As the “new normal” becomes plain old “normal,” we find ourselves missing some of the more mundane points of the “old normal.” We miss office coffee, the white noise of hallway chatter and whirring printers, the gentle pinging-and-ponging in the background punctuated with the primal screams of a defeated adversary. But then I realized something... strange: I missed my morning commute. And I’m not talking about missing the friendly Miami drivers, bless their hearts. I missed the company of my passenger for 40 minutes a day on my way to and from work: music.
So Play That Funky Music, The Beat Goes On, Don’t Stop The Music – this newsletter is dedicated to one of humanity’s oldest companions.
At MM&H, we are rocking as we settle into our daily routine of remote depositions, Zoom court hearings and working in pajamas (but never simultaneously, wink wink). And an amazing thing happened: we grew. I don’t just mean that we hired two more people and have grown our headcount (more on that later), but we actually evolved as people. We’ve turned and faced the strange and maybe we have become stronger because of it. Maybe we all have?
Part of that strength comes from the genuine connections derived from our shared experience. After all, we’re in this together! This feeling of solidarity encourages us to unleash the counselor, psychiatrist and tough-love friend that is the raison d’etre of why we became lawyers in the first place. (It also apparently encourages us to unleash catchy French phrases.) So lend me your ears, and we’ll sing you a song but we’re lawyers dammit, so please manage your expectations.
MORE MORE MORE MM&H Has Got Talent
Despite the Coronavirus pandemic, we’ve added two more to our squad! Daniel harkens from Big Law, then Medium Law and has finally landed on Lawsome Law. He loves tech – which is one of the reasons we love him – and is a member of the Wall Street Blockchain Alliance, which he assures us is more exciting than it sounds. Mainly, though, he crushes complex litigation matters. Jordan comes to us with encyclopedic construction knowledge, sharpening his teeth most recently at the Broward County Attorney's Office. There, he focused on construction litigation and generally beating general contractors into submission. Before that he worked at the State Attorney’s Office trying cases so don’t let his unassuming manner and easy smile fool you; he’s a (figurative) killer.
And, in case you are wondering, yes we are always looking for like-minded (and maybe unlike-minded) individuals to join our team.
With the COVID-19 pandemic affecting businesses everywhere in unexpected and unprecedented ways, once promising business ventures have quickly soured and left investors scrambling to find ways to salvage their investments. Frustrated business partners may be nervous about trying to end their corporate marriage because, as Neil Sedaka said in his 1960 hit, Breaking Up Is Hard To Do. But what if it wasn’t?
Judicial dissolution is a tool available to shareholders, limited partners, and members to petition a Florida court to enter an order dissolving a business entity. Once dissolved, the Court will supervise the liquidation and orderly distribution of an entity’s assets. Courts have called dissolution a “drastic and extreme” remedy, but if a frustrated investor comes to the Court with clean hands and can establish that COVID-19 has made it impossible for the business to continue as originally intended by the parties, a judge is unlikely to force unwilling business partners to remain in a broken corporate marriage. Due the severe nature of judicial dissolution, merely threatening such an action can bring an otherwise unwilling business partner to the negotiation table.
Do note that Florida’s Business Corporation Act, Revised Uniform Limited Partnership Act of 2005, and Revised Limited Liability Company Act each have their own requirements for judicial dissolution, so an investor’s ability to fire this missile may hinge on the type of corporate entity targeted for dissolution. And, although recently validated billionaire Kanye West was right that a corporate prenup was “somethin’ that you need to have,” Florida law prohibits operating or partnership agreements from varying the statutory grounds for dissolution.
The state of Florida and our tri-county municipalities have deemed open construction sites as “essential” business that may remain in operation. Typically, Florida law requires that when furnishing labor, services, or material on an unbonded construction project, a contractor who does not have a direct contract with the owner must serve a “Notice to Owner” no later than 45 days after the initial furnishing of services in order to preserve its lien rights (those who work on your property who are not paid-in-full, have a right to enforce their claim for payment against your property).
In the event a contractor is not paid for its services rendered, it must record a claim of lien within 90 days from final performance of its services. The contractor must then file suit within 1 year from the date the lien is recorded in order to enforce the lien and recover payment. See Fla. Stat. 713.001-713.37. Irrespective of the ongoing statewide COVID-19 stay-at-home-restrictions, these statutory deadlines remain unchanged. Indeed, Florida’s Supreme Court has remained silent and not entered any orders extending the statute of limitations to file lien claims.
Pink Floyd’s iconic song, Time tells us how we’ve all been guilty of wasting time. Then, regrettably, after it’s too late, we of course wish we had more of it. Don’t get lulled into wasting time or sleeping on your legal rights during the COVID-19 pandemic. If you’ve spent more time binge watching, boozing and bon-bon eating than you care to admit, don’t fret, MM&H is here to help.
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MORE STATES INTRODUCE COVID-19 BUSINESS-INTERRUPTION BILLS
There is no denying that we are all living through a renaissance in stay-at-home work and digital collaboration.
Within what felt like milliseconds, “zoom” became a part of the common vernacular, and businesses that previously were unshakable in their in-office, facetime requirements (butts, physically in chairs, in the office) are now chugging along with their employees reporting in digitally.
However, as litigators, we are acutely aware that the business world’s turn towards tech, has created a new wave of possibilities for discoverable evidence. Be it Zoom’s “record” feature that allows parties to record an entire video chat, to Slack conversations, it all becomes fair game in litigation. It is important, especially now, to remain mindful that those gif-riddled Microsoft Teams chat pages, or non-work-related Slack conversations hosted on office Slack accounts could all become exhibits in a lawsuit one day. While this technology is relatively new, advantageous lawyers have no hesitated to bring it into court.
As just one example, in May 2019, in the matter of Milbeck v. Truecar, Inc., Magistrate Judge Alicia Rosenberg, in the U.S. District Court for the Central District of California, was challenged to assess and rule on whether a last-minute discovery request for 1.67 gigabytes of compressed data from Slack should be permitted on the eve of trial. 2019 WL 4570017 (C.D. Cal. May 2, 2019). Calculating that 100 megabytes of Slack data could result in 1.7 million messages, the Judge denied the request as unreasonable, as she calculated the parties request for discovery to be for up to 17 million messages! Id. However, a narrower request, or one made earlier in the case, could have easily seen these millions of conversations turned over in discovery.
With that in mind, before logging on and firing off something in writing that you may not want to appear in court, take a second to consider whether you might want to use an old-fashioned phone call to relay that message instead.
The first of the month marks another D-Day for tenants and landlords. In light of continued closures countrywide, national chains (to name a few: LA Fitness, Subway and Old Navy) and small business tenants have stopped paying rent entirely. Also, while more than 22 million Americans have filed for unemployment since the beginning of March, many residential tenants have been unable to make their monthly rent payments. Landlords meanwhile face diminished revenues and fixed costs, including insurance, taxes and mortgage payments. This presents challenges since the usual resolution procedure, access to courts, has been suspended or impeded as eviction and foreclosure moratoriums have been implemented by governments across the country.
The following are some general common-sense rules (or MM&H’s “good human being” approach) that we believe will prove helpful in navigating this time.
Communicate. If you are a tenant, be honest about your situation and provide support for your financial situation (sales report, attempts to apply for a PPP loan, etc.). At the same time, keep in mind that many landlords are also facing economic hardship as well. Do not make a unilateral decision to stop paying rent. What you are likely to find is that most landlords are prepared to work with their tenants and that it is in both parties’ best interest for the tenant to stay in business. Landlords, check your loan covenants and make sure that you have permission (if required) from your lender for any modifications or concessions. If you can, craft a short-term payment plan that maybe includes a concession or deferment of payments.
Keep the conversation open. As conditions change, the terms or payment plan may need to change (ideally, in writing). For example, tenants or landlords may receive financial assistance or a commercial tenant may see an increase in sales as states begin to reopen. On the flipside, we may have more closures in store for us when (hopefully if) we experience another spike in Covid-19 infections.
Prepare. If you cannot reach an accommodation, tenants and landlord should prepare for a post-moratorium world. This can include preparing eviction complaints as well as preparing for bankruptcy and other insolvency events. However, this process will take time so the parties should continue to negotiate in good faith and keep their lenders informed.
Finally, insolvency professionals are expecting a sharp increase in bankruptcy filings. On May 4, 2020, J Crew and Gold’s Gym filed for chapter 11 bankruptcy protection. This will require commercial landlords and tenants to understand their rights and obligations under the Bankruptcy Code. For tenants, 11 U.S.C. § 365 allows tenants in certain cases to reject leases, which practically allows them to walk away from them subject to certain conditions. For landlords, it is important to understand how to calculate damages under 11 U.S.C. § 502(b)(6). Additionally, landlords should be aware of any personal guarantees, which may be a source of collection if a tenant files for bankruptcy. Landlords also need to be very careful about accepting payments from an entity that is not the tenant as that may expose the landlord to future “clawback” claims under the fraudulent transfer sections of the bankruptcy code.
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DON'T LOSE YOUR MIND Working from home
Working from home with kids? That’s a challenging one. If you’re up to your ears in homemade baked goods and need something new to pass the time, take a look at these #lawsome activities for the whole family and skip the DIY slime from Pinterest (you’ll thank us later).
These challenges can't be found anywhere else on the entire internet. MM&H activities for all ages:
Snakes & Gators board game (all ages together)
Create Your Own Comic Challenge (with and without kickstart characters... ideal for teens and tweens)
Caption Writing Challenge (keep your wits about you... age 2 and up)
Who Said That? Quiz (the older the better... and best with craft beer and wine)
WITH A LITTLE HELP FROM MY FRIENDS
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Mark Migdal & Hayden 80 SW 8th Street, Suite 1999 Miami Florida 33130 United States
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