You’re invited!
Please visit our new Cottage Law website at www.Cottage-Law.com for important information on sale, purchase, tax and succession planning issues for cottages, second homes and similar properties.
Visit www.Cottage-Law.com Today!
We’d love to know what you think of the website and value your comments and input of additional information you would like added to our new Cottage Law website!
Thanks,
Dan Penning
Reminder:
You will soon receive your “2010 Notice of Assessment for Michigan Real Property”
This notice provides valuable information to determine whether a Property Tax Appeal is appropriate.
We can help answer your questions ….
“What do I do with my assessment notice?”
“When can I file an appeal?”
“How do I get through the appeal process?”
We can help answer these questions and more!
Please contact us at 231.271.4500 to assist you in reviewing your Michigan property assessment.
Dan A. Penning
I’m pleased to announce that one of Michigan’s premier business journals, DBUSINESS, recently announced its 2010 “Top Lawyers” in metropolitan Detroit – and three of the principals with Wright Penning & Beamer made the list.
DBUSINESS compiles its list as a resource and reference guide for its readers. Selection criteria include:
The list was published in the journal’s November/December 2009 edition.
According to the publication, selected lawyers “possess the highest professional ability and ethical standards.”
Dirk Beamer, Lee Flaherty and I were selected this year. Beamer for his expertise in business and commercial litigation; Flaherty for her work with non-profits and charitable organizations, and I was recognized for business and estate planning.
As a founding shareholder of the firm I’ve focused my practice areas primarily in planning for business entities including family businesses, estate planning for business owners, individuals, families with special needs children, and succession planning for family cottages and farms. Through these practice areas our firm has become a leading resource for individual and business clients.
Beamer oversees our firm’s diverse litigation practice, focusing primarily on business and commercial litigation. He spearheads the firm’s efforts in insurance law, unfair competition, trademark infringement, employment matters and contract disputes. Dirk has litigated in state and federal courts across the country. He also counsels business owners and managers concerning employment practices and management.
In addition to her work with non-profits, Lee Flaherty is well versed in real estate, business law, estate planning and probate. Lee’s business expertise encompasses the support of ongoing businesses, business purchases and sales, and representation in commercial real estate transactions. Her estate planning practice focuses on the preparation of a wide variety of trusts and other documents to assist clients in avoiding probate, preserving assets and minimizing taxes.
I take pride in my colleagues’ accomplishments and wanted to share this good news with you. As a firm we continue to strive daily to deliver the highest quality legal services to our clients throughout Michigan and beyond.
Dan A. Penning
If you’re like me, you received any number of gift cards this past holiday season. Looking at the handful of gift cards I received, it occurred to me that I might just hold onto them until I needed something from a particular store. But, having heard that the sales reports for this past holiday season didn’t quite meet projections, I quickly asked myself, “What happens to my card if a store goes out of business or files bankruptcy?” Doing some quick research, I learned that consumers lost an estimated $8-10 billion in gift cards due to stores going out of business in 2008. How does this happen?
I discovered that the purchaser of a gift card is essentially loaning the issuing store money in the amount of the card. The issuing store, however, is not required to give the purchaser collateral as security for the loan in the amount of the gift card or do anything else for that matter to insure that the card continues to have value. As a result, the holder of the gift card is nothing more than an unsecured creditor. If the store goes out of business by filing for bankruptcy or by simply shutting its doors, the holder of the gift card will likely receive nothing for the gift card, or, at most, a few cents for each dollar of value (and then only years down the road at the end of the bankruptcy proceeding).
There are stores that have continued to accept gift cards while in bankruptcy proceedings, but there is no law that requires them to do so. For example, when Sharper Image declared bankruptcy in 2008, it had approximately $20 million in outstanding gift cards. Sharper Image stores continued to accept the gift cards but only on one condition: the shopper had to spend double the amount of the gift card to redeem it.
While bankruptcy courts should be able to provide some protection, that protection is often illusory. In one bankruptcy case, a Chicago law firm was successful in gaining class certification from the bankruptcy court for gift card holders, treating the entire group as a single creditor with combined claims of approximately $19 million. But the process takes a long time, and the secured creditors get paid before general unsecured creditors. There is no guarantee that any money will remain to pay the unsecured creditors like the card holders.
Consider also the positive effect that unredeemed gift cards have on the financial reports of the merchants. Fewer than 30 percent of store gift cards are redeemed within a month of purchase. The amount of each gift card may seem small, but in total, unredeemed gift card balances can add up to millions of dollars per retailer. Best Buy (BBY), which had approximately $471 million in unspent balances shown on its books in one recent year, added $135 million in unspent gift cards to its total operating income of $3.6 billion.
According to First Data, a website that compiles gift card statistics, through the 2009 holiday season, merchant branded (“closed loop”) gift card sales increased 2.1 percent compared to 2008. Most closed loop cards don’t have charges and fees in connection with the purchase because retailers can more than recoup their money from gift card sales. According to the National Retail Federation, shoppers spend 15 to 40 percent more than the gift card value.
Open loop gift cards, on the other hand, are not tied to specific merchants but are sold by banks or credit card companies (Visa, American Express, etc.). Recipients may use them at any business that accepts that particular card. However, hidden fees and expiration dates are common with open loop cards. Earlier in 2009, Congress passed reforms relative to the credit card industry that included regulations for open loop gift cards. The rules, which take effect in August of this year, prohibit dormancy fees unless the card has not been used for at least a year. The rules also require at minimum, a five-year expiration date.
If you have unspent gift cards in your pocket, consider spending them right away. Otherwise, keep informed about the retailers’ financial strengths (and weaknesses) if you choose to keep them for later use.
Dan A. Penninng
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