This is a real case that was handled by our bail bond experts … insane! See what you can do with it.

The facts:

• This is a performance assurance request for a multi-million dollar subcontract

• The applicant / director is a long-established company.

• They have successfully completed projects of similar size

• The company has a modest net worth, but is following a profitable trend. The proportions are fine.

• Shareholders’ personal financial statements add more equity to the picture

• The company is owned by a father and son. Son is the main shareholder.

• We notice that your SS numbers are separated by a few digits.

• Father has a substantial net worth. They are has a small net worth as stated in his personal statement.

• The applicant has initiated the subcontract.

• The GC / creditor has a very strict, mandatory bond form. Effectively, it turns it into a forfeiture bond (obligee completes the job and sends you the invoice).

• The father has a living trust

• Son also indicated that he has a confidence

Many moving parts. What are the problems?

1. Low company net worth. Too low for the requested link size.

2. “Close” SS numbers imply that these people are immigrants (they received SS numbers around the same time). Are they US citizens?

3. Subcontract started. Why were they allowed to start without a link? Degree of completion? Acceptable work? Bills paid? Do we program?

4. Do we want to write a forfeiture bond form (financial guarantee?)

5. What assets are in the trusts? Can they give compensation? Will we trust the compensation of a trust?

– Think about your possible solutions –

This is the approach developed by our subscribers:

1. Low company net worth. We do not prefer to demand guarantees because it can be counterproductive, making it difficult for the client to complete the project. Instead, the client agreed to add capital to the business, an investment in its future. The funds could be a subordinated shareholder loan or a more robust method: additional paid-in capital. The latter is more permanent and therefore desirable. The client agreed to permanent capital that would be verified in writing by their CPA and supported by a current interim balance sheet.
2. Close SS numbers. Why should we ask for someone with a social security number? It is because the self numberf does not prove citizenship, nor does filing a US tax return Non-citizens authorized to work in the US can obtain a social security number. “Tax residents” are permanent residents and green card holders who are not citizens and are required to pay US taxes. All bonds are cautious when taking personal compensation from a non-citizen. They can easily flee the country to evade their obligations. For this reason, we determined that the father and son were immigrants, as we suspected, and naturalized US citizens.
3. Subcontract started. This would be clarified by obtaining our Letter of All Good from the obligee, indicating the relevant facts of the project (degree of completion, punctuality, without problems, etc.)
4. Bad link form. We had previous dealings with this important GC and negotiated a bond modification that made the bond work more normally. They agreed to use the link mod again.
5. Trusts. It turned out that there was only one trust. The son was the beneficiary from the trust of the father, not from the trust separated from his own. A review of the father’s trust showed that signing the severance agreement was not prohibited. However, living trusts are revocable, which means that terms can be changed and assets moved, making them unreliable indemnifiers. And it contained the most important asset, the father’s residence. How to overcome this last hurdle? Our solution: We will place a lien on the property giving us access to changes in the trust.

There you go. Did you come up with solutions to match ours? It was a difficult / complicated case, but we worked hard to solve it.

We will work hard to solve your bail cases as well. Bonus offer, fulfillment and payment, and also site and subdivision!

Include us in your bond production efforts. We can make it happen.