How Internet Trading Began

Internet trading - how it all began...

In ancient Israel, it came to pass that a trader by the name of Abraham Com did take unto himself a young wife by the name of Dorothy. And Dot Com was a comely woman, broad of shoulder and long of leg. Indeed, she was often called Amazon Dot Com.

And she said unto Abraham, her husband, "Why dost thou travel so far from town to town with thy goods when thou...canst trade without ever leaving thy tent?"

And Abraham did look at her as though she were several saddle bags short of a camel load, but simply said, "How, dear?"

And Dot replied, "I will place drums in all the towns and drums in between to send messages saying what you have for sale, and they will reply telling you who hath the best price. The sale can be made on the drums and delivery made by Uriah's Pony Stable (UPS)."

Abraham thought long and decided he would let Dot have her way with the drums. And the drums rang out and were an immediate success. Abraham sold all the goods he had at the top price, without ever having to move from his tent.

To prevent neighbouring countries from overhearing what the drums were saying, Dot devised a system that only she and the drummers knew. It was known as Must Send Drum Over Sound (MSDOS), and she also developed a language to transmit ideas and pictures - Hebrew To The People (HTTP).

And the young men did take to Dot Com's trading as doth the greedy horsefly take to camel dung. They were called Nomadic Ecclesiastical Rich Dominican Sybarites, or NERDS.

And lo, the land was so feverish with joy at the new riches and the deafening sound of drums that no one noticed that the real riches were going to that enterprising drum dealer, Brother William of Gates, who bought off every drum maker in the land. Indeed he did insist on drums to be made that would work only with Brother Gates' drumheads and drumsticks.

And Dot did say, "Oh, Abraham, what we have started is being taken over by others." And Abraham looked out over the Bay of Ezekiel , or eBay as it came to be known.

He said, "We need a name that reflects what we are."

And Dot replied, "Young Ambitious Hebrew Owner Operators."

"YAHOO," said Abraham.

And because it was Dot's idea, they named it YAHOO Dot Com. Abraham's cousin,

Joshua, being the young Gregarious Energetic Educated Kid (GEEK) that he was, soon started using Dot's drums to locate things around the countryside.

It soon became known as God's Own Official Guide to Locating Everything (GOOGLE).

That is how it all began. And that's the truth. :-) 

Thanks to Chrissie Lightfoot of The Entrepreneur Lawyer for sharing this in her weekly email.

The Only Thing We Have to Fear

is fear itself.  Franklin Delano Roosevelt spoke those words during one of his fireside chats given in the midst of the Great Depression over 80 years ago.  It's as true now as it was then.  Knowledge is not only power, it is freedom from fear.  Fear of the unknown keeps a lot of people from taking action that could improve their lives.  I subscribe to a service where people post questions about various aspects of the law.  I get dozens of emails a week with copies of the questions asked.  As I read the questions it seems to me that many, if not most, could be answered by a competent attorney in about 30 minutes or less, the time most bankruptcy attorneys offer for a free consultation.  So why aren't people taking advantage of these free consultations?

The answer is fear.  They are afraid of calling a lawyer.  So they troll the Internet where they might or might not get competent advice.  They ask friends, co-workers, anyone but the people who really have the answers.  If you have a legal question, call a lawyer.  Even if they charge a nominal fee, like $30 or $50, for a consultation, isn't it worth it to get advice tailored to your specific situation?  Look at it this way: if you had a broken leg would you ask your friends or someone at work, or go to the Internet for advice on how to set it?

Estate Tax Portability

The American Taxpayer Relief Act of 2012 has an important provision that is now permanent after a two-year trial period.  It allows the $5.25 million estate tax exemption of one spouse to be carried forward to the surviving spouse.  In the past the exemption was personal and was lost upon death to the extent it hadn't already been used.  As a result, the Marital Deduction or A-B Trust came into play, whereby the decedent's estate was divided into two portions, one to take advantage of the marital deduction, the other to use the unlimited spousal exemption.

Now, with portability, if the first spouse has an estate under the cap, currently $5.25 million, he can pass that exemption to the surviving spouse, who can then add it to her own $5.25 million exemption for a total of $10.5 million that she can leave tax-free.  Any unused portion of the $5.25 million exemption can similarly be transferred to the surviving spouse.

As Deborah L. Jacobs of Forbes magazine explains in this article, even if no estate tax return is due from the first spouse, the executor must still file an estate tax return, Form 706, in order to preserve the portability.  Failure to do that results in the loss of the first exemption.

Bad News for Debtors?

The Utah Supreme Court gave debtors a lump of coal for Christmas in the form of its opinion in Gladwell v. Reinhart, 2012 UT 82 (December 4, 2012), a case certified to it by the Tenth Circuit Court of Appeals in Denver to answer a question of state law.  The issue arose in Dr. Reinhart's bankruptcy.  Dr. Reinhart claimed an exemption in 75% of the wages owed to him but unpaid as of the date of his bankruptcy petition.  This is common practice among bankruptcy attorneys in Utah and it had been universally recognized.  Occasionally a trustee would demand the other 25% that wasn't exempt under Utah's exemption statute, but most of the time the debtor kept 100% of any unpaid wages as of the filing date.

In the Reinhart case, the Chapter 7 trustee challenged the claim of exemption.  The bankruptcy court denied the trustee's objection, following the practice that had been in place for years.  The district court upheld the bankruptcy court.  On appeal to the Tenth Circuit, the Court of Appeals certified the case to the Utah Supreme Court.  "Certification" is a process by which a federal court, called upon to answer a previously unanswered question of state law, can ask the highest court of the state to determine the answer.

On certification the Utah Supreme Court held that the exemption statute in question, Utah Code section 70C-7-103, does not to allow a debtor in bankruptcy to claim an exemption for 75% of the wages owed to him but unpaid as of the date of filing.  In other words, 100% of what a debtor is expecting in his next paycheck after he files is subject to being taken by the bankruptcy trustee as "property of the estate."

In the past most debtors' attorneys have timed the filing of the bankruptcy petition to a date just before a payday so that what is in the debtor's checking account at the time of filing is almost nothing, relying on section 70C-7-103 to exempt what is owed to the debtor.  With the ruling in Reinhart debtors risk losing their entire next paycheck after they file.  And, if they wait and file the day after payday, so that what is owed but unpaid is a small amount, any money still in their account from that paycheck on the day they file is subject to being taken.  The Utah Supreme Court has effectively ruled that the debtor's last paycheck before filing is forfeited to his estate, meaning debtors will have to skip a payday in order to file.

Utah being the debtor-unfriendly state that it is, don't expect the Utah legislature to correct this problem any time soon.

Is Best Buy Headed to Bankruptcy?

In 2008 Circuit City filed bankruptcy, leaving Best Buy as the remaining entity under the business model both had used: Selling consumer electronics in large retail stores.  Best Buy has survived but it hasn't thrived.  Store sales have fallen in each of the last eight fiscal quarters.  Many observers feel it's only a matter of time before Best Buy faces the same fate as Circuit City.

The problem Best Buy faces is the same as that faced by most large retailers, that of competition from online retailers such as Amazon, eBay and even Walmart.

If you got a Best Buy gift card for Christmas you might want to use it soon.  If Best Buy files bankruptcy, holders of gift cards become unsecured creditors and the likelihood of getting anything back as an unsecured creditor is virtually nil.