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Spotlight

Starfield & Smith Welcomes

 

Norman Greenspan 

 

Norman
Norman Greenspan, Esq.

Norman concentrates his practice in complex commercial and corporate litigation matters, and white collar criminal defense.  He serves a wide range of clients in areas such as:

 

*  Financial services

*  Contracts

*  Real Estate

RICO, false claims act and qui tam litigation

*  Corporate governance *  Internal corporate investigations

*  Intellectual property

*  Antitrust

*  Grand jury and government investigations involving antitrust, securities, public corruption, bank fraud, FCPA, tax, money laundering, Medicare/ Medicaid fraud, environmental, government contracts, tax evasion, and business fraud

 

Before joining Starfield & Smith, Norman was with Blank Rome LLP for 34 years, where he was an equity partner.  During that time, Norman served as chairman of the litigation department and was a member of the firm's executive committee.  He successfully represented many high profile clients in civil, criminal and administrative litigation matters.  Norman has tried over 60 cases to judgment.

 

Norman has been admitted pro hac vice in courts throughout the United States, and has argued matters before the Supreme Courts of Pennsylvania, New Jersey and Delaware, and the Second and Third Circuit Courts of Appeals. He is an adjunct professor of law at Temple University School of Law.  Norman is also a faculty member at the National Institute of Trial Advocacy and has chaired programs for the Practicing Law Institute and ALI-ABA.  

 

Upon completing law school, Norman was appointed a trial attorney with the Antitrust Division of the U.S. Department of Justice through its honors program.  Subsequently, Norman served as an Assistant U.S. Attorney with the Special Prosecutions Division of the White Collar Crimes Unit in the U.S. Attorney's Office in Philadelphia where he received commendations from the Securities and Exchange Commission, the Federal Bureau of Investigation and the U.S. Postal Inspection Service.

 

Norman has received the highest possible rating from Martindale-Hubbell and has been repeatedly selected as a Pennsylvania Super Lawyer.

 

Welcome Norman!

 

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Best Practices: Review of Business Entity Documents

 
 
 
 
By: Janet M. DeryEsq.  

 

Janet Web Photo
Janet M. Dery, Esquire

 

Among the most basic and crucial things that a lender must do in making a loan to a business entity are to verify that it is using the correct, legal name of that entity in its loan documents, and that those documents are being signed by a party who has authority to bind the entity. Use of an incorrect name in the loan documents may provide a defense in any suit to enforce those documents. It may also prevent a lender's UCC-1 financing statement from being discovered-and, therefore, enforceable-in subsequent searches by future creditors, which could jeopardize the SBA guaranty of the loan. Thus, when the borrower or guarantor is a business entity, one of the most important things a lender should do is to collect and review copies of the business entity's formation and governing documents. These documents will provide the legal name of the entity for use on the loan documents, disclose the owners of the business entity, and identify the party with authority to execute documents on behalf of the business entity.

 

The entity's legal name is found on the formation document that the entity files with its home state to create the entity (e.g., Articles of Incorporation/Partnership/Organization/ Formation). The formation document is the only document that discloses the legal name of the entity, and should be the only document relied upon by the lender to determine the business entity's name. However, the lender's review should not stop here. The lender should also review other entity documentation, such as licenses required for the operation of the business, to confirm that the legal name appears on all such documentation. If the business operates under any other names, the lender should confirm that a fictitious name filing has been made for such names; if no such filing has been made, the lender may want to require one, so that anyone dealing with the business entity under the fictitious name will be able to identify the actual business entity.

 

By reviewing the business entity's governing documents the lender will also discover the ownership of the entity, which is especially important in SBA lending as any owner of 20% or more of the business entity borrower must guarantee the loan. If the business entity is a corporation, copies of all outstanding stock certificates and the corporation's stock ledger should identify all owners of the corporation as well as the number of shares of stock (and, therefore, the ownership percentage) held by each owner. A partnership's Partnership Agreement should contain a list identifying all partners and their ownership percentages; similarly, a limited liability company's Operating Agreement should contain a list identifying all members and their ownership percentages. If the Partnership Agreement or Operating Agreement does not contain this information, the lender should either request that the Agreement be amended to include it or obtain a certification, under oath, from all owners of the business entity specifying their ownership interest percentages.

 

Finally, the entity's organizational and governing documents will identify the party with authority to execute loan documents and bind the business entity. Corporate bylaws should identify the officers of a corporation and their respective powers; this will allow the lender to make sure that an officer with the required authority executes the loan documents. The business entity should provide the lender with the name of the person elected to such office, which should then be certified in the corporation's resolution authorizing the borrowing.   A Partnership Agreement will designate the partner with authority to bind the partnership. Because some states require the Articles of Organization of a limited liability company to identify whether the company will be member-managed or manager-managed, the lender should review both the filed Articles and the Operating Agreement to make sure that they are consistent in specifying whether the company is member-managed or manager-managed. If they do not match, the lender should require the business entity to amend those documents so that they are consistent in the management designation.   When the documents are made consistent, the lender will know whether the members or manager have the authority to bind the limited liability company.

 

By carefully reviewing the business entity documentation before closing any loan to a business entity, the lender will limit potential defenses to enforcement of the loan documents based upon the identity of the party named in the loan documents and the lack of authority of the signatory on behalf of that entity. In addition, the lender is more likely to identify required guarantors, and to protect the SBA guaranty by naming the correct party in its lien documents.

  

For more information on obtaining or reviewing business entity documentation, please contact Janet at (215) 542-7070 or at [email protected].

 

 

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*** Starfield & Smith, PC Opens

a Philadelphia Office ***

 

2000 Market Street, Suite 500

Philadelphia, Pennsylvania

 

 

Seminars                Seminars and Events 

 

FLAGGL Small Business Lending Conference

 

"Navigating the New SOP Changes and Key Technical Issues."  

  

Presented By:  FLAGGL

Instructor:  David W. Starfield

Dates:  September 12-14, 2012

Location:  Rosen Shingle Creek, 9939 Universal Boulevard, Orlando, FL 32819

 

For more information about this event and/or to register, click here.  

 

WPASGL Fall Training & Golf Outing

 

Presented By:  W.P.A.S.G.L.

Instructor:  Ethan W. Smith

Date:  Friday, October 5, 2012

Location:  Pittsburg National Golf Club, 287 Monier Road, Gibsonia, PA 15044

 

For more information about this event and/or to register, click here.

 

NAGGL Rocks! Annual Conference

 

Presented By: NAGGL

Dates:  October 23 - 25, 2012

Location:  Red Rock Resort, 11011 West Charleston Boulevard
Las Vegas, Nevada 89135

 

For more information about this event and/or to register, click here.

 

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DYK                      

                         Did You Know...  

  Compass   

...that Starfield & Smith, PC provides liquidation services, including representation in foreclosure, bankruptcy, workouts and commercial litigation matters to its lender clients nationwide?

For more information about this and other services Starfield & Smith, P.C. provides its clients, please contact Jeffrey S. Feldman at (215) 542-7070 or at [email protected].

 

 

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ContactInfo Starfield & Smith, P.C.
Pennsylvania Offices:
1300 Virginia Drive | Suite 325
Ft. Washington, PA 19034
phone: (215) 542-7070 | fax: (215) 542-0723

2000 Market Street | Suite 500
Philadelphia, PA 19103
phone: (215) 542-7070 | fax: (215) 542-0723

 

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Maitland, FL 32751
phone: (407) 667-8811 | fax: (407) 667-0020

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Irvine, CA 92614
phone: (949) 333-4108| fax: (949) 679-1709

   

 
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