Two new types of licenses for wineries and breweries in New Jersey have been introduced in the state assembly. The details of the proposed legislation are highlighted, below.
Equipment leasing may be an optimal solution for starting or expanding your brewery, brew pub or distillery because, among other things, it may greatly reduce up-front costs and expenses. However, when entering into an equipment lease, it is important to understand the terms of the agreement. Below is a list of 10 key factors to consider before entering into the lease:
Choosing your business location, whether as a startup brewery, brew pub or distillery, or to relocate an existing business, is a critical determination. There are many considerations, both business and legal, that must be weighed in making this decision.
Tax relief for breweries could be on its way thanks to two pieces of proposed legislation, The Small Brewer Reinvestment and Expanding Workforce Act (“Small BREW Act”) and The Brewers Excise and Economic Relief Act of 2013 (“BEER Act”). Under current law, brewers generally pay an $18 excise tax on each barrel brewed. Small brewers, defined as those that brew fewer than 2 million barrels of beer a year, pay a reduced excise tax of $7 per barrel for the first 60,000 barrels brewed each year.
Equitable mootness is a doctrine that allows a court to avoid hearing the merits of a bankruptcy appeal because implementing the relief requested by the appellant would produce a perverse outcome to the bankruptcy plan and/or cause significant injury to third parties. The Third Circuit Court of Appeals recently revisited the application of the doctrine of equitable mootness in In Re SemCrude, L.P. and made it clear that dismissing an appeal as equitably moot should be used sparingly, only where there is sufficient justification to override the statutory appellate rights of the party seeking review.
In SemCrude, the debtors, a midstream oil and gas business, were involved in the gathering, transportation, storage and marketing of crude oil and petroleum products. The debtors filed for Chapter 11 relief with the Bankruptcy Court in July of 2008. Appellants, like many other creditors, were producers that supplied oil and gas to the debtors on credit prior to their Chapter 11 filing. The producers asserted numerous claims against the debtors for the distribution from the proceeds of oil and gas ahead of other creditors. The debtors filed a motion to establish global procedures to administer the producers’ claims. The appellants disagreed about the claims procedure and objected to its use. The appellants argued that they were entitled to prosecute an adversary proceeding on their claims. The appellants filed the suit, but the bankruptcy court stayed the adversary proceeding and allowed the debtors to proceed with their approved resolution procedures. The court noted that the question of whether the appellants will be bound by the resolution procedures could be litigated at a later date by the appellants.
The Debtors subsequently resolved the claims with the producers (other than the appellants) and filed a plan of reorganization. The appellants’ claims were incorporated into the plan, however, they reserved their right to litigate the pending adversary proceeding and objected to the plan. The bankruptcy court overruled their obligations and entered an order confirming the plan.
The appellants appealed to the District Court, asserting that the reorganization plan could not validly discharge their claims without affording them the procedural protections of an adversary proceeding. However, the appellants did not request a stay pending appeal. The plan went into effect shortly after confirmation. Several corporate restructuring transactions, repayment of certain payment obligations and the issuance of securities to those parties receiving equity distribution were implemented following confirmation.
The debtors sought to dismiss the appeal as equitably moot because granting the requested relief would require unraveling of the plan of reorganization and harm third parties. The District Court agreed with the Debtors’ argument and dismissed the appeal under the doctrine of equitable mootness. The District Court reasoned that the plan was substantially consummated. Additionally, granting the appellant’s relief would undermine the reorganization plan and harm third parties. The Third Circuit reversed the District Court and remanded the matter because the record did not support the latter two findings.
The Third Circuit analyzed five conjunctive factors in reaching their decision: (1) whether the reorganization plan has been substantially consummated; (2) whether a stay has been obtained; (3) whether the relief requested would affect the rights of parties not before the court; (4) whether the relief requested would affect the success of the plan; and (5) the public policy of affording finality to bankruptcy judgment. The burden to prove these factors rests with the party seeking dismissal.
The Court reasoned that there was not sufficient evidence of record to support a finding that the plan could not be successful if the appellants were allowed to proceed. Likewise, there was not sufficient evidence to support that third parties would be harmed if the appellants were allowed to proceed. Finally, the court did not find that the public policy supported dismissing the appeal. The Court found that it would be particularly inequitable to allow the debtors to use the doctrine of equitable mootness as a sword against the appellants. Notably, the appellants had repeatedly advanced their contention that they are entitled to the adversary proceeding since the inception of the Chapter 11 filing.
The lesson to be learned from this case is that Courts are not inclined to dismiss an appeal based on the doctrine of equitable mootness, especially when the doctrine is used as a sword by a debtor, instead of a shield to protect the interests of the bankruptcy court and third parties.
The New Jersey legislature recently made changes to the law that may have a significant impact on industrial property that is environmentally contaminated. The law requires a municipality to pay any property tax refund ordered by the Tax Court or a County Board of Taxation to the Commissioner of Environmental Protection for required site remediation when the property under appeal is an industrial property that has is “currently vacant or underutilized” and that is subject to any federal or State court order, or administrative action or order, for environmental remediation.
In a recent case, the Tax Court of New Jersey dismissed a property owners’ tax appeal for providing a false response to the Assessor’s request for income and expenses under N.J.S.A. 54:4-34 (Chapter 91 Request).
Compliance with New Jersey’s procedural law for the filing of a property tax appeal is critical. In fact, filing an untimely appeal (even if only a few days late) will lead to dismissal. The Tax Court recently affirmed this well-settled principle and reiterated that a tax appeal for the current year must be filed on or before April 1st, or 45 days from the date the bulk mailing of the notices of assessment are completed, whichever is later. See Romero v. North Plainfield Borough, Docket No. 012383-2011, New Jersey Tax Court, January 20, 2012. The only exception to this is where a municipal-wide revaluation or municipal-wide reassessment has been implemented. In those instances, the appeal deadline is May 1st.
Receiving notice that a unit owner has filed for Chapter 13 Bankruptcy Protection is not the end of a Homeowner’s Association, Cooperative or Condominium Association’s (collectively referred to as the “Association”) rights to receive unpaid Association fees. However, action must be taken by the Association quickly in order to preserve its rights in the bankruptcy proceeding. A proof of claim should be filed to ensure that the amount of the pre-bankruptcy debt, including all arrearages, are properly documented. If a proof of claim is not filed, the Association may lose its right to receive payment on account of its pre-bankruptcy claim.
