COVID 19 & THE LAW: ELECTION ALERT

The New Jersey Primary will take place July 7, 2020.  Special provisions have been made to make voting easier and safer this year.

Under Executive Order No. 144, a voter may apply for a Mail-In Ballot by mail up to 7 days prior to the election. He or she may also apply in person to the County Clerk prior to 8 P.M. the day of the election.  The voter does not have to be absent from the state to vote for mail.

“Mail-in” voters will be able to deliver their ballot to special drop off locations on the primary election day.  For information on the nearest drop off location, you may call this office.

Election Day Court Proceedings:

 

New Jersey law allows a number of emergency election related hearings to take place on Election Day. A voter denied the right to cast a ballot due to a challenge can appeal the poll workers’ determination in Superior Court, where judges are available throughout the state on Election Day specifically to handle such matters. A person denied the right to use a voting machine or cast a provisional ballot can also appeal to a judge. Traditionally, these claims required the parties to go to the nearest courthouse where designated Judges would set aside other proceedings for a brief hearing.

 

Camden County will make its Superior Court judges available in to conduct remote hearings for any election challenges or issues in Camden County on Tuesday, July 7. This year’s primary election was moved from June 2 because of the COVID-19 pandemic. Tuesday’s election will be vote-by-mail or in-person vote. The county clerk’s office has mailed ballots to registered voters.

 

Voter hearings are very short, with only the voter and, perhaps a challenger testifying.  However, faced with the prospect of traveling to the Courthouse, many potential voters forego filing an appeal.  Therefore, other vicinages would do well to follow Camden’s lead, and perhaps make this option permanent.

 

NEW JERSEY VOTER DEADLINES

July 7, Postponed New Jersey Primary

October 13 Voter Registration Deadline for General Election

October 27 Deadline to apply for a Mail-In Ballot by Mail for General Election

October 30 Deadline for Applications to Receive General Election Mail-In Ballots

And Deadline for Overseas Civilian and Military Voters to Apply for Ballot

November 2 – by 3:00 p.m. Deadline for In Person Mail-In Ballot Applications for General Election

November 3, General  Election


New Jersey Reopens But Strictly Limits Public Parks and Private Golf Courses

New Jersey had ordered closed private Golf Courses and State Parks and forests to prevent possible spread of COVID-19.  A new executive order, EO -133 issued on April 29, 2020 allowed them to reopen on this coming Saturday.  However, the “re-opening” will be heavily restricted.   There will neither be full access and strict regulations on how “opened” areas may be used.  Private Golf course operators will be legally responsible for enforcing strict rules.

State Park Rules:

 

I. The open ground of all State Parks and Forests shall be open, but only for the following activities.

  • Fishing;
  •   Hunting;
  •   Boating;
  • Canoeing;
  • Hiking;
  • Walking;
  • Running or jogging;
  • Biking;
  • Birding; and
  • Horseback riding.

II.  The following areas and facilities within the state parks, however, will remain closed:

  • Restrooms
  • Picnic areas;
  • Playgrounds;
  • Exercise stations and equipment;
  • Chartered watercraft services and rentals;
  • Swimming;
  • Pavilions;
  • Other buildings or facilities, including, but not limited to, visitor centers, interpretive centers, and interior historical sites.

 

III. The following limits on behavior must be followed in state parks:

  • Employees and visitors (overt the age of two)  must wear cloth face coverings within in the state park in all settings where other social distancing measures are difficult to maintain, except where doing so would inhibit that individual’s health.
  • Parking space will be cut in half.Visitors will be prohibited from parking in undesignated areas, including in roadways;
  • No picnicking shall be allowed. No picnic blankets, chairs, coolers, etc. may be carried into the park;
  • visitors must stay six feet apart whenever practicable, excluding immediate family members, caretakers, household members, or romantic partners;
  • No organized or contact activities or sports; and
  • The parks may not be used for the gatherings of individuals.

RULES FOR LOCAL GOVERNMENTS AND LOCAL PUBLIC PARKS

 

  1. The State will no longer close county parks.  Counties which themselves previously closed their parks may chose whether or not  to reopen them.
  2. All recreational campgrounds and transient camp sites at campgrounds must remain closed to the public. Residential campgrounds, which includes mobile home parks, condo sites, and existing/renewing 2020 yearly seasonal contract sites, may remain open.
  3. All Counties and Municipalities must restrict the behavior at and use of their parks with the same rules applicable to state parks. Counties and Municipalities may impose additional COVID-19 restrictions at county and municipal parks.
  4. Counties and Municipalities may also impose additional restrictions on the ability of residential campgrounds, including mobile home parks, to accept new transient guests or seasonal tenants.

PRIVATE GOLF COURSES

 

Private Golf Clubs may reopen both to their members and the public but must:

  1. Require  that   reservations,   cancellations   and pre-payments be made via electronic or telephone reservation systems. Such policies must, wherever possible, consider populations that do not have access to internet service or credit cards;
  2. Stagger tee times so that they are 16 minutes apart;
  3. Limit use of golf carts to single occupant only, excluding an individual’s immediate family members, caretakers, household members, or romantic partners
  4. Frequently  sanitize high-touch areas including, at a minimum, the  following  cleaning protocols
      1. Clean and disinfect high-touch areas routinely, and after each use, in accordance with CDC guidelines, including, but not limited to, restroom facilities, counter tops, door knobs, other common surfaces, range buckets, golf carts, push carts, and other frequently touched  surfaces  including  employee  used equipment,  and
      2. Ensure that the golf course has sufficient  workers to perform the cleaning protocols effectively

5. Restrict players’ ability to touch common surfaces when retrieving golf  balls  by  installing  pins, placing cups upside down or partly above ground, or utilizing a shallow cup;

 6. Close all golf center buildings, pro shops,  other buildings and amenities to the public;

7.  Remove bunker rakes and other on-course furniture like benches, water coolers, and ball washers;

8.  Ensure that the flagstick remains in the golf hole at all times, and instruct players to avoid touching the flagstick or hole;

9.   Discontinue club and equipment rentals;

10. Prohibit the use of caddies;

11 .   Limit tee times to two players, except for immediate family members, caretakers, household members, or romantic partners;

12.  Place additional restrictions   to  limit  person-to-person interactions and  facilitate  appropriate  social distancing, including but not limited to, specific holes, putting greens, FootGolf courses, and short game areas;

13.  Employees, players, and other individuals (over two years old) should wear cloth face coverings in all settings on the golf course where other social distancing measures are difficult to maintain, except where doing so would inhibit that  individual’s  health;

14. Require players to always maintain appropriate social distancing by remaining six feet apart from others.

 

Miniature golf courses and driving ranges, as well as other places of public amusement, must remain closed.

 

 


The CDC’s Guidance If A Person Who Was Potentially Exposed to the COVID-19 Has Been to Your Work Site

By: Deborah Hollander, Esq.

One of the most critical issue for many businesses, and employees, is what to do after a possibly exposed worker has been on the site.  Despite “stay at home” and shut down orders, many work places remain open to provide essential services.

The Center for Disease Control has issued guidance statements for how a work place should react to the presence at the workplace of an employee who has COVID-19 or who has been possibly exposed, including protocols for continuing with essential workers and sanitizing.

The CDC’s Interim Guidance for Workplaces Where A Potentially Exposed Worker Has Been Present.

The CDC has issued an “Interim Guidance” called “Implementing Safety Practices for Critical Infrastructure Workers Who May Have Had Exposure to a Person with Suspected or Confirmed COVID-19.”

This guidance begins by defining when an employee or customer should have seen

“A potential exposure means being a household contact or having close contact within 6 feet of an individual with confirmed or suspected COVID-19. The time frame for having contact with an individual includes the period of time of 48 hours before the individual became symptomatic.”

A.  EMPLOYEE ISSUES

If the employee is sick, they should not come to work.  If they become sick during the day, they should be sent home immediately.

Workers who have had an exposure but remain asymptomatic should adhere to the following practices prior to and during their work shift:

  • Pre-Screen: Employers should measure the employee’s temperature and assess symptoms prior to them starting work. Ideally, temperature checks should happen before the individual enters the facility.
  • Regular Monitoring: As long as the employee doesn’t have a temperature or symptoms, they should self-monitor under the supervision of their employer’s occupational health program.
  • Wear a Mask: The employee should wear a face mask at all times while in the workplace for 14 days after last exposure. Employers can issue face masks or can approve employees’ supplied cloth face coverings in the event of shortages.
  • Social Distance: The employee should maintain 6 feet and practice social distancing as work duties permit in the workplace.
  • Disinfect and Clean work spaces: Clean and disinfect all areas such as offices, bathrooms, common areas, shared electronic equipment routinely.

 

 

Special Sanitation Procedures for Office Space for Seven Days After Presence of Potential Exposure

 

The CDC recommends that special cleaning and sanitation efforts for up to seven days after the employee (or visitor) with potential exposure has been present.  Therefore, if the workplace can be closed for a full calendar week after the potential exposure, then no special disinfecting is necessary.

If that is not possible, CDC recommends:

1. Close off areas used by the person who is sick;

2. Open outside doors and windows to increase air circulation in the area. Wait 24 hours before you clean or disinfect. If 24 hours is not feasible, wait as long as possible;

3. Clean and disinfect all areas used by the person who is sick, such as offices, bathrooms, common areas, shared electronic equipment like tablets, touch screens, keyboards, remote controls, and ATM machines; and

4.  Wear disposable gloves when cleaning and disinfecting.

 

The CDC recommends the following disinfecting procedures be used. 

    First Clean dirty areas:

a.     Wear disposable gloves and gowns for all tasks in the cleaning process, including handling trash.

b.    Additional personal protective equipment (PPE) might be required based on the cleaning/disinfectant products being used and whether there is a risk of splash.

c.     Gloves and gowns should be removed carefully to avoid contamination of the wearer and the surrounding area.

d.      Wash your hands often with soap and water for 20 seconds.

    1. Always wash immediately after removing gloves and after contact with a person who is sick.
    2. Hand sanitizer: If soap and water are not available and hands are not visibly dirty, an alcohol-based hand sanitizer that contains at least 60% alcohol may be used. However, if hands are visibly dirty, always wash hands with soap and water.

 

Then, Disinfect.

  1. The CDC has detailed recommendations on precisely how to disinfect different areas of a business.  These are summarized below:

 

For Hard Surfaces, Use an EPA-registered household disinfectant.

    1. Keeping surface wet for a period of time (see product label)
    2. Follow safety procedures for that product, including wearing gloves and making sure you have good ventilation.
    3. Diluted household bleach solutions may also be used if appropriate for the surface.
    4. Never mix household bleach with ammonia or any other cleanser. (This can create chlorine gas).
    5. Leave solution on the surface for at least 1 minute.
    6. Alcohol solutions with at least 70% alcohol may also be used.

 

For Soft Surfaces such as carpeted floor, rugs, and drapes,

 

  1. Clean the surface using soap and water or with cleaners appropriate for use on these surfaces.
  2. Launder items(if possible) according to the manufacturer’s instructions. Use the warmest appropriate water setting and dry items completely OR Disinfect with an EPA-registered household disinfectant.

 

Electronics: For electronics, such as tablets, touch screens, keyboards, remote controls, and ATM machines:

 

  1. Consider putting a wipeable cover on electronics.
  2. Follow manufacturer’s instruction for cleaning and disinfecting.
  • If no guidance, use alcohol-based wipes or sprays containing at least 70% alcohol. Dry surface thoroughly.

 

Laundry: For clothing, towels, linens and other items

 

  1. Launder items according to the manufacturer’s instructions. Use the warmest appropriate water settingand dry items completely.
  2. Wear disposable gloves when handling dirty laundry from a person who is sick.
  • Dirty laundry from a person who is sick can be washed with other people’s items.
  1. Do not shake dirty laundry.
  2. Clean and disinfect clothes hampers according to guidance above for surfaces.
  3. Remove gloves, and wash hands right away.

 


Border Closing and a President Trump’s Suspension of Immigration

 

On April 22, 2020, President Trump issued a proclamation suspending the entry of any individual seeking to enter the United States as an immigrant who:

  1. Is outside the United States on the effective date of the proclamation; and
  2. Does not have a valid immigrant visa as of April 23, 2020; and
  3. Does not have a valid official travel document as of April 23, 2020, or issued on any date thereafter; and
  4. The proclamation goes into effect at 11:59 pm (ET) on April 23, 2020, for at least 60 days. It can be extended and modified.

 

The following categories are exempt from the proclamation:

  1. Lawful permanent residents (green card holders);
  2. Health care professionals, seeking to enter the country on an immigrant visa to practice their healthcare profession in the U.S. on an immigrant visa as a physician, nurse, other healthcare professional, medical researcher or other work to combat COVID-19. These professionals may also bring their spouses and children to immigrate with them;
  3. Individuals applying for a visa to enter the U.S. pursuant to the EB-5 immigrant investor visa program;
  4. Spouses and children under the age of 21 of U.S. citizens, including prospective adoptees on an IR-4 or IH-4 visa;
  5. Individuals who would further important U.S. law enforcement objectives (as determined by Department of Human Services and Department of State);
  6. Members of the U.S. Armed Forces and their spouses and children;
  7. Afghan and Iraqi nationals who were translators/interpreters or employed by the U.S. government and their spouses or children seeking entry pursuant to a Special Immigrant Visa; and
  8. Individuals whose entry would be in the national interest (as determined by Department of Human Services and Department of State).

Some of these exemptions represent policy concerns (such as the exemption allowing health care providers to immigrate and bring their families).  Other exceptions to an executive ban on incoming foreign nationals which evolved during the Hawaii v. Trump litigation which contested Trump’s initial travel ban (such as the exceptions for Afghan and Iraqi nationals). Consistent with the evolution of the initial Trump ban until revisions were ultimately upheld by the Supreme Court, the current Executive ban does not bar asylum seekers.

The Proclamation requires a review of temporary visa programs within 30 days and recommendations to stimulate the U.S. economy and ensure “the prioritization, hiring and employment” of U.S. workers.

NON-IMMIGRANTS MAY STILL OBTAIN VISAS TO WORK IN THE US

The stated purpose of the current Executive Proclamation is to preserve jobs for US citizens and existing long term permanent residents.  However, the Executive Proclamation does not bar those who seek visa’s to work in the United States but not necessarily to become long term permanent residents.  It does not for instance, bar H1B applicants. Nor does it bar seasonal agricultural workers.

 

OTHER COVID-9 OBSTACLES TO TRAVEL AND STAYS IN THE US

The official proclamation is not the only current obstacle to international travel to or from the U.S.  The U.S. borders with Canada and Mexico are closed for non-essential travel until at least May 20, 2020. With some exceptions, the entry of individuals who were present in China, Iran, the Schengen Area, the U.K., and Ireland, during the 14-day period before their attempted entry into the United States has also been suspended.  Routine visa services at all U.S. embassies and consular posts were suspended March 20, 2020.  U.S. embassies and consulates only continue to provide urgent and emergency visa services as resources allow.

U.S. Citizenship and Immigration Services (USCIS) has, in recent years, closed most of its overseas offices.  It has temporarily suspended in-person services within the United States through at least May 3, 2020, but continues to accept and process applications and petitions, including applications requesting an extension or change of status. USCIS has decided not to toll the time for the filing of immigration benefits and the expiration dates for foreign nationals to file applications, or to respond to requests for further information in response to USCIS’s requests for further information. USCIS has also declined to provide an automatic grant of deferred action for the duration of the national emergency for individuals whose status has expired and cannot be extended or changed.


When is An Employee’s COVID-19 Condition a Work Place Disease: OSHA Relaxes Its Policy

By Deborah Hollander, Esq.

Employers with more than 10 employees (unless in an exempt industry or government agency) are required to keep a record of serious work related injuries and illnesses, called the OSHA 300. The OSHA 300 records must be maintained at the worksite for at least five years. Each February through April, employers must post a summary of the injuries and illnesses recorded the previous year. Also, if requested, copies of the records must be provided to current and former employees, or their representatives.

OSHA has issued a guidance on its website on when COVID-19 workplace exposures are “recordable” on the OSHA 300 Log.  OSHA lists three conditions which have to be met in order for a COVID-19 illness to be “recordable.” Not every case in which an employee reports having COVID-19 must be listed on the log.

 

The Three Factor Test for a “Recordable” COVID-19 Exposure

 

Employers are only responsible for recording cases of COVID-19 if all of the following are met:

  1. The case is a confirmed case of COVID-19, i.e., an individual with at least one respiratory specimen that tested positive for SARS-CoV-2, the virus that causes COVID-19. A suspected case, without a laboratory diagnosis should not appear on the log. Nor are cases in which an employee “self-quarantines” without ever being diagnosed.
  2. The case is work-related, as defined by 29 CFR 1904.5, and
  3. The case involves one or more of the general recording criteria set forth in 29 CFR 1904.7 (e.g. medical treatment beyond first aid, days away from work).

 

OSHA Eases the Work Related Analysis for Non-Health Care Employers

 

It has been the second criteria which has been the most difficult to implement.  Although it is certainly the general rule that an injury or illness must be “work related” to be recorded on the log, this standard is not easily evaluated for COVID-19. The second factor is whether illness was contracted at work and was “work related.” Under 29 CFR § 1904.5, an employer must consider an injury or illness to be work-related if an event or exposure in the work environment (as defined by 29 CFR § 1904.5(b)(1)) either caused or contributed to the resulting condition or significantly aggravated a pre-existing injury or illness. Work-relatedness is presumed for injuries and illnesses resulting from events or exposures occurring in the work environment, unless an exception in 29 CFR § 1904.5(b) (2) specifically applies. See www.osha.gov/laws-regs/regulations/standardnumber/1904/1904.5.

The exceptions typically involve questions of whether the employee was engaged in his scope of duties at the time of a specific exposure.  A specific exposure may be, at least in theory, be readily identifiable suitable for identifying when a person is exposed with work place materials that are known to be such as asbestos.  For instance, a fast food worker who contracts salmonella while preparing hamburgers for customers would have been exposed in a work related situation.  That same employee would not have a work related exposure, if he returned after his shift to buy a dinner for himself.  These types of distinctions presume that one can pin point at least one clear point of exposure.

However, in a pandemic, the potential exposure exists in the general public as well.  An employee may receive exposure at work, or at Church, or in the family home.  Originally, OSHA did not provide any guidance which recognized this dilemma, forcing conscientious employers to try conduct their own
tracing exercises.

Therefore, on April 10, 2020, OSHA clarified its policy for the second criteria:

“In areas where there is ongoing community transmission, employers other than those in the healthcare industry, emergency response organizations (e.g., emergency medical, firefighting, and law enforcement services), and correctional institutions may have difficulty making determinations about whether workers who contracted COVID-19 did so due to exposures at work. In light of those difficulties, OSHA is exercising its enforcement discretion in order to provide certainty to the regulated community.

Employers of workers in the healthcare industry, emergency response organizations (e.g., emergency medical, firefighting, and law enforcement services), and correctional institutions must continue to make work-relatedness determinations pursuant to 29 CFR § 1904. Until further notice, however, OSHA will not enforce 29 CFR § 1904 to require other employers to make the same work-relatedness determinations, except where:

    1. There is objective evidence that a COVID-19 case may be work-related. This could include, for example, a number of cases developing among workers who work closely together without an alternative explanation; and
    1. The evidence was reasonably available to the employer. For purposes of this memorandum, examples of reasonably available evidence include information given to the employer by employees, as well as information that an employer learns regarding its employees’ health and safety in the ordinary course of managing its business and employees.”

This enforcement policy will help employers focus their response efforts on implementing good hygiene practices in their workplaces, and otherwise mitigating COVID-19’s effects, rather than on making difficult work-relatedness decisions in circumstances where there is community transmission.”

The Redundancy of the Third Factor

The third factor is whether the illness or injury is seriousness enough to be “recordable.” An invisible paper cut, for instance, may occur in the office and may be work related but is not usually serious enough to be recordable.  In other situations, this factor limits trivial cases from being entered on the Log.

According to OSHA:

“A work-related injury or illness must be recorded if it results in one or more of the following: Death; one or more days away from work; restricted work or transfer to another job; Medical treatment beyond first aid; loss of consciousness.”

 

It is hard to imagine a Confirmed COVID-19 case that does not meet this criteria. In order to be confirmed case, there must have been a positive laboratory specimen test, and given the testing shortages, such tests are not available unless one has already shown symptoms.  Indeed, in many cases, the test may not be available unless the employee has already sought medical treatment.  The CDC and OSHA are both recommending that a worker who even appears to show symptoms be sent home until receiving a negative test or otherwise being cleared as negative. In some states, such as New Jersey, emergency orders require an employee showing symptoms of COVID-19 to immediately be “separated” from the rest of the workforce, i.e., missing work or being restricted from the physical work place.  Therefore, this third criteria will almost always be redundant.  The employer must record the employee as having a work place related exposure if the employee receives a laboratory confirmed diagnosis, and either based upon regulatory criteria or “objective evidence” reported to the employer, there was work related exposure.


THE NEW CHAPTER V: A CHANCE FOR SMALL BUSINESSES TO SURVIVE

By Deborah I. Hollander, Esq.

The Small Business Reorganization Act of 2019 (“SBRA”) is the most extensive reform to the Bankruptcy Code since 2005.   It added a new Subchapter V to the Bankruptcy Code, to allow small businesses to reorganize without completely going out of business.

Reorganization under the protection of the bankruptcy gives the debtor a “financial breathing spell” from most creditor collection efforts. This protection allows a business to continue its operations while formulating a plan of reorganization to repay its creditors. Up until February of this year, a business could only reorganize under Chapter 11, a complex process which most small businesses could not afford, which small businesses rarely successfully completed and which provided little protection for the entrepreneur who founded and continues to run the business.

Chapter 11 now has a newly created Subchapter V which makes it possible for business owners to keep their ownership interests without having to pay senior creditors in full or provide new value.   Within 60 days of filing, the court will schedule a substantive status conference to help chart the course for the debtor.  The debtor’s plan is due within 90 days of the date of filing.

What size and type of businesses qualify?

To qualify as a small business debtor, the debtor must be a person or entity engaged in commercial or business activity with aggregate secured and unsecured debts of $2,725,625.00.   Businesses which make public offerings and corporations which are part of larger corporate entities regulated by the Securities and Exchange Commission are not eligible. Nor is “single asset real estate,” owners, business whose income comes from operating a single piece of real estate eligible.

Reduced Costs under Subchapter V

There are cost savings built into the new Subchapter V, as opposed to a regular Chapter 11.  The debtor is not requirement to pay United States Trustee (“UST”) quarterly fees. There are no appointments of a committee of unsecured creditors. There is no requirement for a disclosure statement to accompany the debtor’s plan of reorganization.  The period of Reorganization is limited to a five year period.

How the New Chapter V bankruptcy will work

Only the business itself can file for bankruptcy under this chapter.  Creditors cannot join together to force the business into this form of bankruptcy.  The business begins by filing for bankruptcy and electing Subchapter V.  Upon “electing” that Subchapter, shall apply to the debtor’s case, the debtor must file a copy of the business’s most-recent balance sheet, statement of operations, cash-flow statement, and federal income tax return or a sworn statement that such documents do not exist.

 The Subchapter V Trustee

A trustee will be appointed in every Subchapter V case. Within 14 days after filing. The trustee will serve as a fiduciary for creditors and is accountable for all property of the debtor as well as for ensuring the debtor makes the payments as required by debtor’s reorganization plan. The trustee must participate in certain bankruptcy court conferences and hearings concerning matters to the value of any property subject to a lien, the confirmation of a reorganization plan and any modification post-confirmation, and the sale of property of the estate. The trustee’s service terminates upon substantial consummation of the plan

A subchapter V trustee ordinarily will not operate the business of the small business debtor.  The presumption is that the principal of the corporation will continue to operate the business as a debtor in possession. A subchapter V debtor may lose its status as a debtor in possession only if the court finds, after notice and a hearing, that the debtor engaged in fraudulent, dishonest, or incompetent behavior or grossly mismanaged its financial affairs.

The Status Conference

Within sixty days after the business files its petition, the bankruptcy court will hold a status conference to further the expeditious and economical resolution of a case.  The Court can court postpone this conference only if   such extension is needed as a result of circumstances for which the debtor should not justly be held accountable.  At least later 14 days before the date of the status conference, the debtor must file with the court and serve on the trustee and all parties in interest a report that details the efforts the debtor has undertaken and will undertake to attain a consensual plan of reorganization.

The Submission of the Plan: 

The next important step is the debtor’s submission of its actual plan to reorganize.  This must happen no later than 90 days after the case is filed, unless the court extends this period because of circumstances for which the debtor should not justly be held accountable.

The plan must include the following: a brief history of the business operations of the debtor; a liquidation analysis; and projections with respect to the ability of the debtor to make payments under the proposed plan of reorganization. In addition, the plan must provide for the submission of all or such portion of the future earnings or other future income of the debtor to the supervision and control of the trustee as is necessary for the execution of the plan.

If the business owner borrowed against his home to fund the business, he may be able to reduce or modify that mortgage. The debtor may modify the rights of a mortgage or lien holder secured only by a security interest in his principal residence of the debtor if the new value received in connection with the granting of the security interest was used primarily in connection with the small business of the debtor, but not the mortgage used to buy the home.

Confirmation or Rejection of the Plan

In order for the plant to be confirmed, the Bankruptcy court must find that: (1) the debtor will be able to make all payments under the plan; or (2) there is a reasonable likelihood that the debtor will be able to make all payments under the plan; and the plan provides appropriate remedies, which may include the liquidation of nonexempt assets, to protect the holders of claims or interests in the event that the payments are not made.

The plan must provide that all of the projected “disposable income” of the debtor to be received will be applied to payments under the plan for three-year to five year period, beginning on the date that the first payment is due. The plan may also include of the distribution of property to creditors within that same three-year to five year period as long as the property so distributed is not less than the projected disposable income of the debtor.

            DISPOSABLE INCOME

Obviously, a key feature of a Plan is the identification of “Disposable Income” since that is the money which must be paid to the Trustee to fund the plan. There is a new and specific definition of “Disposable income” for Subchapter V small businesses. “Disposable income” means “the income which is received by the small business enterprise debtor and which is not reasonably necessary to be expended — (1) for the maintenance or support of the debtor or a dependent of the debtor or for a domestic support obligation that first becomes payable after the date of the filing of the petition; or (2) for the payment of expenditures necessary for the continuation, preservation, or operation of the business of the debtor.” § 1193(d). This is different than the definition of “disposable income” in other parts of the code. Overtime, case law, will flesh out this definition.

FLEXIBILITY IN TREATING GROUPS OF DEBTORS

The plan must be fair and equitable with respect to each class of interests.  It is not necessary that the group of creditors agree to their treatment. The bankruptcy court may confirm a plan even if a class of claims or interests has rejected the plan providing that such plan does not discriminate unfairly, and is fair and equitable with respect to each class of claims or interests that is impaired.

The plan must satisfy one of three alternatives to pay secured creditors. (1) The holders retain their liens and receive on account of their claims deferred cash payments totaling at least the amount of their claims, as valued on the plan’s effective date. (2) If the plan contemplates selling secured property then the plan must provide that the secured creditors receive the indubitable equivalent of their claims.

If a Plan Is Not Confirmed

If a plan is not confirmed, it is probable that the debtor will end up in a Chapter 7 bankruptcy. Technically, the debtor may obtain any money provided to the trustee but actual receipt of refunds is unlikely, Under the statute, the trustee shall return any payments received from the debtor, but only after deducting– (1) any unpaid claim allowed under section 503(b) of this title; (2) any payment made for the purpose of providing adequate protection of an interest in property due to the holder of a secured claim; and (3) any fee owing to the trustee.

Operating Under the plan

If a plan is confirmed, the debtor has three to five years to complete it, i.e., pay off all the debts and successfully sell all the secured property as outlined in the plan.  During that period there will be a “bankruptcy estate” which includes all property acquired by the debtor after the date of commencement of the case, but before the case is closed, dismissed, or converted to a case under chapter 7,  12, or 13 of title 11, whichever occurs first. It also includes all earnings from services performed by the debtor during such period.

During this period, the debtor remains in possession, although “disposable income” must be provided to the trustee to distribute according to the plan. The debtor may employ pre-filing creditors, as long as their claim was less than $10,000 at the time of filing. This is a crucial element because small businesses may try to keep themselves afloat by borrowing or suspending pay to the business’s founders or other key employees.  It also allows the debtor to use the same accountants and attorneys it had prior to the filing, even if it owes them outstanding bills.

 

 Modification After Confirmation.

Of course, business is not always predictable.  Therefore, it is possible to modify a plan once confirmed.  The debtor may modify the plan at any time after confirmation of the plan and before substantial consummation of the plan, but may not modify the plan so that the plan as modified fails to meet the requirements required for original confirmation. The proposed modification must be approved by the Court, after a notice is given to creditors and a hearing is held before the Bankruptcy Court.

Discharge After Completion Of The Payments

 If all goes well, during three to five years of the plan, the debtor generate sufficient disposable income to make all payments due under the plan within that period. If so, the bankruptcy court must grant the debtor a discharge as soon as. Such discharge will cut off all debts as provided under the plan. Of course, if a debt itself lasts longer than the plan (such as a ten year mortgage, which was kept current but not fully paid off during the plan), or if a debt is inherently non-dischargeable under bankruptcy law, (such as federal taxes), those will remain.

Otherwise the debtor now has a fresh start, having satisfied or discharged  the pre-filing debts, and regains control of all, including its disposable income.

© 2020


THE HAVEN ACT: A HELP FOR DISABLED VETERNS SEEKING A FRESH START

Last year, a new law was enacted called The HAVEN Act which should help disabled veteran show they are entitled to discharge old debts  by helping the to qualify for Chapter 7 bankruptcies. Chapter 7 is the form of bankruptcy in which a person is declared assetless and nearly all of his debts are discharged.  The debtor the can make a “fresh start” and unsecured creditors are spared the frustration and expense of pursuing and collecting un-collectable judgments.

In order to prevent individuals from taking advantage of the law to discharge debts that they could actually find a way to repay, the Bankruptcy Court has the power  to dismiss a chapter 7 case for ‘‘substantial abuse.’’ Since 2005, the Bankruptcy law has included a means or needs-based testing mechanism to determine a debtor’s ability to repay debts and therefore whether his filing of the bankruptcy case should be presumed to be abusive.  Section 707(b) of the Bankruptcy Code provides that if a chapter 7 debtor has the ability to repay debts and has no special circumstances, the filing of the debtor’s case is presumed to be an abuse and subject to dismissal or conversion to a chapter 13 case based on the debtor’s income and various specified expenses.  The debtor’s income, for purposes of this test, is typically determined by calculating the amount of average monthly income the debtor received during the six-month period preceding the filing of the bankruptcy case.

However, it has also long been the policy that some types of government benefits should not be fairly included in the income test. For purposes of the Bankruptcy Code’s means test, Social Security benefit payments are excluded as income. As Senator Edward Kennedy (D–MA) explained when the “means test” was first proposed:

“The bottom line is that bankruptcy shouldn’t be made more difficult for those who are depending on Social Security for their livelihood. Social Security was developed to ensure that seniors can live their golden years in dignity. If we allow Social Security income to be considered while determining whether someone is eligible for bankruptcy, a portion of those benefits could be used in a manner inconsistent with Congress’ intent.”

Payments to victims of international terrorism and payments to victims of war crimes and crimes against humanity were also excluded from the income side of Chapter 7 means testing.

However, the protected status is given inconsistently under the law. Various other federal retirement benefit programs—such as programs for veterans—that take the place of Social Security, at least for the period during which the worker held the type of employment covered under such program. Much like Social Security, these other federal benefit programs almost always prevent assignment or seizure of these benefits by creditors. Nevertheless, the Bankruptcy Code’s means test treats such payments as income.

Up until last year’s passage of the HAVEN Act, Certain veterans’ disability benefits paid by the U.S. Department of Veterans Affairs and the U.S. Department of Defense had been among those benefits treated as income in the Chapter 7 means testing. Such treatment was seen as “an imbalance in the Bankruptcy Code” that resulted in veteran’s failing the “means” test and being disproportionately steered into Chapter 13 cases because they often fail the Chapter 7 means test.’’

The HAVEN Act remedied this imbalance by adding veteran’s disability benefits to the list of sources which cannot be considered part of the debtor’s income in analyzing his eligibility for Chapter 7 discharge. The veteran’s base retirement pay is still included.

“excludes— (I) benefits received under the Social Security Act (42 U.S.C. 301 et seq.); (II) payments to victims of war crimes or crimes against humanity on account of their status as victims of such crimes; (III) payments to victims of international terrorism or domestic terrorism, as those terms are defined in section 2331 of title 18, on account of their status as victims of such terrorism; and (IV) any monthly compensation, pension, pay, annuity, or allowance paid under title 10, 37, or 38 in connection with a disability, combat-related injury or disability, or death of a member of the uniformed services, except that any retired pay excluded under this subclause shall include retired pay paid under chapter 61 of title 10 only to the extent that such retired pay exceeds the amount of retired pay to which the debtor would otherwise be entitled if retired under any provision of title 10 other than chapter 61 of that title.”

(c) 2020


COVID 19 ALERT: NON-VISA TRAVELER’S OPTION TO STAY IN THE US

OPTIONS FOR VISA WAIVER TRAVELLERS SEEKING TO STAY IN THE US

 

(Note: ESTA Holders Who Want to Travel Home, But Who Have Been Unable to Leave On Time Should See Our Earlier Alert On this Topic)

 

By Deborah Hollander, Esq.

 

Non-immigrant visitors to the United States are only admitted for specific purposes or time periods.  If they simply overstay their departure date, they may begin accruing “unlawful presence” even if they are not ultimately departed.   This unlawful presence can significantly impact their ability to return to the United States and future applications for lawful status.

 

In the midst of the Corona Virus 19 crises, some visitors who expected to depart on time, and want to do so are running into difficulties in doing so.  Planes are being cancelled.  Travelers from the U.S. may be barred from entering into the next country they intended to travel to, or they may simply be quarantining themselves and do not want to pass through a crowded airport or fly.  One particular group which has struggled with this issue are visitor (VWP-ESTA) holders who came to this country for up to 90 days without a formal visa and just a passport stamp listing their departure date.

 

The VWP-ESTA program is designed for 90 day visits and allows visitors from designated countries (and the list often shifts) to enter the country without visa.  Holders are not entitled to automatic or lengthy extensions of their stay. They are not allowed to change to another non-immigrant visa once they are here.  There is however one exception, which relies partly on statutes, and partly on the government’s “discretion” to allow the spouses, children and parents of adult relatives of U.S. citizens to stay/

 

 

 

INA section 245(c) (4) renders aliens admitted under the Visa Waiver Program ineligible         to “adjust status” to another visa category or to that of a person admitted for long term permanent residence status (i.e., green card status).  Instead, such persons are generally expected to return to their home country, any apply through the U.S. embassy in that country for a visa, if they are eligible for one.

However,  a VWP-ESTA traveler who is the child, spouse or parent of an American citizen (if such citizen is at least 21 years of age) is allowed to file for long term resident status while in the U.S. on an ESTA passport.  Furthermore, they may be able to do so without leaving the U.S. while their application is pending, and even after they were originally scheduled to depart.

In a 2013 Policy Statement, the United States Immigration and Citizenship Services Agency stated that it would generally adjudicate adjustment of status cases filed by immediate relatives of U.S. citizens who were last admitted to the United States under the Visa Waiver Program before referring them to ICE for removal “That includes cases where [the] Form I-485 was filed after the 90-day period of admission,” i.e., even after the traveler had overstayed.  However, there are three situations in which the USCIS will not adjudicate an adjustment of status application for a Visa Waiver Program entrant prior to referral to ICE for removal:

  • If ICE has already issued a removal order; or
  • The adjustment applicant is under investigation for, has been arrested for (without disposition), or has been convicted of an egregious public safety offense
  • There are fraud and/or national security issues that require resolution.

 

Typically, by “fraud” the government meant that it suspected the foreign national had always intended to stay in the U.S. and concealed that fact when applying for ESTA.  In the case of the COVD-19 virus’s sudden eruption, it should not be hard to argue changed circumstances.

 

Even where this option is available, it should be carefully considered. The U.S. citizen relative must agree to sponsor them.  A relative or relatives must agree to provide an affidavit of support (and have sufficient means to do so) to protect the government from having to utilize low income programs for the foreign national. Even with that affidavit, under current regulations, the applicant and family will still have to a demonstration that the foreign national is unlikely to become a public charge. (See our “Public Charge” Newsletter).

 

Other Alternatives:

 

If a VWP ESTA holder wants to stay in the U.S. and cannot take advantage of the immediate relative exception, or if USCIS revokes its policy, what are the options.  By overstaying the visa, the foreign national will accumulate a period of unlawful presence that can bar future entries into the U.S. There is also the risk of arrest, detention and removal by ICE.  However, ICE has stated it will, for the moment, be focusing on removing foreign nationals who have committed serious crimes or otherwise present a threat.  In some cases, in the future, the foreign national can apply for waiver of this bar. The future problems of re-entry and waiver may seem to be the least bad option.

 

 

Another option would be to apply for asylum. Some immigration attorneys are considering whether the COVD-19 itself can be a basis to justify such an application. While the application for asylum can interrupt removal proceedings, there are serious consequences, including stronger bars to making “frivolous” asylum claims.  The theory that a pandemic can justify asylum is unproven, and is likely to be resisted by the government. Therefore, any such attempt should be undertaken only after careful consultation with an experienced immigration attorney and full knowledge of the risks of failure.

 

Note:

The Visa Waiver Program, (VWP), is a reciprocal visa program. It permits citizens of 39 countries to travel to the United States for business or tourism for stays of up to 90 days without a visa. In return, those 39 countries must permit U.S. citizens and nationals to travel to their countries for a similar length of time without a visa for business or tourism purposes. Since 2016, in order to participate in the visa waiver program, the traveler must have an “e-passport”, issued under the Electronic System for Travel Authorization to use the VWP.  Hence these travelers are called VWP ESTA travelers.

© Sheak & Korzun, P.C. 2020


CO-VD19 ALERT: THE ORDERS WITHIN NEW JERSEY’S CORONAVIRSUS VIRUS ORDER

 

COVID-19 UPDATE

THE ORDERS WITHIN NEW JERSEY’S CORONAVIRSUS VIRUS ORDER

 

New Jersey’s Governor Murphy has issued a semi-lock down order.  Those who are seen as violating it, or are seen as helping others to violate it, may be subject to disorderly person summons in municipal court. (However, most municipal court proceedings are adjourned).  Here are the current key terms:

  • All gatherings of persons in the State of New Jersey shall be limited to 50 persons or fewer, with limited exceptions;
  • All public, private, and parochial preschool programs, and elementary and secondary schools, including charter and renaissance schools, will be closed beginning on Wednesday, March 18, 2020, and remain closed as long as the Order remains in effect;
  • Institutions of higher education will cease all in-person instruction beginning on Wednesday, March 18, 2020, and shall cease such in-person instruction as long as the Order remains in effect;
  • The Commissioner of Education shall continue working with each public, private, and parochial school to ensure students are able to continue their education through appropriate home instruction
  • The Secretary of Agriculture and the Commissioner of Education shall take all necessary actions to ensure all students eligible for free or reduced meals will continue to receive the services necessary to meet nutritional needs during closures;
  • All casinos, concert venues, nightclubs, racetracks, gyms, fitness centers and classes, movie theaters, and performing arts centers will be closed to the public beginning on Monday, March 16, 2020 at 8:00 p.m. and remain closed as long as this Order remains in effect;
  • All other non-essential retail, recreational, and entertainment businesses must cease daily operations from 8:00 p.m. until 5:00 a.m.; and
  • All restaurant establishments, with or without a liquor or limited brewery license, are limited to offering delivery and/or take out-services only.

 

The Order does not deal with the myriad of cancellation, breach of contract and refund issues arising from the closings. For instance, it does not state whether theatre organizations have to refund season tickets, or box seats.  Organizations and customers should begin by looking at their contracts and sales agreements and may wish to contract their counsel on regulatory rules relating directly to their industry.

The actual substantive language is as follows:

 

  1. All gatherings of persons in the State of New Jersey shall be limited to 50 persons or fewer, excluding normal operations at airports, bus and train stations, medical facilities, office environments, factories, assemblages for the purpose of industrial or manufacturing work, construction sites, mass transit, or the purchase of groceries or consumer goods.
  2. All public, private, and parochial preschool program premises, and elementary and secondary schools, including charter and renaissance schools, shall be closed to students beginning on Wednesday, March 18, 2020, and shall remain closed as long as this Order remains in effect.
  3. All institutions of higher education shall cease in-person instruction beginning on Wednesday, March 18, 2020, and shall cease such in-person instruction as long as this Order remains in effect. The Secretary of the Office of Higher Education shall have the authority to grant a waiver to allow in-person instruction to students on a case-by-case basis where a compelling rationale to allow such access exists. The Secretary of the Office of Higher Education shall coordinate with institutions of higher education to determine appropriate student housing conditions for those students who reside in on-campus housing as their primary residence.
  4. The Commissioner of the Department of Education (“DOE”), in consultation with the Commissioner of DOH, shall be authorized to permit schools to remain open on a limited basis for the provision of food or other essential, non-educational services, or for educational or child care services if needed in emergency situations after consultation with the Commissioner of DOH. The Commissioner of DOE shall also have the authority to close any other career or 6 training facilities over which he has oversight, after consultation with the Commissioner of DOH.
  5. The Commissioner of DOE shall continue working with each public school district, and private and parochial schools as appropriate, to ensure that students are able to continue their educations during this time period through appropriate home instruction. Local school districts, charter schools, and renaissance schools, in consultation with the Commissioner of DOE, shall have the authority and discretion to determine home instruction arrangements as appropriate on a case-by-case basis to ensure all students are provided with appropriate home instruction, taking into account all relevant constitutional and statutory obligations.
  6. The Secretary of the Department of Agriculture, in conjunction with the Commissioner of DOE, shall take all necessary actions to ensure that all students eligible for free or reduced meals shall continue to receive the services or supports necessary to meet nutritional needs during closures.
  7. The following facilities are ordered closed to members of the public, effective 8:00 p.m. on Monday, March 16, 2020. These facilities are to remain closed to the public for as long as this Order remains in effect. The State Director of Emergency Management, who is the Superintendent of State Police, shall have the discretion to make additions, amendments, clarifications, exceptions, and exclusions to this list:
  8. Casino gaming floors, including retail sports wagering lounges, and casino concert and entertainment venues. Online and mobile sports and casino gaming services may continue to be offered notwithstanding the closure of the physical facility.
  9. Racetracks, including stabling facilities and retail sports wagering lounges. Mobile sports wagering services may continue to be offered notwithstanding the closure of the physical facility.
  10. Gyms and fitness centers and classes.
  11. Entertainment centers, including but not limited to, movie theaters, performing arts centers, other concert venues, and nightclubs.
  12. Other non-essential retail, recreational, and entertainment businesses must cease daily operations from 8:00 p.m. until 5:00 a.m… From 5:00 a.m. until 8:00 p.m., these businesses may remain open if they limit their occupancy to no more than 50 persons and adhere to social distancing guidelines. Examples of essential businesses excluded from this directive include: grocery/food stores, pharmacies, medical supply stores, gas stations, healthcare facilities and ancillary stores within healthcare facilities. The State Director of Emergency Management, who is the Superintendent of State Police, shall have the discretion to make additions, amendments, clarifications, exceptions, and exclusions to the list of essential businesses and to the timelines applicable to operating hours.
  13. All restaurants, dining establishments, and food courts, with or without a liquor license, all bars, and all other holders of a liquor license with retail consumption privileges, are permitted to operate their normal business hours, but are limit ted to offering only food delivery and/or take-out services. If alcoholic beverages are to be sold from a restaurant, dining establishment or bar with a liquor license, such sales shall be limited to original containers sold from the principal public barroom. All retail sales of alcoholic beverages by limited brewery licensees, restricted brewery licensees, plenary and farm winery licensees (and associated salesrooms), craft distillery licensees and cidery and meadery licensees must be in original containers and must be delivered by licensed entities and/or by customer pick up.
  14. In accordance with N.J.S.A. App. A:9-33, et seq., as supplemented and amended, the State Director of Emergency Management, who is the Superintendent of State Police, through the police agencies under his control, to determine and control the direction of the flow of vehicular traffic on any State or interstate highway, municipal or county road, and any access road, including the right to detour, reroute, or divert any or all traffic and to prevent ingress or egress from any area that, in the State Director’s discretion, is deemed necessary for the protection of the health, safety, and welfare of the public, and to remove parked or abandoned vehicles from such roadways as conditions warrant.
  15. The Attorney General, pursuant to the provisions of N.J.S.A. 39:4-213, shall act through the Superintendent of State Police, to determine and control the direction of the flow of vehicular traffic on any State or interstate highway, municipal or county road, and any access road, including the right to detour, reroute, or divert any or all traffic, to prevent ingress or egress, and to determine the type of vehicle or vehicles to be operated on such roadways. I further authorize all law enforcement officers to enforce any such order of the Attorney General or Superintendent of State Police within their respective municipalities.
  16. No municipality, county, or any other agency or political subdivision of this State shall enact or enforce any order, rule, regulation, ordinance, or resolution which will or might in any way conflict with any of the provisions of this Executive Order, or which will in any way interfere with or impede its achievement.
  17. It shall be the duty of every person or entity in this State or doing business in this State and of the members of the governing body and every official, employee, or agent of every political subdivision in this State and of each member of all other governmental bodies, agencies, and authorities in this State of any nature whatsoever, to cooperate fully in all matters concerning this Executive Order.
  18. Penalties for violations of this Executive Order may be imposed under, among other statutes, N.J.S.A. App. A: 9-49 and -50.
  19. This Order shall take effect immediately and shall remain in effect until revoked or modified by the Governor, who shall consult with the Commissioner of DOH as appropriate.

Tax Returns Must Be Filed By April 15, but Do Not Have to Be Paid until July.

United States tax payers who owe less than $1,000,000.00 in federal income taxes for 2019 still have to file their returns on time, but they can wait until July 15, 2020 to pay them. Taxpayers expecting refunds can still file on time or early and, at least in theory, will receive their refund in the usual time period.   

On March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic. The Emergency Declaration included a provision for there to be “relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency.” 26 U.S.C. 7508A(a).

Section 7508A provides the Secretary of the Treasury or his delegate (Secretary) with authority to postpone the time for filing returns under the internal revenue laws for a taxpayer determined by the Secretary to be affected by a federally declared disaster.  Previously the IRS has granted this relief to taxpayers in specific areas affected by natural disasters.

Individuals, partnerships, and S corporations, may defer up to $1,000,000.00 in payments until July 15, 2020.  This relief applies in aggregate, and cannot be multiplied. Married Couples filing jointly may defer up to $1,000,000.00 for the couple (and not $2,000,000.00).  The self-employed can defer a total of $1,000,000.00 for both the 2019 taxes and the 2020 self-employment tax estimate.   Large corporations organized as “C” taxpayers and the related corporations which file the same return, the deferred amount may be up to $10,000,000.00.  If a tax payer owes more than $1,000,000.00 for 2019, interest and penalties will accrue on the portion due above $1,000,000.00

The deferment applies only to federal income tax. It does not apply to estate taxes, gift taxes, payroll taxes or any other federal tax.   Nor does it apply to state taxes.

The Treasury notice stated that Affected Taxpayers subject to penalties or additions to tax despite this relief may be granted by reasonable cause relief under section 6651 for a failure to pay tax or seek a waiver to a penalty under section 6654 for a failure by an individual or certain trusts and estates to pay estimated income tax, as applicable.  Normally, under Treas. Reg. § 301.6651-1(c) (1), even when a taxpayer shows undue hardship, the regulations require proof of the exercise of ordinary business care and prudence.  It is unclear whether the Treasury Department’s reference to the relief theoretically available under 6651 is an indication that it will relax the standards for granting such relief (which is usually not granted).