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
Picco, who was taking a job with Reed, Smith, Shaw & McClay in
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
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
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
debts (not large by legal standards), but because it was a
corporation, it wasn’t permitted to dissolve until all of its
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
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
Herbert declined to return phone calls to his office. He was quoted
in the Trenton papers expressing anger at the Law Journal for
that the partners in the firm were stiffing creditors instead of
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
and because of New Jersey’s onerous environmental regulations
the firm grew rapidly. By 1992 its staff increased from 6 to 26
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
and Kenny left Picco Herbert to reconstitute their old firm at 3812
Quakerbridge Road, and the number of Picco Herbert attorneys decreased
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
and creditor’s rights attorney with the Morristown-based firm Pitney,
Hardin, Kipp & Szuch.
Arlene Sengstack, principal of AV Search Consulting, a
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
She adds that Picco Herbert’s corporate status saved the partners
from bearing personal responsibility for their debts. "As a
the individuals are protected by something of corporate veil,"
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
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
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
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
Street, Princeton 08542. Michael J. Herbert Sr., managing partner.
— Peter J. Mladineo
08534. Irene Bocchetti, vice president. 609-818-1500; fax,
The frame manufacturer doubled in size when it moved from 88 Youngs
Road in Mercerville to 34,650 square feet in Pennington last fall,
and it has a new phone and fax. Buschman Jackson Cross represented
the tenant and Hilton Realty is the landlord.
Road, Hamilton 08619. Victoria Gaudier, office manager. 609-584-5590;
fax, 609-584-5592. URL: http://www.memltd.com.
The information services provider expanded from 800 square feet at
14 Washington Road to 1,750 on Quakerbridge Road. It has 14 employees
now and expects to increase to 22. Based in Alexandria, Virginia,
it publishes an online newsletter about worldwide emerging markets
with real-time news, pricing, and research services. It compiles and
distributes fundamental financial information on publicly traded
Suite H, Constitution Center, Cranbury 08512. John J. Condon,
609-395-7200; fax, 609-395-0805.
This organization has expanded and moved across the hall to 4,000
square feet. For A&P the five employees at this office provide
of sales, promotion, buying, and personnel.
Princeton 08543-3094. Louis DeCibus, owner. 609-497-9600; fax,
Home page: http://www.princetonmoving.com.
The moving and storage firm opened an 8,000 foot secured facility
for short and long term storage on Industrial Road in Hamilton.
Square Commons, Hamilton Square 08690. Hector Colon, district manager.
609-890-8400; fax, 609-586-8732. E-mail: email@example.com.
This division of Travelers Group moved from a smaller space in
Commons. Owned by Richardson Financial Group, which is associated
with Richardson Realty, it has agents licensed to sell mutual funds.
Hector Colon is the district manager and Peter Ogden is one of the
personal financial advisers.
Village Boulevard, Princeton 08540. Gary J. Fedor, senior vice
609-520-9099; fax, 609-520-8457.
This software firm has nearly doubled its size and has moved to a
larger office, 10,000 square feet, in Forrestal Village. It now has
32 employees, and it develops software for the petroleum industry.
08638. Barry Zhang, president. 609-771-4370; fax, 609-771-4371.
The five-person fiber components company has bought a 3,400 square
foot 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 diodes
marketed to Princeton University, Sarnoff, NEC, and other research
firms, particularly those that develop telephone and cable television
operator with Educational Testing Service.
director of Camp Fire Boys and Girls of Trenton.
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