Business Health Series – Quarterbacking Receivables: Best Practices for Getting Paid

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Gershon Morgulis: Alrighty. Welcome, everyone.

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Gershon Morgulis: Welcome, everyone. Sorry we’re starting a few minutes late.

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Gershon Morgulis: But we’re glad that you’re all here. I am Gersha Margolis, I am the founder of Imperial Advisory. We are a

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Gershon Morgulis: fractional CFO firm, so we… we work with, with larger clients, we work on an interim basis.

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Gershon Morgulis: So we’ll maybe take over if a CFO left, or we’ll end up working for the CFO.

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Gershon Morgulis: take over for a CFO on a temporary basis, or work for the CFO.

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Gershon Morgulis: And with smaller clients, we’re sitting in the CFO seat on a part-time basis.

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Gershon Morgulis: We’ve got an incredible team. Most of our team’s got 30 to 40 years of experience, as well as,

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Gershon Morgulis: Usually around 10 years or more sitting in the CFO seat.

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Gershon Morgulis: And… We work with our clients on both, you know, we do

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Gershon Morgulis: Part of the leadership team, often.

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Gershon Morgulis: Especially for the CFO, and we… Help our clients…

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Gershon Morgulis: Help them grow, help them really figure out what’s holding them back from growth, and hopefully help unlock growth.

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Gershon Morgulis: One of the things that we end up

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Gershon Morgulis: Well, first, let me just say thank you to, to Tony for producing this, and also thank you to all of the people from our team who’ve joined, and especially to Dean, who…

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Gershon Morgulis: Introduced us to our speakers today.

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Gershon Morgulis: And now I’ll give my very quick intro of that, and then I will let the speakers take it from there. So one of our…

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Gershon Morgulis: you know, we try to keep this webinar series, the Business Health webinar series, to cover important things that are not

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Gershon Morgulis: directly what we do, but, you know, very often relate to what we do. And obviously, as finance people, you know.

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Gershon Morgulis: one of the quickest things that can kill your business is not having cash, right? Because if you don’t have cash, your clients, your employees walk out the door, you can’t do anything that you need to do, can’t buy inventory, and you can’t deliver things to your customers. All sorts of things, bad things happen when you have no cash, so…

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Gershon Morgulis: So cash is very important, and there’s different ways that you can,

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Gershon Morgulis: you can solve cash flow problems. One of those ways is by having a good bank, and, you know, we’ve covered that side of the equation in the past, but today I’m very excited to have Seth and Ava here.

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Gershon Morgulis: To talk to us about best practices on getting paid, because if you deal with that, then you have a lot more predictability, and…

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Gershon Morgulis: It’s going to…

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Gershon Morgulis: free up the cash you need to… or a lot of the cash you need to grow your business. So, without further ado, welcome, Seth and Ava. Take it away.

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Seth Meyer: Good morning, Gershon, and thank you for that warm intro. My name is Seth Meyer, and I’m joined with my colleague Ava Armand today. We are members of the Dispute Resolution and construction teams over at Capel, Barnett, Madeline, and Schoenfeld. Dispute resolution is just a nice way of saying we sue people.

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Seth Meyer: our offices are in Syosset, our offices are in the city, our offices are in Florida.

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Seth Meyer: I want to thank the Imperial team for hosting us today, and I want to give a special thank you to my dear friend Dean.

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Seth Meyer: Well, I don’t know if he’s gonna be my dear friend after this, but we’ll see what happens.

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Imperial Advisory CFO: Of course, happy to have you here. Thank you for…

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Seth Meyer: While today’s presentation is about when the business relationship breaks down.

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Seth Meyer: Today’s presentation only happens because of the strong relationship between Dean and me.

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Seth Meyer: As a personal story, as an emerging leader, I was always impressed by Dean’s poise, rational thinking, and steady hand in the face of a very tough and demanding company.

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Seth Meyer: And I’m sure he brings these skills to his clients today, and Gershon is telling me he wants to hear more of you in public. I said, Dean, you have a face for radio, but we’ll see what we can do on Zoom.

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Gershon Morgulis: Yeah, Seth was telling me how you… you did things that were… unthinkable in a good way.

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Gershon Morgulis: Over at a… at a prior company where the two of you worked, and how you are a…

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Gershon Morgulis: really, really amazing, and I agree with him. I said we have to get you to share some of those things, and…

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Gershon Morgulis: Teach. Teach others.

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Imperial Advisory CFO: Well, thank you both for all that, but we’re here for much more important stuff, so.

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Seth Meyer: it’s… Alright. So, jokes aside, our sidelines today are football-focused, mainly because I can’t take

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Seth Meyer: I have to take an opportunity to use as many football puns as possible, but we’re all Knicks fans today, and it was a huge win last night.

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Seth Meyer: That being said, we’re very excited to present Quarterbacking Receivables, Best Practices for Getting Paid.

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Seth Meyer: The Playbook for Success.

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Seth Meyer: starts with the special relationship between the CFO and their finance team, and the client.

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Seth Meyer: The client meets with the business often.

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Seth Meyer: The client, trusts the CFO to say, do I have the money for this? This is what I want to do. This is how I’m gonna do it. Can we make this happen? And the CFO is in that special place to make those dreams come true.

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Seth Meyer: The lawyer is a little jealous.

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Seth Meyer: We also have the special… we also care about the business, we want them to grow, we want them to prosper. We don’t know how to use Excel, so that always throws us out.

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Seth Meyer: But when all three of us are working together.

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Seth Meyer: the CFO, the lawyer, and the business

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Seth Meyer: We ensure problems can be minimized.

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Seth Meyer: Risk can be managed, the business can prosper.

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Seth Meyer: The lawyer is best served when the client

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Seth Meyer: and the CFO are working together to do the pre-lawyer work, to do the small things a business does

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Seth Meyer: In the event things go south.

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Seth Meyer: So, as Jerry Maguire would say, help me help you.

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Seth Meyer: And why do we need this help? Because the world is changing.

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Seth Meyer: It’s a whole new world. The state of the market. It’s not a football pun. I have a 7-year-old daughter, and quite frankly, she’s more persuasive than I am.

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Seth Meyer: Cash is king, has been the adage since day one.

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Seth Meyer: If you have cash, you have flexibility, you have the opportunity to grow, mitigate losses, and keep the business going. Credit is tight, credit is expensive.

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Seth Meyer: The terms for credit are changing, banks want established relations, and they want all your deposits.

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Seth Meyer: What I’m seeing is two things. One.

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Seth Meyer: The business is not in the business of giving out interest-free loans to customers.

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Seth Meyer: When they don’t pay on time, you’re giving them a loan. You’re saying.

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Seth Meyer: My money is less important than your money.

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Seth Meyer: And how this turns into a biggest… the biggest… one of the biggest failures, and it makes me concerned, is when I get a call from a client saying, Seth.

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Seth Meyer: I had to go to a…

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Seth Meyer: hard money lender. I had to go to invoice financing. I had to do something to get money

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Seth Meyer: My future money to pay my problems today.

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Seth Meyer: And all that’s telling me is.

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Seth Meyer: our cash flow process has failed, our collection process has failed, and we need to do something to right the ship. Because if you’re taking out a hard money loan, if you’re taking out invoice financing, you’ve given your profit away.

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Seth Meyer: If you’re getting 70% of your money, and you’re giving someone else the other 30%, that 30% is your profit, that is your growth, that’s your strategic reserve. You’re just kicking the can to tomorrow’s problem, and eventually.

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Seth Meyer: There’ll be no more invoices to finance, and what are we gonna do as a business?

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Seth Meyer: In the post-COVID landscape, Everyone… COVID had been the great reshuffling.

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Seth Meyer: You have companies consolidate, you have companies…

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Seth Meyer: branch into new areas, you have companies go out of business. So, what used to be done with a handshake, or an understanding that this project will take a certain amount of time, has all changed.

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Seth Meyer: Covid gave people the opportunity to be more entrepreneurial, in both a good way and a bad way. Good way in that, potentially, your clients

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Seth Meyer: emerged out of COVID a bad way. They’re also dealing with people who emerged out of COVID.

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Seth Meyer: But may not be as established in the market.

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Seth Meyer: So, with new relationships, we have new types of due diligence, new types of risk awareness, and ways to…

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Seth Meyer: In the most legal way I can say, not get stuck holding the bag if things go south.

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Seth Meyer: And with these new relationships are new terms, new conditions. While you may have had a prior relationship.

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Seth Meyer: where you’re gonna buy X for Y,

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Seth Meyer: You did it on a handshake, everyone was good, now you’re getting given a 100-page contract with new obligations that eat into cash flow, that give you less favorable payment terms.

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Seth Meyer: And with those less favorable payment terms, longer pay times.

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Seth Meyer: And really, now you’re financing someone else’s business.

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Seth Meyer: We want to level the playing field.

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Seth Meyer: the finance team, the CFO,

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Seth Meyer: is the left tackle to keep the business upright. They’re the ones who are going to offer the blindside protection to make sure

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Seth Meyer: That business is humming along. That money is coming and going as it should. And if there’s a friction point, to start the investigation as to why.

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Seth Meyer: Why are the invoices for this company always paid 60 days late? What are we doing to incentivize our customers to pay?

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Seth Meyer: What steps are we taking to minimize that?

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Seth Meyer: The CFOs are going to be asking those questions first, because at the end of the month, at the end of the quarter.

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Seth Meyer: When we’re running our reports, and we’re seeing our free cash flow is down.

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Seth Meyer: Or, our payments are lagging 60, 90, 120 days.

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Seth Meyer: That’s not healthy. That’s not good.

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Seth Meyer: So, you guys are gonna see it before we do.

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Seth Meyer: And when you start to see it, we want to say something.

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Seth Meyer: So the way we’re gonna look at this is the three phases of the game. Like, Bill Belichick says, if you’re not winning all three phases, you lost all of them.

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Seth Meyer: So, a good offense starts with a good defense. Due diligence.

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Seth Meyer: What are we looking for before we enter into contract negotiations?

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Seth Meyer: Knowing our client. Knowing their reputation, knowing our reputation.

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Seth Meyer: Contract negotiation.

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Seth Meyer: What do we want in a contract? What don’t we want in a contract? And what can we fix in a contract?

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Seth Meyer: Now, we’re in contract, and things are going soft. Things are going… Problematic.

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Seth Meyer: We’re not getting paid. They’re asking for extras.

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Seth Meyer: They’re putting our feet to the fire.

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Seth Meyer: They’re making us seem like the bad guy.

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Seth Meyer: What do we do here?

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Seth Meyer: How to protect ourselves when things start to go south. Offense.

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Seth Meyer: We need to get our money back. We need to stop the bleeding, we need to go on offense.

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Seth Meyer: We need to get what’s ours. Collection.

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Seth Meyer: Are we using a lawyer?

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Seth Meyer: Are we using a collection agency? How are we making sure we’re getting paid? Are we going into litigation?

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Seth Meyer: How are we enforcing our rights?

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Seth Meyer: What does the contract let us do? Did we protect ourselves?

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Seth Meyer: Earlier on, because a good defense is a good offense.

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Seth Meyer: Special teams. This is the stuff that lawyers… Ava and myself get excited for.

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Seth Meyer: We get a judgment. How are we going to ruin their day for ruining your month?

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Seth Meyer: Are we freezing bank accounts?

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Seth Meyer: Are we going after company assets? Are we leaning their projects? Are we bringing them in for depositions? We’re at the point now, if we’re using our special teams.

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Seth Meyer: We have protected ourselves, We have gone on offense.

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Seth Meyer: And now we’re kicking that extra point.

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Seth Meyer: I will say, from experience.

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Seth Meyer: Our position to help the business as the lawyer is the strongest before you sign the contract.

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Seth Meyer: Because the terms… The rules of the game are not yet set.

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Seth Meyer: As soon as the contract is signed.

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Seth Meyer: everyone is going to look back to the contract. So, if you’re the one giving out terms.

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Seth Meyer: You’re gonna want someone to rush into a contract that, conceivably, is gonna be more favorable to you.

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Seth Meyer: If you’re being pushed to sign a contract, take a deep breath.

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Seth Meyer: I can’t tell you the number of calls I have with people that says.

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Seth Meyer: I’m not gonna review this, I’m just gonna sign it, because they’re not gonna change anything.

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Seth Meyer: Well…

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Seth Meyer: I’ve always rejected that philosophy, because when you’re going into contract together, you’re at the point where everyone decided, we want to work together, so that’s your best opportunity to get what you want. Once

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Seth Meyer: a contract is signed, you’ve established the rules of the game. And to change the rules once the game has started tends to be harder. Oh, but I want the 3-pointer to account for 8 points now. Well, you should have negotiated that earlier on. Oh, I need to get 20% up front, otherwise the unions are going to be nipping at my toes.

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Seth Meyer: Should’ve negotiated that early on.

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Seth Meyer: Because what happens is, a lot of our clients, or the people that we’re getting contracts from.

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Seth Meyer: They’re using those contracts for their business certainty.

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Seth Meyer: So, once we start changing it after the fact, we run into issues. So… early, Intervention is CAPE.

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Seth Meyer: Don’t get sacked. Due diligence.

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Seth Meyer: The number one place I’m telling my clients to search first

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Seth Meyer: is court websites. In New York, you can use what’s called NYSIF, It’s…

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Seth Meyer: Has public filings of all lawsuits.

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Seth Meyer: If you’re about to get into a contract with someone.

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Seth Meyer: See who they’ve sued. See who they’ve been sued by. Are you dealing with someone who’s very litigious? At the first dispute, are they gonna say, fine, we’re gonna sue you? Are we gonna run

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Seth Meyer: to… Or does everyone have to sue them to get paid?

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Seth Meyer: There’s also a similar docket to look for mechanics liens. Do our contractors who work with a potential client having to lien property to get paid?

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Seth Meyer: You know, these are questions that there are… being asked, because…

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Seth Meyer: we don’t want to run into a problem 6, 8, 12 months down the line. What are others in the field saying?

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Seth Meyer: If I… if we’ve learned anything in business, everyday business is becoming more like high school. Everyone gossips, everyone talks about each other, everyone is saying, don’t do work with him, do work with him, we’re rushing to be with them.

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Seth Meyer: See what other people’s reputations are.

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Seth Meyer: Run a background check. Ask your lawyer. Your lawyers have the ability to run background checks on people. Do the people that you are going to do business with

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Seth Meyer: have…

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Seth Meyer: judgments against them personally. Well, that usually means that they’re supporting the business. They have a lot of judgments, he may want to stay away. If they’re in the newspaper for

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Seth Meyer: Things that you don’t want to be associated with. Well, you may also want to stay away.

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Seth Meyer: And if you find nothing, Well, maybe you want to, work with them. You know, from personal experience.

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Seth Meyer: I want to do a home renovation. Before I looked on Google, or Facebook, or Instagram, I went on the court’s website. Has this home improvement contractor been sued? Do they have any complaints with them, with the towns or the village of… I live on in the town of Huntington.

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Seth Meyer: Do they have any Suffolk County violations? No! They seem clean.

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Seth Meyer: I feel more comfortable working with them.

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Seth Meyer: And then, who are you really working with? Are they the middleman, or are they the decision maker? You know, you may be in the manufacturing chain, you’re providing a part that goes into a bigger part.

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Seth Meyer: Is the person you’re working for really the one who’s going to be making a decision, or is it someone further up in the relationship? If that’s the case, well, what are they saying?

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Seth Meyer: what I’m gonna ask for next are things that protect us in the event things go wrong. And through the course of the business.

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Seth Meyer: You may actually get this in the… just from being with them.

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Seth Meyer: If you’re a seller, ask for the buyer’s bank account information, or a voided check. Why? Now we know where the money is. If there’s a problem, we know where to find it.

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Seth Meyer: If you have trust issues, or you’re worried, ask for a guarantee. Ask for a promissory note. Ask for something that backs up their performance, because

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Seth Meyer: If they have skin in the game, you’re more likely to be treated fairly.

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Seth Meyer: How are the payment terms?

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Seth Meyer: We’re bidding out a job, we’re gonna be working on something. Well, we have to pay…

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Seth Meyer: labor every week, we have to pay other expenses monthly. Is this gonna line up with our business objectives? If not.

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Seth Meyer: Let’s try to negotiate those back.

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Seth Meyer: And what are my options if things start to go south? How do I get out of a bad deal? What are my termination rights? What are my dispute rights? What are my concerns?

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Seth Meyer: And all these things you’re going to start asking yourself before you get into contracts. Because once you get into a con… or in a contract negotiation stage.

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Seth Meyer: You’re going to want to be mindful for certain things.

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Ava Armand: Alright, so blitzing with bad contract clauses. So all the terms you see here should be strictly defined. The last thing you want to do is expose yourself to liability by having these terms be open to interpretation and possibly turned against you.

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Ava Armand: Starting with Latin terms. These may seem like they’re just fancy terms that people just throw in in a contract, but they carry a lot of legal significance.

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Ava Armand: For example, prima facie. That means that someone may have sufficient evidence to establish a claim against you, so you might want to be aware of that.

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Ava Armand: Caveat emptor. Literally means let the buyer beware. So, if you’re a buyer in a contract, as Seth said, you know, perform your due diligence. Make sure what you’re in for, because you might be held responsible for things that may come up in the contract without knowing about them.

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Ava Armand: Pardon my French, force measure. These are going to be very important when things that are out of the party’s control come up, right? So, the COVID-19 pandemic, or what’s happening right now with the Strait of Hormuz.

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Ava Armand: Anything that happens that are beyond the party’s control, but that directly will affect the party’s performance of the contract, are going to want to be explored ahead of time.

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Ava Armand: Consequential damages. These are interesting because they’re going to refer to damages that are not related to a breach directly, right? So, for example, if you’re in a contract with a supplier.

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Ava Armand: and the supplier has delays in delivering materials. Your client may face a fine or penalty due to that delay. That would be an example of a consequential damage.

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Ava Armand: Other types are loss of profits, or even reputational harm.

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Ava Armand: Things, basically, that were not foreseen at the time of making the contract, but that could damage you or your client, and your client’s business interests.

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Ava Armand: Liquidated damages are more clear in the sense that they’re straightforward. Your contract should say that you or the other side may be liable for a fixed amount of money if a specific event occurs.

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Ava Armand: So, if Y… if X happens, then you’re liable for Y.

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Ava Armand: Dispute resolution, as Seth said, extremely important. So usually arbitration, mediation, or litigation.

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Ava Armand: These provisions are extremely important because they’re gonna affect the way that your future dispute takes place, how long that dispute will go on for, and how much that dispute will cost.

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Ava Armand: So you really need to sit down with your attorney and assess each of these venues’ advantages and disadvantages. For instance, the court systems are, you know, very known for being slow.

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Ava Armand: Sometimes cases are dormant within 3 or 4 years. Is that a risk that you want to take?

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Ava Armand: Would you rather have a more expedient proceeding through arbitration?

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Ava Armand: Which may also be more costly. If you’re involved with a consumer-facing business.

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Ava Armand: Arbitration proceedings are usually kept private, whereas court proceedings are, as Seth said, open to the public.

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Ava Armand: So, it’s a very case-by-case analysis that you need to sit down with your attorney and decide what works best for you, your client, and your business interests.

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Ava Armand: Finally, we have a note here about personal guarantees, which we’re going to touch on in a couple slides, but again, if someone wants you to sign a personal guarantee, that means that you’re going to be held personally responsible for any debt that’s owed. So people can go after your house, any personal assets. Make sure that you read that.

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Ava Armand: You make your attorney read it before signing it.

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Ava Armand: Next slide, Seth.

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Seth Meyer: Yes, Ms. Armand. And before we go to the next slide, this is interactive, so if anyone has any questions, feel free to stop us. We’re happy to answer anything.

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Gershon Morgulis: What are the main benefits of

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Gershon Morgulis: court proceeding. Ava sounded like she was saying it might be less expensive. Is there anything else that would justify waiting 4 years for an answer?

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Seth Meyer: Some proceedings can only be brought in court. So, for example, if you want to foreclose on a mechanics lien as a contractor, you can’t bring it in court.

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Seth Meyer: Some parties may want a slow process. There are companies that will say, look, we’ll…

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Seth Meyer: keep this in court for years, you know, obviously your money. With arbitration, there tends to be no right of appeal.

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Seth Meyer: So, you have to be very certain on the arbitrator that you pick, because

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Seth Meyer: his or her decision is final. If you get a bad judge in Supreme Court, you can always appeal it, once as a right, and potentially another time again.

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Seth Meyer: So, there’s different safeguards in place, but if you’re a consumer-facing business, you know, if you’re a…

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Seth Meyer: an IT company, or one of the companies that you see advertised regularly, you may not want to have a lengthy litigation history, because that is a PR issue.

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Seth Meyer: Arbitration…

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Seth Meyer: tends to get you a decision maker who’s knowledgeable in the field, the business side of the field. So you’ll get an arbitrator who only deals with commercial real estate disputes, tech IP disputes, or AI-related disputes in

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Seth Meyer: the court system, generally, you’re going to… it’s a roll of the dice. You could get the judge who’s known for slip and falls, who gets a contract dispute.

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Seth Meyer: There are some mechanisms around that, but you have less control over, judge selection, length of case, and…

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Seth Meyer: Time to resolve. But it tends to be…

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Seth Meyer: Cheaper on the court side, because you’re paying $300 to start a lawsuit, and maybe your fees are going to be capped at, all in, for the court, about $1,000, where arbitration, just to talk to them, is $1,000, and then you pay your judge by the hour.

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Seth Meyer: So, there’s different business realities. Also, if you’re the party with the leverage, and you’re the one issuing contracts, you may want to make it as difficult as possible for the other side to…

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Seth Meyer: get to the ultimate decision maker. So you may require mediation first.

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Seth Meyer: Then, if mediation fails, then you can go to either arbitration or litigation.

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Seth Meyer: So, you know, some… Some parties want to rush to dispute resolution.

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Rik Katz: Cool.

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Seth Meyer: Parties may want to slow it down as long as possible.

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Seth Meyer: And there are benefits to going to mediation. Perhaps it’s something where

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Seth Meyer: One side has a decision maker who’s being unreasonable, and they need to hear from somebody who’s not their lawyer, not the other side, and not the… their… their team.

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Seth Meyer: to basically say, hey, I’m not the judge, but this is what I think the judge will do. You may want to take a deep breath before things get concerning.

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Rik Katz: May I comment? I don’t want to disrupt your slide presentation.

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Rik Katz: But I always believe in prevention is better than cure.

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Rik Katz: And I must admit that in my career, probably I’ve been dealing with bigger companies than this would address.

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Rik Katz: But you did discuss a little bit credit assessment.

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Rik Katz: And perhaps…

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Rik Katz: When you’re already in the boat, and there are holes in the boat, and you’ve got to try and save it.

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Rik Katz: It’s never cheap. It’s going to cost you money, and you’ve got to assess cost versus loss.

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Rik Katz: And, you’re not…

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Rik Katz: You’ve given some great details on that aspect, but not on how to protect from the beginning. And there’s some very good ways, excellent ways, to protect from the beginning, which is where I would place

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Rik Katz: the most… Emphasis.

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Rik Katz: Is that fair?

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Seth Meyer: I agree with you 100%.

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Seth Meyer: And, you know, I always harken back to a story. I was in a networking group, and they say, you know, we’re talking about clients, prospective clients, and they go, what do you do when someone doesn’t listen to you the first time?

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Seth Meyer: And, you know, you had one business owner say, oh, I tried to do this, proactive this, proactive that.

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Seth Meyer: And it came to me, and I said, look, I make more money if you don’t listen to me.

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Seth Meyer: Right? Because… For me to review a contract and to work with you through

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Seth Meyer: onboarding a client is going to be a lot cheaper than if I have to go to court.

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Seth Meyer: you control the rela… the more you can control the relationship with your other contracting party, the stronger everyone is. You’re always better off with the resolution

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Seth Meyer: and the agreement that you make than what someone forces down your throat. So yes, know exactly who you’re doing business with. If they’re a credit risk, make sure you’re taking steps to protect yourselves. Find… depending on the deal, depending on the industry. Collateral, guarantors.

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Rik Katz: Insurance? What’s that? Insurance?

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Seth Meyer: insurance, well, you know, depending on the… the transaction.

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Seth Meyer: Right, you know, title insurance, of course, D&O, E&O, if you’re a builder’s risk policy, you know…

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Rik Katz: Fright Credit Insurance.

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Seth Meyer: credit insurance.

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Rik Katz: Large companies that provide credit insurance.

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Seth Meyer: Correct. I mean, you know, we could… we would have… we would gladly team up with a broker to talk about the various policies that are in place

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Seth Meyer: In the event that a job goes south. Especially in the construction area, we deal with a lot of surety bonds.

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Seth Meyer: And… Those products to prevent against an underperforming or contractor, general contractor that fails to perform.

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Seth Meyer: So, yes, absolutely. And, you know, one of Ava’s slides noted that, you know, what are the bad terms? Well, if they’re gonna put a

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Seth Meyer: surety or a bonding requirement on you, that is very strong leverage for the stronger party. So, yes, I agree with you. Anything we… you can…

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Seth Meyer: Do to mitigate the risks down the line.

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Seth Meyer: do it. You know, too many people… when… pre-COVID,

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Seth Meyer: And I would say into very early COVID,

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Seth Meyer: When interest rates were so low.

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Seth Meyer: People were willing to take risks.

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Seth Meyer: Because they could be bailed out with cheap dollars.

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Seth Meyer: And, accessible dollars. That’s not the case anymore. Money’s hard to come by, so yeah, that…

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Seth Meyer: the business strategy of, oh, I’ll just expand my line of credit.

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Seth Meyer: isn’t… isn’t there today. So, all these preemptive steps are… are huge.

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Gershon Morgulis: But maybe that’s a topic for another webinar.

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Rik Katz: Yeah, maybe.

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Mike Merkur: Can I ask a question? When it comes to, like,

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Mike Merkur: cost-saving technologies, and then you have to license them to companies. Are there…

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Mike Merkur: What are the… what are the, concerns that I should be worried about?

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Seth Meyer: So your… your business is… like an AI kind of agent for cost savings?

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Mike Merkur: More explicitly, it’s like…

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Mike Merkur: You could say it’s like you get more bang for your buck for the same toy products, or for the same…

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Mike Merkur: systems in place, this can get more value. Like, like new technology that’s been invented to license to toy companies or education institutions.

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Seth Meyer: I mean, the… and we can talk more about it offline, because it’s a very specific question, but obviously, protecting your intellectual property, either through

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Seth Meyer: Internal controls to determining what can be copyrighted or not, depending on… or obtain intellectual property protection, depending on what it is.

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Seth Meyer: I’m not sure I follow exactly what your product is right now. Making sure you have the ability to pull back the license, or to restrict access if someone’s not paying.

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Seth Meyer: And, you know, there’s ways to…

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Seth Meyer: Monitor whether someone’s trying to copy your product, get into the code, seeing how you restrict access, but it’s… that’s very intellectual property specific.

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Seth Meyer: And…

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Seth Meyer: At the end of the day, you’re still going to want to know who you’re doing business with, and do they have the ability to pay for what you’re selling them?

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Mike Merkur: Yes, yes, just as a small add-on to that.

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Mike Merkur: If you don’t know who you’re dealing with 100% of the time, because there’s so many unknowns, you’re trying to give a list of what you should, like, red flags, but isn’t it always, like, 90% risk when you’re dealing small company with big company?

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Seth Meyer: Yes and no.

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Seth Meyer: Okay, I’ll give you a very lawyer answer here.

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Seth Meyer: There are some things that you’ll be able to change in a contract with a big company.

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Seth Meyer: There are some things that you won’t.

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Seth Meyer: I’m not… lawyers are not magicians. I can’t make Google say, yes, we’re gonna give you more favorable terms, or we’re gonna be more relaxed on you than…

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Seth Meyer: Than others in the field, and there’s a level of business risk that you would have to take on by doing business with them. I will say that the stronger your relationship is, the less strict they may be in

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Seth Meyer: enforcing or utilizing the contract, right? So… Lawyers talk from

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Seth Meyer: A place of what could and what should happen.

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Seth Meyer: Ultimately, the way the parties work through their contract.

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Seth Meyer: is what’s going to control. So if, for example, you have a very strict notice provision that says, if you’re gonna sue me for extra damages, or you’re gonna want extra money on this because you’re doing extra work, you have to tell me in 2 days

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Seth Meyer: But for the life of your relationship, oh, if you get it to me within a month, we’ll get you paid, no problem.

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Seth Meyer: the contract is going to be secondary to how you actually do business together. Like, courts aren’t going to say, well, you know, you guys were doing one thing one way, but the piece of paper says something else, we’re going to be guided by the piece of paper.

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Seth Meyer: You know, no two judges are alike, but if you’re able to show that, yes, our relationship was more of…

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Seth Meyer: A guideline than it was the law of the land.

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Seth Meyer: You know, that’s…

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Seth Meyer: that’s a different situation. But you have… there will be companies that will say, if you don’t get it to us by the set… that know their contract so well inside out, that if you deviate from it, it’ll be like a game of operation, and they’ll buzz you.

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Seth Meyer: So, you know, it’s… it depend…

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Seth Meyer: You can have the most perfect contract, you negotiate everything favorably to you, but once you’re actually doing business together, and the business realities overtake the best laid plans of the lawyers, that’s what’s gonna control.

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Seth Meyer: So, yeah, you know, we were supposed to tell you if we couldn’t work because of, the temperature, but you guys knew, come on, give us a break. Of course you can have a break. They’re gonna have a hard time telling you 6 months later, no, we’re gonna be strict now.

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Seth Meyer: Unless there’s a clear reset of the relationship.

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Seth Meyer: So… the field will control. The business relationship will control

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Seth Meyer: The… I just don’t want you to be an unaware party walking into a buzzsaw and stepping on all the tripwires.

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Mike Merkur: Very good. Okay, I’m, have to interpret and implement some of that. That’s actually very helpful. Thank you so much. Thanks, Seth.

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Seth Meyer: Of course.

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Seth Meyer: Which dovetails directly into our next slide.

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Seth Meyer: Business relationship is going south. How do I protect myself?

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Seth Meyer: Get us involved sooner than later.

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Seth Meyer: I can’t tell you the number of times I’ve seen someone put in an email. Oh, I spoke to my attorney yesterday, he’ll be in touch.

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Seth Meyer: No one wants to deal with us.

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Seth Meyer: You know, we… We cost everyone money.

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Seth Meyer: We’re uncertain, and we interfere with the business relationship, and all we do is add doubt.

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Seth Meyer: If you tell someone you’re speaking with your lawyer, I would make sure you back it up and actually speak with your lawyer.

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Seth Meyer: Two, your lawyer can help you draft those responsive letters. I spend half my day, and this is… they don’t teach us this in law school, and Ava was kind of surprised when this was part of the job, is we write letters for companies all the time that go on their letterhead to make sure they don’t say the wrong things.

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Seth Meyer: hey, you know, we haven’t been paid in a while, we were gonna send a lot of four-letter words that weren’t paid. In that situation, we say, guys, pump the brakes, let us work on the response together to make sure you protect your contractual rights.

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Seth Meyer: Okay, no problem there. And then we can say, well, maybe you don’t want to do this item of work because you’re not required to under the contract.

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Seth Meyer: Don’t get us involved sooner.

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Seth Meyer: To Mr. Katz’s point, The earlier you get us involved.

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Seth Meyer: The more power we have, and the cheaper it could potentially be.

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Seth Meyer: Maintain detailed records.

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Seth Meyer: A lot of industries are, oh, yeah, we just talked about it.

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Seth Meyer: Send a text. Send an email.

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Seth Meyer: Please send something that you can screenshot later on. It will give you and your lawyer amazing confidence.

439
00:46:39.630 –> 00:46:42.399
Seth Meyer: Send monthly statements to non-performing party.

440
00:46:42.640 –> 00:46:49.099
Seth Meyer: You delivered something, you’ve never been paid. Every month, send an invoice. Ava will tell us why in a little bit.

441
00:46:49.670 –> 00:47:00.459
Seth Meyer: Make sure you’re up to date on the notice, default, cure, and termination provisions. Say you’re the one having trouble, and they’re saying, get off my job site, or we don’t want anything.

442
00:47:01.020 –> 00:47:05.760
Seth Meyer: After you freak out, And you’re like, oh my god, what am I gonna do?

443
00:47:06.590 –> 00:47:10.170
Seth Meyer: Wait a second, my contract says they have to give me 10 days to…

444
00:47:10.720 –> 00:47:14.189
Seth Meyer: Un-F myself. I can do that in the next 10 days.

445
00:47:14.480 –> 00:47:16.069
Seth Meyer: Let me try to do that.

446
00:47:16.920 –> 00:47:23.019
Seth Meyer: and you write back and say, look, I get 10 days to fix this, this is how we’re gonna fix it, don’t terminate me.

447
00:47:24.590 –> 00:47:28.699
Seth Meyer: And if you’re taking less than everything you’re owed, or you’re…

448
00:47:29.110 –> 00:47:33.659
Seth Meyer: Paying less than anything you’re owed, make sure it’s memorialized somewhere.

449
00:47:33.930 –> 00:47:45.450
Seth Meyer: You know, the last thing I want is to get an invoice that’s partially paid, and I have a client say, go after this, and they come back to me and say, oh no, we agreed to take 50% off.

450
00:47:45.810 –> 00:47:48.180
Seth Meyer: Oh, really? That’s… that’s news to us!

451
00:47:48.300 –> 00:47:59.429
Seth Meyer: Everything that you’re gonna discount, or you’re gonna… either way, you’re getting a discount, you’re giving it, or you’re giving extended terms, or you’re doing something that’s outside of the contract.

452
00:47:59.590 –> 00:48:12.070
Seth Meyer: Write it down somewhere. Even if it’s not great for you today, the last thing you want is saying, well, you know, me and the guy gave… I gave him 30 days. He comes back and says, no, he gave me 150 days.

453
00:48:13.010 –> 00:48:15.289
Seth Meyer: Have… have it established.

454
00:48:16.500 –> 00:48:20.790
Seth Meyer: And I’m sure you’re tired of hearing from me, so Ava has some actual useful points.

455
00:48:20.790 –> 00:48:23.610
Rik Katz: Now, just intersuppose one quick thing.

456
00:48:23.610 –> 00:48:24.200
Seth Meyer: Sure.

457
00:48:24.200 –> 00:48:32.520
Rik Katz: I have found… getting to the check signer, if it’s owner to owner, if it’s CFO to CFO,

458
00:48:32.820 –> 00:48:44.189
Rik Katz: But just dealing with the purchaser won’t get you results. But dealing with somebody who understands business as a whole, you have a much better chance before getting involved with a lawyer.

459
00:48:45.340 –> 00:48:48.040
Seth Meyer: I’ll… two anecdotes to that.

460
00:48:48.210 –> 00:48:55.600
Seth Meyer: One is… Our job as business commercial attorneys

461
00:48:56.280 –> 00:49:08.459
Seth Meyer: is to help you get your business result, right? If that business result is sending an angry letter so the two decision makers of a company talk and come to a resolution, that’s great.

462
00:49:08.620 –> 00:49:24.990
Seth Meyer: Right? My job is to get you the result you want. If the result is, well, Seth, I want you to tie this up in litigation to make it hurt for them, that’s something we can do. But after 2 months of that, the lawyer is the enemy when you have to write my checks instead of getting

463
00:49:25.090 –> 00:49:30.190
Seth Meyer: paid. So our job is to be A tool in your toolbox.

464
00:49:30.530 –> 00:49:34.520
Seth Meyer: Right? So if it’s a letter, if it’s a lawsuit, if it’s…

465
00:49:34.770 –> 00:49:40.990
Seth Meyer: contract language or something. Our goal is to get people to resolve their dispute.

466
00:49:41.310 –> 00:49:44.620
Seth Meyer: And we have leverage either through

467
00:49:45.150 –> 00:49:50.310
Seth Meyer: Behind-the-scenes counseling, a lawsuit, a lien, Like, you know…

468
00:49:50.660 –> 00:49:59.999
Seth Meyer: The… what makes me feel the most inadequate as a lawyer is when someone comes to me and says, Seth, let’s do something. And my options are like, well, I can send a letter.

469
00:50:00.540 –> 00:50:04.469
Seth Meyer: They want action. My response is a post-it stamp.

470
00:50:04.690 –> 00:50:11.589
Seth Meyer: So, we… that letter is also powerful, because it tells you they have a lawyer, they’re ready to commit resources.

471
00:50:11.710 –> 00:50:16.649
Seth Meyer: And… hopefully this brings people to the table. So I agree with you.

472
00:50:17.090 –> 00:50:20.680
Seth Meyer: Yes, the goal is to find your business resolution.

473
00:50:21.680 –> 00:50:23.989
Seth Meyer: At any way possible.

474
00:50:24.200 –> 00:50:28.740
Seth Meyer: I don’t litigate for the sake of litigating. There has to be a goal in mind.

475
00:50:28.930 –> 00:50:38.370
Seth Meyer: Right, when I onboard a new client, I say, what do you guys want? Like, what’s your goal here? In 6 months, what do you want? In 3 weeks, what do you want?

476
00:50:38.590 –> 00:50:41.080
Seth Meyer: That way, everyone’s on the same page.

477
00:50:47.360 –> 00:50:49.140
Seth Meyer: Not right, Ava, I think they’re tired…

478
00:50:49.140 –> 00:50:50.710
Ava Armand: Okay, I’ll go.

479
00:50:50.710 –> 00:50:51.160
Seth Meyer: The tide.

480
00:50:51.160 –> 00:50:51.840
Ava Armand: Right.

481
00:50:53.020 –> 00:51:04.530
Ava Armand: So here are some tips that would give you or your client some leverage. The first thing on the list is the personal guarantees, promissory notes, and confession of judgments we previously talked about.

482
00:51:04.660 –> 00:51:14.730
Ava Armand: These are tools that we use to hold a specific individual, right, within an entity, corporation, LLC, personally liable for the debt that you’re owed.

483
00:51:14.840 –> 00:51:32.269
Ava Armand: So, if you’re in a contract with an organization of any type, we strongly encourage that you execute one of these mechanisms to hold someone personally liable for that debt. And as Seth previously mentioned, if someone has skin in the game, they’re more likely to pay out that debt, right?

484
00:51:32.660 –> 00:51:51.139
Ava Armand: What is especially interesting with Confession of judgments is that they allow you to bypass litigation entirely. So, when someone executes a Confession of judgment, basically they allow you to get a judgment against them for the debt that’s owed, right? So, you don’t need to put in a lawsuit.

485
00:51:51.150 –> 00:52:04.220
Ava Armand: you have your confession of judgment, bring it to a judge, and the next thing you need to do is go after the money directly. So it’s a cost-efficient and very expedient procedure that we use

486
00:52:04.270 –> 00:52:05.479
Ava Armand: For our clients.

487
00:52:05.810 –> 00:52:07.579
Gershon Morgulis: What’s a confession of judgment?

488
00:52:07.960 –> 00:52:09.020
Ava Armand: What is it?

489
00:52:09.580 –> 00:52:10.310
Gershon Morgulis: Yeah.

490
00:52:10.310 –> 00:52:23.510
Ava Armand: So it’s literally, as the name indicates, it’s something that you sign that says, I confess that I owe this debt to you. And if the day ever comes that I don’t pay this debt, you can go to court and get a judgment against me.

491
00:52:24.380 –> 00:52:29.620
Ava Armand: So… Really cost-effective, time-efficient mechanism.

492
00:52:30.230 –> 00:52:43.530
Ava Armand: Restraining bank accounts is also something that we use post-judgment, right? So, either you did a lawsuit, you obtained a judgment, good for you, or you had one of these tools available, and you have your judgment this way.

493
00:52:43.760 –> 00:52:48.320
Ava Armand: So what we do then is we issue restraining notices to the banks.

494
00:52:48.670 –> 00:52:58.429
Ava Armand: the banks get them, and they freeze the accounts. So, whoever the debtor is cannot use their money in any way, shape, or form, so they better pay up, right?

495
00:52:58.520 –> 00:53:12.309
Ava Armand: As Seth was mentioning earlier, sending monthly invoices. That’s going to be particularly useful if we’re looking to get the money through an account-stated claim, rather than a breach of contract claim.

496
00:53:12.680 –> 00:53:24.519
Ava Armand: So the account stated claim is easier to prove, because the only thing really you need to establish is that you send the other side invoices, they received them, they never objected to them.

497
00:53:24.780 –> 00:53:37.580
Ava Armand: And that’s it. As long as you can prove that you have these communications with the other side showing that you sent them invoices, they received them, they accepted them, and they never objected to them, you got yourself an account-stated claim.

498
00:53:38.220 –> 00:53:56.380
Ava Armand: And finally, as always, we always, always, always advise that you keep all communications that are related to your contract, or the performance of your contract, in writing. It’s easier to track for you, for us, it’s harder to argue against, and it can always be used against someone else.

499
00:53:57.430 –> 00:53:58.470
Ava Armand: Red Soff?

500
00:54:00.720 –> 00:54:03.370
Seth Meyer: And just last thing, very quickly on judgments.

501
00:54:04.070 –> 00:54:10.919
Seth Meyer: If you get a judgment, it serves as a lien on real property, so anyone in real estate knows that if you’re looking to close on property.

502
00:54:11.300 –> 00:54:15.770
Seth Meyer: And we have a judgment against you. You’re not closing unless we’re paid off.

503
00:54:15.880 –> 00:54:34.910
Seth Meyer: And that judgment can, one, be applied in the county where you live, where the business lives, and any other county where you may have real estate. So, you live in Nassau, but you have a Hamptons house, we can file it in Nassau and Suffolk, and kind of gummy up your cash flow and

504
00:54:35.250 –> 00:54:38.990
Seth Meyer: Ability to, sell.

505
00:54:42.590 –> 00:54:57.700
Ava Armand: All right, and since, you know, as we mentioned previously, the majority of our clients are construction-based, we thought it’d be useful for us to kind of touch base on the mechanisms that we use within the construction world. And the first thing on the list is mechanics lien.

506
00:54:58.150 –> 00:55:15.550
Ava Armand: So when our construction clients don’t get paid, we file a lien against the property. And what that does is it basically places a cloud on the title of the property, essentially preventing the owner from selling it or getting a mortgage on it. So it’s another incentive to settle that debt.

507
00:55:15.680 –> 00:55:25.919
Ava Armand: The timeframe must be respected, so it’s 4 months from completion of a residential contract, and 8 months for a commercial contract.

508
00:55:25.940 –> 00:55:36.110
Ava Armand: For you guys, that means that you basically have one quarter or two quarters to resolve that dispute before getting in touch with us so that we can file the lien on your behalf.

509
00:55:37.460 –> 00:55:39.120
Ava Armand: Seth, anything you want to add?

510
00:55:41.280 –> 00:55:45.150
Seth Meyer: Yeah, liens can be very powerful, or they can…

511
00:55:45.750 –> 00:55:50.559
Seth Meyer: Be as useless as filing a bond to get rid of them?

512
00:55:50.760 –> 00:55:59.860
Seth Meyer: They are very strictly construed, time-wise. So, you know, you have a meeting with a client one quarter, and you say, look, we’re still not paid on a job we finished.

513
00:56:00.760 –> 00:56:17.839
Seth Meyer: keep a yellow sticky note there. In fact, that is coming up at the next meeting, you may want to take some action, because your leverage will be strongest when you can lean, because if there’s any financing on the property, it will freak a lender out, for the most part. So…

514
00:56:18.160 –> 00:56:20.609
Seth Meyer: I recommend getting

515
00:56:20.780 –> 00:56:32.269
Seth Meyer: that very quickly. Also, a lot of people, especially on the residential side, don’t understand what a lien is, and they will absolutely freak out. And again, the goal is to have the conversation to get you paid.

516
00:56:32.800 –> 00:56:37.649
Seth Meyer: To be mindful of time, just a couple of very quick points.

517
00:56:38.030 –> 00:56:52.010
Seth Meyer: If you’re running a job, if you’re running a project, if you’re running a relationship, have someone in-house, not a lawyer, who knows what your obligations are, what your deadlines are, so you can be mindful and stay ahead of them.

518
00:56:52.910 –> 00:57:03.180
Seth Meyer: Again, if there’s issues on the job where you’re not getting paid, someone wants to charge you, someone wants to hold you responsible for, a poor performance.

519
00:57:03.420 –> 00:57:05.270
Seth Meyer: Get in touch with us early.

520
00:57:05.840 –> 00:57:17.999
Seth Meyer: I can’t tell you the number of businesses I’ve spoken with that wallow, silently suffer, don’t. We are attorneys and counselors, so that means we can give you business therapy.

521
00:57:18.300 –> 00:57:27.159
Seth Meyer: Come, talk with us. Please, even if it’s just for 10 minutes, and we tell you it’s not that bad, you got this, you will feel exponentially better.

522
00:57:28.560 –> 00:57:34.429
Seth Meyer: Post-game recap, really quick, I want to be mindful of everyone’s time. You have to be proactive.

523
00:57:34.580 –> 00:57:42.360
Seth Meyer: You don’t ask what you don’t… you don’t get what you don’t ask for, so if you’re, again, gonna wallow, you’re not gonna get anything.

524
00:57:42.620 –> 00:57:51.200
Seth Meyer: For all you know, your upstream party, the party who you’re in contract with, is already sitting on the money, because they saw the problem before you.

525
00:57:51.360 –> 00:57:53.559
Seth Meyer: They’re just not giving it to you until you ask.

526
00:57:54.030 –> 00:57:59.739
Seth Meyer: If a client-customer treats your competitors bad, you’re not special, they’ll treat you bad too.

527
00:58:00.440 –> 00:58:07.259
Seth Meyer: Have the nuclear football codes handy, know the weaknesses, know your opportunities, and find your ways to get paid.

528
00:58:07.640 –> 00:58:09.310
Seth Meyer: Businesses, that’s…

529
00:58:09.890 –> 00:58:20.490
Seth Meyer: I can’t tell you the number of times, and I hit on it before, we’re not going to say anything because they don’t want us to be mad at us. Okay, so you’re the punching bag. So you’re financing their job.

530
00:58:20.630 –> 00:58:31.610
Seth Meyer: The businesses that stand up for themselves are the ones that are likely to succeed. Stand up for yourself. It’s your business, it’s your reputation, it’s your money, it’s your future.

531
00:58:32.260 –> 00:58:33.360
Seth Meyer: It’s you.

532
00:58:33.780 –> 00:58:50.539
Seth Meyer: If you’re gonna stand up for yourself somewhere else, stand up here. I’m not saying guns blazing every time, but know where your backbone is, know where your red lines are, keep them before you hit those red lines, talk with your CFO, talk with your attorney. I promise you.

533
00:58:50.690 –> 00:58:55.490
Seth Meyer: You’ll be surprised how reasonable things can be if you get us involved early.

534
00:58:56.810 –> 00:58:58.119
Seth Meyer: the fine print?

535
00:58:59.240 –> 00:59:04.759
Seth Meyer: Don’t take anything that we said as gospel. This is for educational purposes only.

536
00:59:06.430 –> 00:59:15.289
Seth Meyer: Things change early and often. Talk to us. We can let you know what the new rules, regulations, and what the world is… and what the market is doing.

537
00:59:16.090 –> 00:59:18.070
Seth Meyer: We’re always around to talk.

538
00:59:18.840 –> 00:59:21.069
Seth Meyer: We… one of…

539
00:59:21.570 –> 00:59:30.000
Seth Meyer: our business issues is we don’t charge enough, and we don’t charge often enough, so I’m likely to give you a lot of free legal work before I figure out how to charge you.

540
00:59:30.300 –> 00:59:33.620
Seth Meyer: That’s a joke, but don’t be afraid to pick up the phone.

541
00:59:33.790 –> 00:59:43.789
Seth Meyer: And again, Ava and I want to give a sincere thank you to the Imperial Advisory Team, to Gershon, to Dean, and to all of you guys today.

542
00:59:43.940 –> 00:59:49.459
Seth Meyer: For, for giving us a platform. And if there’s any questions, we’re here.

543
00:59:50.430 –> 01:00:02.210
Gershon Morgulis: All right, we’re gonna put the poll up in a second. Thank you, everyone, for joining us, and we’re just about 12, but sounds like our speakers will stay for questions, so you’re all welcome to stay for a few more minutes.

544
01:00:03.360 –> 01:00:09.739
Gershon Morgulis: Seth, by the way, if you want help with your pricing, you know, it’s something that we help clients with.

545
01:00:11.130 –> 01:00:11.790
Seth Meyer: Awesome.

546
01:00:13.160 –> 01:00:18.610
Gershon Morgulis: We try to help people also make sure they get money, get paid, charge enough.

547
01:00:18.840 –> 01:00:21.619
Gershon Morgulis: Et cetera, et cetera. But there’s a…

548
01:00:21.830 –> 01:00:28.410
Gershon Morgulis: something I saw once, I forget, there’s some kind of burger place where they used to always give out fries.

549
01:00:28.600 –> 01:00:35.919
Gershon Morgulis: And their policy was they would fill up whatever the cup was, and they would always then go and add a little bit more.

550
01:00:36.170 –> 01:00:44.210
Gershon Morgulis: And so, sometimes that itself is a pricing strategy. The giving extra could be to help people feel good and feel comfortable.

551
01:00:44.390 –> 01:00:47.689
Gershon Morgulis: But… Sometimes it’s not. Anyway…

552
01:00:47.690 –> 01:01:00.779
Seth Meyer: Yeah. Well, that’s 5 guys, and now they’re getting dragged because each one of their burgers costs… they’re, like, costing 30 bucks a burger. So they’re paying for it otherwise, which goes to the point of, if you’re not paying for it.

553
01:01:00.970 –> 01:01:03.379
Seth Meyer: Right now, you’re gonna be paying for it somewhere else.

554
01:01:04.730 –> 01:01:08.239
Rik Katz: I would suggest, I would suggest that the,

555
01:01:08.460 –> 01:01:13.109
Rik Katz: Approaching attorneys up front is much, is the best approach.

556
01:01:13.400 –> 01:01:19.140
Rik Katz: And every contract that is not standard should be vetted by your attorney.

557
01:01:19.710 –> 01:01:24.139
Rik Katz: Especially if the other party is trying to make changes.

558
01:01:24.330 –> 01:01:32.140
Rik Katz: I would never undertake a contract where I think I have risks that may come to bite me. It’s not worth it in the long run.

559
01:01:32.900 –> 01:01:35.409
Rik Katz: So you’ve got to be secure up front.

560
01:01:35.560 –> 01:01:43.650
Rik Katz: I mentioned again credit companies because DMB and others Have humongous records on everybody.

561
01:01:43.830 –> 01:01:46.719
Rik Katz: And they will advise you if there’s a higher risk.

562
01:01:47.010 –> 01:01:55.869
Rik Katz: And they will monitor it and send you a message if the debtor is getting into trouble. So those are other ways of dealing with that.

563
01:01:56.270 –> 01:02:00.370
Rik Katz: But really, I think, you know, upfront homework is the answer.

564
01:02:00.510 –> 01:02:03.140
Rik Katz: And then dealing owner to owner.

565
01:02:03.250 –> 01:02:08.519
Rik Katz: or CFO to CFO, not in letters, on a telephone call, personal.

566
01:02:09.110 –> 01:02:19.949
Rik Katz: There you know very quickly what your next step is going to be. They’re either going to agree, or you’re in with your attorney. But those are just some of the things, you know, I’ve…

567
01:02:20.530 –> 01:02:25.070
Rik Katz: I’ve been the inside man checking contracts at previous employers.

568
01:02:25.590 –> 01:02:40.379
Rik Katz: I’ll just give you one example, which I think everybody would appreciate. We supply the automotive industry. Mostly other suppliers, we had full quality qualifications, but they were doing sub-assemblies, we were supplying parts.

569
01:02:40.550 –> 01:02:52.419
Rik Katz: Their contracts protected them against big parts, where there’s a recall, where there’s an accident, where you have to redesign the vehicle, and those are in those contracts.

570
01:02:52.580 –> 01:02:55.430
Rik Katz: And without exception, I took them out.

571
01:02:56.090 –> 01:03:06.819
Rik Katz: We argued over it while we were supplying, and they don’t want to change suppliers midstream, but I never signed one where our company was at risk for that sort of thing.

572
01:03:07.690 –> 01:03:09.690
Rik Katz: So when you’re dealing with a big God.

573
01:03:10.120 –> 01:03:18.889
Rik Katz: You know, either they want you to do business or not, but you can eliminate issues that are not within your control.

574
01:03:19.500 –> 01:03:22.020
Rik Katz: And again, an attorney will help you get there.

575
01:03:24.610 –> 01:03:25.550
Imperial Advisory CFO: Very fair.

576
01:03:27.010 –> 01:03:27.819
Rik Katz: There’s a…

577
01:03:28.600 –> 01:03:29.050
Gershon Morgulis: Thank you.

578
01:03:29.050 –> 01:03:34.319
Imperial Advisory CFO: Well, Seth and Neva, thank you very much. We appreciate your time. It was a great presentation.

579
01:03:34.450 –> 01:03:43.409
Imperial Advisory CFO: very helpful. I think, you’re comfortable, sharing this as well, and we can, we can put it out there. You okay with that?

580
01:03:43.410 –> 01:03:44.490
Seth Meyer: Absolutely, thank you.

581
01:03:45.860 –> 01:03:55.200
Imperial Advisory CFO: But again, thank you very much. It was very informative, appreciate you guys coming on, and I’m sure we can, add other topics as we move forward.

582
01:03:55.200 –> 01:03:55.740
Ava Armand: Huh.

583
01:03:56.090 –> 01:03:56.500
Seth Meyer: Absolutely.

584
01:03:56.500 –> 01:03:57.150
Gershon Morgulis: Yep.

585
01:03:58.340 –> 01:03:59.080
Imperial Advisory CFO: They’re showing.

586
01:03:59.080 –> 01:04:03.109
Gershon Morgulis: Both? No, thank you both. Thank you to everyone who joined, and

587
01:04:03.640 –> 01:04:07.690
Gershon Morgulis: We’ll talk. I found it interesting, I’m sure others did as well, and…

588
01:04:08.530 –> 01:04:11.559
Gershon Morgulis: Hopefully, we’ll be able to make some intros from the poll, at least some…

589
01:04:12.090 –> 01:04:13.950
Gershon Morgulis: People want to follow up with you guys.

590
01:04:15.600 –> 01:04:16.570
Gershon Morgulis: Alright.

591
01:04:17.120 –> 01:04:18.429
Gershon Morgulis: Thank you. Have a great day.

592
01:04:18.430 –> 01:04:18.940
Imperial Advisory CFO: Thank you, guys.

593
01:04:18.940 –> 01:04:19.580
Rik Katz: Thank you.