Quoted from BackFlipper:This is my favorite part - because I have created, purchased, and sold many businesses in the last 25 years. And, yes, I have been burned - particularly to the tune of $3 Million in "shareholder loans."
Let me translate how that works:
1) Invest $3 Million in a business with one owner who controls the cash.
2) Forget to include salary restrictions on that owner when you invest.
3) Owner "pays himself" a huge bonus one week, say $2.5 million.
4) A few days later, the owner deposits $2.4 Million back into the corporate account. This is a shareholder loan to the company.
5) Looking at the monthly numbers (just totals), things look in order. I never notice it.
6) Years go by.
7) You have a buyer for the company at $4.5 Million.
You are notified that there are $2.4 Million in outstanding shareholder loans that get paid before you.
9) You learn an expensive lesson.
John is no dummy. He had no restrictions on the money. He paid it all to himself first, and, out of the goodness of his heart, loaned it back to Zidware. That way, he is first in line as a creditor. That is why he is paying nobody! The language of "shareholder loans" was not included accidentally. By signing it, you are acknowledging that "John has outstanding loans and you were made aware of this."
Well said. I really, REALLY hope no one signed the new agreement. If they did, they certainly aren't part of pinside and are under Jpop's spell.
Whoever is the new licensee needs to revise the agreement. You can't possibly think you can outsmart Pinsiders with that nonsense. What's shocking is that the agreement must have been looked at, touched up, proofread, corrected, revised multiple times, put in the oven, cooled down and STILL came out the way it did. Disgusting.