***PICB*** PRINTING INDUSTRY CREDIT BUREAU ***PICB***
WHERE'S THE MONEY?
PICB'S PERIODICAL DEDICATED TO MAINTAINING PROFITABILITY IN THE GRAPHIC ART INDUSTRY THROUGH GOOD CREDIT POLICIES
PRINTING INDUSTRY CREDIT BUREAU 
(847) 265-0400
ISSUE # 5
MARCH 2012
CREDIT TIP LOGO

DID YOU KNOW that Vegas bookies, like good credit managers, use statistical analysis to identify the Risk/Reward line which determines the odds for all profit and loss scenarios? Financial success becomes the expected result when decisions are based upon detail rather than 'luck' or 'hope.' After all, odds are 'luck' is only worth a 50/50 shot, wouldn't you rather have a better chance? 

 

The recent film Moneyball tells the true tale of a losing baseball team turned national champions by its' general manager who built his team by relying upon statistical analysis. While this may not seem revolutionary it was a game-changing perspective that is now the accepted norm. ALL teams, whether pro or amateur, now analyze every facet of the game. From the players, to the conditions on the field, to the size of the stadium, every possible variable is rigorously scrutinized to determine the winning possibilities vs. probabilities. Decisions are made based upon the 'best chance' to win!

 

While you may not be a manager of a baseball team, your company is no less important. In sports you bet with your heart sometimes, but business is another matter. It is important to understand the process by which information is obtained, analyzed, and valued.  Setting credit lines is the process of determining what dollar amount maximizes your potential reward or profit while limiting the risk of loss.  Using statistical analysis can help your company become financial champions.

 

The analysis is only as good as the information obtained, and the information obtained is only as good as the questions asked:

  • What state is the company registered in, how long have they been operating?
  • Where is the business located, is it a commercial location, a home based business, or potentially a mail drop?
  • Who owns the property, and is it mortgaged?
  • Who are the officers for the company and are they affiliated with any other businesses?
  • What type of business is the company and does it have assets or not?  
  • Is the phone number registered to the business?
  • Are there any court records listing the company or its' principals as a defendant?
  • Are the Federal and State tax ID numbers properly registered to the customer?
  • Are there any Federal or State tax liens against the business? 
  • How many Uniform Commercial Code (UCC) liens are filed with the state?
  • What certificates or additional licensing are required by the city, county, or state and is the company in compliance?

Printing Industry Credit Bureau  

makes it easier to find the answers 

  • RISKEE BUSINESS: Provides unlimited access into PICB's database to determine if a customer has previously been placed for collection
  • RESOURCES: PICB's web portal to government sponsored web-sites that provides real-time information to help answer all the 'right' questions
  • KREDITKARMA: PICB's list of debtors who have been sued, judgment rendered by the courts, but thus far no assets found to satisfy the court awarded debt due
  • DUE DILIGENCE: When you don't have the time to do a thorough review of the customer, PICB can do it for you. We use the old fashion method of hands-on research while using 21st century tools to maximize results.
  • COLLECTION SERVICES: Printing Industry Credit Bureau provides credit and collection services that are dedicated to the Graphic Arts Industry. With more than 35 years of expertise our collection specialists can handle slow-pay or no-pay customers better than an agency who doesn't understand a printer's unique needs.

Like Jimmy the Greek,  

Printing Industry Credit Bureau helps tip the odds in your favor

                                                                                                            www.picb-us.com

(Article by Rick Cruz credit analyst for PICB)

 

 

DEWEY CHI'TING
LARSON  NY
DEWEY MARCH 2012! 
 
ORIGINAL ARTWORK BY MARC.ART, INC.
mob5948@aol.com 
 
ASK AN ATTORNEY
 
Q:  Is there any successor-ship  or survivor-ship language that can be used in our credit agreements, proposals, and/or quotes that can help us recover should there be an  asset sale shortly after a debt was incurred? If so what would you suggest (other than a personal guaranty)?
 

A:  First of all, you cannot make any third party liable on a contractual agreement unless they are the party to the agreement. By simply putting in some language that anybody who purchases the assets from the original debtor is liable does not in fact make that party liable or subject to any direct litigation. Unless a personal guarantee is signed by the principals of the company that are transferring the assets you cannot pursue them individually either unless there are some substantial factual circumstances that would allow you to pursue some fraud claim. The best way to protect yourself against the transfer of assets without being paid is to obtain a lien and make a UCC filing against the assets so that when the assets are transferred the lien follows those assets. Unfortunately, this usually is not practical. 

 

As far as putting any language in the credit agreement regarding successor liability, you of course could put that language in the document but there is always the risk that the document could be declared unenforceable because of that language. This could happen whether or not there is a severability clause in the contract. One possible paragraph that could be put in the credit agreement that may be of some help is the following: The undersigned agrees that in the event the assets of the business are sold, not in the ordinary course of business, within 90 days of the purchase from the company and the company is not paid in full prior to or at the date of sale, the undersigned shall be personally liable for all sums due plus all collection costs and attorney's fees incurred to collect. 

 

Essentially this is a personal guarantee that does not take effect unless there is a transfer of assets out of the ordinary course of business and the debtor does not pay the customer. 

 

William A. Rinehart

Rinehart, Scaffidi, & Mathews

Milwaukee, WI

 

 

  

A: No. If you have an asset sale in bulk it could be conceived as a possible "Fraudulent Transfer." Language in a credit ap does not always cover all future contingencies but a Personal Guarantee is better. Notwithstanding a provision that obligates the officers and directors to notify the credit grantor of any change in financial status would expose them to breach and damages. 

 

Joe Marino 

Marino & Meyers

Clifton NJ 

 

A: Language in the credit application that puts the burden on applicant to disclose any financial problems/inability to pay or the sale of assets within 30-45 days of any transfer. Thereafter, have language that purports to be a personal guarantee if the financial problems and/or sale of assets are not reported, in writing, to a specific fax number or by certified mail. In the event either of the above are not reported or timely reported, the officers/directors agree to be personally liable for the debts to the creditor.  

 

  Andrew Totz

Totz, Ellison, & Totz 

Houston TX 

  

A: When a corporation sells its asset's to another corporation, the purchasing corporation is generally not liable for the debts and other liabilities to the seller. Although Michigan case law on successor liability is not extensive, a number of exceptions to the general rule have been recognized. A purchasing corporation is liable for the debts and liabilities of the seller where (1) the two corporations consolidate or merge to form a new corporation without providing for the obligations of the selling corporation; (2) the purchasing corporation expressly agrees to pay the debts of the selling corporation; (3) the new corporation merely continues the selling corporation; (4) the sale is fraudulent and the property of the selling corporation can be followed to the purchasing corporation. 

 
The Supreme court addressed successor liability in Craig v Oakwood Hospital, where the plaintiff argued that Henry Ford Health Systems was liable for malpractice allegedly committed by a medical corporation purchased by Henry Ford. The Supreme Court ruled that Henry Ford had no successor liability because of the absence of a de facto or de jure merger between Henry Ford and the other corporation and because Henry Ford was not the mere continuation of the prior medical corporation.

 

Note that some courts have held there is a fifth exception involving transactions where there is inadequate consideration for the sale or transfer. This exception is sometimes viewed as an element of one of the other exceptions.

 

Based on previous cases, the trial court based its finding of successor liability on the doctrine of equitable estoppel. The court of appeals concluded that the trial courts equitable estoppel theory actually fit within the second exception cited above because the successor corporations conduct gave rise to an implied acceptance of liability and the creditor reasonably relied on this implied acceptance to its detriment.

 

The Michigan Supreme court has held that where the successor expressly assumes all liabilities of the predecessor, under the second exception cited above, the predecessors jurisdictional contacts can be imputed to the successor for purposes of determining personal jurisdiction, provided that the exercise of personal jurisdiction is reasonable. The Shannon court listed the factors to be considered in determining whether there is a merger (which would impose liability on the successor corporation) regardless of what the parties call the transaction. A merger has occurred if (1) There is a continuation of the enterprise of the seller corporation, so that there is a continuity of management, personnel, physical location, assets, and general business operations. (2) There is a continuity of shareholders which results from the purchasing corporation paying for the acquired assets with shares of its own stock, this stock ultimately coming to be held by the shareholders of the seller corporation so that they become a constituent part of the purchasing corporation. (3) The seller corporation ceases its ordinary business operations, liquidates, and dissolves as soon as legally and practically possible. (4) The purchasing corporation assumes those liabilities and obligations of the seller ordinarily necessary for the uninterrupted continuation of normal business operations of the seller corporation.

 

Where the sale is of assets for cash, the courts look at the same factors, with the exception of item (2). Under the mere continuation exception, the courts look for evidence of a continuity of ownership, officers, and directors and similarities in staff, products marketed, customers, and the use of trade names between the new and old corporations. When the successor business retains some of the predecessor's employees but substantially reduces the number of people employed and changes the business focus, the new corporation is not a mere continuance of the old.

 

Language for credit apps should include the payment in full exception, guaranty, and right to pull credit reports in addition to the usual stuff, and could include a statement that customer agrees the new entity will be liable for any credit purchases if a mere successor or continuance of the old business reflected in this application. 

 

Steven A. Harms

Muller, Muller, Richmond, Harms, & Myers'

Birmingham MI

 

 

 

 

 

CREDIT GEEK SPEAKS

 

Credit like trust is earned

When given too cheaply the consequences can be costly.

 

Ask questions that no one would object to answer and then verify the answer to determine your customer's credibility, for example, 'When did you mail that check and what is the check number?

 

When the check is received the postmark and the check number should reconcile.

 

If the payment is not received ask for the details again and if the details don't match the customer lied!

 

The risk of suffering financial losses can be reduced when problems with your accounts are recognized sooner rather than later. 

 

 

 

In This Issue
CREDIT TIPS
DEWEY CHI'TING
ASK AN ATTORNEY
CREDIT GEEK SPEAKS
KREDIT KARMA
Quick Links  
PRINTING INDUSTRY CREDIT BUREAU CONTACT INFO: 

ANDREA SCHLACK
PRESIDENT
andreas@picb-us.com

 

DENNIS ADAMS
VICE-PRESIDENT
COLLECTIONS MANAGER
dennisa@picb-us.com

 

RICK CRUZ
CHIEF RESEARCH 
OFFICER
rickc@picb-us.com

JANET DIENES
GENERAL MANAGER
janetd@picb-us.com

 

ROBBIE BURCH

DIRECTOR OF SALES AND SERVICE

robbieb@picb-us.com

 

 

KREDITKARMA

DON'T GET BITTEN TWICE

 ******************

UNCOLLECTED

JUDGMENTS MARCH 2012

FOR A COMPLETE LIST

GO TO 

www.picb-us.com

      

 

KENMAR STATIONARY

 

 NY

  

TUMBLEWEED POTTERY

 

 

NC

  

PREMIER PRINTING

 

 IL

  

PINATA GRAPHICS

 

 IL

  

KARRY MATHESON INDIVIDUALLY AND D/B/A MATHESON CUSTOM PRINT

UT

  

LESTER BAFIA INDIVIDUALLY AND D MEGA FORCE PRODUCTIONS, INC

IL

  

RON CARTER INDIVIDUALLY AND D/B/A SOUTH STREET JOURNAL

IL

  

LISA DOTE INDIVIDUALLY AND D/B/A G GRAPHICS AND D/B/A PRINT THIS

IL

  

EL SOL NEWSPAPER

 

IL

 

NOVA CINETECH

 

 IL

 

BERG PRINTING ENTERPRISES, LLC D/B/A MASTERPRINT

WI

      

             

FRANK FINOCCHIARO INDIVIDUALLY & T/A LBT SYSTEMS & LBT SYSTEMS INC.

NJ

 

SEARCH 1 AMERICA F/K/A LUX PREMIER, LUX PUBLICATIONS LLC D/B/A LUX PREMIER

IN

 

SHE SKIN LLC

 

IL

 

HOME VIDEO STUDIO INC

IN

 

PRINT PARTNERS LTD

IL

 

DALE JASLOVE IND  d/b/a HEALTHCARE CONSTRUCTION

MI

 

HI INDIA, INC.,

IL

 

SANDESH PUBLICATIONS, INC. & HEMANT BRAHMBHATT AS GUARANTOR

IL

 

DESI TALK, INC. & HEMANT BRAHMBHATT INDIVIUALLY

IL

 

SANDESH 

PUBLICATIONS, INC.

IL

 

SY LENG A/K/A LENG SY D/B/A ECO SYSTEMS AQUARIUM

CA

 

VILLAGE FARM STAND, INC, D/B/A VILLAGE MARKET OF CALUMENT CITY

IL

 

ZOOM GRAPHICS, INC.

IL

 

THREE ANGELS PRINTING SERVICES, INC

IL

 

MY MOTHERS INVENTION

TX

 

CMY&K ADVERTISING

NY

 

CMY&K PUBLISHING

NY


 

RUMORS ON GRAND INC, A DISSOLVED CORP & KATHLEEN M VOGT AKA KATHLEEN TEWS

IL

 

VINCENT ALEXANDRIA, PARTNER OF WE MUST XL

MO

 

NEW YORK FURNITURE GALLERY, INC.

NY

 

NATALIE HAREWOOD, GUARANTOR FABULUSH D/B/A JOLIE MAGAZINE

NY

 

ASSOCIATED AIR PRODUCTS

FL

 

ANDREW EPERI, INDIVIDUALLY AND D/B/A AFRIQUE

IL

 
 
 
 

 

 

 

 

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THIS MONTHS QUESTION CAME FROM BOB SCHMIDT PRESIDENT OF PRESS SENSE 
 PRESS SENSE
www.presssense.com
630-257-3500
 
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