Volume 3 Issue 1

Quarterly Newsletter

April 2025 minute read

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Industry News

Bankruptcy/Corporate Restructuring
Corporate bankruptcies surged in the first quarter of 2025, reaching their highest first-quarter level since 2010, with 188 filings reported in early 2025, according to S&P Global. You can read more about the increase in filings here.
 
The cannabis industry is struggling, but with marijuana still classified as a Schedule I drug, significant obstacles remain for cannabis companies seeking to restructure. A recent article explores the challenges facing the cannabis industry in the absence of access to bankruptcy protections.
 
Corporate/M&A
FinCEN issued an interim final rule exempting all U.S. reporting companies from filing a beneficial ownership information (BOI) report under the Corporate Transparency Act. Rather, BOI reporting requirements will apply only to foreign reporting companies, and U.S. individuals who qualify as a beneficial owner of such a foreign entity will not be required to provide their BOI on the entity’s BOI report. See here for FinCEN’s official press release.
 
New York legislators are considering the No Severance Ultimatums Act, which, if enacted, would require employers to provide employees with at least 21 business days’ notice to review a severance agreement before signing. Currently, employees over 40 are entitled to a 21-day review period and 7-day revocation period under the Older Workers Benefits Protection Act, but the proposed law would extend these protections to all employees. Read more here.

Commercial Litigation/ADR
With tariffs on the rise and supply chain costs continuing to escalate, parties may be tempted to invoke frustration of purpose or commercial impracticability to excuse performance. However, contracting parties should be aware that courts have held that an increase in the cost of a party’s performance, even as a result of tariffs, does not establish the defenses of frustration of purpose or commercial impracticability. Tilcon New York, Inc. v. Morris Cnty. Co-op. Pricing Council, No. A-5453-10T3, 2014 WL 839122 (N.J. Super. Ct. App. Div. Mar. 5, 2014) (rejecting both defenses despite a 135% increase in the cost of asphalt cement due to tariffs).
 
Real Estate
A New York City real estate group is suing the City to block the recently passed FARE Act, which requires landlords, rather than tenants, to pay broker fees when they hire a real estate broker to list apartments on their behalf. The law is currently scheduled to take effect this June. See here  for more details.

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M&B Life

M&B hosted its annual March Madness event at Tabernacle Steakhouse, where guests enjoyed great food, drink, and conversation, while taking in some exciting college hoops!

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M&B News

Bankruptcy/Corporate Restructuring
David McGrail, Sophia Herbst and Veronique Urban successfully represented an asset purchaser in a bankruptcy case in enforcing a sale order and obtaining sanctions against a landlord that obstructed the purchaser’s efforts to recover the purchased assets from the landlord’s premises.
 
David McGrail and Veronique Urban represented a broker-dealer in its Chapter 7 bankruptcy case, and Ilana Volkov and Veronique Urban represented a premium cannabis vape manufacturer in its Chapter 7 bankruptcy case. Both matters are pending in the U.S. Bankruptcy Court for the Southern District of New York.
 
Commercial Litigation/ADR
After a week-long jury trial, Patrick Train-Gutiérrez and Cynthia Botello defeated a fraud claim against their clients and reduced the damages award for other claims to less than 20% of the amount originally sought by plaintiffs.
 
Kate McGrail and Sophia Herbst successfully moved to compel the production of financial information ostensibly supporting counterclaims asserted against their clients.
 
Ephraim Glatt and Pearl Shah successfully resolved a five-year lawsuit, securing a favorable outcome for a client in the healthcare industry.
 
Patrick Train-Gutiérrez successfully negotiated a nuisance-value pre-litigation settlement for a client, avoiding the costs and risks of prolonged litigation.
 
Ephraim Glatt and Cynthia Botello assisted a healthcare tenant achieve a favorable resolution in a longstanding dispute with its landlord, enabling the parties to preserve and continue their business relationship.
 
Kate McGrail and Cynthia Botello aided a physician in successfully challenging a hospital’s recommendation to deny clinical privileges.
 
Kate McGrail successfully resolved claims against a former senior financial advisor by a major broker-dealer for alleged violations of a non-solicitation agreement in a FINRA arbitration.
 
Corporate/M&A
Menachem Bensinger, Jason Bitsky, and Steven Roz represented a client in its acquisition of a peer support specialist company for almost $30 million.
 
Mona Kaplan and Steven Roz represented a client in the $6 million-plus sale of its property management business.
 
Pearl Shah Dalsania represented a client in the sale of his 50% ownership interest in a summer camp to a third-party buyer. 
 
David McGrail and Pearl Shah Dalsania represented an architecture firm in connection with its business divorce.
 
Menachem Bensinger and Robert Kern guided a client through a complex reasonable compensation study process concerning its CEO’s compensation.
 
Real Estate
Joshua Hager and Robert Kern advised a client on the development of a construction project in South Hampton, New York.