Crisis Management in Start-Ups

Surviving a crisis, more often than not, provides a chance for a total turn-around and a new direction for your business. But managing a crisis is not an easy task as it entails a lot of things to be done on multiple fronts for sure-fire results, albeit in a very short period.

"Companies, whether big or small, are judged more by what they do wrong than what they do right," claims Cindy Railing, a PR consultant from California. Your business is going to suffer if the situation at hand is not properly handled. Crisis management means immediately blocking the holes in the dam which if left unattended, even though for a short time, would cause major damage.

Common Causes Of Crises In Start-Ups

Awareness of causes which could lead to unmanageable crises beforehand could help avoid the onset of one. But missing the signals will land you in troubles every time. The common causes for crises in start-ups are listed here.

1. Lack Of Planning And Failure To Follow One: Although small businesses are supported by the SBA and other agencies, many lack a proper contingency plan. Broadly speaking, many contingency plans do not make provisions for impending disaster. What is worse, anticipated risk profiles are not in place from the beginning.

2. Lack Of Financial Discipline: Most start-up small business owners use their business and personal bank accounts interchangeably. Procrastinating on the part of receivables and payables increases your interest burden, which pushes your business towards a crisis.

3. Unforeseen Problems: Sudden cancellation of order/s or decline in product demand for unforeseen reasons (also a failure to plan for this).

4. Obsolescence And Irrelevance: Your product loses relevance because of obsolescence of technology or due to the arrival of a replacement. This includes loss of relevance due to market erosion, as in the case of outsourcing to third world countries.

5. Acts Of God And Changes In Laws: Hurricanes, earthquakes, fires, floods and war can wreak havoc on your business, as can changes in laws which don't favor your current line of business.

Tiding over the Crisis

Let's take a couple of representative cases of crises to examine how the businesses can survive through them.

Crisis due to fire hazard:
1. Make sure there is no loss of life
2. Report the fire and any associated losses to your creditors, clients, insurance company and banks
3. Get losses estimated; if necessary, get help from professionals
4. Evaluate the possibility of early commencement of operations and if possible, begin operations even if on a small scale or in a makeshift/temporary office.
5. Try to reschedule credit repayment and delivery of goods or services by explaining your situation to your creditors and clients. It is very important to preserve your credit rating if at all possible.
6. Take the advice of your attorney. Explore any government grant possibilities.
7. Plan ahead and stick to the plan in every respect.

All Other Crises:

Finance side:
1. Negotiate with creditors, banks and clients professionally to reschedule repayment so that your business credit rating is not harmed
2. Try to refinance your loans, try second mortgaging or using a collateral loan. Go for a long repayment term if the loss was huge.
3. Try unsecured loans (they have high interest rates, of course) as the likelihood of collateral requirements is less as you would have attached them to the first loan.

Production side:
4. Ask your staff to stand by you during the time of crisis. Motivate and take them into confidence.
5. Analyze what went wrong. You don't want to face bankruptcy or risk your good credit. Be brave and don't waver if you have to make the difficult decision to reduce staff
6. Make short term and long term plans and abide by them
7. Try and regain your creditors' confidence and don't change suppliers at this stage.

Can Government Solve the Foreclosure Problem?

Foreclosures are up nationwide, and will continue to rise as prices continue to go flat in many markets. For some, the problem is painful. Ask New Century Financial Corporation, the nation's second largest subprime lender, who recently filed for bankruptcy. Ask the guy down the block from you whose house is in foreclosure.

Foreclosures are up nationwide, and will continue to rise as prices continue to go flat in many markets. For some, the problem is painful. Ask New Century Financial Corporation, the nation's second largest subprime lender, who recently filed for bankruptcy. Ask the guy down the block from you whose house is in foreclosure.

Some pundits think the rising foreclosures will bankrupt our economy, causing pain for people who lose their business or job as a ripple effect of all these foreclosures. Others think that the rise in foreclosures is a healthy adjustment to the end of a long real estate boom, and is nature's way of taking care of a free-market economic cycle.
Who's right? Time will tell, but it's alarming to see politicians trying to fix this problem. Here are some of their solutions.

Give People Money
Tax the rich, give to the poor. The federal government now wants to fund programs to help people stay in their homes.
Second foreclosure-prevention bill introduced in Senate
A new bill in the Senate proposes giving money to people who can't pay their loans. We taxpayers are confused. If these people are in trouble because they never should have been given such a loan, why should taxpayer money be used to keep them in their homes that they could not otherwise afford?
Maybe someone in Washington has the answer to that question?

Regulate Foreclosure Investors
I have written extensively about the assault on foreclosure investors that have been initiated by consumer advocate groups, resulting in a tsunami of new 'Foreclosure Protection' laws across the country.

A Review of the NCLC's "Dreams Foreclosed" Report
While protecting innocent homeowners from unethical investors is a good idea, new legislation is not always the answer. Enforcement of existing consumer protection laws and prosecution under existing criminal laws is certainly a better option than creating new laws that limit the options of a seller in foreclosure. The best solution to a foreclosure epidemic is a free market that allows investors to gobble up inventory. By hamstringing investors with complicated, punitive regulations, it will only discourage transactions and result in more properties in lender inventory. More lender inventory forces them to sell at lower prices, which hurts the entire real estate market.

Stop the Foreclosure Process
The Government of the State of Massachusetts just handed the State Banking Division the authority to put up to a two month delay on any lender foreclosure. All a homeowner has to do is file a complaint with that office.
State Orders Foreclosure Delays
It is not year clear on how many lenders this will affect, but certainly this move is troubling. If the government's action is based on a consumer complaint, what kind of complaint deserves the kind of government involvement that stops a lender from collecting on its debt?
Certainly, any homeowner whose legal rights have been violated under state or federal law can stop or delay a foreclosure with a court order.

Opponents, of course, will argue that since these people in foreclosure can't afford lawyers, they won't have the means to seek this remedy. Such is life, that people who are in debt can't afford lawyers to protect their legal rights. Do people in $1,000,000 homes deserve the same protection as people in $100,000 homes? Do lenders and their shareholders have the right to foreclose and get their collateral back?
And, think about the next logical step... will the government stop allowing landlords to evict if the problem gets bad enough?

Stop the Lenders from Lending
Nobody can seriously deny that lenders got sloppy in how they lent mortgage money over the last 10 years. As a result, many people got into loans they couldn't pay back, and we now see the consequences.

Conversely, with the exception of gross overreaching by mortgage brokers, it's hard to deny that most people didn't understand the risk involved in borrowing money they couldn't pay back. If you buy a house with no money down and a negative amortizing loan, you are gambling that you will make more money in the future and/or the price of your home will increase. If you are wrong, you lose your home. That's the gamble. It's like Vegas, except for one thing - the house doesn't win when the customer loses. Everybody loses, except the attorneys who get paid to foreclose.

Should the government stop lenders from offering 'risky' loans? The answer, I believe, is emphatically 'NO'. If lenders go too far, they suffer financially. Thus, the market will take care of itself, in that lenders who lose profits will tighten up loan regulations, and Wall Street will downgrade or reject portfolios of risky loans.

Before you get too excited by this last paragraph, I do believe that some regulation is appropriate to protect the consumers and shareholders from getting duped in the process. Additional disclosures to both homeowners and Wall Street investors are appropriate considering the large number of defaulting subprime loans. However, if people want to borrow money under risky terms and lenders want to lend under a high risk of loss, why should the government stop them? Pawn shops, check-cashing stores and used car lots all operate on a high-level of risk.

Step Up Enforcement of Existing Laws
Instead of stopping the business, I believe the government should throw money at enforcement. Prosecute the bad people and leave the options open for people who want to do business under their own terms. There are enough existing laws that give the state and federal prosecutors plenty of room to go after bad operators, and many of them already have.

The government can put bandaids on it, but only the market can solve it the foreclosure problem. When demand exceeds supply in a given market, prices will go back up, and people will have enough equity to sell their homes. Somehow, I don't imagine people will learn their lesson and, thus will continue the same cycle in the future. But, most Americans believe it is not the government's job to stop people from willingly doing stupid things.
When it comes to your financial decisions, be responsible, read the fine print, and remember... "buyer beware".

Click Here for more info for Foreclosure Problem

Written exclusively for Legalwiz.com by Attorney William Bronchick, Certified Registered Nationally-known attorney, Author, Entrepreneur and Speaker.

Going Bankrupt in the World

It all starts by defaulting on an obligation: Money owed to creditors or to suppliers is not paid on time, interest payments due on bank loans or on corporate bonds issued to the public are withheld. It may be a temporary problem - or a permanent one.

As time goes by, the creditors gear up and litigate in a court of law or in a court of arbitration. This is a technical or equity insolvency status.

But this is not the only way that a company can be rendered insolvent. It could also run liabilities which will outweigh its assets. This is bankruptcy insolvency. True, there is a debate raging as to what is the best method to appraise the assets and the liabilities. Should these appraisals be based on market prices - or on book value?

There is not one decisive answer. In most cases, there is strong reliance on the figures in the balance sheet.

If the negotiations with the creditors of the company (as to how to settle the dispute arising from the company’s default) fails, the company itself can file (=ask the court) for bankruptcy in a "voluntary bankruptcy filing".

Enter the court. It is only one player (albeit, the most important one) in this unfolding, complex drama. The court does not participate directly in the script. To say its lines - court officials are appointed. They work hand in hand with the representatives of the creditors (mostly lawyers) and with the management and the owners of the defunct company.

They face a tough decision: should they liquidate the company? In other words, should they terminate its business life by (among other things) selling its assets?

The proceeds of the sale of the assets is divided (as "bankruptcy dividend") among the creditors. It makes sense to choose this route only if the (money) value generated by liquidation exceeds the (money) the company as a going concern, as a living, functioning, entity.

The company can, thus, go into "straight bankruptcy". The secured creditors will receive the value of the property which was used to secure their debt (the "collateral", or the "mortgage, lien"). Sometimes, they will receive the property itself - if it not easy to liquidate (=sell) it.

Once the assets of the company are sold, the first to be fully paid off will be the secured creditors. Only then will the priority creditors be paid (wholly or partially).

The priority creditors include administrative debts, unpaid wages (up to a given limit per worker), uninsured pension claims, taxes, rents, etc.

And only if there is any money left after all these payments, it will be proportionally doled out to the unsecured creditors.

The USA had many versions of its bankruptcy laws. There was the 1938 Bankruptcy Act, which was followed by amended versions in 1978, 1984 and, lately, in 1994.

Each state has modified the Federal Law to fit its special, local conditions.

Still, a few things - the spirit of the Law and its philosophy are common to all the versions. Arguably, the most famous procedure is named after the chapter in the law in which it is described, Chapter 11. Following is a small discussion of chapter 11 intended to demonstrate this spirit and this philosophy.

This chapter allows for a mechanism called "reorganization". It must be approved by two thirds of all classes of creditors and then, again, it could be voluntary (initiated by the company) or involuntary (initiated by one to three of its creditors).

The American legislator set the following goals, in writing the bankruptcy laws:

• To provide a fair and equitable treatment to the holders of various classes of securities of the firm (shares of different kinds and bonds of different types)
• To eliminate burdensome debt obligations, which obstruct the proper functioning of the firm and hinder its chances to recover and ever repay its debts to its creditors.
• To make sure that new claims received by the creditors (instead of the old, discredited, ones) equal, at least, to what they would have received in liquidation.

Examples of such new claims: owners of debentures of the firm can receive, instead, new, long term bonds (known as reorganization bonds, whose interest is payable only from profits).

Owners of subordinated debentures will, probably, become stockholders and stockholders in the insolvent firm will receive no new claims.

The chapter dealing with reorganization (the famous "Chapter 11") allows for "Arrangements" to be made between debtor and creditors: an extension or reduction of the debts.

If the company is traded in a stock exchange, the Securities and Exchange Commission (SEC) of the USA advises the court as to the best procedure to adopt in case of reorganization.

What chapter 11 teaches us is that:

The American Law leans in favour of maintaining the company as a going concern. A whole is larger than the sum of its parts - and a living business is worth more than the sum of its assets, sold separately.

A more in-depth study of the bankruptcy laws shows that they allow for three ways to tackle a state of malignant insolvency which threatens the well being and the continued functioning of the firm:

Chapter 7 (1978 Act) - liquidation

A District court appoints an "interim trustee" with broad powers. Such a trustee can also be appointed at the request of the creditors and by them.

The Interim Trustee is empowered to do the following:

• liquidate property and make distribution of liquidating dividends to creditors
• make management changes
• arrange unsecured financing for the firm
• operate the debtor business to prevent further losses

By filing a bond, the debtor (really, the owners of the debtor) is able to regain possession of the business from the trustee.

Chapter 11 - reorganization

Unless the court rules otherwise, the debtor remains in possession and in control of the business and the debtor and the creditors allowed to work together flexibly. They are encouraged to reach a settlement by compromise and agreement rather than by court adjudication.

Maybe the biggest legal revolution embedded in chapter 11 is the relaxation of the ages old ABSOLUTE PRIORITY rule, that says that the claims of creditors have categorical precedence over ownership claims. From now on, the interests of the creditors have to be balanced with the interests of the owners and even with the larger good of the community and society at large.

And so, chapter 11 allows the debtor and creditors to be in direct touch, to negotiate payment schedules, the restructuring of old debts, even the granting of new loans by the same disaffected creditors to the same irresponsible debtor.

Chapter 10

Is sort of a legal hybrid, the offspring of chapters 7 and 11:

It allows for reorganization under court appointed independent manager (trustee) who is responsible mainly for the filing of reorganization plans with the court - and for verifying strict adherence to them by both debtor and creditors.

Despite its clarity and business orientation, many countries found it difficult to adopt to the pragmatic, no sentiments approach which led to the virtual elimination of the absolute priority rule.

In England, for instance, the court appoints an official "receiver" to manage the business and to realize the debtor’s assets on behalf of the creditors (and also of the owners). His main task is to maximize the proceeds of the liquidation and he continues to function until a court settlement is decreed (or a creditor settlement is reached, prior to adjudication). When this happens, the receivership ends and the receiver loses his status.

The receiver takes possession (but not title) of the assets and the affairs of a business in receivership. He collects rents and other income on behalf of the firm.

So, British Law is much more in favour of the creditors. It recognizes the supremacy of their claims over the property claims of the owners. Honouring obligations - in the eyes of the British legislator and their courts - is the cornerstone of efficient, thriving markets. The courts are entrusted with the protection of this moral pillar of the economy.

Economies in transition were in transition not only economically - but also legally. Thus, each one adopted its own version of the bankruptcy laws.

In Hungary - Bankruptcy is automatically triggered. It is not allowed to swap debt for equity. Moreover, the law provides for a very short time to reach agreement with creditors about reorganization of the debtor. These features led to 4000 bankruptcies in the wake of the new law - a number which mushroomed to 30,000 by 5/97.

In the Czech Republic- the insolvency law comprises special cases (over indebtedness, for instance …). It delineates two rescue programs:

• A Debt to Equity Swap (an alternative to bankruptcy) supervised by the Ministry of Privatization.
• The Consolidation Bank (founded by the State) can buy a firm’s obligations if it went bankrupt at 60% of par.

But the law itself is toothless and lackadaisically applied by the incestuous web of institutions in the country. Between 3/93 - 9/93 there were 1000 filings for insolvency, which resulted in only 30 commenced bankruptcy procedures. There hasn’t been a single major bankruptcy in the Czech Republic since then - and not for lack of candidates.

Poland is a special case, always pitting horses against tanks, always losing the war, as a result. The pre-war (1934) law declares bankruptcy when confronted with a state of lasting illiquidity and excessive indebtedness. Each creditor can apply to declare a company bankrupt. An insolvent company is obliged to file a maximum of 2 weeks following cessation of debt payment. There is, indeed, a separate liquidation law which Allows for voluntary procedures.

Bad debts are transferred to base portfolios and have one of three fates:

• Reorganization, debt-consolidation (a reduction of the debts, new terms, debt for equity swaps) and a program of rehabilitation.
• Sale of the corporate liabilities in auctions
• Classic bankruptcy (happens in 23% of the cases of insolvency).

No one is certain what is the best model. The reason is that someone has yet to come with answers to the questions: are the rights of the creditors superior to the rights of the owners? Is it better to rehabilitate than to liquidate?

Until such time as these questions are answered and as long as the microeconomic debt crisis deepens -we will witness a flowering of versions of bankruptcy laws all over the world.

The Lender Will Sue for Deficiency Judgement After Foreclosure

Foreclosures are on the rise, and so are judgments from lenders to people that have gone through a foreclosure. While there are several reasons to try to avoid a foreclosure such as your credit, future buying power one of the main concerns is if the lender can sue you for a deficiency judgment. A lender, in most cases, has the right to sue a homeowner whom has lost their home to a foreclosure, however in most cases there is little danger for the former homeowner to be sued in the event of a foreclosure.

Understanding how the foreclosure process works will also help you understand how a deficiency is created. The liens that are affecting the property are paid off by way of a sheriff's sale, or foreclosure action. The proceeds that are generated during the sale are used to pay off lien holders that have interest in the property. In many cases, the first mortgage holder ultimately purchases the property, and buys the house back. By making the minimum bid on behalf of them, the first mortgage holder and the most vested, wins the auction. However, when this happens they do not pay the loan off in full, this presents an issue of a remaining outstanding balance on the loan. If the proceeds do not cover the entire loan amount and therefore you have a difference between what is owed and the actual sales price this does not mean that you are responsible for the difference.

First, in order to responsible for the difference, the foreclosure laws in the state where the sale was a held have to allow the lenders to sue the previous homeowner for the deficiency. Not all state permit the lenders to do this, you will need to check your local laws for each particular case. If in the event that the state does not permit this action from the lender, then you are perfectly safe from being sued, you have nothing to worry about, the lender will not be able to take other assets such as cars, or wages from you, and they simply have to take the loss.

In the case where the law does permit the lender to sue, it is rare that they will take legal action to do this. Think about it, people that have lost their homes to foreclosure are usually in a financial position that enabled them to make the payments and lose their home in the fast place. Therefore, most lenders have the same thoughts; they are worried about how they would ever collect the money, even if there were a judgment against the previous homeowner. IN just about all case, they do not have the money to pay it back anyway so a judgment is worthless. Victims of foreclosure generally file a bankruptcy shortly after, because they are having financial difficulties and a bankruptcy is a way to help clean the slate. The fact of the mater is, lenders are not likely to pursue you personally, as in most cases it is simply a waste of time and money, and the will not recapture there loss anyway.

Therefore, in conclusion, you almost never have to worry about a lender suing you for a deficiency from a foreclosure, even if the law allows the lender too. Lenders can try to get the outstanding balance, but the additional costs to pursue it and the unlikely chance they will recoup the loss makes it highly unlikely that they will try to make you pay for the deficiency after a foreclosure. Most lenders will accept the loss, and leave the previous alone so that all parties involved can move forward.

Manage Your Bank Account With Ease And Convenience

Of late, online banking has increasingly gained popularity. Countless consumers have largely benefited from this real possibility to conduct all their banking transactions online, without having to stand in a queue at the bank. Even speaking to someone miles away has now become fairly easy and lightning fast.

You can now run your day-to-day finances, and manage your bank account with ease and convenience, thanks to online banking. This method of banking gives you total control of your transactions. Convenience, ease, speed, and increased control are the benefits of online banking. This has resulted in more and more people now deciding to conduct their banking transactions online, rather than at a branch. Specifically speaking by bankruptcyinformations.com, the main reasons why people prefer online banking are the following:

i) Convenience: Online banking is so convenient that you can conduct your transactions from the comfort and privacy of your own home. For this kind of banking, you don’t have to worry spending time queuing up at your local branch details by bankruptcyinformations. Particularly easy for those who work full time, online banking is a blessing - your banking commitments easily fit into your busy day.

ii) No time constraints: Regular banking is ‘time-restricted’. The timings of the functioning of the banks determine your contact with the bank in order to conduct transactions. For people with busy lifestyles and full time jobs, this can be quite frustrating. However, online banking gives you the benefit of conducting transactions around the clock, which means that you can effectively manage your account at any time of the day, and even at night.

iii) Control: By going online, you are able to conduct almost any banking transaction that can be performed by phone or visit to Bankruptcyinformations.com website for more details. The only exception is that you cannot deposit or withdraw cash online. Other than that, it is from the privacy of your own home that you can effectively keep your finances under your watchful eye.

iv) Greater security: To ensure the safety and security of customers, banks now use very secure software, making online banking safer than ever before. However, you need to exercise caution too - never link to your bank account from an email link, as this could be a false link. Also, avoid saving your banking passwords and security details on a shared computer, as that could give easy access to others.

v) ‘Any time’ access: You can access your account 24 hours a day, with online banking. This means that you can, whenever you desire, conduct transactions such as make bill payments, check your balance and statements, set up or cancel direct debits and standing orders, etc.

With online banking being so easy, it’s good-bye to the problems when it was only from 9.30am till 3.30pm that you could only gain access to you bank.

Considerations Before Evicting a Tenant

There comes a time when every landlord finds himself / herself in a difficult position of having his rental property occupied by a tenant who is not paying rent, or is making a nuisance of himself and causing problems for other tenants, or is causing immense damage to the rental unit, or his / her conduct makes it impossible to continue with a landlord / tenant relationship. Though, state laws governing eviction vary significantly, the following are a few tips to help landlords finding themselves in the unpleasantly messy situation of evicting a tenant.

As the owner of a significant number of residential units, it will be to your benefit to engage a lawyer to advice you on eviction issues, as well as, for handling legal actions. An established relationship with a lawyer is useful as he will carry out various legal tasks charging a flat fee only, whereas, hiring a lawyer on a case to case basis can result in much higher legal fees.

Evicting a Tenant for Non-payment of Rent

The eviction process involves serving a formal notice, informing the tenant the rent is overdue, and he / she faces possible eviction, if they do not pay on time. If a landlord is not knowledgeable about the legal terms of a notice, there are pre-printed forms which fulfil all legal requirements for a proper notice. In case, the rent arrearage has not been paid after the legally defined period i.e. usually, about a week, a landlord can begin eviction proceedings on the basis of non-payment of rent.

Bear in mind, if the tenant makes a partial payment during the eviction process, in most jurisdictions the acceptance of any payment of rent, even a small amount, can result in dismissal of the eviction lawsuit for non-payment.

Lease Violation

When a tenant does not comply with the terms of the lease he / she signed, a landlord must provide a written warning, referring to the lease clause being violated, and allow him / her time to remedy the problem. This is so the tenant cannot later claim ignorance that he / she did not know, they were in violation of the lease, or they received no notice of the violation. The judge will be in favour of the landlord if it is established the tenant ignored a prior notice and the deadline.

Health and Safety Issues

Certain tenants may pose a health or safety problem for other tenants or for the property, in general. In many jurisdictions, it is permissible for the landlord to evict tenants whose conduct is hazardous to the health of other tenants or can damage the property. First of all, a landlord should serve the tenant with a fixed period of time notice (a week) to remedy or repair the problem, or else move out. If no corrective action is taken, a landlord can proceed with the eviction proceedings.

Even if a tenant resolves the issue, but you still want him / her out, serve them a notice on eviction on health or safety grounds, as well as, a notice stating their tenancy is being terminated.

Bankruptcy

In the event a tenant files for bankruptcy, an automatic stay prevents a landlord from continuing with the eviction proceedings until the bankruptcy is resolved, or the bankruptcy court permits eviction proceedings to continue by lifting the stay. This may require a motion to be brought before the bankruptcy court, asking for the stay to be lifted.

Tenant Counter-Claims

When a landlord begins eviction proceedings, some tenant may bring counter-claims against the landlord, such as, inadequate maintenance of property or violation of the lease, and may ask the court to stop eviction proceedings or else for a substantial rent decrease in arrearage owed.

This is why it is good practice to keep written records of any complaints received from tenants about the rental unit or common areas, and steps taken by the landlord to resolve them, as also with warnings of tenant misconduct. Remember a landlord's can preclude a tenant's claim that despite repeatedly complaining about a problem with their unit, the landlord failed to respond with positive action, as long as the landlord has kept records of all interaction with the tenant and of action taken.

Trials

Before going to court, a landlord must ensure all his documentation in relation to the case is in order and there is nothing missing. Unless a landlord is conversant with the rental laws of his state and has had enough experience in eviction cases, it is also advisable to engage a lawyer, well versed in property law of the state a landlord's rental property resides in.

The above should provide you with enough knowledge of what is required for a successful eviction.

Non Profit Credit Counselors

Here's a dirty secret, today's "non profit credit counselors" are often just front organizations paid lucrative commissions by creditors to keep consumers from declaring bankruptcy!

In the "debt collection biz", creditors will sell your outstanding debt along with the debt of hundreds of others to a collection agency for cash up front.

The collection agencies will work this debt until they've made all the money they can.

Then they'll keep selling this block of business to whomever will buy it.

This explains why you can stop being pestered by a bill collector for a while then a completely different bill collecting psychopath will start calling your house or sending you threatening letters out of the blue when you thought they were finished.

The Fair Credit Reporting Laws have put some damper on their crude activities, as have the bankruptcy laws.

But yesterday's bill collectors have gotten wise.

If people go bankrupt, the creditors get virtually nothing.

So why not figure out a way to get people to voluntarily pay much more than they would otherwise by going through bankruptcy?

So today, yesterday's bill collectors often masquerade as "non profit credit counselors".

Business must be good for these "non profits" because they're out on the internet paying $10 per lead for potential debt consolidation clients!

Their "come on" to the consumer is "Don't declare bankruptcy! It will RUIN your credit and cost you money! Use our FREE service instead."

There's no such thing as a free lunch of course.

What unsuspecting consumers DON'T KNOW is that using these services may ruin their credit anyway.

And these "Free Services" are being paid handsome commissions on every dollar the collect from you!

Then they report exactly what they've done to the credit reporting firms and potential creditors in the future MAY consider you a potentially WORSE candidate than a formerly bankrupt person because if they extend you credit and you fall on hard times again, you stil have the option of going through bankruptcy!

Learn your rights.

It's possible for ordinary people with a computer and printer to use the law to "lick bill collectors with a stamp!"

Without giving up your privacy, without having a credit counseling firm "rat" on you, it's possible to achieve the same results that others have used expensive attorneys to achieve - when you know your rights!

Cleaning your credit report is something you can do.

Paying off debts for pennies on the dollar is something you can do.

Educate yourself at sites about free credit repair techniques like http://www.CreditRepairDude.com ... and beware today's Bill Collector Wolves in Non Profit Sheep's Clothing!

When Bankrupting Is Worthwhile

For many business owners bankruptcy seems scary but, sometimes, declaring bankruptcy is a worthwhile strategy. If you are considering the possibility of declaring bankrupting for your business, this article will review some key points you must know. Two of the most popular types of bankruptcy include Chapter 7 and Chapter 11.

Under a Chapter 7 bankruptcy, the judge gets rid of the business debts while under a Chapter 11 bankruptcy the owner must create a plan to repay debtors. While Chapter 11 bankruptcy allows the business to continue running, bankrupting under Chapter 7 forces the closing or selling of the business.

Although these laws may seem gloomy, occasionally they are the business owner's most practical choice. A Chapter 7 bankruptcy is worthwhile when the business has no chance of making a future profit. It also makes sense if the company has no assets and the debts are insurmountable. In these cases, undergoing a bankruptcy may be the best decision the business owner can make.

Although bankruptcy is an option, it also has some negative outcomes. A business owner should always consider the legal fees associated with filing bankruptcy. They are often high for both Chapter 7 and Chapter 11. Some companies find themselves filing for bankruptcy only to close their business anyway to pay the legal fees. Remember that lawyers do not work for free. Get an estimate before you decide to file.

Recovering From Bankrupting Your Small Business

Small businesses owners bankrupting their companies should know that recovering from a Chapter 11 filing is possible. The goal of Chapter 11 bankruptcy is to place the company on more stable financial ground. While the courts relieve the company's debts, they also help in reorganizing it. They hope is to make it more profitable in the future. While this outcome appeals to many small business owners, they must realize that bankruptcy puts them at the mercy of the United States Trustee. The Trustee now oversees all business transactions until the company emerges from bankruptcy. For many business owners this is troubling. They have lost the freedom associated with running their own business. Business owners who are not comfortable with this degree of oversight should not seek out a Chapter 11 bankruptcy to solve their financial problems.

Avoiding Bankrupting

There are many useful tips for avoiding the need for bankrupting but unfortunately even with the best of plans there is always the possibility that bankruptcy is necessary. In these cases, it is wise for the business owners to recognize the need for it early on. This helps them avoid compounding the company's financial problems. In general the methods owners use to prevent bankruptcy are associated with to good, general business practices.

Competition Laws (part 2)

The following business practices are prohibited:

• Agreements to fix prices (including export and import prices);
• Collusive tendering
• Market or customer allocation (division) arrangements;
• Allocation of sales or production by quota;
• Collective action to enforce arrangements, e.g., by concerted refusals to deal;
• Concerted refusal to sell to potential importers; and
• Collective denial of access to an arrangement, or association, where such access is crucial to competition and such denial might hamper it. In addition, businesses are forbidden to engage in the abuse of a dominant position in the market by limiting access to it or by otherwise restraining competition by:

  • Predatory behaviour towards competitors

  • Discriminatory pricing or terms or conditions in the supply or purchase of goods or services

  • Mergers, takeovers, joint ventures, or other acquisitions of control

  • Fixing prices for exported goods or resold imported goods

  • Import restrictions on legitimately-marked trademarked goods

  • Unjustifiably - whether partially or completely - refusing to deal on an enterprise's customary commercial terms, making the supply of goods or services dependent on restrictions on the distribution or manufacturer of other goods, imposing restrictions on the resale or exportation of the same or other goods, and purchase "tie-ins."

C. ANTI - COMPETITIVE STRATEGIES

Any Competition Law in Macedonia should, in my view, excplicitly include strict prohibitions of the following practices (further details can be found in Porter's book - "Competitive Strategy").

These practices characterize the Macedonian market. They influence the Macedonian economy by discouraging foreign investors, encouraging inefficiencies and mismanagement, sustaining artificially high prices, misallocating very scarce resources, increasing unemployment, fostering corrupt and criminal practices and, in general, preventing the growth that Macedonia could have attained.

Strategies' for Monopolization

Exclude competitors from distribution channels - this is common practice in many countries. Open threats are made by the manufacturers of popular products: "If you distribute my competitor's products - you cannot distribute mine. So, choose." Naturally, retail outlets, dealers and distributors will always prefer the popular product to the new. This practice not only blocks competition - but also innovation, trade and choice or variety.

Buy up competitors and potential competitors - There is nothing wrong with that. Under certain circumstances, this is even desirable. Think about the Banking System: it is always better to have fewer banks with bigger capital than many small banks with capital inadequacy (remember the TAT affair). So, consolidation is sometimes welcome, especially where scale represents viability and a higher degree of consumer protection. The line is thin and is composed of both quantitative and qualitative criteria. One way to measure the desirability of such mergers and acquisitions (M&A) is the level of market concentration following the M&A. Is a new monopoly created? Will the new entity be able to set prices unperturbed? stamp out its other competitors? If so, it is not desirable and should be prevented.

Every merger in the USA must be approved by the antitrust authorities. When multinationals merge, they must get the approval of all the competition authorities in all the territories in which they operate. The purchase of "Intuit" by "Microsoft" was prevented by the antitrust department (the "Trust-busters"). A host of airlines was conducting a drawn out battle with competition authorities in the EU, UK and the USA lately.

Use predatory [below-cost] pricing (also known as dumping) to eliminate competitors - This tactic is mostly used by manufacturers in developing or emerging economies and in Japan. It consists of "pricing the competition out of the markets". The predator sells his products at a price which is lower even than the costs of production. The result is that he swamps the market, driving out all other competitors. Once he is left alone - he raises his prices back to normal and, often, above normal. The dumper loses money in the dumping operation and compensates for these losses by charging inflated prices after having the competition eliminated.

Raise scale-economy barriers - Take unfair advantage of size and the resulting scale economies to force conditions upon the competition or upon the distribution channels. In many countries Big Industry lobbies for a legislation which will fit its purposes and exclude its (smaller) competitors.

Increase "market power (share) and hence profit potential"

Study the industry's "potential" structure and ways it can be made less competitive - Even thinking about sin or planning it should be prohibited. Many industries have "think tanks" and experts whose sole function is to show the firm the way to minimize competition and to increase its market shares. Admittedly, the line is very thin: when does a Marketing Plan become criminal?

Arrange for a "rise in entry barriers to block later entrants" and "inflict losses on the entrant" - This could be done by imposing bureaucratic obstacles (of licencing, permits and taxation), scale hindrances (no possibility to distribute small quantities), "old boy networks" which share political clout and research and development, using intellectual property right to block new entrants and other methods too numerous to recount. An effective law should block any action which prevents new entry to a market.

Buy up firms in other industries "as a base from which to change industry structures" there - This is a way of securing exclusive sources of supply of raw materials, services and complementing products. If a company owns its suppliers and they are single or almost single sources of supply - in effect it has monopolized the market. If a software company owns another software company with a product which can be incorporated in its own products - and the two have substantial market shares in their markets - then their dominant positions will reinforce each other's.

"Find ways to encourage particular competitors out of the industry" - If you can't intimidate your competitors you might wish to "make them an offer that they cannot refuse". One way is to buy them, to bribe out the key personnel, to offer tempting opportunities in other markets, to swap markets (I will give my market share in a market which I do not really care about and you will give me your market share in a market in which we are competitors). Other ways are to give the competitors assets, distribution channels and so on providing that they collude in a cartel.

"Send signals to encourage competition to exit" the industry - Such signals could be threats, promises, policy measures, attacks on the integrity and quality of the competitor, announcement that the company has set a certain market share as its goal (and will, therefore, not tolerate anyone trying to prevent it from attaining this market share) and any action which directly or indirectly intimidates or convinces competitors to leave the industry. Such an action need not be positive - it can be negative, need not be done by the company - can be done by its political proxies, need not be planned - could be accidental. The results are what matters.

Macedonia's Competition Law should outlaw the following, as well:

'Intimidate' Competitors

Raise "mobility" barriers to keep competitors in the least-profitable segments of the industry - This is a tactic which preserves the appearance of competition while subverting it. Certain, usually less profitable or too small to be of interest, or with dim growth prospects, or which are likely to be opened to fierce domestic and foreign competition are left to the competition. The more lucrative parts of the markets are zealously guarded by the company. Through legislation, policy measures, withholding of technology and know-how - the firm prevents its competitors from crossing the river into its protected turf.

Let little firms "develop" an industry and then come in and take it over - This is precisely what Netscape is saying that Microsoft is doing to it. Netscape developed the now lucrative Browser Application market. Microsoft was wrong in discarding the Internet as a fad. When it was found to be wrong - Microsoft reversed its position and came up with its own (then, technologically inferior) browser (the Internet Explorer). It offered it free (sound suspiciously like dumping) to buyers of its operating system, "Windows". Inevitably it captured more than 30% of the market, crowding out Netscape. It is the view of the antitrust authorities in the USA that Microsoft utilized its dominant position in one market (that of the Operating Systems) to annihilate a competitor in another (that of the browsers).

Engage in "promotional warfare" by "attacking shares of others" - This is when the gist of a marketing or advertising campaign is to capture the market share of the competition. Direct attack is then made on the competition just in order to abolish it. To sell more in order to maximize profits, is allowed and meritorious - to sell more in order to eliminate the competition is wrong and should be disallowed.

Use price retaliation to "discipline" competitors - Through dumping or even unreasonable and excessive discounting. This could be achieved not only through the price itself. An exceedingly long credit term offered to a distributor or to a buyer is a way of reducing the price. The same applies to sales, promotions, vouchers, gifts. They are all ways to reduce the effective price. The customer calculates the money value of these benefits and deducts them from the price.

Establish a "pattern" of severe retaliation against challengers to "communicate commitment" to resist efforts to win market share - Again, this retaliation can take a myriad of forms: malicious advertising, a media campaign, adverse legislation, blocking distribution channels, staging a hostile bid in the stock exchange just in order to disrupt the proper and orderly management of the competitor. Anything which derails the competitor whenever he makes a headway, gains a larger market share, launches a new product - can be construed as a "pattern of retaliation".

Maintain excess capacity to be used for "fighting" purposes to discipline ambitious rivals - Such excess capacity could belong to the offending firm or - through cartel or other arrangements - to a group of offending firms.

Publicize one's "commitment to resist entry" into the market

Publicize the fact that one has a "monitoring system" to detect any aggressive acts of competitors

Announce in advance "market share targets" to intimidate competitors into yielding share their market share

Proliferate Brand Names

Contract with customers to "meet or match all price cuts (offered by the competition)" thus denying rivals any hope of growth through price competition

Get a big enough market share to "corner" the "learning curve," thus denying rivals an opportunity to become efficient - Efficiency is gained by an increase in market share. Such an increase leads to new demands imposed by the market, to modernization, innovation, the introduction of new management techniques (example: Just In Time inventory management), joint ventures, training of personnel, technology transfers, development of proprietary intellectual property and so on. Deprived of a growing market share - the competitor will not feel pressurized to learn and to better itself. In due time, it will dwindle and die.

Acquire a wall of "defensive" patents to deny competitors access to the latest technology

"Harvest" market position in a no-growth industry by raising prices, lowering quality, and stopping all investment and advertising in it

Create or encourage capital scarcity - by colluding with sources of financing (e.g., regional, national, or investment banks), by absorbing any capital offered by the State, by the capital markets, through the banks, by spreading malicious news which serve to lower the credit-worthiness of the competition, by legislating special tax and financing loopholes and so on.

Introduce high advertising-intensity - This is very difficult to measure. There could be no objective criteria which will not go against the grain of the fundamental right to freedom of expression. However, truth in advertising should be strictly imposed. Practices such as dragging a competitor through the mud or derogatorily referring to its products or services in advertising campaigns should be banned and the ban should be enforced.

Proliferate "brand names" to make it too expensive for small firms to grow - By creating and maintaining a host of absolutely unnecessary brandnames, the competition's brandnames are crowded out. Again, this cannot be legislated against. A firm has the right to create and maintain as many brandnames as it wishes. The market will exact a price and thus punish such a company because, ultimately, its own brandname will suffer from the proliferation.

Get a "corner" (control, manipulate and regulate) on raw materials, government licenses, subsidies, and patents (and, of course, prevent the competition from having access to them).

Build up "political capital" with government bodies; overseas, get "protection" from "the host government".

'Vertical' Barriers

Practice a "preemptive strategy" by capturing all capacity expansion in the industry (simply buying it, leasing it or taking over the companies that own or develop it).

This serves to "deny competitors enough residual demand". Residual demand, as we previously explained, causes firms to be efficient. Once efficient, develop enough power to "credibly retaliate" and thereby "enforce an orderly expansion process" to prevent overcapacity

Create "switching" costs - Through legislation, bureaucracy, control of the media, cornering advertising space in the media, controlling infrastructure, owning intellectual property, owning, controlling or intimidating distribution channels and suppliers and so on.

Impose vertical "price squeezes" - By owning, controlling, colluding with, or intimidating suppliers and distributors, marketing channels and wholesale and retail outlets into not collaborating with the competition.

Practice vertical integration (buying suppliers and distributionb and marketing channels)

This has the following effects:

The firm gains a "tap (access) into technology" and marketing information in an adjacent industry. It defends itself against a supplier's too-high or even realistic prices

It defends itself against foreclosure, bankruptcy and restructuring or reorganization. Owning suppliers means that the supplies do not cease even when payment is not affected, for instance.

It "protects proprietary information from suppliers" - otherwise the firm might have to give outsiders access to its technology, processes, formulas and other intellectual property.

It raises entry and mobility barriers against competitors. This is why the State should legislate and act against any purchase, or other types of control of suppliers and marketing channels which service competitors and thus enhance competition.

It serves to "prove that a threat of full integration is credible" and thus intimidate competitors.

Finally, it gets "detailed cost information" in an adjacent industry (but doesn't integrate it into a "highly competitive industry")

"Capture distribution outlets" by vertical integration to "increase barriers";

'Consolidate' the Industry

Send "signals" to threaten, bluff, preempt, or collude with competitors

Use a "fighting brand" (a low-price brand used only for price-cutting)

Use "cross parry" (retaliate in another part of a competitor's market)

Harass competitors with antitrust suits and other litigious techniques

Use "brute force" ("massed resources" applied "with finesse") to attack competitors

or use "focal points" of pressure to collude with competitors on price

"Load up customers" at cut-rate prices to "deny new entrants a base" and force them to "withdraw" from market;

Practice "buyer selection," focusing on those that are the most "vulnerable" (easiest to overcharge) and discriminating against and for certain types of consumers

"Consolidate" the industry so as to "overcome industry fragmentation".

This arguments is highly successful with US federal courts in the last decade. There is an intuitive feeling that few is better and that a consolidated industry is bound to be more efficient, better able to compete and to survive and, ultimately, better positioned to lower prices, to conduct costly research and development and to increase quality. In the words of Porter: "(The) pay-off to consolidating a fragmented industry can be high because... small and weak competitors offer little threat of retaliation"

Time one's own capacity additions; never sell old capacity "to anyone who will use it in the same industry" and buy out "and retire competitors' capacity."

Competition Laws (part 1)

A. THE PHILOSOPHY OF COMPETITION

The aims of competition (anti-trust) laws are to ensure that consumers pay the lowest possible price (=the most efficient price) coupled with the highest quality of the goods and services which they consume. This, according to current economic theories, can be achieved only through effective competition. Competition not only reduces particular prices of specific goods and services - it also tends to have a deflationary effect by reducing the general price level. It pits consumers against producers, producers against other producers (in the battle to win the heart of consumers) and even consumers against consumers (for example in the healthcare sector in the USA). This everlasting conflict does the miracle of increasing quality with lower prices. Think about the vast improvement on both scores in electrical appliances. The VCR and PC of yesteryear cost thrice as much and provided one third the functions at one tenth the speed.

Competition has innumerable advantages:

• It encourages manufacturers and service providers to be more efficient, to better respond to the needs of their customers, to innovate, to initiate, to venture. In professional words: it optimizes the allocation of resources at the firm level and, as a result, throughout the national economy. More simply: producers do not waste resources (capital), consumers and businesses pay less for the same goods and services and, as a result, consumption grows to the benefit of all involved.
• The other beneficial effect seems, at first sight, to be an adverse one: competition weeds out the failures, the incompetents, the inefficient, the fat and slow to respond. Competitors pressure one another to be more efficient, leaner and meaner. This is the very essence of capitalism. It is wrong to say that only the consumer benefits. If a firm improves itself, re-engineers its production processes, introduces new management techniques, modernizes - in order to fight the competition, it stands to reason that it will reap the rewards. Competition benefits the economy, as a whole, the consumers and other producers by a process of natural economic selection where only the fittest survive. Those who are not fit to survive die out and cease to waste the rare resources of humanity.

Thus, paradoxically, the poorer the country, the less resources it has - the more it is in need of competition. Only competition can secure the proper and most efficient use of its scarce resources, a maximization of its output and the maximal welfare of its citizens (consumers). Moreover, we tend to forget that the biggest consumers are businesses (firms). If the local phone company is inefficient (because no one competes with it, being a monopoly) - firms will suffer the most: higher charges, bad connections, lost time, effort, money and business. If the banks are dysfunctional (because there is no foreign competition), they will not properly service their clients and firms will collapse because of lack of liquidity. It is the business sector in poor countries which should head the crusade to open the country to competition.

Unfortunately, the first discernible results of the introduction of free marketry are unemployment and business closures. People and firms lack the vision, the knowledge and the wherewithal needed to support competition. They fiercely oppose it and governments throughout the world bow to protectionist measures. To no avail. Closing a country to competition will only exacerbate the very conditions which necessitate its opening up. At the end of such a wrong path awaits economic disaster and the forced entry of competitors. A country which closes itself to the world - will be forced to sell itself cheaply as its economy will become more and more inefficient, less and less non-competitive.

The Competition Laws aim to establish fairness of commercial conduct among entrepreneurs and competitors which are the sources of said competition and innovation.

Experience - later buttressed by research - helped to establish the following four principles:

• There should be no barriers to the entry of new market players (barring criminal and moral barriers to certain types of activities and to certain goods and services offered)
• A larger scale of operation does introduce economies of scale (and thus lowers prices). This, however, is not infinitely true. There is a Minimum Efficient Scale - MES - beyond which prices will begin to rise due to monopolization of the markets. This MES was empirically fixed at 10% of the market in any one good or service. In other words: companies should be encouraged to capture up to 10% of their market (=to lower prices) and discouraged to cross this barrier, lest prices tend to rise again.
• Efficient competition does not exist when a market is controlled by less than 10 firms with big size differences. An oligopoly should be declared whenever 4 firms control more than 40% of the market and the biggest of them controls more than 12% of it.
• A competitive price will be comprised of a minimal cost plus an equilibrium profit which does not encourage either an exit of firms (because it is too low), nor their entry (because it is too high).

Left to their own devices, firms tend to liquidate competitors (predation), buy them out or collude with them to raise prices. The 1890 Sherman Antitrust Act in the USA forbade the latter (section 1) and prohibited monopolization or dumping as a method to eliminate competitors. Later acts (Clayton, 1914 and the Federal Trade Commission Act of the same year) added forbidden activities: tying arrangements, boycotts, territorial divisions, non-competitive mergers, price discrimination, exclusive dealing, unfair acts, practices and methods. Both consumers and producers who felt offended were given access to the Justice Department and to the FTC or the right to sue in a federal court and be eligible to receive treble damages.

It is only fair to mention the "intellectual competition", which opposes the above premises. Many important economists thought (and still do) that competition laws represent an unwarranted and harmful intervention of the State in the markets. Some believed that the State should own important industries (J.K. Galbraith), others - that industries should be encouraged to grow because only size guarantees survival, lower prices and innovation (Ellis Hawley). Yet others supported the cause of laissez faire (Marc Eisner).

These three antithetical approaches are, by no means, new. One led to socialism and communism, the other to corporatism and monopolies and the third to jungle-ization of the market (what the Europeans derisively call: the Anglo-Saxon model).

B. HISTORICAL AND LEGAL CONSIDERATIONS

Why does the State involve itself in the machinations of the free market? Because often markets fail or are unable or unwilling to provide goods, services, or competition. The purpose of competition laws is to secure a competitive marketplace and thus protect the consumer from unfair, anti-competitive practices. The latter tend to increase prices and reduce the availability and quality of goods and services offered to the consumer.

Such state intervention is usually done by establishing a governmental Authority with full powers to regulate the markets and ensure their fairness and accessibility to new entrants. Lately, international collaboration between such authorities yielded a measure of harmonization and coordinated action (especially in cases of trusts which are the results of mergers and acquisitions).

Yet, competition law embodies an inherent conflict: while protecting local consumers from monopolies, cartels and oligopolies - it ignores the very same practices when directed at foreign consumers. Cartels related to the country's foreign trade are allowed even under GATT/WTO rules (in cases of dumping or excessive export subsidies). Put simply: governments regard acts which are criminal as legal if they are directed at foreign consumers or are part of the process of foreign trade.

A country such as Macedonia - poor and in need of establishing its export sector - should include in its competition law at least two protective measures against these discriminatory practices:

• Blocking Statutes - which prohibit its legal entities from collaborating with legal procedures in other countries to the extent that this collaboration adversely affects the local export industry.
• Clawback Provisions - which will enable the local courts to order the refund of any penalty payment decreed or imposed by a foreign court on a local legal entity and which exceeds actual damage inflicted by unfair trade practices of said local legal entity. US courts, for instance, are allowed to impose treble damages on infringing foreign entities. The clawback provisions are used to battle this judicial aggression.

Competition policy is the antithesis of industrial policy. The former wishes to ensure the conditions and the rules of the game - the latter to recruit the players, train them and win the game. The origin of the former is in the 19th century USA and from there it spread to (really was imposed on) Germany and Japan, the defeated countries in the 2nd World War. The European Community (EC) incorporated a competition policy in articles 85 and 86 of the Rome Convention and in Regulation 17 of the Council of Ministers, 1962.

Still, the two most important economic blocks of our time have different goals in mind when implementing competition policies. The USA is more interested in economic (and econometric) results while the EU emphasizes social, regional development and political consequences. The EU also protects the rights of small businesses more vigorously and, to some extent, sacrifices intellectual property rights on the altar of fairness and the free movement of goods and services.

Put differently: the USA protects the producers and the EU shields the consumer. The USA is interested in the maximization of output at whatever social cost - the EU is interested in the creation of a just society, a liveable community, even if the economic results will be less than optimal.

There is little doubt that Macedonia should follow the EU example. Geographically, it is a part of Europe and, one day, will be integrated in the EU. It is socially sensitive, export oriented, its economy is negligible and its consumers are poor, it is besieged by monopolies and oligopolies.

In my view, its competition laws should already incorporate the important elements of the EU (Community) legislation and even explicitly state so in the preamble to the law. Other, mightier, countries have done so. Italy, for instance, modelled its Law number 287 dated 10/10/90 "Competition and Fair Trading Act" after the EC legislation. The law explicitly says so.

The first serious attempt at international harmonization of national antitrust laws was the Havana Charter of 1947. It called for the creation of an umbrella operating organization (the International Trade Organization or "ITO") and incorporated an extensive body of universal antitrust rules in nine of its articles. Members were required to "prevent business practices affecting international trade which restrained competition, limited access to markets, or fostered monopolistic control whenever such practices had harmful effects on the expansion of production or trade". the latter included:

• Fixing prices, terms, or conditions to be observed in dealing with others in the purchase, sale, or lease of any product;
• Excluding enterprises from, or allocating or dividing, any territorial market or field of business activity, or allocating customers, or fixing sales quotas or purchase quotas;
• Discriminating against particular enterprises;
• Limiting production or fixing production quotas;
• Preventing by agreement the development or application of technology or invention, whether patented or non-patented; and
• Extending the use of rights under intellectual property protections to matters which, according to a member's laws and regulations, are not within the scope of such grants, or to products or conditions of production, use, or sale which are not likewise the subject of such grants.

GATT 1947 was a mere bridging agreement but the Havana Charter languished and died due to the objections of a protectionist US Senate.

There are no antitrust/competition rules either in GATT 1947 or in GATT/WTO 1994, but their provisions on antidumping and countervailing duty actions and government subsidies constitute some elements of a more general antitrust/competition law.

GATT, though, has an International Antitrust Code Writing Group which produced a "Draft International Antitrust Code" (10/7/93). It is reprinted in §II, 64 Antitrust & Trade Regulation Reporter (BNA), Special Supplement at S-3 (19/8/93).

Four principles guided the (mostly German) authors:

• National laws should be applied to solve international competition problems;
• Parties, regardless of origin, should be treated as locals;
• A minimum standard for national antitrust rules should be set (stricter measures would be welcome); and
• The establishment of an international authority to settle disputes between parties over antitrust issues.

The 29 (well-off) members of the Organization for Economic Cooperation and Development (OECD) formed rules governing the harmonization and coordination of international antitrust/competition regulation among its member nations ("The Revised Recommendation of the OECD Council Concerning Cooperation between Member Countries on Restrictive Business Practices Affecting International Trade," OECD Doc. No. C(86)44 (Final) (June 5, 1986), also in 25 International Legal Materials 1629 (1986). A revised version was reissued. According to it, " …Enterprises should refrain from abuses of a dominant market position; permit purchasers, distributors, and suppliers to freely conduct their businesses; refrain from cartels or restrictive agreements; and consult and cooperate with competent authorities of interested countries".

An agency in one of the member countries tackling an antitrust case, usually notifies another member country whenever an antitrust enforcement action may affect important interests of that country or its nationals (see: OECD Recommendations on Predatory Pricing, 1989).

The United States has bilateral antitrust agreements with Australia, Canada, and Germany, which was followed by a bilateral agreement with the EU in 1991. These provide for coordinated antitrust investigations and prosecutions. The United States thus reduced the legal and political obstacles which faced its extraterritorial prosecutions and enforcement. The agreements require one party to notify the other of imminent antitrust actions, to share relevant information, and to consult on potential policy changes. The EU-U.S. Agreement contains a "comity" principle under which each side promises to take into consideration the other's interests when considering antitrust prosecutions. A similar principle is at the basis of Chapter 15 of the North American Free Trade Agreement (NAFTA) - cooperation on antitrust matters.

The United Nations Conference on Restrictive Business Practices adopted a code of conduct in 1979/1980 that was later integrated as a U.N. General Assembly Resolution [U.N. Doc. TD/RBP/10 (1980)]: "The Set of Multilaterally Agreed Equitable Principles and Rules".

According to its provisions, "independent enterprises should refrain from certain practices when they would limit access to markets or otherwise unduly restrain competition".

Foreclosure Laws in North Carolina

Both judicial and non-judicial processes are followed in North Carolina. Judicial foreclosure means that the court system must be employed to begin the foreclosure process. The bank must file a lawsuit against the homeowner having trouble making his house payment before a sale date for the home can be set.

Non-judicial foreclosure does not require the courts permission to proceed with the sale of the property. This of course save the bank both time and money, so it is the process most commonly used.

The determining factor as to which process which process will be chosen by the bank, is whether or not the mortgage or deed of trust contains a power of sale clause. If it does, then this enables the bank to sell the house without pleading their cause before the court to begin. Most mortgages and deeds of trust due contain a power of sale clause, so most foreclosures proceed non-judicially.

In the absence of a power of sale clause, judicial or in court foreclosure must be followed. After the bank has received a court order to foreclose the process of moving forward with the auction on the house is the same in both processes. The only exception to this rule is that some power of sale clauses state specifically how, when, where and by what terms the sale of the home will take place. This can be different than the usual proceedings. In such a case where the power of sale clause is so specific, the instructions laid out in that clause must be followed.

In all other instances, this is how the next steps in the foreclosure process will occur: Whether a power of sale clause exists, a preliminary hearing must take place. Notices must be sent to all parties attached to the property. Following this, a court clerk will conduct a hearing to determine if a foreclosure sale will take place or not. If the clerk issues a notice of sale, then the process continues on to the trustee's sale or auction of the house.

The next step is, that the notice of sale must be sent by first class mail to the homeowner no less then 20 days prior to the sale. This notice of sale must also be advertised in a local newspaper. This newspaper must have circulation in the county where the home is located. This ad must be placed a minimum of once a week for two weeks. The last of these two adds, must be run no sooner than ten days in front of the scheduled auction date. This same notice of sale must be posted on the door of the court house for the county in which the home is located. This posting must be done less than twenty days before the scheduled sale date.

This notice must contain the homeowner's name, the bank's name, a description of the property and the place and time and date of the auction.

The sale is always conducted at the court house where the notice was posted on the door. The sale is always between 10:00am and 4:00. On the day of the auction, the highest bidder is sold the home, however higher bids or upset bids can be placed by filing them with the court clerk for 10 days following the sale. So if the winning bidder wants to be sure they are indeed the new owner of the home, they must be sure to keep close tabs on the new bids that have been turned into the court clerk over those next ten days. The would want to know if other upset bids have been placed on the home, so that they can respond with and upset bid of their own, to ensure that at the end of the ten days following the sale they are still the owners of the home. Any upset bid placed must be at least five percent higher than the last bid to attain winning bid status.

Pospoements of the auction date are allowed. These postponements are announced at the original time and auction. The new auction date must be posted on the court house door. Postponements are of course performed at the discretion of the bank.

The average length of time between a notice of sale being issued and the sale of the home in North Carolina falls between 90 and 120 days. If judicial foreclosure process is followed, it can take even longer. This is especially true if the homeowner attempts to fight the process in court. The process can also be further delayed by filing bankruptcy.

In North Carolina, the ten days following the close of the foreclosure are considered the right of redemption period. The former owner of the home may regain ownership during these ten days, if they can come up with the total amount of the unpaid plus cost of attorney's fees.

Banks can seek more money from the homeowner after the foreclosure in this state. This is called a deficiency judgment. This course of action would only be followed by the bank if they believe that the former homeowner has other assets worth taking. In most cases, the person who loses their home at auction does no have any other resources worth talking about. The bank realizes this, and understands that is would be a waste of their time and money to get blood from a stone, so to speak. If on the other hand the bank has reason to believe that this person has assets worth pursuing, they will do so.

Integrity 1st Consulting is your Foreclosure ebook specialist- Kathy Swift

U.S. Auto Manufacturers Are They Ready To Declare Bankruptcy?

U.S. auto manufacturers are facing more pressure from import manufacturers every year. They have already been feeling the heat from Nissan, Toyota and Honda, but now with Hyundai taking a larger chunk of the middle and lower range cars, SUV's and trucks this may be the start of the end of the likes of Ford and G.M.

Ford has already announced a restructuring and a projected cut of 30,000+ jobs. G.M. has recently retired an old name brand Oldsmobile and is posting losses on a regular basis. Delphi Corp., the largest auto parts supplier for U.S. manufacturers has already declared bankruptcy which makes buyers leary of future parts availability. Most of the other parts suppliers are very close to or are currently declaring bankruptcy.

In the 80's when Chrysler was having severe finacial woes the government stepped in with million dollar loans and other aid. The government is currently reeling from Katrina, New Orleans, and the war in Iraq. It can't afford to bail out Ford or G.M. The public opinion is against a government bailout as the economy is not its best. George Bush has too many other problems to deal with like high gas prices, natural gas, Iraq, etc...

So, without a government bailout and no proposed new laws to halt the outsourcing and outflowing of jobs and such to overseas giants like China and Japan, it is only a matter of time before Ford and G.M. go bankrupt. Toyota and Honda have been gunning for the number 1 spot and now that they have it are not going to give it up. The only hope left is with the trucks. Both Ford and G.M. have a bustling truck business and it is their only profitable business. The imports have tried to break into this market and after quite a few years they have not had much success. The majority of trucks are bought by die hard Ford or Chevy people. But, that may also change. Toyota has found that the key may be in Nascar. This could and will lead to other imports getting involved and taking the American out of Nascar. That would eventually happen as they have more money and lower costs.

Basically, with the laws the way they are right now, the U.S. auto manufacturers do not stand a chance. So the question is do we restrain trade with countries like China and Japan, possibly hurt foreign relations, Make it more expensive to buy better built and higher quality imports, etc... Or let democracy, free trade, and a capitalist society have its way giving Americans the best, safest vehicles, for the lowest price? Regardless of how we make our laws, Walmarts or their equivalents will always prevail - the basic premise of Walmart's founder Sam Walton was to sell the best products to consumers at the lowest price possible. Look at what he did. In a period of 40 years he went from one store to being the largest retailer in the world. Walmart has plans for 2500 stores in China. Maybe the U.S. auto manufacturers could learn something here. Take the imports on at their own game, stop paying multi-million dollar compensation packages to executives that aren't fixing the company. Maybe they need to pay more attention to what brings the best results in advertising at the least expense. Why is it that some companies must spend millions on advertising and others in the same niche get more results for much less?

Ford and G.M. need to rethink and come out with an attack plan. Go after the imports at their own level. Maybe make a marketing ploy of America and what we may lose. The kids of today aren't growing up dreaming of Shelby Mustangs and Corvettes. They are driving Honda and Toyotas that they fix up like in the Movie The Fast and the Furious. Maybe its too late.

Dont Rush to Bankruptcy - But It Might Be Inevitable

What is Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. A declared state of bankruptcy can be requested or initiated by the bankrupt individual or organization, or it can be requested by creditors in an effort to recoup a portion of what they are owed. However, in the overwhelming majority of cases, the bankruptcy is initiated by the "bankrupt" individual or organization.

Bankruptcies rose by 30% in the 12 months ended December 31, 2005
2,078,415 bankruptcies were filed, up from the 1,597,462 petitions filed in the 12-month period ending December 31, 2004. This was the largest number of bankruptcy petitions ever filed in any 12-month period in the history of the federal courts. and is attributed to the rush to beat the new tougher bankruptcy laws that went into effect on October 17, 2005.

Non-business filings rose by 30 percent in the calandar year 2005 compared with the number filed in CY 2004 . (2,039,214/1,563,145)

Business filings, rose by 14 percent compared with the previous 12 month period
( 39,201/34,317 )


It's a sickening feeling when your debts start to stack up, your marketing strategy is failing, and it doesn't look like you'll ever be profitable. Your family is getting stressed, your business can't pay its bills, and customers are starting to make angry phone calls asking why the things they paid for aren't happening.

At this point, many people feel ready to throw in the towel. I'm here to tell you why you shouldn't be one of those people.

When the chips are down, the only thing to do is to stake your personal success on the success of your business. After all, what's the point in bailing out before you have to? You're guaranteed to lose money that way.

Someone once told me that the difference between an average Joe and an entrepreneur is this: the entrepreneur will not give up on a business until his creditors come and take everything he owns. And even then he might try to hide from them and keep things going from his friend's basement

It might seem dishonest, but for goodness' sake do not tell any of your customers that things are going wrong because your business is in trouble. They will immediately run a mile, putting your business in a far worse situation than it was before. You must always try to make it look like everything is going just fine -- admitting problems will put the final nail in your business' coffin.

If your creditors are at the point of knocking on your door, you should try to get a voluntary agreement with them before you even consider declaring bankruptcy. This is when you negotiate your debts down to a lower level using the threat of bankruptcy, and your creditors sign an agreement with you to say that they will leave you alone once you've paid that money.

I simply cannot get across to you how much you should not consider bankruptcy as a viable option, ever, until you are absolutely forced into it. Think of it as being like suicide: the absolute last resort. Would you commit suicide because your business was going badly? I hope you answered no -- which means that you shouldn't consider bankruptcy either.

Having had a bankrupt company stays with you for a long time in everything you do: your credit rating, your employment history, and even just in the way you think of yourself day-to-day. It's better to have everything wrestled from your hands than to give it up voluntarily -- otherwise you'll always be tortured by wondering what would have happened if you'd kept going just a little longer.

Gina Rothfels quotes "Bankruptcy stared me in the face, but one thought kept me calm; soon I'd be too poor to need an anti-theft alarm."

Investing in Bankruptcy

Investing in Bankruptcies

Investing in bankruptcies can be a big money maker for the real estate investor. Investing in bankruptcies can result in a substantial income when you choose the right property. There are several laws that can change from area to area that govern bankruptcies. This means that there are risks involved to the investor, and being aware of these risks can help your investing tremendously.

A large risk that you face with bankruptcies is that the owner can come back and lay claim to their property. Some states even have laws stating the bankruptcies are not complete for a certain amount of time. You will have to determine if your region has this type of law protecting the homeowners when they file bankruptcy. If this is the case you may want to make sure the home is vacant before making an offer on the property. You do not want to put your money into something only to lose it when the homeowners get back on their feet.

When the owner defaults on the mortgage a bankruptcy order is then put in place. The bank will start the proceedings necessary to regain possession of the property. These bankruptcy properties are usually listed in the local paper under the sheriff's sale heading. The opening bid usually start at approximately two thirds of the appraised value of the home. The highest bidder is awarded the property. Investing in bankruptcies can greatly increase an investor's portfolio.

Having a plan of action when you are investing in bankruptcies is a crucial part. The first thing you must do is determine what your plans for the property are. Is it going to be a rental property or do you plan to flip the house? Determining what you want to do with your properties beforehand is important so that you know what area to look in, and how you can make a profit from your new property.

Choosing the bankruptcies carefully is a high priority. You do not want to find bankruptcies which will be depreciating, instead look for high growth potential that will increase in value. Just because the price seems to be right does not mean the property is the one for you. Determine what the average selling time was of the houses which have been sold. This will give you a good indication as to what you can get for the property you are looking at.

When investing in bankruptcies you should always look at the bottom line. If you can not make a 10% or greater return on the investment then it is not a good property to purchase. You must know your market. Looking at past sales in the area is key. Determining whether the area is growing or declining is an important factor in the bankruptcy. Knowing how long each house that sold stayed on the market is also significant. You may find bankruptcies which have been on the market for six months or more, this is a good indication that it is probably a bad investment. With all the other investors out there, if one of them did not want it, you probably do not want it either.

Once you become more familiar with investing in bankruptcies you will learn what to buy and what to avoid. You will understand which areas are good investments and which ones are not worth your time. You will also be able to understand more of the real estate market and the lending red tape. This will help when you are investing in bankruptcies.

Where To Find Online Bankruptcy Forms Processing Services

There are lots of ways to file bankruptcy by yourself. But, one problem you will surely find is that there are forms for every sort of situation, and how can you tell which is the one you need? For just that purpose, there are online bankruptcy forms processing services. An important first thing to know, before you start your search, is that there are free forms available. You never have to pay for a form! If you find a site that wants to charge you for their forms, don't use it. Why pay for something you can get free?

An important thing when looking for the right form is location. Make sure it is for the state and whatever locality that you are in. State laws vary widely, so it is especially important to find the form for the state you live in. It is worthless if it's for the wrong state! Also, make sure that the form is official. Look for government seals, or compare it with the others, and it will be easy to see whether it is or not. Filing with an illegitimate form won't do you much good!

Now, on the website where you find the form you need, look for information on filling it out. Most of these sites will provide you with information regarding what information you will need to fill it out. There might be other relevant information as well. Fill out the form slowly and thoroughly, and no matter how fine the print is, read it all. Follow instructions carefully and make sure that you're doing it the right way. For example, make sure you are listing the right assets.

When all else fails, go to a lawyer. If the wording is vague, of if there is something you are not sure you clearly understand, talk to a professional who can answer your questions satisfactorily. You can definitely get the free form you need from an attorney, and they will help you fill them out. If you have specific questions about what assets to list and what to leave out, they can tell you exactly what you need. There are also two types: chapter 7 and chapter 13, and you must know which one is best for you. These are important things to understand clearly.

Business Bankruptcy Not Always Best Option

When a company is in dire straits, often a business bankruptcy seems enticing. Your debt will disappear, and, if the company has filed under Chapter 11 bankruptcy, the "fresh start" offered by the reorganization is hard to pass up. But it is not all it's cracked up to be.

Good Reasons Why Business Bankruptcy Not Always Best Solution

But doing a filing isn't always the best answer. For some companies, it could be the wrong answer, while for others, there might be better options. Here are some reasons why it isn't always the best choice.

1. You could lose much of the control over your company. Many executives believe the bankruptcy laws allow them to control their company's activities during a Chapter 11 bankruptcy. But this is misleading. Bankruptcy experts say business owners must understand that other individuals will oversee and direct their decisions during a business bankruptcy. Some of these people include debtors, shareholders, and the court trustees.

2. Business bankruptcy is expensive. Depending on the size of your debt, it might be more expensive to file than to continue to run your business and try to save it. If you choose to file business bankruptcy, you'll have to hire good counsel, and often other professionals who will charge a hefty fee for their services. These costs often surprise business owners so consider them before you decide to go down this path.

3. Business bankruptcy can take more time than you expect. This process isn't a quick fix. You don't file bankruptcy, see a quick turnaround of your fortune, complete the bankruptcy and return to business as usual. Depending on your jurisdiction, court may only hold hearings once a month. Sometimes, the court may delay these hearings that are essential to the day-to-day running of your business. This will slow down the whole course of the process. If you choose to file, understand that there will be numerous "sit down and wait" moments for you.

4. Your employees might flee during the process. Even if the you are filing a Chapter 11, or reorganization bankruptcy, many employees might mistakenly believe the company is in such dire straits as their job is in danger. Even if you reassure your employees, you are sure to lose a few or more as people seek more stable employment elsewhere. During this already difficult time, you'll have to hire more employees, or make do with fewer people if hiring new employees is not possible. If you do hire more people, consider the cost of hiring, training and "breaking in" new workers.

Before you decide to file, make sure you know all your options. If Chapter 11 still looks like a good choice, do your homework. Find out about the filing process and know what to expect. Also make sure you get a competent bankruptcy lawyer to represent you and your company. The future of your business depends on it.

Knowing When You Need A Bankruptcy Attorney

A bankruptcy attorney may be necessary if you have a great deal of debt, assets and other complicated issues in your life. For example, because there is a great deal of documentation required that could be confusing for anyone, a bankruptcy attorney can help you in this area. They will have extensive knowledge in all the laws, rules, regulations, options and rights that pertain to your specific case.

Bankruptcy is not a simple procedure. It is extremely complicated and having an attorney on your side can help to make everything run smoothly and efficiently.

What Steps Will a Bankruptcy Attorney Take?

First: The bankruptcy attorney will talk to you about your situation, finances, assets and debts. This is to determine whether bankruptcy truly is the right option for you. This is also done to establish what the bankruptcy attorney needs to do in order to help your bankruptcy case.

Second: He or she will determine which of your debts might or might not be discharged. If you have any property that cannot be protected by going through some pre-bankruptcy planning such as protection of certain assets, listing items you may have tried to "hide" or filing a homestead exemption.

Third: They will prepare and file the bankruptcy petition along with any needed documentation along with it.

Fourth: They will attend the meeting of creditors with you to ensure that the creditors are practicing legal and fair negotiations.

Fifth: They will take care of any necessary matters that are needed to protect you fully and legally prior to the final discharge. This may include any liens that are on your home, any claims of fraud by a creditor or amending any schedules due to omissions or errors.

How Much Will a Bankruptcy Attorney Charge?

The fee for your bankruptcy attorney will vary depending upon how complicated your particular case is and what it involves. Across the United States, the fee for filing bankruptcy with the courts is generally around $200 for a chapter 7 filing and $190 for a chapter 13. One thing you should know is that a judge in bankruptcy court must approve any attorney fee. The typical costs of attorney fees start at around $500 and up.

How Can I Find a Good Bankruptcy Attorney?

It is important that you find a bankruptcy attorney that is both experienced and reputable. There are some things you should look for to determine if the attorney has both qualities listed above. First consider how to find the bankruptcy attorney. You could look them up in the yellow pages, ask other attorneys or friends and family members for recommendations.

Another important suggestion is to talk to many different attorneys. Do not simply pick the first one you interview. Make appointments with several and ask questions such as:

* How long they have been practicing
* If bankruptcy is their specialty
* Testimonies or References from other clients (if this is a possibility)
* If they will be the one you deal with or if they have paralegals or other aides you will have deal with
* How much they charge
* When they will bill you

The most important thing is to find a bankruptcy attorney that clicks well with your own personality. You will also want an attorney that is hands on and deals with you directly. Furthermore, get everything in writing, when you do finally decide on a bankruptcy attorney.

Rebuild Your Credit After Bankruptcy

If you are worried about rebuilding credit after bankruptcy, this article will help you with some general advice about how to find your way back to the top.

What filing bankruptcy is all about

Bankruptcy is a process whereby a person in debt can crawl out from under it and start again. The idea is to help out those who are in dire financial straits, and are in debt over their heads. The result is that you do not have to pay back most of your debts, you are debt free and can move on. The drawback is that it leaves a nasty stain on your credit report for the next ten years, making it hard to reestablish yourself and recover.

Do I really have to wait another ten years before I can get a loan again?

No. As a matter of fact it is possible to get credit again. However, it will be a bit more difficult. One possibility is to get a protected or pre-paid credit card which can be used by depositing money into it, like a bank debit card. This can help you rebuild your credit again, and establish yourself. After a while it can help you start to get loans and credit again before the ten years is up.

What about my debts?

One good thing about filing is that it gets rid of the creditors once and for all. They won't be bothering you anymore. Once all the paperwork is in and processed, it is illegal for them to keep harassing you. You have the law on your side!

Will everybody know that I filed?

No. Very few will actually know about it. However, since the file is accessible to the public it will be visible on your credit rating, and will be kept on file for ten years.

What are the changes I've been hearing about?

The original laws were passed in 1978, and were revised in 2005. The general idea of the new legislation is to make people who CAN pay some of their debts pay. The laws were being abused by those who could have paid. Here are the major changes that went into effect last year:

-You have to meet certain requirements in order to be able to file bankruptcy. Your family income will be checked to ensure that it is below the state average. They also want to make sure that your family is able to make the regular payments.

-You are required to submit your last year's tax return, in addition to all the other paperwork.

-They also require that you have lived in the state in which you file for at least two years. The reason for this is that some states have more or less lenient laws.

-Child support and alimony and are the debts that have to be paid first.