Jacuzzi/Sundance going under?

[Chas]

If you finance a spa, you are taking out a loan. If you default because of a warranty issue, you have still defaulted on a loan, and your credit suffers accordingly. If the company goes out of business, you still owe on the loan, warranty or not, working tub or not.

Now, if the finance company goes out of business - most likely they will sell the debt to somebody else who will still expect to be paid.

No fun.

 8-)

[Jacuzzi Jim]

  Is it the same if say you die??  Do they collect from the estate or siblings??

[Zep]

Here is some scary stuff:

http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/index.html

[gadfly]

 Is it the same if say you die??  Do they collect from the estate or siblings??

For the most part it, the answer is yes.  Estate debts/taxes must be discharged, before remaining assets are released.

[Jacuzzi Jim]

Here is some scary stuff:

http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/index.html

  Well I am glad he didn't sugar coat it!!!

[ndabunka]

 Is it the same if say you die??  Do they collect from the estate or siblings??

Yes, the state collects from the estate FIRST.  If there is anything left, then it is distributed to the heirs.  If there is still additional debt beyond the deceased assets, there is really little the creditors can do to collect that deficit from the heirs.  The liquidation of assets is the responsibility of the executor of the deceased (to get the most $'s from those assets).  When someone dies without a clear executor, the state can (and does) step in to liquidate the assets.  In these cases, the deceased rarely gets a "reasonable" rate of return on such liquidated.  Rather, they sell them for "whatever" (literally) the bidders (at that time) are willing to pay.  This is the way that many take advantage of the system and often buy HUGE assets at literally a few pennies on the dollar.  Those buyers, then re-sell them and make a LOT (at the cost of the estate and the State).

[gadfly]

Yes, the state collects from the estate FIRST.  If there is anything left, then it is distributed to the heirs.  If there is still additional debt beyond the deceased assets, there is really little the creditors can do to collect that deficit from the heirs....
This is the way that many take advantage of the system and often buy HUGE assets at literally a few pennies on the dollar.  Those buyers, then re-sell them and make a LOT (at the cost of the estate and the State).

You are spending too much time watching infomercials.  The reason that probate takes so long is that the state waits for debtors prove their case.  My understanding is that the order is IRS, State, secured debts (ie spa paper), legitimate unsecured debt, and finally heirs.  As far as making a LOT, the people who make the late TV infomercials peddling these schemes are the ones who make money.  Many buyers watch the courts daily, and there is usually competition for anything that has tangible value.  If something looks like it is selling it is for pennies on the dollar, it is usually a reason like a hot-tub that froze and would cost more to repair than it is worth.

[ndabunka]

You are spending too much time watching infomercials.  The reason that probate takes so long is that the state waits for debtors prove their case.  My understanding is that the order is IRS, State, secured debtors (ie spa paper), legitimate unsecured debt, and finally heirs.  As far as making a LOT, the people who make the late TV infomercials peddling these schemes are the ones who make money.  Many buyers watch the courts daily, and there is usually competition for anything that has tangible value.  If something looks like it is selling it is for pennies on the dollar, it is usually a reason like a hot-tub that froze and would cost more to repair than it is worth.

I would agree that there are a fair number of those early morning "get rich quick" scheme's being fronted out there but there is a modicum of truth in everything.  Sometimes there simply aren't ANY bidders for stuff.  A friend of mine was contacted by a bank because they knew he bought stuff in bulk.  The estate auction in a remote area didn't bring ANY bidders.  The bank told him that they would sell him a tractor trailer of "stuff" for $1000 and wanted to know if he was interested.  He said "Why not" and when he opened it up it had a riding mower, two refrigerators, washer and dryer as well as about $10K worth of furniture.  I think he ended up selling everything in the newspaper over about a month period for somewhere in the neighborhood of $20K.  So, it is possible.  It's just not that "likely" to happen that way all the time.

[Bizdoc]

I am not a spa industry expert, but do work with closely-held and family owned companies.  The sad tale behind Mervyns is a common one now in larger corporate bankruptcies.  A private equity firm buys a company with very little of their own money, pays themselves a massive fee for doing the deal, saddles the company with mega debt and the company goes under as a result.  This scenario is about half of the major bankruptcies (Linens & Things, Mervyns, etc.)  In the Mervyn case, they split off the real estate into another entity, left the operating company with the debt, raised the leases significantly and torpedoed the operating company but left themselves owning the real estate.  Tough luck for the thousands of employees, the vendors, etc.  

There is some merit to dealing with a privately held/family owned company.  Nobody wants to be the person that sinks the family firm (e.g. who would want to be the Jacuzzi that took the firm into bankruptcy).  Also, family firms have "patient capital", in that they are looking at a multi-generational perspective, not just quarterly returns.  In terms of the overall economy, these family owned and "small" companies (under 300 employees) account for 70% of new jobs and 60% of GDP.  Give me a company where the owner and his "kids" work there any day over a company owned by private equity looters.

By the way, the oldest family-owned business in the US is the Zildjian Cymbal Company, founded almost 400 years ago and now in it's 14th generation of family ownership.  They have about 200 employees and about $50 million in sales.  Maybe they would consider branching out into spas?

[Zep]

isn't UPS a privately held company...mainly one family owned company?

[Dr. Spa™ Ret.]

Trading on the NYSE

[Zep]

Yeah I suppose....but a bit odd....yes a "public company" but 99% private?

In 1999 UPS raised $5.47 billion by selling 109.4 million shares of newly created Class B shares at $50 per share on the New York Stock Exchange.

The Class A shares, which controlled 99 percent of the voting rights at the company, remained in the private hands of employees and retirees.

[clover]

Hot Tub Ryan, are you related to GB & LL who worked with RC and CJ?  PM me

Privately held companies are seemingly a bit more fragile than deep pocket holding companies, but they have a key ingredient needed for survival that corporate owned
Companies do not have a passion to endure economic pain needed for the survival of their company.

Corporate owned companies are controlled by the bottom line result, profit or loss.  They are more apt to make a business decision to stop the bleeding.

Just a thought.