The Disciplinary Review Board having filed a report with the Supreme Court recommending that ANTHONY J. LaSALA, of WAYNE, who was admitted to the Bar of this State in 1965, be publicly reprimanded for conduct adversely reflecting on his fitness to practice law, DR 1-102(A)(6), and for accepting employment when his professional judgment was affected by his own financial, business or personal interest, DR 5-101(A) and DR 5-105(B), and good cause appearing;
It is ORDERED that the findings of the Disciplinary Review Board are hereby adopted and respondent is publicly reprimanded; and it is further
Ordered that the Decision and Recommendation of the Disciplinary Review Board, together with this order and the full record of the matter, be added as a permanent part of the file of said ANTHONY J. LaSALA as an attorney at law of the State of New Jersey; and it is further
Ordered that ANTHONY J. LaSALA reimburse the Ethics Financial Committee for appropriate administrative costs.
Decision and Recommendation of the Disciplinary Review Board
This matter is before the Board based upon a Presentment filed by the District IIA (Bergen County) Ethics Committee recommending that Respondent be publicly reprimanded. The Board makes the following findings of fact:
Respondent was retained to form a partnership and corporation for the purchase of Hickory Hill Country Club, Totowa, New Jersey, by Joseph Doney, John D. DeStefano, Anthony Reiter, Joseph Fazio and William Farkas, who is Respondent's brother-in-law. The club was purchased on June 10, 1975 for $1,150,000, with the purchaser taking back a $1,000,000 mortgage. Doney, an experienced club manager, was to operate the club. The others did not take an active role in the club management.
In August 1975 the principal of the realty company holding the purchase money mortgage died. Since the estate was in need of immediate cash, the executor and trustee of the estate offered to sell the mortgage at a discount. The executor contacted everyone he believed could purchase a mortgage of this amount. Initially, he offered to discount the mortgage to $750,000 but later reduced it to $650,000. Respondent was contacted by this executor as representative of the mortgagors since it would be to their advantage to obtain this discount.
The executor believed he asked Respondent to inquire about any other prospective purchaser. Doney expressed an interest to the executor in purchasing the mortgage. Doney and DeStefano asked Respondent if he knew of any one willing to invest in the club. They also told Respondent they would try to obtain the necessary funds themselves. Respondent replied that he would make inquiries.
Throughout 1975, the country club was operating with cash deficits. A financial forecast submitted by the club's accounting firm on August 6, 1975 projected a monthly cash flow deficit of about $14,000. By early 1976, the financial situation did not improve. The partnership became divided as a result of this and other management problems.
In either late January or early February 1976, Respondent introduced Joseph Coyle as a business partner of his who had a proposition to present to the club partners. Respondent told the club partners that he could not legally advise them about the proposition because of his business relationship with Coyle. Respondent then left. Coyle offered to obtain the needed capital by locating investors in exchange for 20 to 25 percent of the club stock as his finder's fee. According to club partner Fazio, it was well known that Respondent would have an interest in this business venture with Coyle. Except for Doney and DeStefano, the other partners were agreeable to this proposition. Doney and DeStefano later maintained that Respondent did not disclose at that meeting that he and Coyle were business partners. The proposal was not accepted.
On February 16, 1976 the club partners met to discuss their bleak financial situation. Based on their accountant's cash flow projections, the partnership would not be able to meet the May mortgage payment. The monthly mortgage payments were $4,500 with a balloon payment in May of $53,500. In June and the following months it would decrease to $3,000. The partners rejected short term ...