Let’s say you are, or think you will soon be, litigating a claim against the officers and directors of your closely held corporation for mismanagement or fraud. Or you are a minority member or shareholder of an LLC or Corporation whose reasonable expectations of your role in the company have been frustrated by the controlling members of the…The point is you feel you have been the victim of minority shareholder oppression, but you want the business to continue to thrive while you litigate your claims. What can you do? You do not want to disrupt the business by seeking the appointment of a custodial receiver. Instead, to avoid injuring the business and its relations with the public, you need a less drastic remedy. One effective approach may be to seek the appointment of “a special fiscal agent.” This “ingenious equitable” device can afford your business some measure of protection while at the same time minimizing interference with normal operations.
But what can special fiscal agents do and how long can they continue to do it? The fiscal agent’s role is primarily “investigative and protective.” For example, the fiscal agent may be empowered to review all disbursements proposed to be made by the company and report any questionable ones to the parties who can then bring them to the attention of the court for relief. The fiscal agent can also advise the court as to the status of the company and its prospects for survival. The fiscal agent can protect the assets and oversee the operations of the company. The fiscal agent may also act as a mediator to resolve disputes and thus avoid more costly applications to the court. (The fiscal agent, however, may not act in an adjudicative or decision-making role.)
For example, in a case we are handling, our client holds an equitable mortgage on a sightseeing boat. The boat was operating, but the mortgage was not being paid. We successfully sought the appointment of a special fiscal agent to oversee the boat’s operation, collect the revenues, and recommend what disbursements should be made, including payment of the client’s mortgage before distributing any income to the owner of the boat.
The appointment of a special fiscal agent is limited in its duration. In another case, the fiscal agent had been appointed to manage rental properties owned by the litigants as tenants in common and had held the position for eight years. The court held that the fiscal agent’s function must be limited not only with respect to the fiscal agent’s role, but also the duration of that role. The exercise of the fiscal agent’s duties is limited to the pendency of the litigation.5
In conclusion, whenever the need arises to monitor the revenues or expenses of a company, prevent suspicious wrongful behavior, or prevent inequitable self-dealing, the appointment of a special fiscal agent should be considered because of the great flexibility this remedy possesses while at the same time avoiding more stringent measures.
Based in Atlantic City, Mark Soifer is a partner at Cooper Levenson with more than 30 years of experience litigating commercial and business disputes.
Tag: South Jersey
NJBIZ stories taking place in and involving South Jersey businesses, companies and business news.
WCRE represents Giralda Properties in leasing, marketing office space in Turnersville
WCRE announced it has represented Giralda Properties LLC, an affiliated entity of Starkman Properties, in leasing and marketing an office suite in Turnersville.The 3,000-square-foot suite was leased by Serenity Home Healthcare & Nursing Solutions LLC. Serenity will be located at the Cross Keys Campus; 110 American Blvd.
Serenity provides short- and long-term care, including skilled nursing, certified home health aides, respite care, personal/companion care, homemaking services and physical, occupational and speech therapy.
Chris Henderson, senior associate at WCRE, represented the landlord in the transaction. Financial terms were not disclosed.
Building the future Industry icon Sanzari constructing new headquarters in Hackensack
Sitting at the head of the table and flanked by his son and daughter — both senior leaders in the construction company that bears his name — Joseph Sanzari proudly talked about the new headquarters he is building on a lot in Hackensack his company has owned for nearly four decades.
Retail center in Manchester sells for 1.575M
The two-building retail center known as GreenTree at Manchester, in the Ocean County township of that name, has been sold for $1.575 million, according to real estate services firm Marcus & Millichap.The 9,790-square-foot property is located at 2111 Route 37 West, the firm said in a news release, and has two tenants: STS and Spirits Express.
“GreenTree was widely marketed, resulting in many offers from buyers at Marcus & Millichap and other brokers,” the firm’s David E. Thurston said in a prepared statement. “The marketed developed into bidding for the property, yielding a price and terms very satisfactory to the seller.”
Thurston and Charles Loccisano, investment specialists in Marcus & Millichap’s New Jersey office, had the exclusive listing. The property was bought by one limited liability company from another.
“This was the second property we have sold for the seller,” Loccisano said in a statement. “Our comprehensive marketing and follow-up during the entire process through closing makes the process easy for our sellers.”
HQSI names new CEO
Healthcare Quality Strategies Inc. announced Friday that its board of trustees has appointed the organization’s next CEO.Mary Jane Brubaker, who currently serves as HQSI’s chief operating officer, will succeed Martin P. Margolies, the company’s founder and CEO who retired on Sept. 30.
“The board is pleased to have found the best individual to assume leadership of this long-standing quality improvement and consulting organization,” David I. Kingsley, chairman of the HQSI board of trustees, said in a prepared statement. “Mary Jane exemplifies the values of this organization, and she brings strong leadership abilities and a commitment to innovation. Combined with her deep industry knowledge and institutional tenure, this makes Mary Jane uniquely qualified to lead HQSI successfully into the future.”
“I’m honored and I’m grateful to the board for the opportunity to lead this exceptional organization of dedicated and talented professionals,” said Brubaker. “For more than three decades, HQSI has been an important partner and improvement catalyst in New Jersey. We look forward to continuing this rewarding work in ways that are relevant and meaningful in this dynamic health care environment.”
Brubaker joined HQSI in 1987 and held various management positions during that time.
Logistics firm opens Sewell warehouse
A Philadelphia-based third-party logistics firm has opened a warehouse fulfillment center in South Jersey, it announced recently.The 25,000-square-foot facility, located at 390-394 Tylers Mill Road in Sewell, includes a warehouse management system that enables clients to check inventory online 24/7, Associates Warehousing Inc. said in a news release.
“With this additional location, we are offering more modern warehouse space to the B2B wholesale fulfillment trade,” Bill Parker Jr., president of Associates Warehousing, said in a prepared statement. “We are hoping this center will attract companies that are taking advantage of the recent Panama Canal expansion and shift their products to the Port of Philadelphia/New Jersey region for distribution.
“This food-grade fulfillment center will complement our Philadelphia warehouses and enhance our position as a centralized gateway from the port to your customer.”
NJBIZ ranks state’s fastest-growing companies slideshow
NJBIZ hosted its Fast 50 Awards on Thursday morning, where it ranked the 2016 edition of the state’s 50 fastest growing companies.About 300 people attended the event at The Palace at Somerset Park, where these rapidly growing New Jersey businesses’ order from No. 50 to No. 1 was revealed before a cheering crowd.
The Fast 50 were determined and ranked based on their dollar and percentage growth over the past three years. Winners will be profiled in a special supplement inserted in the Nov. 14 edition of NJBIZ.
For more information about NJBIZ events, click here.
Two sign leases at Cherry Hill office property, including publisher
Two tenants have signed leases for offices at a property in Cherry Hill, according to real estate firm NAI Mertz.Two Executive Campus is a 102,591-square-foot Class A property located on Route 70 in the township’s Golden Triangle section.
The first tenant, Newspaper Media Group LLC, is a recently formed publishing company that signed for 15,127 square feet of office space to serve as its new headquarters. Newspaper Media Group publishes 23 papers in central and southern New Jersey, including the recently purchased Greater Media Newspapers, which owned 10 weekly papers in three New Jersey counties.
“The merger of these newspaper groups was a major transaction in the South Jersey/greater Philadelphia media industry, and the newly formed company needed an attractive office space to call its home,” Rebecca Ting of NAI Mertz said in a prepared statement. “The west Cherry Hill office market is experiencing a recent uptick in leasing momentum, and this transaction is a testament to this trend.”
The second tenant, which was not disclosed, signed for 13,923 square feet of space.
Ting, a vice president, and Julie Kronfeld, a sales associate, represented building owner 1930 NMT Owner LLC in the deals.
“The new ownership has an excellent sense of the qualities that constitute a superior office building, and they know how to deliver these conditions to their tenants,” Kronfeld said in a statement. “Two Executive Campus is professionally managed and will be phasing in improvements to the common areas as part of their continuous beautification initiatives.”
Ting, Kronfeld and Fred Meyer, vice president-corporate services, have served as exclusive leasing agents for Two Executive Campus since 2013, and brokered the sale of the building last year to the current owner.
NAI Mertz has offices in Mount Laurel and in Pennsylvania.
Catapult Learning Strengthens exec team with addition of Quattrociocchi
Camden-based Catapult Learning Inc., a provider of K-12 instructional services, announced it has hired Steve Quattrociocchi as president of the Education Solutions Group.In this role, Quattrociocchi will be responsible for leading about 4,000 educators and managers, partnering with school systems internationally to deliver professional development programs.
Prior to Catapult Learning, Quattrociocchi was chief operating officer of Ashford University. He was then president and chief operating officer of the online division of Corinthian Colleges. He began his career at The Princeton Review as executive vice president.
“We are thrilled to have Steve join the team and I am looking forward to partnering with him as we expand our Education Solutions business,” Catapult Learning CEO Jeffrey Cohen said in a prepared statement. “Steve brings deep experience in educational leadership and operational management, as well as an impressive track record of success.”
“I welcome the opportunity to work with the incredible team of professionals at Catapult Learning. I’m fortunate to be joining such a respected company that prides itself on providing quality services for students,” Quattrociocchi said in a prepared statement.
Former Revel Casino Hotel TEN hires new executives
TEN, the former Revel Casino Hotel, announced it has named Frank Leone its new senior vice president of casino operations.The company also appointed two other executives: Cindi LePine to vice president of hotel operations and Vincent Turrano to vice president of food and beverage.
“Our executive team is what makes the difference. That is why I am excited to announce our best-in-class executives with unmatched expertise and vision,” Robert Landino, CEO of TEN, said in a prepared statement.
Prior to TEN, Leone oversaw gaming operations at Trump Taj Mahal, Foxwoods, MGM Grand at Foxwoods and SLS in Las Vegas.
“We have assembled a remarkably talented team that has the advantage of knowing the market, knowing the customer, knowing what works, what does not and having distinct plans to make the TEN casino experience the best in country,” Leone said in a prepared statement.
“Opening a 6 million-square-foot, 47 story, and 1,400 room resort is no small feat. We have gathered an elite team within our industry and internationally recruited seasoned executives specific to the Atlantic City market to execute this massive reopening effort,” Landino said in a prepared statement.
Leone plans to reconfigure the casino floor with new sight lines, pathways and new navigation routes.
Modern water infrastructure is critical for New Jersey’s economic growth
Our water infrastructure is failing us.Consider the following:
- In some communities, as much as 30 percent of clean drinking water is lost through pipe leakage before it ever gets to your tap. That’s water that utilities have invested in treating, but can’t charge for.
- Some of the water infrastructure in our older cities dates back to the Civil War. Old water and sewer mains break, shutting down businesses, making travel and commerce difficult, and necessitating costly emergency repairs.
- In 21 of our older communities, rainstorms regularly overwhelm antiquated combined sewer systems. As a result, diluted raw sewage flows into nearby waterways – and sometimes backs up into neighborhoods and basements. The state Department of Environmental Protection has issued permits to those cities and treatment utilities requiring them to institute plans to remedy this problem.
- EPA estimates of the cost to upgrade New Jersey’s water infrastructure will top $40 billion over the next 20 years.
That’s a huge price tag.
However, the state’s economic competitiveness depends on modern, safe, reliable water management. No one solution will be sufficient for a problem so large and complex, and fortunately, a new coalition of organizations and individuals with a vested interest in upgraded water infrastructure is working on a broad range of approaches.
Jersey Water Works is a unique public-private collaborative that includes private-sector water utilities, engineering firms and contractors, regulators at the N.J. Department of Environmental Protection and the U.S. Environmental Protection Agency, municipalities, public water and sewer utilities, environmentalists, and community organizations. Their goal is to forge a suite of solutions that collectively can help upgrade the water infrastructure in cities and towns across New Jersey. Their work to date is focusing on:
- Encouraging the use of business-like systems for managing water infrastructure assets so that repairs and upgrades are scheduled before costly and unpredictable emergency breaks occur;
- Helping water utilities and community groups to educate and engage ratepayers and elected leaders so that they understand the value of drinking water, wastewater and stormwater systems and support necessary investments;
- Promoting the use of “green infrastructure” features such as pervious pavement, bioswales and rain gardens, all of which collect stormwater before it hits the sewers and help prevent flooding while beautifying neighborhoods and raising property values.
And while the inadequacy of New Jersey’s water infrastructure is a serious and long-term problem, the economic benefits of solving it will start to become evident almost immediately. A United States Conference of Mayors report estimates that every dollar of investment in upgrading water infrastructure adds almost $9 to the economy through wages and additional activity in related industries. Just as significant, the American Society of Civil Engineers estimates that nationally, the decline in service and reliability that comes with failure to invest will result in additional costs of $147 billion to small businesses and $59 billion to households over the next 20 years. These are costs we can’t afford, but we can avoid.
One of the biggest benefits to our cities and towns of investing in upgrades to our water infrastructure will be in the form of added value and opportunity. The installation and maintenance of green infrastructure will provide local jobs and job training, including in places where the need for them is greatest; waterfronts will be cleaner and more available for recreation and tourism; neighborhoods will be healthier, more vibrant and more attractive, and property values will rise; and employers looking for places to expand or relocate will give places with 21st-century water infrastructure an edge in their considerations. In other words, such upgrades will contribute to the sustainability of our communities and result in triple bottom line benefits – economic, social and environmental.
With all of this on the table, why wouldn’t we invest?
The Dodge Foundation is supporting Jersey Water Works because we believe that a broad-based response is needed to the problem of our aging water infrastructure, and we know that addressing the problem will open the door to greater economic growth for the state.
I encourage anyone interested in helping to address this problem to attend Jersey Water Works’ second annual water conference on Friday, Dec. 2 in Newark, where national and state experts will convene to identify new strategies and opportunities that drive economic growth in our communities. Please join us and help make New Jersey a national model for water infrastructure innovation.
Chris Daggett is CEO and president of the Geraldine R. Dodge Foundation, which provides financial support to the Jersey Water Works collaborative.
Building connections Marlboro-based Surepath helps companies navigate complicated steps in development process
Here’s the first thing you need to know about Surepath Construction, a small, family-run business in Marlboro approaching its 10th anniversary: It doesn’t actually do any construction.
Here’s the second thing you need to know about Surepath Construction: If your business is looking to do an addition, and you don’t know anything about the construction process, you might want to call them.
At least that’s the way founder and principal Andrew Messinger sees it.
After nearly two decades in the construction business, Messinger felt there was a need for a company that could help others through the development process, so he went out on his own.
Surepath, Messinger said, is in the business of facilitating construction.
“We’ll do estimates and do bid out the job for them because, surprisingly, companies don’t really have a good construction-bidding process,” he said. “We write all the bidding documents, analyze the bids.”
Sometimes, the process stops there, Messinger said, but, often times, Surepath’s involvement continues.
“The client either doesn’t have the personnel or doesn’t build that kind of project a lot, and they’d like us to stay on board,” he said. “What we do then is help them run their construction project as, really, an extension of their company.”
Surepath also aids early in the process by logistically deciding where trucks enter the site and staging the construction, but it can also provide input as early as the design stage.
“We’re in early design and conceptual meetings, and we’re able to give input about the most effective way of doing things,” he said. “We try to help guide our clients and design team to what the proper thing is.”
Messinger said these conversations are where his team’s experience can really pay off for its clients.
“Sometimes, designers have their own vision for what something should be, whether it conforms to what their clients are looking for or not,” he said. “Sometimes, it’s a difficult balance of making sure all those different things meet the requirements of what your client is looking to bid.”
Surepath would not release revenue numbers, but Messenger says he is making money, something that wasn’t so certain when he left a secure senior position at Turner Construction to go out on his own. He did so at a time that turned out to be one of the worst years to start a company: 2007. Or right before the economic downturn.
Biz in brief
Company: Surepath Construction
Founder: Andrew Messinger
Founded: 2007
Employees: 3
Headquarters: Marlboro
“I’d always wanted to own my own company and I decided the time was right,” Messinger said. “Everyone said I was crazy and, had I known what was going to happen with the crash, I probably would not have left.
“But I did and just rolled the dice.”
Surepath itself is small, still just three people after nearly 10 years in business, but Messinger said that has its benefits, such as very low overhead.
“It was all self-funded, which sounds very impressive, but there wasn’t a lot of funding there anyway,” he said.
It also makes the company pliable and nimble when accepting jobs, even to the point of adopting a company’s practices to ease the process.
“We’re able to conform to how our clients want us to do business,” he said. “Sometimes, we’re able to use their systems or forms they have and we don’t have to say, ‘No, we only do things this way’ like some of the bigger companies might say.”
Messinger cites this ability as a characteristic that helped navigate the difficult first years of being a new company during a sluggish economy.
“I think we actually, unfortunately, benefited from the economy because there were projects that were ongoing and bigger companies had started laying off some of their staff,” he said, “but they still needed work done.
“Here we were, a professional construction company that could run jobs and, after the contract was up, we would just go away,” he said. “So, I started getting calls for these little jobs that had to be done where they’d laid off most of their in-house construction personnel.
“And I think that’s how we survived.”
Even though the company was able to navigate the industry during its first years, it wasn’t until 2010 that Messinger knew his company had made it.
He’d received a phone call from an old client at Turner Construction who needed representation on a large project.
It was Novartis, and the project was the expansion of its large campus in East Hanover.
“They did a full campus expansion and I was called very early to help with that,” he said. “They could literally hire anybody that they wanted and they hired me, so that was one of those ‘Wow’ moments.”
That type of business development isn’t unusual for Surepath.
After nearly 10 years in business, Surepath Construction still finds jobs the old fashioned way: by reputation.
“We don’t have a marketing budget, we don’t do interviews,” he said. “So, all of our work is through word-of-mouth, through people that have worked with us who recommend us to somebody else.”
To back up the reputation, Messinger said, there’s a confidence in the abilities and experience of his small staff.
“We’re very highly trained and professional, and a lot of the small companies aren’t like that,” he said. “We have a different background and are able to do things that other companies can’t.”
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