Monday I read Tyler Durden’s article Why Is Corporate America Destroying Itself?
He highly recommended the movie Blackberry which accurately and comically showed their creation and later downfall after creating their innovative successful phone system. That movie can be rented on Prime. I watched it Monday evening and it is a Must See!
I had dreams about it both Monday and Tuesday nights. Things were flowing all around my mind and I was confused and dazed. That is why I stopped writing for a few days until this morning’s explosive news about the SCOTUS. Two major thoughts hit me and one was connected to today's Rant on the Brunson Brother’s case. Therefore I will cover it here and write a second Rant later today on creating small.
In the movie you see when Blackberry lost it’s technical edge and went into the spiral death mode. This is generally to be expected in any rapid technological advancing theater. In the 80’s I learned that computers doubled in size and speed every three years. Your winning computer today is on the closet floor in three years. The changing technology got so fast that innovators would not patent their machines because if they did their competitors would copy the patent drawings, make a minor change and go into production in a year. Without a patent to copy, your competitors would purchase your first models produced and reverse engineer it to make their own, and that would take about three years. Therefore, no patents were applied for.
It is the spiral death mode I dreamed about. In normal business practices, a company would commit any act it could to remain alive. Thus enter the world of fraud, deceit, Ponzi schemes and many crimes one cannot be proud of. The problem is once one crosses that line their ego won’t let them see the truth clearly; they go insane within themselves.
So in my dream I was wrestling for a novel way out. The issue was if one just became a multi-millionaire still in charge of their mind, how might a wind down be played out differently? This went on all last night for me; “how to quit gracefully”.
This is what I finally came away with if I were the wealthy owner. The following laws get in the way of just dying on the job if you are a publicly traded corporation. Consider:
A) In the U. S., a large employer must give a three month’s written notice if you end up going out of business. If you don’t, you owe the employees three months severance that must be paid. If you manage to stay alive, you will loose key employees.
B) If you are a publicly traded corporation, you must notify the Security Exchange Commission in the next quarterly report that you may be in trouble. This is the kiss of death to you because big money will dump your stocks either killing you off or forcing you to sell the company to pirates. Failure to report may place you in jail for fraud.
Therefore, you are forced to lie, cheat and steal to stay in the game, compounding your risks.
However, if the owner is:
1. Able to see the future clearly; 2. Make the decision to get out early and honestly; 3. Able to sidestep both his ego and greed to have it all,
4. He might then get out with his pride, reputation, legally guiltless and remain wealthy.
This is how.
a) Once you make the decision to close, do not sell any large amounts of your stock so insider suits cannot be brought against you. b) Make an early filing with the SEC. They are now off your back and stops stockholders from suing you. You can now begin selling your stock.
Note: You have not announced you are going out of business, but rather
you may have to go out of business.
c) Immediately set aside three months severance pay for employees,
in a special bank account.
d) Hope for the best as you now sell off your stock as the ship begins to sink.
It is still possible a merger may save you but at least you can walk away rich and legally safe, without having to hurt others illegally.