News

Debora Lasch appointed to the Board of Directors of Jennings Center for Older Adults for a 3-year term.

Debora Lasch has been appointed to serve on the Board of Diectors of Jennings Center for Older Adults fora 3-year term expiring May, 2016. This is the first term for Mrs. Lasch. Mrs. Lasch will be serving on the Funding Strategies Committee.

Jennings Center for Older Adults, inspired by the Sisters of the Holy Spirit and the Catholic Diocese of Cleveland, provides health care and supportive services to older adults, with a special concern for those with limited means.

 

Ohio Enacts Modern Domestic Asset Protection Trust Statute

With the adoption of the Ohio Legacy Trust Act, Ohio will become the 14th state to allow the formation of “domestic asset protection trusts”.  The Act, which goes into effect on March 27, 2013, will allow for the creation of a Legacy Trust and will make Ohio one of the friendliest states in America for protecting your assets from creditors.

The newly created Legacy Trusts will allow individuals to transfer assets to a specially-formed trust.  When formed properly, a Legacy Trust will shield your assets from the reach of most creditors AND allow you to continue to benefit from the trust assets. 

While the Ohio Legacy Trust Act provides valuable protections and exciting planning opportunities, forming a Legacy Trust is not a simple matter and may not be the best vehicle to use in your estate plan. To find out more about the new laws and to determine if an Ohio Legacy Trust is appropriate for your asset and estate planning, contact an Estate Planning Attorney at Singerman, Mills, Desberg & Kauntz Co., L.P.A.

 

Ohio Commercial Lending Changes Implemented By The Ohio Legacy Trust Act Effective March 27, 2013

In December 2012, the Ohio General Assembly passed the Ohio Legacy Trust Act, which will become effective on March 27, 2013.  One result of the Ohio Legacy Trust Act is the prohibition of “Cherryland” insolvency carve-outs in nonrecourse loan documents.

“Cherryland” insolvency carve-outs are named after a 2011 Michigan appellate case, Wells Fargo Bank, NA v. Cherryland Mall Limited Partnership.  In the Cherryland decision, the court interpreted a commonly-used provision in a way that caused the nonrecourse loan in question to become fully recourse to the guarantor upon the insolvency of the borrower.  The Michigan legislature enacted laws that effectively reversed the decision in Cherryland, prohibiting the use of a post-closing solvency covenant as a nonrecourse carve-out or as the basis for a claim against a borrower or guarantor on a nonrecourse loan.

In the Ohio Legacy Trust Act, the Ohio legislature mirrored the Michigan laws through the addition of several sections to the Ohio Revised Code.  Sections 1319.07, 1319.08, and 1319.09, will prohibit the use of post-closing solvency covenants as nonrecourse carve-outs in a nonrecourse loan and will make any provision attempting to create such a carve-out invalid and unenforceable.

"Post-closing solvency covenant” is defined in the Ohio Revised Code to mean “any provision of the loan documents for a nonrecourse loan, whether expressed as a covenant, representation, warranty, or default, that relates solely to the solvency of the borrower, including, without limitation, a provision requiring that the borrower maintain adequate capital or have the ability to pay the borrower’s debts, with respect to any period of time after the date the loan is initially funded”.  It does not include a covenant not to file a voluntary bankruptcy or other voluntary insolvency proceeding or not to collude in an involuntary proceeding.

Should you have any questions concerning the new law described above, or if you are a lender offering nonrecourse loans and are concerned as to how this law may impact your loan documents, please do not hesitate to contact a Singerman, Mills, Desberg & Kauntz attorney.

 

Proven Experience in HUD-Insured Multifamily Finance

Since 2001, Singerman, Mills, Desberg & Kauntz Co., L.P.A. has represented for profit and not-for-profit owners and developers of multifamily housing projects, including government-financed and assisted multifamily housing projects, in obtaining HUD-insured financing under FHA 223(f), 221(d)(4), and 223(a)(7) Programs and HUD’s Green Retrofit Program. Our knowledge of such HUD programs and our comprehensive understanding of real estate, finance and tax issues enable us to provide experienced legal counsel in transactions involving a wide array of complexity.  

Over the past three years alone, the firm's legal team of Paul Singerman, Jeff Sayoc and Debora Lasch is proud to have represented clients with the closing of over $90,000,000 of HUD-insured financing. Several of the affordable housing finance transactions have also involved a combination of (i) loans from federal, state, county and municipal sources under HOME, NSP, AHP, ARRA, HDAP, CDBG, HTF and CDL loan programs, (ii) affordable housing bond issuances, and (iii) private equity raised from the sale of federal low-income housing tax credits (LIHTC).

 

Three Singerman Mills Lawyers Speak at the 33rd Annual Real Estate Law Institute

The Cleveland Metropolitan Bar Association’s Real Estate Law Institute has a 33 year history.  Lawyers at Singerman, Mills, Desberg & Kauntz Co., L.P.A. have participated in more than half of that notable history as chairpersons, speakers, and members of the planning committee.  The 33rd Annual Real Estate Institute was no exception. Singerman Mills attorney’s Paul Singerman, Sam Pearlman and Debora Lasch each spoke at the Institute and Sam Pearlman and Debora Lasch served on the planning committee.  Paul Singerman was part of a panel that presented the complexities of “Development Incentives”.  Mr. Singerman's presentation discussed New Markets Tax Credits in particular and the materials for Mr. Singerman's panel can be found here.   Debora Lasch’s panel was called “The 411 of AAI – How to Deal with Property with a ‘Colorful History’”.  This panel provided insight into how experienced brownfield developers not only overcome the spectre of hazardous contamination at brownfield sites but also minimize the risk associated with such sites.  The materials presented by Ms. Lasch's panel can be found here.  Sam Pearlman was the leader of a round-table discussion entitled “Leasing 101 – Basic Non-Residential Real Estate Leasing Issues”.  Mr. Pearlman prepared a basic leasing outline found here as a jumping off point for the attendees.  The round-table leaders chosen to head the round-table discussions were the “senior sages” of the Cleveland real estate law community, of which Mr. Pearlman is certainly a prominent member.

 

 

Singerman Mills Rated Among Cleveland's Best Law Firms by U.S. News & World Report and Best Lawyers

 

Singerman, Mills, Desberg & Kauntz Co., L.P.A. was ranked one of Cleveland's best law firms for 2011-2012 in U.S. News & World Report and Best Lawyers edition of "Best Law Firms in America."

Singerman Mills is one of the firms in the Cleveland First Tier metropolitan rankings in the category of Real Estate Law – 10 in all. Singerman Mills also received a Cleveland Metropolitan Second Tier Ranking in Banking and Finance Law.

The U.S. News & World Report-Best Lawyers "Best Law Firms in America" rankings are based on a rigorous evaluation process. Clients voted on expertise, responsiveness, understanding of a business and its needs, cost-effectiveness, civility, and whether they would refer another client to a firm.

Landlord Wins Appeal Increasing Damages Owed by Guarantor

 

Singerman, Mills, Desberg & Kauntz Co., L.P.A. won a series of cases for a commercial landlord, The Strip Delaware LLC, caused by the breach of a Lease and Guaranty by a national restaurant chain. The tenant had ceased operating and closed its restaurant in violation of the continuous operations clause under the parties' Lease. As a result of that default, the Landlord was forced to file suit to obtain possession of the premises and determine the parties' rights. Singerman Mills prevailed on behalf of the landlord obtaining a judgment in favor of the landlord with the trial court, which was affirmed by the Fifth District Court of Appeals. The Defendants ceased making all payments and the Landlord was then required to file a series of lawsuits against the Tenant and Guarantor for the damages. A series of lawsuit was required due to the non-acceleration provisions in the Lease, which did not allow all damages to be sought in one lawsuit.

In the most recent action for damages, the Fifth District Court of Appeals yet again found in favor of the Landlord The Strip Delaware LLC. The Court of Appeals affirmed as to liability, but remanded to the trial court to increase the damages awarded under the Guaranty to the Landlord. At trial, the court found the tenant and guarantor liable, but limited the liability of the Guarantor finding that the Guaranty expired two years after the first non-monetary default. The Tenant and Guarantor filed an appeal claiming that they were entitled to credit against future increased rents that might be paid by the new replacement tenant (i.e. that speculative future increased rents should apply to offset the past due, unpaid rent by the tenant). The Landlord cross-appealed claiming that the trial court was correct in its holding as to liability, but that the damages should increase because there was no applicable limit under the Guaranty.

The Court of Appeals rejected the Defendant's Appeal finding there was no rule of law in Ohio that allowed increased rents paid by a new tenant to benefit a prior tenant following a breach. The Court also found that in light of the non-acceleration provision in the Lease, it would be wholly inequitable to allow the Defendants to accelerate offsets using speculative future rents. The Court found, "the only thing that [the former tenant] can be thankful for is that the property was rented at all, and for enough to hold him harmless for the period of time that it was occupied after [the date of re-letting]."

The Court of Appeals then found in favor of the Landlord on its Cross Appeal increasing the damages and liability of the Guarantor. Despite some limiting language in the Guaranty, the Court properly found the Guaranty was a rolling Guaranty and there was no limit on the damages that could be awarded to the Landlord. Each new default created a new cause of action. Thus, the Guaranty did not lapse two years after the first default under the Lease and the Guarantor remained liable for all rent, taxes, common area maintenance charges and attorneys' fees. The Court of Appeals awarded the Landlord increased damages, plus 18% interest, for rent, taxes, CAM, re-letting costs, brokerage fees and attorneys' fees.

In the end, as a result of the Defendants' own appeal, the Landlord received a larger award and won even greater damages on appeal than it had previously recovered at Trial.

The Strip Delaware, LLC, v. Landry's Restaurants, Inc.
2011 WL 3587455 (Ohio App.5 Dist.)

Stark Commons Ltd. V. Landry's Seafood House-Ohio, Inc. Slip Copy,
2008 WL 2102353 (Ohio App. 5 Dist.)

To schedule a consultation to discuss particular legal needs, contact Singerman, Mills, Desberg & Kauntz Co., L.P.A. by phone at (216) 292-5807 or by E-mail through this website.

Six Singerman Mills Attorneys have again been named among The Best Lawyers in America 2012

The law firm of Singerman, Mills, Desberg & Kauntz Co., L.P.A. is pleased to announce that the following attorneys were chosen by their peers to be listed in the publication The Best Lawyers in America 2012. All the attorneys were listed previously as Best Lawyers, with their first year noted following their name.

Paul J. Singerman (2007) Real Estate Law

Gary S. Desberg (2007) Real Estate Law

Samuel S. Pearlman (1985) Real Estate Law

Troy R. Brown (2005) Real Estate Law

Gary W. Melsher Real Estate Law

Ronald J. Teplitzky (2006) Banking and Finance Law

Best Lawyers is the oldest and most respected peer-review publication in the legal profession. The Best Lawyers in America is an annual referral guide based on more than 2.8 million peer-review surveys.

Many of the firm's attorneys have also been recognized by Super Lawyers, Chamber USA: Americas Leading Lawyers and Martindale-Hubbell Peer Review Rated Attorneys. The following is a list of honored attorneys and their respective awards.

Attorney	Honors and Awards
Troy R. Brown	AV Preeminent Martindale-Hubbell, 2011, Who’s Who in Executives and Professional, 2003-2004, The Best Lawyers in America 2005-2012
Gary S. Desberg	Ohio Super Lawyer, Cincinnati Magazine, 2006-2012, The Best Lawyers in America, 2007-2011, Chambers USA Leading Lawyers, 2011, AV Preeminent Martindale Hubbell, 2011
Edmund G. Kauntz	BV Distinguished Martindale-Hubbell, 2011
Debora S. Lasch	Ohio Super Lawyer, Cincinnati Magazine, 2008-2009, 2011, AV Preeminent Martindale Hubbell, 2011
Gary W. Melsher	AV Preeminent Martindale Hubbell, 2011, Ohio Super Lawyer, Cincinnati Magazine, The Best Lawyers in America
William M. Mills	AV Preeminent Martindale Hubbell, 2011
Matthew E. Parkins	Ohio Rising Stars, Cinncinnati Magazine, 2009-2010
Samuel S. Pearlman	Chamber USA: Americas Leading Lawyers, Ohio Super Lawyers, Cincinnati Magazine, 2005-2011, The Best Lawyers in America 1985-2012, AV Preeminent Martindale Hubbell, 2011
Michael R. Stavnicky	BV Preeminent Martindale Hubbell, 2011
Paul J. Singerman	Ohio Super Lawyers, Cincinnati Magazine, 2004-2011, The Best Lawyers in America 2007-2012, AV Preeminent Martindale Hubbell, 2011
Ronald J. Teplitzky	Chamber USA: Americas Leading Lawyers, Ohio Super Lawyers, Cincinnati Magazine, 2004-2006, 2008-2011, The Best Lawyers in America 2006-2012

Landlord Wins Appeal Awarding Attorneys' Fees

Singerman, Mills, Desberg & Kauntz Co., L.P.A. won a series of cases for a commercial landlord caused by the breach of a lease and guaranty by a national restaurant chain.  Recently, Singerman Mills obtained a trial court judgment awarding its client, a commercial landlord, $133,908.66 in attorneys' fees, plus 18% interest, as a result of the defaults by the national restaurant chain.

The tenant had ceased operating and closed its operations in violation of the continuous operations clause under the parties' Lease.  As a result of that default, the Landlord was forced to file suit to obtain possession of the premises and determine the parties' rights.  Singerman Mills prevailed on behalf of the landlord obtaining a judgment in favor of the landlord with the trial court.  Singerman Mills then successfully represented the landlord on appeal.  The Fifth District Court of Appeals affirmed the trial court's decision finding that the tenant had breached and confirmed the landlord's rights in the premises. 

Thereafter, the tenant and guarantor improperly ceased making payments. The Landlord then brought a related, but distinct case, against the tenant and guarantor for monetary damages after the Defendants separately and independently defaulted.  The trial court again entered judgment for Singerman Mills’ client, The Strip Delaware LLC, finding that the tenant and guarantor had again breached the Lease.  It was as a result of these defaults that the Landlord was ultimately determined to be entitled to recover attorney’s fees.   The Fifth District Court of Appeals affirmed the decision awarding attorneys' fees, plus interest on the attorney fees, to the Landlord as the prevailing party.  Singerman Mills also successfully argued to keep Defendants’ past appellate bonds in place. The Court of Appeals found that the landlord could apply to obtain payment of its attorneys' fees from the pending bonds.

Strip Delaware, LLC v. Landry's Restaurants, Inc.
(2010), 191 Ohio App.3d 822

Stark Commons Ltd. v. Landry's Seafood House-Ohio Inc.
Slip Copy, 2008 WL 2102353 (Ohio App. 5 Dist.)

To schedule a consultation to discuss particular legal needs, contact Singerman, Mills, Desberg & Kauntz, Co., LPA, by phone or by E-mail through this Web site.

 

Tax Credit to Encourage Investment in Small Business in Ohio

The Conference Committee of the Ohio legislature inserted a new Ohio tax credit into the 2011 Ohio Budget Bill which was signed into law on June 30. The highlights of the tax credit under newly-enacted Ohio Revised Code ("ORC") Section 5747.81 are as follows:

1. Purpose of the credit: To encourage new capital investment in Ohio small businesses.

2. Who may claim the credit: Individuals, estates and trusts (and pass-through entities which are owned directly or indirectly by individuals, estates and trusts).

3. How is the credit used: The credit is a nonrefundable credit against Ohio income tax liability. Any unused credit may be carried forward up to 7 years.

4. Amount of the credit: 10% of the taxpayer's "qualifying investment" in a "small business enterprise", which investment may not to exceed $10,000,000 for a single taxpayer or $20,000,000 for a taxpayer filing a joint return with a spouse for any fiscal biennium (any 2 year period beginning July 1, 2011).

5. When can the credit be claimed: The credit can be claimed only in the year in which the qualifying investment is disposed of.

6. Three (3) Requirements to claim the credit:

a. The taxpayer must receive a "small business investment certificate" from the Ohio Director of Development.

i. Either the taxpayer or the small business enterprise must apply for the certificate which must state the amount of qualifying investment.
ii. A taxpayer may not apply for certificates for more than $10,000,000 of qualifying investments in any fiscal biennium.
iii. The certificates are not transferable and are issued in the order in which qualifying applications are received.
iv. The taxpayer must pledge not to dispose of the qualifying investment before the end of the required holding period.
v. The Director of Development may not issue certificates entitling taxpayers to claim more than $100,000,000 of tax credits in any fiscal biennium.
vi. The Director of Development has the right to request documentation from small business enterprises to verify qualification.

b. The taxpayer must hold the qualifying investment for the required holding period (i.e., 2 years for investments made on or after July 1, 2011 and before July 1, 2013, and 5 years for subsequent investments).

c. The small business enterprise must be listed on the register of small business enterprises maintained by the Ohio Director of Development.

7. Definition of Qualifying Investment. An investment of money on or after July 1, 2011 to acquire stock or other equity interests in a small business enterprise, excluding any investment funded by government grants or loans.

8. Definition of Small Business Enterprise: A corporation, pass-through entity or other business enterprise which meets all of the following tests:

a. At the time of the qualifying investment, either the assets of the enterprise do not exceed $50,000,000, or its annual sales do not exceed $10,000,000;

b. The enterprise employs at least 50 full time equivalent employees in Ohio who are subject to Ohio withholding tax, or more than 50% of the total number of full time equivalent employees of the enterprise in the U.S. are employed in Ohio and are subject to Ohio withholding tax; and

c. Within 6 months after a qualifying investment is made in the enterprise, the enterprise (x) invests in or incurs costs for one or more of the following, (y) in an amount at least equal to the qualifying investment, and (z) continues to use such property in business until the end of the investor's required holding period:

i. Tangible personal property used in business and located in Ohio;
ii. Motor vehicles which are operated on public roads, purchased in Ohio, registered in Ohio, used primarily for business purposes and are necessary for the operation of the business;
iii. Real property located in Ohio and used in business;
iv. Intangible personal property used in business primarily in Ohio; and/or
v. Compensation for new employees (or retained employees) subject to Ohio withholding tax (but excluding increased compensation for owners, officers or managers).

9. Forms and Rules. The Director of Development will create forms and adopt rules to implement the credit.

We have attorneys available to help you navigate the documentation to apply for the credit and a check list to prepare to apply for the credit. Please contact Ed Kauntz and he will be happy to help you and your business benefit from these new provisions.

To get a copy of the form to use to apply for the credit, go to http://www.development.ohio.gov/Business/tax_credit.htm

 

 

Singerman Mills Legal Counsel for MOCA's New Building Financing

Singerman, Mills, Desberg & Kauntz Co., L.P.A. served as legal counsel for the financing of the Museum of Contemporary Art, Cleveland's new museum, which is currently under construction. The $33 Million total financing package included New Markets Tax Credits, a total of four loans from PNC Bank and a Progam Related Investment from the George Gund Foundation. Located at the intersection of Euclid Avenue and Mayfield Road, the new Museum of Contemporary Art will be the cournerstone of Cleveland's revitalized Uptown district. The 34,000-square-foot, four-story sturcture was designed by the acclaimed architecture firm of Foreign Office Architects and represents the firm's first major building in the United States.

To view the construction progress of the amazing new museum building, please visit: http://www.mocacleveland.org/newbuilding.php

 

Singerman, Mills, Desberg & Kauntz, Co., L.P.A. welcomes Ronald J. Teplitsky

Singerman, Mills, Desberg & Kauntz, Co., L.P.A. (www.smdklaw.com) is pleased to announce the addition of Ronald J. Teplitzky to the firm as a principal. Teplitzky joins the firm from Benesch, Friedlander, Coplan & Aronoff LLP where he was a partner in the Cleveland office.

“Ron is a great addition to our firm because of the extensive experience he brings,” said founding shareholder Paul J. Singerman. “This includes significant experience in documenting commercial loan transactions and general business law. He represents numerous financial institutions in connection with the documentation and restructuring of commercial lending transactions and also represents corporate clients in mergers and acquisitions as well as general business matters.”

Teplitzky was named an "Ohio Superlawyer" by Cincinnati Magazine in 2004-2006 and 2008-2011, and was named in The Best Lawyers in America for 2006-2011. He was listed in Chambers USA Leading Lawyers, in the area of banking and finance in 2006-2010.

Teplitzky is a member of the Cleveland Metropolitan and American Bar Associations. He has lectured before several groups on lending and mergers and acquisitions.

For more information or to contact Ronald Teplitzky, visit http://www.smdklaw.com/attorneys/ronaldteplitzky.shtml

Singerman, Mills, Desberg & Kauntz, Co., L.P.A. welcomes Matthew E. Parkins

Singerman, Mills, Desberg & Kauntz, Co. L.P.A. announces the addition of Matthew E. Parkins to the firm as an associate in the area of litigation. Prior to joining the firm, he was an associate with a mid-sized general practice firm where he practiced in the areas of commercial litigation, real estate litigation, construction disputes and surety and insurance litigation.

“Matt will focus his practice on commercial, contract, real estate, construction, surety and insurance and general litigation,” said Michael R. Stavnicky, head of the firm's litigation practice. “His extensive experience in representing owners, contractors and sureties in handling the claims process, contractor defaults, tender/takeover agreements and other matters involved in both public and private bonded projects will make him a valuable addition to our team.”

Parkins was named one of the Ohio Rising Stars by Cincinnati Magazine in 2009-2010. He is a member of the Cleveland Metropolitan, Ohio State and American Bar Associations.

For more information or to contact Matthew Parkins, visit http://www.smdklaw.com/attorneys/matthewparkins.shtml.

To schedule a consultation to discuss particular legal needs, contact Singerman, Mills, Desberg & Kauntz, Co., LPA, by phone or by E-mail through this Web site.

 

Singerman Mills Protects Landlord's Constitutional Rights to Access to the Courts

Singerman, Mills, Desberg & Kauntz Co., L.P.A. successfully reversed a trial court decision that unconstitutionally prohibited Singerman Mills’ client, GMS Management Co., Inc., from access to the courts and barred the filing of any matter with the trial court. In the trial court's order, the administrative judge had asserted that GMS Management allegedly owed outstanding fees and court costs and ordered the clerk of courts to refuse to accept any new pleadings, even if court costs and fees were advanced, until all alleged disputed amounts were paid in full. As a result of that order, GMS Management was barred from filing any pleadings with the trial court and the court refused to process any matter. GMS Management appealed the trial court's decision to the Seventh District Court of Appeals.

Singerman Mills successfully argued on appeal that the trial court's decision was unconstitutionally entered without notice and was an unconstitutional denial of access to the courts in violation of the United States and Ohio Constitutions. Following oral arguments, the Seventh District Court of Appeals agreed with Singerman Mills and reversed the trial court's decision finding the court's order in a nonexistent action, barring the clerk of courts from accepting new pleadings violated GMS' procedural due process rights. The trial court improperly failed to provide GMS with notice or an opportunity to be heard and the decision was reversed. The Court of Appeals held that procedural due process assures the opportunity to be heard after notice of a hearing before depriving a party of a property interest; thus, a party must be given reasonable notice that is sufficient to allow that party to prepare a defense and then must be provided a meaningful opportunity to be heard before an order requires payment and simultaneously prohibits the exercise of a legal right. "We have to hold the courts to the highest standard to protect the Constitution, and that’s what the Seventh District did here,” said Michael Stavnicky, chair of Singerman Mills’ litigation practice.

For more information regarding this case, In re GMS Mgt. Co., Inc. v. Unpaid Court Costs, Fees & Delinquencies (7th Dist. 2010), 187 Ohio App.3d 426 and in this article: "Appeals court: Judge erred in barring landlord"

To schedule a consultation to discuss particular legal needs, contact Singerman, Mills, Desberg & Kauntz, Co., LPA, by phone or by E-mail through this Web site.