I wanted some of the regular readers of my columns and the Blue MauMau community at large to know that I have been asked to present a free telephone seminar on what to do when business owners cannot pay their bills.

I deal with business folks every day who are facing failure. My advice: Look for the silver lining because it's there.

A Debtor Must Face the Reality of His Plight and Act

Ouch! That’s about the one best word to describe my reaction after talking with those of you who called me, anonymously, to discuss problems related to cash flow. Most callers indicate inability to pay back loans, such as SBA, bank lines, family help. Many also have vendor debt and are struggling to pay some now, others later, and vice versa so that supplies keep coming. Worst of all, many owe their ZOR and cringe over that fact. Ouch!

So few realize that help is available. And help should not be in the realm of borrowing money to pay debt. Borrowed money IS debt, and usually serves only to increase the fragility of the situation. Instead, it’s time to look at and carefully consider what a Payables Manager can do. Ahem, but permit me to explain; and I’ve had 45 years experience working situations exactly as described above.

A Multi-Unit Franchisee Sees Debt Trouble With Lease Commitments From Expansion 

Ira Gershwin wrote of Poor Jenny, who didn’t have a penny, and that’s about the same as a franchisee debtor who asked us for help. The problem, leases! The ZEE had three gift-goods stores in a thriving summer vacation/tourist city on the mid-Atlantic coast. Store one was downtown. Store two was in a shopping mall. Store three on a boardwalk by the beautiful sea, tourist infested from 10 AM till midnight seven days a week, but only about five months a year. Each lease ran to his corporation, and was guaranteed personally. The ZOR was not a party to any of the three leases.

Our debtor/client/franchisee, thrilled with profits since 1997 from store one, simultaneously ventured growth by expanding to the mall and to the boardwalk. Problems soon affected the other two locations. The mall had never attained substantial occupancy. Traffic was less than touted by the developer, one of the largest shopping center operators in the country. The year 2006 was a disaster; sales at all locations were less than half of 2005 sales. The cash crunch was excessive. By spring 2007, store sales at the mall were half the monthly rental.

We were hired.

Jury Refuses to Indict Wayward Partner

A prior blog, Franchise Partner Blows the Company Money in Vegas, described how a partner in a franchised business-to-business service operation had gone to Vegas, lost big and then converted money to himself from credit cards issued in the name of the business.  The problems are extensive, in that the ‘other partner’ (the good guy) had alone signed for the credit cards and was personally responsible. 

Once the fraud was discovered, the injured partner notified the states attorney’s office and sought a Grand Jury hearing.  The hearing was held in mid-September, and the Jury refused to indict!  The reason an indictment was refused was that the injured partner had the duty but failed to exercise oversight.  Thus, the law apparently turns a deaf ear when partners don’t watch each other.  I defer to Richard Solomon who far better than I can detail this legality.