Worker's Compensation Premiums for Sub-Contractors

 My firm settles worker's compensation premium disputes almost weekly.

Most of these claims stem from of an annual audit at the end of a policy period resulting in a substantially higher premium calculation than anticipated by the business owner when they signed up for coverage.  This is often due to non-employee sub-contractors being included for coverage.

My clients typically believe this is an error on behalf of the insurance company, especially if they have provided a contract to the subs affirming their status as non-employees.

Unfortunately, this does not automatically exclude these subs from the worker's comp premium calculation.

Unless an insured company can show proof that their sub-contractors carried their own worker's comp insurance coverage, they must be included in the premium calculation.  This is because the insurance company bears the burden of insurance exposure and would be required to pay any claims the subs might file if they were injured while working for the insured company.

I have found that not all insurance agents are aware of this so they fail to point out the issue to their customers when they take out coverage.

If your company is involved in a dispute of this nature with any insurance company, please feel free to contact my office to discuss your options.

Repeat Offender Creditors

 With over 24 years of experience negotiating settlements on lawsuits across the country, I find my firm dealing with about a dozen or so "repeat offender" creditors that regularly file for past due debts.  Most of these companies use the same lawyer even in different jurisdictions but some rotate their claims between 2 or 3 different law firms.  Although each claim is different, I have learned how their best settlements are typically structured and I know how to position my clients for the best payment arrangements with each creditor.

Some of these frequent filers include:

    1. On Deck Capital

    2. ABC Supply Co.

    3. Texas Mutual Insurance Company

    4. Ascentium Capital

    5. Mustang Rentals

    6. American Express

    7. First Mercury Insurance Company

    8. IPFS Corporation

    9. Sunbelt Rentals

    10. Rexel USA

    11. Sunstate Equipment Co.

    12. United Rentals

    13. Elliott Electric Supply

If your company encounters a financial dispute with any of these creditors, call my office for a free consultation and we can discuss the likely outcome for a settlement.

A Speedy Settlement

 One of the benefits my clients receive when they retain my services to negotiate an out-of-court settlement on their behalf is my long-term relationship with many creditor attorneys.  These attorneys know from experience they can rely on my representations for my clients and I know how their best deals are typically structured.

Yesterday, I was hired to negotiate a settlement on a lawsuit recently filed by a creditor I have dealt with regularly for over 20 years.  After our initial consultation, I assured my client I should be able to reach acceptable settlement terms for them in a fairly short period of time.  (The norm for this particular creditor and their attorney is 1 to 3 weeks depending on the circumstances of each claim and they NEVER accept less than 50%.)

This morning, I sent a carefully worded offer to the attorney outlining my client's need for a 50% discount and monthly payments based on what I already knew they had agreed to with many other similar claims.

I received an acceptance shortly after noon this same day.

My client is now able to put the concern of a lawsuit behind them without yet being served AND enjoy manageable payments on 50% of the claim.

Graduated Payments

 I negotiated a settlement last month for a client with a company that had been heavily impacted by the COVID pandemic.  Although his business was beginning to turn around, revenues were still very low and he was unable to commit to more than $100 per month on any settlement.

The creditor was pressing for much higher payments to retire their claim as quickly as possible but this would have resulted in a quick default based on our revenue projections.

Using some creative thinking, I was able to convince the creditor and their attorney to accept graduated payments starting at $100 per month with payments increasing by $50 every 6 months resulting in the final few payments eventually reaching $350 each.  This arrangement allowed my client time to rebuild his business while providing the creditor with payments that would increase over time and eventually retire the debt.

Properly Worded Settlement Offers

 While the need for a discount on a claim may be obvious to a debtor business owner, the commercial creditor may need some convincing.

Properly worded offers can often make the difference.

Simply telling a creditor you are unable to pay a debt and lobbing an offer for less their way is rarely good enough.  Likewise, threatening them with bankruptcy is a poor strategy for a discounted settlement.

Most creditors need to be convinced they should compromise on their claims.  Providing some background on the events that led to the past due account and inability to pay will give the creditor some understanding of a debtor company's financial situation and help bring them to the negotiation table.

If a creditor understands they risk non-payment without some form of compromise or flexible repayment terms, they are more likely to see they are actually part of the solution to receiving at least a partial payment.

Merchant Cash Advance Loans

 My office has been working more and more MCA loans over the past many months with about a dozen cases currently in various stages of settlement negotiations.

Most of my clients involved in these claims took on Merchant Cash Advance loans when sales started to decline during the onset of the COVID pandemic last year.  After struggling to meet terms of repayment, they are all now in default and have been sued for the outstanding balances.

Fees and interest can easily range from 40% to 300% of the amount borrowed

Unlike conventional loans, MCA loans can carry repayment percentage rates substantially higher than what would normally be considered illegal under usury laws.  Since they are tied to a percentage of a company's future sales, they are not technically considered loans and payments are typically set as daily or weekly ACH withdrawals from the borrowers bank account.  Unless they are tied to a percentage of credit card sales, payments remain the same regardless of whether actual sales are up or down.

A Financing Option of Last Resort

I encourage any business owner to carefully consider whether or not the immediate infusion of cash will be worth the long term commitment of repayment with a Merchant Cash Advance loan.

Bank Account Holds

 One of the most frustrating situations some of my clients have encountered is a bank account garnishment.

These arise when a commercial creditor moves to enforce a judgment they have been awarded by the court and they can completely disrupt normal business activities for the debtor company.  Once a garnishment has been placed with the bank, they are required to immediately freeze all related accounts.

Removing a garnishment is never a quick process.

Creditors typically require at least partial payment on their claim along with the assurance of additional payments for the full amount before they will agree to release a garnishment.  Unfortunately, this often becomes a "catch 22" situation since payment may be impossible until the hold is lifted.  The cases I have dealt with required some creative solutions.

Even after a creditor agrees to release a garnishment, the bank must be satisfied there will be no liability on their part before they unfreeze accounts.  This often requires a review by their legal counsel and may involve some extra expense to the debtor company for related attorney's fees.

The best way to avoid a bank account hold is to communicate with creditors and arrange acceptable payment terms.  Even if a judgment has already been awarded, most commercial creditors prefer voluntary payment within the debtor company's means.