PUT SOME HOLIDAY MONEY IN YOUR POCKET WITH THIS SIMPLE TIP

PREPAY YOUR FIRST QUARTER 2018 TAXES

As it looks like the new tax plan will be taking away the ability to deduct real estate taxes in excess of $10,000, and if you are one of those individuals who pay more than $10,000 in real estate taxes, you might think about calling your bank and asking it to pay your first quarter 2018 taxes before the end of this year. It is not a great situation for sure but if you take this step, at  least the 2017 payment of your 2018 obligation will be deductible and you could save thousands of dollars.

All the best wishes for a happy holiday season to everyone. And stay positive.

Sincerely,

Mario Biaggi Jr.

Court Orders Individual Defendant To Refund $300,000 In Attorney Fees Paid By Corporation

"Ouch! That hurt." I can imagine the individual defendant must have said at a minimum something along those lines when the Court not only ordered the removal of that defendant's attorney due to a conflict of interest, but directed that the individual defendant also repay to the corporate defendant $300,000 for legal fees improperly paid by the corporation on his behalf in the defense of a shareholder lawsuit.


It is not unusual that a corporation be permitted to pay the legal costs of their officers and directors when those officers or directors are being sued for their conduct in connection with the affairs of the corporation. Such indemnification in fact is quite common. However, in the situation in which the corporation is a nominal party and the action in reality is a dispute between two shareholders, it is inappropriate for corporate funds to be utilized for the payment of one shareholder's attorney's fees.


In a matter handled by our office, the dispute was between a surviving shareholder and our client, the other shareholder's widow whose estate was suing both the corporation and the surviving shareholder for the value of her husband's interest in the corporation. The corporation was closely held and for all intent and purposes had ceased doing business. 
Thus, the only issue to be decided was whether the estate was entitled to receive value for the deceased shareholder's interest in that corporation.


The surviving shareholder had taken control of the corporation and had it pay his legal fees incurred in defending against the estate's claim. In essence, the widow was paying for not only her prosecution of her claims but for a portion of the individual defendant's defense against those claims. The individual defendant and his law firm engaged in this course of conduct until the discovery exposed the payments that he was making to the firm. The litany of ethical violations committed by the law firm in this process, and cited by the Court on the record, are too numerous to include in this letter but sufficed to say: "Another one for the good guys."

Sincerely,

Mario Biaggi Jr.

           
If you have any legal concerns, always feel free to contact us.

Client Sued For $1,320,000 - Pays Only $38,895

Clementine  v. Eco Life

           
When I first spoke with my adversary about the pending lawsuit against my client, it didn't leave either of us with a warm and fuzzy feeling. In sum, the conversation went like this: "Your client needs to pay us $1,320,000 plus interest to settle this." To which I replied, "My client is not paying you anything except maybe the fees associated with the cost of defending this action." In response: "I guess we will see about that Mario." "I guess we will Andrew." Well, we just did!!!

           
After three and a half years of intense legal advocacy, involving multiple motions, the defendant paid $38,895 or less than two percent of the plaintiff's current total demand, and the only reason that was paid was because it was based on our estimate of the projected remaining legal cost to have the plaintiff's action dismissed. Another one for the good guys.

The litigation focused on defendant's execution of a lease for billboard space in a prime Manhattan location. Plaintiff attempted to establish liability against one of the defendant's shareholders by alleging a cause of action for piercing the corporate veil. In essence, plaintiff argued that the individual defendant was not entitled to the normal protection from personal liability afforded by a corporate structure because the corporation did not follow proper corporate formalities. This cause of action was especially important to the plaintiff because 1) collection against the corporate defendant was going to be difficult; and 2) there were issues as to whether plaintiff had the perquisite authority to sign the lease and thus, whether the corporate defendant was even liable.

Plaintiff's counsel, however, misread the law as it applied to piercing the corporate veil. He failed to realize that while following corporate formalities was one factor in establishing a piercing the corporate veil cause action, there were several others for the court to consider. And moreover, he failed to appreciate that the lack of corporate formalities in a start-up company, such as defendants', is not the same as a lack of corporate formalities over time with an established corporation. Thus, the general protections afforded corporate officers and their shareholders, as I advised counsel three and half years earlier, ruled the day.

As a result, we had a happy client who in his own words "appreciated and was very satisfied with [our] great job"

If you ever have any questions regarding your legal needs, we are only a phone call or an email away.

Sincerely,

Mario Biaggi Jr.

$1,000,000.00 Mediation Settlement

Mediation can be a cost effective means of dispute resolution even though the mediator, unlike an arbitrator in a binding arbitration, typically does not have the authority to make a final determination concerning the issues presented. Nonetheless, if the parties are sufficiently motivated towards resolution, the mediator can help close the deal.

The primary purpose of mediation is to obtain a resolution of the dispute. But even if unsuccessful, the mediation can serve to further crystallize the respective positions of the parties, provide the perspective of an independent opinion from someone who has no skin in the game and even be a basis for a creative approach towards resolution.

In a recent matter handled by my office, I was able to successfully mediate a One Million Dollar ($1,000,000.00) settlement in a breach of contract action. The most significant factor in its resolution was clearly that the parties were motivated. Despite the motivation, however, there existed significant obstacles to a settlement because of the defendant's tenuous financial position.

The mediation, however, was helpful in overcoming these obstacles as the mediator, in a tempered even handed way, provided a dose of reality for both sides.

In addition, by comprising a settlement that consisted of cash, stock options and additional contractual work, the parties through discussion creatively addressed the defendant's concerns over its ability to pay.

And in the final analysis, I am sure it did not hurt that our adversary was well aware that in the event mediation was not successful, our office was fully competent and capable of addressing these issues at trial, if necessary.

Please feel free to reach out for all your legal needs.

Sincerely,

Mario Biaggi Jr.