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Avoiding the Pitfalls of Retaliation from an Employer’s Legal Perspective

Avoiding the Pitfalls of Retaliation from an Employer’s Legal Perspective

By Myrna L. Maysonet, Esq., Shareholder
Greenspoon Marder

In life, love and business, timing is everything. Retaliation under Title VII[i] should be added to that old adage. The elements of a claim for retaliation under Title VII are easily established: (1) a protected activity by an employee; (2) an adverse action by an employer; and (3) a causal connection between the two.[ii] However, successfully defending a retaliation claim is a much more difficult task. In fact, many employers successfully defeat an employee’s sexual harassment claim at trial only to succumb to the employee’s retaliation claim. The exposure for the losing employer on a retaliation claim is pretty high and typically includes, but is not limited to, damages to the plaintiff and potentially hundreds of thousands of dollars for the successful plaintiff’s attorneys’ fees.  

In my experience, the culprit behind most successful retaliation claims boils down to one common factor: unchecked emotions. Once an employee files a claim of discrimination, the employment relationship becomes emotionally charged. The employer often feels betrayed and the employee feels persecuted. Without some kind of neutralizer, these situations will often result in a successful retaliation claim. By taking some crucial steps, employers are forced to make decisions in a neutral and objective manner, successfully eliminating the most common causes and resulting in successful retaliation verdicts.

Promulgate and Strictly Enforce Employee Conduct Policies.

The crux of any retaliation claim is that an employee was subjected to an illegal adverse action because he or she made an allegation of discrimination.[iii] The cases in which an employee successfully pursues a retaliation claim share a number of common causes. The first one is the lack of clear disciplinary rules, or alternatively, the lack of a uniform enforcement of the company rules. These omissions encourage the arbitrary enforcement of discipline, which in turn creates a thriving environment for retaliation claims. This scenario is commonly found in less structured environments such as “mom-and-pop shops” where everyone is treated like “family.” Typically, there is a problematic employee who is routinely late or not performing his or her job duties. The supervisor attempts to correct the problems through verbal warnings, but none of these performance deficiencies are properly documented because there are no written rules or established progressive disciplinary policies in place. The performance or behavioral problems continue to escalate and the employer decides to discharge the problematic employee. However, the employee sees the writing on the wall and immediately complains that he or she was discriminated against by the supervisor. Any subsequent disciplinary action taken after that complaint will be instantly viewed as retaliatory, irrespective of its validity.

To prevent and to successfully defend against these kinds of scenarios, employers must inform employees of relevant policies and practices. Simply stated, tell them about the ground rules for their continued employment with the company. We typically refer to these rules as Standards of Conduct or Employee Conduct Policies. These are rules alerting employees of possible disciplinary measures available to the employer to rectify instances of employee misconduct. All crucial policies should be provided to the employees in writing. Likewise, and equally important, an employer must inform employees - also in writing - about the potential consequences of violating the company’s rules and procedures. This step should typically occur at the time of hire or during training meetings, and it should always be documented to avoid challenges in the future.

However, the implementation of rules alone is insufficient to prevent retaliation claims. Rules are worthless if they are not enforced. The employer must uniformly and consistently apply the promulgated rules. Deviation from set policy will be challenged as pre-textual in nature thereby eliminating one of the employer’s most effective weapons against retaliation claims. For example, if a company has established an attendance policy, then it must strictly enforce that policy across the board at all times. An employer cannot win a retaliation claim if an employee can show that others who violated the same policies, as he did, were not subjected to the same discipline. Similarly situated employees should be treated equally, or a jury will view an employer’s reason for the employee’s discharge as pre-textual or as the result of his or her exercise in a protected activity.

Promulgate and Strictly Enforce Anti-Discrimination Policies and Reporting Procedures.

The second line of attack in defeating future retaliation claims is to implement and enforce an anti-discrimination policy and reporting procedures. Anti-discrimination and reporting policies must instruct the employee in writing that the employer does not make employment decisions based on an employee’s membership in a protected category. It must also establish guidelines for employees to internally report complaints of discrimination. It should specifically identify the person or persons to whom an employee can communicate complaints of discrimination. An employer must remember that a potential harasser can be the employee’s direct supervisor, so disclosure alternatives must be provided for an employee that may be subject to this scenario. 

As with the rules of conduct, having a written anti-discrimination policy is worthless if employees cannot utilize it or the employer is not responsive to the complaints. It is crucial for an employer to show that the anti-discrimination policy is effective when utilized by employees. This does not mean that every complaint of discrimination will be found to be valid or that an employee’s requested action is always taken. Because personality conflicts completely unrelated to discriminatory animus are sometimes disguised as “discrimination” complaints, it means that every complaint is thoroughly and objectively investigated and appropriate action is taken, if found to be necessary. An effective policy stops inappropriate conduct, even if it does not rise to illegal discrimination [iv], and provides measures to avoid further discrimination, including illegal retaliation. 

The most common scenario creating liability for the employer is when managers have not been properly trained on how to deal with complaints of discrimination. Most employees will first alert a direct supervisor or manager of complaints of discrimination. If a supervisor or manager is unaware of his or her duties under the company’s anti-discrimination policy or ignores his or her duties, the employer will most likely lose the potential retaliation lawsuit. For example, an employee may report to his or her direct supervisor that he or she was being harassed by a co-worker. The supervisor is unaware of the company’s anti-discrimination policy and fails to report the complaint to the company’s Human Resources Department or to conduct an investigation pursuant to the company’s policy. Instead, the supervisor unilaterally decides that the complaint is unwarranted and shortly thereafter, disciplines the same employee. In this scenario, there is a great likelihood that the employee can assert a successful retaliation claim. The company is now subjected to immense liability because of the decision of a single supervisor. The same outcome will occur when supervisors purposely disregard a selectively enforced policy.

The key to avoiding these unfortunate and all-too-common scenarios is to train supervisors and managers to understand the importance of the anti-discrimination policy and reporting procedures and their roles in immediately informing the appropriate persons concerning the complaint. Remember, most supervisors and managers are not going to be experts in Human Resources. However, they should be held responsible for ensuring discrimination complaints are immediately communicated to the people designated by the anti-discrimination policy and reporting procedures and who, presumably, have the skill sets necessary to investigate the complaints and make neutral and objective decisions. All employees should be informed at the time of hire of the company’s anti-discrimination policy and reporting requirements. Companies should, at the very least, provide annual anti-discrimination training for all employees and supervisors. Specific emphasis should be placed when training supervisors on the perils of retaliation and their responsibility to ensure that every disciplinary action proposed or taken is grounded and supported by objective facts which can withstand future scrutiny. This is usually the biggest hurdle for an employer when dealing with a retaliation claim. 

Take Emotions Out of the Picture by Requiring a Neutral and Objective Party to Make Employment Decisions Involving Those Who Have Filed Complaints of Discrimination Internally or with the Equal Employment Opportunity Commission (“EEOC”).

In a retaliation claim, the ultimate question for the Court or jury to determine is whether the employer’s decision was pre-textual in nature. “The heart of the pretext inquiry is not whether the employee agrees with the reasons that the employer gives for the [adverse action], but whether the employer really was motivated by those reasons.”[v] Consequently, an employer’s stated motives or reasons for taking an adverse employment decision will always be challenged in a retaliation claim. Who made the adverse decision, what that person knew, and when that person knew it are crucial questions in determining the merits of a retaliation claim. The employer has absolute control over the answers to these questions and should ensure that the ultimate adverse decision taken is not improperly tainted by any potential discriminatory animus. In fact, an employer can defeat a retaliation claim if the employer can show it had a legitimate reason for taking the adverse action. [vi]

As discussed above, the typical work force is not trained in handling or investigating complaints of discrimination. To most, a charge of discrimination is a personal attack, particularly if they are identified as the alleged harasser or wrongdoer. Human beings are emotional, and emotions are bound to usurp objectivity and neutrality. While it should go without saying that supervisors accused of harassment should not be making critical employment decisions regarding the complaining employee, this is exactly what often happens, with disastrous results for the employer. This is the very essence of a retaliation claim, and the solution requires the implementation of separate and distinct procedures for spotting and handling employment decisions involving employees who have engaged in statutorily protected activity; whether it involves discriminatory complaints filed internally, the EEOC, or relating to other statutes such as the Family Medical Leave Act. The key is to remove the perceived conflict of interest by introducing a neutral and objective person into the decision equation who can independently corroborate that any proposed adverse action is not motivated by discriminatory animus, but rather by verifiable and objective evidence. This is where a Human Resource Representative (“HR”), or someone similarly trained, becomes the employer’s best asset to defeat retaliation claims.   

The purpose of HR is not to make operational decisions. Those decisions ultimately belong to management. HR is there to guide and advise the employer with respect to employment decisions involving persons who have engaged in a protected category. HR, in other words, serves as a watchdog by challenging and verifying the accuracy or propriety of disciplinary decision proposed by management. Because HR is typically involved in employment decisions for all employees, he or she is in the best position to know whether the company has promulgated applicable procedures. Likewise, HR is also privy to whether a particular policy is actually enforced or not; is knowledgeable concerning operations; and can assess whether a supervisor’s reasoning for taking a disciplinary action is suspect or infirm. This issue sometime arises in a sales context where statistical data can be manipulated to show certain results which upon further review can be easily refuted. In other words, HR’s role is to serve as a soundboard and to spot potential problems. The main advantage of HR is that since he or she handles complaints for a living, so to speak, he or she is not driven by emotions, thereby effectively removing the emotional baggage which taints a supervisor’s objectivity after been accused of discrimination or retaliation. 

While there are no guarantees in life, I have found that when employers implement these steps to uniformly and objectively address disciplinary issues and discrimination complaints, they are more likely to successfully defeat retaliation claims. Successful employers promulgate policies that are uniformly enforced; they strictly adhere to written progressive discipline polices; and most importantly, they have a separate process of vetting employment decisions involving employees who engage in protected activity that remove emotions and conflict of interests from the decision making process.

With more than 15 years experience, Myrna L. Maysonet is a shareholder with Greenspoon Marder's Labor & Employment and Class Action Defense Groups. Ms. Maysonet has significant experience in matters brought under Title VII, FLSA, ADA, ADEA and equivalent civil rights state statutes and in litigating in multiple jurisdictions in states such as Florida, Nevada, Utah, Tennessee and South Carolina.

[i] 42 U.S.C. § 2000e3(a).

[ii] Alvarez v. Royal Atlantic Developers, Inc., ---F.3d----, 2010 WL 2631839, *11 (11th Cir. July 2, 2010).

[iii] A retaliatory adverse action is any action which “might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53, 68 (2006). Typical adverse actions include, but are not limited to, demotions, discharges, change of schedules, or retaliatory actions against relatives of the person complaining.

[iv] Title VII is not a civility code and not every slight or offensive comment will be an actionable claim for discrimination or retaliation under Title VII. Oncale v. Sundowner Offshore Services, Inc, 523 U.S. 75, 118 S.Ct. 998,1000-03 (1998). The sole intent of Title VII is to combat illegal discrimination in the workplace and not personal animosity.See Pullman-Standard v. Swint, 456 U.S. 273, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982); Henson v. City of Dundee, 682 F.2d 897 (11th Cir.1982).

Hurricane Insurance Claim Preparedness

By Steven Geller, ESQ., Shareholder

July 2012

Hurricane season brings with it regular reminders to prepare. Most hurricane preparedness plans focus on physical supplies such as flashlights, extra batteries, bottled water, and medical supplies. What most plans don't include are preparations for making an insurance claim. Unfortunately, these days one also needs to prepare for making an insurarance claim. Simply having insurance premuims paid up to date and a copy of the policy in safe deposit box is not enough. Policyholders need to make sure the insurance they purchased will actually protect them. Understanding what the policy requires from policyholders, both before and after a loss, including the coverage that is actually afforded, is something that cannot be easily discerned by asking the sales agent or reading the policy.

Before a Loss

Today, more than ever, policyholders must be prepared to battle insurance companies that guard profits with armies of well-trained adjusters and skilled attorneys. This battle is often lost by policyholders before the claim is even reported. Recently, there has been a growing trend by a number of insurers to defeat legitimate claims through a practice known as "post-loss underwriting". Post-loss underwriting occurs when the insurance company decides to scrutinize the insurance application for errors after a claim is made by the policyholder. If anything appears out of place in the application, the insurance company may attempt to void the policy from inception, even if the errors were innocent. To the surprise of many policyholders, insurance companies may be able to do this pursuant to section 627.409, Florida Statutes. Again, the statute does not require that application mistakes be intentional, rather the insurance company need only claim that it would have charged a higher premium for the policy if it had known the additional facts. Sadly, a number of these post-loss underwriting cases may result in forfeiture of the benefits a policyholder bargained for.

To illustrate how problematic application errors can be, consider the case of a condominium that was recently denied coverage after sustaining a fire. Years earlier, the condominuim collected almost two million dollars in insurance benefits from its Hurricane Wilma claim. The benefits were paid for the replacement of condominuim roofs, windows, and a number of other damaged building components. The Wilma claim was almost four million dollars; however, the condominuim had a sizeable deductible that reduced the net benefit paid to the condominum by nearly half. The condominium elected to make do with the two million dollars it collected and not levy any assessments on its unit owners for the deductible. Some of the damaged roofs were replaced, but some that insurer had included as being replaced in the four million dollar calculation were only repaired because they were no longer leaking. Other building components, including some damaged windows and patio doors, were never replaced.

After repairs were made to make the building functional, the condominuim sought new insurance. The insurance application asked for the condominuim's claim history, and the condominium listed the hurricane claim and stated that all necessary repairs had been made. Months later, the condominium suffered a fire loss and submitted a new claim. During its extensive post-loss investigation, the insurance company discovered that some repairs on the four million dollar hurricane claim had not been made. Thereafter, claiming that it would have never issued the insurance policy had it known that the damage roofs were never replaced, the policy was rescinded and the premiums returned, even though the alleged misrepresentation had nothing to do with the loss. Many condominiums affected by the 2004 and 2005 hurricanes did not complete all of the hurricane related repairs that insurers included in their damage assessments. They may want to take another loo at the insurance application that they have on file.

After a Loss

After a loss, policyholders must often navigate a veritable minefield of duties and obligations that could potentially forfeit policy benefits for an otherwise covered loss. Standard insurance policies require policyholders to make reasonable temporary repairs, mitigate the damages, and attempt to prevent further losses. Typically, the insurer may impose additional requirements on the policyholder, such as exhibition of the property, submission to sworn testimony through recorded statements and examination under oath (EUO), as well as production of documentation related to the property, incident, and repairs performed or needed. While the policyholder may only required to comply with many of these conditions upon request by the insurer, some policies require policyholders to take more proactive approach to providing information to the insurer.

Failure to comply with any of these conditions may be ground for denial of policy benefits, and it is not uncommon for unwary policyholders as well as seasoned professionals to stumble while attempting to comply. For example, "cottage industry of EUO litigation" recently prompted Florida's Fifth District Court of Appeals to lament that the actual purpose of the examination under oath - verification of the loss - is increasingly becoming a tool used by insurers to avoid paying claims. The Fifth District Court cited a 2011 opinion from Florida's Third District Court of Appealin which the court admonished the insurer's legal counsel for "never-to-be-emulated" conduct at an examination under oath involving probing questions on topics unrelated to the insurance claims such as unrelated criminal convictions and the person the claimant was living with at the time.

Policies also set strict time deadlines for many of these obligations. If these deadlines are not met, it may relive the insurer from its obligation to pay for covered damage. Depending on the policy, policyholders must usually submit "sworn statements in proof of loss" to the insurer within sixty days of either the date of loss or the insurer's request. One of Florida's largest property insurers has been defending many cases by arguing that the insured's failure to file a sworn statement in proof of loss within sixty days of the damage occurring,even without a request or notification by the insurer, was a breach of the insurance contract, eliminating the insurer's obligation to pay policy benefits. In  many commercial property policies, if the policyholder elects replacement cost benefits instead of the actual depreciated cash value benefit, the policyholder must notify the insurer of its intent to make repairs within 180 days of an actual cash value claim, or risk losing the extra benefits.

Beyond the Fine-Print

Insurance policies are confusing contracts that contain highly technical language that is not always clear, resulting in a continuous stream of judicial opinions that regularly redefine policyholders’ rights and obligations. Today, the wave of litigation that followed the 2004 and 2005 hurricane season continues to reshape the legal landscape of Florida’s insurance law. Our Legislators in Tallahassee pass insurance laws almost every legislative session, further modifying the rights and obligations of policyholders. The result of the ever-expanding body of judicial opinions and legislative changes to Florida insurance law is that only lawyers can really tell you what may or may not be covered by your policy, and even lawyers frequently disagree. Policyholders that rely on their own understanding of their insurance policies may be in for an unpleasant surprise.  Both before and especially after disasters, it is important to consult with a qualified lawyer with experience in handling property insurance claims.

Steve Geller Chairs the First Party Property Insurance Practice Group at Greenspoon Marder.  He is an “A-V” rated lawyer practicing for 30 years, the Former Minority Leader of the Florida Senate, Former National President of the National Conference of Insurance Legislators, served on the Insurance Committees of the Florida House of Representatives and Senate for 17 years, and has been a frequent speaker  on Insurance matters.  He can be reached at"> of 954-491-1120.

Established in 1981, Greenspoon Marder is a full-service law firm with offices in Miami, Fort Lauderdale, Orlando, Tallahassee, West Palm Beach, Boca Raton, Stuart, Port St. Lucie, Naples and Aventura. The firm's practice is concentrated in the areas of commercial and residential real estate acquisitions and development; timeshare and fractional ownership development; resorts; community association law; zoning and land use; banking and real estate finance; public finance; commercial litigation; corporate securities; corporate tax and transactions; healthcare law; foreclosure and bankruptcy; labor and employment; immigration; international law; tax, estate, probate and elder law; international tax; life settlement; disability insurnance and insurance policy issues; family law; sports and entertainment; personal injury; equine law; regulatory compliance and defense. For more information, or call 888-491-1120.

Greater Miami Chamber of Commerce sets goals, honors local companies

The annual Goals Conference continued Friday with awards, plaudits — and recognition of hurdles that still face the region.

By Hannah Sampson

Friday, 06.01.12 

Downtown Miami has come a long way since its earlier incarnation as a business-only hub that went dark after hours, a group of advocates for the area agreed Friday.

But there’s plenty of work left to do to get the region where residents, business owners and city officials want it to be, said dozens of people attending a discussion about downtown Friday at the Greater Miami Chamber of Commerce’s annual Goals Conference.

According to suggestions from a group of more than 40 people, that slate includes:

  • Solve the problem of chronic homelessness.
  • Draw more high-tech companies.
  • Ease driving, parking, bicycling and pedestrian woes.
  • Find money for public park projects.
  • Make the waterfront more welcoming.
  • Build a convention center downtown.
  • More effectively build a Downtown Miami brand.

“We are ambassadors for downtown, and I think we need to tell that story,” said Al West, chief financial officer for the Greater Miami Convention & Visitors Bureau. “We need some way to tell the story that Miami is not your grandfather’s Miami.

” More than 1,200 people attended the conference, which took place Thursday and Friday at the Hilton Miami Downtown. The event is meant to line priorities for the chamber; over the two-day event, topics such as banking, technology, real estate, governmental affairs and infrastructure were on the agenda.

 As outgoing chair Penny Shaffer officially handed over the position, she addressed an issue that dominated the chamber’s attention much of the last year: whether gaming should be allowed to expand in Miami.

The business-advocacy group supported so-called destination resorts that feature casino gambling earlier this year, with some conditions, before a plan to allow three giant casinos in Miami-Dade and Broward was defeated during the legislative session.

In her outgoing video, Shaffer lip-synced to a spoof of the Adele hit Rolling in the Deep, singing: “We could have had it all” while driving down the Las Vegas Strip and strolling through a casino.

The chamber’s new chair is Phillis Oeters, corporate vice president of government and community relations for Baptist Health South Florida.

During the same general session Friday, the chamber honored two community leaders. Edward Villella, the founding artistic director of Miami City Ballet who is in his final season with the company, received the M. Athalie Range, Miami Pioneer for Progress Award.

The Henry M. Flagler Award for Visionary Leadership went to Arthur Hertz, chairman and CEO of Wometco Enterprises, which owns and operates the Miami Seaquarium.

Yet more honors were bestowed when the 2012 South Florida Good to Great Awards were presented during a luncheon on Friday. The annual, tri-county awards showcased 12 finalists “from small to large, who are growing their businesses and growing in the community,” said Oeters, kicking off the celebration.

The awards were inspired by Jim Collins’ book, Good to Great. Finalists were selected by a group of judges for their four-year track records of financial performance, as well as leadership, management, and other factors.

“I can truly vouch that this year’s crop is a hard driving group of creative talent,” said Victoria Villalba, South Florida Good to Great Awards chairman for the Greater Miami Chamber of Commerce and president of Victoria & Associates Career Services.

The finalists and winners were divided into four groups:

Companies with 1-50 employees: Coral Gables-based East Coast Public Adjusters; Coral Springs-based Tek Partners and the winner, VS Brooks Advertising, based in Coral Gables.

Companies with 51-249 employees: Miami-based CareCloud, Coconut Creek-based MotionPoint Corp. and the winner, Miami-based U.S. Gas & Electric.

Companies with 250-999 employees: Sunrise-based Cross Country Home Services, Fort Lauderdale-based Greenspoon Marder and the winner, Miami-based Sushi Maki.

And companies with more than 1,000 employees: The Continental Group, based in Hollywood; Miami-based VITAS Healthcare and the winner, Miami-based Norwegian Cruise Line.

Miami Herald staff writer Ina Paiva Cordle contributed to this report.

The Estate and Gift Tax Laws May Be “A-Changin'" - June 2012 

The Estate and Gift Tax Laws May Be “A-Changin’”
(My apologies to Bob Dylan)

By Alan B. Cohn, Esq.
June 2012

Currently, the estate and gift tax exemption is $5,120,000 (adjusted for inflation from the original $5,000,000 amount). If there are no changes prior to the end of this calendar year, the exemption will return to the $1,000,000 level (adjusted for inflation). The estate and gift tax rates are now a flat 35%. If the law reverts back after the end of this calendar year, the marginal rate will return to 55% (also there is a 5% surcharge for large estates over $10,000,000). There is also a generation skipping tax exemption equal to $5,120,000) which shall also revert back to $1,000,000 (adjusted for inflation) after the end of this calendar year. The 2010 Tax Act inaugurated the concept of portability. This was a way that a surviving spouse could use the unused exemption of the deceased spouse at a later point in time. There were several limitations on its utilization, such as dealing with a second predeceased spouse. That portability concept in the 2010 Tax Act would also expire at the end of this calendar year. All of the above would take place at the end of this calendar year unless Congress affirmatively changes it, or at least enters a stop-gap bill to extend the numbers into next year.

In light of the fact that there is uncertainty as to what will happen after this calendar year, there are certain techniques which should be considered by taxpayers. It would be a good idea for all taxpayers to consult with their planners before the end of the year (don’t wait until the last minute), or if they don’t have planners, to obtain one. The major technique taxpayers should discuss with their planners involves gifting. There is a danger that the gift tax and generation skipping tax exemptions will return to $1,000,000, and therefore, many planners may recommend that wealthier taxpayers utilize their full $5,120,000 gifting and generation skipping exemptions before the end of the calendar year. While there is a risk that Congress could try to retroactively claim tax at death on the amount of the exemption utilized over the final exemption eventually chosen by Congress (assuming the chosen exemption is less than that currently allowed), this author believes that such risk is minimal and should not prevent a taxpayer who otherwise desires to utilize their full gift exemption from doing so. There are certain important decisions which must be considered before the gift is made. Also, in many cases valuations are necessary so please don’t wait until December to contemplate gifting.

While there is still a chance that the current gifting and estate tax exemptions will continue indefinitely, this author has learned one valuable lesson in the years he has been a practicing attorney, and that is “don’t ever try to predict what Congress will do.”

Alan B. Cohn, Esq. is a shareholder at Greenspoon Marder, where he concentrates his practice in the areas of Tax; Estate Planning & Probate; Guardianship; and Business & Corporate law. Mr. Cohn is Board Certified by the Florida Bar in the areas of Wills, Trusts & Estates. He can be reached at or 954-491-1120.

The Great Food Truck Jam - March 2012


The Great Food Truck Jam: An Afternoon of Fun on Atlantic Ave. to Help the Community

Friday, March 16, 2012


With seven gourmet food trucks, music, entertainment, raffles, and children’s activities, what more could you want in a Sunday lunch on Atlantic Avenue in Delray Beach? How about adding a
terrific opportunity to help address hunger in the community?

Friends of Ruth Rales Jewish Family Service invites everyone to bring their picnic blankets and beach chairs to The Great Food Truck Jam on May 6, 2012, from 12:30 to 4:00 pm at Old School Square Park, Atlantic & NE 2nd Avenues. There’s no charge for admission to The Great Food Truck Jam beyond donations of canned/non-perishable food.

A mouth-watering array of treats awaits at The Great Food Truck Jam, which is being chaired by Rebecca Greenspoon. The trucks include: Dog Eat Dog gourmet hot dogs, Manga Mia Italian offerings, Miro's ORB Certified Kosher delicacies, Nacho Mama’s Grill Mexican fare, Vegi Express vegan delights, Good Humor ice cream, and Sugar Rush decadent desserts.

The Jam will benefit the Forster Family Kosher Food Pantry, one of the comprehensive programs of Ruth Rales Jewish Family Service that help the entire community. The Food Pantry delivers supplemental groceries biweekly to clients of all ages, including low-income seniors and families struggling to make ends meet.

Greenspoon Marder is The Great Food Truck Jam’s Presenting Sponsor. Additional generous sponsors include BrainStim Health & TMS Center, Far from Boring Promotional Products, Full Throttle Entertainment, Kanner and Pintaluga, McLane Distributors, Moroco Orthodontics, Palm Bay International, and Sun Gas. Atlantic Avenue Magazine is the Jam’s Magazine Sponsor.

For more information, contact or 561-852-5013.

View article here.

100 Power Leaders - Law - February 2012


100 Power Leaders - Law

Movers and shakers who make a difference in business and beyond

Friday, February 17, 2012

Kevin Gale, Editor in Chief
South Florida Business Journal

Welcome to the second annual South Florida Business Journal 100 Power Leaders section.

We’ve included these leaders not only because they are captains of industry, but also notable for their efforts to help make South Florida a better place to live, work and play.

If I thought it would be easier this year to determine who would be included, I was undoubtedly wrong. There were some tough calls on who to include from last year amid major accomplishments by others who deserved a spot on our list.

Gerald Greenspoon Gerald Greenspoon
Co-Founding & Co-Managing Shareholder, Greenspoon Marder
100 W. Cypress Creek Road, Suite 700, Fort Lauderdale 33309
(954) 491-1120

During the recent recession, Gerald Greenspoon doubled the size of his full-service business law firm. Most recently, he made headlines in acquiring, through bankruptcy court, the 50-year-old law firm of Ruden McClosky. The firm now has 140 attorneys and 400 staff in 10 offices statewide.

Click here to view full article on South Florida Business Journal’s website.

Holocaust Documentation and Education Center Under Foreclosure by City of Hollywood - February 2012

Holocaust Documentation and Education Center Under Foreclosure by City of Hollywood

February 2, 2012

The Holocaust Documentation and Education Center was created to preserve the authentic memory of the Holocaust by recording the testimonies of survivors, liberators, and rescuers, according to its mission statement.

And as that population ages, a push to collect their eyewitness accounts is needed all the more.

The City of Hollywood, however, just began its foreclosure process on the center's current home on Harrison Street, reports the Miami Herald.

The Holocaust Center bought the 2031 Harrison Street building from the city's Community Redevelopment Agency in 2004, agreeing to repay the $1.2 million loan plus interest over 15 years. The city holds that the center hasn't paid a cent yet.

As reported by the Hollywood Gazette, the city is up against a $38 million budget gap. And after cutting staff salaries, city officials say they are in no position to start forgiving debts.

In a letter to the editor in the Sun Sentinel, Steve Geller, who is defending the center pro bono, said the city hired a contractor to inspect the property, but his report was wrong. Geller says shortly after moving in the center, they had to replace the elevator, roof, facade, and windows.

He says the center hasn't been unable to make payments to the city, because they have spent $3 million in repairs to the building they call a "money pit." They say the building is violating so many codes that the museum has been unable to open to the public for the past seven years, further hampering the center's income.

Geller adds, "Recently, the city condemned the second floor of the Holocaust Center because of code violations that had been there for decades. The city is enforcing these violations on a building that the city sold us and confirmed in writing didn't have code violations!"

The center is praised for its extensive oral history library and memorabilia collection, which includes a concentration camp uniform, yellow stars, infant clothing made at Auschwitz, and a Holocaust rail car from Poland.

The Florida Jewish Journal reports that the center just hired a new director of educational outreach last month. When asked about the center's future, Rositta Kenigsberg, president and one of the center's founders, told the Journal, "We've been around for 32 years and we plan to be around to finish this museum, whether it is in the City of Hollywood or some other city."

View article here:

Hundreds of Kids Get Bikes, Toys, Snow at Holiday in the Park - January 2012

Hundreds of Kids Get Bikes, Toys, Snow at Holiday in the Park

Thursday, January 5, 2012
By Staff Report

OPA-LOCKA — Bicycles, dolls and games were among the surprises in store for Opa-locka children when Vice Mayor Dorothy “Dottie” Johnson recently hosted the city’s 10th annual “Holiday in the Park” Toy Give-Away on the grounds of City Hall.

The city’s Parks and Recreation Department and schools helped with pre-registering parents and their children for the toys give-away at the event which also included free food, rides, arts and craft activities, a visit by the Game Xcite Mobile Unit, rock climbing and souvenir photos with Santa and Mrs. Claus.

An ice-making company piled ten tons of artificial snow into a mound at the start of the event on the west lawn of City Hall, 777 Sharazad Boulevard. “Winter Wonderland” was the theme even in the 80-degree temperature.

Johnson said the “snow” would be a unique experience for children who have never experienced a white Christmas. The kids made use of the opportunity by frolicking in it and throwing “snowballs.”

The city distributed about 500 Christmas gifts to the children during the give-away and bicycle raffle, according to spokeswoman Christina Gordon.

The lucky recipients included the Paz kids — Franklin, 8; Xavier, 6; and Yaniella, 3 – who were accompanied by their mother Christina Paz. They won bicycles during the drawing.

Supporters of the event dropped off toys at the Parks Department, including representatives of the Udonis Haslem Foundation, Lawrence Wright & Partners, Citrin Financial & Insurance, Waste Management, Greenspoon Marder, P.A., Auto Depot International and Michelle Village.

Members of the Black Global Bikers Association Inc. and the Miami Select Basketball Club were among volunteers helping to handout the toys.

Many youths who were not pre-registered turned out for the celebration and Johnson responded with an on-site registration, followed by distribution of teddy bears and other toys with help from the Opa-locka police department.

The event also benefited adults, who were provided with information on city services, such as billing hardship, public safety, recreation schedules and recycling timetables, at 12 booths.

The Fourth Party in Commercial Real Estate - January 2012

David Weisman

The Fourth Party in Commercial Real Estate

By David Weisman, Esq.
January 23, 2012

It used to be that there were three parties to a typical commercial real estate transaction: buyer, seller and lender. Each has its own interests and requirements which must be met in order to get to closing. The buyer and seller negotiate a business deal that makes sense, and the buyer goes to its lender to get the money.

Now, there is a fourth chair at the table, a new player who directs the details of the transaction almost from the first negotiation. The mysterious fourth party is the seller's lender. Many commercial lenders are reluctant to take title to troubled property through foreclosure or deed-in-lieu of foreclosure. The seller's lender fears environmental liability, does not want to maintain and manage property, and does not want to engage in the process of selling property. Many sellers’ lenders are encouraging sellers to seek buyers and engage in a commercial short sale.

The process differs from a residential short sale in many cases, because the seller's lender has often taken control of the property by means of a receiver, if there is a pending foreclosure action. Seller's lender imposes its will and its requirements upon the transaction from the very beginning. The contract for sale must be reviewed and approved. Seller's lender often establishes a minimum price and carefully scrutinizes cost allocations to make certain that its short payoff is maximized.

The seller's goal is to get released from any personal guaranties and to be rid of the property without too much difficulty. The seller usually realizes nothing from the sale. This evaporates motivation often found in a hungry seller. The buyer expects to make an arm’s length offer for property at fair current value. The buyer may not initially realize that its seller does not have the power on its own to enter into a normal deal.

The seller is reluctant or often refuses to make typical contract representations regarding the operation and control of the property if a receiver has been in place. The receiver refuses to make any representations and warranties, because it is just a hired gun, even though it has had complete control of the property for months. The buyer must be willing to purchase without many typical warranties and representations which are otherwise customary. It may be difficult to obtain tenant estoppel letters, accurate and current rent rolls, historical expense reports, and similar information which used to flow smoothly into the hands of a buyer during due diligence.

Due diligence periods and closing dates are mandated by the demands of the seller's lender, and both are drastically compressed. Instead of a typical 45 days to inspect the property and 15 or 30 days thereafter to close, the seller’s lender may insist that a buyer has 10 days to inspect and 15 days to close. The buyer agrees in order to make a deal and the result is a scramble and a closing with less than complete information. Artificial deadlines, like end of the quarter or end of the calendar year, put even more pressure on all of the parties to comply with the demands of the seller's lender.

The closing statement is subject to the approval of the seller’s lender as well. Each allocation and cost is scrutinized to make certain that the proceeds are maximized. A battle often ensues between the seller and the seller's lender over project costs which should be paid out to third parties, who have provided goods and services to the property and who expect or demand payment out of the closing proceeds. If the seller is otherwise insolvent, resistance by the seller’s lender may force the buyer to pay expenses of closing of the property that they otherwise would not be obligated to pay.

Miraculously, the deals get closed. The buyers are convinced that the prices that seller’s lender is willing to take to get rid of the problem are low enough to justify the aggravation and additional expense. The properties are selling and the market is improving. Commercial real estate has found life in the new world order, either in spite of or with the help of the fourth party.

David Weisman, Esq. is a Board Certified Real Estate Lawyer at Greenspoon Marder with more than 30 years of experience. He can be reached at 954-491-1120 or

John Oates & Levinson Jewelers Raise Over $100,000 for the Aspen Songwriters Festival – January 2012


John Oates And Levinson Jewelers Raise Over $100,000 For The Aspen Songwriters Festival

by Ashley Joy Parker
January 11, 2012

Mark and Robin Levinson, co-owners of Levinson Jewelers on Las Olas, hosted an exclusive private event starring legendary singer, songwriter, musician and producer John Oates, best known as half of the rock and soul duo Hall and Oates, at their home on Saturday, January 7th.

The extravagant evening, which showcased a concert performance by Oates and was attended by the "who's who" of South Florida, raised over $100,000 for the Aspen 7908 Songwriters Festival. Along with the Levinsons, the evening was also co-hosted by Scot Hunter, CEO of Emerald Asset Advisors and his wife Barbara; Gerry Greenspoon, Managing Partner of Greenspoon Marder and his wife Ellen; and Doug Weiser, Founder of Cloud 9 Film Partners and his wife Lynda.

In addition to the fabulous private concert by Oates, which included six of his well known favorites, guests were treated to a fabulous cocktail hour and dinner, along with a live auction emceed by South Florida Radio Personality John "Footy" Kross. The extravagant auction items included a personalized signed guitar by John Oates; Backstage Passes to a Hall & Oates concert in the city of your choice, plus dinner after the concert with John; a private recording studio session in Aspen with John Oates and his band; and opportunities for everyone in attendance to sponsor a young songwriter. Notables in attendance included world renowned shoe designer Donald Pliner and his wife Lisa and former NFL and Miami Dolphins' great Sam Madison with his wife Saskia. Also, attending this fabulous event was Gram Slaton, Executive Director of the Wheeler Opera House in Aspen.

The fabulous evening was conceived to support the passion of John Oates and his involvement with the Aspen 7908 Songwriters Festival. The mission of the Songwriters Festival is to bring together songwriters new and legendary to create the next generation of great American music in an atmosphere of collaboration and community. Produced by Songwriter Hall of Fame member, John Oates, and the Wheeler Opera House, the 7908 Aspen Songwriters Festival is the nation's most intimate musical weekend, as it creates a bond between the artists who write the songs and the fans who want to hear them in their purest, most real form. Legendary writers perform side by side with the next great generation of songwriting talent.

pic Doug Weiser, Founder of Cloud 9 Film Partners, Scot Hunter, CEO of Emerald Asset Advisors, Gerry Greenspoon, Managing Partner of Greenspoon Marder, Mark Levinson, co-owner of Levinson Jewelers, John Oates and John "Footy" Kross, South Florida Radio Personality

View article here:

Dan Marino Foundation gears up for annual 'WalkAbout Autism' - January 2012


Dan Marino Foundation gears up for annual 'WalkAbout Autism'

January 4, 2012

The Dan Marino Foundation has teamed up with local South Florida autism agencies to celebrate the "Dan Marino Foundation's WalkAbout Autism," presented by Walgreens. The event will take place on Jan. 28 from 10 a.m. to 2 p.m. at Sun Life Stadium and will benefit the Autism Societies of Miami-Dade and Broward counties, UM-NSU CARD (Center for Autism & Related Disabilities) and the Dan Marino Foundation.

Driven by individuals with autism, their families and friends, this fundraising effort generates funds for the autism community of South Florida. The signature sponsors include: the Miami Dolphins; Sun Life Stadium; Centerplate; Walgreens; Publix Super Markets; Badia Spices; Samsung; HH Gregg; Greenspoon Marder; MMD Realty; Panera Bread; and Pepsi Co.

All proceeds raised through this event will stay in the local community and benefit autism services and awareness. Participating South Florida schools will receive 25 percent of the money raised by their teams to support special needs programming in their school. Autism is the fastest-growing developmental disorder. According to the Center for Disease Control, 1 in 110 children in the United States have autism.

"As parents of children with autism, my wife Rachel and I are thrilled to be a part of the 'Dan Marino Foundation WalkAbout Autism,'" said General Manager of the Miami Dolphins, Jeff Ireland. "We know first-hand the importance of support services for children and adults with autism and this event will raise money specifically for those services right here in South Florida. Having the event at Sun Life Stadium where Dan played his hall of fame career for the Miami Dolphins seemed like the perfect choice."

Celebrity walk attendees include: Dan Marino, Rachel and Jeff Ireland, Miami Dolphins alumni players and Miami-Dade and Broward County elected officials.

For more information about the event or how to participate, visit

Where are South Florida's hottest spots for new casinos? - December 2011

Sun Senitel

Where are South Florida's hottest spots for new casinos?

December 15, 2011
By Kathleen Haughney and Nick Sortal, Tallahassee Bureau

TALLAHASSEE — From glittering Miami Beach to the fringes of Broward's Everglades, international casino magnates are scouring South Florida looking for the perfect spot to place world-class, high-end destination casino hotels should the Florida Legislature agree to open the state to all-out Las Vegas-style gambling.

That has business leaders and some county officials jumping at the chance to lure extra dollars and jobs to the region.

"They're dangling that green carrot," said Nicki Grossman, president of the Greater Fort Lauderdale Convention & Visitors Bureau. "Boy, you can't miss the smell of that money. It's important, and that's why everybody is coveting the opportunity to host that casino facility.''

So far, the Miami area has risen to the top of the casino operators' wish lists with Malaysia-based Genting's purchase of the old Miami Herald building and Las Vegas entrepreneur Steve Wynn's pronouncement that the Miami Beach Convention Center would be the ideal location for a new Wynn Resorts property.

So what about Broward County? (Palm Beach County, because it does not currently have voter-approved slot machines, isn't currently eligible for these facilities, but is looking to put a referendum on the ballot for slot machines, so that it could potentially be a market for destination casinos as well)

"Broward is a very attractive location," said Andy Abboud, vice president of government relations for Las Vegas Sands. He deems the county as "equally attractive" to Miami-Dade because of its proximity to two airports — Fort Lauderdale-Hollywood and Palm Beach International — plus the number of existing hotels and resident population of nearly 1.8 million.

Former state Sen. Steve Geller, who lobbies for Mardi Gras Gaming in Hallandale Beach, disagreed. That's because the proposed investment required for entry into the South Florida market may be too stiff, he said.

"Everybody I've spoken to says they don't want to put $2 billion in Broward," Geller said. "The most they'll go is $1 billion."

Several locations in Broward are being located as possible casino venues, most recently the area around the Bank Atlantic Center in Sunrise. The owners of the NHL's Florida Panthers are interested in having a casino move next door, creating an even bigger entertainment area.

State Sen. Ellyn Bogdanoff, R-Fort Lauderdale, said the market will be the ultimate dictator of where casinos decide to build, should the legislation she is co-sponsoring pass.

"Would a casino operator build in Broward?" she said. "Let the market work. No casino is going to come unless they think they can make money."

Here's a list of the potential sites under study, and the state of play on each:

Broward County

—Bank Atlantic Center, Sunrise

The home of the Florida Panthers didn't have to pitch too hard to interest the casino companies in the merits of the neighborhood. The arena draws more than 2 million people annually and is next to Sawgrass Mills, a shopping center that attracts 30 million people yearly and is the most popular tourism spot in Florida after Disney World. The site also has 90 acres of blacktopped space that could easily be developed further.

Panthers president Michael Yormark said a casino would be a "great complement" to the arena and Sawgrass Mills.

"I think ultimately destination casinos will become a reality, whether it's this year or next year," he said. "So we need to watch it closely and we need to be ahead of the curve. That's exactly what we're doing."

—Gulfstream Park, Hallandale Beach

The horse track has been eyed by Caesar's, which has been working in the background in Tallahassee with Las Vegas Sands, MGM and other Las Vegas companies to get the destination casino bill passed. Gulfstream Park is home to a Triple Crown prep race, the Florida Derby, which carries a $1 million purse, and offers slots and a poker room.

—The Diplomat, Hollywood

Down the street from Gulfstream, the Diplomat has reportedly expressed interest in hosting a destination casino at its beachfront property. But the current bill would have to be retrofitted to give the hotel credit for the approximately $800 million already spent to build it. Also, based on the scoring system that is being proposed to award casino licenses, previous experience counts for 10 percent — meaning the Diplomat may need to find a casino partner to be a top candidate.

—Broward County Convention Center, Fort Lauderdale

Grossman, who runs the county's visitor and convention bureau, said she met with executives from the Sands and Wynn casino operations, who wanted to tour the county convention center property in east Fort Lauderdale. Grossman had concerns about use of that site for a casino. The site is eight acres and the county wants to put a convention center hotel there.

"It's awfully small to do what the casino needs to do,'' she said.

Miami-Dade County

— Miami Herald building, Miami

Genting bought the former newspaper building on Biscayne Bay last spring and wants to erect a $3 billion property called Resorts World Miami on the 13.9-acre site.

Company plans call for 5,200 rooms spread over four hotel towers, two condo complexes, a convention center, shops, 50 restaurants and nightclubs. And, should the Legislature authorize it, a casino.

Genting officials have said if Florida lawmakers don't approve the casino, they will still construct a hotel, but on a slower time frame.

— Miami Beach Convention Center, Miami Beach

The convention center area is Wynn's top choice, but he may face lots of local resistance.

The Miami Beach Commission on Wednesday passed a resolution opposing the destination casino legislation that urged the "Florida Legislature to reject any and all expansions of gambling in the state of Florida, including any legislation which would legalize so called 'destination casinos.''

—Land adjoining Sun Life Stadium, Miami Gardens

The Miami Dolphins have expressed interest in getting a piece of the casino action, but the National Football League prohibits ties to gambling. Dolphins majority owner Stephen Ross owns a large tract of land around the stadium that could be used for a casino, and the Dolphins have hired well-connected lobbyist Ron Book to represent them in the discussions with lawmakers and the casino industry.

"There's probably not another site in Florida of that size and already permitted all ready to rock and roll," Book told the Sun Sentinel earlier this year.

Staff writers Brittany Wallman and Craig Davis contributed to this report.

Law Firm Ruden McClosky Makes Bankruptcy History With Sale - December 2011


Law Firm Ruden McClosky Makes Bankruptcy History With Sale

Tuesday, December 06, 2011

By Jacqueline Palank

The sale of South Florida law firm Ruden McClosky PA to fellow law firm Greenspoon Marder PA will likely make bankruptcy history—the first known sale of a still-operating law firm under Chapter 11.

The method that Chrysler, General Motors and Blockbuster all used to sell their businesses to the highest bidder is the same strategy that the Fort Lauderdale, Fla.-based Ruden McClosky put in play upon its Nov. 1 bankruptcy filing.

“To our knowledge...we have not located any case in which a law firm debtor was able to sustain its operations, retain its lawyers and support staff and successfully sell itself to another law firm as a going concern,” said Paul Steven Singerman, Ruden’s bankruptcy attorney.

The sale, valued at more than $7.8 million, may be the first of its kind, but experts say it likely won’t be the last, as law firms continue to struggle amid increasing competitive pressures and global economic distress.

“The odds are there will be more law firms that will or may fail in the future, and I think that there’s a chance that other law firms and other restructuring professionals might note the Ruden case and not rule out of hand the prospect of a going-concern sale of a law firm enterprise,” said Singerman, a shareholder and co-chief executive of Berger Singerman.

He said the deal saves about 130 attorney and nonattorney jobs, preserves business relationships with a wide range of suppliers and service providers, allows payment in full of the law firm’s secured creditors and ensures that unsecured creditors, including former shareholders, recover at least some of what they’re owed. The expanded Greenspoon will now employ about 140 attorneys and 400 staff members at 10 offices throughout Florida.

Several years ago, so-called “363 sales” became common in the bankruptcy world as companies seeking to avoid expensive and protracted restructurings began seeking buyers to take them out of bankruptcy. Under Section 363 of the Bankruptcy Code, a company can sell itself to the highest bidder through a court-supervised auction process that cleanses it of liabilities.

It’s an attractive proposition to all parties.

“Section 363 sales play a vital role because they facilitate sales of businesses as a going concern, help preserve jobs and benefit creditors as well as debtors,” said Paul A. Rubin, a Herrick, Feinstein LLP bankruptcy partner who often represents buyers of distressed assets.

Buyers can sell their assets quickly so as to avoid the loss of their assets’ value, which ensures creditors can recover as much of what they’re owed as possible. Both buyer and seller gain valuable legal protections in the event that disgruntled creditors step forward to challenge the deal, not least of which is the oversight and approval of a federal court.

“A critical benefit of buying assets through the bankruptcy sale process is obtaining an order from a federal bankruptcy judge finding that there has been a reasonable opportunity to market the assets, that the terms of the sale are fair and reasonable and that the consideration being paid by the buyer constitutes reasonably equivalent value,” Rubin said.

Such protections appealed to Ruden, which at its peak was home to about 200 lawyers and was known for representing major real-estate developers and real-estate lenders.

The financially struggling firm hired Berger Singerman in October and looked at its options. A merger, the saving grace for many a struggling law firm, simply wasn’t on the table.

“There’s no prospect for a traditional stock merger working here because that would have saddled Greenspoon with all of [Ruden’s] liabilities,” Singerman said.

So they tried to complete a sale out of court. But Singerman said Ruden’s “longstanding stature” in the

South Florida legal community drew a significant amount of attention from creditors and former shareholders— groups whose objections could derail a deal.

“We feared that if we advanced the out-of-court transaction, planned around it, and came close to the anticipated transaction consummation date, if creditors then filed an involuntary bankruptcy we would have run out of runway,” he said of the cash-strapped firm. “We didn’t have the luxury or the resources of taking a mulligan on the transaction.”

The security of bankruptcy court also appealed to Greenspoon, according to its attorney on the deal, R. Scott Shuker.

“To just do this outside of court you wouldn’t have had the structure and, from Greenspoon’s perspective, the certainty that this was a transaction blessed by the federal court,” said Shuker, a bankruptcy partner with Latham, Shuker, Eden & Beaudine LLP.

So Ruden sought Chapter 11 protection with a bid from Greenspoon in hand, winning court approval to test Greenspoon’s bid at a Nov. 28 auction. The auction was canceled after no rival bidders stepped forward, paving the way for Judge Raymond B. Ray of the U.S. Bankruptcy Court in Fort Lauderdale to approve the sale at a Nov. 29 hearing.

When it came to structuring the purchase price, Shuker said Greenspoon knew it had to pay off at least lender Wells Fargo’s approximately $4.8 million secured claim. The firm also wanted to make sure there was at least some cash left over for unsecured creditors. So it offered to pay $5.6 million in cash, which it later increased to $5.775 million.

Greenspoon also offered to take responsibility for $2 million of Ruden’s existing liabilities, covering the claims of vendors like court reporters in order to preserve important relationships.

Finally, Greenspoon agreed to underwrite the costs of chasing after Ruden’s unpaid legal bills. It would pocket the first $10 million recovered in order to cover its borrowing and new employee costs, then offer Ruden’s unsecured creditors all third of all payments collected thereafter.

“At the end of the day we thought our break-even point was $10 million,” Shuker said. “After we hit $10 million, we were willing to split the upside with unsecured creditors.”

However, after unsecured creditors objected to the sale, Greenspoon agreed to a 50/50 split. This, along with the increased cash component and extensive negotiations, brought the unsecured creditors on board, Singerman said.

Both Shuker and Singerman attributed the deal’s success in part to the “incredible commitment” of Ruden’s remaining employees to stick together. That commitment included shareholders’ pledge to forgo their regular paychecks due Nov. 30, a savings of about $400,000 to Ruden. They also agreed to risk going unpaid, or altogether waive right to payment, on more than $900,000 in employment-related claims that arose before the bankruptcy.

“They did not do this to protect the value of their stock because there wasn’t any value to their stock,” Singerman said of the shareholders. “They did it because that’s what it took to get the consent and support of the official committee of unsecured creditors and to hold the deal together.”

Families Volunteer To Feed The Hungry - November 2011


Families volunteer to feed the hungry

By David A. Schwartz
Florida Jewish Journal
November 29, 2011

Some of South Palm Beach's neediest seniors received a kosher Thanksgiving meal a day early thanks to more than 90 families from the Woodfield Country Club and Woodfield Hunt Club communities.

This was the third year that residents of the two communities in West Boca Raton sorted dinners and enough canned and packaged food and fresh produce to last two weeks into bags and boxes at the Ruth Rales Jewish Family Service's Forster Family Food Pantry.

"I want to thank your organization for what you're doing and I want to bless you all for being volunteers," Joseph Chazin, a 97-year-old resident of Century Village in West Boca Raton said as he invited Ruth Rales CEO Danielle Hartman and volunteers Michele Blair and her children Joshua, 9, and Morgan, 8, of Boca Raton into his home.

Chazin said he would be "in bad shape" without the food. He said although he cooks a little bit, making meals like French toast for breakfast, "I can't do much. I can't stand."

For Chazin, whose wife Edythe died 11 years ago, the days can be long. "To pass the day is not easy," he said. "You sit in that chair. It's hard to be alone."

Like many now elderly people in South Palm Beach, Chazin came to Boca Raton from New York 30 years ago. He cared for his wife for five years before she died 11 years ago.

"The majority of clients are home bound or lack transportation or don't drive anymore," said Hartman, of Ruth Rales. "We rely on community support for the holidays to make those times special. This gives them the opportunity to celebrate the holiday."

About 100 of the 550 individuals who get food each month from the Forster Family Food Pantry received the Thanksgiving delivery.

Volunteers — fathers, mothers and their children — began packing bags and boxes for delivery at 8:30 a.m. They finished two hours later.

"We wanted to have a community program for all ages," said Woodfield Country Club resident Susan Rahn, event co-chair with Larry Blair, who also is chairman of the Ruth Rales Jewish Family Service.

"This is also for the kids," said Blair's wife, Michele Blair. "There are not many opportunities for them to see that there really is a need in Boca."

"We want to help give back to the Boca Raton community, especially in these hard times," said first-year volunteer and Woodfield Country Club resident Bob Marton who was at the food pantry with wife Lisa, their son Ben, 12, and daughters Gabby, 14, and Emmy, 9.

Eric Wallberg, who lives at Woodfield Country Club, brought sons Jacob, 11, and Ryan, 8, to their second Woodfield Feeds the Hungry event. Wallberg said he wants his children to learn about feeding people who aren't as fortunate.

"The kids loved it last year," he said, explaining that his children met seniors and sat and talked. "They really don't want you to leave," Wallberg said. "It made a big impact on myself and the children."

Bankruptcy Court Approves Sale of Ruden McClosky Assets to Greenspoon Marder - November 2011

Bankruptcy Court Approves Sale of Ruden McClosky Assets to Greenspoon Marder

Fort Lauderdale, Fla. – November 29, 2011 – Ruden McClosky announces that the United States Bankruptcy Court for the Southern District of Florida has approved the sale of its assets to the Greenspoon Marder law firm. As approved, the sale will result in combined operations totaling approximately 140 attorneys and 400 staff members located in 10 offices throughout the state.

The transaction positions Greenspoon Marder as one of Florida’s largest full-service law firms and provides Greenspoon Marder with greater access to new Florida markets where Ruden McClosky currently maintains a presence, including Miami, Naples and Port St. Lucie. Additionally, the deal bolsters the Greenspoon Marder brand in Fort Lauderdale, where both firms have enjoyed a longstanding history. Currently, Greenspoon Marder also has offices in Aventura, Boca Raton, West Palm Beach, Stuart and Orlando.

“Ruden McClosky has a rich history spanning more than five decades of providing exceptional client service,” said Michael Krul, managing director of Ruden McClosky. “While we will greatly miss the Ruden McClosky brand, we look forward to this next chapter and to continuing to deliver the same level of professionalism for which our firm has always been recognized.”

Approximately 50 Ruden McClosky attorneys will continue their practices under the Greenspoon Marder name, allowing the firm to expand its areas of legal practice to include new and emerging areas of law, such as: corporate securities; healthcare; intellectual property; public finance; international law and international tax.

In approving the sale, the court recognized that the transaction is consistent with the best interests of Ruden McClosky’s creditors and should proceed as anticipated.

Ruden McClosky Signs Asset Purchase Agreement with Greenspoon Marder - November 2011

Ruden McClosky Signs Asset Purchase Agreement with Greenspoon Marder

FT. LAUDERDALE, FL (Tuesday, November 1, 2011) – Ruden McClosky announces that it has signed an asset purchase agreement with Greenspoon Marder to combine both firms' resources under the Greenspoon Marder name. The combined operations will have approximately 140 attorneys and 400 staff members located in offices throughout the state and will position Greenspoon Marder as one of Florida's largest full-service law firms.

The sale will provide Greenspoon Marder with greater access to new Florida markets where Ruden McClosky currently maintains a presence, including Miami, Naples and Port St. Lucie, as well as bolster the Greenspoon Marder brand in Fort Lauderdale, where both firms have enjoyed a longstanding history for decades. Additionally, this combination will allow Greenspoon Marder to expand its areas of legal practice to include new and emerging areas of law, such as healthcare, intellectual property, public finance, international law, and international tax, among others.

"This agreement creates one of the strongest brand footprints of any law firm in the state of Florida," said Michael Krul, managing director of Ruden McClosky. "Both firms share similar philosophies with regard to corporate culture and commitment to exceptional client service, making this a smooth transition and laying the foundation for a successful long-term relationship."

As part of the transaction with Greenspoon Marder, Ruden McClosky has filed a motion to approve the transaction with the United States Bankruptcy Court for the Southern District of Florida under Chapter 11. This will confirm Ruden McClosky's ability to close the sale of its assets to Greenspoon Marder, consistent with its obligations to existing creditors. Pending approval from the court, the sale is expected to close on or before December 1, 2011.

About Ruden McClosky
Ruden McClosky, one of Florida's largest and longest standing full-service law firms, represents regional, national, and international clients with business interests throughout the state. With offices across Florida, Ruden McClosky is fueled by strong client relationships, a roster of experienced attorneys, and a commitment to delivering superior client service with a focus on results. Among the most respected law firms in the state for more than 50 years, the firm's culture is grounded in professionalism, diversity, and civic involvement. For more information please visit

Established in 1981, Greenspoon Marder, P.A. is a full-service law firm with offices in Fort Lauderdale, Orlando, Aventura, Boca Raton, West Palm Beach and Stuart. The firm's practice is concentrated in the areas of commercial and residential real estate acquisitions and development; timeshare and fractional ownership development; resorts; community association law; zoning and land use; banking and real estate finance; commercial litigation; corporate tax and transactions; international tax; foreclosure and bankruptcy; labor and employment; immigration; tax, estate, probate and elder law; life settlement; disability insurance and insurance policy issues; family law; sports and entertainment; personal injury and malpractice litigation; equine law; regulatory compliance and defense. For more information,

New IRS Scrutiny on Post-Issuance Compliance Procedures for Tax-Exempt Bonds - October 2011

New IRS Scrutiny on Post-Issuance Compliance Procedures for Tax-Exempt Bonds - Will You be Prepared?

October 25, 2011
Denise Ganz, Esq.

Three 2011 Internal Revenue Service ("IRS") releases, described below, highlight the importance to the IRS that issuers and conduit borrowers engaged in tax exempt or tax credit financings implement formal post-issuance compliance plans.
As a result, issuers of governmental bonds may need to formalize policies and procedures relating to post-issuance compliance. Although 501(c)(3) borrowers have already been addressing post-issuance compliance issues when completing Form 990, Schedule K in connection with their tax-exempt bonds, the recent IRS releases indicate that greater focus on post-issuance compliance systems is warranted.

• In April 2011, the IRS released a new Form 8038 for private activity bonds that contains two new "check the box" line items. The first asks the issuer to check a box indicating if it has established written procedures to take remedial action to address private business use problems. The second requires the issuer to check a box indicating if it has written procedures to monitor arbitrage requirements. In October, 2011, the IRS released a new Form 8038-G, which includes the same line items for governmental bonds.
• In July 2011, the IRS released its "Final Report on Governmental and Charitable Financings," detailing the results of two compliance questionnaire projects it conducted in 2007. The first targeted charitable organizations that were beneficiaries of tax-exempt financing and the second targeted issuers of governmental bonds. The report concluded that although a majority of respondents were aware of post-issuance compliance rules and had procedures in place to address the same, fewer than half of the charitable organizations and only about 20 percent of the governmental issuers were able to produce evidence of either specific procedures or an ad-hoc process to assure compliance. The IRS reported that it will continue to stress the need for procedures through similar questionnaire checks.
• On September 8, 2011, the IRS released updated procedures for its Voluntary Compliance Agreement Program ("VCAP") through additions to the Internal Revenue Manual. Under VCAP, an issuer (or a conduit borrower in cooperation with an issuer) can request relief from a violation of a tax requirement pertaining to tax-exempt bonds, tax credit bonds or direct-pay bonds. Such request must include an affirmative or negative statement as to whether the issuer has adopted comprehensive written procedures intended to promote post-issuance compliance. The issuer must also include a detailed description of the portion of such procedures that relate to the VCAP request, including the authorized person(s) who adopted the procedures, the officer(s) responsible for monitoring compliance, the frequency of compliance check activities, the nature of the compliance check activities undertaken, and the date such procedures were originally adopted and subsequently updated. The IRS will consider the extent to which an issuer has appropriate written compliance procedures as an equitable factor in determining appropriate resolution of VCAP requests.

In view of these recent developments, issuers and 501(c)(3) borrowers should consider whether they have the necessary policies and procedures in place to allow them to "check the box" in the new line items in the applicable Form 8038 and demonstrate post-issuance compliance to the IRS when questioned or otherwise required to do so. Issuers should also take appropriate steps to determine that conduit borrowers have the appropriate policies and procedures in place in this regard. The attorneys of Greenspoon Marder’s Public Finance Department are available to assist in all aspects of the foregoing, including the development of written guidelines and internal information-gathering systems related to post-issuance compliance issues.

If you have questions regarding this topic contact Denise Ganz, Esq, 954-491-1120 or

Ruden McClosky in Merger Talks with Greenspoon Marder - October 2011
Daily Business Review

Ruden McClosky in merger talks with Greenspoon Marder
October 12, 2011
Julie Kay

Ruden McCluskyTroubled Ruden McClosky is deep in merger talks with Fort Lauderdale-based Greenspoon Marder and a merger could happen by year's end.

Both firms issued a joint press release confirming the potential merger after receiving calls about it from the Daily Business Review.

While the firms stated they are confident the merger will occur, it looks like ex-partners have veto power over a deal, the Review has learned. As a merger condition, 58 former Ruden partners would have to agree to settle for 30 percent of $3.5 million in outstanding equity payments, one of its deepest unresolved liabilities.

Managing partner Michael Krul emailed the former partners Friday to explain the offer and said they have 10 days to respond.

"We have a potential deal worked out with another law firm, subject to our firm being able to resolve certain outstanding obligations of our firm," Krul wrote in the email obtained by the Daily Business Review. "One of those is, of course, our obligation to our former shareholders."

The merger partner has agreed to provide the cash, which would be paid Dec. 31, contingent on the deal closing, he stated.

Ruden is cutting deals with other creditors, and a deal with former partners is crucial to the merger, Krul wrote.

"With our lender's encouragement, we are working on a fast track to get this deal closed," he wrote.

Without saying so, the email makes it sound like Ruden's finances are precarious.

Greenspoon was not mentioned in the email.

A merger between the two could pose problems of geographic overlap. Greenspoon has five offices, and three are in cities where Ruden has offices. Ruden would offer Greenspoon openings in Miami, Tampa, Naples and Port St. Lucie.

Once Broward County's largest law firm with more than 200 attorneys in offices throughout the state, the real estate-heavy Ruden was hammered by the recession and the collapsing development market. In three years, Ruden has experienced layoffs, mass defections, office closings and pay cuts. The firm is now down to about 70 lawyers.

In August, Ruden began merger talks with Cleveland-based Benesch, a 175-lawyer firm with offices in Ohio, Indianapolis, Philadelphia, Delaware and China. Benesch attorneys visited Ruden's offices. It's unclear why that deal didn't advance.

But since then Ruden has been talking with Greenspoon Marder, according to sources.

The deal would give Greenspoon Marder an entree into new markets and new practices, such as health care law, international tax and intellectual property.

"We view this as a wonderful opportunity to expand Greenspoon Marder by combining the exceptional talent that exists at the Ruden McClosky firm," said Gerald Greenspoon, co-founder and co-managing partner of Greenspoon Marder, in the news release. "Their reputation and experience are exceptional in the Florida legal market, and we look forward to reaching an agreement."

Krul said: "We have spent 50 years building a reputation as a group of committed, results-oriented and client-focused attorneys; and we are excited about continuing in that tradition, potentially under the highly respected Greenspoon Marder name."

Founded in 1981, Greenspoon Marder has 96 attorneys in Fort Lauderdale, Aventura, Boca Raton, West Palm Beach, Stuart and Orlando. The firm has grown rapidly in recent years through a number of mergers and has launched a large foreclosure division, working with banks and Fannie Mae.

Former state Sen. Steve Geller, a partner at Greenspoon Marder, said the firm has been looking for merger partners, particularly in the area of health care law, but he did not know any targets. He said any merger decisions are made by the firm's founders, Greenspoon and Michael Marder.

"Whatever Gerry and Michael decide," Geller said. "We are a profitable law firm."

Two former Ruden partners who asked not to be identified said they would probably approve the equity buyout offer.

In addition to the ex-partners, Ruden also owes its bank, Wells Fargo, close to $5 million on its line of credit, according to a former partner.

Two Law Firms Negotiating Merger - October 2011
The Miami Herald

Two law firms negotiating merger
Posted on Wednesday, 10.12.11

Two long-standing Florida law firms confirm they are in negotiations to combine forces.

Greenspoon Marder, a 30-year-old firm with six offices, and Ruden McCloskey, a 50-year-old firm with eight offices throughout the state, would operate under the Greenspoon Marder name, according to a release. The combined firm would encompass 160 attorneys and 350 staff members throughout Florida. Both firms currently have offices in both Miami and Fort Lauderdale.

Greenspoon Marder, Ruden Expect to Combine - October 2011
South Florida Business Journal

Greenspoon Marder, Ruden expect to combine
by Paul Brinkmann, Reporter
Date: Wednesday, October 12, 2011, 4:11pm EDT

Greenspoon Marder and Ruden McClosky said Wednesday that they are in talks to combine the two firms. The exact nature of the deal is still being discussed.

The two firms have been among the Top 20 in South Florida for years. A combination would result in a much larger entity with 160 attorneys and 350 staff members statewide.

Managing partners of both firms expressed confidence they will agree to terms to fold Ruden McClosky's attorneys and staff into the Greenspoon firm.

Ruden has been financial troubled in recent years. One of its problems is that it cut off payments to former shareholders in January. Former shareholders confirmed Wednesday that Ruden recently sent out an email asking if they would support a cash payout of 30 cents on the dollar to help make a deal with another firm.

Gerry Greenspoon, managing partner at Greenspoon Marder, said Ruden's mix of talent and office locations are particularly attractive to him, despite some overlap.

"They are overall a very good fit, in terms of talent, for our firm," he said. "They have well-known attorneys who excel in their fields, especially real estate, land use, health care and several other areas. They have offices in locations we've been interested in, including Tampa and their presence in Tallahassee. We are also interested in expanding their presence in Miami."

Greenspoon said it may take months or a year to work out the details.

"There are many details that have to be worked out. Some of these issues would be internal to the Ruden firm," he said. "We think we'll be able to offer them financial assistance. They still have significant assets that need to be dealt with and utilized."

Greenspoon said the two firms have talked for some time about the possibility.

"It appears that right now the timing is right," he said. "Basically both parties are willing and anxious to make this work."

Sources said the combination of the two firms probably will not be a merger, and that Ruden will have to work out some of its financial obligations on its own before combining with Greenspoon.

"Our first priority is, and always has been, our clients," said Michael Krul, managing partner at Ruden McClosky. "We have spent 50 years building a reputation as a group of committed, results-oriented and client-focused attorneys; and, we are excited about continuing in that tradition, potentially under the highly respected Greenspoon Marder name."

Ruden experienced financial strain as the real estate market collapsed in 2007. It was once among the biggest in South Florida, but it slipped to No. 21 on the Business Journal's 2011 list of the region's largest law firms, with 54 attorneys. It ranked 12th on the 2010 list.

Greenspoon ranks 16th on the list, with 68 attorneys. Together, the firm's 122 South Florida attorneys would have ranked seventh.

Ruden cut off payments to former shareholders in January. Sources said it owed about $3 million to former shareholders, but that amount is spread out over a 10-year period.

In December 2009, Ruden McClosky lost at least 23 attorneys and two offices on Florida's Gulf Coast to New Orleans-based Adams and Reese. It consolidated its Tampa, St. Petersburg and Sarasota offices into one Tampa office.

Former Ruden shareholder Terrence Russell, now with Fowler White Boggs, said he was surprised at Wednesday's announcement. "What struck me about this is, it's premature. I simply don't understand why you would make an announcement about merger negotiations at this stage," Russell said.

Florida Casino Bill Considered Controversial - October 2011

Florida Casino Bill Considered Controversial
By Jim Freer
Wednesday, October 26, 2011

Two identical bills that would authorize three destination resorts with full-scale casinos, including roulette and other table games, in the southeast Florida counties of Miami-Dade and Broward were introduced in the Florida legislature Oct. 26.

The bills are generating controversy, partly because they do not authorize any new gaming products or tax breaks for Florida's 27 pari-mutuel facilities.

Officials at Gulfstream Park, whose property is in portions of each county, had previously told The Blood-Horse the track and its parent company, The Stronach Group, are interested in being considered for a destination resort license. On Oct. 26 Gulfstream president Tim Ritvo said officials would not have any immediate comment on the legislation.

The bills list government entities as the only organizations that would not be eligible for destination resorts.

Officials at Calder Casino & Race Course, in Miami-Dade County, also said they do not have immediate comment on the legislation and its DRI Extensions:potential impact.

It is striking that Pennsylvania and New Jersey generate almost the exact same amount of taxes for their states, $472.8 million and $474.7 million, respectively. However, Pennsylvania, with an effective tax rate of 54 percent, generated 4,877 jobs, while New Jersey, with a tax rate of up to 10.5 percent, generated 41,672 jobs.

Under the schedule set out in the bills, new destination resorts would be able to open as soon as 2014.

The bill would set a 10% tax rate on revenue from Las Vegas-style slot machines at destination resorts. The tax rate is 35% on those machines at Calder, Gulfstream, and the three other pari-mutuel facilities that have casinos in Miami-Dade or Broward counties.

Pari-mutuel facilities in other Florida counties, including Tampa Bay Downs, cannot have Las Vegas-style slots or video lottery terminals.

Applicants for destination resort licenses would be required to submit application fees of $50 million by late next year to a new state gaming commission that would select winning bids based on factors that include proven ability to attract tourists. Each facility owner would be required to invest at least $2 billion to build a hotel/convention property that could have a casino in up to 10% of its space.

Another controversial issue is that the bill would limit the new resorts to just one area of Florida. In addition, opposition is expected from many House and Senate members who are opposed to any expansion of gaming.

Those are among reasons Sen. Dennis Jones, who heads a committee with initial jurisdiction over gaming issues, gives the bill "a 50-50 chance of passing at best" during the legislature's 2012 regular session that will run from Jan. 10-March 9. Jones, a Republican from the St. Petersburg suburb of Seminole, is chairman of the Senate Regulated Industries Committee.

A final example is the lottery. It has been clearly shown that lottery ticket sales increase during rollovers, when the prize pool gets larger. Some politicians believe that states can reduce the percentage of payouts, take the unclaimed prize money and cut advertising budgets without adversely affecting the amount of total dollars generated for the state. Repeated meetings of the Committee on Lotteries of NCLGS have shown those beliefs to be in error.

Citing similar reasons, former state senator Steve Geller said he does not expect the bill will be approved by both houses in 2012. Geller, a partner in law firm Greenspoon Marder in Fort Lauderdale, is a former minority leader of the Florida Senate and a former president of the National Council of Legislators from Gaming States.

Jones said he will consider supporting a destination resorts bill because of the projected job creation and tax revenue that destination resorts could bring to Florida. He noted that casinos would have a maximum 10% of space at the facilities, with the remainder for hotels and convention centers.

"But there is little reason to assume that a bill of this magnitude should limit these destination resorts to just two of Florida's 67 counties," he said.

During the weeks prior to the bill's filing, Jones was contacted by numerous senators and business people who said they believed their counties should be eligible for destination resorts. He said the Tampa Bay area would be a good location because of its large population, its short distance from several other major Florida markets, and popularity with tourists.

Jones' committee will hold public workshops on the bill in November and will consider any recommended changes from legislators, pari-mutuel industry officials, and other groups.

In addition to authorizing destination resorts, each bill would establish a new regulatory system that by the end of 2012 would eliminate the Florida Division of Pari-Mutuel Wagering that now regulates the state's three Thoroughbred tracks and other pari-mutuel facilities.

The bill would create a gaming commission, with its seven members appointed by Florida's governor. The commission would select winning bidders for destination resorts and be the parent agency for a new Department of Gaming Control that would replace the Florida DPMW.

The proposal would return Florida to a system that would have more racing commission-like features than the current system. The Florida DPMW is part of the massive Florida Department of Business and Professional Regulation, which regulates several dozen industries.

Genting Group, a large Malaysian casino and hotel owner, is the most prominent of the expected bidders for a casino resort license. Genting has bought the Miami Herald's building along the bayfront near downtown Miami and has announced plans to build a casino resort on the property, whether or not a casino is permitted.

Several other Las Vegas-based and Asian-based casino companies are expected to be among bidders.

Issues the legislature will consider include the likely impact of destination resorts on revenue Florida receives from gaming at the Seminole Tribe of Florida's seven casinos, as well as the potentially huge impact on pari-mutuels outlets.

Last year the Seminoles agreed to make their first payments to the state—starting with a total of at least $1 billion over the first five years. In return, they gained exclusive rights to blackjack and baccarat in Florida.

But the Seminoles could stop making payments entirely if any new types of gaming are permitted outside Broward and Miami-Dade counties. They could reduce payments if any new gaming products are permitted in those two counties.

The bill would permit destination resorts to have blackjack, baccarat, roulette, craps, and Las Vegas-style slots. They would not have sports books or be able to take bets on pari-mutuel events.

The legislature has not yet done a study on the possible economic impact of destination resorts.

Jones expects the tax revenue would far outweigh money lost from the Seminoles. In that situation, Florida also could recoup some Seminole-related revenue by allowing VLTs at pari-mutuel facilities outside Broward and Miami-Dade counties, he said.

Other issues include whether Gov. Rick Scott, a Republican, would sign a destination resorts bill and whether the legislature will require designated counties to hold votes on permitting them.

Geller's only current pari-mutuel client is Mardi Gras Casino, formerly known as Hollywood Greyhound Park. It is in Hallandale Beach, about a mile north of Gulfstream.

Mardi Gras would not oppose the opening of destination resorts in southeast Florida if it is given parity on products and tax rates, Geller said. "From what I understand, several of the other pari-mutuels in Broward and Miami-Dade have a similar position," he said.

Geller expects that some legislators from those two counties will not support a destination resorts bill that does not provide such parity to their local pari-mutuel facilities. He also expects that some legislators from other counties might not support a bill that permits VLTs at in their districts.

Geller said many legislators recognize the long-term contributions pari-mutuel facilities have made to the Florida economy, and that he hopes a gaming commission would consider that history if a pari-mutuel company applies for a resort casino. He expects that a Gulfstream application would be in partnership with a major hotelier and a major casino company.

Balancing work and breast cancer treatment - October 2011
Work Life Balancing Act

October 18, 2011
Balancing work and breast cancer treatment

Meet two courageous women who have spent the last year balancing work and treatment for breast cancer. When I spoke to them, they told me they consider themselves lucky. They are fortunate to work for an employer who has given them flexibility and encouragement throughout their treatment. As co-workers they also had each other to give them support.

I'd like you to meet Lisa Tighe and Kathryn Bass, who are my guest bloggers. Lisa is director of Human Resources and Kathryn is Chief Financial Officer of Greenspoon Marder law firm in Fort Lauderdale.

Lisa Tighe and Kathryn BassEvery woman who has battled breast cancer has a unique story to share; but, at the center of each story is a common theme: the importance of a strong support system. For us, two long-time co-workers, our support systems emerged from what many would consider an unlikely source.

Lisa: I never saw it coming. I have no family history of cancer, and I got regular mammograms. Yet, last July, I became one of the statistics, "one of eight."

My first instinct was to prepare my husband and daughter; then, I realized that instead of spending the coming year preparing to die, I could fight for my life. Now, one year later, I have short hair and a few scars, but I am cancer-free.

Like many women, I had a tremendous support system, including my husband and daughter and, quite notably, my employer. Greenspoon Marder allowed me and my daughter, who also works there, flexible work schedules and armed me with the technology to work when and where I chose. Not a day passed without a phone call, text, card or gift from my co-workers. They even rallied around the cause and raised $12,000 for the Susan G. Komen For the Cure® foundation in just one month!

Now, it's my turn to pay it forward, and I am thankful that I have that chance.

Kathy: Breast cancer is humbling, to say the least. I've learned to accept help, which is something that does not come easy to a person with a stubborn streak.

I was diagnosed just five days before my divorce, so my support system came in the form of my mother, friends, employer and my staff. Lisa was a tremendous resource for me, because she had already experienced the process and was very open about what to expect. Greenspoon Marder allowed me a flexible work schedule. My co-workers, especially my Accounting Controller/assistant/friend, were a tremendous help, taking me to doctor appointments, caring for me after chemotherapy, and making sure I had what I needed. They have become like family.

Last week, my staff held an "end of treatment" party for me, coinciding with Greenspoon Marder's week-long fundraiser for Susan G. Komen for the Cure®. It's amazing to see everybody coming together for a great cause, and it makes me believe that, together, we will find a cure someday.

Greenspoon Marder's week-long fundraiser for Susan G. Komen for the Cure

Read more:

When cancer strikes - October 2011

The Miami Herald

by Cindy Krischer Goodman
Wednesday, October 19, 2011


Cancer survivors Kathryn Bass, left, Chief Financial Officer, and Lisa Tighe, Director of Human Resources for the law firm of Greenspoon Marder, credit the close family environment that their boss Gerald Greenspoon, center, nurtures at his law firm for helping them cope with recovery.

Lisa Tighe was sitting in her law firm office when her doctor called with test results. She insisted he give her the information over the phone. "You have breast cancer," he said. Before even soaking in what he said, she marched over to her supervisor's office and told him the news. He responded just how she expected: "You have our total support."

"From that minute on," Tighe says, "He has given me whatever I wanted or needed."

With more than 2.5 million breast cancer survivors in the United States and about 230,480 new cases of invasive breast cancer a year, employer reaction to a diagnosis has been mixed. Some respond like Tighe's firm, Greenspoon Marder, helping their employees balance work and medical treatment; Greenspoon Marder even gave Tighe's daughter, who works at the firm, paid time off to help her mother. Others, though, talk their employees into leaving, dock pay during treatment, refuse to give flexibility or move the women into more menial positions.

Those diagnosed say employer response can make all the difference in their health. "The support you get from management and from co-workers can actually get you in a better frame of mind so you can come back faster from treatments," says Tighe, 52.

Those women whose workplaces respond in a less supportive manner say they feel like they are blown a double whammy. Jan Elledge, a 50-year-old Fort Lauderdale day care worker, lost her job, her insurance and her outlet for mental distraction when she learned breast cancer returned after a two-year remission. Elledge realized it would be difficult to keep her job. She explained to her boss she wouldn't be able to come in after surgery because she couldn't lift the children or be exposed to germs. "They said they had to replace me because they couldn't go without a [caregiver] in the classroom."

A difficult part of healing, Elledge says is the feeling of being unproductive. "It's frustrating sitting around not being able to work." With no income or health insurance, Elledge has relied on government assistance and American Cancer Society programs to keep her afloat.

Some women who feel they lost their jobs over their disease have taken their cases to court.

Earlier this month, Proskauer Rose was hit with a $10 million gender discrimination suit by its former chief financial officer, Elly Rosenthal. She claims the firm demoted her after her medical leave for breast cancer treatment, denied her pay increases and eventually fired her. The firm says the case, filed in Manhattan, is meritless and that it has steadfastly supported colleagues who have suffered illnesses.

And then, there's Pamela Fink, who rushed to have a genetic test after discovering her two sisters had breast cancer. When she learned she did have a predisposition, she decided to have a preventative double mastectomy. She says when she returned to work, the Connecticut-based company began giving her fewer responsibilities, then demoted her and ultimately fired her. She filed a complaint with the Equal Employment Opportunity Commission, one of the first claiming illegal dismissals under a new federal law that prohibits employers from considering someone's genetic background in firings or promotions.

As the country celebrates National Breast Cancer Awareness Month, breast cancer patients battling the disease face an emotional tidal wave that often carries into their workplace. Some patients want to focus their energy on their treatment program and take time off work. But others want or need their jobs for income and health insurance. Their days are about navigating how to fight fatigue and difficulty concentrating to do their jobs and stay part of the team.

In this economic climate, businesses often find themselves torn on how to handle an employee who needs treatment. Many want to support their workers who need time off, but they are operating with bare bones staff and need to keep their companies on track. Some situations may only need a temporary patch — letting other employees fill in while someone gets treatment.

Other situations may require a longer-term solution, hiring a temporary worker or consultant to fill in. Most women say what they need most at work is flexibility and what they cherish most is co-worker and management support.

"The ones who do get support are the ones who are less stressed," said Bobbi Meyers, executive director of the Susan G. Komen for the Cure Miami/Ft. Lauderdale Affiliate. "You never want to put your health in jeopardy because of the stress of how to manage everything."

As CFO of Greenspoon Marder, Kathryn Bass, 56, understands the challenges for an employer. However, she knows firsthand that balancing work and cancer treatment demands workplace support. Bass learned she had breast cancer only two months after she divorced and moved closer to her office. Some days, she would lie on her couch, feeling too nauseous or weak to drive three miles to work. Other days, she would go in for a few hours, leave and finish up at night.

"The staff was incredible what they took on for me," she says. Not only would they pitch in with work needs, her co-workers went grocery shopping for her, drove her to medical appointments and always made the extra effort to keep her in the loop.

Both Bass and Tighe are back at work full time and say they feel fortunate and even more dedicated to their employer and co-workers. (Read their guest post here)

They believe their experiences have helped with firm recruiting and retention: "It showed everyone else who work here how well they treat employees," Tighe said.

Cindy Krischer Goodman is CEO of BalanceGal, a provider of news and advice on work/life balance. Visit or email her at

Her Work/Life Balancing Act blog features a guest post by Kathryn Bass and Lisa Tighe.

Planning for Individual Retirement Accounts

Planning for Individual Retirement Accounts


By Alan B. Cohn, Esq.

Over the years I have been practicing, I have seen a geometric increase in the use of Individual Retirement Accounts (“IRAs”) because of their ability to provide tax-deferred growth on assets. Contributing to such vehicles is quite easy.  However, planning for distributions and beneficiary designations on death are much more difficult.  In many cases, because there has been a decrease in the value of real estate (principally, the value of the homestead) the IRA has become the largest asset on a typical client’s balance sheet.

Distribution Planning

Even people who are not tax planners understand that distributions from IRAs are includable in gross income and are taxed at ordinary income tax rates.  They also understand that if the same asset is held outside of an IRA, then the proceeds on sale might have been taxed at capital gains rates.  Understanding some of the basic distribution rules is important to all clients since there are penalties imposed on insufficient or early distributions.

Distributions taken before a participant turns 59 ½ are subject to a 10% early withdrawal penalty, in addition to the normal income tax which is imposed on the distribution.  There are exceptions to this rule for medical treatment, students financing their higher education, first-time homebuyers, and disability and annuity payments.  After the participant turns 70 ½, there are penalties for not taking IRA distributions in a timely manner.  The smallest distribution a participant is allowed to take after age 70 ½ is called a required minimum distribution (“RMD”).  If the RMD is not made, then a penalty equal to 50% of the undistributed portion is imposed.  The amount of the RMD is determined each year by dividing the value of the IRA (valued as of the previous December 31st) by the remaining life expectancy of the participant.  There are life expectancy tables used for this purpose (Internal Revenue Service Publication 590).  All a participant needs to do is review the life expectancy table each year and take the value of the account and divide it by that life expectancy to arrive at the RMD.

There is an alternate way of calculating the RMD by using the joint and last survivor table provided in Publication 590.  It can be used if the participant’s spouse is both the sole designated beneficiary and more than ten years younger than the participant.  This will result in a smaller RMD, and thus result in a stretching out of the distribution over a longer period of time.

Under normal rules, the RMD must be taken by April 1st of the year following the year in which a person turns 70 ½.  However, the first RMD can be taken as early as January 1st of the year in which the participant turns 70 ½.  Each remaining RMD must be taken no later than December 31st of the following years.  Even though the first RMD distribution can be delayed until April 1st of the year following the year in which the participant turns 70 ½, this will result in two RMDs in that same year (i.e. April 1st and December 31st).  Therefore, two years of income will be bunched into one year, which could place the participant in a higher tax bracket.  Therefore, even though the first RMD does not need to be taken in the year in which a participant attains the age of 70 ½, it might be advisable to do so in order to avoid two years of income being reported in one year.

If additional distributions are made (after age 59 ½ there is no limit on the maximum distribution), it does not have a major effect on reducing your RMDs in future years.  This is because the factor in Publication 590 does not change; only the principal value of the account is slightly reduced.  Therefore, taking additional distributions only makes sense if the participant has losses that will absorb the additional income.  If the participant has losses, then taking additional distributions would be advisable.

If a participant has multiple IRAs, there is no requirement to take a pro rata distribution from each IRA as long as the total amount that was withdrawn by the participant is equal to the total RMD.  The participant can choose from which IRA he or she desires to withdraw the RMD.  Therefore, the participant can make a decision to take a distribution from an IRA that is not performing rather than force a liquidation of assets from an IRA that is performing well.

Beneficiary Designation

As an estate planner, I spend a great deal of time explaining beneficiary designation planning on IRAs to clients.  Providing clients with the optimal options for an IRA is essential.  First, one must make sure that the beneficiary named qualifies as a “designated beneficiary” as defined in the Internal Revenue Code.  To be a designated beneficiary, the individual must be named as a beneficiary in the IRA documents at the time of the participant’s death, and said designated beneficiary must still be alive on September 30th of the year following the year of the participant’s date of death.  That date is known as the determination date.  Generally, individuals qualify as designated beneficiaries although there are some exceptions for certain trusts which name an individual as a beneficiary and would therefore qualify as a beneficiary for purposes of this rule.

Planners need to obtain beneficiary designation forms so that they are signed at the time the wills, living trusts and ancillary documents are executed.  Some attorneys might take care of sending the forms to the plan custodian themselves, while others might give the completed forms to the client to send in.  Whichever method is used, one of the aforementioned options should be on the planner’s “to do” list.

In many cases, there are multiple designated beneficiaries.  More planning options are open to IRAs that contain single beneficiary designations.  At death, all beneficiary designation forms need to be reviewed.  In many cases, certain beneficiaries can disclaim their interest, if desirable.  Having beneficiaries with different ages or non-individual beneficiaries can create tax issues.  The best way to avoid this problem is to have multiple IRAs, each with a single designated beneficiary.  RMDs are determined based on the life expectancy of the oldest beneficiary, which is a crucial rule to understand when there are beneficiaries of different generations or there is a significant difference in the ages of children (i.e. second marriages).

The general rule is if an IRA owner passes away before attaining the age of 70 ½, then all IRA assets must be distributed before the December 31st five years after the year of the IRA owner’s death.  In applying this five-year rule, there is no requirement that a distribution should be taken pro rata; therefore, there is some planning involved.  As an example, a distribution can be taken in the fifth year if, for some reason, the beneficiary believes there might be some deductions available in that year.  If the decedent participant has attained the age of 70 ½ at the time of his or her death, then the beneficiary must take the RMD that the plan participant did not take before death.  The first RMD of the beneficiary must use the plan participant’s remaining life expectancy in the year of their death.  In all succeeding years, the beneficiary will reduce the life expectancy factor contained in Publication 590 for the year of death by one year to determine the RMD.  This is the case, whether or not the beneficiary qualifies as a designated beneficiary.

If the beneficiary of the IRA does qualify as a designated beneficiary, then the designated beneficiary has a better option where he or she can take distributions based upon their own life expectancy, whether or not the decedent attained age 70 ½.  This option is usually chosen for IRA beneficiaries who are designated beneficiaries because it is not dependent upon whether the decedent attained age 70 ½ and usually results in a longer pay out.  In this case, the single life table is used to determine the beneficiary’s remaining life expectancy in the year the first RMD distribution is received.  In subsequent years, the designated beneficiary would reduce the life expectancy by one year to determine their new life expectancy.  The designated beneficiary must begin taking distributions by December 31st of the year following the year of the participant’s death.  A designated beneficiary is not considered an owner of the IRA, so contributions cannot be made to the IRA, nor can they name other parties as designated beneficiaries.

The disclaimer rules for IRAs are similar to all other disclaimer rules (i.e. they must made within nine months of the death of the participant).  In this case, it is very important to look at the contingent or successor beneficiary since a disclaimer will result in that person receiving the benefits.  No disclaimer should be made without being certain of the contingent beneficiary on the documents.  Also, make sure that the contingent beneficiary is a “designated beneficiary,” as defined in the Internal Revenue Code.

If a participant’s beneficiary is their surviving spouse, then there are a myriad of other options that are available.  For example, the surviving spouse can:

  • Take distributions based on the decedent’s RMD. This option is only available if the decedent did not attain the age of 70 ½ at the time of their death.  This allows the surviving spouse to take exactly the amount the decedent would have taken had they not died, which means the same rules apply, such as the first distribution can be delayed until April 1st of the year following the year of the decedent’s death, and with the second distribution being made on December 31st of that same year (see the bunching of income discussion above.).
  • Rollover the assets into a spousal rollover IRA. This would allow the surviving spouse to become the owner of the IRA and retitle the IRA as a rollover IRA, or roll it over into an IRA that the surviving spouse already owns or a new rollover IRA.  The surviving spouse has the option of naming their own beneficiaries and taking distributions on their own RMD schedule.  However, in this case, the surviving spouse must follow all the requirements and is subject to all the penalties on distributions either before age 59 ½ or after age 70 ½.  In cases where the surviving spouse is older than the decedent, this may not be the best option even though it is the option most commonly utilized.  There is no deadline for making a spousal rollover if the assets stay in the same IRA; however, if a distribution is made to the surviving spouse, than that spouse has 60 days to make the qualified rollover to avoid the taxation of the IRA monies as a distribution.  This is an easy mistake to make, so it is strongly recommended that the surviving spouse rollover the assets within the same institution, or hold in a trust and then have the trustee transfer those assets to avoid falling into this mistake.
  • Convert the IRA into a Roth IRA. In Roth IRAs, there are no mandatory distributions required; however, the surviving spouse will pay taxes on the amount converted.

Planning for distributions and beneficiary designations can seem confusing and complex. Therefore, knowing all the IRA distribution requirements during life and designated beneficiary requirements at death and working closely with an experienced estate planning attorney can be major advantages that help avoid costly mistakes.

Alan B. Cohn, Esq. is a shareholder at Greenspoon Marder, where he concentrates his practice in the areas of Tax; Estate Planning & Probate; Guardianship; and Business & Corporate law. Mr. Cohn is Board Certified by the Florida Bar in the areas of Wills, Trusts & Estates. He can be reached at or 954-491-1120. For more information, visit

Key Partners Awards - Law - August 2011

by Gene Glasser, Esq.
Shareholder, Greenspoon Marder
100 W. Cypress Creek Road, Suite 700
Fort Lauderdale, FL 33309

Friday, August 19, 2011

Welcome to the South Florida Business Journal’s special section devoted to the Key Partners Awards. Recipients of this honor are the lawyers and accountants whose advice often makes it possible for South Florida businesses to not only succeed, but to exceed their most impressive goals. Certainly, our business community would find it difficult to function without them.

But these professionals take their considerable expertise and commitment to community another step further. While business is their priority, they also give their time and resources to help many who are in need within our region.

As you read about the Key Partners honorees, you will be inspired by their considerable achievements and by the many, meaningful ways they make South Florida a better place.

Honorees were recognized at an Aug. 18 event at the Hyatt Regency Pier Sixty-Six, presented by MassMutual Financial Group and sponsored by PNC Bank.


· B.S.B.A. in accounting, University of Florida
· J.D., University of Florida
· LL.M., New York University

Personal Note:

“I recently helped develop the University of Florida’s Greenspoon Marder Florida Opportunity Scholarship Endowment,” Glasser says. “My wife, Elaine, and I also facilitate the Levin College of Law’s Glasser Barbecue.”

As the head of Greenspoon Marder’s tax, trusts and estate practice and mentor to the attorneys of the department, Glasser’s 40 years of experience have earned him a national reputation as a top lawyer in his field. He is a frequent speaker on tax, trusts and estate law. In the past 18 months, he has been involved in several speaking engagements, including hosting seminars for clients and CPAs regarding the 2010 Tax Act and life planning for domestic partners.

Glasser has been named among Florida Super Lawyers; Best Lawyers, Tax Law, Trust and Estates; Top Lawyers, South Florida Legal Guide; Florida’s Top Lawyers, Florida Monthly; and Best Legal Eagles.

Glasser is a fellow of the American College of Trusts and Estates Counsel, founder and vice chairman of the board of Unifirst Federal Savings Bank, and on the board of the Memorial Hospital Foundation.

His most notable success comes from the support he lends his clients, peers and others in the firm.

“When I think of a key partner, I think of someone who plays an integral role in supporting and helping to drive the success of a business,” Glasser says. “I find that long-term relationships are one of the most essential ingredients in the recipe for success, so I strive to develop and nurture key relationships and identify opportunities in which I may be able to help someone.”

Asset Protection Laws in Florida Mostly Favor Those With Debt - August 2011

by Alan B. Cohn, Esq.
Friday, August 5, 2011

One of the reasons people move to Florida – besides the weather – is to avail themselves of its asset protection laws. Florida's laws are superior to most other states, if one happens to be a debtor.

The first step someone must take to avail themselves of Florida's asset protection laws is to make sure that they are a Florida domiciliary. You should contact your attorney to make sure all the necessary steps are taken so that no other state or any creditor can contest your domicile. There are a number of factors entering into a domicile determination, some of which require an attorney to implement and some of which do not.

Creditor protection planning has become increasingly important for many individuals. In fact, in most cases, it is an integral part of the estate planning process. The best creditor protection device is the Florida homestead exemption. State law prohibits a forced sale of a debtor's home by their creditors. In fact, this protection will inure to an owner's heirs at law upon their death.

Property as homestead

In order to make real property a homestead, a person must live there with the intent to permanently reside at the property and make the property, in good faith, their permanent residence, and have legal and beneficial title to the property. A natural person, of course, must own the property. Most revocable trusts would qualify as a natural person for this purpose.

There are also acreage limitations. If the residence is in a municipality, the homestead protection only extends to a half an acre. If the residence is located outside a municipality, the homestead protection is 160 contiguous acres. If a person lives in an area that later becomes incorporated into a municipality, then their homestead would still be protected under the 160-acre rule as long as they continue to live there and otherwise make it their homestead.

There are certain limitations to the homestead protection. One of those is tax and assessments on the property or obligations contracted for the purchase or the repair of the property. Other limitations include obligations contracted for the house, field or other labor performed on the property. All of the above rules are Florida rules. The bankruptcy rules differ slightly. The debtor must have resided at their homestead for three years and four months to have it excluded as homestead in the bankruptcy estate.

Other assets are also protected under the Florida statutes. Included in these exemptions are life insurance proceeds (so as long as the death benefit is not the decedent's estate), cash surrender value on life insurance policies, as well as annuities. Retirement benefits payable from a qualified retirement plan, IRA or profit-sharing plan are also exempt from claims of creditors, as well as college funds and medical savings accounts. (This includes plans established under Section 529 of the Internal Revenue Code.)

Property held between spouses

Another important asset protection vehicle is property held between husband and wife as tenants by the entirety. If property is properly held as a tenancy by the entirety, then a creditor of only one spouse cannot attach the property as long as both spouses are living. The only way tenancy by entirety property can be lost to a creditor is if both the husband and wife are liable to the same creditor on the same obligation.

If a person owns an interest in a family limited partnership or a multi-member limited liability company, then the creditor's only avenue to obtain funds is through a charging order. This allows the creditor to receive distributions as they are made from the partnership or the LLC. However, the creditor cannot force distributions to be made nor does the creditor become an owner of the entity. In many cases, this frustrates the creditor. In a recent statutory change, an irrevocable inter vivos trust for the benefit of the spouse that then continues for the benefit of the original grantor spouse is protected from the grantor spouse's creditors.

Finally, one must be very careful in performing this type of planning so as to not be in violation of the Florida Fraudulent Conveyance Act, which deals with any type of transfers or conversions from non-exempt assets into exempt assets to hinder, delay or defraud creditors. This is why these types of transfers should be made after consultation with an attorney while also engaged in the estate planning process.

Alan B. Cohn is a shareholder with Greenspoon Marder, a full-service business law firm with offices throughout Florida. He is board certified by The Florida Bar in wills, trusts and estates. For more information, go to

Growth Management Legislation 2011 - Permit Extensions - June 2011

Growth Management Legislation 2011 - Permit Extensions

June 2011
Margaret-Ray Kemper, Esq. and Noreen S. Dreyer, Esq.


The 2011 Growth Management Legislation (HB 7207, approved by the Governor on June 2, 2011) grants the following permit extensions:

  • Permits extended under the 2009 and 2010 legislation (SB 360, 2009 Session and SB 1752, 2010 Session) may be extended an additional two years.
  • Local government permits and certain Department of Environmental Protection (DEP) and water management district permits with an expiration date from January 1, 2012 through January 1, 2014 may be extended an additional two years.
  • The cumulative extension for local government permits and DEP and water management district permits is limited to four years.
  • Currently valid DRIs are granted a four year extension of their commencement, phase, buildout, and expiration dates.
  • In order to receive an extension granted by HB 7207, written notification must be provided to the entity issuing the permit by December 31, 2011.

More detailed explanations of the extensions granted by HB 7207 follow.

Non-DRI Extensions:

  • Section 73 of HB 7207 grants an additional two-year extension to permits extended under the 2009 legislation (Section 14 of Chapter 2009-96, Laws of Florida, as reauthorized by Section 47 of Chapter 2010-147, Laws of Florida) and to commencement and completion dates for any required mitigation. If a permit was also extended an additional two years under the 2010 legislation (Section 47 of Chapter 2010-147, Laws of Florida), the permit is not eligible to be extended under the 2011 legislation as the permit would have already been extended four years.
  • Section 79 of HB 7207 grants an additional two-year extension to permits issued by DEP or a water management district pursuant to part IV of Chapter 373, Florida Statutes, and to local government development orders and building permits with an expiration date from January 1, 2012 through January 1, 2014, and to commencement and completion dates for any required mitigation. However, a permit extension is not available if this two-year extension together with other statutorily granted extensions would result in the permit at issue being extended more than four years. This extension also does not apply to DRIs, to permits issued by the U.S. Army Corps of Engineers, to a permit determined to be in significant noncompliance with the permit conditions, or to a permit for which an extension would delay or prevent compliance with a court order.
  • To be eligible for the extensions granted by Section 73 and Section 79, written notification must be provided to the entity issuing the permit by December 31, 2011.

DRI Extensions:

  • Section 54 of HB 7207 grants currently valid DRIs a four-year extension of their commencement, phase, buildout and expiration dates. In order to receive the extension, the developer must provide the local government which issued the development order written notification by December 31, 2011.
  • Mitigation requirements are also extended by four years unless before December 1, 2011, a governmental entity notifies a developer that it has commenced construction within the phase for which the mitigation is required and that a contract has been entered into for construction of a facility funded by the developer’s mitigation funds.
  • The four-year extension is in addition to any previous extension of those dates which may have been granted and is not a substantial deviation, is not subject to further development of regional impact review, and may not be considered when determining whether a subsequent extension is a substantial deviation. HB 7207 also amends the comprehensive plan and plan amendment process, the development agreement act, and other provisions governing DRIs.

A summary of the more significant changes to those statutory provisions is outlined below:

Growth Management Legislation 2011 - Significant Changes

Comprehensive Plans:

  • Rule Chapter 9J-5, F.A.C., is repealed, although portions of Rule Chapter 9J-5 are incorporated into Chapter 163, Part II. For example, data and analysis provisions and some of the criteria for determining urban sprawl from Rule Chapter 9J-5 are incorporated into the statute.
  • The financial feasibility standard is replaced with provisions requiring planning to ensure that level of service standards can be reasonably met.
  • Provisions added under HB 697 (energy efficiency), and the 2009 amendments regarding dense urban land areas are repealed. However, dense urban land areas remain exempt from DRI review.
  • Initiative or referendum processes are prohibited for all development orders and plan amendments, including map changes.
  • The twice a year limitation on plan amendments is removed.
  • A comprehensive plan must be based on the minimum amount of land required to accommodate the medium BEBR population projections for a 10 year planning period but is not required to impose maximum limitations on uses.
  • Transportation, park, and school concurrency are now optional. However, a plan amendment is required to rescind any optional concurrency provisions.
  • Sanitary sewer, drainage, potable water, and solid waste remain subject to concurrency.
  • If a local government elects to implement transportation concurrency, proportionate share contributions must be allowed. The proportionate share calculation is amended to remove the cost of existing deficiencies, trips assigned to toll roads, and cumulative impacts from the calculation.
  • Three plan amendment processes are provided for:
    • expedited review (the alternative review process now used in Broward County), applicable to all plan amendments except for those subject to one of the other review processes;
    • state coordinated review (the current ORC review process) applicable to EAR based amendments, sector plans, areas of critical state concern, rural land stewardship areas, and newly adopted comprehensive plans for newly incorporated municipalities;
    • small scale amendments (10 acres or less).
  • Under the expedited review process, agency comments must be provided to the local government within thirty days of receipt of a plan amendment and agency comments are limited. State agencies may comment only on important state resources and facilities. The subjects on which the various review agencies may comment are specified. For example, the Department of State must limit its comments to historic and archaeological resources and the Department of Transportation must limit its comments to issues within its jurisdiction related to transportation resources and facilities of state importance. Regional planning councils’ comments are limited to adverse effects on regional resources or facilities identified in the strategic regional policy plan and extrajurisdictional impacts inconsistent with the comprehensive plan of affected local governments. The state land planning agency may not comment on issues within another agency’s jurisdiction.
  • A plan amendment must be adopted within 180 days after receiving agency comments or the state land planning agency’s ORC report; otherwise the amendment is considered withdrawn. The 180 days may be extended by agreement with notice to the state land planning agency and any commenting affected person. Amendments related to a DRI are exempt from the 180 day requirement.
  • The review process for small scale amendments is unchanged but what qualifies as a small scale plan amendment is modified. The density cap is removed, text amendments directly related to a map change are allowed, and the limitation on plan amendments to the same property granted a change in the prior 12 months and to the same owner’s property within 200 feet of property granted a change in the prior 12 months are deleted.
  • If a plan amendment is challenged, the review standards are:
    • fairly debatable in challenges filed by an affected person;
    • presumed to be correct based on a preponderance of the evidence in challenges filed by the state land planning agency;
    • fairly debatable in consistency challenges filed by the state land planning agency;
    • clear and convincing evidence if the challenge is to the state land planning agency determination of an important state resource or facility.
  • The state land planning agency may not intervene in a proceeding initiated by a third party.
  • The pilot status of the sector plan program is eliminated and the limitation on the number of permitted sector plans is deleted. The review process for sector plans is also simplified.
  • The rural land stewardship program was modified to make it more workable.

Development Agreements:

  • The term of a Chapter 163, Florida Statutes, development agreement is extended from 20 years to 30 years.
  • The requirement to forward a copy of the development agreement to the state land planning agency is deleted, and the state land planning agency’s enforcement authority is removed.


  • The essentially builtout standard for the remaining unbuilt development is increased from 20% to 40%.
  • The substantial deviation criteria for an attraction or recreational facility, office development, and commercial development are increased.
  • A four year extension to the commencement, phase, buildout, and expiration date is granted to valid DRIs. Associated mitigation requirements are also extended unless a local government before December 1, 2011, notifies a developer that has commenced construction within the phase requiring mitigation that the local government has entered into a contract for construction of a facility with funds provided from the development’s mitigation funds for that phase. Written notification must be provided to the local government by December 31, 2011 in order to receive the extension.
  • If a local government agrees, a change in a proportionate share calculation and mitigation plan as a result of recalculating the proportionate share contribution is presumed not to create a substantial deviation and may not be considered an additional regional transportation impact.
  • Solid mineral mines are exempted from DRI review provided a mine owner enters into a binding agreement with the Department of Transportation to mitigate impacts to the Strategic Intermodal System.
  • Dense urban land areas are exempt from DRI review and areas designated as dense urban land will keep that designation.
  • If a portion of a DRI is outside a dense urban land area, the development order may be rescinded so long as: i) more than 85% of the DRI acreage and square footage is within the dense urban land area; and ii) the development outside the dense urban land area does not exceed a DRI threshold.
  • The thresholds for multiscreen movie theaters, industrial uses, and hotels are deleted, thereby eliminating those uses from DRI program.
  • Three, rather than two, of the DRI aggregation criteria must be met before two or more projects may be aggregated and the voluntary sharing of infrastructure criterion is deleted.
  • Local governments may deny requested changes to a development order for local reasons, including an incompatible plat restriction.
  • The changes to the proportionate share calculation are applicable to DRIs.

Permit Extensions:

  • Permits extended under the 2009 legislation may be extended and renewed for an additional two years. Commencement and completion dates for any required mitigation may also be extended. Permits extended for a total of four years under the 2009 legislation and Section 46 of the 2010 legislation cannot be extended under this section. That is, the cumulative permit extensions under the 2009, 2010, and 2011 legislation may not exceed four years. Written notification must be provided to the permitting agency by December 31, 2011 in order to receive the extension.
  • Permits issued by DEP or a water management district pursuant to part IV of Chapter 373 and local government-issued development orders or building permits, including certificates of levels of service, with an expiration date from January 1, 2012 through January 1, 2014 may be extended an additional two years. Commencement and completion dates for any required mitigation may also be extended. Permit extensions granted pursuant to this provision, the 2009 legislation and Section 46 of the 2010 legislation may not exceed four years, and DRI development orders cannot be extended under this section. Written notification must be provided to the permitting agency by December 31, 2011 in order to receive the extension.
  • As noted above, a four year extension to the commencement, phase, buildout, and expiration date is granted to valid DRIs. As with the other permit extensions, written notification must be provided to the local government by December 31, 2011 in order to receive the extension.

If you have questions regarding this topic contact Margaret-Ray Kemper Esq., at 888-491-1120 or, Noreen S. Dreyer, Esq., at 888-491-1120 or

Boca Raton Man Helps Nonprofit Achieve its Goals - April 2011

By Darcy Clinton, Special Correspondent
April 16, 2011

Name: Laurence Blair, 42
Residence: Boca Raton
Birthplace: New York City
Family: Wife, Michele Blair; son, Joshua Blair, 9; daughter, Morgan Blair, 7
Career: Trusts and estates tax attorney at Greenspoon Marder, P.A.
Cause: Ruth Rales Jewish Family Service, a nonprofit organization with locations in Boca Raton and Delray Beach providing programs, services and assistance to people of all ages. Programs include food and financial assistance, senior services, counseling and mental health services.

Q. Describe your volunteer role.
A. I am entering my third year as chairman of JFS. As chairman, I partner with the CEO, Danielle Hartmann, to ensure that the agency stays true to its mission. Also, I make connections in the community to assist the agency to achieve its goals.

Q. Why do you volunteer?
A. I was raised with the belief that if you are able to help another individual, you should.

Q. How did you choose this organization?
A. Nine years ago, I had an elderly client who was living on his own and concerned that if something should happen to him, no one would know. I learned about JFS while researching programs available to help my client.

Q. What has this organization accomplished?
A. During the past year, we worked to streamline our operations and cut expenses without cutting services or programs. The changes were very successful. We were able to maintain our existing services and add other programs, including a part-time psychiatrist and psychologist as part of our mental health program offering, to better serve the community's needs.

Q. What challenges have you faced?
A. As with many organizations, funding sources have diminished while the need for our services continues to grow. The number of Holocaust survivors requesting home health care increased by 50 percent this year. I can think of no greater tragedy than telling a Holocaust survivor that the best we can do is put their name on a waiting list. These are individuals with needs that must be met in a timely manner. With this type of program, a waiting list is not an option.

Q. What goals do you have for the organization?
A. Our vision is to continue to operate as a premier social service agency providing a continuum of services for families and individuals in all stages of life.

Q. Aside from money, what does this organization need?
A. We always look for interested volunteers to become friendly visitors, make telephone calls to homebound seniors, drive seniors without access to transportation to appointments, mentor a child in the community, volunteer at one of our food baggings, deliver food to our food pantry clients, organize a food drive, or teach a class at the Delray Community Center.

For more information, visit or call 561-852-3333.
If you know a Palm Beach County resident who deserves recognition for volunteer work, fax the information to 954-429-1207 or e-mail to Nominations should include volunteer's name, city of residence, a contact name and phone number, and a brief description of why this person deserves special recognition.

Planning for the Buy-Sell Agreement - March 2011

By Laurence I. Blair, Esq.
March 2011

Along with death and taxes, the only other certainty in life is that every closely held business needs a buy-sell agreement. The corollary to this rule is that regardless of whether a business is organized as a corporation, partnership or limited liability company, a buy-sell agreement should be in place to address specific events that, if they occur, will undoubtedly have a dramatic impact on the business owners as well as the future of the business itself.

Unlike a publicly traded company where the "owners" usually exercise no management or control of the business or develop personal relationships with each other, members of a closely-held company have specifically selected each other as business partners, maintain a close working relationship and are active participants in the operation of the business. Also, unlike a publicly traded company, the closely-held company does not have a public market for the sale of an owner's interest.

The owner of a closely owned business must plan in advance for the sale or disposition of his or her ownership interest. If the business of the company is to provide licensed professional services such as architecture, engineering or medicine, the market for the sale of an owner's interest shrinks even more.

For the business owner who is contemplating retirement or who becomes disabled, the looming issue becomes, "how will I get my equity out of the business?" If the business owner dies, the issue becomes what happens to the deceased owner's interest in the business? A related question is how can the remaining owners control the business ownership and avoid becoming 'partners" with the deceased owner's spouse or children? In all those instances, valuation of the company and obtaining the money to purchase an owner's interest becomes a paramount issue for all concerned.

Rather than wait to address these issues when upheaval occurs, a buy-sell agreement is a planning tool that can be utilized to accomplish the following goals:

  • ensuring conformity of management and control while creating a market for the shares of a deceased, retiring, disabled or withdrawing owner;
  • determining who will take over as owner, so that in the event of death, retirement, disability or withdrawal, the remaining owners do not suddenly find themselves in business with the spouse or children of the departed owner;
  • addressing how to handle disputes regarding growth, salaries or other business decisions;
  • preventing the continued involvement of retired or inactive owners in the business;
  • establishing the value of an owner's interest;
  • continuing the legal existence of the business after the death, retirement, withdrawal, bankruptcy or expulsion of an owner.

The buy-sell agreement is the Rule Book for the closely-held business. It becomes activated when an owner wants to sell his or her interest, and it usually provides that the business has the right of first refusal on the same terms as a third-party offer In many cases, the buy-sell agreement would provide that in the event of the death of an owner, the business or the remaining owners would be required to purchase the deceased owner's interest at a predetermined price and typically with life insurance purchased specifically for that purpose.

The buy-sell agreement also addresses specific retirement and disability situations, and contains a buy-out valuation formula. For professional businesses, the loss of a professional license prevents the practice of the profession by that owner and triggers a mandatory buy-out. The terms and conditions of a buy-out agreement are negotiated in advance of any problem arising. Moreover, the parties may change the terms as they may agree.

Smart business planners address these issues when everyone is in the "honeymoon" stage, not when the business is in crisis. Regardless of whether you may wish to sell your interest or to purchase the interest of a retiring, disabled or deceased partner, waiting until a problem arises may be far too late.

When is a Contract Not A Contract? - January 2011

By David Weisman, Esq.

A contract for Purchase and Sale of Real Property consists of a series of promises, some by the Buyer and some by the Seller, which result in the consummation of a transaction more commonly referred to as a closing. The closing is the goal of everyone involved in a real estate transaction from the day the real estate sales person first convinces a Seller to sign a listing agreement, to the day the keys are ceremoniously handed to the buyer. The magical document which guides the performance of the parties, and leads them to the closing table, is the Contract for Purchase and Sale. In this magical document, the Buyer agrees to buy and the Seller agrees to sell. The terms sound simple enough, unless the Contract is “subject to.”

The Contract contingency is a creature which makes a Contract not a contract. It is a condition precedent, which, until satisfied, prevents the Contract from solidifying into a legally binding document.

The most common of the Contract contingencies is the financing contingency whereby the Buyer is not obligated to close the transaction unless and until the Buyer qualifies for a new first mortgage. Printed forms of contracts are uniform in that they require the Buyer to diligently apply and cooperate in every way possible with a potential lender in order to obtain the financing necessary to consummate the purchase. The financing contingency is carefully prepared in the standard form of contract to allow the insertion of an amount and the maximum number of days which the Buyer must either obtain the commitment or rescind the Contract.

A Contract contingency which causes problems in a real estate transaction is one which is inserted haphazardly in a rush to obtain an agreement between an anxious seller and an emotional buyer.  A Contract contingency which is not properly prepared leaves questions open as to how the parties are to proceed in the event the Contract contingencies are not satisfied. An example of such a contingency is the commonly used, “The Contract is contingent upon Buyer closing on the sale of his residence located at 123 Old House Road.”

The reason this contingency is unacceptable is that it leaves the Seller unsure of whether or not a closing will take place. What happens if the Buyer’s agreement to sell his existing residence falls through? Based upon the contingency as written, the Buyer is entitled to a return of his deposit and the Seller, whose house has been off the market for three months, takes nothing and is stuck with the expenses in preparing to sell his house and move.

In order for a contingency to be workable, the contingency must be limited as to time. If the Contract calls for a closing within ninety (90) days, the contingency should expire within the first thirty (30) days so that if the closing is not going to take place, the Seller has not irreversibly changed his position in reliance upon a forthcoming closing. If the contingency might fail days before a scheduled closing, the Buyer could rescind a Contract after the Seller has packed and has vacated the residence, leaving the Seller with a vacant home and no deal.

Putting in a time limit is not enough. The contingency should provide that in the event the time limit expires, the Buyer shall have the option of rescinding the Contract or waiving the contingency.  Very often the Buyer will want to continue with the transaction even if the former residence has not sold, where a Buyer is fortunate enough to have other sources of funds available.

To protect a Seller, a clause could be inserted to provide that while the contingency exists, in the event the Seller receives a non-contingent offer the Seller shall have a right to accept such non-contingent offer after giving the Buyer notice of the back-up offer and giving the Buyer the option to immediately remove the contingency and close the transaction, or release the Seller so that the Seller may accept a firm offer.

In commercial transactions, more types of contingencies can be found. A Buyer might sign a contract contingent upon inspection and investigation of the property for a limited period of time. Buyers and sellers of commercial transactions tend to be more sophisticated, and the contingencies are more carefully defined. It is not uncommon to see a contingency for soil test, financing, rezoning, platting, and general inspection of improvements. Some contingencies allow a Buyer the right to rescind the Contract for a stated period of time for any reason whatsoever.

The more sophisticated commercial sellers are insisting upon a clause whereby in exchange for the inspection period, the Seller will be compensated for costs involved in preparing the Contract or for other expenses involved in connection with negotiating the sale.

Whatever the reason for the contingency and whatever the actual contingency may be, it is important to limit the duration of the contingency, to carefully define under what circumstances the Buyer may rescind the transaction, under what circumstances a Seller may terminate the contingency, and the length of time during which the contingency must be met or waived.

Careful drafting of the clause and thorough consideration of the problem at the time the Contract is signed will avoid problems for everyone as the closing approaches.

What Training Has Your Family Law Guardian Ad Litem Had? - December 2010

By Yueh-Mei Kim Nutter, Esq.
Board Certified in Marital & Family Law
December 2010

For years, cases involving the appointment of Guardians Ad Litem for minor children in Florida family law proceedings have generally been made from a short list of attorneys that each family law judge throughout the State of Florida has developed. From there, the reputations of "good" Guardian Ad Litems (GALs) are built and spread throughout their respective communities.

However, the question remains for the judges and for attorneys seeking to use the services of a Guardian Ad Litem, what, if any, formal training has your Guardian Ad Litem had?The likely answer is none. If you are fortunate, the Guardian Ad Litem in your case is also a Florida Statutes Chapter 39 Guardian Ad Litem. If so, he or she likely received some training in ethics, court room procedures, mental health and substance abuse issues; and also may have learned minor child interview skills and techniques, as well as the protocol for writing a Guardian Ad Litem report.

Florida Statutes Section 61.402, as amended in 2009, requires that a Guardian Ad Litem be certified either by a G.A.L. Program in accordance with Florida Statutes Chapter 39, be certified by a not-for-profit legal aid organization, or alternatively, be an attorney in good standing. As part of the alternative for certification by a not-for-profit legal aid organization, the legal aid organization must provide training using a uniform objective statewide training program for Guardians Ad Litem developed by The Florida Bar. The task of creating an objective statewide training program was given to the Family Law Section.

You may be wondering: A comprehensive statewide training program, when did that happen? Where is the training program available? Yes, there is a statewide training program for family law Guardians Ad Litem that is being created by the Section. Through the efforts and hard work of the amazing members of the Section's Ad Hoc Guardian Ad Litem Committee, including attorneys and mental health professionals, a training manual for family law Guardians Ad Litem has already been created. It is available in hard copy or on-line at the Section's website. However, that is only part of the overall family law Guardian Ad Litem educational plan being undertaken by the Section.

The target date for the unveiling and debut of an eight (8) hour training program on DVD {and also hopefully on-line} is June, 2011. The training program is designed to create uniformity in the qualifications for family law Guardian Ad Litems across the State of Florida. It is designed to take a Guardian Ad Litem through a dissolution of marriage, modification and/or other family law proceeding, specifically, the myriad of issues that arise all too frequently both pre and post-judgment in family court proceedings. The training program will also expose the student Guardian Ad Litem to the range of ethical dilemmas frequently faced by Guardian Ad Litem; and teach the Guardian Ad Litem how to identify positive and negative family dynamics and the affect on children; how to identify and understand the ramifications of of mental health, substance abuse and domestic violence issues that may occur individually or concurrently in their cases. The training program shall also provide direction on how to conduct a child interview, an overview of the court process and the role of the Guardian Ad Litem within same; and the role of a Guardian Ad Litem in contested proceedings, along with the barrage of criticism that a Guardian Ad Litem may face when attorneys, parties, etc. disagree with the recommendations contained in the Guardian Ad Litem's report during hotly contested parental disputes.

Hopefully this training program will stimulate and expand the pool of quality Guardian Ad Litems in the State of Florida who are available to assist children whose parents are embroiled in family law disputes. Thanks to this training program, in the near future, the Guardian Ad Litem appointed in your case will more than likely be an individual who is either an active attorney, a retired attorney in a different area of the law, a grandparent or some other layperson in your community who has taken the time to be educated and is hopefully therefore well qualified to serve the children they are appointed to help.

Senate Bill 360 in the Wake of the Recent City of Weston Ruling - October 2010

Senate Bill 360 in the Wake of the Recent City of Weston Ruling

October 25, 2010
Elizabeth L. Somerstein, Esq.

On August 26, 2010, the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida (the "Second Circuit") determined Senate Bill 360 (chapter 2009-96, Laws of Florida) ("SB 360") to be unconstitutional, and ordered that the Secretary of State expunge the law in its entirety from the official records of the State of Florida.*

While the provisions of SB 360 itself are much larger in scope, this update specifically addresses only the impact of the Second Circuit's recent ruling on the two-year extensions granted pursuant to SB 360 in light of Senate Bill 1752 ("SB 1752").

SB 360:

In 2009, the Florida Legislature adopted SB 360; Section 14 therein included a provision granting two-year extensions to, inter alia, local government development orders or building permits that expire between September 1, 2008 and January 1, 2012. This two-year extension also applied to build-out dates including any build-out date extension previously granted under Section 380.06(19)(c), Florida Statutes.

Specifically, Section 14(1) of Senate Bill 360 states in relevant part:

Except as provided in subsection (4), and in recognition of 2009 real estate market conditions, any permit issued by the Department of Environmental Protection or a water management district pursuant to Part IV of Chapter 373, Florida Statutes, that has an expiration date of September 1, 2008, through January 1, 2012, is extended and renewed for a period of two years following its date of expiration. This extension includes any local government-issued development order or building permit. The two-year extension also applies to build-out dates including any build-out date extension previously granted under Section 380.06(19)(c), Florida Statutes.

As noted above, on August 26, 2010, the Second Circuit held SB 360 to be unconstitutional, and ordered it expunged from the official records of the State of Florida. This ruling, among other repercussions, calls into question the validity of those extensions granted pursuant to SB 360.

SB 1752: Reauthorizing SB 360 Extensions & Providing the Opportunity for Additional Extensions

On May 28, 2010, Governor Crist signed into law SB 1752 (chapter 2010-147, Laws of Florida). Of note, Senate Bill 1752 contains language which, notwithstanding certain conditions, reauthorizes the two-year extensions granted pursuant to SB 360.1

Specifically, Section 46(1)(b) of SB 1752 states in relevant part:

(1) The Legislature hereby reauthorizes:

(b) Any two-year extension authorized and timely applied for pursuant to section 14 of chapter 2009- 96, Laws of Florida [Senate Bill 360].

Further, Section 45 of SB 1752 mirrors the language of SB 360 and provides an additional two-year extension for local government development orders or building permits that expire between September 1, 2008 and January 1, 2012. This two-year extension also applies to build-out dates including any build-out date extension previously granted under Section 380.06(19)(c), Florida Statutes.

Specifically, Section 45 of Senate Bill 1752 provides in relevant part:

(1) Except as provided in subsection (4), a development order issued by a local government, and any permit issued by the Department of Environmental Protection or a water management district pursuant to part IV of chapter 373, Florida Statutes, which has an expiration date of September 1, 2008, through January 1, 2012, is extended and renewed for a period of 2 years after its previously scheduled date of expiration.

This 2-year also applies to build-out dates, including any extension of a build-out date that was previously granted under Section 380.06(19)(c), Florida Statutes…This extension is in addition to the 2-year permit extension provided under [Senate Bill 360].

What Does This Mean?

Extensions granted pursuant to Section 14 of SB 360 are possibly still valid: It appears that Section 46 of SB 1752 reauthorized those extensions granted pursuant to Section 14 of SB 360. Thus this potentially alleviates the concern regarding the validity of those extensions, in light of the Second Circuit's ruling.

Opportunity for additional extensions: Notably, the two-year extension provided pursuant to Section 45 of SB 1752 is in addition to the two-year permit extension provided under SB 360. Thus, SB 1752 appears to provide not only an opportunity for those who have extensions pursuant to SB 360 to garner an additional two-year extension, but also an opportunity to acquire a two-year extension for those who failed to seek one previously pursuant to SB 360. It must be noted, however, that those eligible for the two-year extension must notify the authorizing agency in writing by December 31, 2010, identifying the specific authorization for which the holder intends to use the extension and the anticipated timeframe for acting on the authorization.

Clarification of applicability: Section 45 of SB 1752 clearly applies to local government development orders in general, as opposed to only those permits issued by the Department of Environmental Protection or a water management district. While the language of Section 14 of SB 360 and Section 45 of SB 1752 are nearly identical, SB 360 was not clear on this point.

If you have questions regarding this topic contact Elizabeth Somerstein, Esq., 954-491-1120,

* City of Weston, et al v. Charlie Crist, et al (Case No. 2009 CA 2639). Note: On September 7, 2010, Defendants filed a Motion for Rehearing; Plaintiffs' responded on September 10, 2010. On September 21, 2010, the Court Ordered Denial of the Motion for Rehearing. A Notice of Appeal was filed on September 21, 2010. City of Weston, et al filed its Notice of Cross-Appeal on October 14, 2010. Additionally, on October 15, 2010, City of Weston, et al filed its Suggestion that the District Court Certify Judgment for Direct Review by the Supreme Court of Florida. No known further action there on has been made as of the date of this E-lert

The Immigrant Investor Program, also known as “EB-5” - September 2010

By Herschel Gavsie, Esq.
September 2010

The Immigrant Investor Program, also known as “EB-5”, was created by Congress in 1990 under § 203(b)(5) of the Immigration and Nationality Act (INA) to stimulate the U.S. economy through job creation and capital investment by foreign investors. Foreign investors have the opportunity to obtain lawful permanent residence in the United States for themselves, their spouses, and their minor unmarried children by making a certain level of capital investments and associated job creation or preservation.

There are two different EB-5 pathways for a foreign investor to gain lawful permanent residence: the Basic Program and the Regional Center Pilot Program. Both programs require that the foreign investor make a capital investment of either $500,000 or $1,000,000 (depending on whether the investment is in a TEA1 or not) in a new commercial enterprise located within the United States. The new commercial enterprise must create ten full-time jobs for qualifying U.S. workers within two years of the foreign investor’s admission to the United States as a Conditional Permanent Resident (Conditional Green Card valid for two years).

When making an investment in a new commercial enterprise affiliated with a United States Citizenship and Immigration Service (“USCIS”)-designated regional center under the Regional Center Pilot Program, a foreign investor may satisfy the job creation requirements of the program through the creation of either direct or indirect jobs2. Note however, that a foreign investor making a capital investment in a new commercial enterprise under the Basic Program may only satisfy the job creation requirements of the program through the creation of direct job and must actively play a management role in the business. The investment though a regional center is usually made by subscribing as Limited Partner in a Commercial Enterprise managed by a General Partner and the foreign investor’s funds are usually held in Escrow in a US bank account pending the approval of the I-526 Petition where the foreign investor must provide sufficient proof of his/her lawful source of funds making up the EB-5 Investment and plays only a limited management role as Limited Partner.

After Filing a Form I-526 and receiving approval for a qualifying investment, the foreign investor and his or her spouse and unmarried minor children either can apply by filing a Form I-485, Application to Register Permanent Residence or Adjust Status within the United States, or through an Immigrant Visa Application filed at a United States Embassy or Consulate abroad and will upon approval be issued a Conditional Green card valid for two years.

A second application, Form I-829 Petition by Entrepreneur to Remove Conditions of the Conditional Green Card, is required to be filed in accordance with Section 216A of the INA between 21 and 24 months from the issuance of the Conditional Green Card. This petition must demonstrate that all of the terms and conditions of the EB-5 program have been met by the foreign investor.

The investments through Regional Centers3 are required to be “at risk” and usually required to be left in the commercial enterprise for 5 years. If the investment is made other than through a Regional Center, then the investment must be sustained until the receipt of the second unconditional Green card which is valid for ten years and renewable. It is important for the foreign investor to do proper due diligence investigation both with regard to the proposed investment and the Regional Center

  1. A “TEA” means a Target Employment Area where the unemployment rate is at least 150% over the US National Unemployment Rate as published by the US Department of Labor.
  2. Direct jobs are those jobs that establish an employer-employee relationship between the newly established commercial enterprise and the persons that they employ.
    Indirect jobs are the jobs held by persons who work outside the newly established commercial enterprise. For example, indirect jobs include employees of the producers of materials, equipment, and services that are used by the commercial enterprise. There is also a sub-set of indirect jobs that are calculated using economic models that are known as induced jobs.
  3. A “Regional Center” is defined as any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.

10,000 visas are available each Fiscal year beginning on October 1st of each year specifically designated for the EB-5 category, 3000 of which are reserved for the Regional Center program as a priority.

There are currently 111 Regional Centers designated by USCIS in the U.S.

For further information, please contact:
Herschel Gavsie, Esq. Toll Free: 1-888-491-1120 E-mail:

Flat Fee - September 2010

By: David Weisman
Board Certified Real Estate Lawyer
September 2010

"How much will this cost?" A simple and fair question to which there should be a simple answer. When a person goes into a store, there is a price tag. The customer can see the item and make a decision to buy or not to buy. On the other hand, the merchant has the item hanging on the shelf; and, the merchant knows the cost of the item and the cost of running the store. Based on that, the merchant can set the price in order to make a reasonable profit.

Now, let’s say the customer needs legal services. The client asks the lawyer, "How much will it cost?" It’s a fair question but not as easy to answer.

You see, the merchant and manufacturer know how much fabric it takes to make a shirt; how many nails it takes to put a piece of furniture together; and how many parts it takes to build a car. However, the lawyer cannot know always how many hours it will take to solve a problem or make a deal.

That said, sometimes, if the lawyer is asked to do something which involves a specific activity that takes a predetermined amount of time, then the merchant-consumer analogy can apply. In that case, a lawyer can estimate, based upon having performed the same service before, the cost of the services to be provided. The “flat fee” is an estimate, based upon the lawyer's experience as to the amount of time a task should take. However, each client and each case is different, so if issues arise which affect the handling of the case, the fee would be adjusted.

"How does a lawyer set his or her fee?" Like the merchant, the lawyer must be able to expect a reasonable profit. If the fee is too low, the lawyer cannot afford to stay in business; and, if the fee is too high, the client will take his or her business elsewhere.

The solution is for the attorney and client to reach an understanding that establishes a flat fee but with the assumption that no complications arise which would require an unreasonable amount of time. For example, if the matter requires custom crafting of a transaction, when the fee assumed a standard transaction, the fee would need to adjust accordingly.

It was Abraham Lincoln who said, "A lawyer's time and advice are his stock in trade." Therefore, it is imperative that the attorney and client manage their respective expectations and communicate them effectively to ensure a long and mutually beneficial relationship.

New Condo Law Paves Road to Recovery - July 2010

By: David Weisman
Board Certified Real Estate Lawyer
July 2010

The hardest hit segment of the real estate market during the plummeting downturn of the past several years has been the sale of new condominium units. Certainly in South Florida, perhaps more than other parts of the state, as real estate boomed, developers brought more and more new condominium projects out of the ground or acquired previously constructed rental buildings for conversion to condominiums for sale.

While the entire real estate market has suffered greatly through the past several years, the oversupply of condominium units resulted in an even more depressed market in this area. The problem was made more severe because many of these properties were targeted for sale as investment property or vacation homes, not primary residences. This meant that these were the first buyers to walk away from deposits or allow foreclosure of the property. This resulted in the eventuality of forcing developers who specialized in this type of market and the banks that financed them to go out of business.

The Florida legislature has reacted to this element of the crises by enacting the “Distressed Condominium Relief Act”, Section 718.702 of the Florida Statutes, in order to offer what hopes to be a shot in the arm for the condominium development industry. In describing the Legislative intent, the preamble to the act states, in part:

The Legislature acknowledges the massive downturn in the condominium market which has occurred throughout the state and the impact of such downturn on developers, lenders, unit owners, and condominium associations. Numerous condominium projects have failed or are in the process of failing such that the condominium has a small percentage of third-party unit owners as compared to the unsold inventory of units. As a result of the inability to find purchasers for this inventory of units, which results in part from the devaluing of real estate in this state, developers are unable to satisfy the requirements of their lenders, leading to defaults on mortgages. The Legislature finds that individuals and entities within this state and in other states have expressed interest in purchasing unsold inventory in one or more condominium projects, but are reticent to do so because of accompanying liabilities inherited from the original developer, which are by definition imputed to the successor purchaser, including a foreclosing mortgagee.

There have been a lot of real estate investors sitting on the sidelines over the past few years afraid to put money into the crashed real estate market. A further impediment preventing these investors from buying up the inventory of condominium units is the fact that when a person buys a bulk quantity of condominium units and offers them for sale in the ordinary course of business, that investor becomes a successor developer. Up until the new law, the label of successor developer carried with it a bundle of obligations and liabilities that many real estate investors were unwilling to assume.

While some of the obligations such as the filing of registration statements and the compliance with disclosure laws have not changed, the burden of liabilities of the original developer for construction defects and other issues has been lifted from an investor who takes on only the label of a bulk buyer or bulk assignee under the new act. There are different obligations which a bulk assignee must assume, but the assumption carries many of the beneficial development rights of a successor developer.

Already, investors are coming into the market buying units at well below what they were selling for at the peak, often for less than half of the selling prices of the high points of the market. These investors, in turn, are able to offer the units for sale at a dramatically reduced price. The preferred business model is to acquire the units cheap and sell them for a reasonable profit with a quick turnaround.

In some cases, where the developer has rented out the units in order to produce some income while holding the property, the customers who purchase from the bulk buyers have found a vehicle to invest in a rental income property with the tenants already in place.

The new law is not without difficulties. Given the severity of the crises in the real estate market, the legislature rushed a bit and there is some inherent conflict in the law. Definitions and restrictions regarding, for example, a bulk buyer’s right to maintain an onsite sales office seem to have different treatment in different parts of the statute. Already, leading condominium law attorneys around the state are working to correct this glitch. Hopefully, the statute and the benefits to the marketplace, both at the developer level and eventually at the retail level will help to ease the condominium oversupply and help to bring about recovery in the real estate market.

The Perils of Purchase Money Paper - May 2010

By David Weisman, Esq.

In today's real estate market, a Seller may be faced with the opportunity to take back a purchase money mortgage from the Buyer for a portion of the purchase price.  With more and more adjustable rate mortgages being assumable with qualification, some device must be available to make-up the difference between the principal balance of the existing first mortgage and a ten or twenty percent down payment which the Buyer has available in cash. If a property has increased in value since the adjustable rate mortgage was executed, this difference can be substantial.

It seems that a Seller has an easy task.  Accepting a purchase money mortgage secured by the Buyer's new residence sounds like a safe investment. If the interest rate is equal to the current market, the Seller may have a better investment in the purchase money mortgage than in the stock market, a certificate of deposit, or other investment.

What Sellers and their real estate brokers overlook are the perils of purchase money mortgages. We often forget that sometimes, the Buyer will not pay their mortgage as it becomes due. This is particularly true of a balloon mortgage, the useful device whereby the Seller receives monthly payments over three to five years, and then gets the remaining principal balance in one lump sum.

What happens if the Buyer doesn't make his payments? The Seller has one choice: a mortgage foreclosure action.

If the Seller commences a mortgage foreclosure, the Seller can expect to spend four to eight months tied up in legal proceedings while the Buyer could be living in the property rent-free. In addition, if the Seller acquires the property at the foreclosure sale, the Seller may be faced with unpaid taxes, a bill for legal fees and costs, and perhaps a property in a shambles.

An even more important problem is that first mortgage which the Seller thought they were relieved of. If the transaction was properly handled at closing, the first mortgagee is aware that the Seller is holding a second mortgage and will give notice of any default before the loan is accelerated and the first mortgagee commences foreclosure. If the Seller is not so lucky, the first mortgage may start foreclosure proceedings even before the purchase money mortgage is foreclosed, and the Seller may be in jeopardy of losing his interest in the property completely.

Even where the Seller is lucky enough to have given notice to the first mortgagee, and where the first mortgagee is intelligent enough to notify the Seller prior to commencing a foreclosure action, that Seller holding the purchase money mortgage must now make that first mortgage payment in order to protect his position. This leaves the holder of the purchase money mortgage in a horrifying position of making the payments not only on the house he owns, but also on the house he thought he sold.

The problem may be less severe where the Seller of an encumbered property takes back a first mortgage. That Seller will still have the same burdens of taxes, the costs of the foreclosure action, and the deteriorated property.  While that Seller will not have the worry of a first mortgage, there will be the lost income from a mortgage which is generally larger in amount than a purchase money second mortgage.

How can a Seller protect himself? The simple solution is to use the same rules as an institutional lender. Spend the money for a credit report. Make sure that the total of the existing first mortgage and the purchase money second mortgage do not exceed eighty percent of the property value.

Make certain that the first mortgagee (if any) knows that there is a second mortgage, and agrees to give notice of any default.

Seller financing is a useful tool to market property; but it is also a dangerous trap for an unwary person, which should only be entered into with full knowledge of the facts and the risks.

Greenspoon Marder Growth Spurt Spurs New Lines of Business - May 2010

Fort Lauderdale, FL, May 18, 2010 (

Greenspoon Marder, a full-service business law firm, has opened two new practice areas and expanded three others, with the recent hiring of five new attorneys. The Florida-based firm now offers International Tax services, to complement its domestic practice, and Public Insurance Adjusting, to address insurance claims on behalf of home and business owners. Greenspoon Marder also bolstered its Trusts and Estates, Litigation and Regulatory groups.

Lazaro J. Mur, Esq. joins Greenspoon Marder as a senior partner, focusing on International Tax, Estate Planning and Administration, as well as Sports and Entertainment Law. Mur has been nationally recognized by the Wall Street Journal for his expertise on global tax strategies, and he has lectured with the National Business Institute throughout Central and South America and as a visiting professor at Oxford University. Mur has been awarded the American Jurisprudence Award for outstanding achievement in the studies of taxation of foreign income and foreign persons. He serves as an advisor to numerous companies and on their boards of directors. He is president of the Florida Hispanic Chamber of Commerce, which represents over 70,000 Hispanic-owned businesses. Mur earned his Juris Doctor and Masters of Law in Taxation from the University of Miami School of Law.

New associate Robert A. Reynolds, Esq. brings another new practice area to Greenspoon Marder, as a Public Insurance Adjuster representing home and business owners. Reynolds is a member of the Florida Association of Public Insurance Adjusters, the Windstorm Insurance Network and the Trial Lawyers Division of the Florida Bar Association. Previously, he worked with Congressman Patrick Kennedy in Washington, D.C. Reynolds earned his Juris Doctor from Roger Williams University in Bristol, R.I.

Further bolstering Greenspoon Marder's well-established Tax, Trusts, Estates and Guardianship practice group is new associate Adam Schucher, Esq. Schucher is an active member of the Real Property, Probate and Trust Law Section of the Florida Bar, serves on the Board of Directors of the Estate Planning Council of Greater Miami, and is involved with the Professional Advisory Committee of the Foundation of the Greater Miami Jewish Federation. He earned his Juris Doctor from the University of Florida College of Law and his Masters of Law in Taxation from the Graduate Tax Program at the University of Florida College of Law.

Associate Erica Franqui, Esq. concentrates in the firm's growing practice areas of general corporate law and regulatory and compliance law for debt management, debt settlement, telemarketing and money transmitting businesses, as well as licensing for other state and federally regulated businesses. Franqui is a Certified Associate in Anti-Money Laundering/BSA Compliance and has experience with restaurant franchising and agreements, city and county permitting, zoning and variance processes and hearings, plan approvals and the purchase and sale of liquor licenses. She received her Juris Doctor from St. Thomas University School of Law, where she was a member of the Peter Fay Inn of Courts and served as a Senator of the Student Bar Association.

Franklin S. Homer, associate, will further strengthen the firm's Commercial Litigation practice, which remains extremely active. Homer received his Juris Doctor from the University of Miami School of Law, where he served as editor for the Inter-American Law Review, Chief Presiding Officer of the Honor Council and a member of Phi Delta Phi International Legal Fraternity. He interned with the National Association of Securities Dealers (NASD) in Boca Raton and with the Honorable Kenneth A. Marra, United States District Court, Southern District of Florida.

### Established in 1981, Greenspoon Marder, P.A. is a full-service law firm with offices in Fort Lauderdale, Orlando, Aventura, Boca Raton, West Palm Beach and Stuart. The firm's practice is concentrated in the areas of commercial and residential real estate acquisitions and development; timeshare and fractional ownership development; resorts; community association law; zoning and land use; banking and real estate finance; commercial litigation; corporate tax and transactions; international tax; foreclosure and bankruptcy; labor and employment; immigration; tax, estate, probate and elder law; life settlement; disability insurance and insurance policy issues; family law; sports and entertainment; personal injury and malpractice litigation; equine law; regulatory compliance and defense. For more information, visit

Ten Common Mistakes Employers Make - April 2010

By Peter R. Siegel, Esq.
Labor & Employment Law
April 2010

With the proliferation of employee-related lawsuits showing no signs of slowing down, it is more important now than ever for Florida employers to avoid the most common mistakes which often result in discrimination lawsuits. Employers may limit their exposure to liability by remembering to avoid the following common mistakes:

  1. Failing to conduct a legal job interview. Many discrimination lawsuits are filed by prospective employees as a result of employers conducting improper interviews. The following is a partial list of questions which must never be asked to job applicants: What is your date of birth? Have you ever been arrested? Do you have a disability? Have you ever been treated for drug addiction or drug abuse? Are you married? Are you pregnant? Does your religion prevent you from working weekends? Have you ever belonged to a union? Have you ever filed for workers' compensation?
  2. Failing to have a sufficient Employee Handbook. Every employer should have an employee handbook and have it reviewed by labor counsel at least once a year. Every employee handbook should include a strong EEO (Equal Employment Opportunity) policy, a policy prohibiting sexual harassment and discrimination, and language making it clear that the handbook is meant for guidance only, that it does not constitute a contract, that the company reserves its right to terminate employees at will, and that the company may change the terms of the handbook at its discretion.
  3. Failing to recognize that business owners, human resources professionals, and supervisors may be personally liable for employment decisions. Business owners, human resources professionals, supervisors, and other decision makers may be personally liable for their decisions at the workplace. Penalties range from monetary fines to jail time. The good news is that managers and supervisors have been held immune from liability under some federal discrimination laws, including Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act. However, too many companies fail to recognize that several employment laws contemplate personal liability for violations. For example, business owners, HR professionals, and supervisors may be personally liable under the Fair Labor Standards Act, the Equal Pay Act, the Family and Medical Leave Act, the Consolidated Omnibus Budget Reconciliation Act, the Employee Retirement Income Security Act, and the Immigration Control and Reform Act. If you make employment decisions as part of your job, you could be at risk personally for those decisions. Accordingly, it is strongly recommended that you make sure that your employment policies are updated regularly, that you understand the employment laws which govern the workplace, and that you consult with legal counsel before making significant personnel decisions.
  4. Failing to follow child labor laws when employing minors. Employers must remember that children under the age of 14 cannot work although there are exceptions for newspaper delivery and the entertainment industry. Minors (under the age of 18) cannot work in alcoholic beverage sales, in any occupation using forklifts and tractors over 20 horsepower, on scaffolding, or in "hazardous" occupations (including heavy construction, occupations using toxic or corrosive substances, electrical work, and roofing). Minors cannot operate heavy machinery or work with explosives or dangerous equipment. Children ages 14 or 15 are prohibited from working in the construction industry. Companies which employ minors must never forget to monitor their work schedules to ensure compliance with the numerous child labor laws. There are also regulations regarding maximum hours, prohibitions against working more than six consecutive days in a week; and different rules which apply depending upon whether school is in session as opposed to the summer and holidays.
  5. Failing to evaluate employees routinely and accurately. Most supervisors fail to write up employees who are having performance problems at work. As a result, many employees who are discharged have personnel files which are either replete with excellent evaluations or have no evaluations at all. If a personnel file fails to reflect the poor performance of an employee, the employer will have a difficult time justifying the discharge if a discrimination suit is filed.
  6. Failing to pay overtime to nonexempt employees. Unless an employee is deemed "exempt" as an executive, administrative, professional, or outside sales employee, employers must pay the employee time-and-a-half his/her regular hourly pay for all hours worked in excess of 40 per week. Many employers mistakenly pay employees a salary regardless of the number of hours they work and assume, incorrectly, that an employee who receives a salary is never entitled to overtime pay. Employers need to consult with legal counsel to ensure that they are acting in accordance with the requirements of the Fair Labor Standards Act. Such an approach will avoid the problems associated with having to pay back wages, penalties, and attorneys' fees in the event of an audit by the United States Department of Labor and/or an employee lawsuit.
  7. Failing to establish an effective sexual harassment policy. Courts continue to hold employers liable for the actions of their supervisors and employees unless complaining employees fail to take advantage of company complaint procedures. Employers must, therefore, implement clear and concise policies and procedures which address sexual harassment in the workplace. It is also essential to train supervisors and employees with respect to these policies at least once a year. For a sexual harassment policy to withstand judicial scrutiny it should define forbidden behavior, require supervisors to treat subordinates with respect, provide alternative routes for complaints, describe disciplinary measures, encourage employees to voice concerns, clearly prohibit retaliation, and describe the responsibilities of employees and supervisors who are notified of the harassment. A definitive policy, combined with prompt action when harassment is discovered, forms the employer's strongest shield against costly liability.
  8. Failing to understand that conditioning employment offers on medical exams is illegal. The Americans with Disabilities Act prohibits employers from requiring a medical examination, or asking disability-related questions, prior to making a job offer. Once a job offer is extended, the offer may be conditioned upon the results of a job-relevant medical examination if all employees in the same job category have to undergo a medical examination.
  9. Failing to establish an Internet/e-mail policy. Many employers are being sued for conduct involving employee use of the Internet and e-mail. Accordingly, employers must make it clear that Internet access and e-mail at the workplace should be used for company business only and not for personal purposes. In order to be effective, an Internet/e-mail policy must (1) be disseminated throughout the company and indicate the ramifications if the policy is violated (2) state that the company has the right to monitor all Internet and e-mail activities for any business purpose including employee supervision (3) prohibit access to adult materials on the Internet and (4) prohibit e-mail communications which could be considered offensive, harassing, or defamatory.
  10. Failure to conduct a human resources audit. The Equal Employment Opportunity Commission projects an even greater increase in the number of discrimination charges it will handle in the next few years involving age, disability, race, religion, national origin, and gender. It is therefore important to remember that a human resources audit conducted by a labor attorney can reduce an employer's exposure to litigation by analyzing a company's structure, policies, procedures, documents, and record-keeping practices to ensure compliance with the growing number of complicated employment laws. Such an audit is a productive first step that should be taken to increase compliance with these laws and decrease the liability inherent in employing people.
Florida: The Tax Haven If You’re A Domiciliary - April 2010

Florida:  The Tax Haven if You're a Domiciliary

By Gene K. Glasser, Esq.
Tax, Trusts and Estates

Gene GlasserSunshine, the ocean, and minimal taxes. For most individuals who are domiciliary and residents of the State of Florida, the only significant state taxes paid are real property taxes on their residence and sales taxes. Florida does not have an income tax, intangible tax, estate taxes, or inheritance taxes.

In the event a Florida domiciliary owns their residence, they are entitled to the homestead exemption. The homestead exemption will save taxes on an annual basis. The primary benefits of the homestead exemption are twofold. First, in determining the amount to be assessed on the property there is deducted $50,000.00. Assuming a 2% real property tax that will save the resident approximately $1,000.00 a year. The amount of savings is determined on the millage that is applied to the $50,000.00. Second, based on the constitutional change, “Save Our Homes,” the annual assessed value of the residence can only increase by 3% a year. Therefore, when real estate values increase by 3% or more, there is a cap of 3% on the increase on an annual basis. Over a protracted period of time, the real estate market generally increases more than 3% on an annual basis and therefore there will be significant savings based on the cap on the annual increases.

Assume an individual lives in New York City and there is an 8% income tax. New York also has its sales tax which is significantly more than the general sales tax in Florida of 6%. New York also has real property taxes and other taxes. If an individual has IRA distributions of $30,000.00 and interest amount of $70,000.00, but have $100,000.00 worth of income that would be subject to income tax in New York. Therefore, there would be an $8,000.00 tax. On the other hand, if the individual is a resident and domiciliary of the State of Florida, then there would be no income tax on the IRA distribution and the interest income.

Generally, all dividends, interest, IRA distributions, pension payments, are taxed in your domiciliary state where you permanently intend to reside. Taxes are paid in each of the states where wages are earned and on rental income of that jurisdiction. By way of example, if a Floridian works three months a year in New Jersey and earns $30,000.00 then that $30,000.00 would be subject to New Jersey State income tax. If an individual is a Florida domiciliary and resident and owns significant stocks, bonds, retirement plans, but has a piece of rental property in Pennsylvania, then the only tax to be paid in Pennsylvania would be based on the rental income in that jurisdiction. The interest, dividends, and Pension or IRA distribution would not be taxed.

In the event a domiciliary and resident in the State of Florida does not have wages or rental income in another jurisdiction then there are no filing requirements in any other jurisdiction. If there are wages or rental income in another jurisdiction then generally if that state has an income tax there would be the requirement to file a non-resident income tax return which would only include the rental and wage income but not other sources of income.

Florida does not have an estate or inheritance tax. However, many of the states have estate or inheritance taxes. A Floridian would generally not be taxed in another jurisdiction unless they have real property in that jurisdiction. Assuming a Floridian passes away and has a significant portfolio of stocks, bonds, and other assets. However, they have a piece of property in Chicago, Illinois. There may be an estate tax attributable to that piece of property in Chicago, Illinois but not the Florida residence, stocks, bonds, IRA’s, mortgage receivables, and other similar assets.

In order to become a Florida resident it must appear that it is your intent to permanently reside in the State of Florida. Intent is a subjective requirement. However, the intent is generally demonstrated by objective manifestations. Therefore, in order to establish yourself as a Florida resident it is advisable to consider the following:

  • File an Affidavit of Domicile. This is a statement that you’ve changed your jurisdiction from another state to Florida. It lists the former residence and your new residence address.
  • Register to vote in Florida.
  • Vote in Florida.
  • Change your driver’s license to Florida.
  • Change your license plates to Florida.
  • File your Federal Income Tax Return 1040 in the Florida service center which is in Georgia.
  • Change the address on your 1040 to reflect your Florida address as your residence.
  • In the event you have a requirement to file tax returns in the other jurisdictions because of wages or rental real estate, file a non-resident tax return.
  • Claim the Florida Homestead Exemption if you own your residence.
  • Join local clubs or organizations.
  • Change your estate planning documents to reflect you are a Floridian.
  • To the extent possible, move most of the assets to Florida.
  • Spend as much time as you can in the State of Florida.
  • Have your mail, magazines, subscriptions, and other literature sent to the State of Florida.
  • Hire Florida professionals, i.e., accountants, lawyers, physicians, veterinarians.

In Florida, there are a significant number of snow birds. Many of those individuals can choose between Florida and their original home jurisdiction as their domicile. From an asset protection viewpoint, Florida has many more exemptions than other jurisdictions. There can be significant annual tax savings by changing from a former jurisdiction where there are either large income taxes, whether it be state, county or city, or estate or inheritance taxes, by the same jurisdiction. The original jurisdiction can be the vacation home of the summertime. However, if you follow most of the guidelines set forth above in changing your domicile residence to the State of Florida, you should be treated as a Floridian and not a citizen of the other state.

Gene K. Glasser, Esq. is a managing shareholder at Greenspoon Marder, where he focuses his practice in the areas of Tax, Trusts & Estates; Corporate & Business; Wills; Guardianship; and Probate. Mr. Glasser is Board Certified by the Florida Bar in the areas of Estate Planning and Administration. He can be reached at or 954-491-1120.

Established in 1981, Greenspoon Marder is a full-service law firm with offices in Miami, Fort Lauderdale, Orlando, Tallahassee, West Palm Beach, Boca Raton, Stuart, Port St. Lucie, Naples and Aventura. The firm’s practice is concentrated in the areas of commercial and residential real estate acquisitions and development; timeshare and fractional ownership development; resorts; community association law; zoning and land use; banking and real estate finance; public finance; commercial litigation; corporate securities; corporate tax and transactions; healthcare law; foreclosure and bankruptcy; labor and employment; immigration; international law; tax, estate, probate and elder law; international tax; life settlement; disability insurance and insurance policy issues; family law; sports and entertainment; personal injury; equine law; regulatory compliance and defense. For more information, visit or call 888-491-1120.

New Challenges to Protecting a Landlord’s Interest from its Tenants’ Creditors - March 2010

New Challenges to Protecting a Landlord’s Interest from its Tenants’ Creditors

March 10, 2010
Mark F. Grant, Esq. and Elizabeth L. Somerstein, Esq.

A bright-line test guided the recent decision, Everglades Electric Supply, Inc., v. Paraiso Granite, LLC, wherein the Fourth District Court of Appeals gave an extremely strict and narrow interpretation of the anti-lien provision of Florida’s Construction Lien Law. Fla. Stat. § 713.10 (2009).

Section 713.10, Florida Statutes (2009), concerns the extent of a construction lien filed under the law, and in relevant part reads:

[A] lien under this part shall extend to, and only to, the right, title, and interest of the person who contracts for the improvement as such right, title, and interest exists at the commencement of the improvement...[w]hen an improvement is made by a lessee in accordance with an agreement between such lessee and her or his lessor, the lien shall extend also to the interest of such lessor.

Section 713.10 further details three ways in which a lessor can protect its fee interest from the attachment of liens based on improvements made by the lessee. The Statute reads that the lessor must do one of the following:

(1) The lease or a short form [lease] is recorded in the clerk's office and the terms of the lease expressly prohibit such liability; or

(2) All of the leases entered into by a lessor for the rental of premises on a parcel of land prohibit such liability and a notice which sets forth the following is recorded by the lessor in the public records of the county in which the parcel of land is located:

(a) The name of the lessor.
(b) The legal description of the parcel of land to which the notice applies.
(c) The specific language contained in the various leases prohibiting such liability.
(d) A statement that all leases entered into for premises on the parcel of land contain the language identified in paragraph (c).

(3) The lessee is a mobile home owner who is leasing a mobile home lot in a mobile home park from the lessor. Fla.Stat. § 713.10 (2009) (emphasis added).

The subject of discussion in Everglades centered around the above noted protective provisions (1) and (2) of § 713.10: a memo of lease with the exoneration provision contained in the lease or a blanket notice with an exoneration provision and the statement that the provision appears in all leases.

In Everglades, a shopping center Landlord entered into a lease containing an exoneration clause for one of its units. The Landlord then exercised § 713.10(2) Fla. Stat. and recorded a blanket notice with an exoneration provision, indicating that all of the leases in the shopping plaza contained the recorded exoneration provision. According to the express terms of the Statute, the exoneration provision of the blanket notice must conform to the specific terms of the exoneration provisions of the various leases covered by the notice. The Lienor (a sub-subcontractor of the Tenant) made its point clear: the Landlord failed to comply with § 713.10(2) because not every lease signed by the Landlord contained the same specific exoneration language contained in the recorded notice. The Court agreed. Rejecting the notion of substantial compliance, the Court found the blanket notice void, thus subjecting the Landlord’s fee interest in the shopping center to the lien claim for Tenant's work filed by the sub-subcontractor. The Court further expounded on the scope of the blanket notice; notably, the Court strictly construed the blanket notice to be effective both prospectively and retroactively, thus applying to those leases entered into after and before the recording of the blanket notice.

Lessons to learn:

Be aware of the scope of a blanket notice - the Court determined that the blanket notice would apply not only to prospective leases, but would also retroactively apply to those leases entered into prior to filing the blanket notice. As per the Court’s suggestion, consider taking advantage of § 713.10(1): recording short-form leases until any non-conforming leases are no longer in effect. At that point, a recorded blanket notice has the ability to be consistent with all leases. Alternatively, the blanket notice should contain all forms of the provision which restricts liens by tenants’ contractors; in that case consider specifically identifying which lease spaces contain which provision.

Consistency in language matters - even a slight variation in the language could nullify the ability to opt out of the protections afforded under the Statute. Many landlords file § 713.10(2) blanket notices without undertaking to determine if all leases contain the exact exoneration clause set forth in the notice. Conduct an audit of your leases and form of memorandum(s) that you have recorded to confirm whether or not they strictly comply with § 713.10.

If you have any questions regarding your property and the potential benefit by an exemption pursuant to Fla. Stat. § 713.10(1)-(3), contact Mark Grant, Esq.,, or Elizabeth Somerstein, Esq.,, 954-491-1120.

Eviction 101: What to Do When Enough is Enough - March 2010

By Dariel J. Abrahamy, Esq.
March 2010

Whether you need to evict a residential tenant or a commercial tenant, the process is virtually the same, with one important distinction.

With residential tenancy, the first step is to provide the tenant with a three-day notice, pursuant to Fla. Stat. § 83.56(3). The 3-day notice is a condition precedent to an eviction action. Bell v. Kornblatt, 705 So. 2d 113 (Fla. 4th DCA 1998). The three-day notice is a writing that must be provided to the tenant to inform the tenant that you are demanding payment of rent or possession of the premises. This is an extremely specific notice, the form of which is mandated by statute. It is crucial that this notice be drafted with great detail. The three-day notice can only include terms that are defined as rent under the lease. Therefore, you cannot include late fees, interest, and services in the amount you refer to in your three-day notice, unless those terms are defined as rent in the lease. The notice can be hand delivered, posted, or mailed (five days need to be added for mailing).

For commercial tenancies, Fla. Stat. § 83.20 sets forth the three-day notice obligations. However, the notice does not necessarily need to be three days. The amount of time can be extended if a longer time frame is set forth in the lease.

If the tenant does not pay or deliver possession within the time period specified in the notice, the next step is to file a complaint for tenant removal. What is your ultimate goal? Do you want the tenant out? Do you want the money due and owing? Do you want the tenant out and the money in hand? If your main goal is to get the tenant out, you should file an eviction lawsuit. The eviction lawsuit is governed by the summary procedure set forth at Fla. Stat. 51.011. After you serve the tenant with the eviction complaint, the tenant has five days to file a written answer. If the tenant does not answer the complaint in the specified time period, you may then move for a default, and ultimately for a final judgment of eviction. The Clerk of Court will issue a writ of possession, which the Sheriff will post on the premises. The Sheriff will then schedule a time for the landlord and the landlord's agent or attorney to be present for the removal of the tenant. Remember that the Sheriff is chasing bad guys too, so be patient with them.

If the tenant has any defense other than payment of rent, the court will require the tenant to pay rent into the court registry in order to defend the action. See Fla. Stat. §§ 83.60(2) and 83.232. Even if you think the tenant should be kicked out of your property for failing to pay the rent, you cannot change the locks on the door and engage in self-help. Fla. Stat. § 83.67(6) states that if you violate provisions of this section, such as self-help, the landlord shall be liable to the tenant for actual and consequential damages or three months' rent, whichever is greater, plus costs, including attorney's fees.
If you want to go after the tenant for the money owed, add a count for damages in the same complaint as the eviction, or file a separate complaint for damages. Regardless of which way you do it, the tenant will have 20 days to answer the count for damages in the eviction complaint or the complaint for damages.

Landlords often become frustrated that their tenants are living rent-free and may want to take matters into their own hands. However, problems often arise with respect to the 3-day notice, self-help, and other issues which, had the landlord consulted an attorney, could have been avoided. Florida is an extremely tenant-friendly state. I advise that you consult an attorney prior to signing a lease with a tenant, sending a three-day notice or filing an eviction.

Dariel J. Abrahamy, Esq. is a senior associate at Greenspoon Marder and focuses his practice in the areas of landlord/tenant litigation, real estate litigation, foreclosure litigation and commercial litigation.
888-491-1120 or

Negotiating Commercial Leases - February 2010

By David Weisman, Esq.

Relationships between contracting parties must be carefully created so that when difficulties arise, resolutions will be simple

A “lease” is defined by Black’s Law Dictionary as a “contract for exclusive possession of lands or tenements for determinate period!’ An older definition appears as: “A contract in writing, under seal, whereby a person having a legal estate in hereditaments, corporeal or incorporeal, conveys a portion of his interest to another, in consideration of a certain, annual rent or render, or other recompense.” While the latter definition is somewhat antiquated, it is a reminder that a lease transfers an interest in real property to another, which is more than a simple contract. Therefore, the negotiations of the terms and conditions of a lease should not be taken lightly.

More importantly than the textbook definitions, the lease is a device which is used to transfer ownership and control of property to another, and creates a relationship between the contracting parties that will continue for a term of years. That term varies, but the minimum term of a commercial lease is from three to five years, and more often leases today are longer. Through the use of renewal options, a lease term can extend for 20 years or more. Thus, the relationship must be carefully created so that when difficulties arise, the resolution of that difficulty will be simple.

An article in the Journal is too brief to discuss all of the intricacies of commercial lease provisions, but a few Important concepts are set forth here as a guide to the general practitioner.

The Parties

The most basic fact to determine before the negotiation starts, is the identity of the parties. One must be wary of trade names, such as Main Street Associates. Entities shown at the heading of the lease must actually exist. It is important to verify the ownership of the property and the authority of the persons negotiating and signing the lease.

Each party must beware of a “shell corporation” formed only last week for the sole purpose of entering into the lease. The landlord must be certain that the tenant has the financial ability to make the lease payments. Since many new businesses are started with minimal capitalization, a landlord can protect itself by requesting a personal guarantee from individuals involved in the venture. Principals of the tenant will resist the personal guarantee because they are only willing to risk a certain amount of capital. As a compromise, a limited guarantee can be negotiated, such as rent for the first year of the lease or a dollar amount which will accomplish the purposes of both parties.

An attorney must be certain that the person who negotiates the lease has the authority to do so. Many landlords today are using leasing agents, some of whom may be lawyers who were smart enough to get out of the day-to-day practice of law. These agents may not have the authority to bind the landlord. Certain key points of the deal, especially rent agreements, may not have been properly documented or communicated.

The Premises

While it may seem straight-forward, another important task is defining the “premises”. In a retail or office lease, it is not uncommon for the landlord to use a “load factor,” an amount by which the useable square footage is multiplied in order to arrive at rentable square footage. This procedure allows the landlord to collect rent for the common areas of the building which are not demised to any specific tenant.

In a lease of an entire building, the definition of the demised premises focuses more on the area surrounding the building than the number of square feet within the building. In a setting such as an office park or warehouse complex, the tenant must be certain that the demised premises include a sufficient amount of parking, ingress, and egress so that the tenant will be able to reach its space.

The Term

Once the who and the what have been determined, the focus shifts to when the lease begins. The commencement of the lease term is not the same as the commencement of the obligation of the tenant to pay rent. Most commercial leases provide for a rent abatement period so that the tenant can improve the space or have time for the business to begin producing revenue. The lease should commence immediately upon the tenant being granted any rights to enter the premises, so that the contractual provisions regarding insurance, indemnity, and other rights and obligations of the parties take effect. If the space is available at the time the lease is executed, the commencement date can be easily ascertained. If the project is under construction, then the commencement date should be defined by an external event, such as the issuance of a certificate of occupancy. However, the commencement of the lease should be acknowledged in writing, to provide an ascertainable commencement of the lease, and make the computations of the termination date, the end of the rent abatement, and the right to exercise options free from argument in the future.

The Rent

Following the who, what, and when is the how (much). The rent is the heart of the business negotiation. Determining the base rent is a relatively simple function of the market—where the property is located, and the success of the project. The factors which are open to negotiation are rent abatement, rent increases, and additional rental charges.

Almost every commercial lease negotiation results in the landlord giving a period of free or reduced rent. Besides being a financial incentive for the tenant to sign the lease, this gives a new business a start-up period which may be necessary in order for the business to get on its feet and become successful. Rent abatements from six to 12 months are not uncommon, and these allowances are often granted in addition to contributions for tenant improvements. The amounts of each are entirely dependent upon market conditions at any given time.

Rent abatements can be structured in several ways. The most common way is for the tenant not to pay any rent for the first six months of the lease. This structure benefits the tenant, but may place a financial burden on the landlord by limiting cash flow. A better way for the landlord to structure the rent abatement is to double the length of time and cut the abatement amount in half; that is, require the tenant to pay 50% of the rent for 12 months, rather than no rent for six months. This gives the landlord some cash flow to make mortgage payments or meet other expenses, and it gives the tenant the desired reduced operating costs for the initial period of his or her business.

What rent is abated? It may seem fairly simple to say that the tenant will be entitled to free rent for a period of six to 12 months, but to the tenant this may mean that no payments whatsoever are due during the abatement period. The landlord, conversely, may be of the opinion that the rent abatement applies only to base minimum rent, the flat dollar amount which is payable for the use of the demised premises. Most commercial leases today contain provisions for payment of real estate taxes, insurance, and common area maintenance. Are these items being abated together with base minimum rent? This must be considered, both in the financial negotiation and in examining the clauses which deal with a rent abatement in the event of condemnation or destruction of the premises.

Besides base minimum rent, the landlord’s revenue can be increased by “additional rent.” The most common add-on is found in the retail lease: percentage rent. This clause provides that the tenant will pay to landlord a stated percentage of the tenant’s gross sales, once the tenant has reached a minimum sales level. If this is required, the tenant should be certain that the break-even point for the payment of this percentage rent is at least as much as the base minimum rent, and that this is adjusted if there are any adjustments in the amount of base minimum rent, such as a consumer price index adjustment.

Another type of additional rent is “common area maintenance,” the landlord’s carte blanche for recovering whatever expenses may be incurred in the operation of the property. The tenant should be cautious to except capital improvements or repairs to premises which belong exclusively to any one tenant.

Base rent is also subject to adjustment. Even in a short-term lease, absent an unusual circumstance such as a near-empty building, a tenant cannot expect the rent to remain fixed for several years. The rent can be adjusted either based upon an ascertainable index such as the consumer price index, or based upon a flat annual increase which is negotiated at the outset of the lease. If the consumer price index is used, the tenant will argue that the annual increases should be capped at a reasonable percentage, and the landlord will argue that a minimum increase should be allowed. Each of these propositions is reasonable from the perspective of the different parties, but the numbers have to be worked out carefully to avoid either the landlord’s property being burdened with a low-yield lease, or the tenant from being driven out of business by exorbitant increases.

Assignment Rights

After the negotiations have been completed and the parties are happily enjoying the relationship of landlord and tenant, what happens when the tenant receives an offer he cannot refuse: the offer to buy the business and give the tenant the opportunity to retire to a condominium on the beach?

The tenant looks to the lease that was so carefully negotiated and finds that assignment and subletting are not permitted without the prior consent of the landlord. If those are the only words which appear in the lease, the landlord must be “reasonable”. Under current case law, absent additional language granting the landlord the right to be arbitrary and capricious, a landlord must be commercially reasonable in deciding whether to approve a new tenant under an assignment or subletting clause which provides for the landlord to consent. Fernandez v. Vasquez, 397 So.2d 1177 (Fla. 3d DCA 1981). Among the factors which the courts examine in determining commercial reasonableness are the financial strength of the proposed assignee, the proposed assignee’s experience in the business which existed in the premises, or the proposed assignee’s use of the premises. The use to be made of the premises is governed by the use clause, and a careful landlord’s draftsman should not permit too broad a use clause.

Since landlords do not like to be reasonable, if the assignment clause states clearly that the consent will be in landlord’s sole and absolute discretion, or that the landlord shall have the right to withhold consent without providing any explanation whatsoever, or similar language, the landlord then is not bound by the case law and can deal with its property freely.

The tenant may wish to provide for the right to sell the business, and if this is the case, the tenant should negotiate into the initial drafting of the lease a provision which allows for an assignment in connection with the sale of the business, and should provide for certain standards which, if met, mandate the landlord’s consent. An example of such standards would be a net worth figure, financial strength equal or greater than that of the existing tenant, or some similar ascertainable standard.

Should the tenant be permitted to profit from the assignment of the lease? The landlord should consider a provision that the landlord will receive 100% of the consideration for the assignment, if the tenant is not selling the business as a going entity. If the tenant has negotiated a below-market lease, or the tenant has taken advantage of generous improvement allowances and rent abatements, the tenant should not then be in a position to profit from the landlord’s initial negotiations, and the landlord should be entitled to recoup some of that initial investment.

In the case of subletting, the landlord should prohibit the tenant from profiting or competing with the landlord in the real estate business, particularly if the tenant has a below-market lease. Theoretically, the tenant could profit from earlier negotiations by subletting at a profit and depriving the landlord of a tenant for other vacant space at a market rent. The only circumstance where the landlord should be more liberal regarding the subletting is a case in which the tenant’s business is in jeopardy. By allowing the tenant to sublet a portion of the premises, the landlord enables the tenant to remain in business and continue paying rent.

Tenant Allowances

Another financial incentive which a landlord offers a tenant to sign a lease is a tenant-improvement allowance, which allows the tenant to construct or renovate the demised premises prior to taking occupancy. The amount depends on the market conditions, the same as any other financial negotiation. In some markets, it is not uncommon to find the landlord contributing the equivalent of one year of rent to construct the tenant’s improvements.

The landlord’s allowance may not be sufficient to build out the premises to the tenant’s satisfaction, and the tenant must contribute additional funds to complete the improvements. The landlord must be certain that the tenant has sufficient funds to complete the improvements to avoid being left with a partially finished premises that might be more expensive to demolish than the value of the entire tenant improvement allowance. The landlord can be protected by requiring a cash bond or a letter of credit, by relying upon the tenant’s financing commitment from a construction lender who will be providing the dollars to do the construction, or by loaning the money to the tenant and increasing the amount of base minimum rent to amortize (presumably at a market interest rate) the loan. Whatever method is used, a smart landlord will require the tenant’s dollars to go into the construction first. This way, when the tenant runs out of money, the landlord’s improvement allowance can be used to complete the premises.

Who should do the construction? If the tenant is sophisticated, it may choose its own architects and contractors, but all plans and specifications should be subject to the landlord’s approval to be certain that the premises are constructed in accordance with the overall scheme of development, and in a workmanlike manner. In a new construction setting, the landlord has already engaged a contractor who will be building the shell of the building and whose construction personnel are familiar with the premises. It may be wiser for the tenant to use the landlord’s contractor to do the finish work as well as the shell construction. This may avoid an argument over who causes a delay in construction. Subsequent renovations should be subject to the same considerations as the initial improvements.

At the termination of the lease, the tenant improvements should, usually, remain on the premises and become the property of the landlord, who will have an easier time re-letting an improved space than one which is bare and in need of complete renovation prior to occupancy. The alternative is to require the tenant to remove the improvements and alterations at the termination of the lease. The disadvantage to this provision is that the tenant has no incentive to do a thorough job restoring the premises to their “original condition!’ As a compromise, the landlord should reserve an option to decide whether the improvements should be abandoned or removed at the termination of the lease. From the tenant’s perspective, the words “restored to its original condition” should either be avoided entirely or defined as to whether the original condition means the condition of the premises as a shell, or after the original tenant improvements were completed.

It is the best of arrangements: the transfer of the obligations relating to real property in exchange for money, without permanently parting with the ownership of the property. It is the worst of all possible situations: the loss of control of something owned. Leases are a fact of commercial life which, if carefully negotiated and drafted, can be an excellent financial package for both landlord and tenant. Carefully viewed as a long-term relationship, the concept works for everyone; casually done, it is a disaster. This article may be of help as a starting point for successful commercial lease negotiations.

Special Report: Bankruptcy & Auctions - Equity Capital New King of Commercial Real Estate - January 2010

By Jeffrey H. Cannon
January 21, 2010

A group of investors led by Starwood Capital Group and private equity firm TPG, formerly Texas Pacific Group, beat out seven rivals to win Chicago-based Corus Bank's bankrupt $5 billion condo portfolio with a combined bid of $2.77 billion.

Starwood's up-front stake was only $554 million, and hands the company and its investor partners 112 construction loans, more than two-thirds of which are in default or foreclosure. As a result, Starwood Capital quickly emerges as the condo king of South Florida and the once-hot and now-beaten markets like Las Vegas and California.

To sweeten the acquisition deal, the Federal Deposit Insurance Corp. provided up to $1 billion over the next five years for any unfunded commitments, construction overruns and carrying costs for bank-owned inventory, at an effective 0 percent interest rate, and took a 60-percent equity stake in the Starwood partnership. Investors would have to pay off any of that debt plus $1.38 billion in debt issued by the FDIC before they can begin collecting on their investment.

The bid was 20 percent higher than competing offers, and many speculate whether Starwood overpaid for the transaction. Is this an opportunity for equity capital to take advantage of the market or a case of too much equity chasing a potential yield? Time will be the arbiter. But the last time such opportunities existed — almost 20 years ago — such transactions proved to be significant windfalls. The Miami Tower built for CenTrust and purchased by Winthrop is one such example.

The Corus transaction illustrates the opportunities equity capital can uncover and discover in today's "frozen" debt markets as the illiquidity first experienced in 2008 transitioned into 2009. The big names in commercial real estate were not the pension funds, real-estate investment trusts or life insurance companies that invested in and originated billions of dollars in commercial real-estate transactions before 2008 and 2009. They were not the large investment banks and commercial banks such as Goldman Sachs, JPMorgan Chase, Bank of America or Wells Fargo, which originated billions of dollars in commercial loans and mortgage back securitizations.

The names being spoken by the real-estate professionals today are DebtX, First Financial Network, Carlton Exchange, Eastdil Secured, Garnet Capital Advisors and Mission Capital Advisor.

Redeploying Funds These names, unfamiliar to anyone not directly involved with commercial real-estate debt markets, have come to prominence as auction houses and loan sale advisers help regional and community banks staunch portfolio losses and return desperately needed capital back to the institutions' balance sheets. In addition, they are the conduit that has allowed the FDIC to regain liquidity from the sale of loans acquired from failed banks and thrifts. This, in turn, permits the organization to redeploy funds to systematically and efficiently shutter insolvent financial institutions without insured depositor loss. The FDIC has been adding to its stable of note-sale advisers and recently — perhaps ominously — contracted with one for a five-year term.

While this isn't new — many of these names established themselves in the days of the savings-and-loan crisis with the Resolution Trust Corp.'s substituting for the FDIC — the sale of loan notes and real estate-owned assets through the use of sealed bids and auctions has provided a baseline for the valuation of commercial real estate. The difference now is equity capital has substituted for debt capital, forcing prices down to allow investors to realize the necessary yield to compensate for risk.

The expectation that the commercial real-estate market will enter a freefall akin to the housing market has not presented itself; neither has the expectation by lenders that the market will make a quick recovery.

The result is that the fundamentals of sound investing will prevail — location, location, location, with manageable leverage and proven and realistic expectations of cash flow. Commercial real estate trades on its ability to generate cash flow, and the returns investors require determines its value.

As the recession worsened and 150 Ponzi schemes representing every state were uncovered in 2009 alone, investors today are seeking realistic returns on capital that are tangible and have straightforward investment strategies. Commercial real estate deals that work on a realistic return on investment coupled with a determination of a return of investment will provide the benchmark for 2010.

Jeffrey H. Cannon is Greenspoon Marder's director of real estate services in Fort Lauderdale and is a former South Florida banker.

Greenspoon Marder Attorney Robby Birnbaum Wins Rare Exception From the FDA - December 2009

By Review Staff
December 07, 2009

Up until recently, people in need of hearing aids were required to first get evaluated by a doctor, to comply with strict Food and Drug Administration rules.

The problem was, many seniors lacked easy transportation to get to the doctor or, if too young for Medicare, lacked insurance for the visit and hearing aid, which is well over $1,000.

A national hearing aid manufacturer, Assistive Hearing, wanted to be able to sell hearing aids over the Internet and through television commercials, without requiring doctor exams. Company officials contacted numerous Washington, D.C., regulatory law firms to discuss their chances of securing an exception from the FDA to do so and were told it would be impossible.

But Robby Birnbaum, a partner at Greenspoon Marder in Fort Lauderdale, which had been representing the company on other matters, wanted to give the matter a shot.

Earlier this year, Birnbaum won a rare exception from the FDA to allow the Assistive Hearing to become the first to sell hearing aids without a medical exam. The thrilled company is now selling the items on late-night television and over the Internet, with great success.

"They were ecstatic," Birnba um said. "This was a huge market for them."

The device is also the first rechargeable one on the market, which frees the elderly users from having to figure out what kind of batteries to buy, make frequent visits to the drug store to purchase them and insert the tiny batteries properly.

How did Birnbaum accomplish what the big law firms said could not be done?

"We made our best legal argument possible," he said simply. "We took two very different and unconnected areas of law, put those positions together and were able to convince the FDA to grant us the allowance."

Birnbaum came up with a two-fold legal approach. To deal with the medical examination issue, Birnbaum argued that the FDA has a waiver procedure for other medical devices, and posed the question — why could that not be extended to hearing aids?

But the waiver provision required patients to sign the waiver in person at Miracle Ear at Sears or another such store.

Birnbaum argued that the E-Sign Act, which allowed taxpayers to sign forms electronically, should extend to another government agency, the FDA. Then he argued that people should be able to buy hearing aids over the telephone or Internet and check a box to allow for electronic signature or approval.

"We used the signature law very creatively, in a way it was never used before, and the FDA agreed to allow it," he said. "If you come up with a way to verify that a signature is good, then any federal agency should accept the E-Sign. ... That handled our Internet order issue."

In addition to the hearing aid triumph, he won the first approval from the IRS for a U.S. consumer credit counseling company to maintain its non-profit, educational status, even though the IRS had revoked the nonprofit status of more than 300 companies in the industry.

He also coordinated a major lawsuit against the state of Pennsylvania's banking department, seeking to enjoin a law that would have prohibited more than 300 consumer debt assistance companies from doing business in the state. And he settled a $3.2 million regulatory case against one of the largest telephone sales call centers in the country.

Inspections: Let the Seller Beware - November 2009

By David Weisman, Esq.

Buyers have the right to be sure they're getting their money's worth, but protect your sellers from extraordinary repair costs - and yourself from reduced commissions-by imposing limits on what inspection clauses can call for.

Almost universally, contracts for the purchase and sale of real estate grant the buyer a right to make a physical inspection of the property which is the subject of the contract. They place upon the seller the burden of repairing any defects which may be discovered as a result of the inspections.

The inspection paragraphs, intended for the protection of the buyer, have become a loaded gun to be used at the closing table to negotiate a lower price for the property under contract. In many cases, the seller executes the contract without being aware of the nature and extent of the inspections which the buyer is entitled to make.

The purpose of this article is not to explore the technical, legal ramifications or the fine print of the inspection clauses; rather, it is the author's intention to point out a few pitfalls and practical suggestions to avoid the arguments at the closing table which turn an otherwise happy occasion into a nightmare.

Inspection clauses might be as simple as provisions for roof and termite inspections to be performed by individuals licensed in those fields; or they might be as complex as provisions for inspections of the mechanical, structural, and plumbing components and the seawall, swimming pool, machinery, and appliances, with no standard other than "good working order". The phrase "good working order" is often misinterpreted and misunderstood to mean that a seller must make the house new, even though the seller has been living in it for 25 years and the price of the property reflects the fact that the home is not new.

The problem often arises as a result of a comprehensive inspection performed by a company whose only business is performing such inspections. The comprehensive inspection may indicate leaking faucets, non-functioning light switches, and an oven clock which runs three minutes slow every leap year. A buyer, and the buyer's representatives, must understand that a home which has been lived in for a number of years will have certain inherent defects — directly related to the age of the property — which the seller should not be obligated to repair.

Conversely, the buyer, having viewed the property once, twice or maybe three times with the selling agent, cannot possibly analyze the physical condition of the property by walking through and looking at the interior of the house. The buyer should be entitled to inspect the condition of the roof and to determine that the house has no termites, as these are major repair items which can cause a substantial financial burden on the buyer in addition to the purchase price and typical closing costs. Added to the simple fairness, most banks and mortgage companies must know that the security for their loan will not crumble to the ground a week after closing.

In some cases, the seller knows that the roof is leaking. The seller hears the termites chewing on the attic rafters in the middle of the night. That seller might be willing to make those repairs and may figure the cost of them into the purchase price. Under the recent landmark decision Johnson v. Davis, the seller is under an affirmative duty to disclose hidden defects of which the seller has knowledge. Enough has been written about that case so that the details of the decision need not be set forth here, but the overall effect is that the doctrine of caveat emptor (let the buyer beware) no longer applies to the sale of real property. This is not an unfair proposition when one considers that the seller who has been living in the house is in the best position to know of its physical defects. Given that knowledge, and assuming proper disclosure in accordance with the holdings of Johnson v. Davis, the seller should then be free to negotiate a purchase price without fear of further bargaining at the closing table.

The most common way to reduce the amount of bargaining which takes place is a limitation on the dollar amount which the seller will be required to spend to correct the defects discovered by the inspections. The limitation is generally stated as a percentage of the purchase price, allocated in some contracts to each item subject to inspection and set forth in a blanket amount in other contracts. For example, one contract might obligate the seller to repair the roof up to 3% of the purchase price, set forth a repair limitation of 2% for the termite repair, and set forth an additional 1.5% for the appliances and other personal property. This would expose the seller to a potential liability of 6.5% of the purchase price, or a whopping $6,500 in a $100,000 transaction.

The inspection paragraphs, intended for the protection of the buyer, have become a loaded gun to be used at the closing table to negotiate a lower price for the property under contract.

Another method of allocating the limitation is to set a maximum limitation on the cost of all repairs. A 4% limitation on roof, termite, appliance, and all other repairs reduces the seller's repair obligation in the $100,000 transaction to $4,000.

The inspections themselves can often result in problems. The buyer, or typically the selling agent, will arrange to have XYZ Roofing Company inspect the roof. XYZ, hungry for a repair order, offers to install a new Tiffany roof for $15,000. The Tiffany roof will have the finest tile and seven layers of roofing materials to create the finest roofing system known to mankind. That will be wonderful for the buyer, but will cost the seller a fortune. The seller, conversely, will hire the ABC Roofing Company to provide an estimate for the installation of a thrift shop roof, which will be water tight at least through the closing and will feature the latest in economy shingles and one layer of the finest off-price roofing material available.

Obviously, there is room for moderation and negotiation between the Tiffany and the thrift shop roofs. A more complicated contract will set forth provisions for a third inspection, to be performed at the direction of the first two inspections, and after much discussion, grumbling, and argument, the buyer will receive a credit at closing for an amount somewhere between the two original inspection reports. The buyer then can choose whether he wants to live under a Tiffany or thrift shop roof and can add or subtract from the credit as he sees fit.

The alternative to this is a clause which says that the buyer is buying and the seller is selling the property in "as is" condition. This means that the buyer and seller have agreed that no repairs will be made by the seller, and presumably the price of the property will reflect the condition as observed by the buyer.

An "as is" contract probably does not relieve the seller of the obligation to disclose known defects. Accordingly, if the roof is leaking and the termites chewing, and the seller is aware of it, the seller must speak up. Unfortunately for the buyer, an "as is" contract might save some money at the closing, but the buyer will not know which costs must be paid.

A simple middle ground can be reached. The buyer can agree to acquire the house "as is:' but should retain the right to make whatever inspections the buyer chooses to make immediately after the contract is signed. Title inspections are made within five days of the execution of the contract. The buyer could be given the right to rescind the contract if the inspections are not satisfactory or have the option to move forward and accept the property "as is".

What happens if the estimated cost of repairs exceeds the limitation in the contract? In most cases, the contract provides that if the cost of repairs exceeds the stated limitation, either party shall have the right to pay such excess, and if neither party chooses to pay the excess over the limitation, the contract shall be cancelled, the deposits refunded, and the deal is over. This clause gives the party with the most economic motivation the right to close the transaction at a slightly greater cost.

The role of the real estate broker at the closing table has become one of peace-maker. The loaded gun in the buyer's hand must be put back in its holster. The seller must be made to realize that his castle creaks. How do the agents make peace? By convincing all parties to concentrate on the major items and to avoid the discussions which make tempers flare, cooperation turn to antagonism, and deals fall apart. Cooperate, compromise. . . and close.

Greenspoon Marder Reveals 'Secret Weapon' in Attack on Distressed Real Estate Market - November 2009

November 20, 2009
Fort Lauderdale, FL /PRNewswire/

The law firm of Greenspoon Marder, P.A. is taking an unconventional approach to an unusual real estate market. The firm recently hired a Director of Real Estate Services to capitalize on real estate opportunities developing in the commercial and multi-family markets. Jeffrey H. Cannon, who has three decades of experience in real estate, banking and financial services, will utilize his varied experience and bank contacts to identify, analyze and present opportunities to clients of the firm.

"There's a home for every real estate asset," said Cannon. "We just need to find it. There are many instances where buyer and seller haven't met, or they're just not sure how to put together a lucrative deal. It's our job to come up with a strategic - even out-of-the-box - solution to benefit buyer and seller."

"It's a win-win," added Gerald Greenspoon, co-managing partner of Greenspoon Marder. "We can now offer our clients the knowledge and experience of a law firm deeply rooted in real estate, combined with the expertise of a seasoned real estate and financing professional. It's a powerful team, which is vital to putting together deals in this market."

Cannon, who is not a lawyer, has an extensive, 27-year career in the commercial real estate, financial services and banking industries. He has served as executive vice president of commercial banking at CNL Bank in South Florida and executive vice president for commercial real estate for Regions/Union Planters Bank in the Broward and Palm Beach County markets. Prior to that, Cannon established and managed the residential construction lending department for SouthTrust Bank in South Florida and served as senior vice president responsible for commercial real estate lending for First Union and Barnett banks in Broward, Palm Beach and Lee counties.

"Over the years, Jeff has developed impressive analytical skills in real estate," said Michael Ross, senior partner at Greenspoon Marder. "He'll capitalize on that skill set in identifying valid opportunities in the commercial and multi-family markets and then present them to potential investors."

Cannon holds a bachelor's degree in business administration from Washington University in St. Louis, Mo. and a master's degree in business administration from Florida Atlantic University. He is involved with the Urban Land Institute, International Council of Shopping Centers and the National Association of Industrial and Office Properties. A Boca Raton, Fla. resident, Cannon is actively engaged with the SOS Children's Village in Coconut Creek, Fla. and is a graduate of the Leadership Fort Lauderdale. Established in 1981, Greenspoon Marder, a full-service law firm with offices in Aventura, Boca Raton, Fort Lauderdale, Orlando, Stuart and West Palm Beach. For more information, visit

SOURCE Greenspoon Marder, P.A. Copyright 2009 PR Newswire

Crist Replaces Rothstein With Berger - November 2009

By: Paul Brinkmann
Tuesday, November 24, 2009

Gov. Charlie Crist removed disgraced attorney Scott Rothstein from the state Judicial Nominating Committee, three weeks after allegations surfaced that he used the Rothstein Rosenfeldt Adler law firm as a front for a multimillion-dollar Ponzi scheme.

Crist appointed another South Florida lawyer, William Berger of Greenspoon Marder in Fort Lauderdale, in Rothstein's place.

"I'm thrilled and honored," Berger said Wednesday. "I'm abhorred at what's been going on with the Rothstein law firm. It's an embarrassment. But I'm overwhelmed that the governor thinks I'm someone who can help return us to honorability."

Berger acknowledged that he and the firm contribute to political campaigns, but "I don't look at this as a reward."

In the past, Crist has held off removing people from any public office until they are charged with a felony. But the governor signed an executive order Wednesday, saying that Rothstein's voluntary disbarment agreement with the Florida Bar constitutes malfeasance, because Rothstein admitted his disbarment was in response to allegations he misappropriated funds.

Protecting Your Assets in Trying Times - October 2009

Protecting Your Assets in Trying Times

By Gene Glasser
October 2009

The subprime mortgage crisis, difficult stock market, and the decrease in the value of real estate have caused many individuals and families severe economic problems. The monthly cash flow in carrying real estate properties can erode liquidity and net worth. Fortunately for some, Florida has long been known as a debtor's state. If a family or individual has significant liabilities then certain exclusions unique to Florida law allow those assets to be exempted from execution by judgment creditors. In addition, in the event of a bankruptcy, the Federal bankruptcy laws acknowledge and respect these exemptions.

One major exemption relates to wages of the head of the family. Under Florida Statute 222.11 the earnings of a head of a family are exempt from the claims of creditors. The key to this exemption is to be a head of a family. Therefore, a single individual with no dependents would not qualify. However, if you have dependents or are supporting certain individuals and are classified as a head of a family then all of the wages are exempt. The exemption has no dollar limit. By way of example, an individual can earn employment wages of $200,000.00 a year and have a significant creditor, but the creditor cannot garnish the wages.

The major asset that is exempt from creditors in the State of Florida is Homestead. Under Article X Section 4 of the Constitution, the homestead property is exempt from forced sale. There is no dollar limit on the exemption. The exemption relates to an acreage limitation. A half-acre inside a municipality and 160 acres outside a municipality are exempt from the claims of creditors. Florida homestead law has been well known over the years. Individuals in debt move to the State of Florida to avail themselves of this significant exemption. In the event the homestead is purchased or increases in value within a certain time frame of a bankruptcy, then there are certain complications. However, under state law, there is no such impediment.

Pursuant to Florida Statute 222.13, life insurance is exempt from creditors. Therefore, if an individual owns a significant life insurance policy with cash value, i.e., whole life, variable or universal, then a creditor cannot garnish the life insurance. Also, annuities are exempt from the claims of creditors. Pursuant to recent cases, private annuities come within the protection of the annuity statute. Therefore, if property is sold and the seller takes back a private annuity, then those payments may also be exempted from creditors. On the other hand, if a sale is made and the debtor takes back a promissory note, there is no such exemption.

Interests in pension plans, profit sharing plans, 401(k)'s and IRA's and other Federally exempted retirement plans are exempt from the claims of creditors. Certain plans enjoy the exemption both under the laws of the State of Florida as well as the Federal law. For example, a 401(k) plan is exempted under Florida Statute 222.21 and also under the ERISA laws because a qualified plan requires a spendthrift provision.

In addition to the foregoing exemptions, in the event a husband and wife, when one of the parties has a liability, the assets owned by the spouse may not be subject to the claims of the debtor's spouse. By way of example, if the wife is driving an automobile that she owns and is in an accident, and a judgment is suffered against the wife, then the husband's assets would not be subject to the claims of the wife's creditors.

In these economic times there exists significant liabilities. Individuals will be prudent to consider asset protection. There are always uncertainties in life. Any protection which can be afforded should be utilized to protect the individual or family unit.

Gene K. Glasser is a managing shareholder at Greenspoon Marder, where he focuses his practice in the areas of tax, trusts and estates. Mr. Glasser is Board Certified by the Florida Bar in the areas of tax law and estate planning and administration. 954-491-1120 or

Are You Helping or Hurting Your Beneficiaries? - October 2009

Are You Helping or Hurting Your Beneficiaries?

By Alan B. Cohn, Esq.

Most people make IRA and qualified retirement plan beneficiary designations without giving nearly as much thought as they should to the tax and economic consequences of their designation.  This is especially surprising when one considers that for many people, an IRA or qualified retirement plan is the biggest single source of liquidity (with the possible exception of life insurance proceeds) their estate will have.

The beneficiary designation has important economic consequences.  For example, if an individual has been careful to establish a trust for his or her spouse or children, not just to minimize estate taxes, but in order to enable a trustee to supervise investments and distribution of the funds of the estate, it makes little sense for the individual to name the spouse as outright beneficiary of IRA and retirement plan distributions with children as outright alternate beneficiaries. Instead, the trust should probably be designated beneficiary to be consistent with the estate plan.

The income tax consequences of the beneficiary designation can be significant because qualified retirement plan and IRA funds accumulate tax-free until distribution, but are then taxed fully on distribution (assuming no rollover) depending on factors such as the amount in the IRA and the beneficiary's other income. It may be important that funds be distributed in installments over the beneficiary's lifetime in order to stretch out for years the time over which income taxes will need to be paid, and perhaps to lower the rate at which they will be taxed.

If the beneficiary is an individual, lifetime installment distributions can normally be accomplished through an IRA, but retirement plans may not offer as much flexibility.  At one time, distributions (other than certain distributions to surviving spouses) could not be rolled over after a participant's death from a retirement plan to an IRA, limiting a beneficiary's flexibility as to distributions.  The law now permits beneficiaries -- even non-spouse beneficiaries -- of a deceased participant to rollover funds in a qualified plan to an IRA.  Once in the IRA, the funds can be distributed over the beneficiary's lifetime, prolonging for many years the payment of income taxes.  However, the beneficiary designation must meet certain requirements for the beneficiary to be able to make such a rollover.

Both retirement plan funds and IRA funds are includible in the decedent's estate, even though they are not distributed at the time of the decedent's death.  This means, for example, that in a taxable estate in which the marital deduction is not available (i.e. on the first spouse's death, retirement plan funds were rolled to an IRA, much of which remains undistributed at the death of the surviving spouse), there will be an approximately 45% estate tax.  If the estate distributes funds from the IRA to pay the estate taxes, the distribution will be subject to income taxes.  Suppose, for example, the decedent dies with a $2 million IRA.  The estate taxes, if no marital deduction is available, would be approximately $900,000.  If the estate taxes are paid from the IRA, approximately $1.4 million will need to be paid from the IRA, because there will be approximately $500,000 of income taxes in addition to the estate taxes.  Instead, if other proceeds, such as life insurance, could be used to pay the estate taxes, the beneficiaries of the decedent would be able to allow a $2 million IRA fund to continue to accumulate monies income tax free with only the distributions being taxed.

With a larger estate, there is rarely a perfect solution to these issues.  Therefore, it is important to discuss beneficiary designation and tax planning alternatives with a qualified estate planning attorney.

Alan B. Cohn, Esq. is a shareholder at Greenspoon Marder, where he concentrates his practice in the areas of Tax; Estate Planning & Probate; Guardianship; and Business & Corporate law. Mr. Cohn is Board Certified by the Florida Bar in the areas of Wills, Trusts & Estates. He can be reached at or 954-491-1120.

Commercial Market May Fare Better Than Residential - October 2009

By David Weisman
Board Certified Real Estate Lawyer
October 2009

The storefronts of almost every community are lined with signs advertising space for rent. Construction projects sit partially completed with either weeds or tall grass dotting the landscape. Signs advertising new buildings sit fading in the sun. The commercial real estate market is not in good shape.

The question is often asked if the commercial market will be as badly affected as the residential market, with as great a number of mortgage foreclosures, abandoned properties and general problems. While it is no secret that there are problems with the commercial market, it is unlikely that those problems will devolve to the degree of the residential market for several reasons.

First, commercial lending has been slightly saner during the time of rising prices. With the residential market, the biggest problem was that property owners were buying at top prices or were refinancing at top values based upon appraisals that were available to the residential lenders. The lenders relied upon what appeared to be sound valuations, but the market corrected itself and the values fell. Conversely, commercial appraisals are more conservative, more complex and take into account a variety of factors, such as the income generated by the property and the potential cost to reconstruct the property. Therefore, it was less likely that commercial loans based upon overvalued property would flood the market.

Secondly, commercial lenders tend to have a more direct relationship with their customers and typically are willing to work with customers at the early signs of trouble. In many cases, commercial lenders are entering into modification agreements extending the maturity of loans, particularly loans extended for the acquisition and development of new projects. These lenders recognize that the projects were not started or have not been completed with the diligence contemplated by the initial loan documents, because the developer was wise enough not to bring the product to market during this difficult time.

Finally, commercial lenders do not want to own the commercial properties. Because most commercial property owners will not abandon the property when there is difficulty, the lender has an opportunity to allow the owner additional time to rebuild his or her business or to market the property for sale, while allowing the owner to manage the assets. This way, the lender is not forced to employ personnel to maintain and manage the real estate while it is being marketed for sale.

Much has been written lately about looming maturities and the inability of projects to be refinanced. The attitude of most lenders who are willing to extend maturities should soften this perceived crisis.

Probably the most at risk segment of the commercial lending market is related to the residential crisis. This segment consists of those lenders who were aggressively lending to homebuilders, condominium developers and condominium converters. These loans were structured to be short-term while the property was acquired, built or fixed up and re-sold at a rapid rate. Very often, these loans are designed to be repaid within 18-24 months. The inability of the developer to sell the units results in the inability to pay the loan.

With the exception of these distressed properties, it does not appear that prices have been slashed to record lows or that sellers are accepting the first offer that comes along. There are still buyers with cash who are hunting for bargains, but it does not appear that the normal commercial properties are being sold at bargain basement prices.

As credit loosens up and money is more available for commercial lending, activity will pick up, property will change hands and dormant projects will awaken. With everyone having been burned a little bit, it is likely that everyone in every segment of the market will tread lightly.

A native Floridian, David Weisman has been board certified in real estate law since 1987 and is peer-rated "AV" (the highest rating available) by Martindale-Hubbell. Mr. Weisman's broad-based real estate practice includes commercial leases, commercial acquisition, financing closings, real estate development, tax-deferred exchanges, landlord/tenant disputes and zoning and title issues. Contact Mr. Weisman at 954-491-1120 or

Polo Horses Die: Polo Association to Consider a Prohibited Substance Policy - April 2009

By: Missy Diaz and Maria Herrera
April 25, 2009

WELLINGTON, The U.S. Polo Association Board of Governors met Saturday in Palm Beach County and set up a committee to examine what safeguards exist for polo horses and whether the sport needs a prohibited substance policy. The committee will review the results of the investigation into the death of 21 polo horses and develop policies to ensure the safety of polo horses, a press release said.

Executive Director Peter Rizzo said in the release that the committee will also examine policies from other equestrian organizations. "The USPA has a tradition of promoting equine safety," Rizzo said.

The USPA has a committee called the Equine Welfare Committee, but it does not have any rules about care for horses outside of actual matches. Equine legal expert Don Dufresne said the USPA is being proactive in addressing the need for such a policy. "They are recognizing that the safety of the horse is of utmost concern," he said. He said it would probably take a great deal of time and thought for the association to formulate a policy that works for polo horses.

Quoting anonymous sources, La Nacion, newspaper of Argentina, reported Friday that the 21 Lechuza Caracas team horses scheduled to play in Sunday's polo match were injected with a lethal dose – 10 times the intended amount – of selenium, a trace mineral that is poisonous to horses in high doses. The newspaper reported that 0.5 mg/ml was prescribed but the compound actually contained 5 mg/ml. Selenium is essential to good health but required only in small amounts, according to the National Institutes of Health. It is found in soil, some meats and seafood.

Franck's Pharmacy, in Ocala, has acknowledged "that a strength of an ingredient in the medication was incorrect" but would not provide any additional information. The Florida Department of Agriculture and Consumer Services, the University of Florida's College of Veterinary Medicine and the Federal Drug Administration's Center for Veterinary Medicine declined comment Friday, citing the pending investigation.

Officials investigating the deaths said Thursday that they believed they have identified the chemical that caused the deaths but would not publicly identify it Friday, again citing the continuing investigation. It's unclear at this point how the error occurred. The identity of the prescribing veterinarian has not been confirmed and the prescription has not been made public.

In a written statement Thursday, the Lechuza team said a Florida-licensed veterinarian wrote a prescription for a compounded substitute vitamin supplement containing vitamin B, potassium, magnesium and selenium: "Only the horses treated with the compound became sick and died within 3 hours of treatment. The horses that were not treated remain healthy and normal."

The pharmacy's statement said that "on an order from a veterinarian, Franck's Pharmacy prepared medication that was used to treat the 21 horses."

But some suggested Friday the tragedy could have been averted if the injectable vitamin compound had been sent to a third party lab before dispensing it. The compound was a substitute for Biodyl, the team said, a vitamin-mineral mix that isn't approved for use in the United States.

Jim Nahill, a Woburn, Mass., compound pharmacist, said compounders are supposed to make one product for one patient under one order. If a mixture is intended for use in more than one patient, it should be sent to a third-party lab to test "for potency, purity and sterility," Nahill said.

There could be any number of scenarios, according to L.D. King, executive director of the International Academy of Compounding Pharmacists, a professional trade association. "If the formula was written incorrectly, is read or entered into a computer incorrectly or you put the decimal point in the wrong place," he said. "If the medication was sent to a lab they would probably find that error."

The standard of practice, according to the United States Pharmacopeia, a nonprofit that sets standards for prescription and over–the–counter medicines, is that a batch of more than 25 identical units requiring sterile preparation is required to be tested, King said.

The state Department of Health, which regulates pharmacists and pharmacies, has strict rules prohibiting bundling prescriptions, spokeswoman Eulinda Smith said. The department also requires that compounds for individual patients be mixed separately and not in a batch, she said. "The rule for a pharmacy is there's one prescription per patient," she said.

The Department of Health is investigating the pharmacy, which has no prior violations, she said. Paul Wayne Franck, one of the pharmacists, was disciplined for minor violations in 1992. Nahill, the Massachusetts pharmacist, said that while sending compounds to a third-party lab can be expensive, it's due diligence.

"My business is less than $2 million a year and we're validating so there's no reason these large places aren't validating," he said.

Loyd Allen, an expert on drug compounding, said compounding or mixing ingredients is very safe, averaging 2.7 human deaths per year. Nahill said veterinarians should require pharmacists have compounds verified by an independent lab.

Wellington vet Scott Swerdlin, who treated some of the Lechuza Caracas horses, questioned how that might have saved animals if a prescription was written in error.

"[The lab] just validates that the script matches the compound," he said. "I don't know that that would have resolved the problem."

Staff Writer Alexia Campbell and Staff Researchers Gilbert Medina and Gail Bulfin contributed to this report. Missy Diaz can be reached at or 561-228-5505. Copyright © 2009, South Florida Sun-Sentinel

Renter's Market: How To Be A Landlord In A Foreclosure-Infested Building - April 2009

By: Erik Bojnansky, Special Correspondent
April 10, 2009

So, you bought a Downtown Miami condo unit at the height of the market. You still hope to make some of your money back, or hang on until conditions turn around. Unfortunately, most of the units in your building have been foreclosed on. What should you do? First, make sure you have enough finances to hold on.

Lucia Dougherty, a Brickell-based shareholder in the law firm Greenberg Traurig, said: "It is such a renter's market. You are going to have to eat a couple of months." If you can't afford additional expenses, "short selling" your condominium at a financial loss may be the best option, she said. Even in the best of circumstances, you will be expected to pay maintenance fees and taxes on your condominium. And, unfortunately, the rent you will be able to charge will hardly cover those expenses.

In buildings where many unit owners have been foreclosed on, or where owners are unable, or unwilling to pay, those fees will either climb higher or the services and amenities that once came with the building will be no longer existent. For example, in one building, where as many as 60 percent of unit owners are delinquent in paying fees, the cable was shut off, Dougherty said.

"Condo boards have to try and pay certain bills. If there are only [a few] people able to pay that, for each of those people the [maintenance goes up]," said Thomas F. Coyle of the Fort Lauderdale-based law firm, Greenspoon Marder.

And if amenities once offered at a building are suddenly canceled, a unit owner can be held accountable by a tenant. The state gives seven days to address any complaints by a tenant, otherwise the renter can walk away from a lease or "avail themselves of certain types" of remedies.

However, if you are lucky enough to own a unit in a building where the developer still owns half the units, you may be able to catch a break. "If you have a condition where the developer is there, with 50 percent of the units, he is still going to have to pay the maintenance for units not sold," Dougherty said.

Second, get a lawyer to draft a lease.

Landlords must be aware of their rights, their obligations to the tenant and the conditions of their building, Coyle said. If you don't think certain amenities will be offered any longer, state that you can't guarantee it in writing. (To find out, consult the condominium's property manager--if there is one.) If possible, seek a one year lease with a deposit.

"From an owner's perspective, an owner will want to have a lease that will help carry the property," Coyle said. "From an owner's perspective, a long term lease is better than a short term lease."

"The owner is trying to get as much money as they can, up front," said Dariel Abrahamy, also of Greenspoon Marder.

Finally, be prepared to prove that you do, in fact, own unit. The condo crash has attracted a lot of unsavory individuals who have even broken into condominiums and rent own units they don't own. Then there are those who rent out units that are being foreclosed on by mortgage holders. "Lots of times renters are in there and they get evicted," Dougherty said. "Yeah, it happens quite a bit." For that reason, prospective renters have no choice but to be careful when seeking a Downtown domicile.

Jack McCabe of McCabe Research and Consulting LLC, said renters have to seek "any kind of guarantee" of ownership from a landlord and independently find out if the address is being foreclosed on. "There are a number of different scams. You have to do your homework."

With that in mind, unit owners will have to swallow their pride and be prepared to offer proof to a tenant. Besides a voucher from the property manager (if, again, there is one), have a copy of your deed handy.

"There is no better proof than the deed," Coyle said.

Erik Bojnansky is a special correspondent for He is freelance journalist and former Editor of the Miami SunPost.

Greenspoon Marder, One-Stop Shop for Legal Matters - March 2009

By: Lynn Carroll
March 11, 2009

Whether you're looking for corporate representation or advice on personal legal matters, Greenspoon Marder is a one-stop shop for busy professionals.

"We're a full service business law firm that is dedicated to providing superior client service," said Joseph S. Geller, a litigator who also concentrates his practice on government relations and government law. Although the firm's practice is primarily in the areas of real estate; commercial litigation; corporate law; administrative law; tax, trusts and estate planning; personal injury and medical malpractice; and timeshare law, he said, "we're also ready to help when our clients require assistance with asset protection, financial planning or family law. We're here to help with all of their legal concerns."

Personalized service has been a hallmark of Greenspoon Marder since it first opened its doors in 1981. It's become known as a full-service practice where hands-on, people-oriented service is paired with an extensive professional expertise. With offices across the state, in Aventura, Boca Raton, Ft. Lauderdale, Orlando, Stuart and West Palm Beach, the firm offers its service throughout the nation and the world. "The founding members of the firm are still active and are very hands-on," Geller said. "It makes you feel good about being part of this organization."

Geller, who joined Greenspoon Marder together with his brother Steve after 25 years in practice together, said the opportunity to work in the firm's Aventura office was very attractive to him.

"Aventura is underserved in terms of quality law firms, considering the amount of business and business growth here," he said. I'm on the lookout to find more ways to integrate us into this community."

The Aventura offices of Greenspoon Marder are located at 18851 NE 29th Ave., Suite 406. For more information, call 305-940-8440 or visit

Law & Accounting - Working Together - March 2009
Beware of potential for tax increases - March 2009
All Gaming All the Word Casino Journal

Beware of potential for tax increases

by Steve Geller
March 1, 2009

Steve GellerGaming industry officials must work vigilantly to show legislators why raising rates is a bad idea

States throughout the country are experiencing unprecedented economic hard times. The terrible economy is decreasing revenues to governments; at the same time the demand for services is rising. At last count, 43 states had budget deficits. Unlike the federal government, states are generally not permitted to run deficits. States will try to trim the deficit by spending reserves, issuing bonds, delaying maintenance, etc. The remainder of the deficits must be closed by a combination of tax increases and spending cuts.

The voters in every state are convinced that they're paying too much in taxes, and politicians are reluctant to raise taxes or cut spending on popular programs. Politicians will look for easy answers when possible. One solution sure to arise in most states is to raise "sin taxes," or the taxes on alcohol, tobacco and gambling.

Although increasing tax rates on gambling may seem to be an easy way of raising money, it can be counterproductive. I will paraphrase Eugene Christiansen of Christiansen Capital Advisors: "A state can make money on slot machines at many different tax rates. The tax rate will determine the product. At 7 percent, you get the Wynn or the Bellagio. At 35 percent, you get very nice convention hotels. At 70 percent, you get slots at convenience stores."

Lower tax rates create more jobs and more investment in a community. The three major states with the lowest tax rates are Nevada, New Jersey, and Mississippi. They are also the three states with the highest number of commercial casino jobs in the country.

It is striking that Pennsylvania and New Jersey generate almost the exact same amount of taxes for their states, $472.8 million and $474.7 million, respectively. However, Pennsylvania, with an effective tax rate of 54 percent, generated 4,877 jobs, while New Jersey, with a tax rate of up to 10.5 percent, generated 41,672 jobs.

The correlations between tax rates and direct investment are also clear. According to raw data acquired from Christiansen, $25.6 billion dollars in direct investment was recently committed to non-tribal facilities in 10 states with gambling. Of this, more than $18 billion, or more than 70 percent, was in the three low tax states.

There is also a mistaken belief that gambling is so lucrative that the state can impose any tax rate, and raise more revenue each time they do so. By this standard, if the states raise the tax rates to 105 percent of adjusted gross income, they'd be rolling in money. In reality, the real tax revenue would be $0.

Most people are familiar with the experience of racinos in New York. They appear to have been a failure, despite the large population in the area. Even after being reduced, the tax rate remains the highest in the nation. Although there are VLT\s at eight locations, most of the revenue comes from one racetrack (Yonkers), and the number of jobs created and the amount of money invested have been quite small.

Florida is another example of a state with a high tax rate and low return. The independent Florida Office of Economic and Demographic Research suggested that the tax rate that would generate the most total economic benefit to Florida, including job creation, construction, and other investments, was 35 percent. Instead, after adding the 50 percent state tax rate, the $2 million charge per facility per year, local taxes and purses, the effective tax rate is approximately 62 to 65 percent. At that rate, only three of the seven licensed pari-mutuels have opened, and each is losing money.

Neither Florida nor New York is generating the revenue from racinos that their supporters predicted. I believe that both New York and Florida would generate more total tax dollars with a lower tax rate.

When states raise gambling taxes too high, other states or Indian tribes with lower tax rates can offer better facilities and spend more money on marketing, including giveaways. This results in a decrease, not an increase, in total state revenue for the states with high gambling taxes.

A final example is the lottery. It has been clearly shown that lottery ticket sales increase during rollovers, when the prize pool gets larger. Some politicians believe that states can reduce the percentage of payouts, take the unclaimed prize money and cut advertising budgets without adversely affecting the amount of total dollars generated for the state. Repeated meetings of the Committee on Lotteries of NCLGS have shown those beliefs to be in error.

Most Legislatures began their sessions between January and March of 2009, and will complete their work between May and July. It is important for representatives of all parts of the gaming industry to communicate early and often with their elected officials, and make sure that the elected officials understand that increasing tax rates can have negative effects on tax revenue, jobs and investment in their states.

All data herein was derived from the AGA Web site or from Christiansen Capital Advisors LLC.

American Recovery and Reinvestment Act of 2009 and the Impact on Public Finance - February 2009

American Recovery and Reinvestment Act of 2009 (Stimulus Bill) and the Impact on Public Finance

February 27, 2009
Denise J. Ganz, Esq.

Various provisions of the American Recovery and Reinvestment Act of 2009, signed into law by President Obama on February 17, 2009, impact tax-exempt bonds. These provisions may benefit local governments and financial institutions in a variety of ways. If you are an issuer of tax-exempt bonds or a financial institution involved in tax-exempt bond finance, the following provisions of the Act will be of interest to you:

• The ceiling for being able to issue “bank qualified bonds” is increased in 2009 and 2010 from $10 million to $30 million.

• 501(c) 3 and governmental conduit borrowers in 2009 and 2010 are treated as direct issuers for purposes of the bank qualification requirements and thus have separate $30 million limits.

• Tax-exempt bonds issued by a local government or for the benefit of a 501(c)(3) that were not bank qualified may be refinanced under certain circumstances so that the refunding bonds receive bank qualified treatment.

• The calculation of interest expense of financial institutions that is subject to disallowance will exclude tax-exempt obligations issued in 2009 and 2010 up to an amount equal to 25% of adjusted basis of the institution’s assets.

• Interest on new money bonds issued in 2009 and 2010 is no longer treated as a preference item for purposes of the alternative minimum tax and also is not included in the current earnings adjustment under the corporate AMT.

• Tax-exempt obligations issued on or after January 1, 2004 that are subject to the tax preference or adjusted current earnings of the alternative minimum tax may be refinanced under certain circumstances so that the refinanced debt is no longer subject to AMT.

• The definition of “manufacturing facilities” for purposes of the qualified small issue bond provisions is expanded to include facilities used in the production of intangible property for purposes of bonds issued in 2009 or 2010. Intangible property includes patents, copyrights, designs, know-how and other similar items. It is intended to include, among other items, the creation of computer software and intellectual property associate with bio-tech and pharmaceuticals.

• The scope of a “manufacturing facility” is amended with respect to bonds issued in 2009 or 2010 to replace the 25 percent allowance for directly related and ancillary property with an unlimited allowance for functionally related and subordinate property.

• A new category of tax credit bonds is created in 2009 and 2010 to finance the construction, rehabilitation and repair of public schools or for the acquisition of land for public schools.

• Issuers have the option of issuing taxable “Build America Bonds” prior to January 1, 2011. These bonds, which would otherwise qualify as tax-exempt, provide a taxable tax credit to the holder equal to 35% of the interest on the bonds or, at the election of the issuer, provide for direct payments from the Federal government to the issuer in lieu of the credit to bondholders. Private activity bonds are not eligible.

• A new category of taxable Build America Bonds, called Recovery Zone Economic Development Bonds, is created with authority for $10 billion of issuance in 2009 and 2010 to finance economic-development purposes in certain designated recovery zones. These bonds provide for a payment to the issuer of 45% of the interest paid.

• A new category of tax-exempt exempt facility bonds, called “Recovery Zone Facility Bonds,” is created with authority for $15 billion of issuance to finance depreciable property to be used in a recovery zone in the active conduct of a trade or business, subject to certain exclusions.

• Tax credit programs are extended or increased for Clean Energy Renewable Bonds, Energy Conservation Bonds, and Qualified Zone Academy Bonds.

The Act provides new and expanded investment opportunities for tax-exempt and tax credit bonds issued in 2009 and 2010. Attorneys in the Public Finance Practice Group are available to assist in maximizing the benefits provided by the Act for public finance matters.

Tax-Exempt Entities and New Post-Issuance Bond Reporting - Are You Prepared To Comply? - February 2009

Tax-Exempt Entities and New Post-Issuance Bond Reporting - Are You Prepared To Comply?

February 27, 2009
Denise J. Ganz, Esq.

The Internal Revenue Service has a new, expanded Form 990 which will significantly increase the information required to be filed by organizations described in Section 501 of the Internal Revenue Code of 1986, as amended. In addition to requiring additional general information relating to a tax-exempt entity, the new Form 990 requires substantial disclosure in regard to tax-exempt bonds issued for the benefit of the entity. Although only basic information on bond issues is required for tax year 2008, beginning with tax year 2009 extensive information on the use and investment of proceeds and the organization's procedures for compliance with tax restrictions will need to be reported on Schedule K. In addition, Schedule K to the new Form 990 requires reporting organizations to disclose whether they have sought the advice of independent counsel regarding the appropriate use of bond proceeds and bond-financed facilities.

If you are a tax-exempt organization with outstanding tax-exempt bonds, you should consider the following:

• Whether you may be exempt from the new Form 990 reporting requirements

• Whether you have appropriate policies and procedures in place to track the use and investment of bond proceeds in compliance with Schedule K

• Whether you have the appropriate policies and procedures in place to track the use of bond-financed facilities in compliance with Schedule K

• The phase-in reporting requirements of Form 990 Attorneys in the Public Finance Practice Group are prepared to work closely with tax exempt organizations to assist in completing Schedule K, including the development of guidelines and procedural manuals to permit effective responses to Schedule K and the conduct of internal audits to assure compliance with Schedule K requirements on an on-going basis.

Denise Ganz is a Greenspoon Marder shareholder. If you have any questions regarding the information contained in this article or any other legal matter, please contact Ms. Ganz, your Greenspoon Marder attorney or any member of our Public Finance Practice Group.

A Tsunami of CDD Defaults - What To Do? - February 2009

A Tsunami of CDD Defaults - What To Do?

February 27, 2009
Denise J. Ganz, Esq.

Community development districts are formed under Florida law to finance, manage and maintain basic infrastructure and services for community development. CDDs finance infrastructure improvements by issuing bonds payable from non-ad valorem special assessments levied on property benefitted by the improvements. Most long-established and built-out community development districts are not experiencing financial difficulties. However, as a result of the downturn in the real estate market, it is expected that a sizeable number of newer undeveloped or partially developed community development districts will default in payment of their bonds this year due to the failure of landowners to pay special assessments levied on their property.

If you are a financial institution holding a mortgage on property in a Florida community development district or a bank, bond fund or other institution owning CDD bonds, then you should be prepared to think about the following:

• Whether the CDD collects the special assessments securing its bonds directly or through the County Tax Collector, under the Uniform Method

• Why the method of special assessment collection matters

• How the CDD is collecting its operation and maintenance assessments and how O&M assessment liens can be enforced

• When special assessments can be accelerated

• The pros and cons of triggering foreclosure proceedings - should it be automatic?

• Whether foreclosure proceedings can commence immediately or only after a one-year waiting period

• Whether to purchase tax sale certificates or tax deeds on distressed properties

• The legal limits on CDD debt restructuring

• How landowner bankruptcy can impact remedies relating to assessments

• How entitlements can be maintained

• What to consider when purchasing CDD bonds after a default

Attorneys in the Public Finance Practice Group have participated in over 135 community development district bond financings since 1992. We are prepared to assist in navigating the complex issues arising from the upcoming expected wave of CDD defaults.

Denise Ganz is a Greenspoon Marder shareholder. If you have any questions regarding the information contained in this article or any other legal matter, please contact Ms. Ganz, your Greenspoon Marder attorney or any member of our Public Finance Practice Group.

Homeowners Are Eligible for Tax Relief on Gains from Short Sales - January 2009

By: Oscar Pedro Musibay
January 09, 2009

Property owners executing short sales on their homes may be hit with a tax bill on the difference between the loan amount and the sale price, tax experts warn.

But, a law passed in 2007 exempts some property owners for up to $2 million of gain, accountants and attorneys say.

Alan Lips, a partner with the accounting firm of Gerson Preston Robinson & Co., said the tax nuances on short sales are a major issue for staff and clients. He's received several calls from people seeking advice on tax law and how it relates to short sales.

A provision in the tax law classifies the loss to the bank as a gain to the loan holder.

"With a short sale, they think they are getting a bargain," explained Michael Ross, a senior partner at the Greenspoon Marder law firm in Fort Lauderdale. "Debt forgiveness can sometimes be considered income, which is taxable. Everyone has heard the story: Mom and pop sell a property on a short sale. Then they get a tax bill from Uncle Sam, and they don't have money to pay it."

The federal government has provided some help, said Howard Lucas, managing partner of Coral Gables-based accounting firm Goldstein Schechter Koch.

The Mortgage Forgiveness Debt Relief Act of 2007 allows the property owner to exclude from taxation up to $2 million in debt dispensation on a principal residence. The act says the debt must have been used for buying, constructing or improving the house. The exemption started in 2007 and was slated to end in 2009, but was extended until 2012. It can apply to everything from a mortgage to an equity line.

Homeowners were able to take advantage of insolvency rules to avoid the tax prior to the 2007 act. And those with debt relief that is greater than $2 million can take advantage of insolvency rules to avoid the tax today, but the exemption is harder to prove, said Saul Silverman, a partner at Goldstein Schechter Koch.

Short sales have been one of several possible outs for property owners who can't afford their mortgages and want to avoid foreclosure. Another option for homeowners is a deed in lieu of foreclosure, in which property owners sign the property over to the bank. Lastly, property owners can work with the bank to modify the terms of their loans, which may include lowering the interest rate and extending the life of the loans.

Market challenges Property owners who opted for short sales have already been dealing with market challenges, which made them nearly impossible last year.

Long before the financial market meltdown, the real estate downturn had driven down pricing on all property, making it increasingly difficult for property owners to satisfy mortgages through a sale. Buyers with short sale offers were put off by the slow response of lenders, which were – and continue to be – overwhelmed by foreclosure activity, said Cara Mantovani, managing broker at Boca Raton-based Kenco Realty Group.

In 2008, Mantovani had about 25 short sale contracts, a handful of which closed. Lenders were taking eight months to review a short sale bid. She currently has three short sale contracts set to close in 30 days. All are cash deals.

Banks have become more efficient in the last few months, improving the turnaround time on bid reviews to four to six months. But, comparables – sales used to help determine a property's market value – continue to slow the process by coming in higher than the market will bear and falsely skewing lenders' expectations, she said.

"Some properties are down 50 percent from what the owner paid," Mantovani said. "We are seeing that in Miami, Boca Raton, Palm Beach Gardens."

Attorney Steve Daniels, a partner in Arnstein Lehr's West Palm Beach office, warned of another wrinkle in the short sale process. He said the bank can go after the seller for the shortage on the mortgage – a reality a seller must negotiate with the lender before a sale is completed.

"The bank gives you a satisfaction of mortgage so you can sell, but, technically, the seller owes the money to the bank," he said. "This is part of the negotiation." | (954) 949-7567

Downsizing Not in Greenspoon Marder's Plan - December 2008

By: Julie Kay
December 30, 2008

Co-managing partner Gerald Greenspoon said his firm has been able to adapt to changing times.

While other law firms are downsizing, one Florida boutique firm is actually growing.

Fort Lauderdale-based Greenspoon Marder recently opened its sixth office in Stuart and added four attorneys. And it's looking to expand further.

The 72-lawyer firm opened the new office to accommodate two new lawyers who joined the firm and have practices in Stuart, co-managing partner Gerald Greenspoon said. The former Adorno & Yoss attorneys are Chad Paiva, who heads the consumer and bankruptcy practice, and Marc Cohen, who leads the collections practice.

In addition, the firm added family law specialists Mark Rabinowitz and Elizabeth Tener to the Orlando office. Rabinowitz was formerly at Carlton Fields and Tener at the Law Firm of Charles B. Jamieson.

How is Greenspoon Marder able to expand in this economy?

"We still have a good core fundamental business," Greenspoon said. "We've always run our practice as a business and looked to adapt to changing times."

The firm anticipated the devastating drop in real estate and corporate business that hit Florida ahead of the rest of the nation and began preparing more than two years ago.

Looking to diversify, the firm began representing lenders in residential foreclosures and beefed up its personal injury plaintiff practice, which is "immune to a downturn in the economy," Greenspoon said.

Additionally, real estate and corporate lawyers were switched to other areas, such as bankruptcy workout and litigation. The firm will continue to look for opportunities to add attorneys, although it won't necessarily open any additional offices, Greenspoon said.

Joe Ankus, a longtime legal headhunter with Ankus Consulting of Weston, said the move makes sense for the firm. "Moving into the Stuart market for Greenspoon is an excellent idea and reflects a hopefully growing trend of larger and statewide firms moving into towns traditionally dominated by small, extremely local players," he said.

"Stuart is an affluent market that has been largely controlled by small, provincial firms in the past."

Established in 1981, Greenspoon Marder has offices in Fort Lauderdale, Orlando, West Palm Beach, Aventura, Boca Raton and Stuart.

Julie Kay reports for the National Law Journal, an Incisive Media affiliate of the Daily Business Review.

Florida Boutique Goes Against the Economic Grain - With a Growth Strategy - December 2008

By: Julie Kay / Staff Reporter
December 18, 2008

MIAMI — While other law firms are downsizing, one Florida boutique firm is actually growing.

Fort Lauderdale-based Greenspoon Marder recently opened a new office —its sixth — in Stuart, Fla., and added four attorneys. And it's looking to expand further. The 72-lawyer firm added the new office to accommodate two new lawyers who joined the firm and have practices in Stuart, said co-managing partner Gerald Greenspoon.

In addition to those lawyers — Chad Paiva, who heads up the consumer and bankruptcy practice, and Marc Cohen, who leads the collections practice — the firm recently added family law specialists Mark Rabinowitz and Elizabeth Tener. Rabinowitz and Tener will practice in the firm's Orlando, Fla., office. Paiva was formerly at Carlton Fields; Tener, at The Law Firm of Charles B. Jamieson; Paiva and Cohen, at Adorno & Yoss.

How is Greenspoon Marder able to expand in this economy?

"We still have a good core fundamental business," said Greenspoon. "We've always run our practice as a business and looked to adapt to changing times."

The firm anticipated the devastating drop in real estate and corporate business that hit Florida and elsewhere and began preparing more than two years ago. Looking to diversify, the firm began representing lenders in residential foreclosures and beefed up its personal injury plaintiff practice, which is "immune to a downturn in the economy," said Greenspoon.

Additionally, lawyers practicing in real estate and corporate were switched to other areas, such as bankruptcy workout and litigation. The firm will continue to look for opportunities to grow and add more attorneys, although it won't necessarily open any additional offices, Greenspoon said.

Joe Ankus, a longtime legal headhunter with Ankus Consulting of Weston, Fla., said the move makes sense for the firm. "I think moving into the Stuart market for Greenspoon is an excellent idea and reflects a hopefully growing trend of larger and statewide firms moving into towns traditionally dominated by small extremely local players. Stuart is an affluent market that has been largely controlled by small, provincial firms in the past."

Established in 1981, Greenspoon Marder has offices in Fort Lauderdale, Orlando, West Palm Beach, Aventura, Boca Raton and Stuart.

Why LLCs are the Entity Du Jour for Small Business Owners - Summer, 2005

Why LLCs are the Entity Du Jour for Small Business Owners

Summer 2005
By Michael Krul, Esq. and Stefan Rubin, Esq.

You or someone you know has probably formed a limited liability company (LLC) for some purpose. In fact, the number of LLCs created in Florida has increased every year over the last decade-from 1,391 in 1995, to 19,186 in 2000 and 100,070 in 2004.

By comparison, just over 170,000 for-profit corporations were formed in Florida in 2004. A major reason why LLCs have become so popular in recent years is the flexibility they allow their owners.

An LLC can provide the personal liability protections of a corporation and can enjoy the tax advantages of a partnership, all without being subject to various IRS restrictions imposed on S corporations. Although Florida has a Limited Liability Company Act setting forth default statutes applicable to LLCs, most LLC owners enter into a written operating agreement governing the LLC which may vary substantially from statutory defaults. In the operating agreement, an LLC can be structured to be managed more like a general partnership where each owner has an equal vote in day-to-day operations, or it can be structured more like a corporation where the owners merely elect one or more managers, and the managers can either run the business or provide only broad governance and appoint officers to run day-to-day operations. Because all of these provisions can be set forth in an operating agreement at any time after the LLC is formed, the LLC owners need not make these decisions when they form the entity.

Many factors come into play when deciding what choice of entity to use for a new business, such as how the owners want to structure the entity's management, distributions of cash, allocations of income and loss for tax purposes, and restrictions on transfers of ownership interests. Regardless, in almost all circumstances it is advisable to use an entity which limits the liability of the individual owners. This article does not attempt to replace the advice of a business lawyer or accountant as to any particular situation, but is intended merely to discuss certain general advantages and disadvantages of the various business entity forms in Florida.

Limited Liability of Owners

Almost any form of business entity used in Florida can be structured to limit the owners' personal liability for company debts to the amount the owners actually invest in the company. By law, owners of Florida corporations and LLCs enjoy limited liability, as do limited partners of a limited partnership. Since 1999, Florida general partnerships and limited partnerships can also limit the liability of their general partners by filing a simple Statement of Qualification with the Florida Division of Corporations and paying a nominal filing fee. Therefore, limiting the liability of owners should almost always be done, and should not be a determining factor in selecting a form of business entity.

Income, Employment and Intangible Taxes

Florida LLCs may have as few as one owner, whereas partnerships by law require at least two owners. For federal income tax purposes, an LLC with only one owner is disregarded as a tax reporting entity, and its profit or loss flows directly to its sole owner's tax return. The LLC need not even file an informational return with the IRS. It is in essence treated as a sole proprietorship, for tax purposes, yet because the LLC is not a sole proprietorship, its owner enjoys limited liability whereas a sole proprietor does not. If your business is best structured by having a holding company with numerous wholly owned subsidiaries, then having each subsidiary be a single-member LLC owned by one holding company LLC results in each single-member LLC being disregarded for federal income tax purposes – which simplifies accounting and tax reporting for the business enterprise.

An LLC with two or more owners can "check the box" to be taxed as a partnership, or it can elect to be taxed as a corporation or even as an S corporation. For purposes of this discussion, assume that all LLCs elect to be taxed as partnerships. An LLC taxable as a partnership enjoys "pass through" income tax treatment similar to an S corporation (discussed in more detail below). However, LLCs are not subject to IRS restrictions on S corporations. Also, IRS rules for partnerships are similar, but not identical, to those for S corporations, so depending on your particular circumstances one form may be better for your business. For instance, the partnership and S corporation tax laws vary on "at-risk" rules and basis issues, which is too complex to discuss in this article but should sometimes be considered in choosing a form of entity. Unlike S corporations, LLCs (a) can have entity owners (including corporations, other LLCs, investment retirement accounts (IRAs), pension plans, etc.), (b) can have foreign resident owners, (c) are not limited in the total number of owners, and (d) can have more than one class of ownership interests.

While the State of Florida does not impose a tax on personal income, it does impose a corporate tax at the rate of 5.5% on the income of corporations (and certain other entities) which are also subject to federal income tax. Thus, S corporations and partnerships are not subject to the tax. Prior to 1998, LLCs were subject to Florida's corporate tax, but since then LLCs taxable as partnerships or S corporations for federal income tax purposes are not subject to Florida's corporate tax. However, if an LLC elects to have its income taxable as a C corporation1 for federal purposes, it would also be subject to Florida's corporate tax.

Also while C corporations are subject to double taxation - meaning that the corporation pays federal income taxes on all of its profits (up to 35% tax rate}, and the corporation's shareholders pay federal income taxes on any profits which they receive as dividend distributions from the corporation (usually 15% tax rate) – S corporations, LLCs and partnerships are not subject to double taxation. These entities are "pass through" entities for federal income tax purposes, meaning that the entity merely files an informational return with the IRS, but does not pay any income taxes. Instead, the entity's profits are allocated to its owners, typically pro rata in accordance with their ownership percentages, and the owners are responsible for payment of the applicable federal income taxes on those profits (typically at a rate close to the 35% tax rate). Although the owners must pay the taxes on the entity's profits, the profits are taxed only once. This brings an additional 15% to the bottom line by not g to pay income tax on the distributions of money from the entity to its owners.

Advantages of LLCs over S corporations:
• LLCs can have other entities as owners ouch as other LLCs. IRAs, pension plans, etc).
• LLCs can have multiple classes of ownership interests, each with different rights and preferences.
• LLCs avoid risk of "pass through" tax status inadvertently being terminated.
• LLCs, if structured with one or more wholly owned subsidiaries, simplify tax reporting and accounting.
• LLCs offer less restriction on amount of entity losses that are deductible by the owners.
• LLCs are not limited to 75 owners.

When making the choice of entity, most people's tax considerations stop here. However, other federal and state taxes should also be considered. For example, federal employment tax requirements may vary across different entities. Many small business owners operating through an S corporation pay themselves a salary for their services as an officer or employee of their corporation, and then declare dividend distributions of remaining available cash. In this scenario, only the reasonable salary amount is subject to federal employment taxes of 15.3% (social security and Medicare taxes) on the first $90,000 of salary and 2.9% (Medicare tax only) on all additional salary amounts2. However, IRS rules for partnerships and LLCs are not as clear, and sometimes require that the entire amount received by an owner, whether from salary or distributions from the partnership/LLC, be subject to employment taxes at the 15.3% tax rate. So, an individual operating through an S corporation may be entitled to save 2.9 cents on every dollar received from their company above $90,000, and save 15.3 cents on every dollar by which their reasonable salary is less than $90,000. However, IRS rules in this area are still evolving and are interpreted differently by various accountants and lawyers. In addition, the IRS is increasing efforts to investigate and collect employment taxes from those who unreasonably abuse the laws. See Congress & IRS Aim to Tighten Screws on Employment Tax Enforcement, Pg. 7

The Florida Department of Revenue also imposes a tax on intangible assets, such as stock of corporations and member interests of LLCs, but not on limited partnership interests (so long as the partnership interests are not registered with the SEC}. The intangible tax is assessed at the rue of $1 per $1,000 of asset value, with an annual exemption to each person and entity for the first $250,000 of asset value. A common misperception is that the tax is only imposed on stock if the stock is of a publicly held corporation. In fact, the tax applies to the stock of any corporation and also to membership interests of any LLC as well as several other intangible assets, so many small business owners may unexpectedly find themselves subject to intangible tax.

Therefore, if you expect your business will have assets worth more than $250,000 - which can happen immediately if the business will acquire and/or develop real estate - a limited partnership (LP) or limited liability limited partnership (LLLP) form of entity should be considered. However, the annual filing fee for LPs and LLLPs in Florida can be substantially greater than that of a corporation or LLC, so the financial benefits depend upon the individual circumstances.

Third Party Creditors

Partnership interests, LLC interests and corporate stock are all considered personal property in Florida. Although the creditors of an owner of corporate stock can typically seek to foreclose upon the stock in full or partial satisfaction of its owner's liabilities, Florida's partnership, and presumably LLC laws limit a creditor of an owner to only obtaining a charging order against the partnership or LLC interest owned by the debtor owner3. A charging order entitles the creditor to receive distributions otherwise payable to the owner, but does not entitle the creditor to take title to the ownership interest, vote on behalf of the interest, sell the interest or force a liquidation of the company's assets. Regardless, in most circumstances a corporation can attempt to avoid such consequences by having all its shareholders enter into a written shareholders agreement restricting certain transfers or providing the other shareholders a first right to purchase the debtor shareholder's stock before it transfers to a creditor. While such agreed restrictions will typically be upheld in state court, it is uncertain whether they would be upheld in a federal bankruptcy court.

Future Business Issues

Expectations of the business's future operations, financial need and growth are additional factors in selecting a form of entity. For instance, if you expect your business will seek venture capital financing in its early stages, you would not want to form an S corporation because the venture capital investing entity would not be an eligible owner under IRS regulations. Because venture capital groups historically could only invest in C corporations, when business owners first started using LLCs, venture capitalists were reluctant to become involved. Today, venture capitalists commonly invest in LLCs. If you intend for your business to grow by acquiring other businesses, IRS regulations allow for certain tax-free reorganizations where both the acquiring company and the target company are C corporations. Unfortunately, only C corporations can take advantage of these tax-free transactions, so S corporations, LLCs and partnerships are unable to benefit.

If you seriously expect that your company will be a candidate for an initial public offering (IPO) one day, then you should consider the C corporation. Almost every advisor during the IPO process will expect and advise that the entity be a C corporation. However, many companies end up making their "public" debut by selling their assets to an existing public company and not actually going public themselves. When this happens, a C corporation would subject all its profits from the asset sale to double taxation, whereas any other form of business entity would not. In order to get the best of both worlds, the company can begin operating as an LLC. Then, if and when A becomes time to go public, because the IPO is a long process the LLC's first step in the process can be to merge or convert to a C corporation.

In conclusion, the Florida LLC can be structured to incorporate the best aspects of both partnerships and corporations. But can you truly have your cake and eat it too? As discussed above, depending on the particular circumstances of your business, the LLC form may not be best for your business. That is why the process of choosing a form of entity often becomes a balancing test as you determine which advantages of the various entity forms outweigh their disadvantages, all with respect to your particular situation.

1 A corporation which has not made the “S” election with the IRS to have its income taxed as a “pass through” entity.
2 Based on 2005 limits, but subject to change annually.
3 Florida law is unclear on whether a creditor of an LLC owner would be limited to only obtaining a charging order.

E-Mails: The Indestructible and Potentially Explosive “Paper” Trail - February 2005

E-Mails: The Indestructible and Potentially Explosive “Paper” Trail
February 2005
By Beth-Ann E. Krimsky, Esq.

Whether large or small, businesses today operate in a world of proliferating e-mail communications. E-mail has simplified and accelerated the speed of business communication. We use it for the ability to reach out at a time convenient for the sender, the ability to respond at a time convenient for the recipient, the ability to record and store information, messages and responses, in an easy, less formal type of business communication. However, as we have all been warned, once it is in black and white, it may always be in black and white. Even if the content of e-mail communication is not harmful to a business or a future litigation position, the existence of the e-mails alone may cause tremendous financial and legal obligations in the litigation context. Based on newly developing case law, even if e-mail communications are innocuous, the consequences of not preserving and producing e-mails can be devastating in light of the potential imposition of monetary sanctions and the severe remedies a court has the discretion to impose if e-mails are not preserved.

Recent examples include the imposition of a $2.9 million fine against a U.S. company due to its failure to preserve and produce e-mail evidence. The U.S. District Court calculated the fine by assessing $250,000 for each of the 11 principal employees involved with the “missing” information. Another U.S. District Court allowed a plaintiff’s attorney to instruct a jury that the missing e-mail evidence must have been unfavorable to the defendant thereby creating an overwhelming appearance of liability.

For better or worse, e-mails are most businesses current form of business communication and therefore they must be managed properly. Just because the information is stored electronically, that data is no less of a document than parchment paper would be and as such, businesses must be aware of, and plan for, the potential use of e-mails in the litigation context before they are in litigation and after they are in litigation. The cost of not planning before, and not complying after, can be extremely high.

Training Regarding the Impact of E-Mails

Because e-mails are likely to exist for the indefinite future, the best course of action for a business is to educate its employees regarding proper content and management of e-mails. What is viewed as a spontaneous thought or a quick response in the course of a business day may later be presented as a blown up Exhibit “A” at trial. While angry words on the phone or in person can dissipate or be followed by an apology, once an e-mail is sent, it is forever in black and white and on electronic back-up tapes that can be accessed and seen completely out of context. Further, to the extent one e-mail is saved and another is lost, the saved e-mail can take on heightened importance and the implication of “conveniently losing” the explanation can be enough to convince a court or jury of wrongdoing.

Consider this string of e-mails that could have been sent with the best intentions:

Human Resources Director to Company President, 10/2/03, 3:00 p.m.
I have been researching the implementation of the Diversity Initiative we have been discussing. I would like to hire a diversity coordinator to survey our personnel and help us focus our efforts. The cost is $16,000 for the full survey and report process.

Company President’s Response to Human Resources Director, 10/3/03, 10:30 a.m.
What do we need a diversity survey for? We are not diverse and we know who is prejudiced in our company. That is a waste of money.

Although the fictitious company may have gone on to implement an acceptable diversity policy, while the second e-mail is likely to be shown at the racial discrimination trial of an employee who was fired on 10/4/03, the first e-mail may not have been saved or produced and may never see the light of day. Further, even if the plaintiff employee did not work with one of the “prejudiced” people in the company, the admission in writing of a hostile work environment could be enough to sway a jury.

Furthermore, many employees are under the mistaken impression that pressing the delete button on their computer makes the problem disappear. In light of sophisticated back-up systems and the likelihood that an e-mail was sent by, or to, a third person, once it is sent, it is likely to reappear. Although you may say “ I would never write that,” we all must be aware that a seemingly innocuous comment in a black and white business document that is date and time stamped can take on a formal appearance and therefore may be given greater importance than intended. No one can control every word written, but reminders of the impact of e-mails can and must be disseminated. Once employees are aware of the potential for disasters, they are more likely to self-edit and take care in the use of the written word. In addition, there are some high risk areas that warrant extra training regarding the use of e-mails such as human resource decisions, planning and reviews that impact every company and product development and liability concerns.

The Double Burden of E-Mails in the Litigation Arena

1. The Cost of Electronic Discovery

In the ordinary context of discovery in litigation in the United States, each party may examine the documents relevant to the dispute that are maintained by the other side. The term “documents” is construed broadly and generally includes e-mails and computer generated and stored data. The cost of providing the documents and/or data for review is generally the responsibility of the producing party. Thus, the more prolific the e-mail culture is in your company, the more expansive and costly the discovery process may be. Recent case law suggests a willingness of the courts to consider shifting that burden from the producing party to the requesting party but only after an exhaustive balancing of numerous factors. See Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y 2003). In Zubulake, the court reconfirmed the general presumption that the party responding to a discovery request must bear the cost of complying with the request and asserted that cost shifting should only be considered if undue burden and expense is involved. The court then set forth a new seven factor test with each factor to be weighed in the following order:

(1) The extent to which the request is specifically tailored to discover relevant information;
(2) The availability of such information from other sources;
(3) The total cost of production, compared to the amount in controversy;
(4) The total cost of production, compared to the resources available to each party;
(5) The relative ability of each party to control costs and its incentive to do so;
(6) The importance of the issues at stake in the litigation; and
(7) The relative benefits to the parties of obtaining the information.

In another recent case, Wiginton v. Ellis, 2004 WL 1895122 (N.D. Ill. August 9, 2004), another U.S. District Court added a new factor: “ the importance of the requested discovery in resolving the issues of the litigation,” as it split the estimated $250,000 cost of extracting e-mails from tapes and performing key word searches on a 75/25 basis with the seeker of the e-mails being responsible for 75% of the cost while the creator was still responsible for 25% of the cost, just in the discovery phase. While this trend is helpful for a defendant who may be responsible for an extensive data based production, cost shifting is not the ordinary course of business and is only possible after a court’s application of the fact intensive discretionary factors. Given what may be an unavoidable cost, businesses would benefit from an upfront cost analysis of document retrieval at the time it invests in its document management retention system.

2. The Cost of Not Complying with E-Mail Discovery Can Be Worse than the Cost of Complying

Over the past few years, courts have begun to send resounding shots of warning to businesses and attorneys --- produce, produce, produce, or else.

In two recent court opinions issued by two different United States District Courts just a day apart, those courts imposed significant and deterrent-based sanctions on businesses and attorneys to the tune of $2.9 million in one case, and what may be an even greater sanction, allowing a jury to be told “ e-mails were destroyed so you may assume they were harmful to the party who destroyed them.”

In Zubulake v. UBS Warburg, LLC, 2004 WL 1620866, (S.D.N.Y July 20, 2004), a female employee sued her employer for gender discrimination. The court at various times in the discovery portion of the case concluded that despite counsel’s urging to retain all documents and e-mails, key employees either failed to preserve e-mails, failed to take necessary steps to back up data, failed to produce back-up tapes and/or destroyed electronic information. While the court focused on the corporate manager’s failures to produce, it also issued a very clear warning to all business counsel to help ensure that spoliation of evidence does not occur. Specifically, the court pronounced that counsel:

a. Must “issue a ‘litigation hold’ at the outset of litigation or wherever litigation is reasonably anticipated, . . .” which should be periodically reissued throughout the case.
b. Should communicate directly with the key players in the litigation, and the employees likely to have relevant information to inform them of the requirement to preserve evidence. Speaking to in-house counsel alone does not appear to be sufficient.
c. Must “ instruct all employees to produce electronic copies of their relevant active files . . . and make sure that all back-up media which the party is required to retain is identified and stored in a safe place.” The court went on to suggest that counsel should strongly consider taking possession of back-up tapes to avoid the possibility of inadvertent recycling.

The court also imposed financial sanctions on the defendant and most importantly, permitted what is referred to as an “adverse inference instruction” to a jury with respect to the deleted emails. The specific instruction could only lead the jury to believe the deletions were intentional and were to prevent the jury from seeing damaging evidence. The message was clear that the corporate defendant could not hide behind their IT manager, could not say the documents were gone when they were backed up and was required to cooperate with its own counsel to provide access to the documents.

The very next day in United States v. Philip Morris, U.S.A., Inc., 327 F. Supp. 2d 21 (U.S.D.C. July 21, 2004), a different U.S. District Court found that the defendant deleted and irretrievably lost e-mails that were likely to have contained information relevant to the litigation. It appeared that the employees at the highest corporate level failed to follow the document retention policies of the employer and a court order that would have ensured the preservation of those e-mails. While the court in that case did not impose the “adverse inference instruction,” it did preclude any witness who failed to comply with the document retention policy from testifying and it required the defendant to pay a $2,995,000 monetary sanction. The court stated that even though it will never know what, if any, role the destroyed e-mails had to the plaintiff’s case, “ it is essential that such conduct be deterred, that the corporate and legal community understand that such conduct will not be tolerated and that the monetary sanctions fully reflect the reckless disregard and gross indifference displayed by [the defendants] toward their discovery and document preservation obligations.” This ruling was not a final ruling in the case, but merely related to pretrial evidence and issues.

At the present time, proposed amendments to the Federal Rules of Civil Procedure regarding the discovery of electronic information and e-mails are under consideration and are open to public “comment.” Until such time as any amendments are adopted the current broadly worded rules apply and the court’s interpretations govern. While it may appear that a strong “destruction of documents” policy is attractive, it can only be effective if there is no back-up system, which there usually is, or if you are able to retrieve documents from third parties, which at present is highly unlikely. In light of the fact that e-mails may be indestructible they must be managed. The best course of action is to think and read twice before you press that send or delete button.

3. How to Heed the Warnings

First, businesses should recognize that e-mail dissemination must be managed throughout the company and not only through the information services department. Content training and an explanation of the permanent nature of e-mails must be provided for any person with access to email. Second, businesses must plan for the potential for litigation discovery when the document retention system is installed so any document retrieval can be as cost effective as possible. If a system is already in place, procedures for back-up and other capabilities should be reviewed now and not after a litigation has started. Third, businesses and counsel must have a litigation e-mail retention and production policy in place both before and after a dispute arises. In the event of a dispute all relevant employees must cooperate with counsel to ensure that all records are provided to counsel. If one thing is clear, even an innocent disappearance can take on new and great importance in the context of the discovery of electronic information.

Is Your Store, Restaurant, or Other Place of Public Accommodation Ripe for Suit Under the ADA? - August 2004

Is Your Store, Shopping Center, Restaurant, Office or Other Place of Public Accommodation Ripe for Suit Under the ADA?
August 2004
By Beth-Ann E. Krimsky, Esq.

A.  The Public Accommodations LawPARAGRAF 1

Title III of the American with Disabilities Act (“ADA”) provides people with disabilities with “full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation.” 42 U.S.C. § 12812(a). Public accommodations include public and private venues open to the public such as shopping centers, hotels, offices, hospitals, campgrounds, parks, theaters and sporting arenas, among other areas. The ADA went into effect in 1992 and has been implemented through the Americans with Disabilities Act Accessibility Guidelines 28 CFR Part 36 or what is commonly referred to as the “ADAAG”. The ADA and its implementing regulations are enforced by the United States Department of Justice or through private lawsuits, generally filed in Federal Court. There are very few exemptions to the ADA.1 In addition, many states have adopted accessibility standards similar to the Federal Standards.

B.  Who Does the ADA Apply To?

The ADA applies to entities that own, lease, operate or lease to places of public accommodation. Thus, for example, if a tenant space in a shopping center is not accessible to an individual with a disability, suit may be brought against the owner or the tenant, or both. In essence, the ADA is designed to benefit the person with the disability without concern for who bears the cost of the required changes to the premises.

C.  Attorneys’ Fees and Increasing Number of Suits

Although the relief afforded by the ADA is primarily injunctive relief that could result in a Court Order to make modifications or alterations to the property, the ADA also provides for the plaintiff to recover its attorneys’ fees. That provision for the recovery of attorneys’ fees creates incentives for attorneys to handle the matters and in some instances, can provide motivation to litigate a matter that could otherwise be resolved by negotiation. Indeed, as noted by some Federal Courts, ADA public accommodation suits have been proliferating. In the Middle District of Florida alone, 579 ADA cases were filed by only five organizations during the past three years. Rodriguez v. Investo, LLC 305 F. Supp.2d 12788 (M.D. Fla. 2004). See also, Charlie Footman v. Wang Tat Cheeney, 18 Fla.L.Weekly Fed. D143(a) (August 30, 2004). It appears that Florida, California and Texas are the most prolific centers of ADA litigation.

D. Does the ADA Apply to Me? Myth v. Reality

1.         Myth:              My building was built prior to 1992 so I am grandfathered in.                         Reality:            Even pre-ADA buildings are required to make certain accommodations for                                                             accessibility for people with disabilities and they are not exempt from the law.

2.         Myth:              Because the modifications are too expensive, I don’t have to make them.                         Reality:            The ADA provides a defense to full compliance with the law in those cases where                                                 the building was constructed before 1992 and the modifications would be cost                                                      prohibitive. This “not readily achievable” defense is based on a case-by-case                                                           comparison of expenses to profits. If you assert the defense, you must be willing                                                 to reveal the financial condition of the business. Furthermore, a financial inability                                                 does not exempt compliance but merely modifies it.

3.         Myth:              It is the tenant’s responsibility to make its bathrooms accessible so an owner or                                                      landlord can’t be sued.                         Reality:            The ADA applies to “owners, tenants, sub-tenants and operators of a public                                                           accommodation”. Although one may contractually shift the ultimate responsibility                                                 for payment of the cost to make the accessibility accommodations, that                                                                  contractual agreement cannot serve as a defense to the disabled plaintiff or the                                                      plaintiff disability organization.

4.         Myth:              The City or County gave me a Certificate of Occupancy so I must have met all of                                                 the ADA obligations.                         Reality:            Issuance of a Certificate of Occupancy by a local building official is no defense in                                                 a lawsuit under the ADA. Indeed, the local requirements may not be the same or                                                   as stringent as the Federal guidelines.

5.         Myth:              I won’t be sued until after I get notice that a customer had trouble at my store,                                                     office, restaurant, etc.                         Reality:            There is no notice requirement under the ADA. In most instances, the first notice                                                   is service of a summons and complaint in Federal Court.

F. Can I Protect Myself Before I am Faced with a Federal Court Lawsuit?

While one may never be able to avoid being sued, one can take steps to minimize the likelihood and to ensure the defenses are available to you if you have been sued.

1.  Review current properties with an experienced ADA consultant/architect. In addition to contracting   or architectural experience, inquire as to whether they have served as an expert witness in any litigation        as this may make the expert more aware of issues likely to be raised by a plaintiff.

2.  Fix the most obvious and easy targets that can be seen at a drive-by of the location or a look in the             door. These include parking space signs, proper striping of the parking access aisles, door thresholds and             counter height, and door width for access to bathrooms.

3.  Consider the use of unisex bathrooms to accommodate a larger wheelchair and to avoid having to             modify more than one restroom.

4.  Put a compliance plan in place now rather than waiting for a suit.

5.  Include provision in tenant leases clearly stating obligations for modifications and legal fees if a             claim is brought.

G. What if I am Served with a Suit?

1.   Retain counsel with experience in the defense of ADA public accommodation matters as quickly as               possible. The sooner an inspection and discussion with plaintiff’s counsel starts, the lower the legal fees   that will be incurred. Remember, if there are only a few items that need to be changed, you still may be          responsible for both the plaintiff’ s attorneys’ fees and your own attorneys’ fees. As such, you want to           take any possible steps to mitigate both.

2.  Do not refer the suit to human resources or an employment attorney. Although similar concepts from the employment discrimination arena apply, these suits are more suited for counsel with a real estate or                      construction litigation perspective. The complainant is a customer or member of the public, not an                         employee.

3.  Although the Complaint filed in Court is likely to only seek injunctive relief to get the changes made,             plaintiffs are likely to be entitled to attorneys’ fees and costs so acting fast to minimize those fees,             particularly with all of the requirements in Federal Court for prompt disclosures and scheduling reports,   will save those fees. It generally makes better business sense to expend resources to fix a potential       problem than to fight over it. While this is not always the case, and there are some valid defenses to           ADA claims, often had a defendant been aware of the problem, it could have avoided the lawsuit in the       first place.

1 Certain religious entities, state and local governments and some private membership clubs can claim certain limited exemptions.

Beth-Ann Krimsky practices in the area of general commercial litigation, including real estate and land use based litigation. In addition, she has represented nationwide retail sales companies, shopping center owners and tenants, restaurants and office building owners, among others, in connection with ADA compliance and litigation defense matters. She received her J.D. from the Harvard Law School.