X-Virus-Scanned: clean according to Sophos on Logan.com Return-Path: Sender: To: lml@lancaironline.net Date: Thu, 20 Sep 2007 19:36:59 -0400 Message-ID: X-Original-Return-Path: Received: from mail110c35.nsolutionszone.com ([209.235.148.120] verified) by logan.com (CommuniGate Pro SMTP 5.1.12) with ESMTPS id 2342031 for lml@lancaironline.net; Thu, 20 Sep 2007 11:44:46 -0400 Received-SPF: pass receiver=logan.com; client-ip=209.235.148.120; envelope-from=rsmiley2@centurytel.net X-Authenticated-User: rsmiley2.centurytel.net Received: from PC294771894831 (d7-68.rb.gh.centurytel.net [69.29.198.68]) (authenticated bits=0) by mail110c35.nsolutionszone.com (8.13.6.20060614/8.13.1) with ESMTP id l8KFi4Vq018809 for ; Thu, 20 Sep 2007 15:44:06 GMT X-Original-Message-ID: <001001c7fb9d$059ef810$640aa8c0@PC294771894831> From: "Bob Smiley" X-Original-To: "Lancair Mailing List" References: Subject: Re: [LML] product liability X-Original-Date: Thu, 20 Sep 2007 08:43:39 -0700 MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_000D_01C7FB62.57A13D20" X-Priority: 3 X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook Express 6.00.2900.3138 X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.3138 This is a multi-part message in MIME format. ------=_NextPart_000_000D_01C7FB62.57A13D20 Content-Type: text/plain; charset="windows-1250" Content-Transfer-Encoding: quoted-printable Creating another entity offers some limited protection. But lets ask a = few questions. Are you personally going to be building the aircraft? Are you going to be the pilot? Are you going to be doing the maintenance? Are you a stockholder with voting rights in the company ie do you have = some decision authority in the company? If you answer yes to any of the above; you are involved in the business = operations and are subject to personal liability exposure. These are = the risks we take in life. Only you can determine the risk reward = benefits for your actions. When an attorney goes after a company or organization, they also go = after its officers as a group, each person individually and all = associated companies and persons involved in the operations. They = attempt to pierce the corporate shell(s) wherever possible. Case in = point. Enron or Adelphia Communications. You cannot forget those = examples. In summary, the attorneys always ask the question "show me the = money". They search for the money and go after it. I heard on the news yesterday that that dry cleaning company that was = sued by a judge for, I believe it was, $61,000,000 over a pair of pants. = Well, the cleaners successfully defended the suit but he had to close = down three of his dry cleaning stores because of lost business and legal = fees to defend his position. Go figure. I know of two individuals who are members of the Puget Sound Pilots = Association. They pilot large ships through Puget Sound in Washington = State. They incorporate themselves and do not hire out as individuals. = Thus they are hired as Phillip Jones Inc. I suppose if you incorporate = yourself and fly PIC as Phillip Jones Inc.with zero assets you have two = corporate shells to pierce; you might have some protection but you will = still have to pay legal fees to defend yourself in a lawsuit. In the = case of a multimillion lawsuit you will have to pay substantial sums of = money for your attorney's fees even if you are successful in defending = yourself. Can you just imagine at $300 per hour how many hours you = would pay for to defend a $10,000,000 lawsuit? The cost could be = substantial. You cannot have a successful defense and not pay your = attorneys. My attorney told me that the only way to be protected is to to carry = insurance. Shells do not work if someone is substantially damaged and = you have a junk yard dog attorney attacking you. The only way you can protect yourself is as follows: 1. you give away all your assets to your wife before any litigous event = is known; 2. you, or a shell corporation, own the plane only; 3.you or your wife do not support the plane operation and maintenance = costs from your personal incomes. Maybe you can do so in terms of = non-voting shares in the stock of the plane. 4. You cannot have any voting rights or any incidence of control of the = plane. I also found out that Florida and Texas offer great protection on estate = preservation in catastrophic legal situations. The total value of your = personal residence is protected from bankruptcy and attachment in legal = actions. That is why those corporate scoundrels are building 10-15 = million dollar homes in Texas and Florida. Bob Smiley N94RJ ------=_NextPart_000_000D_01C7FB62.57A13D20 Content-Type: text/html; charset="windows-1250" Content-Transfer-Encoding: quoted-printable
Creating another entity offers some = limited=20 protection. But lets ask a few questions.
 
Are you personally going to be building = the=20 aircraft?
Are you going to be the = pilot?
Are you going to be doing the=20 maintenance?
Are you a stockholder with voting = rights in the=20 company ie do you have some decision authority in the = company?
 
If you answer yes to any of the above; = you=20 are involved in the business operations and are subject to personal = liability exposure.  These are the risks we take in life. Only you = can=20 determine the risk reward benefits for your actions.
 
When an attorney goes after a company = or=20 organization, they also go after  its officers as a group, each = person=20 individually and all associated companies and persons involved in the=20 operations. They attempt to pierce the corporate shell(s) wherever = possible.=20 Case in point.  Enron or Adelphia Communications.  You cannot = forget=20 those examples. In summary, the attorneys always ask the question = "show me=20 the money".  They search for the money and go after = it.
 
I heard on the news yesterday that = that dry=20 cleaning company that was sued by a judge for, I believe it was, = $61,000,000=20 over a pair of pants.  Well, the cleaners successfully defended the = suit=20 but he had to close down three of his dry cleaning stores because of = lost=20 business and legal fees to defend his position.  Go = figure.
 
I know of two individuals who are = members of the=20 Puget Sound Pilots Association.  They pilot large ships through = Puget Sound=20 in Washington State.  They incorporate themselves and do not hire = out as=20 individuals.  Thus they are hired as Phillip Jones Inc.  I = suppose if=20 you incorporate yourself and fly PIC as Phillip Jones Inc.with zero = assets you=20 have two corporate shells to pierce; you might have some protection but = you will=20 still have to pay legal fees to defend yourself in a lawsuit.  In = the case=20 of a multimillion lawsuit you will have to pay substantial sums of money = for=20 your attorney's fees even if you are successful in defending = yourself.  Can=20 you just imagine at $300 per hour how many hours you would pay for to = defend a=20 $10,000,000 lawsuit? The cost could be substantial. You cannot have a = successful=20 defense and not pay your attorneys.
 
My attorney told me that the only way = to be=20 protected is to to carry insurance.  Shells do not work if someone = is=20 substantially damaged and you have a junk yard dog attorney attacking=20 you.
 
The only way you can protect yourself = is as=20 follows:
 
1. you give away all your assets to = your wife=20 before any litigous event is known;
2. you, or a shell = corporation, own the plane=20 only;
3.you or your wife do not support the = plane=20 operation and maintenance costs from your personal incomes. Maybe = you can=20 do so in terms of non-voting shares in the stock of the = plane.
4. You cannot have any voting rights or = any=20 incidence of control of the plane.
 
 
I also found out that Florida and Texas = offer great=20 protection on estate preservation in catastrophic legal = situations.  The=20 total value of your personal residence is protected from bankruptcy and=20 attachment in legal actions.  That is why those corporate = scoundrels are=20 building 10-15 million dollar homes in Texas and Florida.
 
Bob Smiley
N94RJ
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