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Roger
Roger, Attorney
Category: Legal
Satisfied Customers: 26418
Experience:  Litigation Attorney
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I entered into a partnership (LLC) with the owner of a mental

Customer Question

I entered into a partnership (LLC) with the owner of a mental daycare program in NJ. The newly formed LLC is an outpatient substance abuse recovery program and it has nothing to do with the day mental day program. Part of my partners contribution to the LLC is providing the space after the day program ends my contribution-set up the program, obtain state license, state contracts, managed care contracts which I did.
Before starting the program I have several HIPAA concerns. The place has camera's installed all over, including, in areas were group sessions are being held and in the caseworkers main office were consumers ( in NJ Medicaid patients are called Consumers) are being individually counseled. My partners spouse is monitoring the system via his I-Phone 24 hrs/day. The worst part is that I just found out my partner is not legally married and that the spouse is not part of the day care program due to a past criminal conviction (over 8 mil tax evasion case). Money and time were invested (over 1 year).
Question 1: are the surveillance camera's a HIPAA violation.
Question 2: Could my partners significant other past (according to him, he paid his dues spending 2+ years in prison 9 years ago) affect the LLC?
Question 3: The fact that i brought this up, made them very angry and the dissolution of the company came on the table. Could they force me to dissolve the company? We don't have an operating agreement. The company was formed more than one ago, has zero income so far and my partners equity is 20% and was supposed to reach 50% once a certain capital investment on her part is reached.
Submitted: 9 months ago.
Category: Legal
Expert:  Roger replied 9 months ago.

Roger : Hi - my name is XXXXX XXXXX I'm a litigation attorney. Thanks for your questions. I'll be glad to assist.
Customer:

Hello, does my problem fit your expertise?

Roger : 1. It is legal to have surveillance cameras in the waiting room and common areas (non-private) as the consumers do not have a reasonable expectation of privacy there. It is not a HIPAA violation IF no record is made.
Roger : However, placing cameras in private areas - - session rooms and private counseling rooms - - that could be an issue.
Roger : Even if it's not a violation of HIPAA, it could be a violation of privacy rights.
Roger : Thus, any cameras that are not in common areas should likely be removed.
Roger : 2. As long as the significant other of your partner is not a member of the LLC, this should cause you no issues as far as the company is concerned. It may be that the state or some agency says that she's not qualified because of past criminal conduct. If that were to occur, she may be disallowed from working there.
Roger : 3. Your partner couldn't necessarily dissolve the company if you wanted to keep it in operation. However, you would have to buy him out for a value that you agree to in order to prevent a liquidation.
Roger : If you didn't buy him out, then he would have the right to liquidate the company, assets, etc. in order to recover what he can of his investment.
Customer:

The company does not have any assets, other than the contracts that should produce 150k - 250k monthly.

Roger : Ok. The contracts would be considered an asset of the company, so there is value there.
Roger : Obviously, you have to perform in order to receive payment, but there is the potential for a significant amount of income for the business.
Roger : Hopefully, you and your partner can resolve these issues and continue moving forward with your business plan. However, you certainly need to address the issue of the cameras in private areas as that could get the company in some hot water.
Customer:

Dissolving the llc and relocating will cost time and money and probably will affect the contracts too. If they are ready to lose their part and force me to look for a new location could this work in determining the buy out price.\?

Roger, Attorney
Category: Legal
Satisfied Customers: 26418
Experience: Litigation Attorney
Roger and 2 other Legal Specialists are ready to help you
Expert:  Roger replied 9 months ago.
Sure, this could be a factor in determining a buyout that you would be willing to pay.

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