet of an athlete’s legacy and must be considered. There are cyber companies (www.360privacy.io) that monitor on-line mentions, prevent hacking, and help remove destructive and false claims to protect the athlete’s reputation and legacy. Companies like Regal Credit (www.regalcredit.com) take protective measures to safeguard an athlete’s credit and financial assets, as well. Minimize public records – For real estate purchases, athletes can use tools like trusts and corporate structures to ensure that their names are not disclosed via public records. Planning for the Unexpected. The average career of a professional athlete is, by any definition, short: the NFL athlete’s career hovers just over three years, and the NBA athlete’s career lasts about five years. Athletes have the added risk of an even shorter career in the event of an injury or any number of other unforeseen events. Planning now helps avoid chaos later. Insurance. Connecting with a reputable insurance advisor can be game-changing to cover injuries and disabilities if the athlete is unable to play, even temporarily. Life insurance not only covers the athlete’s family upon death but can also be an opportunity for investment strategy, particularly when income is earned quickly but for a shorter duration. Some athletes even invest in liability insurance to protect themselves from extortion attempts. In fact, Ernst and Young report that professional athletes sustained almost $600 million in fraud and extortion-related losses from 2004 to 2019, a number that has continued to climb. Pre-nuptial agreements. We all know the statistics: one in two marriages ends in divorce. Athletes are no different, and the added stressors of constant travel, a grueling training schedule, and fame can make marriages particularly vulnerable and challenging to maintain. Prenuptial agreements are a must for athletes to ensure that their hard-earned savings are protected, even in the event of a divorce. Update Your Plan Regularly An athlete’s life and financial situation will evolve over time; income levels, contracts, relationships, and even states of residence change with great frequency. An athlete should revisit their plan immediately after signing a new contract, upon injury, following a major purchase, upon marriage, the birth of children, upon retirement or when starting a new business venture. A properly created plan should be nimble and easy to update. Work with a Trusted Team As with any team sport, you should not go it alone. An athlete’s privacy and estate strategy should be guided by an experienced estate planning attorney, a licensed financial professional, a tax advisor, a security and privacy consultant, and an insurance professional. Athletes work hard to build a legacy on and off the field. By taking a proactive approach to privacy and estate planning, athletes can protect their assets, support their loved ones, and maintain control of their personal legacy.
May 30, 2025
Bankruptcy
Acquisition Strategies: Navigating Section 363 Sales and the Impact of Undersecured Liens
Overview and Advantages Section 363 of the Bankruptcy Code allows a Chapter 11 debtor to sell assets "free and clear" of existing claims, liens, encumbrances, and other liabilities. This provision facilitates expedited sales that might otherwise be hindered outside of bankruptcy proceedings. With a growing number of cases where courts allow a traditional asset buyer purchasing assets out-of-court to become liable for the seller’s liabilities, a court-approved sale of all or part of the seller’s assets brings distinct advantages. Among these advantages is the ability to take over favorable contracts and leases, even if they contain anti-assignment clauses. As a result, strategic buyers have the unique opportunity to purchase distressed assets inside of bankruptcy in a way that eliminates or reduces future liability because the bankruptcy court order approving the sale often expressly forecloses “successor liability” claims against a good-faith purchaser. Recent Notable Sales The versatility and legal protections offered by Section 363 sales make them an attractive option for strategic buyers and distressed companies, regardless of their industry or size. From pharmaceuticals and biotechnology, clean energy to retail, one can find multiple examples of successfully closed sales. Merz Pharmaceuticals' Acquisition of Acorda Therapeutics' Assets Merz Pharmaceuticals, LLC subsidiary of Merz Therapeutics, completed the acquisition of key assets, including two FDA-approved medications for neurological diseases like Parkinson’s and MS, from Acorda Therapeutics, Inc. on July 10, 2024, through a court-approved Section 363 sale in the Bankruptcy Court for the Southern District of New York. The transaction was valued at $185 million in cash. Teknor Apex Company's Acquisition of Danimer Scientific's Assets Teknor Apex Company completed the acquisition of substantially all assets of Danimer Scientific, Inc. under Section 363 as part of its Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. The winning bidder agreed to a total cash purchase price of $19 million and assumption of certain liabilities. Lucid Group's Acquisition of Nikola Corporation's Facilities Lucid Group, Inc. acquired selected facilities and assets from the bankruptcy estate of Nikola Corporation, a manufacturer of electric and hydrogen-powered trucks, including Nikola's manufacturing facility in Coolidge, Arizona, and its Phoenix headquarters, totaling over 884,000 square feet of real estate, to expand its electric vehicle (EV) manufacturing and testing operations. Gonher Music Center's Acquisition of Sam Ash's Assets Mexican-based retailer Gonher Music Center acquired substantially all of Sam Ash's assets for $15.2 million in a 363 sale in 2024, following a competitive auction process. Gonher outbid E-Distributors Inc. after initially submitting a bid of $10.3 million for the e-commerce and wholesale assets, which subsequently increased to $15.2 million to secure the combined package. The assets included Sam Ash’s e-commerce operations, intellectual property, trademarks, customer data, and the wholesale Samson business. The sale excluded assets related to the store closing sales. Mondee Holdings' Asset Sale to Mondee Purchaser LLC Mondee Holdings, Inc., a travel technology company specializing in the leisure travel sector, both in the United States and internationally, sold substantially all of its assets to a newly formed entity, Mondee Purchaser LLC, backed by affiliates of its lenders TCW Asset Management Company LLC and Wingspire Capital LLC with the majority stake held by its former CEO. New York Case Spotlight: In re Urban Commons 2 West LLC What makes these asset sales possible is Section 363(f) of the Bankruptcy Code. Section 363(f) of the U.S. Bankruptcy Code allows a company in bankruptcy to sell estate property "free and clear" of liens and other interests, provided that one of five specific conditions is met: (1) applicable nonbankruptcy law permits the sale of such property free and clear of such interest; (2) such entity consents; (3) such interest is a lien, and the price at which such property is to be sold is greater than the aggregate value of all liens on such property; (4) such interest is in bona fide dispute; or (5) such an entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest. 11 U.S.C. § 363(f). Subsection 5 is particularly significant when dealing with "underwater" assets—those whose sale price is less than the total of the liens against them. A recent decision by Judge Bentley brings a little more peace of mind to asset buyers in New York bankruptcy proceedings. In re Urban Commons 2 West LLC, 22-11509 (Bankr. S.D.N.Y. March 4, 2025). The Urban Commons case involves the sale of the lease interests in Manhattan’s Battery Park City Hotel. The hotel was part of a mixed-use condominium building and subject to a ground lease with the Battery Park City Authority (BPCA). The hotel initially operated under the Ritz-Carlton brand, but in March 2018, it changed its brand to The Leading Hotels of the World and its name to The Wagner at Battery Park. The Debtors purchased the Hotel Lease Interests in September 2018 for approximately $147 million, of which $96 million was financed by a first mortgage issued by BPC Lender, LLC (the “Lender”). The loan matured in 2020, and the Debtors were unable to obtain refinancing. Later that year, following the onset of the Covid-19 pandemic, the hotel ceased operations and remained closed. By the time of the bankruptcy filing, the amount owed under the mortgage loan had grown to approximately $114 million plus fees and costs. The Debtors negotiated a global resolution with the main creditors, proposing a sale to the holder of the first lien on a $78 million credit bid and cash payments aggregating $20 million in cash to cure defaults on leases and contracts. The only objection to the sale and confirmation of the plan came from the holder of a $189,000 mechanic’s lien that was deeply underwater. The objector relied on an unpopular district court opinion, Dishi & Sons v. Bay Condos LLC, 510 B.R. 696, 710 (S.D.N.Y. 2014). In Dishi & Sons v. Bay Condos LLC, the Court held that subsection (5) applies only if the debtor, as the property owner, could compel the lienholder to accept monetary satisfaction. Judge Bentley rejected the Dishi court interpretation of Section 365(f)(5) because he held the construction was so narrow as to virtually nullify Section 363(f)(5). The Court adopted a “realistic possibility” standard, meaning that section 363(f)(5) encompassed not any conceivable hypothetical proceeding that might compel interest holders to accept a money satisfaction, but only proceedings that might realistically be brought in the case before the court if the automatic stay were lifted or did not apply. In most cases, this would include either foreclosure proceedings or UCC sales. The mere hypothetical possibility of an eminent domain taking would not satisfy section 363(f)(5). In conclusion, Section 363 sales offer a compelling avenue for strategic buyers to acquire distressed assets efficiently and with reduced risk. However, the nuances of Section 363(f), particularly subsection (5), underscore the importance of understanding jurisdictional interpretations. Stakeholders considering participation in a Section 363 sale must conduct thorough due diligence and engage experienced legal counsel to navigate the complexities of bankruptcy proceedings.
May 30, 2025
Labor and Employment
Workplace Violence: Why Employers Can’t Afford to Ignore the Warning Signs
When employers think about workplace safety, the conversation often begins and ends with OSHA inspections or slip-and-fall prevention. But in today’s world, the most urgent threat to your workforce isn’t on the floor. It’s in the atmosphere: workplace violence. Violence doesn’t just mean active shooter scenarios. It includes verbal threats, stalking, physical intimidation, domestic abuse that spills into the workplace, and psychological harassment. These are not just personnel issues but legal liabilities waiting to explode. The Legal Landscape is Shifting and Employers Must Keep Up Under OSHA’s General Duty Clause, employers are legally required to provide a safe working environment free from recognized hazards, including the risk of workplace violence. Failing to act on known threats can result in citations, civil liability, and, in extreme cases, criminal exposure. Add to that claims for negligent hiring, negligent retention, workers’ comp exposure, ADA violations, and reputational ruin, and the stakes become even clearer. Laws are continuing to evolve. California’s 2024 mandate for Workplace Violence Prevention Programs (WVPPs) set a new national standard, and other states, including New York, are following suit. Employers must now demonstrate proactive measures, not reactive apologies when something goes wrong. The Red Flags are Rarely Subtle and Often Dismissed Nearly every workplace violence incident is preceded by clear indicators: escalating arguments, erratic behavior, hostile emails, or an employee voicing concern about a colleague’s conduct. What’s dangerous — and legally reckless — is waiting until someone crosses the line before acting. Employers are expected to prevent foreseeable harm, which means acting before tragedy strikes. Your First Line of Defense: a Written, Enforced Violence Prevention Policy Organizations of all sizes and industries must have a clear, written policy for workplace violence prevention. This is not just a formality. Your workplace violence prevention policy should: Define prohibited conduct with precision, including threats, intimidation, and harassment. Create safe, accessible, and anonymous reporting channels. Establish a transparent response protocol. Reinforce zero tolerance for retaliation. This is your legal and cultural foundation. Training is Not Optional! It is a Legal and Practical Imperative A policy that sits unread on a shelf offers zero protection. Managers, supervisors, and employees must be trained to recognize red flags, de-escalate conflict, and report concerns safely and effectively. Even a single hour of annual training has proven to materially reduce risk. Training must be specific, interactive, and mandatory. Where appropriate, combine it with harassment prevention or ADA accommodation training; do not treat it as a check-the-box exercise. High-Risk Moments Demand Heightened Vigilance Terminations, layoffs, and performance-based discipline are flashpoints for violence. Employers should: Plan separation meetings carefully. Consider having security present. Conduct high-risk terminations off-site or via video if needed. Offer Employee Assistance Programs (EAPs) where appropriate. The Right Team: Security, Legal, and Behavioral Health Professionals Working in Tandem Preventing and responding to workplace violence takes more than HR alone. You need a cross-functional team of: Security professionals who assess risk and implement physical safety protocols. Threat assessment experts (forensic psychologists, trained law enforcement) who evaluate risk and help strategize de-escalation. Employment counsel who understands the legal implications and can coordinate with law enforcement, courts, and insurers. Executive protection for high-profile or targeted employees. Each component must align under a single, integrated WVPP strategy. Real Estate and Isolated Work Environments Face Elevated Risk Industries like property management, real estate, and healthcare, where employees work alone, during off-hours, or interact frequently with the public, face unique and elevated exposure. Employers in these sectors must tailor policies, training, and security measures accordingly. Employer Liability is Real and Expensive Beyond OSHA citations, employers may face lawsuits alleging: Negligent hiring or retention. Failure to warn. ADA violations (e.g., mishandling mental health-related threats). Discrimination or retaliation for mishandled reporting. Employers cannot afford to be reactive. Workplace violence prevention is not about paranoia. It is about creating a culture of trust, accountability, and action. Employees are more likely to report threats when they believe the company will take them seriously. That alone can prevent tragedy. If your workplace violence prevention policy has not been reviewed in the last year or if your team has never been trained on recognizing or responding to threats, the time to act is now.
May 29, 2025
Labor and Employment
Non-Compete Ban for Maryland Healthcare Professionals Set to Take Effect July 1, 2025
Effective July 1, 2025, the second phase of Maryland’s restrictions on non-compete agreements and conflict of interest provisions for healthcare professionals will go into effect, targeting employers who provide direct patient care. This follows the earlier phase of the law, which banned non-competes for veterinary professionals beginning June 1, 2024. What Does This Mean for Healthcare Employers? Healthcare employers can continue enforcing non-compete provisions in agreements executed before July 1, 2025. However, starting July 1, any newly signed agreement that includes a non-compete or conflict of interest clause for a qualifying healthcare provider may be partially or wholly unenforceable, depending on compensation and job function. Key Provisions Under the Updated Maryland Statute Under the amended Md. Code Ann., Labor & Employment §3–716, Maryland continues to prohibit non-compete agreements for employees in any profession who earn 150% or less of the state’s minimum wage. The updated law expands these protections by banning non-competes for veterinary practitioners and veterinary technicians, as well as for licensed healthcare professionals who provide direct patient care and earn $350,000 or less annually. For healthcare professionals earning more than $350,000 annually, non-compete agreements are still permitted but now face strict limitations: they may last no longer than one year and must be limited to a geographic radius of 10 miles from the provider’s principal place of practice. The amended law also introduces a new obligation for employers: upon a patient’s request, they must disclose the new location of a former healthcare provider. Despite these expanded restrictions, the statute explicitly affirms that employers may still take steps to protect client lists and proprietary business information. Best Practices for Healthcare Employers In light of the upcoming change, employers should: Review and revise all employment agreements that will be signed on or after July 1, 2025 Ensure HR and recruiting teams are informed and using compliant templates Plan for patient communication procedures tied to provider transitions Use alternative protections—like confidentiality and non-solicitation agreements—to safeguard business interests. Even contracts signed before July 1 may still face scrutiny under Maryland’s reasonableness standard for restrictive covenants. Background on Non-Compete Reform The updated statute stems from House Bill 1388, passed in 2024 as part of Maryland’s growing effort to curtail restrictive employment practices in the healthcare and veterinary sectors. Nationally, the Federal Trade Commission’s (FTC) attempt to implement a broad non-compete ban across every industry remains in limbo after district court challenges blocked enforcement. In March, FTC attorneys filed motions requesting a 120-day stay of the agency’s appeals, citing the change of the presidential administration and a need to reassess its position under new leadership. It remains unclear whether non-competes will remain a policy priority at the federal level. As a result, state-level action, like Maryland’s, has become the primary driver of non-compete reform.
May 28, 2025
Commercial Litigation
Big News for Virginia Litigation: Jurisdictional Limits in General District Court Increased to $50,000
As of March 21, 2025, the Virginia General Assembly and Governor have approved a significant change to Virginia’s civil and commercial court system. Every business owner, real estate professional, attorney, and claims adjuster should take note of the change. Under Senate Bill 1291, the jurisdictional limit for civil and commercial cases in Virginia’s General District Courts will increase from $25,000 to $50,000. The change will become effective July 1, 2025. This marks the first major adjustment to the jurisdictional limits in years and will have wide-ranging impacts on how civil and commercial disputes are litigated across Virginia. What This Means: More Cases in the General District Courts: Plaintiffs with monetary claims (such as debts or damages claims) up to $50,000 can now file in the General District Courts, which allows parties to benefit from faster dockets, less formal procedures, and lower litigation costs. Transfer Procedures Simplified: If a plaintiff later amends their claim to exceed $50,000, the law allows for a direct transfer to Circuit Court without the need for nonsuit or dismissal, preserving the statute of limitations. Attachment Cases Also Impacted: The $50,000 jurisdictional limit also applies to attachment cases (proceedings to seize property). Unlawful Detainers (Evictions), Interpleaders, FOIA Cases, and Property Owners Association Disputes Unaffected by change: The General District Court retains specific jurisdiction over these matters without being restricted by the $50,000 monetary cap. Why It Matters: This change is a major boost for access to justice. Litigants with mid-sized claims can pursue recovery in a court designed for efficiency without the high costs and extended timelines often seen in Circuit Court. This shift makes pursuing and defending civil and commercial claims more predictable and affordable for businesses, insurers, and individuals alike. At Offit Kurman, we are already preparing to help our clients navigate these changes strategically — whether it’s handling higher-value disputes in the General District Courts or advising on new litigation tactics made possible by the expanded jurisdiction. Reach out to Anders Sleight | Offit Kurman today to discuss your specific situation and how you may be able to take advantage of these changes. To prepare for the July 1 change, stakeholders should update litigation strategies, educate relevant staff on the new $50,000 limit and General District Court procedures, and reassess claims that may now qualify. Staying current on procedural updates will help businesses, insurers, and legal teams take full advantage of the court’s increased efficiency and lower costs.
May 28, 2025
Intellectual Property
Jimmy Page Accused of Infringing 'Dazed and Confused'
If the ongoing acrimony between Daryl Hall and John Oates wasn’t enough to fill the void of aging rock stars airing their grievances in court, never fear. There’s an endless well where that came from. Jake Holmes, original writer and composer of the song Dazed and Confused, has sued Led Zeppelin’s Jimmy Page, among other musical production and publishing entities, for damages related to a songwriting credit he feels he is owed. Indeed, Holmes wrote the now-iconic hit in 1967, at which time Jimmy Page heard the song and rearranged the composition for his then-outfit, The Yardbirds. Page would later work with Robert Plant to reimagine the song for their upstart band, Led Zeppelin, again neglecting to credit Holmes for his role in the song’s creation. Off the heels of a now-settled 2010 lawsuit regarding the issue, the recently released documentary, Becoming Led Zeppelin, has brought the song, and Holmes’ claims, back into public consciousness. Doubtless, Holmes wanted to strike while the iron is hot. Plaintiff Holmes filed a complaint in the U.S. District Court for the Central District of California, asserting three primary claims: two for copyright infringement and one for breach of contract. Holmes alleges he is the sole copyright owner of Dazed and Confused, originally registered in 1967. He claims that Jimmy Page and associated defendants, willfully infringed on this copyright by exploiting the composition without authorization—first in connection with the Yardbirds’ performances and later through its use in the 2025 documentary Becoming Led Zeppelin. Holmes's complaint alleges that, despite a 2011 settlement agreement (resolving the prior 2010 suit, which affirmed Holmes’s exclusive rights to the composition), Jimmy Page, Succubus Music Ltd., and WC Music Corp. continued to falsely license and monetize recordings of Dazed and Confused as if Page were the sole author. Holmes contends that these recordings include numerous Yardbirds live releases and that the defendants generated revenue from licensing, streaming, and royalties without proper attribution or payment to Holmes. Additionally, Holmes claims that the recent documentary film Becoming Led Zeppelin incorporated unauthorized performances of Dazed and Confused—both by the Yardbirds and by Led Zeppelin—again falsely crediting Page and excluding Holmes. He asserts that multiple defendants, including major production and distribution entities like Sony Pictures Classics and Big Beach LLC, participated in the infringing activity. Holmes seeks actual or statutory damages, injunctive relief, an accounting of profits, and attorneys' fees, alleging willful infringement and breach of the 2011 settlement agreement. This new action has the potential to set a standard for infringement cases regarding works so central to the infringing entity’s identity as to reframe that entity’s success completely. Time will tell whether Page’s Levee will finally Break, or whether Page and Zeppelin will Ramble On as they have for the past 50+ years.
May 28, 2025
Commercial Litigation
To Use or Not to Use? Fear Not! The Public Domain Beckons Thee
Ah, the public domain—where copyrights dare not tread, and content lives free from the litigious claws of infringement claims. Whether thou art a humble creator or a bold entrepreneur, rejoice! For in this blessed realm, you may pluck the ripest fruits of history without fear of lawyers whispering “cease and desist” in thine ear. As an experienced litigator who has spent years navigating the nuances of copyright and trademark disputes, I often receive inquiries from clients and creators alike asking whether using material in the public domain could still lead to legal liability. These questions are understandable—copyright law is notoriously complex, and the fear of receiving an infringement claim can chill even the most well-intentioned use of historical or creative works. However, the law is clear. Under the Copyright Act of 1976, 17 U.S.C. § 101 et seq., once a work has entered the public domain, it is no longer protected by copyright. That work may be used freely without permission or risk of infringement liability. This principle is further reinforced by judicial precedent and administrative interpretations issued by the U.S. Copyright Office. Below is a short—albeit Shakespearean—synopsis of the right-to-use works that have passed into the public domain. All the World's a Stage... and the Public Domain is Yours to Play Upon When a work enters the public domain, it is like King Lear abdicating his throne—no longer held by a single rights-holder but shared by all. You may quote, adapt, remix, or even set it to dubstep, should the spirits moves you. There is no need to “beware the Ides of Infringement,” for the legal ghosts have departed these works. A Rose by Any Other Name Would Still Be Royalty-Free From the Bard himself to silent films, early jazz, and vintage pulp novels, the public domain is a veritable treasure trove. If your heart desires to adapt Romeo and Juliet as a sci-fi space opera or turn Macbeth into a murder-mystery podcast, thou art free to do so. And should anyone protest, simply say: “The copyright hath shuffled off this mortal coil.” Much Ado About Nothing (To Pay) No fees, no permissions, no licensing headaches; using public domain content means your budget won’t suffer a tragic fate. You are free to profit, reimagine, or distribute at will without hearing the dreaded words: “Thou art summoned to court.” The Lady Doth Protest Too Much, Methinks! But Legally She Can’t If a work is truly in the public domain, no rights-holder can claim otherwise—not even an overzealous heir or a distant cousin twice removed who believes Great Uncle Will’s haikus should still be protected. Verily, if someone doth protest, remind them that the law is clear: once public, forever free. What Light Through Yonder Archive Breaks? More works enter the public domain each year, like clockwork, every January 1st. These cultural gems become part of the commons, waiting for creative minds to breathe new life into them. Whether thou art a playwright, podcaster, game designer, or meme-smith, this is your cue to take the stage. Parting is Such Sweet Sorrow (But You Can Keep the Content) So go forth, noble creator, and draw from the well of the public domain with confidence. For when it comes to these works, the law doth not bite its thumb at thee. “A Pox Upon Uncertainty: Better to Know Than to Be Woe” While the public domain offers a vast and invaluable reservoir of creative material, it is of paramount importance to confirm that a given work is, in fact, free of copyright protection before using it. Not all “old” content is automatically in the public domain; factors such as the date of publication, the country of origin, and whether proper formalities were observed can all impact a work’s legal status. Mistakenly using material that remains under copyright could expose a user to infringement claims, even if the misuse was unintentional. Therefore, before thou dost take up thy pen (or camera, or microphone), it is wise to consult with legal counsel. As with so many matters in the law, ’tis better to measure twice than to be sued once.
May 27, 2025
Labor and Employment
Virginia Expands Non-Compete Restrictions for Employers
Virginia Governor Glenn Youngkin has signed Senate Bill 1218 into law, amending the state’s non-compete statute. Effective July 1, 2025, the updated law will broaden restrictions on non-compete agreements in Virginia. Previously, the law only protected “low-wage employees,” or those earning less than the average weekly wage in Virginia. Under the new amendment, employers will also be prohibited from entering into non-compete agreements with “non-exempt employees.” These are workers who are entitled to overtime pay under the Fair Labor Standards Act. Under the new amendment, all non-exempt employees – regardless of their income level – will be covered by the Commonwealth’s prohibition on non-compete agreements. However, the amendment is not retroactive. Therefore, employers who have entered into non-compete agreements with non-exempt employees prior to July 1, 2025, will remain valid; any such agreements executed on or after July 1, 2025, will be prohibited by law. Moving forward, employers will need to ensure accurate classification of workers as either exempt or non-exempt under federal standards to avoid liability under the new amendment. Employers should review their policies on non-competes, particularly as applied to offer letters, severance agreements, and employee handbooks to ensure compliance with the amendment.
May 27, 2025
Intellectual Property
Building a Patent Strategy that Actually Works for Your Business
If your business relies on bringing innovations to market that generate returns on investment, then a well-designed patent strategy is critical for realizing those returns. Patents help introduce new products to the market, secure investment, and establish your business’s competitive edge, all supporting and controlling the top and bottom lines. A thoughtful patent strategy simply helps turn innovation into long-term business value. However, achieving this long-term business value requires you to consider patents as part of the big picture of your business; business goals, market dynamics, and product roadmap are all important. Patents are not simply a check-the-box activity or even pure costs; they are investments in the future of your business. But how do you turn patents--powerful legal rights-- into business value? Start With the ‘Why’ Before jumping into the legal process, consider what patents could do for your business. Do you need to: Protect the core technology that drives your revenue? Create barriers to entry for competitors? Support a licensing model or open new revenue streams? Make your business more attractive to investors, acquirers or strategic partners? If the answer is yes to any of the above, a proactive patent strategy deserves a place in your broader business plan. Timing is Critical Patent law rewards those who act early in the innovation process. In fact, certain activities can result in the loss of patent rights. It is important to file for patent protection for an innovation before disclosing your invention publicly, whether through a sale, publication, presentation, or even a demonstration. But timing is a balancing act. Concepts that are too general or have not undergone some level of technical and market vetting may not be ready for patenting, but filing too late, after public disclosure can be catastrophic. Aim to file for patent protection when you can describe a clear use case and the market can identify key technical features important for that use case and market, ideally before you raise funds or launch publicly. Today, product development often requires engaging third parties early in the process. Two tactical steps can be used to bolster your strategy and provide some flexibility in timing: Use non-disclosure agreements with third parties you need to share your concept with to get help File provisional applications if you want to secure a filing date while continuing to refine the invention. Think Beyond One Patent Your strategy shouldn’t stop with one patent application or even one type of patent. Patents grant you the right to exclude others from making, using, or selling the invention as claimed. But patents often are not broad blocking patents. Patents are often focused on incremental innovations, and patent law generally limits one patent per invention. Often, several inventions are built into a product, and robust protection would therefore require multiple patents. You may need to: Protect multiple components or processes within a single product. File in international markets where you plan to sell or manufacture the product. Keep an eye on adjacent technologies and file follow-on continuation patents as your product and market evolve. At least considering these options allows you to manage your patent strategy to your product roadmap, keep an eye on competitive threats, and help manage your patent more proactively. Patents are Investments, Not Costs Filing a patent isn’t just a line item on your legal budget — it’s an investment in your business’s future. Like any other asset, patents have the potential to generate returns, whether through increased valuation, market exclusivity, licensing opportunities, or strategic advantage. What makes patents more of an investment than just a budget line item? First, delaying or forgoing patents gives your competitors a free pass to use innovations you developed for their own gain. Without patents, competitors will capitalize on what your business introduced to the market, leaving little recourse for you after the fact. Those competitors can then file patents that could hamper your ability to sell your products. This has a direct impact on the topline and undermines R&D investment. Proactive patent protection avoids this altogether and serves as a competitive deterrent. Second, patents can help add revenue through licensing. However, licensing revenue is nearly impossible without legal rights protecting the products. Patents are an effective tool to support licensing or acquisition opportunities. Third, patents attract and retain capital. Investors always ask if the technology has protection. The larger the investments you seek, the more scrutiny will be placed on your patent strategy and how it relates to the technology supporting your innovations. Investors often look for competitive advantages, and patents provide that. Patents are assets and can help support business valuations that facilitate investment. Related to direct investments, patents can also act as collateral to secured transactions, facilitating investment or debt for financing other parts of the business. Without patents protecting your technology, you are forgoing an effective tool that drives investor confidence, which, in turn, drives investment in your business. A well-timed, well-aligned patent strategy doesn’t just protect what you’ve built, it helps justify and maximize the investments you’re already making in innovation. Treat patents as part of your business assets and budget for them accordingly. Encourage Internal Innovation An intentional patent strategy doesn’t just protect innovation, it helps fuel it. When your innovators know there’s a process in place to capture and evaluate their ideas, they’re more likely to share them. Encouraging your team to share and disclose ideas that may be patentable unlocks potentially patentable concepts that can support your business goals. A great way to maximize patent value is to create an invention disclosure system that harvests innovations within your organization while rewarding disclosure among your team. This can form the basis for an engaged team oriented towards protection innovation. An excellent supplement, patent seminars can help educate your staff about the patent process and what it takes to be an inventor under U.S. law. The Bottom Line A strong patent strategy isn’t about legal red tape; it's about creating leverage, supporting your growth, and building real, lasting value. Treating patents as an investment—not a cost—unlocks their full potential as a driver of innovation, funding and long-term success.
May 23, 2025
Labor and Employment
Weddings, Honeymoons, and Milestones: Employer Guidance for Time Off Requests
For HR leaders and business owners alike, the question is not whether employees will request time off for major life events, but when and how your organization will respond. Weddings, honeymoons, and personal milestones do not fall under FMLA or mandatory leave laws, but how you handle these moments speaks volumes about your culture, legal risk tolerance, and ability to retain top talent. There’s No Legal Right — But There Are Legal Risks It’s true: U.S. employers have no legal obligation under federal or state law to offer “wedding leave.” These events are not protected by the Family and Medical Leave Act (FMLA), paid sick leave laws, or any other statutory entitlement. But do not mistake a lack of mandate for a lack of risk. Employers who approve or deny time-off requests inconsistently, particularly in ways that appear to impact employees based on gender, race, religion, or other protected characteristics, may face claims under Title VII or state anti-discrimination laws. The U.S. Department of Labor (DOL) continues to emphasize enforcement around leave and accommodation policies that have a disparate impact. While “wedding leave” is not protected, your process must still comply with anti-discrimination and fair treatment standards. FMLA and Paid Leave Interaction: Be Clear on What Applies While weddings and honeymoons typically fall outside the scope of the FMLA, some related events might trigger protected leave. For example: Destination wedding involving a serious health condition (e.g., pre-surgical travel): FMLA may apply. Caring for a seriously ill spouse during or after a wedding or travel abroad: FMLA may apply. Employee illness or complications resulting in an inability to return to work: also potentially protected under FMLA. Moreover, the DOL recently clarified that when employees receive state or local paid family or medical leave benefits, employers cannot require them to simultaneously use accrued paid time off (PTO). This rule limits an employer’s ability to control how leave is structured when overlapping benefits are involved. Employers must understand the interplay between federal FMLA rights and state/local paid leave programs. Suppose an employee receives paid benefits through a government program (e.g., California PFL, DC Paid Family Leave). In that case, employers must designate FMLA leave when appropriate but may only allow PTO to be used as a supplement if mutually agreed, not mandated. Build Goodwill Without Losing Control Your policies should reflect both empathy and operational discipline. A wedding is not a frivolous request — it is a once-in-a-lifetime event that deeply matters to your employee. When employers respond with humanity and structure, it creates loyalty. That does not mean granting every request or disrupting workflow. It means having a clear, written policy that: Requires advance notice (e.g., 30–60 days). Reserves approval based on business needs. Clarifies whether PTO or unpaid leave may be used. Avoids any ambiguity about the consequences of overstaying approved leave. Consider including a “personal leave” clause in your employee handbook to address non-medical, non-FMLA, and non-emergency time off. Your language can be simple and clear: personal leave may be granted at management’s discretion, subject to operational needs. Watch Out for International Travel If the honeymoon involves international travel, extra scrutiny is warranted. Confirm the return-to-work date in writing before the employee departs, and clearly communicate that unapproved extensions may be treated as unexcused absences. Lingering COVID-era entry restrictions, visa issues, or logistical complications can cause delays, but those are not excuses for avoiding your leave policies. Where possible, plan backup support and document expectations in writing to avoid any disputes upon return. Small Gestures, Big Impact From a culture-building perspective, do not underestimate the power of a simple “Congratulations!” A card, a team mention, or a verbal note from leadership can make an employee feel valued. Some employers go a step further — offering a “wedding day off” or an extra PTO day. These gestures are optional, but impactful. Policy Consistency Is Your Best Defense If your leave policies are outdated, vague, or silent on personal time off, now is the time to revise them. Review and align them with current DOL guidance, FMLA regulations, and your state’s paid leave laws. Train your managers, document every request and response, and apply the same standards to every employee, regardless of role, relationship, or circumstance. Bottom Line for Employers Personal milestones matter to your employees and your business. They can create resentment, attrition, or even litigation when handled poorly. When handled well, they can build trust and reinforce culture. Be fair. Be clear. Be compliant. Be human. And most importantly, be consistent.
May 21, 2025
Immigration Law
Top Mistakes That Jeopardize Your Green Card—and How to Avoid Them
As we are currently in a time of extensive scrutiny of immigration actions, individuals must understand their status, rights and obligations. Legal Permanent Residents possess many protections that nonimmigrants do not have, but must carefully maintain their status. One of the key aspects of maintaining a green card is maintaining an existing “intent” to permanently reside in the United States. This is an issue that comes up with green card holders who move abroad or spend significant time outside of the United States. If the Department of Homeland Security (DHS) has reason to believe an individual does not have the intention to reside in the United States, then they can bring proceedings against the individual to remove their green card. The law and policy are summarized by the U.S. Citizenship and Immigration Services (USCIS) as follows: Permanent Resident Cards become technically invalid for reentry into the United States if the holder is absent from the United States for 1 year or more. U.S. permanent residence status may be considered abandoned for absences shorter than 1 year if the green card holder takes up residence in another country. The first point is technical; if one is out of the country for a year or more, their green card is no longer valid for entry. Customs and Border Protection (CBP) will raise this issue at the Ports of Entry to the United States. It can be waived at entry, but the CBP rarely allow that. Instead, they follow a “hawkish” approach to individuals with absences of a year or longer. It should be noted that legal permanent resident status is protected by law and must be removed by legal proceedings. The second point is where individuals can potentially incur CBP scrutiny through a prolonged periods of absence from the United States. For example, if an individual comes into the U.S. twice a year for several years to maintain their green card, questions may arise about the individual’s intent to reside in the U.S., even though that they were technically compliant. Generally speaking, if a legal permanent resident thinks they will spend more than six months outside the United States, they should talk to an immigration attorney. On May 1, 2025, CBP updated its guidance to legal permanent residents returning to the United States. This policy document states that legal permanent residents who have been out of the country for longer than six months will be subject to new immigration inspection procedures. No further details of these new and increased inspections have been released. See Traveling outside U.S. - Documents needed for Lawful Permanent Residents (LPR)/Green Card holders Certain key actions can automatically raise a question of the green card holder’s intent if they leave the United States, specifically: Clearly manifesting an intent of permanently residing in another country (i.e., applying for long-term status in that country. Green card holders must file US taxes on their global income, and they must file taxes as residents for tax purposes; failure to file resident tax returns can be seen as an intentional abandonment of status. Making statements to CBP or DHS that do not support the green card holders’ assertions that their trips abroad are temporary. Accordingly, green card holders who move abroad temporarily must be diligent in maintaining ties to the United States and take proactive steps to protect their green card. They must realize they are jeopardizing their status by extended time abroad. Returning to the United States once a year will eventually draw the ire of the CBP, and the green card holder can expect to receive progressively more intrusive and sustained questioning upon entry to the United States. Steps that green card holders who live abroad could take to protect their status include the following: Travel with evidence of why your trip outside of the US is temporary – temporary job offer, extended care for a family member, explanations for delays, etc. Continue to file US Income taxes. Maintain a residence in the US. Be diligent in not spending 365 days outside of the United States. Registering with the Selective Service is required. Updating their home address with USCIS via Form AR-11. Obtain a Re-Entry Permit:Re-Entry Permits protects a green card holder’s status for two years upon approval. Although not a guarantee of entry, the Re-Entry Permit is excellent evidence to present to CBP that the individual’s absence abroad is temporary. Re-Entry Permits can be renewed depending on the circumstances that the individual faces. Re-Entry Permits must be applied for in person in the U.S.; Having the USCIS receipt notice as evidence of the application is good evidence to demonstrate to the USCIS. Been out of the country for a year or longer?The safest route is to apply for an SB-1 immigrant visa at your local U.S. Embassy to avoid issues entering the country. Lastly, should an individual face potentially denial of entry to the United States for circumstances beyond their control, they can apply for a returning resident special immigrant visa to ensure they can enter the U.S.
May 20, 2025
Business
Avoiding Common Contract Pitfalls: Legal Landmines in Agreements
Contracts are the backbone of every business relationship. Whether buying a business or entering into a new commercial agreement, many small to mid-sized businesses do not fully negotiate critical clauses within the document. Failing to fully negotiate certain language, relying on informal agreements, or failing to update commercial contracts with appropriate amendments as the relationship evolves can become a significant liability to a company. Informal arrangements may feel efficient in the short term but can create significant issues if a dispute arises. In this edition of Search Fund Operate, we break down the most commonly negotiated (and litigated) provisions in contracts. The below is an overview of how acquirers, operators, and business owners can proactively protect themselves from exposure. The Risk of Informal Agreements Many business relationships begin with trust — a handshake deal, an email exchange, or a PDF template someone downloaded online years ago. But when disputes arise, courts look for formal agreements. Informal or undocumented agreements often lack enforceable provisions around risk allocation, dispute resolution, and payment mechanics. Even worse, they often fail to outline each party’s actual responsibilities, deadlines, or remedies. Tip: If a dispute reaches litigation, and there is no signed agreement or only partial documentation, courts may rely on the parties' prior conduct or applicable statutory rules that might not reflect the parties’ original intentions. Inconsistencies can lead to conflicting testimony and unpredictable results. Without formal terms, operators risk operational confusion and disruptions, customer dissatisfaction, and expensive court battles. This risk grows exponentially when the business is being sold or scaled, as buyers expect to inherit clear, enforceable rights and obligations. Liability and Indemnification Indemnification Clauses Indemnity provisions shift the burden of financial responsibility for specific claims. These are some of the most heavily negotiated clauses. Poorly drafted clauses can: Leave you liable for the other party’s negligence or misconduct. Fail to include third-party claims (e.g., customer injuries from vendor products). Omit procedural requirements for notice and defense, leaving you without control of litigation that affects your reputation. Tip: Ensure that the indemnification clause is protective of your interests. Push for mutual indemnification, defense, and settlement rights, not just reimbursement. Also consider whether to limit indemnification to direct damages or extend it to consequential losses. Environmental Indemnity In certain industries — such as manufacturing, logistics, or commercial real estate — environmental risk requires special attention. Contracts should: Clearly allocate responsibility for environmental conditions, both known and unknown. Include representations about compliance with environmental laws and past environmental issues. Address remediation costs and third-party claims. Tip: Require the disclosing party to provide environmental reports and clarify who bears responsibility for pre-existing contamination. Liability Carve-Outs Clauses that attempt to shift risk should specify whether they cover negligence, gross negligence, or willful misconduct. The broader the language, the greater the protection. Sophisticated parties often negotiate carve-outs for fraud or breaches of confidentiality. Limitation of Liability: Know Your Exposure Exclusion of Damages Most contracts attempt to exclude certain categories of damages: Consequential damages (e.g., lost profits or reputational harm) Incidental damages (e.g., additional shipping or handling costs) Punitive damages (rare, but potentially significant in litigation) However, these clauses must be: Clearly drafted and conspicuously presented in the agreement Consistent with governing law and not prohibited by statute Tied to specific breaches or defined categories of claims Tip: Courts may strike down limitation clauses if they are hidden in boilerplate language or conflict with public policy (e.g., consumer harm or gross negligence). Careful drafting is necessary to ensure these clauses are enforceable. Caps on Damages Liability caps are common. These are often limited to: The total fees paid under the agreement over a certain period A multiple of the monthly or annual contract value These types of damages caps should be: Commercially reasonable Include carve outs for egregious conduct (e.g., fraud, IP infringement) Reviewed for enforceability in high-risk jurisdictions (such as California or New York) Tip: Combine caps on damages with tailored indemnification clauses and insurance requirements offer the most balanced protection. Right to Recover Damages Parties should not assume that silence on damages means full recovery. Contracts should affirmatively state: Whether consequential or incidental damages are recoverable Whether lost profits are compensable Whether the right to injunctive relief is preserved for breaches such as misuse of IP, confidential information, or violation of non-competes (if included and within a jurisdiction where enforceable) Tip: Courts can be reluctant to award damages not clearly contemplated in the contract language. Assignability and Change of Control An often overlooked provision is whether contracts can be assigned to another party — a crucial issue during a business sale or restructuring. If assignment is restricted, it may require: Written consent from the counterparty Disclosure of assignee's financial information Attorney fees associated with any legal review prior to consenting to the assignment Some contracts even treat a change of ownership or control as a default or termination trigger. Tip: Failing to secure assignability can delay or derail an acquisition, especially if key customer contracts are involved. Operators should inventory and review top agreements well before a contemplated sale. Payment Terms and Dispute Mechanics Clear Payment Language Contracts should specify: Invoice frequency and delivery method Payment deadlines, accepted payment methods Grace periods, late fees, and interest charges Whether payments are conditional on acceptance, delivery, or milestones Right to stop future delivery of services or products in the event of non-payment Vague or missing language around payment terms is a common source of cash flow disruption. Courts often apply standard practices or industry norms — which may not reflect your business model. Tip: Use net terms that clearly reflect the payment terms. Add provisions for disputed invoices and partial payments. Condition of Delivered Goods or Services Ensure the contract addresses: Acceptance criteria and inspection periods What constitutes a material defect Remedies for nonconforming or damaged goods Whether services must meet a defined performance standard Tip: If materials are delivered late or defective, and the contract is silent, the buyer may have limited options to reject or recover costs. Dispute Resolution Well-structured dispute resolution clauses can minimize litigation costs and clarify where and how conflicts are resolved. These clauses should address: Venue and jurisdiction Governing law (state of choice) Mediation or arbitration requirements before litigation Scope of issues subject to arbitration Tip: Choose arbitration only when you can afford and control it — not all arbitration is cheaper or faster than court. Choice of Law and Venue Failing to specify a governing law can create confusion and increase cost. Choose a state with predictable case law and commercial friendliness Clarify venue for both lawsuits and arbitration (county and state) Tip: Courts generally uphold these clauses, but ambiguity can invite satellite litigation over which rules apply. Recovery of Attorneys’ Fees By default, parties generally pay their own legal fees unless the contract provides otherwise. A prevailing party clause can: Deter frivolous lawsuits Improve recovery leverage for the aggrieved party Help offset enforcement costs in breach scenarios Tip: Ensure the clause clearly defines "prevailing party" and whether partial victories count. Other Heavily Litigated Provisions Force Majeure Since COVID-19, courts have closely scrutinized force majeure clauses. These should be specific and include: Pandemics, epidemics, and public health emergencies Cybersecurity incidents and data breaches Labor strikes, natural disasters, and government actions Tip: Clarify notice requirements and what obligations are suspended or excused. Termination Rights Contracts should clearly state: Whether either party may terminate for convenience Grounds for termination for cause (e.g., material breach, insolvency) Required notice periods Obligations upon termination (e.g., final payments, transition support) Tip: Courts often look to see if the termination provisions were exercised in good faith and consistent with the contract’s intent. Integration Clause A merger or integration clause ensures that only the written agreement governs the relationship. This is a critical protection against claims of oral promises or email side agreements that contradict the final document. Conclusion Contracts are not just formalities — they are critical risk allocation tools. Whether you are acquiring a business, managing a commercial relationship, or selling to customers, business owners should ensure that agreements are thorough, clear, and enforceable. This will reduce litigation risk and protect your enterprise value. For buyers and operators, reviewing all critical contracts pre- and post-close is an essential part of your diligence and compliance process. Don’t assume the existing agreements are sufficient — many are not. Where possible, standardize contract templates, build clear negotiation guardrails, and involve legal counsel to spot ambiguous or dangerous provisions before they become problems.
May 14, 2025
Commercial Litigation
AI Ain’t Atticus: Why Machine Learning Can’t Master Legal Reasoning (Yet)
An increasing number of litigators are relying on artificial intelligence to streamline their workflows and generate legal products, from research and memos to predictive insights. While the efficiency and capabilities of these tools are advancing rapidly, as a seasoned litigator in both federal and state courts in various arbitration fora such as AAA and FINRA, I would strongly caution practitioners—and the clients who hire them—to use AI as a supplement, not a substitute, for sound legal judgment. AI’s Role in Litigation AI-driven platforms are helping lawyers analyze vast amounts of data, uncover patterns, and even predict case outcomes based on historical decisions. Tools like e-discovery software can process and categorize thousands of documents in a fraction of the time it would take a human team. Firms also use chatbots and virtual assistants for preliminary client intake and communication, and some even use AI to recommend settlement strategies or assist in jury selection. These types of time saving techniques are obviously attractive to many practitioners, particularly smaller firms who are attempting to compete with much larger adversaries in complex litigation matters. Having practiced at both large firms and boutiques, I know that timing and resources are paramount considerations when taking on any new matter. But like anything in life, when it seems too easy, there may be a catch…. Key Considerations Bias and Fairness AI systems are only as reliable as the data they’re trained on. If historical data contains bias—such as racial, socioeconomic, or gender disparities—AI could unintentionally replicate or reinforce these inequities. Ensuring fairness and transparency in algorithms is essential. Accountability and Ethics Lawyers are held to ethical standards that no machine can shoulder. AI may support decision-making, but it cannot assume responsibility. Over-reliance on AI can lead to missteps; ultimately, the attorney who must answer for them. Accuracy of Legal Content Some AI programs have been found to generate case citations that are incomplete, misleading, or outright fictitious. Indeed, certain AI programs have produced case results for cases that do not exist. This undermines the credibility of the legal product and can raise serious concerns in the courtroom. If an attorney submits filings containing fabricated or incorrect citations, the consequences may include sanctions, reputational damage, or even adverse rulings. Moreover, this has broader equity implications—clients with fewer resources may disproportionately suffer from lower-quality work products that rely too heavily on unchecked AI output. Privacy and Confidentiality AI tools often require access to large datasets, including sensitive client information. Maintaining confidentiality and compliance with privacy regulations is paramount, especially as cyber threats and data breaches become more sophisticated. Explainability Many AI systems function as "black boxes," delivering results without a transparent explanation of how those results were reached. In a legal context, particularly when presenting arguments in court, being able to explain and defend reasoning is non-negotiable. Regulatory Compliance As AI’s presence in legal practice grows, regulators are beginning to set standards for its use. Law firms and their practitioners must remain vigilant, ensuring their use of AI adheres to both current and emerging legal ethics and professional conduct rules. Conclusion Many practitioners and pundits believe that AI holds great promise for litigation, from enhancing efficiency to revealing insights that might otherwise be missed. But its role should be that of an assistant, a tool or a resource (at most) — not a decision-maker nor a substitute for a seasoned, educated and skilled practitioner. Practitioners must therefore exercise judgment, skepticism, and caution, recognizing that the practice of law remains, at its core, a human endeavor.
May 12, 2025
Commercial Litigation
Serving Hard-to-Find Defendants – Motions for Alternate Service
Filing a complaint in a New York court can be easy. But after a plaintiff files that complaint, the plaintiff must serve the defendant with the summons and complaint. Failing to serve the defendant properly may lead the case to be dismissed. For many plaintiffs, attempting to serve the complaint on the defendant is as far as they get. Often, defendants know that if they can make it difficult for the plaintiff to serve the complaint, they have a chance to make the lawsuit go away. However, when plaintiffs have difficulty serving the defendant, they can take advantage of New York’s laws and creatively serve the complaint and move their case forward. In New York, CPLR 308 is the law that identifies the methods a plaintiff must use for completing personal service on a defendant. Ideally, a plaintiff can serve a defendant by personally delivering the summons to him or her. CPLR 308(1). But if not, a plaintiff may deliver the summons to a person “of suitable age and discretion” at the defendant’s “actual place of business” or “dwelling place or usual place of abode.” CPLR 308(2). Suppose plaintiff cannot serve the defendant by personal delivery or to a person of suitable age and discretion despite the plaintiff’s due diligence. In that case, the plaintiff may affix the summons to the door of the defendant’s “actual place of business, dwelling place or usual place of abode” and then mail a copy of the summons to the defendant’s “last known residence” or “actual place of business” in the specific manner called for in CPLR 308(4). For many plaintiffs, one of those three service methods will do the trick. But what if a plaintiff cannot track down the defendant’s actual place of business? Or does the defendant’s place of business have security that won’t permit access to the defendant’s office? Or the plaintiff cannot access the defendant’s home because it’s in a gated community? This is where CPLR 308(5) comes in: when serving a defendant is “impracticable,” a plaintiff may ask the court for permission to serve the defendant in any “such manner as the court . . . directs.” To request this from the court, a plaintiff can file a motion. Sometimes, these motions are called motions for substitute service or for alternate service. In that motion, the plaintiff must show the efforts undertaken and that serving the defendant is “impracticable”—not impossible. Then, the plaintiff may request the court to allow it to serve the defendant by some method other than CPLR 308 prescribes. In considering these types of motions, courts require that the defendant receive due process and that the service on the defendant is “reasonably calculated, under all circumstances, to apprise the defendant” of the lawsuit. Courts have wide latitude in fashioning the method of service and adapting that method to the particular facts of the case. In deciding these motions, some courts have prescribed plaintiffs to serve the summons and complaint on a defendant’s attorney, insurance company, or family member, and some have even allowed service by email. The circumstances for each situation are different. However, if a plaintiff is having difficulty serving a defendant—perhaps because the defendant is evading service—then that plaintiff might consider pursuing a motion under CPLR 308(5). This is particularly important because serving the summons and complaint must be completed within 120 days after commencing the lawsuit. CPLR 306-b. When a plaintiff prepares a motion under CPLR 308(5), it is crucial to include documentation of the plaintiff's efforts. Those efforts will not only tend to show that service on the defendant is “impracticable” but also that the proposed method of service that the plaintiff seeks to use is fair and will give the defendant due process.
May 8, 2025
Landlord Representation
New D.C. Law on Pet Fees & Policies – What to Know for October
The newly enacted Pets in Housing Amendment Act of 2024 D.C. law will impose significant new limits on pet-related fees and restrictions for rental housing providers. For leases starting on or after October 1, 2025: You may charge a refundable pet security deposit, but it must not exceed 15% of one month’s rent and must be kept separate from the standard security deposit. You may charge monthly pet rent, but only within strict limits:Up to 1% of the first full month’s rent per dog; and No more than 1% total for all other common household pets combined. You may not charge any fee, deposit, or rent related to a service or assistance animal, which is protected under federal and local disability laws. Reasonable pet policies (e.g., number limits) are still permitted, but must not be arbitrary or overly restrictive. For leases starting on or after October 1, 2026: You may not impose restrictions or charge fees based on a pet’s breed, size, or weight. Any pet-related charges or conditions must comply strictly with the limitations described above. These rules do not apply to leases that begin before October 1, 2025, but any lease renewed or newly executed on or after October 1, 2025, will be subject to the new requirements. We recommend reviewing your current lease templates, pet addenda, and fee schedules well in advance of these dates.
May 6, 2025
Construction
How Long Is Too Long? What Statutes of Repose Mean for Your Liability Exposure
How long are you on the hook for defects in a completed construction project? It’s a question that keeps many contractors and design professionals up at night—and for good reason. No project is flawless, and the duration of responsibility for construction or design defects depends on numerous factors, including the contract language, the type of harm or injury that is the subject of concern, and statutes of repose. Typically, construction and design work are performed under written contracts. As an initial starting point, if a design or construction defect arose and was identified during the project itself, most construction contracts have specific clauses that require the claims to be noticed, raised and submitted timely, often within a short time period of days or weeks. Thus, if an issue is discovered during the project itself, the accrual date might be immediately at that time, and, under the contract, prompt notice and submission of the claim are often required. For incidents that occur after the project is completed, the written contract may contain clauses that identify the “accrual” or starting point for claims that occur or are discovered after the project is completed. For example, some versions of AIA contracts identify Substantial Completion as the date when claims “accrue,” meaning that Substantial Completion is the triggering start date for when the clock on a statute of limitations (deadlines) begins to run. B143-2004, Section 3.6.3. Thus, for latent, unknown defects in construction or design, the contract might identify a specific milestone (e.g. Substantial Completion) as the accrual date, with a deadline that runs from there. The contractual clauses identified and discussed so far typically pertain to construction or design defects that are pursued as claims between the parties on the project, who typically have a contract where the cause of action would likely be a breach of contract or perhaps negligent design/construction. Statutes of Repose and Contractual Repose Additionally, if a contract clause does not govern the issue, deadlines for claims are typically found in statutes of limitation and statutes of repose. These are state specific statutes; thus, different states will likely have different rules, deadlines and interpretations. A statute of limitations is a deadline to file claims from the date the claim accrues, typically the date of the injury. Thus, under a statute of limitations, once the injury occurs, a claimant has a specific period of time (going forward) to file the lawsuit. It is a deadline that looks forward from the date of loss. Sometimes, the statute of limitations can be extended if the defect was unknown, or if the injury did not occur until a much later date. Depending on the circumstances, the deadline might be extended further than anticipated if the loss was hidden, concealed, or the injury is delayed. On the other hand, a statute of repose is a backward-looking deadline. Instead of looking from the date of injury, it pegs a milestone date and imposes a hard cutoff looking backwards. Once the repose period expires, no legal action can be brought, regardless of when the defect was discovered or the injury occurred. Statutes of repose create a deadline with an absolute bar on claims brought outside the set time limit. Repose periods vary by jurisdiction, and construction professionals working across state lines must be aware of those differences. Some notable examples in the Mid-Atlantic include: Pennsylvania: 12 years Maryland: 10 years Virginia: 5 years District of Columbia: 10 years Delaware: 6 years Thus, for example, in Virginia, five years after the date of performance of the work, no matter what the circumstances, all claims are barred. To be clear, the statute of limitations might run sooner than five years, depending on the type of claim, but with a statute of repose, there is no availability for an extension if the defect was concealed, latent, or unknown. Thus, it acts as a final cutoff, regardless of when the injury occurred, and regardless of who the claimant is. Understanding these timelines is essential when assessing long-term liability and risk on completed projects—especially during the negotiation and drafting of contract provisions. In some cases, parties may choose to establish a contractual clause of repose that is shorter than the statutory period provided under state law. These contract clauses should be drafted carefully to define clearly: The types of claims covered (e.g., contract, tort, breach of warranty, contribution, etc.) The event that triggers the limitations period (such as substantial completion or final payment) The duration of the contractual repose period (e.g., one year or longer duration). When drafted with precision, time limitation clauses can offer powerful protection by limiting claims to a shorter period. To further reduce exposure, contractors and design professionals should take proactive measures throughout the project, such as detailed recordkeeping to establish the scope of work performed and decisions on the project, along with establishment of the actual dates of substantial and final completion. Understanding statutes of repose and contractual clauses of repose is essential to limiting long-tail liability and thus protecting your business. These strategies won’t just help you sleep better at night—they’ll significantly strengthen your position against claims that arise long after you’ve completed a project. When drafting contract clauses and implementing risk management strategies, consulting with experienced construction lawyers, accountants, and insurance experts is best.
May 6, 2025
Business
Unexpected Tax Penalties in Talent Contracts: Could Your Motion Picture, Recording, or Sports Contract be Subject to IRC Section 409A?
Could your motion picture agreement, recording agreement, or sports contract be a non-qualified deferred compensation arrangement? You may think it unlikely, but a non-qualified deferred compensation arrangement refers to any agreement under which an employee or independent contractor—i.e., a “service provider”—may receive a payment in a taxable year later than the year in which the service provider had a legal right to the payment. There are specific rules governing non-qualified deferred compensation arrangements: Code Section 409A of the Internal Revenue Code of 1986, as amended. Failure to comply with the detailed requirements of Code Section 409A can trigger the immediate taxation of deferred income and impose an additional 20% penalty tax on that income. Any contract providing for the provision of services that provides that some payments may be made after the year that the contract was entered into may be a non-qualified deferred compensation arrangement. This is because the Internal Revenue Service takes the position that a service provider first has a legal right to payment when the contract is entered into, and this applies even if the contract requires the service provider to provide services and the services have not yet been provided. Entertainment Industry Examples: How Code Section 409A May Apply Motion picture contracts frequently provide top talent with a percentage of the box office as compensation for services. In recording contracts, a new artist is generally given an advance to deliver a master recording to a record company. The record company owns the master recording, but the agreement provides the artist receives a “royalty” equal to a certain percentage of sales that will be offset against the advance that the artist received. Since the artist does not have a property right in the master recording, the “royalties” are compensation and will be subject to Code Section 409A, unless an exception applies. Sports contracts often provide for deferred compensation in a colloquial sense. Since the payment to be received by the athlete is not a payment under a qualified retirement plan governed by ERISA, the deferred compensation will be subject to Code Section 409A unless an exception applies. One exception to Code Section 409A is the short-term deferral exception. A payment qualifies as a short-term deferral if the payment must be made by March 15 (for a calendar year service recipient) of the year following the year in which the payment becomes vested or is no longer “subject to a substantial risk of forfeiture.” In this case, this is a short-term deferral and Code Section 409A does not apply. Permissible Payment Events Under Code Section 409A If a payment constitutes non-qualified deferred compensation, then there are only certain events on which the payment can be made: An objectively determinable time or schedule set forth in the agreement (e.g., on January 1 of a certain year or the athlete’s 50th birthday) Death or disability Separation from service (with a very specific definition) Change of control (also a very special definition) Unforeseen emergency Once the payment terms are set forth in an agreement, the terms cannot change, except in very limited circumstances. The payment can never be accelerated by more than 30 days, and there are very strict rules regarding further deferral of the payment. One of those rules is that if a payment is deferred, it must be deferred by more than 5 years from the original payment date. Consequences of Violating Section 409A If Code Section 409A applies and is violated, the penalties are generally imposed on the service provider. These penalties include acceleration of recognition of income for all payments to be made under the agreement in the year in which the violation occurs. Additionally, the service provider is required to pay a 20% penalty tax, as well as ordinary income tax on these accelerated payments. Code Section 409A is complex and often overlooked in entertainment and sports agreements. But if your contract includes future payments tied to services performed now, it is worth asking whether these rules apply. Careful planning can help avoid unexpected taxes and penalties.
May 5, 2025
Commercial Litigation
Virginia Court of Appeals Clarifies Impact of the CARES Act on Eviction Actions
In a recent decision, the Virginia Court of Appeals clarified the impact of the CARES Act on Virginia eviction proceedings. Read the full ruling here. The ruling is significant for Virginia landlords, property managers, and tenants, particularly those managing or residing in properties covered under the CARES Act. Background: The landlord filed an eviction action (unlawful detainer) against residential tenants after they allegedly failed to pay rent. Under Virginia law, the landlord issued a five-day notice to pay rent or vacate the premises. However, the notice also stated the tenants had 30 days to vacate pursuant to the CARES Act. The trial court dismissed the eviction action, ruling it violated the CARES Act’s 30-day notice requirement because the action was filed before the 30-day vacate period expired. On appeal, the Court of Appeals reversed the trial court’s decision. Key Implications of Ruling: Filing an Eviction Action Does Not Require a Tenant to Move Out: Filing an eviction action is only the first step in the legal eviction process, and it does not require the tenant to leave the property. Therefore, a landlord who files an eviction action within the 30 days allowed by the CARES Act does not violate the CARES Act. Difference Between Summons and Execution of a Writ: The CARES Act prohibits landlords from taking action that would require a tenant to vacate the premises before the 30-day notice period has expired. However, it does not prevent landlords from initiating an eviction action. Only a physical eviction of a tenant, performed by a Sheriff, would violate this provision if done within the 30-day timeframe. Practically speaking, a physical eviction cannot occur this quickly. Preemption of State Law by Federal Law: When there is a conflict between federal and state law, federal law preempts state law. Thus, the CARES Act’s requirements, if applicable, provide tenants in covered properties with 30 days before they must vacate, superseding any contrary provision of Virginia law. Impact on Virginia Landlords and Tenants: Proceed with Filing: Landlords can file eviction actions within the 30-day notice period without violating the CARES Act. Understand Tenant Protections: The ruling reinforces the requirement for landlords, subject to the CARES Act, to allow the full 30-day period before proceeding with any action that would physically remove tenants from the property. Any attempt to execute a writ of eviction within that period could lead to legal consequences. Clarity on Lease Termination: Even if a lease is terminated under Virginia law, the tenant still has the right to remain on the premises for 30 days after receiving notice, in accordance with the CARES Act. Conclusion The Court of Appeals’ ruling affirms that landlords may lawfully file eviction actions during the CARES Act’s 30-day notice period, while still upholding federal protections for tenants. Understanding the intersecting requirements of federal and state law is key to ensuring compliance and avoiding disputes. For those facing landlord-tenant issues, seeking qualified legal guidance remains an important step.
May 2, 2025
Mergers and Acquisitions
Younger Generations Looking to Sell: What Millennial and Gen X Business Owners Need to Know
I recently wrote about the “Gray Tsunami” and the mass numbers of Baby Boomers that will be retiring over the next few years. For Boomers, there are specific considerations that must be addressed if sale is their exit option. Similarly, there are age-oriented issues facing younger generations looking to sell their businesses. There are approximately 138 million Americans across the Millennial and Gen X generations as of the latest data. Millennials, born between 1981 and 1996, make up about 72.7 million Americans, and Gen X, born between 1965 and 1980, is not far behind at about 65.35 million. Data also shows that Millennials own 13% of small businesses, with Gen X owning 47%. As such, these two massive generations combined account for the majority of small business owners in the US. When looking at a transition at a much younger age, there are different issues to consider as opposed to those who sell later in life. Timing and Valuation A business owned by someone in their 30’s, 40’s, or 50’s will typically have a shorter life span than one owned by a Boomer. This means there might not be decades of financial performance to demonstrate stability to a buyer, and the business could be at a stage of high growth potential, but not maturity. While this is not always the case, buyers tend to prefer a strong history of stable cash flow and profitability. This is why timing is a critical factor. Younger generations should strategically plan their exit so that the timing works in their favor to maximize their valuation. Shifting market conditions and economic trends can impact valuations as well, so it is important to consider a variety of factors when determining the right timing that results in the greatest valuation. The retiring Boomer generation is also a major consideration in terms of timing. If a flood of Boomers are looking for buyers simultaneously, younger generations might look to delay their sales to reduce the competition for buyers. Conversely, this also presents a significant and unique opportunity to younger generations looking to buy. Planning for the Future Individuals in the Millennial or Gen X generations will likely have a great deal of life in front of them, so planning for the future is essential if they are going to sell their business. Consider the short and long-term goals of the sale. Do you want to be acquired to start a new business? Is your goal to retire early? Are you looking at other employment opportunities? Do you want to only sell a portion of the business to a strategic partner such as a PE firm, as opposed to a full exit? These are all important points to consider as they will help you to determine what kind of valuation will be required to meet your specific needs and how you need to structure the sale. These are different for everyone based on life goals, thus, looking at your future and what you need to make it happen is key. It is also important to work closely with your legal advisor to ensure the transaction is structured in a way to allow for the necessary financial and legal protections Selling to Start Again If your goal is to sell the company and start a new venture, then there are some very specific points that will need to be negotiated with the seller. For example, what kind of agreements does the buyer require? A non-compete agreement could prevent you from starting a similar business within a specific region or time frame, and a non-solicitation clause could restrict the hiring of former employees or soliciting clients. These are points that need to be front of mind if you are considering starting a similar business down the road, as they could seriously impact its success. Company Culture vs. Financial Gain Younger generations also tend to place a greater sense of value on company culture, employee retention, and customer loyalty. So, finding the buyer that will carry on the established company values and culture can play a larger role. Younger sellers must work to find the balance between carrying on the long-term vision for the company and maximizing the financial return from the sale. Selling your business at any age requires careful planning and preparation. But when selling earlier in life, there are complexities that exist due to the longer road that lies ahead. Having a clear long-term vision and understanding how the acquisition fits into your plan will help you to maximize the benefits and carry out your goals.
May 2, 2025
Bankruptcy
Director & Officer Duties: What Every Leader Should Know
Earlier this year, the FDIC, acting as receiver for Silicon Valley Bank (“SVB”), filed a breach of fiduciary duty lawsuit against six officers and eleven directors of the bank. The FDIC alleged that these individuals ignored internal risk warnings, prudent banking standards, and SVB’s own risk management policies in pursuit of short-term profits and a boost to the stock price of SVB Financial Group (SVBFG). According to the complaint, SVB’s downfall stemmed from critical errors, including an overreliance on long-term, unhedged, interest-rate-sensitive securities. This exposed the bank to significant risk amid a rising interest rate environment. Compounding the issue, executives allegedly manipulated internal risk models to conceal problems rather than address them. Between 2021 and mid-2022, SVB removed key interest rate hedges in an effort to inflate short-term earnings and SVBFG’s stock price, increasing its exposure to rate volatility. In late 2022, despite signs of financial distress, SVB paid a $294 million dividend to its parent company, further depleting its capital reserves. This filing serves as a timely reminder of the critical responsibilities that directors and officers (D&Os) hold—especially during periods of financial instability. The current environment of uncertainty, market volatility, and fear of recession heightens the risk of bankruptcies and the accompanying scrutiny of the actions of officers and directors. What should directors and officers consider when a company transitions from solvency to insolvency? D&O Duties Two fundamental fiduciary duties exist under Delaware law1: the duty of care and the duty of loyalty. Fulfilling the Duty of Care To satisfy the duty of care, directors and officers must make decisions based on a reasonably informed process. This means they must actively gather and consider all material information relevant to a decision. The standard for breaching this duty is gross negligence. Delaware law—specifically §102(b)(7) of the Delaware General Corporation Law—permits corporations to include charter provisions that exculpate directors from monetary liability for breaches of the duty of care. While this makes awarding money damages rare, breaches may still give rise to equitable remedies or support claims for aiding and abetting. Fulfilling the Duty of Loyalty The duty of loyalty requires directors and officers to act in good faith and in the best interest of the company, not in pursuit of personal benefit. This duty focuses on avoiding conflicts of interest. To fulfill the duty of loyalty, directors and officers must be disinterested, meaning having no personal financial stake in the matter, and independent, or in other words not being under the control or influence of someone with a personal financial interest. Who Are the Duties Owed To? Directors and officers must remember that fiduciary duties are owed to the corporation itself, with the goal of maximizing the value of the enterprise. When the company is solvent, fiduciary duties are effectively owed to shareholders, as they are the residual beneficiaries of the corporation’s success. Ordinarily, the board of directors owes fiduciary duties to both preferred and common stockholders. However, in the event of a conflict between their interests, the board is obligated to prioritize the interests of common stockholders over those of preferred stockholders When the company becomes insolvent, the focus shifts. Insolvency gives creditors standing to bring derivative claims for breaches of fiduciary duties since the value of the enterprise is now effectively for their benefit. A corporation is considered insolvent under two main tests: 1) balance sheet test – when liabilities exceed the fair market value of assets; and 2) cash flow test – when the corporation is unable to pay its debts as they come due. This evolving fiduciary landscape underscores the importance of responsible governance, especially when a company is under financial stress. Directors and officers must remain vigilant, informed, and unbiased to fulfill their legal and ethical obligations—and avoid the kind of fallout we saw with SVB. T A couple of other examples of director and officers’ actions that led to successful breach of fiduciary duty claims come from the case of TransCare Corporation and AMC. TransCare – Insider Transaction In TransCare, a Chapter 7 trustee brought claims against the sole director of TransCare. TransCare Corporation was a Delaware corporation headquartered in Brooklyn, New York. TransCare Corporation, by and through its subsidiaries, provided ambulance services to hospitals and municipalities for emergency and non-emergency patients and paratransit services to the New York Metropolitan Transit Authority (“MTA”) for individuals with disabilities. At all relevant times, Lynn Tilton served as the sole director of TransCare. The officers of TransCare did not have the authority to (a) approve an annual operating plan budget or any interim operating plan or budget; (b) negotiate the sale or disposition of any assets; (c) recapitalize or make other changes in the capital structure; (d) disclose any financial information to any third party; (e) enter into any contract or license agreement not contemplated by the approved Annual Plan (of which there was none); (f) enter into any financing or loan agreement; (g) dispose of any unusable asset or write off any receivable, or make a charitable contribution; (h) change auditors; (i) engage legal counsel; (j) settle or compromise any claim; (k) engage any consultant; or (l) conduct any reduction in force. Accordingly, Tilton made all decisions for TransCare and managed TransCare through her employees at related entities. TransCare encountered financial difficulties and Tilton decided to split it into OldCo and NewCo. First, OldCo would be wound down in one of two ways: (i) outside of bankruptcy over ninety days followed by Chapter 7 or (ii) through a Chapter 11. Second, Patriarch Partners Agency Services, LLC, an entity indirectly owned and controlled by Tilton and acting as an administrative agent for a term loan extended to TransCare, would foreclose on collateral and sell it to NewCo which would continue to operate as a going concern. The foreclosure and sale to NewCo became the problem. Lynn Tilton’s fundamental error was turning what should have been an arm’s-length sale into a one-sided, self-dealing foreclosure and sale to herself without any of the procedural safeguards that Delaware law requires for “entire fairness.” In particular, she: Controlled every step of the deal — conceived, negotiated, approved, and executed the strict foreclosure and subsequent sale through her own affiliates, with no independent board or special committee involvement. Fixed the price unilaterally — she set the $10 million “foreclosure credit” herself (and even miscalculated it, including receivables she never bought), rather than having a neutral advisor or market process test the value. Failed to explore alternatives — she never retained a financial advisor to solicit third-party offers, didn’t consider a Section 363 sale in bankruptcy, didn’t seek debtor-in-possession financing or reach out to known interested buyers, and simply decided that only she would lend to or buy the assets. By standing on both sides of the transaction and excluding any bargaining, oversight, or competitive bidding, she tainted both the process (“fair dealing”) and the price (“fair price”), breaching her fiduciary duties of loyalty and good faith. AMC – Interfering with Shareholder Vote In the case of AMC, its board was accused of using its power to issue new securities and structuring those securities’ voting rights to sideline ordinary shareholders, force through dilutive capital aising proposals, and secure a management-friendly outcome—even when the bona fide majority of investors opposed it. AMC’s board ran afoul of basic shareholder‐protection principles in several i ways. Despite retail investors rejecting two proposals (in Jan. and June 2021) to increase the number of authorized common shares, the board kept coming back, effectively trying to dilute holders who’d already rejected the proposal.” In July 2022, instead of going back to common holders, the board created a new class of units (APEs) that enjoyed special voting rules—unvoted APEs would be “tacked on” proportionally to the votes cast, magnifying the weight of any single APE vote. This design guaranteed that APE holders could override the common stockholders en masse, even if most common shares sat out the vote. After the unsuccessful public sale of APEs , AMC quietly sold $75 million worth of them to Antara Capital and swapped additional units for debt relief—on the explicit condition that Antara vote them in lockstep with management’s agenda. Leveraging those “committed” votes, the board pushed through both (a) an increase in authorized common shares (to enable APE conversion) and (b) a 1-for-10 reverse split—despite a clear lack of support (or even participation) from the ordinary shareholders. Because most common holders either voted “no” or didn’t vote, the Antara backed APE votes tipped the scales. The plain effect was to disenfranchise the broad base of retail investors—many of whom had amassed shares precisely to have a voice in corporate governance. By structuring the APE vote the way they did, the board effectively “hijacked” the voting process, turning what should have been a straightforward shareholder decision into an engineered outcome. Retail investors brought lawsuits alleging that the board had breached its duty of loyalty (by putting its own fundraising goals ahead of shareholders’ interests) and duty of care (by adopting convoluted voting schemes without proper disclosure or shareholder debate). The court’s preliminary block on converting APEs into common shares underscores that the directors have to exercise extreme caution when they use corporate power to intrude on shareholder rights. Key Takeaways for Leadership Stay Informed: Implement robust risk monitoring and reporting systems. Act Swiftly: Confront bad news Guard Capital: Resist dividend payments or share buybacks when liquidity or solvency is in question. Document Decisions: Keep minutes and expert analyses to demonstrate an informed process. Prevent Conflicts: Establish clear recusal policies and independence protocols. By anchoring decision making in these fiduciary principles—especially during times of financial stress—directors and officers can both protect the enterprise and shield themselves from liability. On March 25, 2025, Delaware adopted amendments to Section 144 of the DGCL that became effective immediately and among other things, establish statutory safe harbors in defense of breach of fiduciary duty actions related to controlling stockholder transactions and interested director and officer transactions.
April 30, 2025
Labor and Employment
Under-Performing Pregnant or Disabled Employees: Balancing Performance Management with the ADA, FMLA, and Pregnant Workers Fairness Act
Performance conversations can quickly become legal minefields when an employee is pregnant, has a disability, or has requested protected leave. Too often, well-meaning employers delay intervention, mishandle documentation, or apply policies inconsistently, opening the door to claims under laws like the Americans with Disabilities Act (ADA), the Pregnant Workers Fairness Act (PWFA), and the Family and Medical Leave Act (FMLA). Employers navigating sensitive performance management matters should understand the laws at play and focus on the fundamentals: document thoroughly, communicate clearly, and take decisive action. Know the Landscape: ADA, PWFA, and FMLA in the Performance Context Americans with Disabilities Act (ADA) The ADA prohibits discrimination against qualified individuals with disabilities. It requires employers to provide reasonable accommodations that enable those individuals to perform the essential functions of their jobs—unless doing so would cause an undue hardship. Importantly, employees with disabilities must still meet legitimate performance and conduct standards. But before disciplining or terminating such an employee, an employer must consider whether: The performance issue is related to the disability. A reasonable accommodation could help the employee meet expectations. The employee was given a meaningful opportunity to improve. Pregnant Workers Fairness Act (PWFA) Effective June 27, 2023, the PWFA expands protections for pregnant workers by requiring employers to offer reasonable accommodations for known limitations related to pregnancy, childbirth, or related medical conditions—similar to the ADA framework. Key differences between the PWFA and ADA include: The PWFA applies even to temporary or moderate limitations (e.g., lifting restrictions, more frequent breaks, and part-time schedules). Employers cannot require a pregnant employee to take leave if another accommodation is available. The statute prohibits retaliation for requesting or using a pregnancy-related accommodation. Performance issues that arise in the context of pregnancy or a related condition should be handled carefully—especially if the employee has requested (or is entitled to) accommodation under the PWFA. Family and Medical Leave Act (FMLA) The FMLA entitles eligible employees to up to 12 weeks of unpaid, job-protected leave for serious health conditions (including pregnancy), family caregiving, and bonding with a new child. Employers must tread carefully if an employee is underperforming while on FMLA leave or shortly after returning. Disciplining or terminating an employee for conduct related to a protected leave period can easily be construed as interference or retaliation—even if the employer’s intent was neutral. Common Pitfalls When Performance and Protected Status Intersect Ignoring the Role of Accommodation Employers must explore accommodations under both the ADA and PWFA before taking adverse action. If an employee’s performance is suffering due to a medical condition or pregnancy-related limitation, your first step is not discipline—it’s engagement. Legal obligation: Initiate the interactive process to determine if a reasonable accommodation would enable the employee to meet expectations. Failing to engage in this process is a leading cause of liability under both laws. Accommodations may include modified duties, schedule changes, ergonomic supports, remote work or temporary reassignment. Inconsistent Application of Performance Standards If an employer holds a pregnant or disabled employee to a higher (or lower) standard than others, the result is rarely good. Legal risk: Disparate treatment claims under Title VII, the ADA, the PWFA, or state human rights laws. Ensure your expectations, metrics, and disciplinary procedures are applied consistently—particularly regarding attendance, deadlines, and work quality. Poor or Biased Documentation Vague or emotionally charged performance documentation (“She’s not committed anymore since becoming pregnant”) is both unhelpful and legally risky. Best practice: Stick to objective, quantifiable facts. Instead of “seems distracted,” document details, like: “missed three deadlines in March; quality of reports has declined, with five factual errors noted.” Good documentation provides a legitimate, non-discriminatory basis for action—and will support your decision if it’s challenged later. Disciplining During or After FMLA Leave Without a Clear Basis Courts closely scrutinize adverse actions taken during or shortly after FMLA leave. Even if you have valid concerns, timing matters. Tip: If an employee’s performance issues predate the leave, ensure you have clear records to show that the concerns existed—and were addressed—before the leave began. Avoid the appearance of retaliation by proceeding only when the documentation supports your decision. Practical Steps for Employers: How to Manage Performance Issues Lawfully and Effectively Train Managers to Spot Accommodation Triggers. Supervisors should loop in HR or legal before acting whenever an employee references a medical condition, pregnancy limitation, or medical leave. Engage Early and Document Diligently. Don’t delay performance conversations out of fear—address issues early, but do so thoughtfully. Document any meetings, expectations, improvement plans, and accommodations discussed or offered. Apply Policies Uniformly. Consistency is key, whether it’s an attendance policy, quality standard or progressive discipline process. Explore Accommodations Before Discipline. Particularly where medical or pregnancy-related limitations are at play, you must first assess whether the employee can meet expectations with reasonable support. Avoid “Gotcha” Terminations. Avoid abrupt disciplinary action if performance concerns haven’t been clearly documented and communicated. Courts frown on surprise terminations, especially after protected leave or accommodation requests. Consult Counsel Before Termination. Before terminating a pregnant or disabled employee—or one who recently returned from leave—have a legal review of the facts, documentation, and process. A brief consultation can prevent months of costly litigation. Pregnancy and disability do not shield employees from accountability, but they do change how employers must approach performance management. With the passage of the Pregnant Workers Fairness Act and the continued complexity of ADA and FMLA compliance, employers must proceed with care, compassion, and a clear understanding of their legal duties. Performance issues don’t go away on their own, but mishandling them can create far bigger problems. The key is to act early, engage meaningfully, and document everything.
April 30, 2025
Commercial Litigation
Stop! … In the Name of Injunctions: The Benefits of Seeking Temporary Restraints and Injunctive Relief in Intellectual Property Disputes and Measures for Litigation Avoidance
As a commercial litigator with extensive experience in protecting clients' interests (through applications for temporary restraints and emergent relief, I’ve seen firsthand how quickly intellectual property (IP) disputes can escalate and the significant risks they pose to businesses. Whether dealing with IP infringement in the franchise industry or defending against claims related to employee misappropriation of proprietary information, securing immediate legal protection can often make the difference between a company maintaining its competitive edge or suffering irreparable harm. This article discusses the benefits of seeking relief through temporary restraints and injunctive relief, along with some effective measures businesses can take to avoid these disputes in the first place. The Need to Protect IP in a Fast -Paced Competitive Business Environment Intellectual property (IP) has become one of a company’s most valuable assets. Businesses rely on IP to maintain their competitive advantage, from patents and trademarks to trade secrets. However, when IP is infringed upon or misused—whether by competitors or employees—the damage can be swift and irreversible. In such cases, taking immediate action in state or federal court by seeking temporary restraints or injunctive relief can be critical. These legal remedies help businesses stop ongoing harm while the case is resolved. In addition, businesses can proactively take several steps to reduce the risk of IP disputes and avoid costly litigation altogether. Intellectual property is often the backbone of a company’s identity, growth, and success. Whether it’s a unique product design, a trademarked logo, or a trade secret that fuels innovation, IP represents a competitive edge that must be protected. Unfortunately, when IP is stolen, misused, or infringed upon, the consequences can be severe, ranging from lost revenue and market share to irreparable damage to the company’s reputation. Fortunately, businesses do not have to wait for a full trial to start protecting their rights. In cases of IP infringement or misuse, courts offer remedies like temporary restraints and injunctive relief. These legal tools can provide immediate relief by halting harmful activities and preserving the status quo until a final resolution can be reached. In this paper, we’ll take a look deeper at the benefits of these remedies and explore steps businesses can take to proactively avoid disputes. Legal Remedies for IP Infringement: Temporary Restraints and Injunctive Relief What are Temporary Restraints and Injunctive Relief? Most businesses are familiar with injunctive relief in the broad sense, but for the benefit of the uninitiated, temporary restraints (referred to as temporary restraining orders, or TROs) and injunctive relief are court-ordered remedies designed to prevent further harm in situations where a party’s actions pose a threat to another’s rights. In the context of IP disputes, these measures can be used to halt the unauthorized use or misappropriation of a business’s intellectual property before a full trial occurs. Benefits of Temporary Restraints and Injunctive Relief Immediate Protection for Your IP When a company’s intellectual property is under threat, time is of the essence. Temporary restraints or injunctive relief can stop the infringing party from continuing their harmful actions immediately, preventing further damage while the legal case is being decided. Preservation of the Status Quo These legal tools help preserve the status quo by halting the alleged infringement or misuse. This ensures that the business’s IP remains protected and that the defendant cannot profit from the unlawful actions during the ongoing litigation. Demonstrating Irreparable Harm Courts are more likely to grant temporary relief if the plaintiff can demonstrate that the irreparable harm—meaning that simply awarding monetary damages won’t fix the situation. IP disputes often meet this standard because of the unique and lasting damage that can result from the theft or misuse of proprietary information. Deterrence Injunctive relief provides immediate protection and sends a strong signal to the defendant—and potentially others—that the company is serious about enforcing its intellectual property rights. This can deter future misuse and reduce the likelihood of ongoing or further infringement. Strengthening Your Legal Position Successfully obtaining an injunction can improve your position in settlement talks. The threat of an injunction often nudges parties toward a quicker, more favorable resolution. Maintaining Competitive Advantage Intellectual property is often what sets a company apart from its competitors. Taking swift legal action to protect that IP ensures competitors can’t use the stolen or misappropriated information to gain an unfair advantage in the marketplace. Legal Framework for Temporary Restraints and Injunctive Relief Whether in federal or state court, the process for securing temporary restraints or injunctive relief follows a similar framework. Courts typically evaluate the following factors: Likelihood of Success on the Merits: Is there a strong case that the party seeking the injunction will ultimately prevail in the litigation? This is generally easiest to establish when presenting a contractual provision establishing rights to injunctive or other equitable relief if IP is compromised. Irreparable Harm: Will a party suffer harm that can’t be fixed by financial compensation alone? Balance of Equities: Does the harm to the plaintiff outweigh the harm that granting the injunction would cause to the defendant? Public Interest: Does the granting of the injunction serve the public interest? These criteria are used by courts to help ensure that injunctive relief is granted in appropriate circumstances and prevents the misuse of valuable intellectual property. Measures for Litigation Avoidance: Preventing Employee Infringement and Misuse of IP One of the most critical aspects of litigation is to counsel one’s clients in litigation avoidance. In other words, what actions or precautions can a business take to avoid having to file an expensive application in court? While seeking legal relief can be essential in some cases, businesses should ideally work to prevent IP disputes before they occur. Below are several practical measures companies can implement to minimize the risk of IP infringement or misuse by employees: Clear IP Agreements Ensure all employees, contractors, and collaborators sign comprehensive agreements that clarify IP ownership and include non-disclosure (NDA) and non-compete clauses. This establishes clear expectations and prevents unauthorized use or sharing of proprietary information. Regular Training on IP Protection Educate employees on the importance of intellectual property and the legal ramifications of misusing company assets. Training programs should cover what IP includes and how to safeguard it in day-to-day business operations. Implement Strong Access Controls Restrict access to sensitive IP based on job roles and responsibilities. Limiting exposure reduces the risk of accidental or intentional misuse of proprietary information. Exit Protocols and Ongoing Obligations When employees leave the company, conduct exit interviews to reinforce their post-employment obligations, including the return of proprietary information and compliance with any non-compete or non-disclosure agreements. Monitor IP Use Regularly Regular audits and monitoring of how employees use company IP can identify potential issues before they escalate. If unauthorized use is detected, immediate corrective action can be taken. Consistent Enforcement of IP Rights It’s crucial to enforce intellectual property rights consistently. If employees or third parties misuse or infringe upon your IP, taking swift and decisive action demonstrates that you’re serious about protecting your assets. Leverage Technology to Protect IP Implement digital security measures such as encryption, cloud storage protections, and access controls to safeguard sensitive IP from misappropriation. Consult Legal Counsel Regularly Work with legal counsel to ensure that your employment contracts, non-compete clauses, and NDAs are up-to-date and enforceable. A proactive legal review can prevent future disputes from arising. The Bond Requirement – Another Variable and Significant Cost While seeking temporary restraints or injunctive relief can offer swift protection against IP infringement, one important consideration is the possibility that a court may require the party seeking the injunction to post a bond. This requirement is often viewed as a safeguard to protect the defendant from potential harm if it turns out that the injunction was wrongfully granted. What is a Bond in the Context of Injunctive Relief? In many cases, when a plaintiff applies for a temporary restraining order (TRO) or preliminary injunction, the court may require them to post a bond. The bond is a financial assurance that the defendant will be compensated for any damages they suffer if the injunction is later determined to have been improperly granted. The bond amount can vary significantly depending on the court's assessment of the case, but it can often be substantial. Below, we outline some of the key risks and considerations involved with posting a bond in intellectual property disputes: Potential Risks of Posting a Bond Financial Burden The requirement to post a bond can create a significant financial burden, particularly for smaller businesses or startups. While the bond amount is intended to cover any damages the defendant may suffer from the injunction, it represents an upfront cost that could be difficult to manage, especially when seeking emergency relief. Bond May Be Higher Than Expected Courts have discretion over the amount of the bond. They may set the bond higher than the plaintiff anticipates in certain cases. This can be especially challenging for businesses that are already under financial strain from IP theft or infringement. The bond is typically required before the injunction is granted, meaning the plaintiff must have the resources available to post it in a timely manner. Risk of Financial Loss Suppose the court ultimately rules in favor of the defendant and determines that the injunction was wrongly granted. In that case, the bond posted by the plaintiff may be forfeited to the defendant as compensation for any damages suffered due to the injunction. This means that a business could lose a substantial amount of money, even if the injunction were necessary to protect its IP in the short term. No Guarantee of Full Recovery Even if the defendant does suffer damages due to a wrongly granted injunction, the bond amount may not fully cover the total financial losses. This leaves the defendant potentially under-compensated, creating a risk that they could pursue further legal action or claims for additional damages. Mitigating the Risk of Bond Requirements While posting a bond is common in many IP litigation cases, there are strategies businesses can employ to reduce the risk or financial burden associated with this requirement: Negotiate the Bond Amount: In some cases, it may be possible to negotiate the bond amount with the court, especially if the defendant is a competitor or party with limited financial resources. Courts sometimes allow for smaller bonds or even waive the requirement entirely if the plaintiff can show that the defendant is unlikely to suffer harm. Request a Lower Bond: When requesting an injunction, the plaintiff can present evidence showing that the bond amount should be minimal. For instance, if the financial damage to the defendant would likely be low or if the plaintiff’s IP is clearly valid, the plaintiff can argue for a lower bond amount. Seek a Limited or Conditional Injunction: Another potential strategy is to request a more limited or conditional injunction that would reduce the possible harm to the defendant and, in turn, lessen the court’s concerns about the bond amount. Prepare Financially: Businesses seeking injunctive relief should plan ahead and ensure they have the financial resources available to cover the bond, should the court require it. This proactive step can prevent delays in obtaining relief. In conclusion, intellectual property is one of the most important assets for any business, and its protection is crucial for maintaining a competitive edge. When IP is threatened by infringement or misuse by a current or former employee or competitor, seeking relief through temporary restraints and injunctive relief in state or federal court can provide immediate and effective protection. However, seeking injunctive relief through the courts can be costly, involving legal fees, expert witness costs, and the potential requirement to post a bond—each carrying its own financial burden and risk. As a business litigator with extensive experience in emergent applications (bringing and defending against them), litigation should not be the first line of defense. By implementing proactive measures—such as clear agreements, employee training, and robust monitoring systems—businesses can reduce the risk of IP disputes and avoid the need for costly legal battles. Access to capable attorneys with strong backgrounds in litigation and preventative strategies is essential.
April 29, 2025
Immigration Law
Heightened Scrutiny at U.S. Borders: What Travelers Need to Know
There has been a significant increase in media coverage of travelers subjected to increased scrutiny at ports of entry to the United States. In some cases, individuals have been refused entry and detained until sent back home. Furthermore, U.S. Customs and Border Protection have increased their searches of travelers’ electronic devices upon entry to the United States. Is it considered safe for nonimmigrants and legal permanent residents to travel? Increased scrutiny at ports of entry We are now seeing the impact of the implementation of President Trump’s Executive Action: “Protecting the United States from Foreign Terrorists and other National Security and Public Safety Threats”1. There have been media reports of individuals from NATO Allied countries being detained at border crossings and, in some cases, subjected to expedited removal. Aside from the news, we have seen advanced vetting and security screenings reported at the US border. This vetting has included legal permanent residents and non-immigrants. This vetting is likely to continue and may be introduced at U.S. Consulates in the coming months and in the processing of matters with the U.S. Citizenship and Immigration Service. Is it safe to travel on my green card? Legal permanent residents (LPRs) are provided significant protections and rights similar to those of United States citizens regarding international travel. In the last few months, we have seen an increased scrutiny of LPR travel. Certain fact patterns have come to light, including increased interviews of LPRs with active (even if minor) criminal matters or a history of certain immigration violations. In addition, LPRs who spend significant time outside of the United States and who, in previous years, would be let back without issue if they visited every six months are now subject to harsher scrutiny of their ties to the country. Finally, LPRs from countries floated as soon to be subjected to a travel ban have also faced issues coming into the United States. (See Draft List for New Travel Ban Proposes Trump Target 43 Countries - The New York Times.) In light of the above – is it safe to travel on my green card? The answer is generally yes; however, if you fit into one of the above situations we advise consulting with an immigration attorney immediately. Furthermore, your status may be at risk if you have been outside the United States for longer than six months or even a whole year. Lastly, legal permanent residence may only be taken by a legal process initiated in the immigration court system. Travelers should be exceptionally wary of signing any document that purports to surrender their legal permanent residence at a port of entry. Is it safe to travel on my nonimmigrant visa? Non-immigrant visa holders report increased vetting at ports of entry, and US Customs and Border Protection agents possess the power to deny entry to visa holders. Most nonimmigrant travelers should be prepared for additional questions regarding their status and should carry evidence regarding their status. This could include USCIS petition approval notices, evidence of continued employment, and itineraries for travel. Employment-based non-immigrants should inform their HR of international travel if specific immigration advice is needed. We advise all nonimmigrants who are not confident regarding travel to consult an immigration attorney for guidance. Certain nonimmigrants should be especially vigilant now; this includes J1 and F1 scholars and students. Both visa holders should consult with their school Designated School Official (DSO) regarding their ability to travel and travel with up-to-date evidence regarding their status. Student and Exchange Visitor Information System (SEVIS) termination of student status with little to no warning or evidence has been reported, and affected students should contact their DSO and an immigration attorney immediately. Electronic device searches – what you need to know The United States Customs and Border Protection (CBP) has significant powers of search and seizure at ports of entry to the United States. These powers are part of the “border exemption” to the Constitution's Fourth Amendment and have been upheld by the Supreme Court. (See United States v. Ramsey, 431 U.S. 606 (1977)). This power can be used regardless of the nationality of the traveler. Further, this search power has been used by CBP to search the electronic devices of travelers, which can include their social media. Travelers are advised to be exceedingly careful regarding social media usage and content on their mobile devices. By way of example of this vetting, current administration priorities include extreme vetting of individuals supporting designated terrorist organizations, which includes Hamas and the conflict in Palestine. The only exception to this search power that the courts have upheld is attorney-client privilege. Be calm, be courteous, be contrite The process of additional scrutiny at border crossings can be intimidating and stressful. It is important to remain calm during the process. Traveling with evidence of your status and activities in the United States is a good idea to support your statements to upon entry.
April 25, 2025
Business
How Buy-Sell Agreements Can Help Prevent a Messy Business Divorce
Just like any kind of relationship, not all business partnerships are built to stand the test of time. They can sour just as easily as a romantic partnership or friendship as vision and long-term goals diverge, financial stress comes into play, or personal issues enter the business relationship. When these kinds of factors arise, it can often result in a “business divorce.” A business divorce has the potential to be just as messy, emotionally charged, and costly as a marital divorce, particularly when there is no established plan in place to outline how the two parties will separate. This is why buy-sell agreements can be critical, helping to ensure a smooth and fair process in the case of a business divorce. It is always best to agree on buyout terms in advance while everyone is getting along and not leave it to the expense and risk of legal proceedings before an arbitrator or judge who does not understand your business. What is a Business Divorce? A business divorce occurs when two or more parties decide to end a business partnership, and it is estimated that anywhere from 50-70% of business partnerships will fail. There can be numerous contributing factors that lead to the dissolution of the partnership. As stated earlier, there are typically differing visions for the company’s future, the strategies used to achieve long-term goals, financial disagreements, or even personal issues that begin to impact the partnership. However, there can also be actions taken by a partner that reflect negatively on the company or even an illness or death that would require the partnership to dissolve. No matter the root cause of the divorce, there are several avenues that can be taken when the partners make the decision to split. This could be one partner buying out the other, fully dissolving the business, or some kind of restructuring that occurs. It is at this stage of deciding which path to take where emotions can start to come into play, and lawsuits and other disputes can arise if there is not an agreed-upon method to end the partnership. This is where buy-sell agreements can be a game changer. Why Buy-Sell Agreements are Critical Think of a buy-sell agreement as a prenuptial agreement for business owners. When a married couple has a prenup in place, it provides a roadmap for how to divide the assets if they divorce. Buy-sell agreements provide the same kind of roadmap for a partnership, outlining a course of action should one partner want or need to leave. As with a prenup, these are typically negotiated when the partnership is established; however, it is never too late to negotiate this in a partnership if one does not already exist. These agreements allow for a smoother process and minimize conflict, as they provide an established business valuation methodology as well as liquidity and exit plans, including the terms of the payout to the departing partner, which could be over several years so as not to impair the business cash flow. They can also prevent a spouse or heirs from attempting to assume a partnership role in the case of a partner’s death or disabling illness, and they can help stabilize the business during what can be a chaotic time. When considering structures for a buy-sell agreement, there are several options. These can include one or more owners buying out a departing owner’s stake, the actual business buying the departing partner’s stake, or some of combination of the two. In the case of death, the buy-sell can provide for the purchase of life insurance on the deceased partner. The structure of a buy-sell agreement is specific to the individual business and partnership and must be agreed upon by all parties involved. At the end of the day, a buy-sell agreement can save a great deal of heartache and expense if you find yourself in the middle of a business divorce. A little bit of additional planning on the front end could be the key to an amicable split that allows for the continuity of the business and avoids a legal mess.
April 18, 2025
Family Law
Navigating the Unique Challenges of LGBTQ Divorces in a Changing Legal Landscape
The legalization of same-sex marriage in the United States in 2015 with the landmark Obergefell v. Hodges decision marked a monumental step toward equality. However, the journey does not end with marriage; LGBTQ couples face unique challenges when it comes to divorce. While the process may seem similar to that of heterosexual couples on the surface, the reality reveals nuanced differences rooted in evolving laws, social norms, and disparities in legal protections. Understanding these distinctions is crucial for navigating the complexities of LGBTQ divorces and protecting one’s rights in a constantly shifting legal world. Key Differences Between LGBTQ and Heterosexual Divorces Legal Recognition and the Length of Marriage: Problem For many LGBTQ couples, legal recognition of their relationships began far later than their commitment to one another. States only began recognizing same-sex marriages at different times, leaving couples who were together for decades without a legal timeline for their unions. When it comes to divorce, courts often calculate marital property division, spousal support, and other factors based on the duration of the legally recognized marriage, not the entirety of the relationship. This discrepancy can lead to inequitable outcomes. For example, an LGBTQ couple that was together for 20 years but legally married for only five years may see their financial obligations and property rights evaluated based on the shorter timeline. Custody and Parental Rights Child custody is one of the most contentious areas in divorce, and LGBTQ couples face unique hurdles. Many LGBTQ families rely on alternative reproductive methods, including Artificial Reproductive Technology (ART), surrogacy, adoption, or donor insemination. If only one partner is the biological or legal parent, the non-biological parent’s parental rights may not be automatically recognized, even if they were actively involved in raising the child. This can lead to complex custody battles where courts may prioritize biological connections over emotional bonds. Discrimination in Court While legal protections for LGBTQ individuals have improved, implicit biases still exist within the court system. Some LGBTQ individuals may encounter judges or attorneys who lack experience with or understanding of same-sex family dynamics. This can result in decisions that do not fully account for the nuances of LGBTQ divorces. Division of Assets and Property In LGBTQ divorces, asset division may be complicated by how property and financial arrangements were managed before same-sex marriage became legal. Property acquired before legal recognition of the relationship may be deemed separate property rather than marital property, creating challenges when dividing assets equitably. How to Protect Yourself in an LGBTQ Divorce Preparing and understanding your rights are essential to safeguarding your interests in this evolving legal world. Here are key steps LGBTQ individuals can take to protect themselves: Legal Protections Before Marriage For those entering a marriage, creating a prenuptial agreement is one of the most effective ways to protect assets and clarify financial arrangements. A prenuptial agreement can specify how property will be divided and how spousal support will be managed in the event of a divorce. For those already married, a postnuptial agreement can serve a similar purpose. Address Parental Rights Proactively LGBTQ couples with children should ensure both parents’ legal rights are established, even before a divorce becomes a possibility. For non-biological parents, this may involve formal adoption or obtaining a court order recognizing their parental status. By securing legal parentage, non-biological parents can strengthen their custody and visitation claims in the event of a divorce. Keep Comprehensive Records In cases where the length of the relationship predates legal marriage, maintaining records of financial contributions, shared property and joint decision-making can be invaluable. These records can help demonstrate the extent of the partnership and support equitable asset division during a divorce. Consult an Experienced LGBTQ Divorce Attorney Given the unique legal and social dynamics of LGBTQ divorces, working with an attorney who has specific experience in LGBTQ family law is crucial. Such attorneys understand the complexities of same-sex relationships and can advocate effectively for your rights. Stay Informed About Changing Laws The legal landscape for LGBTQ individuals continues to evolve. Court rulings, legislation, and shifting political climates can impact rights related to marriage, divorce, custody, and more. Staying informed about changes in the law can help you anticipate challenges and adjust your approach as needed. The Ever-Changing Legal Landscape for LGBTQ Divorces While the right to marry was a monumental victory, LGBTQ couples still face challenges that heterosexual couples typically do not. For example, the potential for the Supreme Court to revisit Obergefell v. Hodges or other related rulings creates uncertainty about the durability of marriage rights. Additionally, state laws governing issues such as parental rights, property division, and spousal support vary widely, leading to disparities in how LGBTQ divorces are handled across the country. Recent challenges to protections for LGBTQ individuals, including attempts to narrow the interpretation of anti-discrimination laws and redefine parental rights, underscore the need for vigilance. Advocating for continued progress and awareness ensures equality in the family law system. Conclusion LGBTQ divorces, while sharing similarities with heterosexual divorces, present unique challenges rooted in legal history and societal biases. By understanding these differences and taking proactive steps to protect their rights, LGBTQ individuals can navigate the complexities of divorce with confidence. In an ever-changing legal world, preparation, advocacy, and informed decision-making are the keys to achieving equitable outcomes and safeguarding hard-won rights.
April 17, 2025
Mergers and Acquisitions
Every M&A Transaction Is a “Big Deal”
M&A over the last number of years has been “hot.” Despite slower-than-expected first quarter, we are anticipating another strong year for sell-side M&A. With stories of success, however, certain assumptions tend to follow. Business owners looking to buy or sell sometimes mistakenly believe Offit Kurman is too busy or expensive for their needs. A common objection typically sounds like: “My deal is probably too small for you.” I’ve been hearing from sellers with businesses worth $5 million or less lately. In any other context, it would be a bizarre thing to say. One million dollars is not “small.” For most of us, a check of that size would be a life-changing amount of money. However, the marketplace has a way of skewing perceptions. M&A advisors and investment bankers typically chase transactions in the eight and nine-figure range, and many refuse to go after anything worth less than $10 million. The same holds true for many law firms. As a result, owners of closely held businesses become jaded and self-select out of the market. Other business owners, meanwhile, believe the opposite: that our firm is exclusively focused on small or mid-market transactions, and we do not have the capability to handle large, multimillion-dollar deals. As someone who has seen hundreds of transactions through to completion, I can provide some perspective: every M&A transaction is a big deal. Especially if you’re a seller, we’re talking about what may be the single largest transaction in your lifetime. Moreover, at Offit Kurman, we are enterprise value agnostic. That means we are happy to provide representation and guidance to any business owner regardless of the potential size of a transaction. Here are a few more reasons why deal size should not limit your ability to work with a qualified M&A attorney: The size of the deal has no bearing on your legal fees. At Offit Kurman, we do deals at $1 million, $10 million, $100 million, and above (and below) because the purchase price has no financial impact on our billing structure. Our job is to zealously represent and protect every client. In contrast to investment bankers, who usually get paid a percentage of the deal, our attorneys bill at an hourly rate. That means time — not size — is what counts. Factors such as the condition of your business and the complexity of the deal determine how much work your attorneys must do. M&A demand is market-driven. Buyers and sellers control the M&A market. You could have a massive, multinational business — with advisors lining up to help you sell it — but if there’s no demand for the company, there’s no deal. Similarly, a small, well-positioned firm could be a hot commodity in its niche. A five-person government security contractor, for instance, might be able to leverage its relationships and intellectual property to create competition among multiple potential buyers. You don’t need to pay big money for expertise. Be wary of working with advisors who only take on enterprise M&A — there’s a good chance they’re overcharging and under-experienced. At Offit Kurman, we have successfully negotiated complex deals of various sizes, industries, and geographies. We bring this experience to every client matter. We can scale our representation to the size and character of the business, as well as the personality of the owner, at a price point and workflow that meets the client’s needs. Ultimately, M&A transaction size is relative to one’s frame of mind. As a seller, you may not be able to quickly change the value of your business, but you can control the value of the experience in shaping your future. Instead of worrying about how your purchase price compares to another business, focus on your own goals. Retiring wealthy? Now that’s a big deal.
April 17, 2025
Estates and Trusts
Estate Planning: Peace of Mind for Uncertain Times
In the late 19th century, death was almost fashionable. Funerals were well attended and even rivaled weddings in their splendor and expense. Department stores offered an array of luxury clothing for grieving mothers and widows. Black fabrics were reserved for those in deep mourning. Then shades of gray and mauve were mixed in as one felt able to rejoin society. If death wasn’t celebrated, it was at least taken very seriously. But then, our Victorian cousins were closer to death than we are today. The average person didn’t live to see his 50th birthday, and more than three-quarters of all deaths occurred in children under the age of five. Today, people are living longer than ever, and as a consequence, death is considerably less in vogue. Improvements in medical care, diet, and occupational safety have prolonged life. Still, they have done little to combat the new threats to our existence. The terrors of shootings and random acts of violence, the perils of hurricanes and other natural disasters, and the specter of civil unrest and even all-out war are reason enough to worry about what might lie ahead. In times like these, peace of mind comes controlling the things you can and being prepared for the unexpected, which means setting aside money for an emergency, having health and life insurance, and even safeguarding against your own disability or death. This last item can be the most challenging to consider. It includes thinking about what would happen if you couldn’t manage your own finances or health care. Someone should be put in charge of these essential responsibilities under a durable power of attorney and an advance medical directive. Armed with these documents, your spouse, partner, or someone else you trust can look out for your best interests if you ever become incapacitated. Without a power of attorney, it could be necessary for a loved one to become your legal guardian through a court proceeding. Guardianships usually require letters of certification from two healthcare professionals who have examined you, as well as an attorney to represent both you and the person seeking to become your guardian. The process is expensive and time-consuming, but it can be avoided altogether with a durable power of attorney. Failing to prepare an Advance Health Care Directive can also lead to unfortunate results. Responsibility for medical decision-making would probably fall to your next of kin, regardless of who that might be. It could be a spouse, but for a single person, an estranged family member could suddenly be responsible for making life-and-death decisions on your behalf. Without an advance medical directive, it’s not uncommon for multiple people to have this authority. For example, if your next of kin were a group of siblings, they might argue among themselves as to what sort of medical care you should receive. Some could remember you as a fighter who would want to try every possible treatment before giving up, while others might feel that you should be kept comfortable and not be allowed to suffer. An even worse outcome can occur when someone fails to prepare a will. It’s tempting to think that the “right people” will inherit when someone dies without a will. However, the rules of inheritance may provide only a portion of the estate to a surviving spouse and nothing at all to an unregistered domestic partner. In these times of uncertainty, take control of the things you can. Speak with an Estates & Trusts attorney about preparing a will and other planning documents to protect yourself and the people you care about. Then, enjoy the peace of mind that comes from knowing that you are prepared for some of life’s uncertainties.
April 16, 2025
Labor and Employment
Does Your Dress Code Discriminate? What Employers Need to Know
In the ever-evolving landscape of workplace discrimination laws, savvy employers are reexamining longstanding policies—including those that may not seem controversial at first glance. One of the most commonly overlooked (yet frequently litigated) areas? The company dress code. What was once a straightforward requirement—“business casual” or “jeans on Fridays”—has become a complex legal issue, especially as courts and administrative agencies scrutinize how dress and grooming policies intersect with anti-discrimination laws. From hairstyle protections to gender identity accommodations, the modern workplace dress code carries more legal weight than many employers realize. Here’s what you need to know to ensure your company’s dress code reflects both current legal standards and best practices. The Legal Foundation: Employers May Set Reasonable Standards As a general matter, employers are permitted to impose reasonable restrictions on workplace appearance. Courts have long recognized a company’s legitimate interest in maintaining a professional image—especially for employees who interact with clients, vendors, or the public—or in enforcing safety-based attire requirements depending on the nature of the work. However, dress codes must be implemented in a way that does not discriminate directly or indirectly. Your workplace dress code should not: Impose unequal burdens on certain groups Reinforce outdated gender stereotypes Fail to provide religious or medical accommodations Be applied inconsistently or selectively Gender-Specific Policies: Proceed with Caution Historically, some courts have permitted different grooming or dress requirements for male and female employees—as long as the policy is applied evenly and doesn’t impose a greater burden on one gender. However, employers relying on these traditional standards may be exposing themselves to risk. Courts have increasingly accepted Title VII claims based on gender stereotyping, where policies require employees to present in ways that conform to traditional gender roles—for instance, requiring women to wear skirts or prohibiting men from growing long hair. These requirements can give rise to claims when they compel employees to dress in a manner inconsistent with their gender identity or personal expression. Several states and municipalities have taken a more explicit approach. In California, for example, it is unlawful to require women to wear skirts. In Washington, DC, the law prohibits discrimination based on appearance, which includes dress and grooming. Employers operating in multiple jurisdictions should review policies with a careful eye toward state and local requirements, which may be more protective than federal law. Gender Identity and Expression: Aligning with Bostock and Beyond In the wake of the U.S. Supreme Court’s 2020 decision in Bostock v. Clayton County, employers must recognize that Title VII prohibits discrimination based on gender identity and sexual orientation. As a result, enforcing gender-specific dress codes or grooming policies that conflict with an employee’s gender identity may constitute unlawful discrimination. Many jurisdictions have adopted laws that go even further, requiring employers to affirmatively allow employees to dress in accordance with their gender identity or expression. Employers should carefully assess whether their appearance standards respect these legal obligations and provide sufficient flexibility. The Rise of Hairstyle Discrimination Laws A growing number of states have passed legislation recognizing that grooming policies can serve as proxies for racial discrimination. Laws in Maryland, Virginia, California, New York, and others prohibit workplace restrictions that ban natural hairstyles or protective styles such as afros, braids, locks, and twists. These laws are often framed as extensions of race discrimination protections under Title VII. Employers should avoid policies that prohibit or limit hairstyles unless there is a demonstrable, legitimate business justification—such as a safety concern in an industrial setting—and even then, the policy must be narrowly tailored. Accommodations for Religious Beliefs and Medical Conditions Under Title VII, employers must reasonably accommodate sincerely held religious beliefs, including those that conflict with dress or grooming policies. This may include permitting head coverings, religious jewelry, or exceptions to attire norms due to modesty practices. Similarly, under the Americans with Disabilities Act, employers must accommodate qualified employees with disabilities. For instance, a blanket ban on facial hair may need to yield to an employee with a medical condition that makes shaving painful or harmful. Failure to consider these accommodations not only exposes employers to liability—it also undermines inclusivity and employee morale. Union Activity and Protected Expression Dress codes must also respect employees’ rights under the National Labor Relations Act (NLRA), which protects their ability to engage in concerted activity, including the right to wear union insignia or clothing expressing workplace concerns. A policy that broadly bans “derogatory” or “inappropriate” attire without a clear connection to legitimate business interests—like safety or security—may be deemed unlawfully overbroad by the National Labor Relations Board. Best Practices for Employers To ensure that dress codes meet legal standards and reflect modern workplace norms, employers should consider the following: Use Neutral Language: Policies should be gender-neutral, avoiding references to attire “expected” of men or women. Avoid Over-Specification: Instead of listing every acceptable or unacceptable item of clothing, opt for broader, flexible guidelines (e.g., “employees must present a clean and professional appearance appropriate to their role”). Be Consistent: Apply the policy uniformly across departments and roles, unless a legitimate business reason supports a distinction. Build in Flexibility: Include language acknowledging the need to accommodate religious practices, cultural expression, or medical conditions. Review Regularly: Revisit your dress code periodically in light of new legal developments and cultural trends. Final Thoughts While office dress codes may seem like a minor issue, they often sit at the intersection of major employment law concerns. A policy that is too rigid—or worse, discriminatory in application—can lead to reputational harm and costly litigation. The good news is that most companies can maintain professionalism without micromanaging wardrobe choices. A thoughtful, updated policy can reinforce your company’s values while keeping you compliant with the law. If you have questions about your company’s dress code or need assistance revising your policies, consult employment counsel familiar with the latest developments in federal, state, and local law. A well-drafted dress code can do more than keep the office looking sharp—it can help your company avoid some very real legal pitfalls.
April 16, 2025
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