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Business Practice Group: 2015 Year-In-Review

February 11, 2015

In 2014, Zarwin Baum’s Business Practice Group welcomed two lateral partners, strengthening existing practice areas and expanding into new ones.  
Louis N. Marks joined the Firm in April as a shareholder in the Corporate and Business Department.  Along with other members of his Department, Lou counsels a variety of businesses, mostly middle-market in size, in the areas of corporate law, corporate finance, and business planning and development.  With the addition of Lou, the Firm’s Corporate and Business Department continues to be able to provide its business clients with comprehensive representation across all facets of corporate and business law.  Previously, Lou was a Partner at Dechert, Montgomery McCracken and Archer Greiner.
In October, the Firm established a Public Finance and Charter School Department, naming as its Chairman Alan Wohlstetter, formerly a partner at Fox Rothschild.  Throughout his career, Alan has been involved in financing more than thirty charter schools, serving as Bond Counsel or Underwriter’s Counsel for schools in Pennsylvania, California, Texas, and Colorado.  Alan also has broad experience in the areas of public finance and public-private partnerships.  The Firm is excited about this new practice area and the additional services we are now able to provide existing and prospective clients.
In addition to increasing its man power and depth, the Business Practice Group achieved tremendous results for its clients across all practice areas.  Our litigators successfully prosecuted and defended claims where millions of dollars were at stake.  And our transactional lawyers assisted clients with substantial real estate financing, leasing, acquisition, disposition, restructuring, development and land use matters, as well as significant corporate mergers, acquisitions and asset-based financings, with an aggregate value in the hundreds of millions of dollars. We would like to share some highlights.  
Anthony R. Twardowski, Chairman of the Firm’s Commercial Litigation Department, secured a multi-million dollar federal court judgment on behalf of one of the Firm’s banking clients against a co-borrower and two guarantors of a commercial mortgage loan, concluding nearly four years of hard fought litigation.  The case began as a fairly routine collection/foreclosure action but soon escalated when the debtors and guarantors asserted defenses and affirmative claims for relief ranging from fraud and conversion to defamation, invasion of privacy and interference with contractual relations.  Tony first challenged the lender liability claims, successfully obtaining the early dismissal of all but three of the eleven claims asserted.  The case then proceeded to discovery, during which Tony developed a factual record that convinced the Court years later that the remaining three affirmative claims were equally without merit.  Judgment was accordingly entered in the bank’s favor with respect to all claims asserted against it.  The bank’s affirmative claims, of course, still remained.  As to those, Tony initially focused on the corporate debtor and later addressed the liability of the individual co-borrower and guarantors who had raised a number of specific defenses applicable only to them. The Court had little trouble disposing of the bank’s claim against the borrower, entering judgment in the bank’s favor for the full amount sought.  As for the bank’s remaining claims, the Court entertained substantial briefing and held a number of hearings, but in the end, agreed with Tony’s arguments in all respects and accordingly entered judgment in the bank’s favor on these claims as well.    
In another matter, following several days of hearing and substantial briefing on novel issues of eminent domain law, Anthony R. Twardowski, assisted by Scott E. Goldstein, convinced a Philadelphia Court that the City of Philadelphia had constructively seized nearly eight acres of privately owned property, on which the owner planned to develop a multi-unit residential community, and at the urging of a local civic association which opposed the development, effectively converted the property into a public park. In a decision of first impression on the issue of governmental de facto takings, which is now on appeal before the Commonwealth Court, the Court concluded that Tony and Scott had presented compelling evidence that established beyond a reasonable doubt that the City, by refusing to pass an ordinance to pave the only available street to access the property, had improperly seized their client's property, valued in excess of $2 million, without paying just compensation. Overruling the City’s strenuous objections, the Court accordingly appointed a Board of View to determine precisely how much the City must pay.  
In a non-jury federal trial against one of the Firm’s petroleum marketing clients, Anthony R. Twardowski and Brendan G. Lamanna convinced the Court that several components of the damages sought by the plaintiff, specifically liquidated damages and attorneys’ fees, were unsupported by the governing contract and applicable law.  The client accordingly was spared a substantial judgment that otherwise would have been entered and the matter settled soon thereafter.  
Capping an epic eighteen year legal battle, involving hundreds of millions of dollars and fought in the New York federal courts and in various courts throughout Brazil, Anthony R. Twardowski negotiated and successfully concluded a settlement between his American surety clients and their Brazilian obligee and indemnitors.  
Anthony R. Twardowski and Kenneth J. Fleisher, Chairman of the Firm’s Real Estate Department, successfully defended a prominent home builder which had been sued by a condominium association seeking to recover in excess of $1 million of allegedly unpaid association fees.  Following the Court’s ruling denying the association’s summary judgment motion, which was rendered on the eve of trial, the case settled with only a minimal financial contribution from Tony’s and Ken’s client. 
Kenneth J. Fleisher and a team consisting of David M. McComb and Brendan G. Lamanna obtained a preliminary injunction on behalf of an international client who owns a company which purchased a multi-unit residential apartment complex in Bucks County.  After closing, the client learned that an unrelated third party claimed he purchased the company from the same seller.  The third party then transferred title to the property to another company which he formed, signing the deed as if he were the owner of our client’s company.  Ken and his team filed a Complaint against the individual and his newly-formed company seeking, among other things, declaratory relief and to quiet title, as well as a Petition for Preliminary and Permanent Injunction.  Following oral argument, the Court issed the requested Preliminary Injunction, preventing further transfer of the title and preventing defendants from attempting to exercise any manner of control over the property until further order.  
David M. McComb successfully defeated a motion for a Temporary Restraining Order which had been filed in Philadelphia federal court against a manufacturer of medical devices.  Dave’s client had hired a salesperson who was subject to a noncompetition agreement with a former employer.  Dave took the position that the products of the two companies did not directly compete with each other, but the former employer disagreed and filed suit.  In opposing the request for a Temporary Restraining Order, Dave argued that such a motion can be granted only where there is a threat of immediate harm.  The court agreed and concluded that there was no showing of immediate harm because the former employer had waited a month to bring suit and the competitive overlap between the companies’ products was not clear.  
Philip A. Magen and Scott E. Goldstein obtained a dismissal on preliminary objections of an ejectment action filed against homeowners in Montgomery County by a former owner of the property.  The former owner contended that the property was sold pursuant to an invalid and erroneous court order.   Following oral argument, the Court found the former owner had no right to challenge the order authorizing the sale and determined that the current homeowners were properly entitled to remain in the property.
Paul M. Schmidt, Chairman of the Firm’s Environmental Department, negotiated an extremely favorable settlement of a cleanup cost recovery action in New Jersey.  Plaintiff sued Paul’s client, seeking recovery of nearly $600,000 in investigation and remediation costs.  Paul obtained the settlement by employing New Jersey’s “Offer of Judgment” Rule.  Paul has significant experience using the rule in environmental cases, and in this litigation he was able to do so before incurring any discovery fees, and at a cost to his client of only 7% of plaintiff’s claimed damages.  By quickly identifying the technical and legal weaknesses of Plaintiff’s case and immediately filing a low, but fair, Offer of Judgment, Mr. Schmidt was able to use the threat of nearly complete fee-shifting as leverage to settle the case.
Our transactional lawyers, led by Kenneth J. Fleisher and including Stephen F. Ritner, Paul W. Baskowsky, Louis N. Marks and Michael M. Goss, and our land use attorneys, led by Darwin R. Beauvais and Stephen G. Pollock, enjoyed an equally impressive 2014.  Among their many noteworthy accomplishments are:
Closed a $30,000,000 construction loan for a public real estate firm in connection with a planned 140,000 square foot shopping center in northern New Jersey;  
Represented the lender in closing commercial mortgage loans for the purchasers of an office building in California and a flex office-warehouse building in Chicago;
Negotiated on behalf of a contractor a multi-million dollar construction contract for a portion of a pipeline project;
Assisted client in re-negotiating two loans, a revolving bank loan for $40,000,000 and a term loan from the principal owner for $18,000,000;          
Represented the purchaser of a multi-building, multi-parcel mixed commercial and industrial property in Delaware County, Pennsylvania; 
Assisted a local entrepreneur in acquiring all of the outstanding stock of a Panama corporation involved in waste recycling; 
Assisted client in conducting a private offering of equity in new Delaware company to accredited investors;
Successfully concluded Annual Meetings of Stockholders for two different public Delaware companies (one from New York and the other from Boston) pursuant to Proxy Statements which the Firm drafted and prepared;
With only two weeks before a tax driven year-end deadline, closed on behalf of a lender a complex loan transaction valued at $9,000,000 and involving the buy-out of the minority shareholders in the borrower; 
Completed a complicated sale of a former manufacturing plant in Edison, New Jersey on behalf of the seller; 
Represented the lender in a $3.6 million loan to the developer of a single-tenant building for a health care provider;
Secured zoning approval to convert a public elementary school vacated by the   Philadelphia School District into 63 market rate apartments and 10 affordable units, including negotiating a community benefits agreement with several registered community organizations; and
Secured all necessary approvals from City agencies, including the City’s Art Commission, for a mixed use project involving an iconic high-rise tower with an illuminated building logo sign.  

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