Thursday, June 28, 2007

Tweeter Home Entertainment Group Files for Bankruptcy

Tweeter Home Entertainment Group Inc. ("Tweeter"), the high-end electronics retailer, filed for Chapter 11 bankruptcy. Two bids have emerged for assets of Tweeter as part of the bankruptcy reorganization.

The value of a many businesses is greater if sold or reorganized as a going concern than the value of the sum of its parts if the business's assets were to be sold off individually. In theory, creditors of Tweeter should receive more money than in Chapter 7 liquidation.

We are currently consulting with former employers of Tweeter that are owed money for severance packages, back wages and benefits. These types of claims might be entitled to priority over other creditors for as much as $4,650. If you are a California resident and would like assistance in filing your claim with the bankruptcy court, we might be able to help you.

We provide competent, thoughtful representation that helps achieve client goals at a reasonable cost. Please call our office for a complimentary consultation at (619) 448-2129 or visit my website at for more information.

Monday, June 25, 2007

Enforcing Judgments From Other States

Question: I live in Arizona and have a large judgment against my former business partner. He moved to San Diego, so how do I collect my judgment?

Answer: Your judgment is only good within the boundaries of your state. However, the Sister State Money-Judgment Act allows you register the judgment in California so that you can use California law to go after any assets the judgment debtor owns in California.

To register your judgment in California, you will need to complete judicial council forms EJ-105 Application for Entry of Judgment on Sister-State Judgment and form EJ-110 Notice of Entry of Judgment on Sister-State Judgment. You will need to attached a certified copy of the sister-state judgment to the application for entry of judgment. A declaration showing how you calculated the post-judgment interest is required as well. Most California counties will have additional local procedures, including the requirement to submit a proposed California judgment.

Once the court enters the judgment, you must serve the Notice of Entry of Judgment on the judgment debtor. Enforcement of the judgment is automatically stayed until 30 days after service of the Notice of Entry of Judgment. The judgment debtor has 30 days to challenge the judgment.

The most common challenge is that the sister-state court lacked jurisdiction for some reason. If the judgment debtor does not challenge the judgment, then the judgment creditor can take whatever steps are necessary to collect on the judgment. Click here for an article on the various methods to collect California judgments.

Our office has domesticated a number of sister-state judgments in California. Feel free to contact us if you need further assistance.

About the Author:
Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Friday, June 22, 2007

Consumer Alert: Dream vacations can become real nightmares with travel-related fraud

This Better Business Bureau consumer bulletin is sponsored by San Diego Gas & Electric, a Sempra Energy utility.

The summer vacation season is upon us and scams can turn your long‑awaited trip into a travel nightmare. It has been reported that vacation scams cost consumers more than $10 billion each year.

Among the types of complaints reported to BBBs across the country, one of the most frequent involves travel. Out of the 3,900 industries the BBB monitors, the travel industry consistently ranks near or in the top 25 for number of complaints. The complaints generally involve consumers who report they felt misled or deceived after receiving less or something different than what was promised or expected.

For example, consumers have criticized so‑called "deluxe accommodations" that turned out to be, in reality, far less than first‑class. The sales brochure or videotape may show beautiful sunsets along white sandy beaches, smiling, healthy couples with tropical drinks and a smart looking hotel lobby. However, when you arrive you may find a substandard, even dirty motel room that's located in a crime‑infested neighborhood several miles away from the beach. Other consumers have been critical of incomplete information regarding airline schedules and too many restrictions.

Among the recent travel-related scams reported to the BBB:

-- A San Diego-based firm selling discounted vacation packages on eBay to Hawaii, Mexico and the Virgin Islands scammed consumers across the U.S. out of several hundred to more than $5,000 throughout 2006 and early 2007. Travelers were tricked with bait and switch tactics and ended up paying much more for the vacation packages than they planned. After paying for the vacations, some consumers also found that rooms, travel, and other reservations were made with invalid credit cards, or never booked at all.

-- A company in Missouri conducted seminars in local hotels that promised travel incentives, discounts and assistance in becoming a “travel agent.” The BBB found that the company routinely charged consumers membership, administrative, and renewal fees that greatly exceeded any discount on vacation packages, and that much of the information activities “sold” by the company could be found elsewhere free-of-charge to consumers.

Here are some tips from the BBB on how to spot and avoid the threat of vacation and travel-related fraud:

-- Gather Information.

Don’t be fooled by professional looking Web sites or e-mails. Few legitimate businesses can afford to give away products and services of real value or substantially undercut other companies’ prices. Visit the BBB Web site,, or call the BBB for a free reliability report on the travel company making the offer.

-- Ask detailed questions and get it in writing.

Get names of airlines, hotels, car rental companies and travel providers. Consider contacting these businesses directly to verify arrangements. Always ask for confirmation of your travel arrangements in writing and ensure you receive copies of cancellation and refund policies.

-- Pay with a credit card and avoid deals that require you to book 60 days in advance.

Credit card companies may allow consumers to dispute a charge within 60 days of purchase. Representatives from eBay also caution consumers against paying with personal checks and strongly recommend paying with a method such as PayPal that has built-in protection measures.

-- Contact the BBB if you are a victim of fraud.

The BBB helps consumers and businesses through complaint and dispute resolution services. Victims of travel-related scams can visit or call the BBB to file a complaint.

Ultimately, consumer complaints expose bad businesses and help other consumers avoid becoming victims of vacation and travel-related fraud.

Before booking travel plans, consumers need to do their research and check with the BBB for trustworthy advice on dependable businesses to keep from getting burned this summer.

Please visit for additional consumer alerts, warnings and tips.

Monday, June 18, 2007

California Wage Garnishments And Duties of Employers

Question: I had the sheriff's department serve a wage garnishment on the judgment debtor's employer, but the employer hasn't done anything with it yet. What can I do?

Answer: A judgment creditor initiates a wage garnishment by obtaining a Writ of Execution from the Court and filling out an Application for Earnings Withholding Order and provide both documents and the appropriate fee to the sheriff's department. The sheriff's office will then prepare an Earnings Withholding Order ("EWO") and serve it on the employer. An EWO directs the employer to withhold part of the earnings of the employee and pay the withheld sums to the sheriff's office.

The sheriff's department will also provide the employer with a questionnaire called the Employer's Return that must be completed and returned within 15 days. The employer's return provides important information to the judgment debtor regarding whether the judgment is collectible.

The EWO has the same force of a court order. If the employer fails to complete the questionnaire, the first step is usually a strongly worded attorney letter to the employer. If the employer still refuses to fill out and return the questionnaire, you can file an action for contempt of court. Often the threat of fines and jail time will motivate the employer to fill out the questionnaire. You can also recover your legal fees if the court finds the employer in contempt.

Once you have the questionnaire in hand, you can determine if the employer wrongfully withheld wages. The law allows judgment creditors to held employers directly liable if the employer failed to withhold wages as required for the EWO.

Enforcing employer obligations with respect to the Employer's Return and wage garnishment orders are best done with the assistance of an attorney. Please contact us at (619) 448-2129 if you need further assistance.

About the Author
Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Thursday, June 14, 2007

Validity of Unsigned Court Orders

Question: Are orders without judge's signature valid? I got a preliminary injunction that has judge's rubber stamp, but it is not signed by the judge and the clerk. I think they are afraid to sign it because the plaintiff made up evidence to get the injunction. Can I ignore the injunction? Will they hold me in contempt? Is the order valid?

Answer: The order with the rubber stamp is called the "conformed" copy. The clerk stamps this copy and gives it to the attorney or party without an attorney. The signed order is in the file. If you go to the courthouse, you can usually obtain a copy of the signed order, at 50 cents per page. Using the judge's name stamp to provide a conformed copy of an order is a very common practice.

Technically, you don't even need to be served with a copy of the order in order for it to be valid. To be held in contempt of the court, the opposing party must provide 4 elements: (1) existence of a valid order; (2) your knowledge of the order; (3) ability to comply; and (4) willful disobedience. The most common way of proving knowledge is to have a process server hand delivery a copy of the order, but your presence in court when the order is made is sufficient to establish knowledge.

About the Author:
Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Tuesday, June 05, 2007

Dissolving a Corporation in California

There are many reasons to formally dissolve an inactive corporation:

  • No more $800 minimum franchise tax fee;
  • No more filing of tax returns
  • No more annual filings with the California Secretary of State
  • No more annual meetings of the shareholders and board of directors

The voluntary dissolution of a domestic stock corporation is initiated by an election to dissolve. The election to dissolve may be made by the vote or written consent of at least fifty percent of the outstanding shares of the corporation, by the board of directors if no shares have been issued or in limited circumstances, by a majority of the incorporators if no directors were named in the original Articles of Incorporation and none have been elected.

To dissolve, the corporation must file a Certificate of Election to Wind Up and Dissolve prior to or together with a Certificate of Dissolution. However, if the election to dissolve is made by the vote of all the outstanding shares, only the Certificate of Dissolution is required.

Although Tax Clearance certificates are no longer needed, the corporation is required to file any outstanding and/or final returns with the California Franchise Tax Board. In addition to the services of legal counsel, a CPA or other tax professional should be retained to assist with preparing the closing tax returns.

When dissolving a corporation, the directors signing the Certificate of Dissolution must certify one of the following to be true:

  • The corporation's known debts and liabilities have been actually paid;
  • The corporation's known debts and liabilities have been paid as far as its assets permitted;
  • The corporation's known debts and liabilities have been adequately provided for by their assumption;
  • The corporation’s known debts and liabilities have been adequately provided for as far as its assets permitted; or
  • The corporation never incurred any known debts or liabilities.

Failure to adequately provide for the debts of the corporation could result in personally liability of the shareholders. The services of legal counsel are very important in avoiding this type of personal responsibility.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.