My son and Bankruptcy

[OHRoadwarrior]

You are absolutely nuts. The only possible way that you could be remotely accurate is if there are actual contracts that the customers would be required to honor if sold or auctioned to someone else...and likely required to honor for more than one season. You are completely ignoring the nature of this business.

Good luck with that theory. I suggest you look at the situation regarding CCX and Consolidated Freightways. It took them several years to cross over accounts, without recourse, before Consolidated went bankrupt from lack of a sustainable business.

 

[LdiJ]

Good luck with that theory. I suggest you look at the situation regarding CCX and Consolidated Freightways. It took them several years to cross over accounts, without recourse, before Consolidated went bankrupt from lack of a sustainable business.

That doesn't have the slightest bearing on a mom and pop landscaping business.

 

[OHRoadwarrior]

That doesn't have the slightest bearing on a mom and pop landscaping business.

You obviously fail to grasp that commercial law is commercial law then.

 

[bigun]

You obviously fail to grasp that commercial law is commercial law then.

There is theory and then there is reality.
Reality is, no trustee is going to spend anytime on a business that is seasonal with no expensive equipment that can be easily liquidated for a meaningful payout to creditors.
A lawnmowing list just isn't worth anyone's time. I'd wager we've spend more time on this thread than a bk trustee will spend on the actual case.

 

[OHRoadwarrior]

There is theory and then there is reality.
Reality is, no trustee is going to spend anytime on a business that is seasonal with no expensive equipment that can be easily liquidated for a meaningful payout to creditors.
A lawnmowing list just isn't worth anyone's time. I'd wager we've spend more time on this thread than a bk trustee will spend on the actual case.

Agreed, however, telling them it is okay to do, is advising that fraud is legal. The point of this ongoing debate. If you notice several posts ago I said they could, not that they would.

 

[BigMouthWino]

There is theory and then there is reality.
Reality is, no trustee is going to spend anytime on a business that is seasonal with no expensive equipment that can be easily liquidated for a meaningful payout to creditors.
A lawnmowing list just isn't worth anyone's time. I'd wager we've spend more time on this thread than a bk trustee will spend on the actual case.

If one of the creditors were to suss out the transfer of customers at the 341 hearing it might be sufficient for them to prevail in their own objection to the discharge. This is also not highly likely unless they have a large debt outstanding to either an aggressive creditor or debt buyer.

 

[LdiJ]

If one of the creditors were to suss out the transfer of customers at the 341 hearing it might be sufficient for them to prevail in their own objection to the discharge. This is also not highly likely unless they have a large debt outstanding to either an aggressive creditor or debt buyer.

Its not highly likely because the customer list has no saleable value. Its of value to the son only because he has been the one doing the work and he is the one his customers are accustomed to dealing with. In fact, if he struck out on his own, with no input from his parents, and offered his services to the existing clients he services, who do you think they would choose? Him, or some stranger who was actually stupid enough to purchase the parent's customer list?

 

[OHRoadwarrior]

Many commercial companies are bought out by competitors, to obtain their clients. It occurs in the services industry frequently. That is why going into bankruptcy with the company still open is a major factor in this debate.

 

[LdiJ]

Many commercial companies are bought out by competitors, to obtain their clients. It occurs in the services industry frequently. That is why going into bankruptcy with the company still open is a major factor in this debate.

Yep, they sure are...but not when they are mom and pop seasonal companies in bankruptcy.

 

[BigMouthWino]

Yep, they sure are...but not when they are mom and pop seasonal companies in bankruptcy.

The company is not yet in bankruptcy. They are transferring the assets out of the company prior to a bankruptcy filing.

Do try to keep up.

 

[LdiJ]

The company is not yet in bankruptcy. They are transferring the assets out of the company prior to a bankruptcy filing.

Do try to keep up.

That is the whole argument. I do not consider any portion of their customer list to be a saleable asset. I am familiar with the nuts and bolts of several mom and pop landscaping companies and not a one of them has any real assets to transfer...and anyone with any sense at all wouldn't buy their customer list nor their company as a whole. They might realize a small amount from their physical assets, depending on the age of the assets, but not much.

They might own a couple of commercial mowers (1500.00 to 4500.00 new, 300.00 to 1200.00 used), a trailor, maybe worth 1k used, some small tools (most likely the personal property of the person using the small tools...like mechanics) etc. They rent anything truly big that they need, because otherwise its not cost effective. They work for people, not big commercial enterprises and they either specialize in one shot landscaping design or regular maintenance...mowing, weed wacking, with occasional bigger clearing out jobs. If they have contracts at all they are seasonal ones that either party could cancel at will.

A bankruptcy trustee isn't going to even bother going after the assets of a mom and pop landscaping business let alone its customer list. It would be too much effort for too little reward.

Nor would it be fraudulent or illegal in any way for their son to solicit the existing customers he serves for a business of his own.

 

[Ohiogal]

Its not highly likely because the customer list has no saleable value. Its of value to the son only because he has been the one doing the work and he is the one his customers are accustomed to dealing with. In fact, if he struck out on his own, with no input from his parents, and offered his services to the existing clients he services, who do you think they would choose? Him, or some stranger who was actually stupid enough to purchase the parent's customer list?

Actually it does. One of the reasons that Tru Green and other companies safeguard their customer lists. Also, if he struck out on his own with NO input for his parents, his parents could sue him for basically stealing company information.

 

[xylene]

Also, if he struck out on his own with NO input for his parents, his parents could sue him for basically stealing company information.

On what what basis?

The basic tort?

 

[BigMouthWino]

On what what basis?

The basic tort?

Theft of trade secrets.

 

[Ohiogal]

On what what basis?

The basic tort?

On a few bases. Tortious interference with business, theft of trade secrets and there may be other things. The customer list is the property of the business. Would the parents be successful? I don't know. Would a bankruptcy trustee pursue the value of the business transferred? I don't know but it is possible that he could. It could be considered fraud for the parents to do this. Would a trustee pursue these "assets"? Maybe. Depends on the specfics of the entire situation but it is possibility.