“Are You Prepared for a Downturn (Business Preservation Thoughts) ”

by Scott G. Husaby
from Krass Monroe, P.A.


Can you answer yes to all of the following questions? If not, you may be a candidate for a Krass Monroe Business Preservation Review.

1. Have you maximized the limited liability characteristics of your operating entities?

2. Are your real estate, franchise rights, intellectual property rights and other non-operating assets held in separate entities?

3. Have you spun off under-performing stores into separate entities in order to minimize cross default and cross collateralization issues?

4. Are you utilizing supplier agreements for different entities?

5. Do all of your leases provide the ability to sublet, have buy-out provisions and /or have an option to purchase the real estate?

6. Are you prioritizing the payment of your business obligations so items that have potential personal liability, such as payroll taxes, are satisfied first?

7. Are you minimizing spousal guarantees and insuring that any required personal guarantees have burn-off provisions (or were subsequently renegotiated to add such provisions)?

8. Have you built sufficient walls between your business assets and personal assets, and are you avoiding the commingling of business obligations and personal assets?

9. Have all of your shareholder loans to your business been collateralized (even if only on a secondary basis)?

10. Do your buy/sell agreements sufficiently incorporate mechanisms to account for an economic downturn, particularly in the areas of valuation and put options?

11. Have you considered the use of tools such as a family limited partnership to shift assets to family members and also create additional layers of ownership that creditors must work through?

What will a Krass Monroe Business Preservation Review do for you?

1. Provide a thorough review of your current business structure, business operation, ownership of personal assets, and estate plan to identify potential asset protection issues.

2. Provide a proactive plan to structure your business and personal assets in order to preserve your assets during these uncertain economic times.

3. Provide necessary assistance to implement your new business preservation plan.

Let Krass Monroe's extensive restructuring, workout and tax experience assist you in protecting what you have worked so hard to build.