Re: One less bell to answer.

On Mon, 18 Aug 2008 04:47:09 -0700, "Ted Mittelstaedt" <tedm@xxxxxxxxxxxxxxxx>
wrote:


"Ben Kaufman" <spaXm-mXe-anXd-paXy-5000-dollars@xxxxxxxxx> wrote in message
news:lo4ga4lluuh0stula72nn1759figr1elia@xxxxxxxxxx
On Sat, 16 Aug 2008 23:07:45 -0700, "Thumper" <roadapple@xxxxxxxxxxxxxxxx>
wrote:

2006 BMW K1200GT - Sold, with all the upgrades. 160 HP MC. Sold cheap.

Next 2006 VRSCA, with all the trimmings. 130 HP MC. Under 5000 miles,
factory warranty.

Then my antique and classic cars (which are NOT moving sales wise).

Then the BSA Rocket 3 (If I can get any good money out of it), followed
by
the completely restored 1975 T160. (again for a good price, if possible).

Then the CBX, which I am getting fonder and fonder of.

Then.... we'll see. Times are really bad now, the worst they've ever
been.

Our customers are not paying us in any sort of timely manner. Even after
begging for payment of invoices 120 days+ old, we are not getting paid.
The
credit we relied on has vanished and we getting deeper and deeper in
debt. I
am not getting paid and am pouring money into the company any way I can,
as
we MUST survive. This work is all I have ever known and my reputation is
stellar.

Don't even think about us asking our major customers to pay us up front.
They'll just send the work somewhere else.

Oh, and we are just loaded with work, that we currently struggling to get
financing to buy the necessary stock materials for.




*** me, times are tough.
Next month could be it, if the bank refuses to work with us..
That means transferring everything I own to Cat, her father or Dean so it
can't been taken. (Does anyone know anything about this move).

But, maybe the god of film will step in and pay us all at once, breathing
some life into us temporarily.

Hooray for Hollywood!

No jokes please. I am really depressed and am suffering from bad panic
and
terror attacks. I have been doing this work since 1974. I can see Cat
abandoning me and winding up living in a cardboard box after this. I have
no
family.

Irony? Two of our major restorations are playing at a big house this
week. I
have been asked to lecture about another one playing at a prominent film
school in November.


PLEASE! do not mention that I posted this, if our clients think were
floundering they will quit sending us work altogether.

Krusty was right.


Retain a business lawyer to help you collect!


Ben,

The usual way these things work is that the small companies like
the one Thumper is working for are utterly dependent on the larger
companies for continuing work. The larger companies know this.
The larger companies use these suppliers as a way of getting a
short term business loan by simply not paying them for a while.

If Thumpers company sics a lawyer on the larger companies then
they will simply stop sending him work, and what checks his company
is getting from them will simply stop.
a year from now right before it goes before a judge, they will offer
him a cashiers check for 50% of payment to settle out of court. If
he doesen't take it, he will get a judgement for 100% - but they still
won't pay, and now he will have to pay even more to another lawyer
to go after the judgement money. By the time that lawyer gets anything,
it will mostly be eaten up by the costs of collection. And if he takes
the 50% offer then his lawyer will get half.

And of course, his company will never see any work from the
larger companies again.

My employer has had our share of larger companies pull the deadbeat
stuff. Fortunately, in my industry there's a lot more customers for
what we do than for what Thumper does. So, we have been able to
tell the deadbeats to go find another supplier. The way we regard it
is that if some large customer that isn't paying us quits and goes to
one of our competitors, now that competitor is having to carry our
ex-customers debt load, and deal with their slow-paying, and we are
now free to concentrate our sales efforts on stealing the non-deadbeat
customers away from our competitors.

Thumpers fundamental problem is that there's too many guys out
there that do what he does who are willing to work on a promise of
payment. I don't know why this is since I'm not that familiar with
his industry. BUT, such a thing has happened in my own industry -
in the past. Basically about 10 years ago, every little po-dunk
techie out there figured he could do what we do in his garage and
make a million dollars doing it. We observed that a number of what
I call "professional deadbeat firms", that is, firms that simply never
pay anyone if they can help it, and go from supplier to supplier
to supplier, breaking hearts all the way, were doing this to these
eager beavers. (and to us, too) Eventually, after a number of years,
the number of eager beavers out there became fewer and fewer and
fewer, and our competitors became nastier and nastier and nastier on
insisting that they get paid, so we felt comfortable on getting nastier
and nastier on insisting that we got paid. The "professional deadbeat"
firms
ended up discovering after this happened that nobody out there willing to
supply them would tolerate not being paid anymore, and so they
stopped doing it. At least, they stopped doing it in our industry,
no doubt, they are still doing it to their other suppliers.

Thumpers company really has 3 choices if they want to
stay working in this industry:

1) They can tell their suppliers that they are way too busy to
take on a new project right now - thus effectively sending
work to their eager beaver competitors who are willing to do
it for free - and putting their own employees out of work. In
short, they can basically mothball their operations for several
years until all their eager beaver competitors have gone broke
extending credit to these film studios, then Thumpers company
can put everything back online and start accepting jobs again.
Needless to say, when the studios eventually figure out that
Thumper's company isn't doing anything for them anymore,
their incentive to pay will be even less than it is now.

2) They can borrow more and more and more money as the
payments get pushed out further and further and further. In
effect, when it comes to Thumper and his competitors, the
people who will end up winning will be the people who can
last the longest without getting paid. Basically, he can out-credit
all his competitors.

3) They can essentially put a full-time staff person on the job
of calling and visiting all of the accounts payable clerks in
every one of these studios, begging for payment, basically
every day. Obviously, such a person would be generating zero
revenue.

In short, all of these options will cost serious money and
fundamentally threaten the survival of the company.

The one bit of comfort that I can offer in this situation is
the following:

Every one of Thumper's competitors is having the same
problem that he is. Thus, there is no way to avoid a day
of reckoning at some point in the future. A market
where there's too many suppliers all supplying the same
thing, and nobody is getting paid because the customers have
figured out that there's too many suppliers, is unsustainable.
By every known economic law, such a market will eventually
collapse, it is unavoidable.

IF Thumper's company is able to survive until the collapse,
then if they are still a running operation after the collapse,
they will be flush with cash. In other words, there is a light
at the end of the tunnel. It is just a matter of figuring out
how long it's going to take until everyone else out there dies,
figuring out a plan that will keep you going until then, and
executing it and not panicing.

And I will add, that it's critical to maintain good and close
relations with your banker during this time. The usual
knee-jerk instinct is to say as little as possible to the bank,
in hopes that the bank will not pay attention to you, and
pay more attention to someone worse off than you are.

This works in the beginning of it, but sooner or later the
banker is going to call you in to have a "Come to Jesus"
meeting. At that point if you try feeding a line of BS to the
bank, your going to be manipulated by the banker into
making a commitment that you have a 90% chance of NOT
making, the banker will then just sit back, wait for you to
break your word to him, then nail your *** to the wall.
It's critical at the "Come to Jesus" meeting to be completely
open with your books, explain exactly what is going on,
and exactly how your planning on surviving the crap. As
long as you have work coming in from a customer that
has a lot of money, even if the customer isn't paying you,
the banker will be happy to continue loaning money to you.
They know that even if you go bankrupt they are still
protected, because you will give them your recievables,
and they will go to your customers and get their money.
Because, no matter how deep pockets that your customers
have, they simply don't have the kind of resources that the bank
has, and they know it and the bank knows it.

After all, it's not like the banks haven't dealt with this
kind of crap before.

Ted


The lawyer is not necessarily for "siccing" but for legal advice on possible
options.
From my understanding, if Thumper doesn't get paid now he is in deep problems.
He is also extremely anxious and sick over the state of affairs. A lawyer's
actions don't have to be the engagement of a lawsuit, especially when you want
to retain the client or keep the issue low key in a small "community."
Sometimes just the fact that a letter notifying an account is way over due being
sent by a lawyer rather than an accounting clerk can make a big difference in
results.

Sometime just getting a professional consult, in an of itself, will have a
tremendous reduction of tension over the state of affairs.

Ben

.