May 2017 CMM Newsletter: Growing the Long Island Economy
Posted: May 29th, 2017
News (All)
Campolo’s Economic Impact Study featured in “Leaders Speak of a ‘Retrofitted’ Suburbia”
Posted: May 25th, 2017
By Adina Genn, Long Island Business News
Two transportation initiatives announced Wednesday will boost Long Island’s economy, Suffolk County Executive Steve Bellone told local leaders at the Hauppauge Industrial Association Business Trade Show & Conference executive lunch today in Brentwood. Those projects – the MTA-approved funding for the proposed LIRR third track and the addition of Denver-based Frontier Airlines, which will start service at Long Island MacArthur Airport to Orlando – will help to retrofit suburbia, he said. The efforts will help to make the region competitive, attracting a young knowledge workforce.
“It will create an environment in which they can thrive and make the region accessible to them,” he said.
These initiatives “don’t happen in a vacuum,” said Mitch Pally, CEO of Long Island Builders Institute, crediting support from private-public initiatives.
In particular, LIRR initiatives, which include East Side access, and a second-track project in Hicksville, would “increase capacity by 40 percent,” boosting the value of land near railroad tracks, as people seek transit-oriented development.
About 4,500 attendees attended the expo, which boasted 375 exhibitors.
The HIA is home to nearly 1,350 businesses, employing an estimated 55,000 people, according to Joseph Campolo, managing partner at Campolo, Middleton & McCormick, a law firm with headquarters in Ronkonkoma, where a new transit-oriented development is expected to break ground next month.
Additional panelists included Jim Coughlan, principal of Tritec Real Estate; Marty Dettling, senior vice president of the Albanese Organization; and Don Monti of Renaissance Downtowns.
Read it on LIBN: http://libn.com/2017/05/25/leaders-speak-of-a-retrofitted-suburbia/
Amendments to Not-For-Profit Corporation Law Effective May 27th
Posted: May 25th, 2017
Important new amendments (“Amendments”) to the New York Not-For-Profit Corporation Law will go into effect on May 27, 2017. The Amendments aim to mend inconsistencies in the law since the Nonprofit Revitalization Act, which went into effect in 2013. New York Not-For-Profit Corporations should review their bylaws and conflict of interest policies to make sure they are up to date with these most recent changes.
One of the major changes is to the definition of a “Related Party.” The term was revised to include directors, officers, Key Persons (discussed below), any of their relatives, and any entity in which the directors, officers, Key Persons (or their relatives) have more than 35% interest. If the entity is a partnership, the threshold is a 5% interest.
For the purposes of defining who is a related party, the Amendment replaces “key employee” with “Key Person.” A Key Person is not a director or officer (but may or may not be an employee) but has substantial influence over the corporation, manages a substantial portion of the corporation, or controls a substantial portion of the corporation’s finances. A Key Person is now subject to the Conflict of Interest Policy.
Perhaps the most significant change concerns related party transactions. Generally, a related party transaction is one from which a person within the nonprofit, or a relative, will receive a financial benefit. Previously, the law prohibited this type of transaction unless the Board determined that it was in the nonprofit’s best interest. The Amendments provide some exceptions to what is considered a related party transaction, such as (1) if the related party’s interest in the transaction is “de minimis,” (2) if the type of transaction is not customarily reviewed by similar boards of similar organizations, and (3) if the related party is the type of person that the non-profit is organized to benefit as part of its mission. These exceptions align with previously published guidance from the New York Attorney General’s Office.
The Amendment now permits the nonprofit’s Board of Directors to appoint a committee to approve a related party transaction. Additionally, the nonprofit will now have a limited defense to an action brought by the Attorney General’s office related to improperly authorized related party transactions if the nonprofit can prove it took certain actions.
Generally, directors who have an interest in a transaction are not permitted to be present during deliberations of the Board, or a committee of the Board, on whether to enter into the transaction. However, the recent change clarifies that the interested director may be asked by the Board to present information or answers to the Board’s questions regarding the transaction.
The Amendment modifies the definition of “independent director” to now provide a sliding scale for disqualification in making certain decisions for the nonprofit. For example, now a director may still be considered independent even if the director, or her relative, has received a benefit of $10,000 or less in the three preceding years if the nonprofit’s gross revenues are less than $500,000 per year.
Generally, Executive Committees are committees of the Board and have the authority to bind the corporation in certain circumstances. Previously, a majority vote of all members of the Board of Directors was required to designate an Executive Committee. The recent change now allows a majority of a quorum present at the Board meeting to designate an Executive Committee.
Another change is that certain duties of the Board cannot be delegated to the Executive Committee. Non-delegable duties include (1) the election or removal of officers and directors, (2) the approval of a merger or plan of dissolution, (3) the adoption of a resolution authorizing the sale, lease, exchange or other disposition of all or substantially all the assets of the corporation, and (4) the approval of amendments to the certificate of incorporation.
Previously, employees of a non-profit could not serve as Chairperson of the Board of Directors. However, the changes now permit an employee to serve as Chairperson so long as the Board approves the appointment by a 2/3 vote and memorializes the basis for the Board’s approval. This change went into effect on January 1, 2017.
If you have any questions about the Amendments or would like your bylaws and conflict of interest policy to be reviewed, please do not hesitate to give us a call.
Focus on Long-Term Care: Activities of Daily Living
Posted: May 25th, 2017
Tags: elder law
Most people go around and take care of their everyday business without ever realizing how independent they are. Only when you have trouble doing something do you realize that you used to do it before. For a younger person, this can come when you injure yourself and may have limited use of an arm or a leg. Unfortunately, this also comes with age.
Often times we see a friend or family member that has trouble doing things that they’ve always done. These things are usually called the Activities of Daily Living (ADLs).
Most ADLs are basic self‑care tasks that you learn as a child such as bathing, dressing, or eating. Don’t confuse them with Instrumental Activities of Daily Living (IADLs), which are similar but are actually more complex skills.
IADLs are skills you need to live independently without some type of assistance. You tend to learn these IADL skills a little later in life, such as in your teens. They include things like using the phone, understanding and managing finances, managing medications, food shopping, cooking, and housekeeping.
People diagnosed with Alzheimer’s disease or dementia normally have trouble with IADLs and often require some type of companion care. Companions do not “touch the client” and therefore do not normally need any special type of licensing.
ADLs are different. These affect the ability for someone to independently care for themselves. Normally, for someone to trigger their Long Term Care (LTC) Insurance or obtain Community Care Medicaid, a nurse must first conduct an evaluation to determine the level of assistance needed to carry out these ADLs. The more assistance that is needed, the more care the insurance or Medicaid will cover.
Only six ADLs are recognized. They are:
- Toileting: Getting on and off the toilet
- Continence: Controlling your bladder and bowel functions
- Bathing: Cleaning and grooming activities such as showering, shaving, and brushing teeth
- Dressing: Getting dressed by yourself without having trouble with zippers and buttons
- Eating: Feeding yourself without much difficulty
- Transferring: Walking or moving from a wheelchair to a bed and back again
Because assistance with these functions requires the person to be “touched,” in New York it requires the aide to have some training and the home care agency to be certified.
The Medicaid program will not typically pay for companion care where only the person’s IADLs have been affected. You will have to show that your loved one needs assistance with the ADLs. Depending on the particular LTC insurance, you may be able to get some assistance with the IADLs, along with the ADLs.
For assistance with applying for Community Care Medicaid or for questions regarding your loved one’s long-term care insurance, please contact us.
In Depth: The Closing Deed
Posted: May 25th, 2017
Tags: real estate
Have you ever taken a look at the deed to your home and wondered, “What does it mean and what does it do?” You have spent a large sum of money at the closing table and signed voluminous amounts of mortgage documents, only to walk away with a piece of paper that gets recorded in the Clerk’s office in the County where the property is located. But this piece of paper is filled with more information than meets the eye.
At the top of the deed, just below the date of the conveyance, the “grantor” is named. The grantor is the seller, or the person(s) or entity conveying the property, also known as “the party of the first part.” Thereafter the “grantee” is named, that is the buyer who is known as “the party of the second part,” and now the new owner.
When more than one grantee is named, it is important to consider the manner in which they are named, because there are different ways to hold title in New York. Married couples, as a general rule, go into title as “husband and wife” or “tenants by the entirety.” The deed would recite: John Brown and Mary Brown, as tenants by the entirety or John Brown and Mary Brown, as husband and wife. What this means is that if one spouse dies, the property is automatically owned one hundred percent by the surviving spouse. If the deed does not recite as “husband and wife” or as “tenants by the entirety,” title is still deemed to be held with survivorship rights if the couple is married, unless specifically stated otherwise.
If two (or more) individuals are named on a deed who are not married, and there is no language specifying the form of ownership, title is deemed to be held as “tenants in common.” In this form of ownership, there are no survivorship rights. If one person dies, their percentage of ownership interest passes to their heirs, not the surviving individual on the deed, unless that individual happens to be their heir. If the two individuals want survivorship rights like a married couple without being married, the deed must specifically state as “joint tenants with rights of survivorship.”
In certain instances there may be a benefit for a married couple to go into title as tenants in common if the value of the property is such that the parties and their heirs can benefit from utilizing certain estate tax exemptions in the most effective way upon each other’s deaths.
Below the grantee section is conveyance language and a description of the property being transferred. It is either a metes and bounds description, which is gleaned from a survey, or a reference to a duly filed subdivision map. Sometimes it is referred to as “Schedule A” and referenced on a subsequent page.
The language below the property description will vary depending upon the type of deed (Warranty, Bargain and Sale with Covenant against Grantors Acts, Bargain and Sale, Quit Claim, Fiduciary, Executor or Administrator’s) being delivered.
The grantor(s) signs at the bottom of the deed and his or her signature must be acknowledged before a notary so that the deed can be recorded in the County Clerk’s office.
Preserving Attorney-Client Privilege When Responding to a Cybersecurity Breach
Posted: May 25th, 2017
Tags: cybersecurity, technology
You are the CEO of a small or medium-sized company and someone from your IT team runs to your office, pale-faced, to tell you that the company’s network has been hacked. They don’t know how the penetration occurred, when, or whether any data or confidential material has been stolen. Who do you call first? Your cyber forensic expert? The cybersecurity consultant you hired to help fortify your systems? The Board of Directors? No, your first call should be to your attorney.
Why should your first call be to your attorney? Whether you call in-house or external counsel, you will want to know what federal and state reporting obligations must be addressed, whether and when to involve law enforcement, and how best to respond to the incident to preserve evidence and limit your legal liability in the event of a regulatory action or lawsuit. However, the most urgent and often overlooked reason is to ensure that your company’s response to the incident falls under the umbrella of attorney-client privilege.
If your company is subject to a data breach and customer records are lost, you likely have an obligation to report the loss. Once reported, your company may face a civil suit, regulatory investigation, or government enforcement action. Imagine if your pre-incident security assessment revealed critical weaknesses in your cybersecurity system and there are emails describing those weaknesses. Would you want those emails to be discoverable in a civil litigation? What about emails discussing what or what not to include in your company’s cybersecurity policy or after-the-fact internal criticism of the way your team responded to a breach?
In United States v. Kovel, the Second Circuit Court of Appeals extended attorney-client privilege to third parties, such as accountants, who assist lawyers representing their clients. The reasoning of the 1961 Kovel decision has been broadened over the years and is now being extended to cybersecurity consultants. In 2015, a federal judge ruled in favor of Genesco Inc. in a dispute with Visa to compel the production of documents from IBM, which Genesco had retained to provide consulting and technical services to help Genesco’s counsel. Visa was attempting to recoup $13 million in damages assessed after a data breach, but the judge found that IBM’s documents and communications with Genesco were protected by the privilege.
Companies cannot, however, simply copy their attorneys on every email with their cybersecurity consultants or invite their attorney to a cybersecurity meeting to read the newspaper in a corner. To protect communications with and work product of your cybersecurity team, you need them to truly be working hand-in-hand with your attorneys to advise not only on the technical but legal and regulatory aspects of pre- and post-incident activity. This is why it is so important to have your cybersecurity team in place long before an incident ever occurs.
Companies should engage third-party cybersecurity consultants through outside counsel and any contract with that consultant should be signed by the attorney as well. The contract’s statement of work should make clear that the work is being performed in conjunction with counsel and in anticipation of litigation. Communications that truly relate to the provision of legal advice should be appropriately labeled and, to the extent possible, attorneys should direct the work of the cybersecurity consultants.
There is no guarantee that all communications and work product will be protected by the privilege. However, engaging counsel both before and after a cybersecurity incident can increase the efficiency of your cybersecurity consultants who may not be focused on the company’s legal requirements and demonstrate to regulators how seriously your company takes the problem.
Waves, Waivers, and More: A Guide to Summer Recreation
Posted: May 25th, 2017
By: Scott Middleton, Esq. email
Tags: negligence
The warm weather has finally arrived. As many of us get ready to participate in – or allow our children to participate in – summer activities, we will invariably be confronted with a waiver/release form.
Are these waivers enforceable in New York? As with many things in law, it depends. Generally speaking, any contract, membership application, admission ticket, or similar writing entered into between a participant and the owner of a pool, gymnasium, or place of recreation/amusement seeking to exempt the owner from liability or damages in exchange for a fee is void as against public policy.
The intent of the law in New York is to prevent places of amusement or recreation from benefiting from exculpatory clauses printed on admission tickets or membership applications because the public is either unaware of them or does not understand their full effect.
Enforceability generally comes down to whether a facility is instructional or recreational in its purpose.
If the facility is instructional in nature (look to a website, brochure, or even a certificate of incorporation), then a waiver/release form is likely enforceable. By way of example, private/personal training gyms, martial arts schools, and gymnastic programs are typically instructional in nature.
If the facility is purely recreational, such as amusement parks, pools, and camps, the waiver/release form is generally not enforceable.
When considering these activities, one must also consider the applicability of the doctrine of primary assumption of the risk. When engaging in a sport or recreational activity for which a participant consents to those commonly appreciated risks that are inherent and arise out of the nature of the sport and flow from such participation, the participant – even a child – assumes the risk of any injury. Think of activities such as horseback riding, scuba diving, surfing, and skydiving. These activities often carry with them instruction-based programs as well, so both theories exonerating the facility from liability or damages might apply.
Be aware of what you’re signing, appreciate the risks of an activity, and if you have questions before signing any document, feel free to call our office to discuss the ramifications.
Campolo Spearheads Economic Impact Study of the Hauppauge Industrial Park to Help Fuel Growth
Posted: May 23rd, 2017
Many firms tout their economic development services, but Campolo, Middleton & McCormick is unique in that we are actually in the trenches working on critical initiatives to attract investment and development in our region.
CMM Managing Partner Joe Campolo, a board member of the Hauppauge Industrial Association (HIA-LI), recently spearheaded the first ever Economic Impact Study analyzing the critical role of the Hauppauge Industrial Park in the state and local economy. The study details the Park’s population density, industrial diversity, high employment rate, eco-friendly initiatives, and strong economic impact on the region. The comprehensive study was developed under the direction of an HIA-LI task force of Long Island business owners, in collaboration with the Suffolk IDA, Regional Plan Association, and Stony Brook University.
“These 11 square miles make up only .0002 percent of New York State in terms of size, yet the sales volume of the Park accounts for approximately 1.35 percent of the gross state product of New York State,” Campolo said. “The numbers make clear just how critical the Park’s continued growth is to the Long Island and state economy. It’s the crown jewel of the region.”
Phase One of the Economic Impact Study revealed the following impressive numbers:
- 1,350+ manufacturing, construction and services industry businesses reside in the Park
- 55,000+ individuals employed by Park businesses
- 1 in 20 jobs on Long Island is dependent on the Hauppauge Industrial Park
- $13.4 billion sales volume generated by Park businesses
- $2.897 billion in total combined Park business payrolls
- $64.5 million levied in annual property taxes
Download the Executive Summary of the Economic Impact Statement.
“Over time, we expect that Park infrastructure improvements like the new sewer system and overlay district, combined with innovative development and increased investment, will enable expansion of the Park to include residential and entertainment spaces as well as typical industrial uses,” said Terri Alessi-Miceli, President of HIA-LI.
Potential growth opportunities for the Park include development of rental apartments, walking paths, entertainment venues, an innovation hub, and a buying consortium.
Campolo is leading HIA-LI’s efforts to attract investment and development in the Park. “We are very aggressively pursuing the dollars and improvements needed to bring the Park into the future.”
LIBN: “Chess Legend Garry Kasparov to Speak on LI at CMM International Event”
Posted: May 17th, 2017
By Adina Genn, Long Island Business News
Garry Kasparov
– the legendary chess champion and outspoken critic of Vladimir Putin – will be on Long Island June 7. The chair of the Human Rights Foundation, Kasparov will discuss his recent book Winter Is Coming: Why Vladimir Putin and the Enemies of the Free World Must Be Stopped.
Hosted by Campolo, Middleton & McCormick, the fundraiser will benefit the Human Rights Foundation, a nonpartisan nonprofit organization that promotes and protects human rights in closed societies.
This year marks the 20th anniversary in which Kasparov lost the chess match with IBM’s computer Deep Blue. He is making headlines now talking about why the United States should fear Russia under Putin and why human beings should embrace artificial intelligence.
The event will be held at the Woodlands in Woodbury from 6-9 p.m. Tickets and additional information available here.
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