Innovating Office in Distress: Strategies for Managing Office Space Challenges. Interview Leo Jacobs and Eric Brody at the South Floria Real Estate Forum

Recently, the innovation stage hosted a riveting discussion with Mr. Leo Jacobs, one of the nation's leading experts in bankruptcy and workout counsel. The session, aptly titled Innovating Office in Distress, was a masterclass in navigating the pressures that arise in challenging financial times, particularly in the office space sector.

Here’s a closer look at the critical takeaways from the session:

Understanding the Nature of Office Space Distress

Office distress is more than just financial strain. It's the compounded weight of emotional, operational, and strategic challenges. Leo Jacobs emphasized that addressing this begins with a shift in perspective: it’s not about perfunctory fixes like better coffee or yoga sessions but about confronting the hard truths of documentation, negotiation, and strategic planning.

The Role of Proactive Paperwork Management

Many developers and business owners overlook their loan documentation until it’s too late. Jacobs explained that this complacency often stems from three main barriers:

Denial: Not wanting to face potential issues.

Ignorance: Lacking knowledge of how to approach the problem.

Inaction: Being unsure how to proceed once the issue is recognized.

These barriers can lead to high-pressure situations where lenders exert undue influence. Jacobs stressed the importance of understanding your paperwork and seeking expert counsel early to level the playing field.

In negotiations, particularly with lenders, the ability to assertively say “no” is crucial. Jacobs highlighted that saying no isn’t about hostility but about signaling readiness and competence. It establishes a foundation for meaningful negotiations, where both sides can collaboratively address the real issue—the problem itself, not the people involved.

Strategic Aggression: A Necessary Posture

Jacobs introduced the concept of strategic aggression, which is about demonstrating your capacity to defend your position without necessarily engaging in conflict. This approach can compel lenders to reconsider their stance, knowing they’re dealing with a sharp, well-prepared party.

Avoid signing any documents presented by the lender without thorough review.

Recognize that pre-negotiation letters often signal terms not initially agreed upon.

Understand the legacy implications of decisions—bad deals can reverberate across generations.

Jacobs underscored the importance of having the right counsel during times of distress. The lawyer who structured your deal may not be the best choice to renegotiate under duress. Instead, seek professionals who approach the situation with fresh eyes and a wartime mindset—individuals equipped to challenge and renegotiate terms effectively.

Ultimately, the session was a reminder to act with foresight and intention. Whether you're refinancing, negotiating with lenders, or simply ensuring your office space remains a viable asset, proactive strategies and expert counsel are indispensable.

As Jacobs put it, “The problem is the problem.” With this mindset, stakeholders can shift from adversarial battles to solution-oriented discussions, ensuring better outcomes for all involved.

For businesses navigating distress, these insights provide a roadmap to not only survive but innovate through challenging times. 

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Known for finding creative, expedient solutions to complex and high-profile cases, Leo excels in matters including distressed investment and asset management, real estate law, corporate law, dispute resolution, business divorces, negotiation, and more. Leo’s extensive expertise in debt and equity structures enables him to employ a full spectrum of legal tools to achieve swift, optimal results for clients. His practice, Jacobs P.C., bridges commercial litigation, corporate transactions, and financial rehabilitation, handling cases across federal, state, and bankruptcy courts, as well as administrative tribunals.

Facing challenges? Reach out to experienced professionals early, prepare for the unexpected, and always approach negotiations with clarity and strength.

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 Jacobs P.C., a boutique business litigation law firm, is proud to announce its recognition in the 2024 Chambers USA Rankings, earning rankings in both the Commercial Litigation and Bankruptcy/Restructuring categories.

Press Release: Jacobs PC Earns Double Ranking in Chambers USA for 
Commercial Litigation and Bankruptcy

NEW YORK, NY (November 24, 2024) — Jacobs P.C., a boutique business litigation law firm, is proud to announce its recognition in the 2024 Chambers USA Rankings, earning rankings in both the Commercial Litigation and Bankruptcy/Restructuring categories.

This prestigious acknowledgment highlights Jacobs P.C.’s unwavering commitment to delivering strategic, client-focused legal solutions in high-stakes cases. Chambers USA is renowned for its rigorous assessment process, evaluating law firms based on client feedback, legal excellence and market presence.

“This honor from Chambers USA is a testament to the dedication and skill of our entire team,” said Leo Jacobs, Founder of Jacobs PC. “Our rankings in these two critical areas reaffirm our mission to provide assertive, innovative advocacy that empowers our clients to achieve their business goals.”

The firm’s recognition in the Commercial Litigation category underscores its success in representing businesses and high-net-worth individuals in complex disputes, including real estate conflicts, partnership issues, and white-collar criminal matters. Its ranking in Bankruptcy/Restructuring reflects the firm’s deep expertise in navigating intricate bankruptcy proceedings, leveraging creative solutions to deliver results for both creditors and debtors.

Jacobs P.C.’s approach combines swift, results-oriented strategies with a collaborative, client-first philosophy. The firm continues to push boundaries in both litigation and bankruptcy, solidifying its reputation as a leader in the legal industry.

Amy Rossetti 
R[AR]E Public Relations 
amy@rarepublicrelations.com 
310.779.6025

Always consult with legal experts. If you have any concerns or questions, please contact us today to speak with one of our expert business law attorneys.

Jacobs P.C. announced today that it has successfully filed a comprehensive response on behalf of SIG CRE 2023 Venture LLC, Rialto Capital Advisors, LLC, and Quantum Servicing Corporation in a declaratory judgment action brought by multiple borrowers over loan extensions originally issued by Signature Bank.

Press Release: Jacobs P.C. Successfully Defends Borrower in Dispute Over Loan Extensions

New York, NY (November 18, 2024) – Jacobs P.C. announced today that it has successfully filed a comprehensive response on behalf of SIG CRE 2023 Venture LLC, Rialto Capital Advisors, LLC, and Quantum Servicing Corporation in a declaratory judgment action brought by multiple borrowers over loan extensions originally issued by Signature Bank.

The plaintiffs, who entered into five-year loan agreements with Signature Bank prior to its closure in 2023, allege that the defendants engaged in improper practices to hinder their ability to extend their loans under the agreements' automatic renewal terms. Signature Bank's loan documents provided borrowers the unilateral right to extend loans for an additional five years by giving written notice 60 to 90 days before the original maturity date, subject to narrowly defined conditions under which the lender could decline the extension. 

Following the FDIC’s takeover of Signature Bank, these loans were transferred to the defendants for servicing. The plaintiffs claim the defendants improperly imposed additional conditions not stipulated in the original agreements to block extensions. These conditions allegedly included legal fees, pre-negotiation agreements, and appraisals, among others. 

Jacobs P.C.’s response highlights the defendants' adherence to legal and procedural obligations during the transition of Signature Bank’s loan portfolio to its new administrators. The firm contends that the alleged actions were lawful and within the scope of the defendants' rights under the loan agreements. Jacobs P.C. further asserts that the defendants acted in good faith and maintained consistent communication with the plaintiffs regarding their obligations. 

“The case raises important questions about how loan servicing transitions are handled following the failure of a financial institution,” said Leo Jacobs, Founder of Jacobs P.C. “Our clients acted in compliance with the terms of the agreements they inherited and in the best interest of ensuring sound financial practices.” 

Jacobs P.C. is committed to achieving a fair resolution of this matter and looks forward to presenting its clients' case in court.

The Real Deal South Florida Forum, held at Mana Wynwood, gathered over 6,000 real estate professionals and 120 exhibitors for two days of networking and celebration of South Florida’s real estate market.

Photo Nov 06 2024, 1 46 01 PM-min.jpg

The TRD South Florida Forum: Unmissable, Unstoppable, Unforgettable!

The Real Deal South Florida Forum, held last week at Mana Wynwood, is the event where the magic happened. Forget the typical real estate conference—this was two action-packed days where deals were made, partnerships bloomed, and industry leaders came together to reimagine the future. Here, the biggest names in real estate gathered to exchange insights, network, and fuel their business success. This year, TRD South Florida Forum took it up a notch, with two massive halls dedicated to empowering the industry and celebrating the region’s vibrant market!

The lineup was nothing short of phenomenal! 

Patrons dove into topics that matter most in Real Estate, like the ever-evolving Brickell market, the sustainability of Miami’s office and tech scene, and the influence of luxury brands in condo and hospitality. For brokers and agents ready to supercharge their skills, there were exclusive workshops focused on harnessing AI to streamline workflows and boost productivity.

But the real excitement was on the Expo floor, where over 120 top-tier sponsors and exhibitors brought the future of real estate to life. Interactive exhibits, stunning project showcases, and cutting-edge services—where industry giants met, including the unstoppable team from Jacobs P.C. Known for their high-impact presence, Jacobs P.C. didn’t just sponsor the event—they owned it! Their must-attend panel, "Innovating Office Distress," featured the visionary Founder Leo Jacobs and Senior Partner Jacob Frydman, who shared powerful strategies for tackling today’s office real estate challenges. This session sparked invaluable conversations and left attendees buzzing with new ideas.

Jacobs P.C. kept the momentum going with an exclusive after-party that truly captured the spirit of South Florida’s elite. This wasn’t just an after-party; it was a networking haven, blending connection, collaboration, and entertainment in the perfect atmosphere. Jacobs P.C.’s commitment to fostering community shone through every detail, from the lively conversations to the unforgettable connections that were made. By night’s end, it was clear: Jacobs P.C. is a powerhouse in the Commercial Real Estate market. At TRD South Florida Forum, the energy was electric, the networking was invaluable, and the opportunities were endless. From all of us at Jacobs P.C., Thank you to all that attended!

South Florida's Real Estate Forum Sponsored by Jacobs PC

South Florida's Biggest Real Estate Event Sponsored by Jacobs PC

 Our team of legal and real estate experts, led by Leo Jacobs, is heading to Miami for the industry’s biggest event of late 2024. Now expanded to two full days at Mana Wynwood on November 6-7th, this event will host 6,000 attendees and over 100 exhibitors. Expect two days of learning, networking, and celebrating the South Florida market. This year, both the Main Stage and Innovation Stage return, gathering top leaders in development, finance, brokerage, and policy who are shaping the future of South Florida’s urban landscape.

November 6-7, 2024

The South Florida Real Estate event is just around the corner!

On the first day of the event, at 1:30 PM EST on the Innovation Stage, Leo Jacobs will deliver an insightful presentation titled “Innovating Office in Distress.” This session will examine how economic shifts, hybrid work trends, and rising interest rates are creating unprecedented challenges for office spaces, particularly in South Florida. The discussion will also cover strategies to meet evolving tenant needs, such as flexible and wellness-focused spaces, and explore office-to-residential conversions, smart technology integration, and innovative financial solutions like preferred equity and alternative financing.

Additionally, the session will address regulatory hurdles, share case studies of successful repositioning, and discuss future trends, encouraging a proactive, creative approach to transforming distressed office spaces into vibrant, profitable assets aligned with modern living and working preferences.

To learn more about the benefits of attending this important event, visit: South Florida Real Estate Forum | The Real Deal 

Congratulations to Leo Jacobs for winning the Bankruptcy Attorney of the Year at this year's Real Estate Development Awards. This award highlights his outstanding achievement in the real estate industry.

 Celebrating excellence in the real estate industry!

Celebrating Excellence in Real Estate Development: Recognizing Outstanding Achievements In the dynamic world of real estate development, where innovation and expertise intersect, we are delighted to share the exciting news of the recent Real Estate Development Awards. This prestigious event brought together industry leaders to honor those who have made significant contributions to the field.

Leo Jacobs awarded Bankruptcy Attorney of the Year at this year's Real Estate Development Awards

At the forefront of this event was Leo Jacobs, a distinguished professional focusing on the bankruptcy industry, whose expertise and vision have made a profound impact on the real estate sector. His outstanding achievement in the real estate industry has led him to be nominated and awarded as Bankruptcy Attorney of the Year at this year's RED Awards. Coordinated by the talented Selman Yalcin, the awards ceremony highlighted the outstanding achievements of individuals who are shaping the future of real estate development. Joining Leo Jacobs in the spotlight were other esteemed award winners, including Lev Mavashev, Thomas Donovan, Eric Brody, Christopher Okada, and Chany Roaen. Each of these individuals has demonstrated excellence in their respective areas, reflecting the diversity and innovation present in the real estate industry. 

Congratulations to all the deserving winners! Your dedication to excellence and your commitment to pushing the boundaries of real estate development are truly commendable. The Real Estate Development Awards serve as a testament to the passion and talent that drive our industry forward. As we celebrate these achievements, let us be inspired to continue fostering creativity and innovation in the real estate industry. Together, we can create a future where bold ideas and visionary leadership define success in the ever-evolving world of real estate. Stay connected for more updates and insights from the real estate industry. #RealEstate #Awards #Success 

Leo Jacobs, the founder of the boutique law firm Jacobs P.C., is one of New York City’s most prominent commercial litigation and bankruptcy attorneys. He’s a quick-witted, brutally honest, no-nonsense straight shooter. 

 Meet the Legal “Psychiatrist” to New York’s Billionaire Real Estate Developers 

 Leo Jacobs, the founder of the boutique law firm Jacobs P.C., is one of New York City’s most prominent commercial litigation and bankruptcy attorneys. He’s a quick-witted, brutally honest, no-nonsense straight shooter. But Leo’s secret to success not only lies in his ability to navigate the treacherous waters of in and out of court restructuring of NYC’s toughest debt and equity real estate deals– it is his wholehearted, holistic dedication to his clients mental health that is unprecedented in the cutthroat streets of the Big Apple. 

Some call Leo the Debtors’ psychiatrist*; the distressed real estate surgeon. In any case, he can patch together broken deals, shattered mindsets and propel the down-and-out to victory after a dramatic fall. 

“It is not only about putting clients in a better financial position,” Leo told Impact Wealth Magazine. “It is about harvesting and nurturing them, giving them my undivided attention, and getting them into a much better mental and physical state. I sell the dream to get back onto the top of the mountain no matter how tough it is. It is a Rocky movie; it is a story of second chances.” 

However, Leo’s rise into a gold-trimmed penthouse office inside Manhattan’s storied Fuller building on “Billionaire’s Row,” aka Madison Avenue, hardly materialized overnight. The mid-thirties lawyer grew up in Queens. His rise centered on representing his Bukharian Community in their share of prominent high-profile real estate, partnership, and commercial disputes. 

Yet he sees his practice now as much more than wheeling, dealing, and advocating. It is holding the hand of those caught in the throes of some of the darkest points of their life; it is talking the billionaire who lost everything down from the ledge; it is holding the hand of the tough-talking big-wig gripped by panic attacks; and it is literally saving the life of the stoic developer drinking himself to death. Ultimately, Leo is the attorney and life advisor offering a hand to those quietly suffering in a world that is hardly sympathetic or understanding of those who fall from grace in the brash and hard-line driven NYC real estate world. 

“Nobody is talking about it, but I am going to because this is how these debtors, developers feel. The majority of them are men, and they are suffering from their past business decisions ,” Leo continued. “No billionaire will ever admit to the suicidal thoughts they encounter day after day; the emptiness they feel when everything around them they shaped is taken from them that which they grew from nothing to something.” 

For Leo, working with so many who seem to have it all but are drowning inside serves as a searing reminder that we don’t know what anyone is going through behind closed doors. And bringing a client back from the brink is a skill he has honed and perfected over the years. As a coach, confidant, and consigliere to some of New York’s most influential real estate players Leo focuses foremost on determining a client’s “motivations.” 

“First, you have to understand what motivates the client. Each client is motivated by different things. Some are motivated by God. Some are motivated by women. Some are motivated by ego, or their families or by the embarrassment (of failure),” Leo explained. “So, the key for me is to flip his or her negative attitude and figure out their motivations for getting back up on that mountain. And sometimes I have to reroute their motivation because their motivation is fueled by negative emotions.” 

The game used to be to get the client from 0 to 1. Now the game is to get the client from -1 to 0 and then back to 1. That extra step is the difference in Leo Jacobs craft the developers and debtors now seek. He is a wartime general. The biggest and boldest real estate players of New York City are experiencing that war with high interest rates, changing laws, and pressure from shareholders to deliver more in these times. 

"I sell the dream to get back onto the top of the mountain no matter how tough it is. It is a Rocky movie; it is a story of second chances. "

For one, Real Estate magnate Abraham Leifer, the founder and CEO of Aview Equities and Leifer Equities, informed Impact Wealth that the post-COVID era had propelled him into exceedingly challenging and unfamiliar terrain, where he would feel adrift without Leo's guidance. 

“It’s much more, much better than just having a lawyer. Leo is the person who makes sure I know that I am not alone and that will be okay,” Abraham said. “He takes a call at any time of the night, but most importantly, he is a great listener who comes up with expedient solutions to complex problems in a simple way.” And no matter the season, there is hardly a lull in Leo’s flow. 

Part of his day may be spent propelling the aggressor away from the prey that is plagued by 8-figure civil judgments, helping a client find the right therapist to help with mental strengthening before the legal process can commence, and calming another one down with a long phone call that stretches into the early hours of the morning. Then, of course, there is working with debtors, developers, investors, and guarantors on in-court and out-of-court restructuring processes, bankruptcy, and modification for loans with CMBS lenders and private money managers. Leo routinely emphasized that he is “nothing without” his bankruptcy and commercial litigation team, pointing out that JPC advises fiduciaries, shareholders, and partners (General and Limited Partners) on fiduciary disputes. Moreover, the firm is renowned for its speedy work in the commercial litigation sector, where they focus on garnering preliminary relief quicker than what can be achieved in the drawn-out court system. 

Leo’s firm filed the last bankruptcy of 2023 (a $65MM fashion footwear chapter 11 bankruptcy) and the first Southern District of New York Single Asset Real Estate Bankruptcy of 2024, a case valued at $100Mm. 

“Our secret sauce is negotiation (tact), arbitration (privately settle disputes), mediation (create a meeting of the minds) coupled with speed at execution. Instead of fighting against the adversaries, we make our adversaries our counterparties who work together to solve the common problem of their client and our client. We make our adversaries understand our client’s position, or we make them understand their client’s position better than even they understand their clients position,” Leo stressed. 

In life’s spare moments, Leo devotes himself to non-profit and community service, including hours of pro Bono representation to the Bukharian Jewish People and an avid supporter of AIPAC. He acts as the attorney to theBukharian Community and the President of the Bukharian Law Association, a 150 member member organization bettering the lives of Bukharian college graduates seeking to go to law school through educational tools and the lives of law students and lawyers through continuous education and committee meetings on community issues such as housing, drugs and local safety. 

“Hashem, family, community, friendship and self-love,” Leo added, shedding light on the pillars he lives by. “When you break bones in your body, those bones heal back stronger. And that is the goal with my clients. We don’t always get second chances in life. But I bring the underdog back. I give debtors and developers a second chance, a second wind.” 

*Leo Jacobs is a New York Admitted Attorney and Counselor at law, not a psychiatrist. 

An effective tool in a New York business owner’s toolkit is the pre-negotiation letter. Here, we explore the pros/cons of signing a pre-negotiation letter.

Pros and Cons of Signing a Pre-Negotiation Letter

Untangling this Option for New York Business Owners

In the dynamic landscape of New York business, the complexity of deal-making and dispute resolution often requires preemptive strategic moves. An effective tool in a New York business owner’s toolkit is the pre-negotiation letter. 

What does this involve? It allows parties to decide to outline their positions and intentions through this formal correspondence—before diving into a full-fledged negotiation or dispute resolution. As a New York business owner, should this be something you consider? In this article, we explore the advantages and potential pitfalls of signing a pre-negotiation letter.

Benefits of Signing a Pre-Negotiation Letter

There are a number of benefits of entering into a pre-negotiation letter agreement. It’s important for New York business owners to understand not all of these advantages may apply to them. The best course of action is to consult with an experienced New York law firm, as attorneys can assess a business’s particular scenario and goals.

One of the most evident benefits is the structured framework a pre-negotiation letter offers. Instead of stepping into a negotiation room with abstract ideas or apprehensions, both parties have a clear idea of what to expect. This structure is especially beneficial for intricate deals or disputes where details can be overwhelming. With an initial roadmap, the negotiation process can be considerably more streamlined and purposeful.

In the business world, verbal agreements or informal exchanges can lead to misunderstandings and complications. Having a written record of initial positions can be a lifesaver in such scenarios. If disagreements arise later or if parties need to revisit previous points of contention, this document serves as an impartial and unchanged record.

Time is a valuable commodity in business; some might say the most valuable one. Extended negotiations not only consume time but also resources and energy. By clarifying positions at the outset, a pre-negotiation letter agreement can lead to quicker consensus, benefiting all involved parties.

Forewarned is forearmed. Knowing the stance of the opposing party beforehand can be instrumental in crafting compelling arguments, anticipating counter-responses, and refining one's strategy. Instead of reactive negotiations, parties can proactively address concerns, leading to more constructive discussions.

Risks of Signing a Pre-Negotiation Letter

Like just about anything in life and business, there are two sides to every story. In this section, we break down some of the detriments of entering into a pre-negotiation letter agreement.

Negotiations often require adaptability. While a pre-negotiation letter sets the stage, it can sometimes be a double-edged sword. Once a stance is documented, deviating from it or employing a different strategy might be seen as inauthentic or insincere, hampering the trust-building process. So, determining the importance of flexibility in your negotiations is a critical element you should assess with your attorney

Every strategy has vulnerabilities. By revealing your position early, you might inadvertently show your hand, giving the other party insights into potential weak points that they can exploit during negotiations. This is where an experienced New York attorney who is skilled at navigating pre-negotiation letters can help you determine if a pre-negotiation letter protects you from exposing your vulnerabilities, or where doing so actually helps your case.

The legal dimension of pre-negotiation letters cannot be ignored. A hastily or improperly drafted letter can lead to unintended commitments. In the absence of clear disclaimers or protective clauses, what was intended as a preliminary discussion tool might evolve into a binding agreement, leading to unforeseen liabilities. Again, a knowledgeable attorney can guide business owners through the risks and how to avoid them.

Protection can come at a price. Ensuring that the pre-negotiation letter is thorough, accurate, legally sound, and works to your advantage,  can require significant investment in terms of time and potentially legal consultation. Especially for smaller New York businesses or less significant deals, this cost might outweigh the benefits, unless you’re working with a firm that can handle the task quickly and efficiently.

Weighing the Pros and Cons of a Pre-Negotiation Letter Agreement

Like any strategic tool, the value of a pre-negotiation letter lies in its judicious use. For New York business owners, understanding the nuances, benefits, and potential drawbacks is crucial. It’s not about avoiding or embracing this approach universally but rather discerning when it can be a game-changer and when it might be a misstep.

If you’re facing any legal issue, whether commercial litigation, bankruptcy, or real estate bankruptcy, our expert attorneys can help. Contact us today to arrange for a consultation.

Jacob Frydman said in the lawsuit filed Friday in New York County Supreme Court that Herrick blew a key deadline against his former business partner, leading to a lackluster jury verdict in what should have been a billion-dollar-plus case.

NY real estate developer wants $1.1 bln from law firm over blown deadline

May 8 (Reuters) - A real estate developer has filed a $1.1 billion legal malpractice lawsuit against New York law firm Herrick Feinstein, alleging that the firm bungled his case and that one of its attorneys lied to two federal judges to cover up his mistake.

Herrick and its partner Arthur Jakoby, who was also named as a defendant, said in a statement that the claims "completely lack merit" and that the firm "has a substantial unpaid legal fee claim against Mr. Frydman."

Leo Jacobs, whose law firm is representing Frydman in the lawsuit, said if "there are any sums due, please provide an invoice and I am sure it will be taken care of promptly."

Frydman had alleged in a 2014 lawsuit that his former business partner Eli Verschleiser conspired with others to hijack the email servers of his company, United Realty Partners, and unlawfully accessed his email account. Frydman also alleged Verschleiser engaged in an anonymous, online smear campaign against him.

Frydman claimed he suffered nearly $380 million in compensatory damages. But lawyers at Herrick told a damages expert and others that their deadlines to submit reports in the case were in January 2017 when they were actually due in December 2016, the lawsuit said.

After the deadline passed, Jakoby fabricated an agreement that falsely made it seem as if Verschleiser's lawyers agreed to an extension, and then submitted deceptive filings to U.S. Magistrate Judge James Cott and U.S. District Judge John Koeltl about the matter, Frydman alleges.

"In sum, Herrick and Jakoby blew a clear and unambiguous court-ordered deadline, and then lied to not one, but two federal judges to cover up their malpractice," the lawsuit said.

Koeltl excluded the damages report in a March 2017 ruling, finding Frydman and his lawyers had no excuse for missing the "unambiguous deadline for expert disclosure." A federal jury eventually sided with Frydman in his lawsuit against Verschleiser and others, awarding him more than $2.1 million.

"But for Herrick’s and Jakoby’s malpractice, plaintiffs would have recovered punitive damages of $1.139 billion or more," the lawsuit said.

Verschleiser, who is not a party to the legal malpractice suit, is seeking to overturn the jury's decision. His attorneys did not immediately respond to a request for comment.

The case is Jacob Frydman, et al., v. Herrick, Feinstein LLP, et al., New York County Supreme Court, Index No. 150679/2023

For Jacob Frydman, Prime United Holdings LLC and United Realty Advisors LP: Ilevu Yakubov (Leo Jacobs), Lewis Fischbein and Adam Sherman of Jacobs PC, and Casey Coyle of Babst, Calland, Clements, and Zomnir PC

For Herrick, Feinstein and Arthur Jakoby: Anthony Sylvester of Sherman Atlas Sylvester & Stamelman

Should New York business owners file bankruptcy? Or not? One option to consider is the automatic stay. Here, we explore pros and cons of an automatic stay.

Automatic Stay in Bankruptcy: Good or Bad for New York Business Owners?

Crucial Considerations Surrounding General Bankruptcy and Real Estate Bankruptcy

Understanding the complexities of bankruptcy can be challenging—particularly given the precarious state of mind business owners find themselves in during turbulent financial times. Should a business owner file bankruptcy? Should they not? And for what reasons—both for and against filing?

One of the primary features of the bankruptcy process that stands out to many New York business owners and among New York bankruptcy attorneys is the "automatic stay." This provision can either be a lifesaver for some or a point of contention for others, especially within the realm of New York real estate. 

So, is the automatic stay good or bad for New York business owners? Here, we explore both sides of the coin.

An automatic stay is an injunction that immediately stops most creditors from pursuing collections against a debtor upon the filing of a bankruptcy petition. This means that while under the protection of the automatic stay, creditors cannot make calls, send letters, file lawsuits, garnish wages, or take any other collection action against the debtor. 

The primary purpose of the automatic stay is to give the debtor a reprieve from collections and allow them a chance to reorganize or discharge their debts in peace. Having the room to breathe provides a more stable mental state, so debtors can keenly focus on finding a solution.

What Is the Automatic Stay in Chapter 7 Bankruptcy?

While the automatic stay applies to all forms of bankruptcy, it plays a particularly notable role in Chapter 7 bankruptcy. In short, in this form of bankruptcy the debtor's non-exempt assets are liquidated to repay creditors. The automatic stay ensures that these assets aren't prematurely seized and that the bankruptcy trustee has an opportunity to distribute them fairly amongst the creditors. The following reveals a more detailed look at automatic stay in respect to Chapter 7 bankruptcy.

Unlike other forms of bankruptcy where the debtor may work out a plan to repay debts over time (like in Chapter 13), Chapter 7 is predominantly a liquidation process. Here, the debtor's non-exempt assets—meaning those assets not protected by an exemption and thus liable to be sold off—are liquidated to repay outstanding debts. These might include luxury items, certain real estate properties, or investments. However, many of a debtor's essential assets, such as primary residences, basic household goods, and tools of one's trade, may be exempt depending on the state's laws.

The automatic stay acts as a protective shield during this process. Once a debtor files for Chapter 7 bankruptcy, the automatic stay kicks in, immediately preventing creditors from taking direct action to collect what they are owed. This includes not only harassment via calls or letters but also halts actions like repossessions, evictions, or wage garnishments.

The primary role of the automatic stay in the context of Chapter 7 is to ensure that a debtor's assets aren't hastily or unfairly seized by aggressive creditors. Instead, it entrusts the orderly process of asset distribution to a bankruptcy trustee. This trustee, appointed by the court, is responsible for collecting the debtor's non-exempt assets, selling them, and then distributing the proceeds to creditors according to the priority set by bankruptcy law.

Without the automatic stay, there's a potential for a chaotic race among creditors to grab a piece of the debtor's assets. This could result in unfair distributions, with some creditors getting more than they are entitled to while others are left with nothing. The automatic stay ensures that there is an orderly, legal process to distribute assets equitably, giving every creditor their rightful share based on their priority and the nature of their claim.

Automatic Stay and Real Estate Bankruptcy in New York

For New York business owners involved in real estate, the automatic stay can play a crucial role. When a business owner files for bankruptcy, any ongoing foreclosure proceedings on properties they own are immediately halted. This can be particularly beneficial if the business owner is seeking to catch up on mortgage payments or negotiate a loan modification. The time afforded by the automatic stay can provide a much-needed window for recovery or to strategize a plan for moving forward.

However, there is a flip side. If you're a creditor or someone awaiting proceeds from the sale of a property, the automatic stay can delay your access to funds or the progression of a deal. This can be challenging for businesses operating on thin margins or those who rely on the timely receipt of funds. Additionally, if a property is perceived as being a declining asset or if it's uninsured, creditors may petition the court for relief from the automatic stay to proceed with foreclosure.

Making the Right Decision on an Automatic Stay—Straight from the Expertise of a New York Real Estate Attorney

Given the intricacies of the automatic stay and its implications in the New York real estate market, it's imperative to consult with a knowledgeable New York real estate attorney. Such experts, like those at Jacobs PC,  can provide clarity on how the automatic stay might impact a business, whether you're a debtor seeking protection or a creditor pursuing what's owed to you. 

It’s always been our position to ensure business owners can come to us for guidance on how to navigate turbulent waters, ensuring rights are protected and the best possible outcomes are achieved. Jacobs PC Founder Leo Jacobs has in-depth knowledge of the pros and cons of an automatic stay, and he is not hesitant to do the very best thing for Jacobs PC clients—whether or not an automatic stay is warranted. 

Closing Thoughts on the Automatic Stay in Bankruptcy

The question of whether the automatic stay in bankruptcy is good or bad for New York business owners doesn't have a one-size-fits-all answer. For debtors, it can be a critical tool that provides breathing space, especially in the high-stakes world of New York real estate. However, for creditors or other parties involved in real estate transactions, the automatic stay can introduce delays and complications.

Ultimately, the efficacy of the automatic stay, especially in the context of New York businesses and real estate, relies heavily on individual circumstances. Business owners, whether they are potential debtors or creditors, should familiarize themselves with the implications of the automatic stay. 

Consulting with a New York real estate attorney can provide valuable insights tailored to a business's unique situation. Understanding the potential advantages and drawbacks of the automatic stay can prepare New York business owners for the challenges and opportunities it presents. 

If you’re facing a bankruptcy issue, we have innovative and expedient solutions. Contact us today to speak with one of our expert bankruptcy attorneys.

While both commercial litigation and civil litigation involve disputes through the New York legal system, they differ in significant ways.

What’s the difference, and why does it matter?

When it comes to legal disputes, there are various litigation processes that individuals and businesses can pursue. The most common confusion arises when the differences between commercial and civil litigation is not well understood. While both involve disputes through the legal system, they differ in significant ways.

Commercial litigation involves legal disputes between businesses or corporations relating to commercial transactions, contracts, and other business-related matters. These disputes may include breach of contract, unfair competition, intellectual property disputes, partnership disputes, and other similar disagreements. Commercial litigation cases can be complex and often involve significant financial and business interests.

For example, if two companies enter into a contract and one of them fails to fulfill their obligations, this could lead to a commercial litigation case. Similarly, if a New York company believes that another company is using their intellectual property without permission, they may file a lawsuit to protect their rights.

Commercial litigation cases can be time-consuming and expensive, often involving extensive discovery and expert witnesses. They may also involve multiple parties, such as when a class action lawsuit is filed against a company.

In contrast, civil litigation encompasses a broader range of legal disputes outside the business realm. Civil litigation cases involve disputes between individuals, including issues related to personal injury, property disputes, consumer complaints, and more. They may also include class actions and wrongful death cases. Civil litigation cases can arise out of a variety of circumstances, including accidents, medical malpractice, defamation, and more.

Civil litigation cases can be emotionally charged, as they often involve personal issues such as injury or property damage. They may also involve significant financial compensation, such as in the case of a medical malpractice lawsuit.

One example of a civil litigation case is a personal injury lawsuit. If someone is injured in an accident that was caused by someone else's negligence, they may file a lawsuit to seek compensation for their medical expenses, lost wages, and pain and suffering.

Another example of civil litigation is a property dispute. If two New York neighbors are in disagreement over the location of a fence or the use of a shared driveway, they may file a lawsuit to resolve the issue.

Overall, while commercial and civil litigation may differ in their focus, both types of cases are important in ensuring that individuals and businesses are held accountable for their actions. Whether you are involved in a commercial or civil litigation case, it is important to seek the advice of a qualified attorney to help guide you through the legal process.

Key Differences Between Commercial and Civil Litigation

The main difference between commercial and civil litigation is the types of disputes involved. As mentioned, commercial litigation focuses on disputes between businesses, while civil litigation deals with disagreements between individuals. Commercial litigation cases often involve complex legal and financial matters, while civil litigation cases may involve emotional or personal issues such as injury or loss of property.

The legal procedures and processes involved in commercial and civil litigation cases also differ. Commercial litigation cases tend to be more complex and usually have more parties involved. As such, the legal procedures for discovery and trial are often more complicated. Civil litigation cases, on the other hand, typically follow a standard set of procedures and are typically resolved more quickly than commercial litigation cases.

The Role of Attorneys in Each Type of Litigation

Another significant difference between commercial and civil litigation is the role of attorneys in each type of litigation. In commercial litigation, it is common for businesses to hire specialized New York attorneys and law firms with experience in business law. In civil litigation, attorneys often specialize in specific areas of law but may not necessarily be experienced in business law.

The potential outcomes and remedies available in commercial and civil litigation cases also differ. In commercial litigation cases, the main goal is often to obtain financial compensation or other remedies that benefit the business. Civil litigation cases often result in monetary awards or other remedies that benefit the individual plaintiff or plaintiffs, such as compensatory damages or injunctions.

Examples of Commercial and Civil Litigation Cases

One prominent example of commercial litigation was the dispute between Apple and Samsung over patent infringement. Another example is the Exxon Valdez oil spill case, which involved commercial litigation between the oil company and the government regarding environmental damage caused by the spill.

Civil litigation cases can arise from a wide variety of circumstances. Examples include car accident cases, medical malpractice lawsuits, and slip and fall cases. One famous example of civil litigation is the case of O.J. Simpson, who was found liable in a civil lawsuit for the wrongful death of his ex-wife and her friend.

Factors to Consider When Hiring a Litigation Attorney

If you are involved in a legal dispute, finding the right attorney is essential. When choosing a litigation attorney, there are several factors to consider. You may want to look for an attorney with experience in the particular type of litigation you are facing. It is also important to find an attorney who is responsive to your needs and communicates with you effectively throughout the process.

The Importance of Specialization in Litigation

Specialization in litigation is also essential. While some attorneys may handle a broad range of cases, it is often beneficial to seek out an attorney who specializes in the type of litigation you are facing. Specialized attorneys typically have a deep knowledge of the issues involved and may be better equipped to handle your case successfully.

If you are involved in a legal dispute, it can be difficult to know where to start. One critical step in navigating the litigation process is to prepare thoroughly. This may involve gathering evidence, compiling documentation, and preparing a strategy with your attorney.

In some cases, alternative dispute resolution options such as mediation or arbitration may be a more effective approach than litigation. These options can sometimes be faster, less expensive, and more private than the traditional litigation process. Your attorney can help you explore these options and determine whether they are suitable for your case.

Role of Mediation and Arbitration in Commercial and Civil Litigation

Mediation and arbitration are common alternative dispute resolution methods used in both commercial and civil litigation. In mediation, a neutral third party helps to facilitate communication between the parties and find a mutually agreeable solution to the dispute. In arbitration, a third-party arbitrator hears evidence and arguments from both sides and makes a binding decision on the outcome of the dispute. Both mediation and arbitration can be effective ways to resolve legal disputes outside of the courtroom.

Closing Thoughts on Commercial Litigation vs. Civil Litigation

While commercial and civil litigation both involve resolving disputes through legal means, they differ in significant ways. By understanding the key differences, individuals and businesses can better navigate the litigation process and find the right legal representation to achieve a successful outcome.

Facing a commercial litigation scenario? Our seasoned attorneys are here to help.

While the pandemic disrupted traditional New York real estate practices, it brought new opportunities and challenges that are forever altering the industry.

How the Pandemic Has Forever Changed New York Real Estate

Navigating the New Normal: Bankruptcy, law, and the evolving landscape of real estate

The COVID-19 pandemic, which swept across the globe in early 2020, has significantly impacted various sectors of the global economy. New York real estate, once considered an indomitable fortress, has been rattled, leading to profound changes that may last for years or even decades. While the pandemic disrupted traditional real estate practices, it also brought new opportunities and challenges that are forever altering the industry.

The Surge of Bankruptcy and Real Estate Bankruptcy

At the outset of the pandemic, the unprecedented lockdowns in New York City led to a rise in business closures, contributing to an upsurge in bankruptcies. Small retailers and large corporations alike found it challenging to stay afloat. Consequently, bankruptcy in the real estate sector also surged as tenants struggled to make rent payments and New York property owners defaulted on mortgage loans.

The uptick in real estate bankruptcy cases has led to greater scrutiny under business law. Legal professionals specializing in real estate law specific to New York have had to acquaint themselves with ever-changing government regulations related to COVID-19. The boom in bankruptcy cases also led to a reassessment of business risk models, with New York developers and landlords now more cautious in evaluating tenant credentials and lease agreements.

One of the most profound shifts in real estate has been the migration from densely populated cities (New York City’s boroughs) to suburban and rural areas. With remote work becoming a norm rather than an exception, the need to live near workplaces diminished. 

As a result, real estate prices in suburban areas have witnessed significant growth, while metropolitan real estate is experiencing depreciation for the first time in years. This rural exodus has led to new zoning and permitting issues, putting local governance and New York real estate law at the forefront of residential planning.

Commercial real estate in New York has been one of the hardest-hit sectors. With the decline of brick-and-mortar stores and the adoption of remote work, the demand for commercial spaces plummeted. Offices sat empty, malls became ghost towns, and hotels witnessed record-low occupancy. New York property owners had to grapple with the uncertainty of changing tenant needs and the looming threat of bankruptcy.

In response to these challenges, some commercial property owners have started repurposing their buildings. For example, empty malls are being converted into residential apartments or distribution centers. Changes like these require an intricate understanding and navigation of business law and real estate law to address zoning, leasing, and contractual obligations.

The pandemic has also accelerated digital transformation in New York real estate. Virtual tours have become commonplace, and blockchain technology is being used to make property transactions more secure and transparent. These technological advancements have mandated a revision in real estate law to ensure that these transactions meet legal requirements and ethical standards.

Investors are also reconsidering their portfolios. The risks exposed by the pandemic and the surge in bankruptcy have led to an interest in more diversified real estate investments. Alternative options such as data centers, healthcare facilities, and cold storage warehouses have gained attention. In addition, Real Estate Investment Trusts (REITs) focusing on these categories have seen a rise in demand.

The pandemic has ushered in amendments and new guidelines in New York real estate law to adapt to the changing landscape. These changes encompass rent relief policies, eviction moratoriums, and altered bankruptcy regulations to provide a safety net for both tenants and property owners.

Government regulations around property management, rent collection, and public health have also tightened, requiring real estate professionals to stay updated continually. Legal experts in business law and real estate law are increasingly specializing in pandemic-induced cases, adding another layer of complexity to an already intricate field.

While the impact of COVID-19 has been devastating in many aspects, it has also served as a catalyst for change, pushing the New York real estate industry to evolve rapidly. Stakeholders, including property owners, investors, and legal professionals, have had to adapt to new realities shaped by the pandemic.

In the post-COVID-19 era, the emphasis will likely be on sustainable development, with a focus on creating resilient business models that can withstand such unexpected shocks in the future. The overlay of business law, especially regarding bankruptcy and real estate law, will continue to evolve to address the complexities that will no doubt arise in this new landscape.

As we move into an increasingly digital and decentralized world, it is clear that the pandemic has changed the New York real estate industry in ways that are both challenging and transformative. And while the dust has yet to settle, one thing is for certain: the old norms are gone, and a new paradigm has taken their place.

If you’re facing challenges sparked by the COVID-19 pandemic, our expert attorneys can help.

In certain situations, it is crucial to consult with a commercial litigation attorney—particularly one who has experience in the state of New York.

Process of Choosing a New York Commercial Litigation Attorney

Don’t go into battle with the wrong attorney on your side

Dealing with a legal dispute can be a stressful and complicated experience, especially for businesses. While some issues can be resolved without legal assistance, in certain situations, it is crucial to consult with a commercial litigation attorney—particularly one who has experience in the state of New York. If you are in need of legal representation, it is important to carefully choose a commercial litigation attorney who can provide you with the guidance, support and expertise that your case requires.

Importance of Choosing the Right Commercial Litigation Attorney

When it comes to commercial litigation, the stakes are high. Whether you are facing a breach of contract, intellectual property dispute, or other legal issue, it's essential to have a skilled and experienced lawyer on your side. The right lawyer can help you protect your business interests, ensure a fair resolution, and navigate complex legal issues with confidence.

One of the most critical roles of a commercial litigation Attorney is to protect your business interests. This can include everything from contracts and intellectual property to trade secrets and proprietary information. Your lawyer can work with you to draft and review legal documents, develop strategies, and provide representation in negotiations, arbitration, and litigation.

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