Is there a "Market Price" on toxic assets?

Has there ever been a clearer indicator that market to market is broken....."It is unclear whether banks will sell the assets"

http://www.thestreet.com/story/10493886/1/treasury-100-firms-want-toxic-assets.html

Just ridiculous! Why we ever decided to throw real dollars after a phantom unrealized loss is beyond me, but I guess I am going to have to get over it because that is what we are doing.

Blog Post Cited in Orange County Register Article on Annual Minutes Mailings

This blog's most popular entry, posted in January 2007 but updated continually since, concerning misleading corporate and LLC annual minutes mailings was recently cited in a small business advice column in the Orange County Register:

Old scam reappears in O.C.:

Burbank attorney Jonas Grant gives a good explanation of the law on his California Business Law Blog, based on problems his clients reported to him in 2007. The post has gotten dozens of comments from people who received these solicitations, some from other states.

(One even accuses Grant of sending the letters, thus the red-letter disclaimer at the top of his post. Talk about shooting the messenger.)

By Jan Norman, March 29, 2009

California Sales Tax Rate Increase

Effective April 1, 2009, but unfortunately not an April Fool's Day joke is a 1% rate increase to California's sales tax, for a new total of 8.25%. In addition, certain cities and localities may add an additional surcharge of up to 2.0%, for a grand total not to exceed 10.25%, among the highest sales tax rates in the nation. Los Angeles County's rate is now 9.25%.

More detailed information is provided in this notice issued by California's sales tax authority, the Board of Equalization (CA "BOE").

See also:

California Legislature Plans to Increase Taxes Amid Recession

Free Legal Forms Online

Adams Drafting, a blawg of interest primarily to business attorneys, has an interesting post and following discussion regarding the use, misuse, and dangers of free legal forms found on the Internet or elsewhere: With Free Online Forms, You Get What You Pay For. Excerpts:

The problem isn’t a shortage of free legal forms online. Instead, it’s that there’s available online for free a vast and ever-growing supply of contract models, most of them crappy, and separating what’s OK, in terms of language and substance, from what’s not OK is a gruesome task....


I see the problem as being not that the documents are inherently incorrect in themselves - I’m sure the good sites produce very sound documents - but that they are drafted in the abstract. If a person pulls a document from any standard database - whether one of these sites or their own firm’s standards - it will be blind luck if it actually works for the agreement they are trying to draft for without amendment. Then there seem to be three options:

(i) The document as just used as-is - the document is unlikely to fit the deal.
(ii) A non-lawyer makes some changes. The problem here is the risk of unintended legal consequences of a change.
(iii) A lawyer reviews it. Clearly the issue here is cost.

I suppose people just need to balance those factors, but for any deal worth anything significant, it is likely to be worth having a lawyer have a look, at which point it is more cost-effective for them to use their own standards.

See also Factual Error Found On the Internet, The Onion, 2002.

New Twitter account - Follow us

The Law Office of Jonas M. Grant, P.C. is now on Twitter - which means you can "follow" us by signing up as one of our followers here, and receive occasional updates, including notification of new blog posts here - typically about four per month - and you can of course stop "following" at any time.

Our Twitter page can be found here:

Twitter: Law Office of Jonas M. Grant, P.C.

For those who prefer, there is also a free subscription available for the Atom feed for this blog.

See also:

• LinkedIn: Jonas M. Grant
• Facebook: Law Office of Jonas M. Grant, P.C.

BAN meeting and SBA hope

Getting ready for the Birmingham Angel Network screening meeting on the 26th at Innovation Depot. (www.birminghamangels.com)

Also, noticed that the Treasury Department announced they will purchase up to $15 billion in securities backed by Small Business Administration loans in an effort to unfreeze the secondary market for SBA loans.

Here's hoping that we can get some of our new companies up and running.

Nigerian Email Scam Targets Lawyers & Their Client Trust Accounts

Law.com reports that a new variation of the standard so-called Nigerian, 419, or advance fee email scam has been targeting lawyers. Phony clients allegedly seeking to collect funds from stateside customers contact a U.S. attorney seeking collections assistance. As soon as the attorney has accepted the representation, the customer immediately agrees to pay (how often does that happen!?), often in two partial payments to be timed one right after another. The check then received will usually be a forged cashier's check, payable to the attorney, and from which the attorney is told to deduct his fee (which the client may not be too concerned about the amount of, another red flag).

The author suggests that attorneys avoid becoming victims by:

• Researching clients using Google and other sources before accepting the matter
• Contacting any attorney or other party that has supposedly referred the matter to the lawyer
• Accepting overseas, especially Chinese, clients only if their story makes logical sense and upon the payment of a retainer
• Responding to any initial inquiries not known to be fraudulent, but which are suspected to be, making sure to point out clearly that an advance deposit against fees/costs is always required
• Taking any suspected fraudulent check to the issuing bank for analysis - they will often be able to identify small details that make the forgery obvious
• If a large payment is received upon behalf of a "client", even if by a cashier's check, holding the funds at least two weeks for clearance before disbursing the funds

A typical solicitation looks like this, and may even track this language precisely:

Dear ,

Request for Legal assistance


This is an official request for legal representation on behalf of XXX Co.Ltd.
We are a textile company with principal business in garment manufacturing and trading.
We are presently incapacitated due to international legal boundaries to exert pressure on our delinquent customers and we request for your services accordingly. We got your contact information from the Online Lawyers Directory as a result of our search for a reliable firm or individual to provide legal services as requested.
After a careful review of your profile as well as your qualification and experience, we are of the opinion that you are capable and qualified to provide the legal services as requested.
On behalf of XXX Co.Ltd, Please accept my sincerest appreciation in advance for your willingness to render your services as we look forward to your prompt response to our request.

Thank you.

Another example:

Attention Counsel,
XXX CO., LTD. is a manufacturing company with its head office in Japan, and branches all over Asia continent. The management of XXX CO., LTD. requires your legal representation for our North American delinquent customers. We are looking for a reputable attorney to represent us in North America in order for us to recover monies due to our organization by overseas customers, and as well follow up with these accounts. In order to achieve these objectives a good and reputable law firm will be required to handle this service.
We understand that a proper Attorney client agreement must be entered into by both parties.
Your consideration of our request is highly anticipated, and we look forward to your prompt response.
Yours Truly,

XXX

June 2009 update: The State Bar of California has issued a fraud alert to California attorneys on this topic:

STATE BAR ISSUES FRAUD ALERT TO CALIFORNIA ATTORNEYS

MEDIA CONTACT: Diane Curtis 415-538-2028 diane.curtis@calbar.ca.gov

San Francisco, May 29, 2009 —

The State Bar of California today issued a warning to attorneys to beware of international Internet scams purporting to hire U.S. lawyers to collect large debts.

Despite efforts to publicize the scams over the last year, Bank of America Vice President Blossom Dunng said attorneys continue to be targeted. In four separate cases since the start of the year, Bank of America attorney customers lost hundreds of thousands of dollars from counterfeit checks.

"As bank officials say, 'Know who you're doing business with,'" said State Bar President Holly Fujie. "If you deposit a check for $500,000, you had better have a clear idea where that money is coming from."

The scammers often use the names of real companies to gain credibility and use e-mail addresses that seem to have a connection to the companies. The State Bar itself has received such bogus solicitations:

"This is an official requisition for your legal consultation services on behalf of _________," one e-mail sent to the bar said. "We are presently incapacitated due to international legal boundaries to exert pressure on our delinquent customers in USA and we request your services accordingly."

"We got your contact information from the state of USA lawyers Directory as a result of our search for a reliable firm or individual to provide legal services as requested. After a careful review of your profile as well as your qualification and experience, we are of the opinion that your [sic] are capable and qualified to provide the legal services as requested."

If an attorney responds, the process begins and at some point the attorney receives a legitimate-looking check - sometimes even what appears to be a cashier's check - for the supposed debt. The attorney is asked to subtract his retainer and then send a check for the rest to the client.

In 2006, one attorney had a $2 million loss. This year, Dunng said, checks from the attorneys to the phantom clients range from $75,000 to half a million dollars.

Dunng, treasury services manager who handles all 8,800 Bank of America Client Trust Accounts, said the customer, not the bank, is responsible because it is common practice for the bank to make deposited funds immediately available to good bank customers.

"Attorneys should be the last people to fall for these scams," said Fujie. "Be careful!"

Scott Wilson, FBI special agent in Cleveland, says scams change so quickly that it's very difficult to keep up with them. Still, law firms that have been victimized or contacted as part of what looks like a fraud scheme should report the incidents. If a law firm has lost money in a fraud scheme, contact the local FBI office, says Wilson. If firms or lawyers have not lost money but believe they have been targeted by scammers, they should make a report to the Internet Crime Complaint Center at www.ic3.gov.

To view a story in the California Bar Journal about attorney victims of Internet scams, go to www.calbar.ca.gov, and check the California Bar Journal archives for July 2008.

Founded in 1927 by the state legislature, the State Bar of California is an administrative arm of the California Supreme Court, serving the public and seeking to improve the justice system for more than 80 years. All lawyers practicing law in California must be members of the State Bar. By May 2009, membership reached more than 222,000.