Status of Everything Attachments

[Sid Post]

With Ted's, the owner, $5.5 Million lakefront mansion, how will he pay property taxes and basic upkeep? I am assuming there is a big loan on his house considering the cost but, if he was funding it out of EA Attachments proceeds and defrauded customers, there might be some action there.

Will lawyers be able to PIERCE THE VEIL?

“Piercing the veil” is a legal term that describes a situation where a court holds a corporation's shareholders or directors personally liable for the corporation's debts or actions. This is also known as “piercing the corporate veil”.

A court will only pierce the veil if it would result in an injustice. This requires more than evidence that a creditor will not get paid. It requires evidence that the corporation or LLC was used in some way to perpetrate a fraud or accomplish some other wrongful purpose.

 

[plowhog]

Running a business involves risk. But requiring payment in advance of receiving a product or service transfers much of that risk to the customer. What is regrettable is that it also increases the number of customers hurt when things go south.

Here is another memorable company that required payment in advance. I believe the owner served 30 months and was ordered to pay back $10M, although I don't think paying that was possible:

Rare coin dealer pleads guilty in $15 million fraud

A Newport Beach man who was a prominent dealer of rare coins and precious metals pleaded guilty in federal court Thursday to using an online scheme to defraud more than 400 people out of at least $15 million.

www.latimes.com

 

[workinonit]

These companies running these Ponzi schemes typically don't go south at this point in their game. His business was gang busters. Most times they make it on down the road quite a ways before things finally catch up to them. The new building debacle is what brought ole Ted down. Make no mistake that without it he would have still failed but it might have been years from now before it happened.

I've done commercial lending. The bank underwriters look at everything. The collateral will determine the methodology. Most of it is regulated by federal agencies. This applies to this situation and a national news story we cannot discuss.

Apparently whomever was investigating Ted's finances was a horrible investigator. No way anyone with any knowledge at all misses what Ted was doing. He likely had local lenders that would write him a check for whatever he wanted knowing he was good for it.

 

[Sid Post]

He likely had local lenders that would write him a check for whatever he wanted knowing he was good for it.

In rural communities, this happens a lot. In fact, it is how local business is successful in many cases.

For example, your pickup is a total loss but, it is Summer so you need it to till the fields and plant crops and won't have money to pay for it until harvest next year. Yes, there is a loss of crop risk but, that is how a lot of business is, or at least was done before corporate farming.

As long as your reputation is good and you are a long standing member of the community, "handshake" deals like this were pretty common.

If Ted really was running a Ponzi scheme, I hope the creditors take his home and cars away and leave him with nothing of his ill-gotten gains.

Also, regarding the new fabrication building, that was financed by Fidelity so, not a local "good old boy" network issue.

 

[plowhog]

Apparently whomever was investigating Ted's finances was a horrible investigator.

There is so much that is unknown. Much likely only known by the owner.

I ran a successful business for decades with a strong balance sheet and long history of profits. Rarely used lending. But each time I did seek or need a loan, I was required to put personal assets up for collateral. Enough personal assets to guarantee the loan if the business failed.

If the owner's residence is a $5M+ property, there is some collateral there even if it was financed. And if the owner could afford such a residence, there may be other collateral that could provide some security. Time will tell.

 

[Bobctat2035]

As someone who runs an e-commerce business, let me explain something to all of you who can't grasp the concept of a company requiring up front payment.

If you purchase an item from my website (custom or not) and I ship it to you without payment....there is literally nothing I can do to force you to pay me short of suing you. If you're down the street, no problem. If you're 2000 miles cross country...this is a problem. Multiply this times 50 orders a day across the entire country? Right. This is why 0% of the websites you order from will ship without payment.

You might argue "Well gee I shouldn't have to pay until it ships at least" and yes that is possible but what happens is we make this $5000 custom item for you and in three months later when it's completed we say "Ok, ready to ship. Pay me" and Mr. Customer
A: Doesn't respond in a timely fashion with payment so we're left dealing with said custom item packed and ready taking up space
B: Customer forgot about it and changes needed to be made / needs to cancel
C: Customer blew all their money on hookers and blow, maxed out their credit card and can't afford to pay anymore

It is FAR simpler for literally everyone involved to simply pay upfront like you do countless times on any other ecommerce website on a daily basis. In the end, you can always file a chargeback which is basically 100% foolproof if the company can't prove it shipped your product to your address. If you're using a check / wire / debit card for online purchases then that's your own stupid fault.

I don't condone EA's businesses practices. Personally I thought the guy always came off as kind of a tool in his videos and his responses to reviews and I've personally seen his monstrosity house on Lake Norman which looks like a giant blue turd at all angles. The endless complaints about payment upfront though are completely unfounded and based in total ignorance. Please stop already.

 

[workinonit]

I would speculate that there are very, very few $5K items that you or anyone else orders and pays up front for. Most everything I order charges my card when it ships. And by the way, I don't think Ted made custom implements. So if someone reneged, next man up. Ted's downfall was that he had customers falling all over themselves to send him money for his "far superior" tractor implements and it caught up with him. There are other companies making things as good or maybe better than Ted did and you don't have to send them money to hold for 6 months.

I just ordered $3K worth of fence wire from Deer Busters. It was picked up that day by SAIA and then they charged my card. Funny how that works.

 

[D&D]

If you purchase an item from my website (custom or not) and I ship it to you without payment....there is literally nothing I can do to force you to pay me short of suing you.

The endless complaints about payment upfront though are completely unfounded and based in total ignorance. Please stop already.

A) These are not custom order items, otherwise I agree.

B) selling inventory that you don’t have and requiring payment upfront is bad business, period. Does not matter what you’re selling

when’s the last time you hired a contractor to build a house or do some repair work? Did they require payment in full, upfront? Did you hire them?

 

[Bobctat2035]

A) These are not custom order items, otherwise I agree.

B) selling inventory that you don’t have and requiring payment upfront is bad business, period. Does not matter what you’re selling

when’s the last time you hired a contractor to build a house or do some repair work? Did they require payment in full, upfront? Did you hire them?

Custom and made to order are one in the same. If you order a specific implement for a specific machine that is not sitting around as inventory then it is made to order. If and when you cancel your order they now have to store this product until the right person comes along and purchases it. When you're offering hundreds or thousands of variations of products, it can be a long time before someone orders that specific product again.

A contractor working on your home is apples to oranges. If a contractor does work on your home without getting paid it's easy for them to sue you for payment or put a lien on your house. It's not so simple when the customer lives 1000 miles away. You going to spend all your time flying around the country to sit in small claims courts because "It's bad business" to require payment up front? I don't think so. There are a billion transactions online everyday with people paying up front with very few issues.

 

[D&D]

Custom and made to order are one in the same.

yes, nothing EA made was custom or made to order. They were all stock orders.

What does your e-commerce site sell? Let’s see if we can make an apples to apples comp. Do you charge any customer accounts today and wait months to ship for back orders?