Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

NJ Bans Additional Loans for Companies in Default Status

Author: James F. McDonough

Date: February 1, 2016

Key Contacts

Back

NJ Bans Additional Loans for Companies in Default Status

Recently, Gov. Chris Christie announced that he signed a new bill into law that would prohibit the state of New Jersey from subsidizing low-income property developers who defaulted on state loans. According to a report by the Washington Times, the bill was initially proposed after a company received several millions of dollars from New Jersey while in default status for previously secured loans.

The details of the new law

The governor signed the bill because he was adamant that the state should no longer be responsible for subsidizing these low-income property development companies that are either delinquent or late with loan repayments. According to a statement cited by NJ.com, Democratic Sen. Nicholas Scutari co-sponsored the bill because it was clear that a solution needed to be found.

“We cannot reward companies that are behind on payments to the state, especially when it is coming at the taxpayers’ expense,” Scutari explained. “Just like any financial institution would evaluate its risk when considering loan applications, the state must do the same.”

The rationale behind the new law

There are several companies in the state that are currently receiving loans from other agencies around New Jersey, despite owing the state government millions in loan debt. One prime example listed by the Washington Times was Roizman Development Inc., which is a Pennsylvania company that has received millions from two agencies in New Jersey while it owed over $6 million in state government loan repayments. Roizman Development Inc. was the first property developer in New Jersey to secure state loans as part of the governor’s incentive programs for low-income housing. The company then developed low-income housing in Camden, New Jersey as part of the 2013 Economic Opportunity Act. It secured a $57 million loan to rebuild 175 homes through several federal tax credits, a federal loan and $26 million in additional state construction loans from New Jersey. In turn, the project was approved for up to $23.4 million in loans and tax credits for Roizman Development Inc. over the course of the next 10 years. However, the company has been slow in its debt repayments, which spurred the state into action.

How it will impact companies in default status

Following the law’s enactment, all repayment on state government loans will be from rent for the properties. These funds will be secured from guaranteed rent payments from the federal government’s Section 8 housing program.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Dissolving Your Business: Essential Legal Steps to Protect Your Interests post image

Dissolving Your Business: Essential Legal Steps to Protect Your Interests

If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]

Author: Christopher D. Warren

Link to post with title - "Dissolving Your Business: Essential Legal Steps to Protect Your Interests"
The Role of Corporate Restructuring in Mergers & Acquisitions post image

The Role of Corporate Restructuring in Mergers & Acquisitions

Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]

Author: Dan Brecher

Link to post with title - "The Role of Corporate Restructuring in Mergers & Acquisitions"
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public post image

Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public

Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]

Author: Bryce S. Robins

Link to post with title - "Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public"
Understanding Chattel Paper: A Key Component in Secured Transactions post image

Understanding Chattel Paper: A Key Component in Secured Transactions

Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]

Author: Dan Brecher

Link to post with title - "Understanding Chattel Paper: A Key Component in Secured Transactions"
Crypto Compliance: A Comprehensive Guide post image

Crypto Compliance: A Comprehensive Guide

For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]

Author: Bryce S. Robins

Link to post with title - "Crypto Compliance: A Comprehensive Guide"
Supreme Court and Title VII: Implications for Reverse Discrimination post image

Supreme Court and Title VII: Implications for Reverse Discrimination

Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]

Author: Matthew F. Mimnaugh

Link to post with title - "Supreme Court and Title VII: Implications for Reverse Discrimination"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!