Credit Card Companies suing for “running-up” Balances
With short-term credit hard to come by in the first half of 2009, businesses have to identify and use capital sources they previously would not have considered. One of the avenues many small businesses across the United States have resorted to is running up the company gold cards issued by all the credit card companies. The practice of using the business credit cards for monthly, incidental purchases is an accepted practice. Most companies have limited the use and they pay the balances over a very short period of time because the cost of the money is high compared to other sources. What has changed is that ‘other sources’ are not available and businesses are using their high limit company credit cards for operating expenses beyond anything done in the past.
American Express has filed suit against on such company in Southern Oregon. North River Boats, Inc. and the owner Brian Bush received notice, Thursday, June 11, 2009, that American Express is seeing them for the nearly $500,000 charged on the company gold card plus 9 % interest accruing since May 5 as well as the recovery expenses. This comes as just another blow to the boat manufacturing and retail company that has tried several angles to obtain financing to keep going. Boats have been sold at auction to satisfy demands by Wells Fargo, the FBI obtained search warrants in April due to suspicion of exaggerated inventory reporting in documents submitted to obtain financing. North River Boats, a respected and popular drift boat prized by Northwest fishermen, has closed the four retail stores it once operated, closed manufacturing down and laid-off 100 local workers, restarted production with 40 workers in early May with the hopes of landing contracts for government and commercial customers to be delivered the legal suit from American Express last week.
Credit card companies issue the cards with limits that they do not expect to be accessed. Heed should be taken by small businesses considering running up their company credit cards.
Bankrupt General Motors Inc. Set to Sell Off Saab Unit
Negotiations were reported on Thursday, June 11th, as very close to closing that will sell the Saab unit to Nordic bidders. Koenigsegg Automotive AB and a group of Norwegian investors were rumored to be the final bidders for the former Detroit industrial giants Saab design. Although the deal is not finalized, and negotiations are private, Swedish broadcaster SVT has been reporting news of the pending sell on authority of an anonymous insider. Another American automotive signature piece is likely to cross the ocean and become part of another countries future.
Lawmakers Lining Up the Facts on Bank of America’s Acquisition of Merrill Lynch
Investigative hearings started last week that are looking into Bank of American’s acquisition of Merrill Lynch last winter. Bank of Amercian CEO Kenneth Lewis testified to Congress that he was not coerced via threats from the Treasury and Federal Reserve but a number of the House Oversight and Government Reform Committee are very skeptical. Actions taken to forestall the “financial collapse of America” are now being examined closely and laws may be forthcoming to regulate any such future activities.
Coastal Credit Solutions, Inc. operates a financial market place that matches Consumers and Businesses with debt eliminating and/or alternative financing service providers. If you have over $5,000 personal or business credit card debt or are seeking small business financing, please call us 866-205-8370 for a FREE no obligation consultation.
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