Business First’s August 11, 2014 edition entitled “Pre-seed Funding Looms as Unsolved WNY Problem,” in which David Colligan addresses the difficulty of pre-seed funding in the Western New York area. David is quoted as saying, “As the environment gradually matures, pre-seed funding has increasingly loomed as an unaddressed problem. A lot of Angel investors would invest in these companies if they could show market acceptability and support.”
Governor Cuomo’s Buffalo Billion initiative has generated a competition for the best new business ideas from around the globe with a $5 million cash prize as the top award. One of the requirements of the competition’s winner is an agreement to stay in Buffalo for a minimum of one year. On January 9, 2014 the Buffalo News quoted David as saying, “Buffalo, N.Y. has suddenly become almost a poster child for Rust Belt rehabilitation and change.”
Business First’s May 17, 2014 article entitled, “Buffalo Angels Fund Tops $1 Million” highlights the member-managed Angel investor fund created to provide the opportunity for local investors to collaborate and participate in the growing Angel investment asset class and to fill a funding need to grow the Western New York economy. It is a subsidiary of the Western New York Venture Association and the Buffalo Angels Network. As the manager of the Buffalo Angels LLC David Colligan was quoted as saying, “This opens up the opportunity to collaborate with other Angel groups across New York State, Southern Ontario and elsewhere.”
On April 30, 2014, David Colligan was the featured speaker at the Emerging Business Leaders Food for Thought symposium held at the Amherst Chamber of Commerce. This took place in an untailored setting allowing for candid conversations significant to young professionals. Highlights included the evolution of his legal career over the years and formation of Colligan Law LLP in 2013, as well as his role as a founding director and chairman of Launch NY, a not-for-profit venture development organization committed to entrepreneurship in Upstate New York.
By Matthew K. Pelkey
The Acer Access and Development Program, otherwise known as the Maple TAP Act, is a part of the federal 2014 Farm Bill enacted earlier this year which will provide USDA grants of up to $20 million per year over five years to maple producing states to encourage production and development of the maple industry. This is a competitive grant process between maple producing states.
The public policy justification behind this funding is that the United States is missing out on a large opportunity given the number of maple trees we have and the relatively low number of trees we are tapping. Canada, and more specifically Quebec, is capitalizing on 75% of worldwide production. The U.S. does not even break 20% of worldwide production.
The problem, and corresponding opportunity, is that Quebec utilizes 35% of available maple trees whereas the U.S., with 2 billion potential taps, only has a utilization rate of .38%. Given that we are currently importing 4 times as much maple syrup as we produce—there is a tremendous market opportunity presenting itself.
New York is particularly well suited to benefit from the Maple TAP Act given that we currently utilize about only 0.50% of maple trees and have the highest total potential taps of any maple producing state at approximately 300 million.
Source of data and graph: Cornell University paper, Background Information and Justification for Reintroducing the Maple Tapping Access Program Act as part of the new Federal Stimulus Package.
With an available 300 million taps, there is a tremendous market opportunity in New York State alone. Indeed, if New York even utilizes a third of its available maple taps, the resulting economic impact would be tens of millions of dollars to farmers and the upstate economy.
According to U.S. Senator Charles Schumer’s office, the sponsor of the Maple TAP Act, the potential economic impact to upstate New York breaks down as follows:
- In the North Country, the epicenter of New York’s maple industry, there are 70 million potential new taps, and the TAP Act could help bring in an additional $19 million in revenue per year.
- In the Capital Region, there are 34.8 million potential new taps, and the TAP Act could help bring in an additional $10 million in revenue per year.
- In the Western New York, there are 21.1 million potential new taps, and the TAP Act could help bring in an additional $6 million in revenue per year.
- In the Rochester-Finger Lakes Region, there are 11.6 million potential new taps, and the TAP Act could help bring in an additional $3 million in revenue per year.
- In the Southern Tier, there are 70.8 million potential new taps, and the TAP Act could help bring in an additional $22 million in revenue per year.
- In Central New York, there are 45.5 million potential new taps, and the TAP Act could help bring in an additional $13 million in revenue per year.
- In the Hudson Valley, there are 26.8 million potential new taps, and the TAP Act could help bring in an additional $8.7 million in revenue per year.
So where can this funding be used most effectively? Anecdotally, if you talk to current producers the biggest barrier to further production is access to land. Landowners, many of which are concerned that tapping their trees will compromise the quality of timber intended be subsequently harvested and sold, are hesitant to lease their properties to maple producers. New York State could, and quite frankly should, propose funding through the Maple TAP Act to encourage landowners to lease property to maple producers and increase access to these trees. Furthermore, focus should likewise be given to encouraging research, development and commercialization of new products from maple sap and syrup.
Inherited IRAs are available to bankruptcy creditors.
By Frederick J. Gawronski
The United States Supreme Court unanimously ruled on June 12, 2014 in Clark v Rameker, that non-spousal inherited IRAs are not exempt from a debtor’s estate in bankruptcy.
This case involved an IRA that petitioner Heidi-Heffron Clark inherited from her mother in 2001. Heidi received distributions from the IRA for 9 years. In 2010, Heidi and her husband filed for Chapter 7 bankruptcy. In the Wisconsin couple’s schedules, they listed Heidi’s inherited IRA as retirement funds and hence exempt from the reaches of creditors.
The Bankruptcy Trustee, Rameker and the couple’s creditors disagreed, claiming the funds from the inherited IRA were merely Heidi’s inheritance, thus becoming an asset of the bankruptcy estate and available to creditors.
Writing for the Court, Justice Sotomayor noted that the phrase “retirement funds” is not defined in the Bankruptcy Code, so a normal meaning must be applied to the term. The Court concluded that its ordinary meaning as ‘sums of money set aside for the day an individual stops working”. In the Court’s view, there are three characteristics differentiating inherited IRAs from retirement funds:
- The holder of an inherited IRA is prohibited from contributing additional money to the account;
- The holder of an inherited IRA is required to take mandatory withdrawals from the account without regard to the holder’s retirement; and
- The holder of an inherited IRA may withdraw the entire balance of the account at any time, use it for any purpose, all without penalty.
As indicated by the Court, the result is consistent with general debtor-creditor law and the Bankruptcy Code. Exempting a traditional, non-inherited IRA is to provide for the retirement needs of the debtors, even to the detriment of creditors. A non-spousal inherited IRA serves no such purpose.
PLANNING NOTE: The ruling only applies to the federal bankruptcy exemptions. There are several states which do protect these types of IRAs, including Florida and Texas. New York does not have such an exemption. And the exemption applies to the debtor’s location, not the person leaving the inheritance. Accordingly, those individuals with IRAs who want the balance of the money to be protected from their heirs’ creditors should designate a spendthrift trust as the beneficiary of the balance, not the heirs directly.
By A. Nicholas Falkides
Colligan Law recently helped a timber owner gain access to his valuable timber stand. Our client owned a 40+ acre parcel on which was located a house with a 5 acre lot in the front and 35+ acres of valuable timber in the rear. He sold the front portion to the defendant but retained an easement to access his timber parcel. He used the easement for 15+ years without a problem, but found it blocked by the defendant when our client attempted to sell off his timber in a public bid. Colligan Law tried the case to a jury, as a result of which our client’s easement was confirmed, and the defendant directed to unblock the easement. The jury also awarded the client over $100,000 in damages for his lost profit on the timber sale and a portion of his attorneys’ fees. The defendant appealed and Colligan Law prevailed on appeal on all counts.
For a copy of the Court’s Decision, or more information about how Colligan Law can assist you with timber rights claims, please contact us at: 716.885.1150.
By A. Nicholas Falkides
Colligan Law recently assisted a local property owner in defeating a claim that a neighbor acquired title to a vital strip of the client’s land through adverse possession. The client owned an apartment building and was required to maintain two separate exit paths under the fire code. A hostile neighbor filed suit claiming title to a five foot strip of the client’s property, with the strip constituting one of the client’s required fire egress paths. Colligan Law defeated this claim, as well as a second claim that the neighbor had acquired an exclusive easement over the disputed strip of land. Colligan Law also defeated the neighbor’s claim for money damages as well as claims for nuisance and trespass.
For a copy of the Court’s Decision, or more information about how Colligan Law can assist your business with real property claims, please contact us at: 716.885.1150
By A. Nicholas Falkides
Colligan Law recently obtained the dismissal of a discrimination and retaliation claim against a local employer. The former employee alleged discrimination on the basis of race and national origin. He also alleged that he was terminated in retaliation for complaining about the alleged discrimination. In a detailed decision, the Federal Court found that the former employee failed to establish a prima facie case of retaliation because he did not suffer an adverse employment action as a result of participating in a protected activity. The Court also found that the former employee was not terminated, and that even if he was, there was no causal connection between his discrimination complaint and his alleged termination. Finally, the Court found that there was no evidence of retaliatory animus, and no temporal proximity between the filing of his discrimination complaint and his alleged termination. For a copy of the Court’s Decision, or more information about how Colligan Law can assist your business with employee claims, please contact us at: 716.885.1150.