Read the rest of the chapters of the CIDER Method (chapters 8-18). The other chapters that are listed in our syllabus reading schedule from our other book need to be read prior to you taking the final exam.

LINK FOR THE VIDEO: https://www.youtube.com/watch?v=qgz0N3CwAmM

Antitrust legislation was enacted to help promote competition between businesses.  The  Clayton and Sherman Acts are a central part of the laws to help prevent monopolistic activities and foster healthy competition among businesses. Certain business practices are absolutely illegal (per se violations) under antitrust laws such as Price fixing between competitors. Can you imagine Coke and Pepsi getting together and agreeing to set the price of a can of pop. This practice would prevent a price war and be good for the two companies involved, but would adversely affect the consumer. The main thrust of antitrust law and legislation is the premise that the more businesses competing, the more the consumer ultimately benefits.

The government encourages competition and discourages exclusive control of market by a business enterprise. In addition, to price fixing, an agreement between competitors to divide territories is also “per se” illegal.

For example, Super America (now Speedway) reaches an agreement with Seven Eleven to stay out of Texas and Arizona in return for 7/11 staying out of Minnesota and Wisconsin. This would help both companies, but the consumer gets the shaft.

When companies that have some degree of control in the economic market in question want to merge they need permission from an administrative (government) agency and must prove that they are not violating certain aspects of the antitrust law. As a business owner you must be aware of the laws to avoid committing illegal anti-trust acts. While it may seem prudent to have lunch with your competitor and work out some deals such as: they will stay out of Minneapolis and you will stay out of St. Paul, that agreement is illegal and as an anti-trust violation.

Securities law are to protect investors to help them be informed. The Administrative agency Securities Exchange Commission (SEC) regulates the issuance of securities by corporations. A security is a money investment that expects (hopes) for a return on the money because of someone else’s efforts. Stocks fall under the SEC jurisdiction. Many people became aware of the SEC through the Martha Stewart case of insider trading. Bernie Madoff’s financial scheme also brought more (critical) attention to the SEC.

The consumers often are critical of the SEC or other government agencies when they fail to catch a Bernie Madoff or a Tom Petters. The public demands more agents to recognize deceitful action. But of course this costs tax dollars. On hand groups want lower taxes but then they are often the first to complain a government agency needs to do more. It is tough to have it both ways since tax dollars are needed to hire more government employees to watch over all the questionable tactics. Be careful you are aware that when you demand lower taxes that reduction of funds limits the ability of many government agencies to effectively watch over inappropriate business dealings from tainted meat to insider trading to unsafe oil wells to  . . .  well you get the idea.

Insider trading is prohibited. It is illegal to buy or sell stocks based on information not available to the general public. If you are on the board of directors of Pepsi Co and learn they are about to purchase Lipton, you might think “Hey this will drive the stock up and up so I should buy 1000 shares.” This is illegal since the information about the buying Lipton is not available to general public. This also applies if the person on the board calls his cousin in Fridley and tells him to buy. But, if the cousin waits until the news hits the newspaper and the public is also informed, then buying the stock is not illegal.

Debtor-Creditor law focuses on how a creditor may collect debts and what protection do debtors have. The most powerful weapon of a debtor is the threat of bankruptcy. A Chapter seven bankruptcy is what most people think of when they hear “bankruptcy”. There are however other forms of bankruptcy.  A Chapter 13 is called a Wage earner plan and Chapter 11 is referred to as a reorganization for businesses.

A valuable lesson that should be learned by all of you is that a creditor who does not have security (collateral) on the debt is in danger of having the debt discharged. If you loan a friend money and draft a well-written contract setting forth all the terms, that will not stop the debtor from filing bankruptcy and discharging that loan.

Furthermore, if you, as the creditor, try to contact your friend (the debtor) after you receive the bankruptcy petition you are in violation of the law. A creditor can not contact the debtor once they have received the petition.

The phrase “that is not worth the paper it is written on” stems for this. The loan will be discharged unless you can show the debtor committed fraud or did not complete the petition properly.

Once the debtor files the petition for bankruptcy in federal court (all bankruptcy cases are venued in federal as opposed to state court) there will be a first meeting of creditors. Usually no one attends this meeting except the debtor , his or her attorney (if represented) and the Trustee. The trustee will review the petition and ask if the contents are true. If the petition is acceptable the Trustee will approve the petition and the debts will be discharged.

Your friend will owe you nothing because the debt is gone. Now if you had said the gun collection was security then you would be able to keep that collateral.

Many people mistakenly believe that once a person files bankruptcy, the Trustee takes their assets and distributes them to the creditors who at least get something (50 cents on the dollar ), but this is rarely the case.

Most of the time the person filing is able to protect all of their assets through exemptions such as a homestead exemption that protects the home. The bankruptcy filer is allowed numerous other exceptions such as jewelry, car, wages etc. The point is, the unsecured creditors (that is you, the person who loaned your friend the money) will get nothing.

Credit card debts are unsecured debt and are almost always a central part of any filing. You should be aware some debts are not dis-chargeable such as: criminal fines, child support, student loans, tax liens, taxes owed, and judgments stemming from intentional acts. A mortgage is a secured loan. So, if you are thinking, “hey, I’ll buy a $300,000.00 house by getting a mortgage and three months later I’ll file bankruptcy,’ it does not work. The bank will simply foreclose on the mortgage and take back the house. Same with a car loan, they will just take back the car  . . . if they can find it.

The assignments I had planned are below, BUT as a courtesy to all of you I am not NOT requiring those to be completed. You have all worked hard in this class and the pace has been rapid fire with assignment after assignment with quizzes and exams thrown in. I think you all deserve a break. The only required assignment is to go to the drop box for this week and put in a statement saying, “I watched the video on anti-trust and put in either your favorite line or the most memorable line in the video,” (You are supposed to have watched it) and give your feedback on the class-Your impressions, what you liked and what you did not like. Oh, and remember to take the final exam within the  limited time parameters.

1) Describe the specifics and differences between a chapter 7-a chapter 11 and a chapter 13 bankruptcy.

2) If you obtain a judgment against a person (you are the plaintiff-they are the defendant) for $200,000 and the defendant will not pay you voluntarily, what are some of your options to collect? Your investigation evidences that they own no property, but they have a job at Honeywell -how do you get your money (the process and procedure)? Talk about how much you can obtain (percentages).


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