Wisconsin Business Law and Litigation
A blog dedicated to Wisconsin business law and business litigation matters, authored by Chris Moander of the Moander Law Firm.

As more food for thought, I’ve guest posted on my friend Jon Groth’s blog. You can read my post here on the primary collections laws that apply to Wisconsin.

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

No, that’s not really a joke - it’s the point of the following post, that properly organizing your accounts receivable files and other debt-oriented materials is a really good idea!

So, the time has come to face a debtor that has vexed collection efforts at every turn. Your collector is lined up and has begun preparations for what may lie ahead. When you turn over the debtor’s file, what will the collector find?

Organization is key in a collection matter, but is secondary to timing. As you have likely encountered, debtors (feeling desperate) often resort to running, hiding, liquidating assets/collateral, and any number of other evasion tactics. To reduce losses caused by debtor avoidance maneuvers, your business might consider confirming that certain documents are preserved, properly organized, and easily accessible. It is likely you have an existing need to maintain these records, including:

• The name, address, telephone number, Social Security number, a copy of the debtor’s driver license, and other information used to identify the debtor.
• If the debtor is a business, the contact person at the company
• Credit applications
• Debtor-signed contract or agreement
• Financial statements
• Ledger’s reflecting the debt, including the life cycle to date of your company’s relationship with the debtor
• Correspondence to debtor from your company (i.e. in-house collection documentation): emails, letters, and any other kind of documentation
• UCC financing statements
• Copies of debtor’s checks, including those that cleared and any declared NSF.
• Tax returns (for both individuals and companies)
• Records of prior relationship(s) between debtor and creditor to establish a course-of-dealing
• Any other relevant or applicable information

The list above isn’t exhaustive, but it conveys the idea of what information your business will need to organize and secure. When your collector examines these files, he or she will be able to: (1) get a sense of the debtor’s legal composition (otherwise extra research may be required); (2) potential alternatives to litigation (i.e. arbitration); and (3) whether interim relief is available (pre-suit garnishments). Because time is of the essence, you collector can move faster with organized files and thus increase the likelihood of collection and reduce costs across the board - the key value in proper document organization!

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

Well, it depends. Often, when collections is mentioned, people think of credit cards and the like…some feel like collections is dirty word reflecting hardball collectors calling you at 2 am.

Let’s look at the other side of this coin. Your company worked hard to seal a lucrative contract, only to have the other side simply stop performing or never ship the goods. They won’t accept your phone calls, nor your mailings. You dedicated considerable time and money to winning the agreement, in some cases rejecting offers from others willing to work with - all to your detriment! You sue and win - now what?

Perhaps a competitor has been using your trademark for some time, causing you to sue her and you win. She’s not paying up and she’s made that clear as crystal.

Or maybe your business offers financing to consumers so they can buy new washers and dryers. The payments begin to come in late and then, not at all. You come to find that some consumers have vanished, along with your collateral.

Litigation makes businesses shudder. However, collecting what is owed to you does matter, for a number of reasons: (1) the cost of collecting is less than the debt owed (in some cases); (2) you want to make it clear that you do mean business when debts are owed to you, so people and entities that contract with you are serious in their commitments; (3) if you don’t collect, a major part of your business may die (think banks), to name a few.

My point is simple: sometimes, many times, it is imperative that your company collect (or at least try) - your bottom line may be at stake if you don’t.

www.moanderlawfirm.com

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

Rush Nigut posted a slew of good links to information on purchasing a franchise, including some stuff by Teri Rasmussen, the SBA, and Mike Hamblin - all good sources to get a handle on how the franchising process works.

I came across a series of posts on wind energy and taxes at the Tax Law and Business Organization Strategy blog. I have not read all seven yet, but Jack Howell has done a thorough job analyzing a huge number of issues that one may encounter when developing windpower on a property. WE Energies has pushed windpower for five years, so it is worth considering the tax implications of future development, such as selling of wind rights, the debate of royalties on windpower, and everyone’s favorite - wanting to push power back on the grid.

Dear Readers,

I want to give some much-deserved credit to my fellow attorney and friend Jon Groth, author of Jon Groth’s Personal Injury Weblog, which focuses on personal injury law in Wisconsin. His blog effectively address personal injury matters in light of local events - two good examples are his posts on the recent Burkosky family tragedy in Oconomowoc. Please check out his blog and drop him a line.

Jon also is a member of the Wisconsin Solo and Small Firm Conference Planning Committee. He has been and will continue to work tireless on one of the great bar events in Wisconsin.

Take note, companies that sell software or offer online services - it is fairly simple to ensure that you EULA is enforceable. As Kraig Baker points out: make sure the contract terms are clear, accessible to individuals to be bound by the agreement, and enforced consistently. Kraig reinforces good old common sense here - keep things simple.

The Small Business Times did a wonderful job last week in organizing the Biz Tech Expo. Above all, the speakers were great, at least so far as those to which I listened.

From a business law standpoint, several things stood out to me:

• If you are wanting to cut healthcare costs and keep employees in good working order, wellness programs are the “wave of the future.” It comes as no shock that offices function better and employees are happier when employees are psychologically and physically healthier - prevention works. I have no proof of my claim, but I would suspect that legal issues with employee behavior are fewer when overall happiness exists in the workplace. Also consider that wellness programs are not just cushy benefits, but rather focus on career paths for workers which yield a better business on the whole - the right people in the right place with the right mindsets….hard to beat that.
• Wisconsin, particularly Milwaukee, is behind similarly sized cities in truly utilizing the web for business purposes. At first, I did not really believe this, but several tech executives with which I spoke indicated that SE Wisconsin has been resistant to (1) web marketing and (2) web applications. Organizations that elected to use the web have leapt over competitors quickly. The lesson here: the web isn’t a fad (I’m sure you know this as you’re reading a blog), so fork over the cash for a killer site showcasing your goods, but bear in mind that you still need to get your intellectual property protected and need to be ready to formualte new contracts with new customers.
• If there is a recession, small business in SE Wisconsin has managed to avoid it. I asked each representative how business was going and, assuming I was not being lied to, business is good. The other side of the coin is that attendees to the Expo may not be an accurate cross-section of businesses in the Milwaukee area. As a final note on the matter, I was impressed with the professionalism and competence of the vast majority of businesses I met and I can certainly see why they are doing well.

Dear Readers:

I will be attending the Small Business Times BizTech Expo for the next few days. If you have not had a chance to sign up, come on down. I’m very excited about this event because it’s drawing some major national speakers and some quality local speakers. Aside from the usual expo set up of booths and chit-chat, there well over ten individual business strategy seminars that are free to people attending the event!

If you do come on down, I will be the guy likely having a great time meeting new folks, learning about new technologies, and talking shop with everyone and anyone.

I came across a link that I think outlines the basics of how venture capital works. The slideshow shows key elements of the financing process. What I find particularly important and useful is the explanation of why VC firms need and, frankly, deserve preferred stock in companies in which they invest - I love the fact the author uses the term “mischief” to describe the alternative of giving VC’s common stock.

I also think the author has the right idea in emphasizing that both investors and entrepreneurs have something to gain from transparency in the financing process - if everyone understands the terms, a true “meeting-of-the-minds” occurs and each side is happy with the deal.