As I “enjoy” the benefits of living in my sixties, I am increasingly amazed by the truth of something I have known for a long time, but which I have come to appreciate with even greater intensity: health requires a level of discipline that is not easy to maintain.  Now, everyone recognizes this truth almost intuitively.  We are acutely aware of foods that aren’t  nutritionally good for us, but that just flat-out taste great!  We know that exercise is a fundamental need of the human body, but creating the time to work out in the midst of our long days seems almost impossible.  And we all have our excesses; whether it’s smoking or drinking more coffee than we should, or eating beyond our needs, we are beset by drives that harm us in the long run.  What compounds the problem is that the resistance to such temptations seemingly grows less and less as the years go on. 

But when people stop long enough to muse about the secrets of a long and healthy life, the answers are not difficult.  The answers simply bring us back to the same basic tenets that we already know to be true, but which require at least a modicum of discipline to follow.  We seem to want to ignore these basics, though we know that in the long run (and sometimes in the short run)  these are the things that can and will trip us up.  Oh well, we think to ourselves, maybe some other day, when we have more time, when our doctors tell us  we “have to.”  What a shame that we will wait until a crisis occurs to pay attention to our health.

Sound familiar?  If it doesn’t ring true regarding our own personal health circumstances, then maybe it sounds a little bit like the financial health troubles we’re having.  Clearly, we haven’t been monitoring the health indicators which tell us about our fiscal fitness.  Just think about the habits that we (collectively) seem to have acquired over recent generations.

1.  Obesity- We have become very fat, to put it bluntly.  There is an increasing presence of  high-calories and empty-nutrition in our diets.  Not enough “real food” makes it into our lives.  Lean strategies have contributed mightily to stemming the expansion of growing waste-lines, but not heavily enough to counteract the fat that has formed, particularly at the top of corporations, where the will to say, “Enough” seems to have withered away along with other muscular thinking.

 

2. Lack of Exercise- Exercising is not easy; we all know that.  It requires     resolve and strength and sufficient knowledge to understand what it does for us.  And exercise experts all say that a variety of exercises is needed to develop overall fitness: exercise of restraint, exercise of judgment, exercise of fairness, exercise of reason.  Too few players or captains of industry seem to want to train anymore, leading to our current state of weakness.

 

3.  Use of Stimulants- We’re becoming a society of junkies, waiting for the next fix to  spur us on and unaware of the addictions that are making us sick.  Our purview is roughly the time between the current high and the next fix, and we really don’t seem to care too much about the detox that has to follow if we’re to survive.  The substance abuse is broad: oil, bailout money, credit, health care, market sovereignty, political truth.  To make matters worse, there’s new dealer around, and his name is Sam.

 

4. Irregular Check-Ups- It’s a longstanding truth that in order to maintain good health, we have to monitor our vital signs.  If we don’t truly know what those metrics of health are, we have no way of gauging our condition.  And lately we seem to want to hear what we would like to hear, rather than what the actual numbers might be telling us.  Ignoring an entire category of unemployed or a bulging credit bubble because we don’t like how it looks is no different than discounting twenty points on a blood pressure reading because we don’t think it matters.  Check-ups matter, and numbers don’t lie; people do, and mostly to ourselves.

 

5.  Following Fads- We have become magnetized to the steely draw of get-healthy-quick schemes.  The seductive allure of strategies that require no pain, no patience, and little effort are siren songs for dashed hopes and disappointment.  Just as junk foods contain little but empty calories, our entitlement demands for instant gratification lead us to quick-fix fads that are actually harmful to health.  Swaps and replacements aren’t of the same values as organic goods; organic may take longer, but it’s healthier.

 

6.  Delusions of Immortality- We might enter adulthood believing that we’ll never grow old and die, but we do.  We might believe that using tobacco is OK, that cancers happen to other users but not us, but it’s not and they do.   We might think that we’re entitled to abuse our systems and natural laws without paying the price, but we aren’t.  The future is created by the present, and that future is no less precious, important or in need of our best than today.  If nothing else, our children might appreciate having us around in the future, or even having a future at all….

Staying healthy isn’t always a matter of choice, of course.  Accidents happen, unexpected natural disasters occur and our well-being is tested.  But we are capable of withstanding the unexpected jolts far better if we’ve paid attention to those elements which we do control.  Having resources in reserve for such occasions better ensures fitness.  As Kenneth Cooper, the father of aerobics and fitness pioneer has said, “Fitness is the ability to carry out daily tasks with vigor and alertness, without undue fatigue and with ample energy … to meet the above-average physical stresses encountered in emergency situations.”  The Boy Scouts of America say it a different way: “Be Prepared.”

Discipline.  It’s not the easiest virtue to embrace, but easy is not always best.  With the benefit of years behind me and 20/20 hindsight, I more readily recognize the importance of disciplines in my life.  Age and experience provide a clearer picture of where my life may be leading me, and that clarity affirms my need for those basic disciplines.  I won’t live forever, but I want to live each of my days to its fullest, and leave for my children a healthy legacy.

Am uitat sa fac recomandari pentru artistii prezentati de mine in acest blog. Astfel:

- Rachmaninoff: 

Preludiu Op.32 Nr. 10 – it will make your heart cry!

Preludiu Op. 33 Nr. 5  - sweet cocaine on a stick, that’s fast!

- Alkan:

Festinul lui Esop – neoclasicism

Etude Op. 35 Nr. 1

- Prokofiev:

Etude Op.2 Nr.1 – Pure freakin’ genius!

Sonata nr. 7

Daca vreti sa ascultati mai multe compoziti de-ale lor, dati un comment.

This is the music guy,

Tiberiu

Ok, now it’s time to solve the mystery. (Final Post) [see previous here]

In 1978 Jimmy Carter reorganized the government with this order, and this took the issue of retirement account prohibited transactions away from the domain of the IRS and gave it to the Department of Labor (DOL).

This fact was unknown to (or possibly ignored by) the ROBS promoters who claimed the IRS ROBS letter confirmed the validity of the ROBS strategy. The truth is that the IRS letter did not say whether or not the ROBS strategy creates a prohibited transaction because the IRS didn’t have the authority to say it. It was the authority of DOL. Ah, what fun bureaucracy can be.

Speaking with the Proper Authority

Now, I’ve known about this transfer of authority ever since the creator of the IRA LLC (late attorney Debra Buchanan) told me about it back in 2004. So I’ve been in close contact with DOL employees for several years. Here’s where the bureaucracy gets funny (or scary, depending on how you look at it).

A couple of weeks after the IRS ROBS letter came out, I called my friendly DOL contacts to ask, “What do you think of the ROBS strategy that the IRS just wrote a letter about?” They responded with, “What letter? What is ROBS?”

[If my friends at the IRS and DOL are reading this now, don't take offense. Everyone knows that government agency intercommunication is kind of like Big Foot and the Loch Ness Monster. It's not your fault.]

So I faxed the IRS ROBS letter over to DOL. I was happy to do this for the IRS because I know they are really busy.

Finally… the Meeting

My annual trip to Washington, D.C. was scheduled for about six weeks later. So this gave DOL plenty of time to review the letter so we could discuss it at our meeting.

When the meeting came in December, all of the mystery surrounding ROBS collapsed with a couple of straightforward sentences out of the mouths of the decision makers at DOL (paraphrased):

The ‘qualifying employer securities’ exemption means that transaction of the plan acquiring stock from the C corporation is exempt. BUT, this exemption doesn’t throw the rules out the window for looking at the whole strategy. This whole strategy generally provides an ‘outside-of-the-plan’ benefit to the participant, who is a disqualified person. Thus this strategy creates a prohibited transaction.

Bear in mind this unofficial conversation is, well, not official. What would make it official is if I (or anyone else) submitted a written request for a DOL “Advisory Opinion” letter that explains whether the ROBS strategy is a prohibited transaction.

These DOL guys indicated that such a request would be met with an Advisory Opinion declaring ROBS illegal.

Don’t Kill the Messenger

There it is, folks. End of story. ROBS is a prohibited transaction. Many people and attorneys can disagree, but it comes down to 4 guys at this government agency in Washington, D.C. to provide the interpretation of the prohibited transaction law. In other words, it doesn’t matter what anybody thinks except for them. And they think you owe the government a 115% tax (on the amount of money involved in the scheme) if you do a ROBS.

Up until this meeting, I was just as hopeful as anyone that ROBS would come out of the gray area in a favorable conclusion. I don’t want to end this topic on an disappointing note, so I will be throwing out some ROBS alternatives in a future post.

[This is a continuation of a previous post. You should read that one first so this makes sense.]

The IRS Responds

For the first time ever, the IRS actually addressed the “financing a small business with an IRA or 401(k)” strategy. They called it “ROBS” for “roll over business startup,” and issued a letter on October 1, 2008. This letter basically stated:

• We know about the ROBS strategy
• We are concerned about it for several reasons

Celebrate and Ignore

Most ROBS promoters spun the IRS ROBS letter as a long-awaited government blessing for the strategy. They said that the concerns that the IRS listed were administrative errors, such as not filing the plan’s annual valuation report, not telling the corporation’s employees that they can also participate in the plan, and not ever launching a bona fide business in the first place. “These can be avoided. Read between the lines here.”

According to ROBS promoters, what was between the lines is that the IRS implied that the ROBS strategy was legitimate in the first place.

You would think my quest for a final answer to “Is the ROBS strategy legal or illegal?” would lead me to the IRS building in Washington, D.C… Not so. What ROBS promoters were ignoring (or unaware of) is that a strange, mostly unknown Presidential move from the 70s placed this matter outside of the IRS and onto a different government agency. In fact, the IRS letter talked around the core ROBS issue and never faced “Is the ROBS strategy legal or illegal?” head on—because, after the move in the 70s, they actually don’t have the legal authority to comment or decide on the issue.

What Now?

Determined to get to the bottom of this, I went to the other government agency.

Oh yeah, let me tell you why this matter is so important: If the ROBS promoters are wrong, everyone who believed them will be subject to a tax of at least 115% of the amount of funds involved in the strategy. OUCH!

[to be continued]

Guidant calls it Audeo. Benetrends calls it Rainmaker. SDCooper calls it ERSOP. It goes by many names and it’s gotten a lot of attention from the franchise industry and, as of about a year ago, the IRS. The IRS calls it “ROBS” for Roll-Over Business Startup.

What is it?

It’s a strategy where a person with retirement funds:

1. Forms a C corporation.
2. Uses the new C corporation to adopt a 401(k) or profit-sharing plan.
3. Performs a rollover from existing retirement funds (IRA, 401k, etc) into the new 401(k) plan.
4. Directs the new 401(k) plan to invest into the new C corporation by purchasing shares of stock.
5. Now this person has a C corporation with some or all of their retirement funds in it, and they are told they can use the funds to run the corporation, launch a venture, buy a franchise, and even pay themselves a salary.

Special Powers – For Good or Evil?

This is a tremendously powerful strategy. The problem? Many attorneys think it’s illegal because of the prohibited transaction rules. Those rules say that the accounthoder (a.k.a. plan participant) is classified as a “disqualified person,” meaning that the retirement plan can’t transact with him or do things designed to benefit him outside of growing the plan.

To complicate matters, many other attorneys think it’s legal and on very solid ground. Why the disagreement? The pro-ROBS attorneys say that a special exemption throws the prohibited transaction rules out the window when you classify the transfer of the C corporation stock as “qualifying employer securities.”

A Quest for the Final Answer

About a year ago, my phone was ringing off the hook from people saying, “Some say it’s legal, some say it’s illegal. What’s the truth? I don’t want to risk my retirement fund on something sketchy!”

So I set out to get to the bottom of it, and the outcome will surprise you. Stay tuned for the tale of my trip to Washington, D.C. to meet with the guys with whom the buck stops.

The American public seems to have receded in its anger and indignation over the recent, egregious examples of corporate financial malfeasance, but I haven’t.  The stories just keep on surfacing, but as in many cases of overexposure, the constant drumbeat of greed and irresponsibility eventually makes us numb and, worse, non-responsive.  As I witness  job losses by honest and hard-working people continue to grow, the return to business-as-usual on the part of the Wall Street wizards, and a government which has become capable only of narrow, self-interest action, I am shaken when I read this quotation from author and philosopher Ayn Rand:

When you see that trading is done, not by consent, but by compulsion- when you see that in order to produce, you need to obtain permission from men who produce nothing- when you see money flowing to those who deal, not in goods, but in favors- when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you- when you see corruption being rewarded and honesty becoming a self-scarifice- you may know that your society is doomed.

I’m compelled to see our current circumstances in light of Rand’s observation.  But I also know that our world is filled with individuals who still see the wisdom in the greater good, the nobility of servanthood, the wealth and rewards of a “compassionate capitalism.”  I know ESOP companies and their priorities and their commitments. 

We need the voices and experiences of employee ownership now more than ever, not just as a means of legal ownership succession, but as a tool of cultural transformation at a time when our system desperately needs the model.  As the famous 18th century British statesman Edmund Burke is attributed to have said:

The only thing necessary for the triumph of evil is for good men to do nothing.

I cannot help but feel the call to action….

Earlier this year a judge in Alberta, Canada signed an order allowing a defendant to be served by posting the Notice of the Action to the defendants Facebook account. 

This is the third instance of Facebook being allowed/ordered for the Service of Process that I am aware of.   First in Australia and the second in New Zealand, both occurred in the last 12 months. 

This post comes on the heals of a posting regarding Service of Process via Twitter earlier this week.   Clearly judges around the world see social networks as being at least as reliable a means for giving notice if not more so than publication when all other methods have failed.    I have to admit that I would agree that in certain circumstances service of process via social-networks or by other electronic means makes more sense than service by publication. 

I would not dismiss these recent developments as being a fad or a trend.  They are important and I believe they demonstrate that the courts and our customers are more and more willing to consider alternate manners of service that only a few short years ago where unthinkable. 

Just this evening I received an email from a fellow process server in Nevada.  He wrote that he has realized that his court filing business is all but gone come February of next year because the courts in the 8th Judicial District of Nevada has mandated electronic filing.  

He admits knew this day was coming.  He also admits that he was not prepared for the reality of it hitting him so soon and so hard.   He now finds himself wondering how to adjust his business model in order to survive the changes that are happening around him.   He is not alone; process serving companies from Seattle to Philadelphia in the last year have found themselves facing the same dilemma. 

The Service of Process has remained largely unchanged for more than 100 years.  I believe we are fooling ourselves if we think the act of serving process will not see a dramatic change in the years to come. 

My point is we have been talking about eFiling and eService at a national level for more than 10 years.  We need start preparing ourselves and our business for these and other challenges if we hope to remain relevant in the digital age.   

Are we on our own as we face these challenges or will the state and/or national process server associations lead the way?   Do those associations even have a role in addressing these challenges?  If so, do they have the talent and where-with-all to help insure the profession remains viable for many years to come?    

What do you think?

Australian Judge Approves sending default notices via Facebook  -  In December last year the social networking site Facebook was used to notify a couple that they lost their home after defaulting on a loan.   The court approved this method of delivery only after there had been numerous failed attempts to effect service at the couples home and by email. Australian courts have in the past given permission to serve process by standard e-mail and text messages when it was not possible to effect service on the subjects in person.  

Facebook released a statement following the court ruling. “We’re pleased to see the Australian court validate Facebook as a reliable, secure and private medium for communication. The ruling is also an interesting indication of the increasing role that Facebook is playing in people’s lives”.

FACEBOOK SOP – PART TWO – THIS TIME IN NEW ZEALAND Last year, it was an Australian court that allowed documents to be served on two defendants via the very popular social network site Facebook. Now, a New Zealand court has also has agreed; New Zealand High Court Associate Justice David Glendall approved the delivery of court papers via a Facebook notification to the account of a man being sued. One can only hope this Facebook trend will soon die of natural causes. For more information about the New Zealand case, please visit , NZ court papers can be served via Facebook, judge rules, March 16, 2009, written by Ian Llewellyn http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10561970

Process Service by E-Mail - New York A Snyder v. Alternate Energy Inc., a New York City Civil Court decision from last year allows e-mail service in certain circumstances, and reviews past opinions on the subject. For a very thorough review of this case please visit the following blog post:

The Volokh Conspiracy http://volokh.com/posts/1210268085.shtml Aside from the obvious implications of this court decision, what I find particularly fascinating is the comments to the author’s blog. The comments mostly from lawyers both applaud the decision and question just how effective traditional email can be for giving actual notice. Great comments, check out the blog to gain some insight into what attorney’s think about this trend.

eService Pursuant to Rule 4 (f) of the FRCP Earlier this year, a Virginia judge was asked to approve e-mail service of process. The following is a link to the motion to allow eService. Lawyers for indicted former Rep. William J. Jefferson, D-La., have asked Alexandria U.S. District Judge T.S. Ellis III to allow service of process by e-mail on a globetrotting witness. The actual Court Motion can be found at: http://bit.ly/WWLXo

28.08.2009

“Nu te grăbi să schimbi un rău cu altul.”

Esop (620 îH-560 îH)

In our work with publicly-traded corporations, tax-exempt employers and employee-owned (ESOP) companies, a common question arises from decision-makers.  “With all of the concern about the amount and types of compensation for executives, how can we know if we get it right?”   My short answer is “Process”, and knowing “the Two Cs” is one part of it. 

The setting of compensation for the top tier of management in any organization now has been identified clearly as an element of corporate governance regardless what type of employer we talk about.  No company would set a price for its product or service without first determining how much it costs to produce or provide it and without comparing what other similar products or services sell for.  Compensation decisions, especially for the most important talent in the organization, require the same understanding of both cost and comparability.

Do you know the “all in” cost of an executive position?  The SEC and Risk Metrics, formerly Institutional Shareholder Services, urges boards or compensation committees of public companies to use a “tally sheet” (which collects in one place the data that ultimately shows up in proxy disclosure tables).  I refer to this as the “Dick Grasso Rule” (for the recipient of a truly remarkable amount of deferred compensation, much to the astonishment of most of his board!), and I should note that the NYSE was then a private company.  None of our clients has as many types of compensation or as much of it in total as is found in some large companies or tax-exempts, but the point is this:  As a decision-maker, do you know the value of the current “package” of your key executives?

How does the compensation of key executives compare with that of “peers”?  Let’s start with who is in your organization’s “peer group.”  Generally speaking, for this purpose a peer organization should be one with whom your organization competes for customers and/or talent (for a tax-exempt, that may mean other organizations that have a similar mission or that compete with you for patrons).  Ideally, we could find 12 to 20 organizations having similar size, number of employees, corporate structure, etc., but practically speaking there are few exact matches.  Nevertheless, for statistical purposes, we need a group that is neither too large nor too small.  Also, if there is one characteristic of “comparability” that is more important than others, it is size (typically, assets or sales volume).  Both in types and amounts of executive compensation, size matters.  So if yours is a community bank with $500 million in assets, we can’t add BB&T to your peer group, even though it has a branch as big as your headquarters directly across the street!  Using publicly available information, we can amass “comparables” readily for the top five executives and for those below that level, we have access to numerous surveys and sources.  For closely held businesses, obtaining comparables from other closely held companies is particularly difficult. Once the peer data has been collected, sifted and presented, you can see how compensation types and amounts for executives in your organization compare with others in your peer group.

So, if you know “the Two Cs”, do you now have “the answer”?  No, but you have done the due diligence necessary to start the “Process”.  Do you know your Two Cs?

I will return to the topic of “Process” in future posts.

-Bob Musick, bmusick@titanhr.com

MS Cristian Sutu,

Epictet spunea celui care ii soptea ca stie niste lucruri ingrozitoare despre altul, ca daca ar sti cate lucruri stie el insusi despre sine s-ar ingrozi !
In schimb Epicur definind placerea omeneasca..a impartit-o in placeri naturale si necesare. Care ar fi acelea ? Din naturale, pe langa a dormi, a manca si a face sex…mai este si aceea de a te uita la RTV cand apare Hoara…
Din cele necesare dar nu si naturale..fumatul diverselor chestii de campanie si imbatatul cu apa rece…
Si mai avem nici naturale si nici necesare, cum ar fi acelea de a fi parlamentar, mogul de presa, jurnalist…
A patra categorie sunt placerile care imi plac mie…Basescu, barbatii adevarati, banditii de urmarit, balamucul facut de presedinte, belelele mogulilor, Bucurestiul fara Oprescu si toti care au cuvinte despre mine, incepand cu “mama ce buna e” !
Ca sa dispara Hoara, eu zic sa facem o hora si tot pe loc, pe loc, pe loc, pana nu rasare ioc ! Fara Busuioc ca e la protv si nu se pune !
Deci, ce vrei tu straine ? Asta e campanie serioasa de presa ? Va miscati complet nenatural, precum “vulpea si strugurii” varianta Esop si Faedru. De ce nu faceti campanie pentru ultimul care da bine pe sticla si deschide gura cand e vorba de cascaval…si iata cum am intrat in La Fontaine, ca deh…am fi ajuns la Grigore Alexandrescu cu “lupul moralist”, dar intram si in “cainele si catelul”, pe langa “vulpea liberala”…ups.. si atunci chiar ca-mi vine sa iau “toporul si padurea” daca ma supar !
Asa ca…necessaria et naturalia non sunt turpia, concluzie nasoala, pentru care sper sa nu fiu acuzata de crima de lezmajestate si sa fiu infierata pe umar cu…crini !

Acesta este un pamflet , ca raspuns la acest subiect

http://sutu.ro/2009/08/07/no-more-hoara/

si trebuie luat ca atare !

…like everyone else these days spreading myself thinly time-wise gets increasingly difficult. Therefore I’m combining two of my blogs, this one and my other one – which has resulted in “A Dad in France”. You can continue reading about my Dad at http://braunstonian.wordpress.com

Many, many thanks for visiting and reading my blog – but please come and join us at my “new” one.

Faimoasa fabula cu cioara a lui Esop si invatatura pe care o ilustreaza ”nevoia este mama invataturii”, sunt perfect adevarate dupa cum veti vedea.

Legatura cu fabula lui Esop este evidenta. Pentru cei care nu isi mai aduc aminte in fabula este vorba de o cioara insetata care gaseste un ochi de apa; nivelul apei era insa atat de scazut ca cioara a trebuit sa arunce pietre in groapa pentru a-l ridica.

2009 WSOP: $10000 NLHE Main Event Day 1a, Redmond Lee Grabs Early …

Recap of Day 1a of Event #57, $10000 World Championship No-Limit Hold&em, at the 2009 WSOP.

photo by flipchip • lasvegasvegas.com Wendeen H. Eolis, first lady to cash in any World Series of Poker A few favorite photos from Day 1A of the 2009.

2009 WSOP Main Event Day 1. Table not so good. Got up to 50k. Played like a retard for 3 minutes. Down to less than 20. Didn&t win anything. Down to 10. Got a gift. Finish day @ 19k. Bleh. In the entire six weeks, I don&t think I&ve …

photo by flipchip • lasvegasvegas.com Wendeen H. Eolis, first lady to cash in any World Series of Poker A few favorite photos from Day 1A of the 2009.

Recap of Day 1a of Event #57, $10000 World Championship No-Limit Hold&em, at the 2009 WSOP.

I’m a little bit disoriented by the news out of Detroit. GM was once a titan of capitalism, and is now a nearly incomprehensible joint venture which includes two national governments and a union healthcare fund. It isn’t even clearly socialism, and probably nobody on earth understands the whole thing.

And to make my head spin even more, Hummer is going to be sold to a Chinese firm. Hummer! The very symbol of aggressive American superiority and machismo, made in China! To enhance the humiliation, a GM plant will make Hummers for their new Chinese masters for a year or so. Somehow I think that the old “U.S.A.!” marketing approach is not going to work very well, now that Hummer is a case study in our collective inability to make anything anymore. The Hummer is a dinosaur, and it should have been dropped. Or maybe the Chinese know something I don’t about the rising global middle class and its rich sense of irony. Maybe they are looking forward to driving those beasts to rub our face in the declining Yankee empire.

But I digress.

My disorientation stems from a New York Times piece on the United Auto Workers’ unfamiliar new role in trying to pull GM and Chrysler back from the brink. Usually I am a merciless backseat editor, griping about lost opportunities to at least consider how cooperatives might contribute to solving our economic and financial crises. But here’s what’s got me interested in this article: It actually seems to focus too much on employee ownership for my tastes. There are four whole paragraphs tackle this issue, even taking a moment to compare UAW’s situation to the ill-fated employee ownership of United Airlines.

This is a useful comparison, to be sure. But what worries me is that this is a really ugly mongrel of employee ownership. Even without the deep and dangerous complexities of the emerging ownership structure, we are dealing with an imploding industry. Remember that taxpayers are putting at least $50 billion on the line for a best case scenario of 11 plants closing and 20,000 jobs lost, in addition to the damage caused by closure of over 1000 dealerships. This is ideally going to be ugly and painful.

There is also a good chance that it will end badly, and some may try to blame employee ownership for that. The main reason why this is not really a test case is that the employees won’t have control. Even in Chrysler, which will be 55% owned by the UAW fund, they will only have one seat on the board, and shares will be nonvoting. United’s ESOP at least had three seats and a veto over strategic decisions. The very structure of an ESOP is not a whole lot different than it would be if a bunch of workers banded together and invested in stock individually. One difference is that they don’t actually own the stock until they retire, but instead get a proportionate vote for how the trustee should vote for the collective bloc of ESOP shares. (Confused yet?) This is a far cry from a worker cooperative, in which every worker-owner gets an equal vote in governance of the firm.

The other issue is that there are apparently layers of separation between the UAW employees and any crumb of actual empowerment that they may enjoy. Rather than the ideal situation, in which everyone at a plant gets a vote about matters impacting that plant, power will apparently be conveyed via the whole union, whose interest is not even limited to running the company in question. There may even be a separate board that makes decisions on behalf of the retiree’s fund, separate from the union’s overall leadership (which is already somewhat distant from the rank and file).

Don’t get me wrong. I think that this is better than just letting GM fall (even if it ultimately falls anyway), but there are better ways to do this. Rather than the current scheme, which is very muddled and probably temporary, it would make sense to view firms that need government bailouts as opportunities to build true and democratic employee ownership. Rather than hand these firms back to whomever has been the most successful speculator in recent days (often day traders and real estate “flippers”), we should take a long-term view towards ownership structures that give power to those who are really invested in the firm.

Do  press release da ESOP

A Associação de Empresas de Software Open Source Portuguesas (ESOP) inaugurou uma nova área no seu site oficial na qual estão disponíveis diversos casos de sucesso de implementações Open Source em Portugal.
Com esta iniciativa, a ESOP pretende reforçar a sua função catalisadora no fomento da grande competitividade das soluções Open Source nos variados modelos de negócio, ao apresentar de forma detalhada projectos relevantes em organizações portuguesas. Este trabalho, que envolve um processo sistemático de recolha e normalização de informação junto das empresas da ESOP e respectivos clientes, estará em actualização permanente. Neste momento estão publicados e disponíveis para análise 11 casos de sucesso desenvolvidos pelas empresas da associação aos quais brevemente se juntarão outros.
A divulgação contínua de casos de sucesso na área do Open Source em Portugal insere-se no objectivo principal da ESOP de dinamizar o mercado e promover o que de melhor existe no sector das Tecnologias Abertas, ajudando as empresas e seus parceiros a encontrar soluções e software de excelência capazes de suportar o seu negócio. A ESOP, procura assim dar valor acrescentado às organizações portuguesas utilizando os modelos de desenvolvimento baseado em tecnologias Open Source, conhecidas por maximizar os níveis de inovação e competitividade.

Press release oficial.

Área dos casos de sucesso.

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ESOP V5.5 – Engineering Software Open Platform

Seller financing should not be (as much of) a concern in the sale of your business if you’ve structured your sale properly. Combining seller financing with an ESOP sale may provide a winning combination.

This article focuses on seller-financing primarily in an ESOP sale, and how this can benefit business sellers. Click to this seller financing basics article to learn more about financing the sale of a business to a third party.

The chances are better than 9 in 10 that you will be required to provide seller financing for at least some part of the sale price for the buyer. In fact, in the mergers and acquisition world most business sellers finance more than 40% of the sale price by accepting a subordinated note from the buyer, with the principal payable after the bank-financed portion has been repaid.

The reasons are quite simple. Most successful businesses are worth considerably more than the value of their assets. The difference is generically called goodwill, and banks will not loan money on goodwill. More…

It amazes me how much strange information and teaching there is out there regarding how to motivate others.  First of all, there’s an easy way to accomplish this in the business world: make everybody an owner (see: ESOP’s).   Employees don’t think and act like business owners…and why should they, if they’re not really owners?  I’ve seen several articles recently outlining the methods to basically “get those darn deadbeat employees to act like owners.”   In other words, let’s get them to think and act like they own the place.  This doesn’t hold water for people who are working for wages.

OK – so you don’t work at an employee-owned company.  Then let’s all agree that motivation is still an INTERNAL thing.   Any other type of motivation, which must come from OUTSIDE a person, is simply someone else trying to force their methods/will/plans/behavior on other people.  In other words, it’s simply coercion.  For a person to buy into the “company plan or company vision,”  they must: (1) know the specifics of the The Plan and (2) AGREE with the vision or plan.   Without this voluntary agreement, this voluntary buy-in, there is no widespread support of  The Plan.

It’s somewhat amazing that in our American politics we extol the wonders of democracy, while in most business circles we carefully avoid this way of operating.   There are, thank God, spectacular exceptions…..check out Semco, Southwest Airlines, WL Gore, Sierra Trading Post, REI, Clif Bar, etc.

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ESOP V5.5 – Engineering Software Open Platform

When you think about the act of giving notice/the serving process I bet you did not have in mind being served by a posting to your Facebook wall, twitter account, or to your email inbox.  

Well it seems as though not a week goes by when there is not another instance of electronic service process in the news or being written about in the legal community.   Increasingly our customers and constituents view the physical act of service of process as being out of touch with the times.   We can not afford to stand by and read story after story suggest that service of process through social networks and by email is an acceptable or reliable means for effecting service.   

The following is a link to an article that appeared in the legal publication South East Texas Record last month. Please check it out the author mentions several of the instances I have written about on my blog and on this forum.

http://bit.ly/1gOny7

The following is the closing line of his article:

“Professional process servers may no longer have to worry about the cat-and-mouse challenges of physically serving defendants, if an online alternative beckons.”

Recently I happened upon a Draft of a Federal Court Law Review Article, written by Ronald J. Hedges, Kenneth N. Rashbaum and Adam C. Losey.   The final version as far as I know has not yet been published.

The article is about Electronic Service of Process at Home and Abroad – Allowing Domestic Electronic Service of Process in the Federal Courts.   The article covers the history of Electronic Service of Process in the Federal Courts going back to the earliest instances where electronic service was allowed by facsimile, as well as, the current rule Federal Rule of Civil Procedure 4(f)(3) that allows in certain circumstance for a foreign defendant to be served electronically.  

The article goes on to make reasoned case for why the Federal Rules of Civil Procedures should be amended to keep pace with modern methods of both business and personal communication.   The draft Law Review Article is 22 pages of must read material if you want to gain a better sense of how our constituents, federal practitioners and federal judiciary view the issue of electronic service of process.  

The following are just a few of the key points the authors offered in support of amending Federal Rule 4 to allow domestic electronic service of process:

“When the Federal Rules were first drafted, the typewriter and telephone were on the cutting edge of communications technology.”

“While the law hardly advances at the speed of technology, federal courts have adapted to new technology. There is a bevy of precedent for amending the Federal Rules to keep up with technology.”

 “[Electronic filing systems] are now in use in 99% of the federal courts.”

“The use of this electronic filing system not only replaces the courts’ old electronic docketing and case management systems, but also provides courts the option to have case file documents in electronic format, and to accept filings over the Internet.”

“In a service of process context, there is a strong efficiency argument for the use of email. An email can be sent for little or no cost and can reach the recipient’s inbox literally moments after it is sent.”

“ It is likely that history will repeat itself in the international adoption of domestic and international electronic service of process via email and social networking communications, only this time around the United States will follow the lead of Australia and New Zealand.”

“Even if all the arguments against electronic service of process hold true, when electronic service of process is used as a secondary or tertiary channel of service it is more secure and more reliable than the channels currently used. Federal courts already allow service via means that are less reliable than normal channels, provided that more reliable channels are first exhausted.”

“Technology has evolved to the point that electronic service is superior to many forms of traditional service. Electronic service should now be treated as an equal to paper media by the Federal Rules.”

The entire draft article can be found at the following link: http://www.fclr.org/fclr/articles/html/2009/hedges.pdf I suspect a few of us could poke a few holes in the logic supporting their premise. But just a few… 

The bottom-line in my humble opinion is that the private process serving profession is in big trouble if it does not confront this challenge in a way that forges a path forward that we can live with.