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ED November 2016

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38 November 2016 Club Bulletin www.EDpublications.com What can happen to club owners when they fail to plan? EGALLY SPEAKING L by Clint Coons Lawsuits: Have you built your defense against a damaging lawsuit around an LLC or corporation for your club, with bank and savings accounts under your name? If so, you're "a plaintiff's attorney's wet dream," accoridng to attorney Clint Coons. But as Coons explains, he "shatters these dreams" with his rules of asset protection planning. P remises injuries to patrons or staff, employee wage claims, drug or sex trafficking, prostitution and whatever else could go wrong despite your best training, procedures and policies, can still land you and your business in court. And, despite all of the exonerating evidence, your business could still be held liable. How can and does this happen? As my grandfather, a practicing attorney for over 50 years so aptly put to me after I began my practice "the law has changed in significant ways grandson. 30 years ago you had to have done something wrong to be sued. Today, that is no longer the case." Let us not also fail to recognize the prejudice and misconceived notions shared by many in public about the nature of the business. Consider the following situation suffered by my client, whom I will refer to as Kevin. One evening two patrons left Kevin's club, and while standing in front of the club having a smoke, both are struck by a vehicle pinning them against the side of Kevin's club. One patron lost both legs and the other one leg to the accident. The driver, another patron, had just received his car from Kevin's valet and mistakenly put his car into reverse rather than drive. A subsequent blood test shows his blood alcohol content (BAC) was 1.2. A lawsuit is brought seeking 20 million in damages. Kevin's club, the valet service, the building owner and Kevin are all named as defendants (notably, the jailed driver is ignored, as he has no assets). Kevin's initial reaction was to turn over the defense to his insurer to whom he pays sizeable premiums. Unfortunately, after reviewing the facts, Kevin's insurer informs Kevin he is not covered because he violated his insurance policy when he hired a valet service. What Kevin failed to realize was in article 49, paragraph 3, page 15 of his policy (written in type so small you can't read it) wherein it stated if Kevin ever hired a valet service he was obligated to have the valet service name his insurer as an additional insured under their policy. A greedy piece-of-shit insurer, scum-bag attorneys and many other comparable names probably come to mind after reading this account. Kevin felt and voiced the same and lamented how "this is totally unfair, I did nothing wrong." In response, I reminded him of what my grandfather said, "being wrong has nothing to do with getting sued," you are staring down a double barrel liability shotgun loaded with claims and sighted on huge money. If you are like Kevin or other club owners I have worked with in the past, you have probably built your defense around an LLC or corporation for your club; hopefully, a separate LLC for your building, and a large insurance policy. Club accounts are probably flush, and your personal bank accounts and investments are similarly substantial and in your personal name. If so, then you are a plaintiff's attorney's wet dream. I believe in shattering these dreams by showing business owners how the use of creative entity strategies can keep profits and investments protected, and in some instances, deter litigation. This belief and actual success with thousands of clients bring me to my rules of asset protection planning, which, by the way, were used by A common mistake made by many business owners is making it far too easy for a plaintiff's attorney to find their assets. Such mistakes are common because many attorneys who set up these structures do not appreciate or value the importance of anonymity. - Coons

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