Please note that, in light of Governor Murphy's recent "stay at home" order in New Jersey due to the COVID-19 pandemic, McLaughlin & Nardi, LLC's attorneys and staff are working remotely at this time. However, we are still ready, willing, and able to address all of your individual and business legal needs. Please contact us by phone at (973) 890-0004 or email at info@esqnj.com. We are committed to providing the same high level of legal services that our clients have come to expect over the years. Thank you.

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As a result of the Coronavirus (“COVID-19”) pandemic, the federal government has passed several pieces of legislation in an attempt to provide relief to struggling businesses.  One of these Acts is the Coronavirus Aid, Relief, and Economic Security Act (also known as the “CARES Act”).  However, since this legislation was signed empty-officeinto law, the CARES Act has been subject to various interpretations, pitfalls, and continuously-evolving government guidance.

The CARES Act created and allocated approximately $350 billion to the Paycheck Protection Program (“PPP).  However, those funds were almost immediately depleted by millions of businesses seeking assistance and the government thereafter allocated an additional $175 billion to the PPP.

The PPP provides loans to struggling businesses in the amount of two and a half times the small business’s average monthly payroll costs.  Thus, if the average monthly payroll is $50,000, the business might be eligible for up to $125,000 in PPP loans.  While the PPP is considered a loan program, the funds may be largely (or entirely) forgiven as long as the business uses the funds for approved expenses which are appropriately documented. However, like most aspects of the CARES Act and the PPP, there has been a great deal of uncertainty surrounding the specific requirements for loan forgiveness.  The SBA (the United States Small Business Administration) alone has posted supplemental rules and guidance on the matter more than ten times in two months.  Thus, as a result, the Paycheck Protection Program Flexibility Act was passed on June 5, 2020 amending the CARES Act. This new law has important ramifications for New Jersey small businesses.

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Hi, I’m Rob Chewning. I work with the firm of McLaughlin & Nardi, LLC.  At the firm we practice several different types of law, including bankruptcy law.  I am here today to talk to you about The Small Business Reorganization Act and Subchapter 5 bankruptcies.

As a result of COVID-19, millions of small businesses have been forced to shut down and cease business operations indefinitely with no end in sight.  Some of these small businesses have tried to hold on in the hope of getting federal stimulus money that can carry them through this tough time.  However, there are several million other businesses which will not be eligible or will not be able to get their hands on this federal stimulus money which is causing them to consider the options that they have.

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In the tough economic times brought on by COVID-19, many governors and veterans-300x200mayors, including New Jersey’s Governor Murphy, have said that widespread layoffs may be necessary if federal assistance is not forthcoming.  Our attorneys represent New Jersey Civil Service employees, and we see the struggles they are facing.  Given this, we thought the time was right to review the layoff rights available under New Jersey Civil Service law.

 
Layoffs

A layoff is the termination of a permanent employee’s employment because of economic reasons.  Demotions or reduction of hours for economic reasons are also treated as layoffs, triggering the rights and procedures applicable to layoffs.

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As a result of the Novel Coronavirus (“COVID-19”), the federal government has passed significant legislation in an attempt to provide relief to businesses small-business-300x215struggling with economic hardships as a result of widespread closures and stay-at-home orders.  One major part of these governmental actions includes the passage of the Coronavirus Aid, Relief, and Economic Security Act (also known as the “CARES Act”) on April 2, 2020.

The CARES Act provides for approximately $2 trillion in aid through expanded unemployment assistance, individual relief checks, tax credits, loans, and grants to businesses which were closed or significantly effected by COVID-19, and funding to hospitals and health care facilities. Of this, approximately $350 billion was allocated to the CARES Act’s Paycheck Protection Program (“PPP).   When that money was almost immediately sought by the millions of businesses seeking assistance, an additional $175 billion was additionally allocated.

The PPP limited its funding to each company to two and a half times the company’s average monthly payroll costs.  While the PPP is considered a loan program, the funds may largely (or entirely) be forgiven as long as the company uses the funds for approved expenses. The details of exactly which expenses would be considered approved and how these funds could be used has been the subject of much uncertainty over the past several weeks.  Indeed, the SBA (Small Business Administration) has posted additional rules and guidance on the matter more than 10 times in two months.

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As a result of the Coronavirus (COV-19), millions of small businesses have been forced to close their business operations entirely with seemingly no end in sight. small-business-300x200 Naturally, this has led to a spike in bankruptcy filings.  However, many small businesses have held out hope for federal stimulus aid before deciding on whether bankruptcy is the right option for them.

The enactment of a new bankruptcy law, the Small Business Reorganization Act, may provide small businesses suffering from COV-19 related financial issues with relief.  The purpose of the act was to make the benefits that larger business entities may take advantage of when filing for a Chapter 11 reorganization bankruptcy easier to access for smaller business entities seeking relief from debt without going out of business.  The Act simplifies the process by allowing small businesses to file a Subchapter 5 bankruptcy reorganization.

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national-gallery-of-art-1380105-m-300x248Since the COV-19 outbreak began, more than 22 million Americans have filed for unemployment.  The increase in unemployment filings have been the result of businesses of all sizes being forced to shut down entirely or significantly limit their operations.  As a result, many people, both employers and employees, are seeing less income or no income at all while still being expected to pay their monthly payments such as rent, mortgage, car loan, credit card bills, and insurance.  These financial obligations are especially devastating for people and businesses that were already having trouble making those monthly payments prior to the COV-19 outbreak.

If a person and/or business is experiencing financial trouble, has significant debt, and/or is subject to collection actions such as a foreclosure or a collections lawsuit, bankruptcy may be a potential remedy.  One of the major benefits of filing for bankruptcy is the immediate automatic stay of collection actions and lawsuits.

The type of bankruptcy that may be appropriate for an individual and/or business depends on several factors.  For more information on the different types of bankruptcies, check out our posts on Chapter 7, Chapter 11, and Chapter 13 bankruptcies.

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supreme-administrative-court-3565618_960_720-300x200A holographic will is a will that is handwritten, signed and dated by the testator (the person whose will it is).  Under New Jersey estate planning Law, holographic wills can be probated and will serve to ensure that the Testator’s assets are bequeathed according to the Testator’s wishes.  In fact, a holographic will is valid even in the absence of witnesses.   While a formal, written will with witnesses prepared by an experienced estate planning attorney is always preferable, a holographic will can be used in an emergency.

During the current health crisis, particularly for those who have tested positive for COVID-19 or those who are at particular risk, it may be better to have a holographic will than to have no will at all.  However, it is important to know the requirements as well as the risks and downsides to using such a handwritten will.   If at all possible, it is certainly better for everyone involved, from the testator to the executor and beneficiaries, for there to be a properly executed traditional will.

The crucial requirement under New Jersey wills and estate law,  for a handwritten will to be admitted to probate in New Jersey is that the will was written by hand, signed and dated by the decedent and that the signature and key provisions are clearly written by the same hand and that the handwriting is identifiable as that of the decedent.   To prove that in court usually requires testimony by a handwriting expert and/or witnesses who are familiar with the decedent’s handwriting.   The holographic will must be presented to the Superior Court by an order to show cause in order to be probated, even if all interested parties agree that the will is valid and represents the decedent’s wishes and intentions about their estate.

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The Coronavirus (COV-19) has had a negative impact on everyone physically, mentally, and financially.  Businesses are no different.  Small and medium sized businesses are especially vulnerable in these troubled times.  They are faced with difficult decisions such as whether to temporarily lay off their employees or which bills to pay when little or no revenue is being received.

At McLaughlin & Nardi, LLC, we focus a portion of our practice on advising small and medium sized businesses when faced with these difficult financial decisions.  When a business becomes overwhelmed and unable to meet its financial obligations, filing a Chapter 11 bankruptcy may be a great means to get the business back on track.

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As a result of the Coronavirus (COV-19), the unemployment rate has increased rapidly and reports suggest that the unemployment rate may reach 30% in the country.   This immediate loss of income for many individuals and families have left them unable to meet their continuing financial obligations such as paying for their mortgage, credit card bills, medical bills, etc.

If an individual or family is in a position where they are behind on their mortgage or other bills, filing a Chapter 13 bankruptcy may be good option for getting them back on track financially.

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The need to file bankruptcy can come quickly and abruptly due to a serious life event such as a serious medical diagnosis that results in large medical bills or being terminated or laid off from a job that results in a loss of income.  Many individuals have experienced this as a result of the Coronavirus (COV-19), which has caused these individuals to feel as though they are “drowning in debt.”

If an individual or family is in a position where they are significant debt and cannot pay their bills, filing a Chapter 7 bankruptcy may be an appropriate step to get them a “fresh start” financially.

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