[Ed. Note – The following post is a guest post from attorney Jeff Vandrew. Although we do estate planning work, we refer most of the pure asset protection work to folks like Jeff.
As fraud recovery lawyers, we are often looking to unwind bogus asset protection structures. We are amazed about how many people purchase off the shelf asset protection “solutions” from high pressure sales promotions or Internet gurus. Read Jeff’s article to understand why these rarely work.
If you find yourself unable to collect a judgment because of a fraudulent transfer, bogus lien or the like, give us a call. We never charge for an initial consultation and have helped clients in over 30 states. For more information about fraud recovery, contact attorney Brian Mahany at or (414) 704-6731 (direct). Want more information about asset protection? Contact Jeff through the link below.]
Equity Stripping, Asset Protection, and Bogus Liens
I’ve recently had a few clients approach me about an asset protection technique that is being heavily promoted on cruises and in seminars. It’s mostly marketed to those with significant investments in real estate, and it’s called equity stripping.
- the adequacy of the capital contribution
- the ratio of shareholder loans to capital
- the amount or degree of shareholder control
- the availability of similar loans from outside lenders
- certain other relevant questions such as (a) whether the ultimate financial failure was caused by under-capitalization; (b) whether the note included payment provisions and a fixed maturity date; (c) whether a note or other debt document was executed; (d) whether advances were used to acquire capital assets; and (e) how debt was treated in the business records.