Internet Business Asset Protection



Posted: Monday, July 06, 2009

by
Panama Legal

Introduction Our law firm handles a number of clients that are operating online businesses. Most online or internet businesses we are familiar with include: online sellers of software, clothing, e-books, books, web hosting, domain name registration, anonymous proxies & tunnels, security services, anonymous email, online games, phone cards and cell phones, travel, online marketing, seo, pay per click, popup ads and banners, programming and just about anything else that can be marketed online. You will find we understand your business, test us. A good question would be how could an asset protection law firm help you if they do not understand what it is that you do?

Internet Legal Problems If you are reading this you are probably not a massive company with $300,000,000 a year in sales or more. You are probably from $1,000,000 to $35,000,000 in sales per year. You are worried or should be worried about frivolous litigation attacks waged on you by the large Internet companies that love to attack folks like you using the courts and powerhouse law firms to do so. You can also experience some civil litigation problems from government authorities on a city, county, state or federal level. It can come from a local district attorney looking for some low hanging fruit to attack on some nonsense. It could be an attack from an attorney general or even a national government regulatory agency. You have enough money and assets to become a target in that the person suing you could get enough of a recovery to offset some or most of their legal expenses. This means they get to take you out of the market for free or close to free. Government agencies are tempted to go after a person or corporation if they can see attachable assets when they do an asset check. The first place they look is in the banks. They have a very easy time doing this without your knowledge. Then they look for real estate and other things they can attach and eventually confiscate. This money pays for the cost of their investigation and prosecution. This then lets them grow bigger since they can actually make money on such cases. The system is very broken and you are likely to be the victim someday. If your assets do not come up on any search then they move on to a more tempting target. We have spoken to a large number of people over the years that call us after it is too late and they have had their assets tied up and are in court. An ounce of prevention (moving assets offshore before the trouble starts) is worth a pound of cure.

Crushing You with Legal Bills - Imagine how much money a company with profits of $600,000,000 a year could spend on legal bills to destroy you legally and get an order restraining you from doing what you do effectively putting you out of business. To settle out of the lawsuit you might have to agree to go out of business or sell to them cheaply. The enemy can spent $500,000 a month or more on lawyers. This means you will need to spend a minimum of 40% of that figure or $200,000 a month to defend. How many months of that can you take? A lawsuit can easily go 36 to 60 months and then come appeals.

Large Law Firms - A common mistake the big guys want you to make is to not hire a large law firm but instead to go to a 2-8 lawyer law firm for a lower price. If you do this the chances of losing go up three fold. How much money does this little law firm contribute politically each year? Compare this to how much money a law firm with 900 lawyers donates. What about a law firm with 3,000 lawyers? See the real rules of the game. They keep hammering you with legal bills because they know you will cave in. You cannot run the legal bill up on them to cause them to drop the case; they do not care what they spend. The more they see you spend the happier they are because they know you will run out before thy will. If you are able to afford the big law firms and take the $600 to $900 an hour bills then you can probably beat the adversary away with their frivolous lawsuit. Problem is the legal bills will exceed your profits for some years. Imagine a conference with two partners, and two junior lawyers and a legal secretary and a para-legal taking place for four hours deciding how to handle a motion to suppress, amend a complaint etc. The two partners are $1800 and hour times 4 = $7200. Then the two junior lawyers are billed at $325 an hour, so this is $325 X 4 = $2600. The then paralegal and legal secretary are $125 an hour each which is another thousand dollars. So this afternoon cost you $10,800. After the meeting then the actual work is prepared and two lawyers set a date and go to the court to argue it. They charge even more per hour for court appearances, like figure $1200 an hour for the partners. This is what the company attacking you is paying to get you. They will bust you out and get your assets or drive you out of business and recover more market share from crushing you. The rules of the game are twisted in favor of the rich. If using a smaller law firm were effective the large companies would do this too. Large law firms rarely lose against smaller law firms WHEN it is the large firm who started the action. They get paid the big bucks before they know how to pervert the system and make it work for them.

How Does the Law Firm Run Up the Legal Bill The answer is discovery mostly. They think of things to do to get the bills up. They create an extensive list of witnesses. They take numerous depositions, which your lawyer will need to go to. These depositions are long, sometimes for several days per witness. This can be $10,000 or more per day of deposition. You might have many weeks of this. At the deposition your lawyer will object to questions and this will cause more fights and motions etc. Then they will subpoena all sorts of documents.

Your lawyer will object to some of them and thus more fights in court again over the documents. They comes amended complaints. Motions get filed and if they lose they appeal the motion. They even request emergency arbitration hearings where the judge orders your attorney to attend. Judges like settlements. They will drive you crazy with document requests, taking depositions of any staff you have and your attorney will need to control these discovery efforts which is time and money. The large 900 man law firms have all the crazy motions and writs etc in their computers. They print them out and file. A small law firm has to figure this work out. A 900-man law firm has a lawyer on staff that knows about any motion or writ possible.

After they drive you crazy with discovery then they will start adding defendants into the case. This really adds to the legal bills for the big law firm. This just goes on and on. Eighty percent of all cases filed settle before reaching trial. With these types of cases I expect 98% of them settle before trail and they know this and thus act wildly since they know it is going nowhere except to settlement.

Reality of These Lawsuits - The fact that their lawsuit is without legal merit is sort of irrelevant since their goal is you never make it to trial. Sometimes they make up motions that no one ever heard of before. They hang their case on the thinnest of legal precedents, just enough to avoid a summary judgment. They want to get you to cave in before the trial. The real way to fight with them is to retain a law firm with hundreds of lawyers that are politically active and counter sue them for vast sums. You will have to pay massive legal bills like they are paying but sooner or later they will want to settle before trial. Not everyone can afford to spend several hundred thousand dollars a month on legal bills for the 36-60 months it would take to get them to settle. Most of these are lawsuits large companies bring on much smaller companies are without legal merit, frivolous is the legal term. They make the lawsuit look valid enough to make the judge think there are real issues of fact and law so the case does not get kicked out on a summary judgment. The best approach is asset protection before the trouble starts. If nothing else you have your money put away here they cannot get it and they do not even know about it. Of course moving your business offshore is even better then they cannot get that as well.

What Do You Do To Stay Safe First move your banking personal and business offshore in a way that it is protected from attacks from these big law firms. We can help protect you very effectively. These big law firms rarely ever go offshore. The games they play with not work there. They will be lacking authority, jurisdiction, and political influence. It is expensive and the chances of success are minimal at best. These lawsuits are not solidly based in law as a rule, they are harassments designed to make you fold. If you are offshore you lower your profile a lot. Your assets are no longer findable, you are off the radar. Moving your business offshore is of course an even stronger defense.

-Aurelia Masterson, http://www.panamalaw.org

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