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This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters. To learn more, visit njsba.com.

Trio of Corporate Governance Bills Advance in Assembly

Bills designed to ease corporate governance in New Jersey were voted out of the Assembly Commerce and Economic Development Committee last week. All three, introduced by Senator Patrick Diegnan when he was in the Assembly, have New Jersey State Bar Association support as important measures to update the state’s corporate governance laws and ease the burden on corporations to act in accordance with them.

A-2162 clarifies the scope of corporate bylaws and specifies that the bylaws may provide a forum selection clause. A-2971 clarifies that corporate directors may approve actions without a meeting, by electronic transmission. Both bills were also voted out of the Assembly last week.

A-2973 allows certain points to be included in a corporation’s proxy solicitation materials, including a condition requiring a minimum level of beneficial ownership of shares of the corporation’s voting stock by the nominating shareholder or a minimum duration of those shares; conditions limiting nominations of directors who have been previously nominated to the board; a provision limiting the number of shareholder-nominated directors for each shareholder meeting at which directors are to be elected; procedures requiring the nominating shareholder and the shareholder’s nominees including information concerning ownership by those persons of shares of the corporation’s capital stock; a provision limiting nominations to shareholders who have not, and whose nominee or any affiliate of those shareholders has not, within a specified time period, publicly proposed to acquire shares constituting a specified percentage of the voting power of the corporation’s outstanding voting stock; and a provision requiring that the nominating shareholder undertake to indemnify the corporation in respect of any loss arising as a result of any false or misleading information or statement submitted by the nominating shareholder in connection with a nomination. This bill awaits the full vote of the Assembly.

Companion bills are currently awaiting full votes in the Senate.

Fair Foreclosure Act Bill Moves Forward

Senator Ron Rice’s bill codifying the Judiciary’s Foreclosure Mediation Program was voted out of the Senate Community and Urban Affairs Committee last week. S-1130 requires that a homeowner-borrower have the option to participate in the program and to receive written notice of the program upon the filing of a mortgage foreclosure complaint. The NJSBA requested amendments to the bill, and is continuing its efforts to amend the legislation as it moves forward.

The association stated its concerns to the sponsors of the bill, specifically with respect to the proposed civil penalties for those who mediate in bad faith, which the association argues is inconsistent with the Uniform Mediation Act and current case law. Further, it violates mediator confidentiality to testify regarding such bad faith.

The association also remains concerned about the proposed fee increase for filing the first paper in an action. Finally, the association recommends that to encourage meaningful participation in the mediation process, language be inserted in the bill to require that the individual appearing on behalf of the lender enter into binding modification.

The association will continue to monitor the bill’s progress. It awaits a full vote in both houses.