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Commercial Department Year-In-Review

January 6, 2014

2013 was an extraordinary year of both litigation and transactional success for Zarwin Baum's Commercial Department. Our litigators recovered tens of millions of dollars in judgments and settlements and successfully defended claims where the stakes were equally high, while our transactional lawyers assisted clients with real estate financing, acquisition, development and land use, along with corporate mergers, acquisitions and asset-based financings, with an aggregate value well in excess of $200 million. We'd like to share some of the highlights.

LITIGATION

While Zarwin Baum's commercial litigators make every effort to resolve business disputes without the need for costly and time-consuming litigation, sometimes lawsuits are unavoidable. When litigation is the only option, we assure our business clients that their interests are zealously protected by a team of highly experienced and dedicated advocates who will thoroughly yet efficiently prosecute or defend their claims through discovery, trial and appeal. As reflected below, last year was especially fruitful for Zarwin Baum’s commercial litigators and their clients.

In early 2013, Tony Twardowski and Phil Magen secured dismissal of breach of contract and unfair competition claims asserted by two national home builders against one of their competitors. Through creative and aggressive discovery efforts, Tony and Phil learned that the plaintiff home builders had taken inconsistent positions in other litigation and convinced the court that the plaintiffs were accordingly precluded from pursuing their claims against their competitor. Unhappy with the lower court's decision, the plaintiffs appealed. After briefing and oral argument, the appeals court upheld the dismissal in all respects. The damages sought, and eliminated by the successful motion and appeal, exceeded $10 million dollars.

 A few months later, Tony Twardowski and William Firth successfully defended two Delaware limited liability companies in litigation brought by one of their members seeking the appointment of a liquidating trustee to oversee the winding up of the companies’ affairs. On the eve of an evidentiary hearing, based on the detailed and comprehensive briefs and affidavits submitted on behalf of the LLCs, the Delaware Chancery Court determined that a hearing was unnecessary, denied the motion to appoint a trustee and dismissed the litigation in its entirety. In its opinion accompanying the Order, the Court noted that the written submissions by the LLCs, which painstakingly outlined the reasonable and prudent actions taken theretofore by the managing members, sufficiently demonstrated that the relief sought was unwarranted.

At about the same time, Tony Twardowski and Philip Magen favorably settled a federal lawsuit brought by a bank against its D&O insurer to recover the costs incurred in investigating a demand made by a shareholder as a precursor to commencing derivative litigation. The insurer took a hard line throughout the discussions that preceded litigation and even sought to dismiss the bank’s complaint based on its interpretation of the policy language. During oral argument on the dismissal motion, relying on the arguments outlined in Tony’s and Phil’s responsive brief, the Court challenged the insurer’s coverage position extensively and, in the end, strongly suggested that the insurer meet with the bank to discuss settlement. Following a brief meeting between counsel and the Court, the insurer agreed to pay the bank the lion’s share of its total claim.

In two other insurance coverage cases resolved during the summer and fall, Tony Twardowski and Philip Magen (1) secured an insurer contribution in excess of $1 million to the settlement of a substantial fraud/securities claim brought against a bank and one of its officers and (2) won a Court decision awarding a seven figure policy limits judgment in connection with a data breach claim under an electronic risk policy.

Tony Twardowski and Grace Flanagan also tried to verdict a substantial claim by a a prominent Philadelphia commercial real estate broker who had procured a highly profitable long-term commercial lease for the defendant landlord. Years later, the landlord claimed that plaintiff’s inadvertent error in administering the rents of the lease entitled the landlord to terminate the brokerage agreement and cancel all commissions owed to plaintiff. Tony and Grace aggressively argued on behalf of plaintiff to maintain his right to the commissions earned. After a three-day bench trial in early summer, the Court found in plaintiff’s favor and ordered the defendant to pay the entire commission for so long as the tenant remains in the property, a result which should net plaintiff hundreds of thousands of dollars of additional commission payments.

Representing the owner of a major regional shopping center in a four day trial, Ken Fleisher and Phil Magen successfully defended the shopping center owner against claims by neighboring property owners that they had a prescriptive easement for vehicular and pedestrian access over the shopping center.

In a number of hearings held throughout the year, Gary DeVito and Darwin Beauvais successfully represented a civic organization which opposed a prominent convenience store’s attempt to convince Conshohocken Borough Council to amend its zoning code to allow a proposed sire on Fayette Street in contravention to the current zoning code. Despite the applicant’s presentation of several experts, Gary and Darwin were able to neutralize and counter their testimony. Ultimately, after several hearings before the Planning Commission and Borough Council, both the Planning Commission and Borough Council voted overwhelmingly against the proposed text amendment.

Finally, Patrick Wolfe, Jr. and Grace Flanagan successfully defeated an appeal to overturn the dismissal of plaintiff’s civil rights claims. Pat and Grace discovered that plaintiffs had taken positions in a bankruptcy proceeding that were at odds with those taken in the current matter and convinced the New Jersey District Court and the Third Circuit that the complete dismissal of the case was an appropriate sanction, despite plaintiffs’ argument that it was their attorney’s fault for failing to disclose information to the bankruptcy court.

TRANSACTIONAL

Zarwin Baum’s transactional lawyers had an equally productive 2013, having assisted clients in the sale, acquisition, financing, leasing and development of multi-unit residential, commercial, retail, industrial and mixed used properties throughout the United States, as well as establishing asset-based credit facilities and negotiating and preparing loan documents on behalf of the Firm’s numerous banking clients for an equally wide variety of real estate projects, collectively worth in excess of nine figures. Among other things, Zarwin Baum’s business lawyers helped clients:

Acquire the assets of an Assisted Living Facility (the client’s second facility in the region), including the real property, from a nonprofit corporation; Sell assets, including a branded product line, to a large private equity-backed company;

Acquire the assets of a clinical laboratory for a large private equity-backed company to add to its portfolio; Acquire the assets of a mobile X-ray company for a private equity-backed health care company to add to its portfolio;

Secure a $40 million line of credit for a client in the construction services industry (for cable and wireless companies), secured by assets in the US and Canada, and set to increase to $100 million in January, 2014.


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