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CMM Represents ServiceAide, Inc. in Acquisition from CA Technologies

Posted: December 19th, 2016

Campolo, Middleton & McCormick represented industry leader ServiceAide, Inc. in its acquisition of IT Service Management Software Cloud Service Management (CSM) from CA Technologies (Nasdaq: CA). CMM partner Christine Malafi led a corporate team that also included Donald Rassiger and Vincent Costa. Terms of the deal were not disclosed publicly.

Backed by a solid technology investment firm, ServiceAide is focused on the benefits to customers from the marriage of a world-class ITSM SaaS operation and proven innovative big data technology. ServiceAide will provide existing clients with a highly successful team committed to ensuring CSM becomes the leading SaaS offering in the cloud ITSM space. According to ServiceAide CEO Wai Wong, “This relationship is a natural, the time is right, and this kind of innovation is clearly a game changer in an industry that is poised for resurgence.”

Since 2010, CMM has been involved in M&A transactions valued at more than $3.5 billion. The firm has a depth of experience in structuring M&A transactions on both the buy-side and sell-side across a variety of industries, including healthcare, technology, real estate, and retail. Its M&A client roster includes companies of all sizes, from worldwide conglomerates to closely-held Long Island businesses.

Added CEO Wai Wong, “It was great to partner with Christine and CMM in getting this transaction done. The entire process was well organized with high transparency in what to expect and when. I couldn’t have asked for more.”

About ServiceAide, Inc.
ServiceAide Cloud Service Management is a powerful yet simple to use SaaS ITSM product available worldwide. ServiceAide was created around the core concept of connecting data to create coherent information that can revolutionize business results. The company accomplishes this by building a solid foundation of big data and machine learning Sigma technology, combined with world-class service and support. Learn more at www.serviceaide.com.

About CMM
Located in both the heart of Long Island and on the East End, Campolo, Middleton & McCormick, LLP is Suffolk County’s premier law firm. Over the past generation, CMM attorneys have played a central role in the most critical legal issues and transactions affecting Long Island. The firm has earned the prestigious HIA-LI Business Achievement Award and LIBN Corporate Citizenship Award, a spot on the U.S. News & World Report list of Best Law Firms, and the coveted title of Best Law Firm on Long Island. Learn more at www.cmmllp.com.

LIMBA Relaunches in 2017 with New Format and CMM as Major Corporate Sponsor

Posted: December 14th, 2016

Campolo, Middleton & McCormick, LLP, a premier law firm, and Long Island Metro Business Action (LIMBA), the longstanding catalyst for transportation and economic improvement on Long Island, are pleased to announce that they have joined forces for 2017 to promote the needs of Long Island and expand their reach in the community. As major corporate sponsor of LIMBA, CMM will co-host six LIMBA meetings in the new year. These joint meetings will feature an updated format in which CMM Managing Partner Joe Campolo will interview representatives from various levels of government, municipal agencies, and the local economy on issues of importance to Long Islanders. The first joint meeting will feature U.S. Congressman Lee Zeldin on Friday, March 3, 2017 at the Courtyard Marriott, 5000 Express Drive South in Ronkonkoma, at 8:00 a.m.

LIMBA officers and hosts Ernie Fazio and Bill Miller also announced the expansion of LIMBA’s Board of Directors to include representatives from various segments of the community including the nonprofit, legal, banking, transportation, hospitality, education, healthcare, and environmental sectors, among others. This added input will help LIMBA create diverse and relevant programming.

“LIMBA has been a part of the Long Island landscape for generations because it has never lost focus on the issues that are critically important to our community,” Campolo said. “We’re excited to join forces with LIMBA to bring engaging and dynamic leaders to an expanded audience.”

Fazio added, “Having two great brands working in concert to promote the needs of Long Island is a major win for the community. We’re looking forward to using the influence of both organizations to reach more Long Island businesses.”

About CMM
Located in both the heart of Long Island and on the East End, Campolo, Middleton & McCormick, LLP is Suffolk County’s premier law firm. Over the past generation, CMM attorneys have played a central role in the most critical legal issues and transactions affecting Long Island. The firm has earned the prestigious HIA-LI Business Achievement Award and LIBN Corporate Citizenship Award, a spot on the U.S. News & World Report list of Best Law Firms, and the coveted title of Best Law Firm on Long Island. Learn more at www.cmmllp.com.

About LIMBA
Founded in 1968 by Paul Townsend, editor and founder of Long Island Business News, Long Island Metro Business Action (LIMBA) has long served as Long Island’s catalyst for transportation and economic improvement, sponsoring breakfast forums featuring Long Island business activists and government officials, as well as providing leadership in advancing new projects. Ernie Fazio serves as Chairman. Learn more at www.limba.net.

Newsday Coverage of Women’s Leadership Panel featuring Malafi

Posted: December 5th, 2016

From left, Christine Malafi, partner at Campolo, Middleton

From left, Christine Malafi, partner at Campolo, Middleton & McCormick; Neela Mukherjee Lockel, CEO of American Red Cross on Long Island; and Christine Riordan, president of Adelphi University, during a panel discussion with women CEOs at the HIA-LI’s 6th annual Women’s Leadership Breakfast in Hauppauge, December 2, 2016. Photo credit: Ed Betz.

Panel: Women Should ‘Outsource’ to Achieve Career/Life Balance

by Ken Schachter

Conflicts between advancing in business and maintaining a family life can be overcome with the right tactics, women executives said at a business breakfast panel sponsored by HIA-LI on Friday.

“The things I don’t want to do, I outsource,” said Judith Heller, assistant vice president of physician recruitment at Northwell Health. “Give yourself permission not to do the things you don’t want to do . . . Find a service that will do your laundry for you.”

Speaking at the Hyatt Regency Long Island in Hauppauge, Heller said that although she is willing to cook, “people don’t want to eat my food.”

Fresh Direct, the grocery delivery service known for its prepared foods, “will save your life,” she said.

Another panelist, Christine Malafi, a partner at the Ronkonkoma law firm Campolo, Middleton & McCormick LLP, acknowledged there are times when she serves a family meal “and we look at each other and say, ‘We’re going out.’ ”

In a similar vein, Karen Davis-Farage, president and co-owner of the Pole Position indoor electric go-kart tracks in Farmingdale, Jersey City and elsewhere, said that her children understood that she would not be coming to all of their events.

Davis-Farage said she hired nannies who shared her “core values” and she ceded parental authority when she was absent for business. When a school called because one of her children had hit pupils at school, she told the educators that her nanny was “the mother during the week while I’m at work.”

Beyond family issues, Christine Riordan, the president of Adelphi University, said that women need to overcome their fears and learn to take risks.

“You have to face what you’re afraid of” by gaining skills and crafting strategies, she said. “Women are more afraid to put themselves out there than men are.”

Riding the inevitable career dips also may require women to “be able to rebound and do it gracefully.”

But in the end, Riordan said, “success comes in many, many forms, particularly for women.”

The Internationalization of Anti-Corruption Investigations and Enforcement

Posted: November 28th, 2016

Tags: international, white collar

In November 2016, France adopted new anti-corruption legislation permitting deferred prosecution agreements in bribery cases. In July 2017, Mexico’s new anti-corruption law will take effect. The more-stringent law should prompt all companies operating in Mexico to re-evaluate their anti-corruption compliance programs. And in February of this year, China released draft amendments of a new law governing commercial bribery that would, among other things, include vicarious liability for employers and liability for bribes paid through third parties.

American companies are understandably focused on complying with the U.S. Foreign Corrupt Practice Act (FCPA), which carries stiff civil and criminal liability for any company that gives something “of value” to a foreign official in order to gain a business advantage. However, foreign governments are passing comparable laws at a seemingly exponential rate and U.S. companies must take care to comply not only with the FCPA, but any local anti-corruption laws in effect in the countries where they operate.

Some of the largest settlements in the history of the FCPA have been magnified by corresponding penalties levied by other countries connected to the corrupt activity. For example, in 2008, Siemens, a German multinational company, set the record for the largest FCPA settlement at $800 million for the series of corrupt payments made by its subsidiaries around the globe. Siemens was subject to the FCPA’s jurisdiction because it traded on a U.S. securities exchange. The company also settled with the German government for an additional $800 million, bringing its total settlement to an astonishing $1.6 billion.

In 2016, Amsterdam-based VimpelCom reached a $795 million settlement agreement that was split evenly between the U.S. and Dutch governments for bribes paid to a government official in Uzbekistan between 2006 and 2012.

Perhaps the greatest indicator of the globalization of anti-corruption enforcement is the growing number of joint and concurrent anti-corruption investigations between foreign governments. Both the DOJ and the UK’s Serious Fraud Office are investigating bribery allegations relating to Unaoil, a Monaco-based intermediary for companies in the oil and natural gas sector.

In February 2016, U.S. software firm PTC paid $28 million to resolve FCPA offenses relating to payments for recreational travel by Chinese government officials. The company had won millions in government contracts and admitted the payments for the luxury travel were buried in the inflated costs of the contracts. One month after the company settled the U.S. charges, China announced that it was launching an investigation into similar conduct by the company.

U.S. companies operating overseas must ensure that they have adequate compliance programs to prevent against FCPA violations, but they must never forget that they are likely subject to a host of foreign anti-corruption laws.

Important New DMCA Safe Harbor Requirements for Web Operators

Posted: November 28th, 2016

Tags: intellectual property, technology

If you or your company has a website or app that hosts material submitted by users or that provides links to materials to other websites, take note: the U.S. Copyright Office has a new electronic filing system for registering websites, apps and other online platforms for “safe harbor” protection from copyright infringement liability under the Digital Millennium Copyright Act (“DMCA”). (This electronic system replaces the prior paper-based system.)

Section 512 of the DMCA contains a safe harbor provision from copyright infringement liability for online service providers. For example, the safe harbor provision protects website operators from copyright liability in situations where the website operator is not aware that a hyperlink included on its website is directed to infringing content hosted by another site, and where the website operator is not aware that a particular item of such user-submitted content infringes a copyright.

However, to obtain protection under the safe harbor provision of the DMCA, certain requirements and conditions must be satisfied. One of the requirements is the designation of an agent to receive notifications of claimed copyright infringement and making the contact information for the agent available to the public on its website and providing such information to the U.S. Copyright Office.

Beginning December 1, 2016, all website operators seeking safe harbor protection under Section 512 are required to submit designations through the U.S. Copyright Office’s new electronic filing system. Further, website operators that previously designated a copyright agent through the U.S. Copyright Office’s former paper-based system must submit a new designation through the electronic system by December 31, 2017. Failure to do so will result in loss of the safe harbor protection since the new electronic filing system will fully replace the paper-based system. The designation must also be renewed every three years, or else the designation will expire and become invalid – this is particularly important given that the current paper-based system does not require a renewal.

Accordingly, website operators seeking to avail themselves of the safe harbor provisions under the DMCA to avoid liability for copyright infringement should ensure compliance with the new electronic filing system. Failure to do so may result in the loss of the safe harbor protections.

Please contact us with any questions about how to protect yourself from copyright infringement claims.

Estate Planning and Estate Tax Forecast

Posted: November 28th, 2016

By: Martin Glass, Esq. email

Tags: estate planning

Well, the election has come and gone. What does that mean in terms of estate planning and estate tax?

As a quick review, the current federal estate tax exemption is $5.45 million and is scheduled to increase to $5.49 million as of January 1, 2017. Each year it goes up a bit as it’s indexed by inflation. This means that there is only federal estate tax for any transfer of wealth above the exemption. I say it that way because it also includes any gifting that you’ve done (above the $14,000 exclusion) during the course of your lifetime.

President-elect Donald Trump wants to change all this. His plan calls for the repeal of the federal estate tax, or as he calls it, “the death tax.” But this is not a complete freebie.

Although he says he plans to repeal the estate tax, he also says he plans to repeal the step-up in basis upon death for capital gains.

Currently, when someone dies with an appreciated asset (whether it’s a house or stock), the basis, or what you paid for the asset, gets bumped up to its value at the time of your death. The capital gain is the difference between the asset’s original value and the value at the time of your death. So, if it gets bumped up, there is no capital gain and therefore no capital gain tax.

If you take away the step-up (or bump up), then there will still be an 18-20% capital gain tax. Mr. Trump is also planning to put in a $10 million exemption on the capital gain. This is to exempt small businesses and family farms.

But this will lead to other problems. The first is that the tax is collected when you sell the asset, not when the decedent dies. So there’s going to have to be a tracking system to know if/when you go over the $10 million. The second, and bigger problem, is trying to figure out what dad paid for the AT&T stock 45 years ago. Or, if he had a brokerage account with multiple stocks, you’ll need to try to get the basis for each one of those.

So, we are going from a $5.49 million exemption on all estate assets with a 40% tax to no estate tax and a $10 million exemption on only the appreciation of the assets with a 20% tax. But the bookkeeping is going to be a nightmare.

It’s also important to note that the New York estate tax isn’t going anywhere. Currently, it has a $4.1875 million exemption and will go up to $5.25 million in April 2017. And by 2019, the New York exemption is supposed to match the federal exemption. It’s unclear what they’re going to do at that time if there is no federal exemption. I don’t see New York repealing their estate tax.

Keep in mind that all this is just a plan. It will take a number of years to wind its way through Congress. What will happen remains to be seen.

5 Negotiation Mistakes You May Not Know You’re Making

Posted: November 28th, 2016

By: Joe Campolo, Esq. email

Tags: negotiation

Don’t be your own worst enemy in a negotiation.

There are plenty of things to be mindful of at the negotiating table – wondering if you’re sabotaging your own efforts shouldn’t be one of them. If you recognize yourself in any of the following negotiation behaviors, try taking a step back to reassess your approach.

Mistake #1: Underestimating your own strengths
If you head into a negotiation doubting your position and your ability to convey it, it will become a self-fulfilling prophecy. Instead of focusing on the weak aspects of your position, keep your eye on the strengths. It’s important to be confident during negotiations – or at least act like it.

Mistake #2: Overestimating your opponent’s strengths
On the flip side, try not to get flustered by the great argument or negotiating prowess your adversary supposedly has. Otherwise, you’ll end up letting your adversary call all the shots while you’re scrambling to keep up. Remember that your opponent is also feeling the heat of the negotiation. Don’t shoulder all the pressure yourself while giving your adversary a free pass!

Mistake #3: Not really listening
When your adversary is speaking, do you tune out and spend the time formulating a response? Do you keep interjecting because you “know” what your adversary is going to say? If you talk through or zone out while the other side is sharing their thoughts, you’ve wasted the opportunity to be empathetic to their point of view and come up with workable solutions.

Mistake #4: Letting your adversary’s title get the best of you
Your adversary went to the best schools, has four advanced degrees, is CEO of a Fortune 500 company, and is the most interesting person in the room. That’s great for that person – but your opponent’s accomplishments, credentials, or prestige shouldn’t prevent you from negotiating as you would with anyone else. You have a seat at the table for a reason.

Mistake #5: Having a negotiation style that’s too “hard” or “soft”
Some negotiators would rather walk away than make even the most minimal of concessions, just to “win” and prove a point. They will do everything they can to make their adversary uncomfortable enough to throw up their hands and give up. Other negotiators are just looking to get out of the situation and will concede anything and everything just to move things along, even to their own detriment. I believe everyone’s negotiation style falls somewhere along a spectrum. If you’re too far to one side, rethink your approach.

See “Seven Critical Elements of Negotiation Success” by Robert Bordone and Matthew Smith of the Harvard Negotiation Institute.

Sorry for the Delay: The Importance of Giving Timely Notice to Your Insurer

Posted: November 28th, 2016

By Christine Malafi

When an insured seeks liability coverage under its general liability or commercial liability policy after it has been sued for personal injuries or death resulting from an accident, New York State Insurance Law § 3420(d) requires the insurance company to make its decision to disclaim liability or deny insurance benefits to the insured and provide “written notice as soon as is reasonably possible” to the insured and those persons making the claim. This obligation usually arises after the insured’s obligations under the applicable insurance policy have been triggered—one of which is the insured’s obligation to provide its insurance company with reasonable, timely notice of the claim in the first instance. So, if the insurance company doesn’t timely refuse to provide insurance coverage on the basis of late notice having been provided to it, that defense will be found to have been waived by the insurance company and unavailable to it in a subsequent suit seeking to force the insurer to provide coverage.

The New York State Court of Appeals recently reviewed these obligations in the context of a claim for coverage brought by a commercial business in connection with property damage suits against it based upon the alleged dumping of hazardous materials by the business, where the Insurance Law denial/disclaimer rules do not apply. The Court instead applied a common-law waiver and estoppel analysis and allowed the insurance company to assert the defense in the insured’s breach of contract action under the applicable insurance policies.

In Estee Lauder Inc. v. OneBeacon Ins. Group, LLC, 28 N.Y.3d 960 (2016), the highest Court in New York State found that the insurance company’s failure to assert an affirmative defense of late notice by the insured, after reviewing all factors, did not waive the defense to coverage in the subsequent suit brought by the insured. The Court found that the insurer in that case had raised late notice by the insured in “early communications” and that the “mere passage of time rather than . . . the insurer’s manifested intention to release a right . . . or on prejudice to the insured” was not a sufficient basis to find that the insurer was prevented from pointing to the insured’s late notice to avoid its coverage obligations.

Therefore, timely written notice of the late notice defense by the insurance company did not waive the potential complete defense to coverage. The insurance company was permitted to amend its Answer to include the defense, meaning, potentially, that the insured will not get the paid-for benefits of its insurance policy due to its late notice of the claim.

The lesson to be taken from this decision is that you must review your insurance policies and know when you are required to provide notice to your insurance company in order to protect your rights in the event of a lawsuit against you. At CMM, we are available to assist you in such a review to help you make sure that you don’t lose your insurance coverage for this reason.

November 2016 CMM Newsletter: Insurance Update, Negotiation Mistakes & More

Posted: November 25th, 2016