Graubard Miller Graubard Miller 2026-07-17T15:24:04Z https://www.graubard.com/feed/atom/ WordPress /wp-content/uploads/sites/1403932/2023/05/cropped-site-icon-gb2-32x32.jpg On Behalf of Graubard Miller <![CDATA[Due diligence pitfalls in New York commercial property deals]]> https://www.graubard.com/?p=50661 2026-07-17T15:24:04Z 2026-07-17T15:23:22Z A commercial property purchase may be the largest single investment you ever make. You could commit millions of dollars to one building based largely on what the seller tells you. One overlooked lien, code violation or inflated rent roll could erase years of expected returns. Careful due diligence can help you find these problems before you sign. 

Regulatory rules that surprise buyers

New York City enforces building rules that many buyers underestimate. Local Law 97 of 2019 caps carbon emissions for buildings over 25,000 square feet. Owners who miss reduction targets may face steep annual fines. Local Law 11 of 1998 requires periodic facade inspections for taller buildings. Mandated repairs can cost far more than a seller admits. You should review a building's compliance history before you commit.

Physical, financial and title risks

Several other issues can hide beneath a clean-looking deal. Watch for these common problems:
  • Environmental contamination: A Phase I site assessment can reveal past industrial uses that may require costly cleanup.
  • Title defects: Unrecorded easements or restrictive covenants could limit how you use the property.
  • Overstated income: Rent rolls may not match actual collections, so verify leases and tenant payments.
  • Hidden liens: Unpaid water and sewer charges can survive the transfer of title in New York City.
Each of these risks could shrink your returns or block your plans entirely. Early discovery gives you room to renegotiate or walk away.

New ownership disclosure duties

Your entity structure now carries reporting obligations too. New York's LLC Transparency Act (2023 N.Y. Senate Bill S995-B) requires certain non-U.S. LLCs to report beneficial ownership information to the state. 

Steps that protect your investment

A thorough review covers emissions compliance, facade obligations, environmental history, title records and ownership filings. Each check may uncover costs the seller never mentioned. Knowing these risks early helps you negotiate a fair price or exit a bad deal.  Many buyers build a review period into the purchase agreement when buying or selling property. If your deal becomes contested or a serious defect surfaces, an attorney's input may help you weigh your options.]]> On Behalf of Graubard Miller <![CDATA[Key contract issues can occur in high-value commercial situations]]> https://www.graubard.com/?p=50658 2026-05-29T10:13:28Z 2026-05-29T10:13:28Z Commercial relationships are often intricate and depend on several factors to be successful, many of which are more than just price and performance. Contracts must explain exactly how the relationship will work, including what each party will do and what will happen if either side doesn’t meet their expectations.  When the deal involves substantial money, long-term cooperation, sensitive information or services critical for the business, any vague terms in the contract can create serious risks. Because of this, a clear scope is one of the most important factors in these cases. 

What should the contract include?

The contract should include an agreement that describes the services, products, deadlines, performance standards and deliverables. If any part of the scope is unclear, the parties may disagree about the timeliness, completeness or suitability of the work.  High-value contracts should also address risks before a dispute occurs. Limitation of liability is a primary consideration in these cases. Other inclusions might be indemnity provisions, insurance requirements, disclaimers and warranties. Generic language shouldn’t be included here because the terms must match the actual risks associated with the project.  Payment terms, confidentiality clauses, data and termination clauses are all necessary in these contracts. The more details that are included in these, the better it is for all parties involved because it leaves less room for disputes to occur in the future.  Remedies for specific breach of contract situations should also be included. This should be based on what may reasonably occur. For example, remedies for late delivery, data loss, breaches of confidentiality, defective work or repeated service failures might need to be covered. If remedies aren’t included in the contract, the parties may spend more time arguing about the consequences than they do solving the problem.  A strong commercial contract does more than serve as a record of the deal. It also gives each party a clear understanding of what’s expected and what happens if expectations aren’t met. Working with someone who can review the contract and ensure it’s set up to protect the business is critical.   ]]> On Behalf of Graubard Miller <![CDATA[Considerations before entering into a new market]]> https://www.graubard.com/?p=50657 2026-05-29T10:08:40Z 2026-05-29T10:08:40Z Entering a new market can give a company space to grow, but it also comes with significant exposure to risks. A business can face legal, financial and operational risks in a new market even if it may see that the expansion would address a demand for its product or service. This can sometimes be mitigated by carefully reviewing all factors before the launch.  Market entry decisions must always start with a realistic view of the demand that gives the company an idea of who the customers are, how they buy and what problems need to be solved. This can also give them an idea about what local competitors serve the area. It should also look into whether customers in the area will actually pay the price or be willing to switch from established providers.

Legal and regulatory issues must be considered

One of the most important things to check before doing anything else is determining what laws and regulatory requirements are in the new market. These may include licensing, tax obligations, privacy requirements, employment laws, import rules, consumer protection standards and industry regulations.  Under this same umbrella are contracts for the new market. Vendor agreements, distribution relationships, customer terms, service level promises, leases and data arrangements are all factors in a new market expansion. Ensuring that the contracts and other agreements are legally valid in the new market is critical.  Intellectual property concerns are another consideration. New market expansion means having to ensure that brand names, trademarks, software and marketing materials all have protection in the new market.  On top of those, the company also needs to consider financial and operational readiness for the expansion. Staffing needs, insurance, supply chains, customer support, and the cost of adapting the business model may all come into the picture. A market may appear attractive on the surface, but it may strain the cash flow if any costs are underestimated.  Having someone on your company’s side to review the legal matters related to expansion may be beneficial. This could boost the protection for the company as you explore the new growth opportunities.   ]]> On Behalf of Graubard Miller <![CDATA[The importance of a human capital audit during an acquisition]]> https://www.graubard.com/?p=50627 2026-04-22T11:10:23Z 2026-04-22T11:10:23Z Review top performers’ contracts Mergers and acquisitions tend to result in a sudden loss of talent. The best and brightest may start looking for jobs elsewhere, as they are unsure about their future with the company. Reviewing the contracts for key professionals within an organization can help identify those who could leave immediately after the announcement of the transaction. Leaders can then take steps to keep that talent, such as negotiating a new salary and benefits package or offering a multi-year retention bonus. Contract reviews can also highlight other sources of exposure, such as change-of-control bonuses. Executives and key employees may be eligible for cash bonuses or equity incentives to keep them at the company after a change in ownership. Validating that these do not already exist before offering new incentives is critical. The audit may also need to look for double-trigger payouts. Some contracts may include a double-trigger payout clause that allows for severance or restricted stock units paid to workers after a change in company ownership followed by either an involuntary termination or a resignation for a valid reason. A human capital audit also allows an opportunity to determine who is subject to a noncompete agreement or other restrictive covenants that protect the company. The process could also identify misclassified contractors who generally work as employees. The company can take steps to address this by formally hiring workers previously classified as independent contractors. Finally, a review of contracts could help prevent intellectual property (IP) assignment gaps. If contracts include vague language about IP ownership or overly-broad language, valuable IP could be at risk. A review of existing contracts can identify employment law compliance issues and also overpaid professionals, such as those with bonus structures that are not sustainable. Conducting an audit to evaluate the human capital to be acquired during an upcoming merger or acquisition can help a company make the upcoming transition as smooth as possible. The guidance of an attorney familiar with large business transactions and employment contracts can prove invaluable during this process.]]> On Behalf of Graubard Miller <![CDATA[3 board-level blind spots that trigger fiduciary duty claims]]> https://www.graubard.com/?p=50625 2026-03-24T12:36:38Z 2026-03-24T12:36:38Z As a board member, you sit in a role where your decisions carry legal weight. In New York, fiduciary duties turn on process and judgment, not intent. Under the business judgment rule, courts look at whether you acted with care, loyalty and good faith under New York corporate law. Your value as a board member depends on how well you engage with that standard in practice.

Information gaps before major votes

You increase risk when you approve major actions without full context. New York courts may review whether you had enough information to make an informed decision. You need a reasonable foundation for judgment, though courts do not require perfect data. However, you may face higher exposure when you rely only on summaries or when you accept management framing without challenge. Board materials should support your understanding of financial, legal and operational assumptions. Your questions often matter as much as your vote.

Financial signals that should not be overlooked

You reduce risk when you pay attention to financial patterns, not just final numbers. New York fiduciary claims often focus on ignored warning signs in reporting, including shifting assumptions or repeated adjustments that lack clear explanation. You may see pressure to move quickly past complex financial issues, which can create exposure. You strengthen your position when you seek clarity on inconsistencies before voting and when you elevate concerns through proper board channels. State courts often focus on whether you responded when issues first appeared.

When alignment becomes a liability

You face fiduciary risk when personal or business ties affect your judgment. New York law places strong weight on your duty of loyalty and disclosure. You may increase exposure when you rely on informal disclosures or casual recusal. The same may be so when you fail to document your role in conflicted decisions. When you have a material conflict, courts may apply the entire fairness standard where you must prove both fair dealing and fair price. The burden shifts to you, and the business judgment rule no longer protects your decision. You ultimately protect your position when every decision reflects clear separation between interest and duty. Structure and transparency often matter more than outcome.

Protecting decision integrity in high-stakes governance

You lower fiduciary risk when your decision process remains clear and traceable. New York courts often review how you reached a conclusion, not just the result. Your record as a board member depends on that consistency. Strong corporate governance shows up in disciplined inquiry, careful review and clean disclosure. Your credibility grows when your decisions reflect independent judgment under New York standards.]]> On Behalf of Graubard Miller <![CDATA[Using 1031 exchanges to your advantage ]]> https://www.graubard.com/?p=50623 2026-01-27T15:47:51Z 2026-01-27T15:47:51Z For real estate developers, few financial and practical tools offer as much strategic flexibility as a properly executed 1031 exchange. Section 1031 of the Internal Revenue Code allows investors to defer capital gains taxes when they sell qualifying investment or business property and reinvest the proceeds into like-kind property. When used thoughtfully, a 1031 exchange can help developers preserve capital, scale portfolios and reposition assets without triggering immediate tax liability. At its core, a 1031 exchange is about timing and structure. Rather than paying capital gains taxes after a sale, a developer rolls those proceeds into a replacement property. This deferral can significantly increase purchasing power, particularly in high-value markets like New York City, where capital gains exposure can be substantial. An ability to redeploy untaxed equity often makes the difference between acquiring one property and acquiring a more strategically valuable one.

Making the most out of this opportunity 

Developers frequently use 1031 exchanges to move between asset classes. Like-kind does not mean identical. An exchange can involve transitioning from multifamily to mixed-use, from raw land to commercial property, or from smaller holdings into larger, consolidated assets. This flexibility allows developers to adapt to market shifts, zoning changes and long-term development strategies while maintaining tax efficiency. 1031 exchanges can also be layered into broader development strategies. Developers may use exchanges to assemble land, shift capital into redevelopment opportunities or defer taxes across multiple transactions over time. When combined with careful estate and succession planning, long-term deferral can result in substantial benefits. Generally speaking, developers have 45 days from the sale of relinquished property to identify potential replacement properties and 180 days to complete a qualifying acquisition. Missing these deadlines can invalidate the exchange and trigger full tax liability. In fast-moving urban markets, lining up replacement options early is, therefore, practically necessary. The use of a qualified intermediary is mandatory in a 1031 context. Sale proceeds cannot pass through a developer’s hands. Funds must be held by an intermediary to preserve exchange eligibility. Missteps at closing, including improperly drafted contracts or early access to funds, can disqualify an exchange entirely. Utilizing 1031 exchanges to your advantage requires more than understanding the tax code. A trusted New York City real estate law firm experienced in developer-focused transactions can help to structure exchanges properly, and in ways that take into account a developer’s broader goals, holdings and unique circumstances. ]]> On Behalf of Graubard Miller <![CDATA[When M&A disclosures could lead to legal risks in New York]]> https://www.graubard.com/?p=50618 2026-01-27T10:07:47Z 2026-01-27T09:55:48Z Mergers and acquisitions (M&A) can transform companies, but they also bring risks if communications are not handled carefully. In New York, federal and state laws generally require honesty in these deals. Understanding these risks may help investors and businesses navigate high-stakes deals with more confidence.

1. False claims and half-truths

Legal trouble often arises when a party makes a false statement or fails to share information needed to keep a statement from being misleading. This applies to official documents and public reports. Why it matters is that the error usually needs to be important enough to change the mind of an average investor. Regarding half-truths, companies generally cannot share the good news while leaving out related bad news that changes the story. For example, inflating sales numbers, hiding environmental problems or lying about big contracts can all create liability.

2. Undisclosed conflicts of Interest

If leaders have a personal interest in a deal, failing to share that information can create legal exposure. In New York, hiding these conflicts may prompt investors to file lawsuits if they believe the company misled them about how it made decisions.

3. Unrealistic financial goals

Predictions about a company's future value generally need to be grounded in reality. Trouble can arise if management shares goals they know are unreachable or fails to mention negative trends that could hurt the company's future. Investors often rely on these numbers, so accuracy is key.

4. Special rules for SPACs

"Blank check" companies, known as special purpose acquisition companies (SPAC), face stricter rules under recent regulations. Key areas that typically require clear explanation include how the sponsors are paid, any conflicts of interest and how new shares might lower the value of existing shares. The actual cash value investors receive must also be clear. Failing to clearly explain these factors can increase the risk of legal action.

5. Risks for deal middlemen

Bankers and agents who assist with private investment in public equity (PIPEs) generally check the facts to help reduce potential risks. However, unlike public stock launches where mistakes alone can cause trouble, agents in these private deals typically face liability only if they act recklessly or hide the truth on purpose.

6. Fraud and careless statements

Beyond federal rules, New York state law typically imposes penalties when someone intentionally makes a false statement or hides a fact to trick another party. Liability generally arises if the victim reasonably relied on that specific information to make their decision. To protect themselves, sellers often use contracts with "as is" clauses, which may limit claims between expert business parties. Additionally, buyers generally cannot sue if they failed to check facts that were easy to find with a little homework.

7. Broken contract promises

Merger agreements usually contain a list of promises, known as warranties. If a seller breaks a promise like saying there are no hidden debts when there actually are, the buyer may sue for the lost value. In New York, a buyer can often sue for a broken promise even if they knew about the problem before signing. Because of this, sellers should write down every known issue in the contract rather than relying on what the buyer might already know.

Securing trust and reducing liability

M&A deals in New York require careful attention to avoid legal pitfalls. False claims, hidden facts or reckless behavior can trigger lawsuits. Companies and investors that prioritize honesty, check their numbers and clearly list conflicts can typically navigate these transactions more safely.]]> On Behalf of Graubard Miller <![CDATA[The critical role of NDAs in mergers and acquisitions]]> https://www.graubard.com/?p=50602 2025-12-24T14:46:01Z 2025-12-24T14:46:01Z Non-disclosure agreements (NDAs) are critical for protecting sensitive and confidential information during a merger or acquisition. NDAs allow parties to exchange everything from financial data to intellectual property to customer and employee details. These agreements allow all parties to avoid regulatory privacy violations and prevent information from getting out to competitors and others who can use it against the emerging company.

The timing of NDAs is crucial

No party to a merger or acquisition should wait until they’re in the middle of it to put the appropriate NDAs in place. It may be necessary to have additional people sign an NDA if negotiations move forward.  Even after the deal is finalized (or even scrapped), the NDA should protect any information and/or documents that have been shared for a specified period. This will vary depending on the type of business that’s involved. If the initial NDAs can be crafted to protect information at all stages of the deal, regardless of the outcome, that’s simpler for everyone involved.  Negotiating the terms of the NDA itself can be a challenge to the relationship between or among the parties involved and whether the deal is able to be completed. It’s important to balance the need to keep confidential information secure with the need for the other parties to have access to the information they need – particularly in an acquisition.

What the NDA needs to cover

A comprehensive NDA should include the following:
  • A clear definition of what data is considered confidential
  • Exceptions where parties may share data with others (such as financial and legal professionals) and the requirement of confidentiality agreements for those outside parties
  • The duration of the NDA terms (which, as noted, typically extends beyond the close of the deal)
  • Remedies for a breach of the NDA, such as injunctions and monetary penalties
It’s critical to remember that an NDA is not meant to be a substitute for being scrupulously careful with data and document handling. It is, however, crucial for codifying and detailing the specific expectations for how closely such information will be held and – as just noted – for detailing penalties if one or more terms of the agreement is breached. Negotiating an NDA is an early and important step in the relationship between parties that are considering a merger or acquisition. These negotiations can help shed light on how seriously the other party takes their responsibility for handling sensitive information and complying with regulatory requirements. It’s crucial for each party to have their own legal guidance as they negotiate the terms of the agreement to protect their business, customers and employees.]]> On Behalf of Graubard Miller <![CDATA[Legal risks in cross-border deals for New York companies]]> https://www.graubard.com/?p=50599 2025-11-11T03:20:00Z 2025-11-11T03:20:00Z Global deals can open doors to new markets, talent and revenue. However, they also bring real legal risk. Many New York companies move quickly when an international opportunity appears. Yet even strong deal teams can overlook foreign rules, compliance issues and structural pitfalls that threaten the value of the transaction.

Key regulatory challenges companies should expect

Cross-border deals require more than contract review. They demand awareness of the legal systems involved. As a result, companies must prepare early.
The following common regulatory issues often create delays or disputes:
  • Local foreign investment rules
  • Export controls and sanctions laws
  • Data privacy restrictions
  • Antitrust filing requirements
  • Industry-specific licensing needs
Each of these areas affects timelines, deal structure and long-term obligations. You can learn more about regulatory issues that affect cross-border transactions by reviewing guidance from the U.S. Securities and Exchange Commission.

Due diligence complications across jurisdictions

First, due diligence becomes harder when the target company operates under different legal and accounting standards. Records may be incomplete or follow unfamiliar formats. Next, language barriers and cultural differences can slow reviews. Finally, local laws may limit access to certain documents, which can restrict full risk assessment.
Therefore, companies benefit from clear plans and local advisors who understand the target market.

Contract drafting in cross-border deals

Contract terms that work in U.S. transactions may fail overseas. Choice of law and dispute resolution clauses carry greater weight. In addition, parties must consider currency terms, tax exposure and performance standards across jurisdictions.
Several issues often require special attention in cross-border agreements, including:
  • Enforceability of key provisions
  • Local labor and employment constraints
  • Intellectual property ownership
  • Tax treatment of cross-border payments
  • Government approval requirements
Early coordination among legal, tax and finance teams helps reduce deal friction.

Post-closing risks companies should plan for

After closing, unexpected compliance obligations may appear. Foreign regulators may also revisit approvals or request updates. Moreover, integration issues can arise when policies, reporting practices or governance systems conflict.
Therefore, strong internal controls and communication systems matter as much as the deal terms.
In summation, cross-border deals offer major advantages but also real legal challenges. With careful planning and informed review, New York companies can confidently move forward.
]]> On Behalf of Graubard Miller <![CDATA[Why are more joint ventures in New York ending up in court?]]> https://www.graubard.com/?p=50595 2025-11-06T14:05:45Z 2025-11-06T14:05:45Z Where joint ventures break down Joint venture agreements exist to allocate control, capital and risk. In practice, these agreements should naturally prevent issues among partners. In reality, there are too many factors that lead to these disputes:
  • Capital calls: Sometimes one partner will refuse to fund the project or dispute the calculation presented.
  • Project delays: Construction slowdowns, permit issues or supply chain problems trigger arguments over responsibility and financial impacts.
  • Cost overruns: Significant increases in budget lead to disagreements over additional contributions, senior debt terms or budget recalibration.
  • Exit rights: When one partner wishes to leave, there may be a clash over buy-sell provisions or the business value assessment process.
These disputes get worse once lenders apply pressure, interest rates affect refinancing or a market shift changes the profitability of the project.

Why litigation is increasing in New York

New York’s current real estate climate makes joint venture relationships fragile. Construction costs keep rising. Projects take longer. Lenders are stricter. Regulations shift without warning. These pressures leave partners with almost no room for mistakes. When a project starts to slip, investors act fast. They push back, protect their money and enforce their contract rights. Joint ventures also look very different today. Many use layered ownership structures, multiple investor classes and detailed governance rules. These setups create confusion when something goes wrong. Partners disagree about who controls decisions, who funds budget gaps or how much equity each partner owns. As the situation becomes more complex, the disputes become tougher to resolve. That is why more partners turn to litigation or arbitration to settle high-stakes disagreements.

Protecting interests before a dispute escalates

Clear documentation, steady communication and early legal guidance are essential. A lawyer can review the agreement, explain each partner’s rights and identify leverage before the situation worsens. In New York’s high-value developments, disputes escalate fast, and strong legal positioning can protect a partner long before the case reaches court.]]>