Corrections or additions?
Life in the Fast Lane
These articles by Peter J. Mladineo and Barbara Fox were published
in U.S. 1 Newspaper on January 14, 1998. All rights reserved.
Like good lawyers everywhere Steven Picco and Michael
Herbert tried to put a positive spin on the news of the break-up of
their almost 10-year-old Trenton-based law firm, Picco Herbert Kennedy
PC.
Picco, who was taking a job with Reed, Smith, Shaw & McClay in
Forrestal
Village, told reporters that the partners’ “biggest problem was
that we started to bump into each other.” Herbert, the municipal
attorney for Princeton Borough, was suing Mercer County in a waste
disposal case. Picco represented the county. Herbert was also recently
named municipal attorney for West Windsor Township, which was being
sued by developers represented by Hill Wallack, which had recently
hired partner Patrick Kennedy.
Herbert, who was leading a contingent of lawyers from the old firm
into plush new quarters in Princeton, told reporters that “we’ve
all done quite well for ourselves. We are going to places that will
give us the opportunity to practice law in our areas of interest.”
Herbert’s new firm, Herbert, Van Ness, Cayci & Goodell, moved into
22 Chambers Street in the Borough just days before being officially
reappointed as Borough attorney — a coincidence that drew
favorable
applause at the Borough’s annual reorganization meeting.
The spin might have been too good. Shortly after the announcement
of the firm’s break-up, unsecured creditors of the firm received
letters
from a Somerville-based workout specialist, Hildebrandt Inc., asking
that they agree to settle their claims for 30 cents on the dollar.
The problem was that the firm had reportedly amassed $400,000 in
unsecured
debts (not large by legal standards), but because it was a
professional
corporation, it wasn’t permitted to dissolve until all of its
creditors
were satisfied. But the partners wanted to disperse immediately. They
didn’t want to stay in business long enough to earn the requisite
cash to pay off their creditors.
But the biggest problem of all for the cash-strapped lawyers was that
one of the accounts payable was $1,403.02 to the New Jersey Law
Journal.
The journal got the letter, agreed to a settlement of $429.01, and
then printed a front page story in its December 29 edition describing
the firm’s financial problems and work-out scheme.
Picco was unavailable for comment but his staff indicated that remarks
quoted in the Trenton newspapers were fairly accurate. “Let me
say that the consultants have used the common sense of Dilbert’s boss
and the subtlety of Genghis Khan. I’m sure this is a traditional,
hard-nosed routine to accumulate cash, but I would’ve done it
differently.”
Herbert declined to return phone calls to his office. He was quoted
in the Trenton papers expressing anger at the Law Journal for
suggesting
that the partners in the firm were stiffing creditors instead of
digging
into their own pockets to pay their bills. “Each one of the six
principals took a considerable financial sacrifice to make payments
on the debts,” he was quoted.
Picco and Herbert founded the environmental law firm in 1988 in
Trenton
and because of New Jersey’s onerous environmental regulations
industry,
the firm grew rapidly. By 1992 its staff increased from 6 to 26
attorneys
and the law firm absorbed Hartsough & Kenny. That year it also signed
a long-term, $2.94 million lease on Class A office space at 50 West
State Street in Trenton.
Picco Herbert Kennedy continued growing until 1995. But then, probably
as a result of Christie Whitman’s more business friendly regulations,
the number of environmental suits started dropping. That year
Hartsough
and Kenny left Picco Herbert to reconstitute their old firm at 3812
Quakerbridge Road, and the number of Picco Herbert attorneys decreased
to 18.
The firm’s latest twist seems to be a rare move indeed for a law firm.
“Frankly I’ve never heard of it,” says Peter Forgosh, a
bankruptcy
and creditor’s rights attorney with the Morristown-based firm Pitney,
Hardin, Kipp & Szuch.
Arlene Sengstack, principal of AV Search Consulting, a
Bridgewater-based
legal recruiter, adds that “it’s not typical for law firms, but
law firms that dissolve, and there have been a lot in the last several
years, have to deal with their liabilities as well as their
assets.”
She adds that Picco Herbert’s corporate status saved the partners
from bearing personal responsibility for their debts. “As a
corporation,
the individuals are protected by something of corporate veil,”
she says.
Will Picco Herbert’s offer work? If another area business’s experience
is any indication, the answer is probably not. In November Makrancy’s
Greenhouse and Florist Inc., sent a letter to its creditors to accept
a 15 percent take-it-or-leave-it settlement of debt (U.S. 1, November
26). The florist, which had run into trouble after the devastating
winters of 1994-’95 and 1995-’96, had arranged a deal with a financier
to loan the shop enough money to continue operation if it could get
75 percent of all of its creditors to accept a 15 percent payment.
It didn’t work.
Within a few days of sending the letter, Makrancy’s filed for
bankruptcy
protection. Joseph Markowitz, managing partner of the 3131 Princeton
Pike-based firm Markowitz & Zindler, feels that this method of debt
management usually never works. “Invariably you would get 80
percent
of the creditors — if they understood it. Then what happens is
20 percent don’t go along, and you have to go into court and bind
them. That’s where it always ends up.”
In Picco Herbert’s defense, Sengstack explains that law firms are
frequently at the other side of the stick when it comes to unpaid
bills. “They’re just like any other business: they send out bills,
bills don’t get paid and they end up negotiating settlements as
well,”
she says. “They’re constantly finding themselves in positions
where they have to discount their time.” How will Picco or Herbert
feel the next time a hard-up client asks them to take a fraction of
their fee?
Herbert, Van Hess, Cayci and Goodell, 22 ChambersStreet, Princeton 08542. Michael J. Herbert Sr., managing partner.609-924-2495.– Peter J. MladineoTop Of PageExpansionsArt Wholesalers Ltd., 27 Route 31 South, Pennington08534. Irene Bocchetti, vice president. 609-818-1500; fax,609-818-9500.The frame manufacturer doubled in size when it moved from 88 YoungsRoad in Mercerville to 34,650 square feet in Pennington last fall,and it has a new phone and fax. Buschman Jackson Cross representedthe tenant and Hilton Realty is the landlord.Meridian Emerging Markets Ltd., 3535 QuakerbridgeRoad, Hamilton 08619. Victoria Gaudier, office manager. 609-584-5590;fax, 609-584-5592. URL: https://www.memltd.com.The information services provider expanded from 800 square feet at14 Washington Road to 1,750 on Quakerbridge Road. It has 14 employeesnow and expects to increase to 22. Based in Alexandria, Virginia,it publishes an online newsletter about worldwide emerging marketswith real-time news, pricing, and research services. It compiles anddistributes fundamental financial information on publicly tradedemergingmarkets companies.Metro Service Group (MSG), 2650 Route 130 North,Suite H, Constitution Center, Cranbury 08512. John J. Condon,president.609-395-7200; fax, 609-395-0805.This organization has expanded and moved across the hall to 4,000square feet. For A&P the five employees at this office providemanagementof sales, promotion, buying, and personnel.Princeton Van Service, Industrial Road, Box 3094,Princeton 08543-3094. Louis DeCibus, owner. 609-497-9600; fax,609-497-1333.Home page: https://www.princetonmoving.com.The moving and storage firm opened an 8,000 foot secured facilityfor short and long term storage on Industrial Road in Hamilton.Primerica Financial Services, 2137 Route 33,LexingtonSquare Commons, Hamilton Square 08690. Hector Colon, district manager.609-890-8400; fax, 609-586-8732. E-mail: torby@worldnet.att.net.This division of Travelers Group moved from a smaller space inLexingtonCommons. Owned by Richardson Financial Group, which is associatedwith Richardson Realty, it has agents licensed to sell mutual funds.Hector Colon is the district manager and Peter Ogden is one of thepersonal financial advisers.Saladin and the Princeton Energy Program, 116-301Village Boulevard, Princeton 08540. Gary J. Fedor, senior vicepresident.609-520-9099; fax, 609-520-8457.This software firm has nearly doubled its size and has moved to alarger office, 10,000 square feet, in Forrestal Village. It now has32 employees, and it develops software for the petroleum industry.Princeton Optics Inc., 101 Walters Avenue, Ewing08638. Barry Zhang, president. 609-771-4370; fax, 609-771-4371.Homepage: https://www.princetonoptics.com.The five-person fiber components company has bought a 3,400 squarefoot industrial building two blocks from the College of New Jersey.In its 18-page catalog are products from $100 to $3,000, typically$500. They include fiber optic isolators and couplers and laser diodesmarketed to Princeton University, Sarnoff, NEC, and other researchfirms, particularly those that develop telephone and cable televisionsystems.Top Of PageDeathsTraci D. Williams, 22, on January 5. She was a computeroperator with Educational Testing Service.Eileen E. Stanley, 55, on January 11. She was executivedirector of Camp Fire Boys and Girls of Trenton.Corrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
