Could someone help me understand soc's reponse to

[Ref]

my post on his page?

What does he mean "think out of the box"?

Any suggestions?

Ref :-(

[4honor]

I think that what he is saying is that to be successful in court you will PROBABLY end up spending more on experts (because the paperwork you are proposing will intimidate the mathless wonder, er, umm Judge) to win this than the actual CS would be to just pay. He suggests you negotiate in good faith for something other than what the Ex is asking, but something more than what you are asking. Neither you nor the ex win, but at least the lawyers don't.

He has suggested you stipulate tothe hgher amount asked by the ex with the condition that there will be an accounting and a refund at the end of the year (or an increase with arrears depending on the outcome.)

OR

He also suggested a percentage of your income to be sent at every distribution (you could structure it to be an after tax percentage.) You can also place in the paperwork that when the business is 24 months old, that you are to modify the CS and use state guideline based on your income over the 24 months.

Either of these has possibilities for reduction or increase within the year, but at least the percentage will give you more of a handle on your income.

You as a business owner cannot effectively win a downward modification because there is too much suspicion by the courts of this finanical arrangement. So you should make the best compromise you can.

[Ref]

DH actually file for a decrease after he lost his job. He had no idea that this opportuntity would come about.

Court is in less than 2 weeks. CS runs for less than 3 years from now.

Any suggestions from the peanut gallery?

Ref

[Stirling]

I think Soc. is trying to tell you that you need to get creative in your approach and arguments in order to support your case.  

If I understand your situation correctly you started a new business at the beginning of the year which initially generated significant income.  Currently, the business is not generating as much income.  Your concern is that a pending CS modification will result in an over-stated CS award based on the beginning of the year profits.


I don't know the details of your business, but here are a few arguments that you could use if the fact pattern is there to support your case.  First is what Soc. suggested, that you gather support to show that your business is cyclical.  That given the nature of the business you make more money in the beginning of the year and less at the end of the year.

You could also try to make a case that the beginning of the year profits were extraordinary and non-recurring in nature.  That it was a one time event and the end of the year profits is a more realistic expectation of what your future income will be.

As Soc said you will probably need some kind of expert to testify in order for your arguments to have credibility with the judge.  

I agree with Soc when he said that judges/attorney don't like math.  This is why the will give credibility to an expert financial witness.  It is also why a judge may lean towards just annualizing your year to date income for the year and use that in the CS calculation since it is simple to do and is based on a lodgic the judge can understand.  Again you have the burdan of proof to show that annualizing your year to date income will distort the CS calculations.  You need to prove what a realistic expectation of your future recurring income will be.

If your new business is so volitile that a reasonable projection of your future recurring income is not possible then you should consider, as Soc. suggested, to cut a deal with your Ex which deviates from the guidelines.  Soc. suggested to base CS as a specific percentage of your actual earnings.  Again get creative here in trying to come up with a compromise that everyone can live with.

Good Luck!!!

[Stirling]

Can you withdraw your pition for a CS reduction, or has the CP filed for a modification as well?

[Ref]

He can't withdraw. BM, in a completely spiteful move filed for 2 contempts and a modification on visitation. All of these things that she filed for are easily proven that she is lying. We have EVERYTHING in her own handwriting in a very explicit nature.

We just have to deal with it.

Thanks
ref

[Ref]

DH's business started in January 2006 after he was laid off the October before.

He didn't get a distribution until April 2006 and the last one Dh received was in August. What Dh's lawyer is saying is that the judge will take the total distributions and divide them by 5 months instead of the 10 months to get the monthly amount.

Dh just received a small distribution in October, so maybe this will move the judge to 7 months.

I am not sure why the judge would figure out a monthly amount in a way other than speading the distribution amount over the whole time the business has been running, but this seems to be what the lawyer and Soc is saying.

And any compromise with BM is impossible. We offered to take SD early on visitation instead of making BM leave school early and having SD go to a sitter for a couple of hours on SD's bday and BM refused just because it would mean extra time for DH. So SD spent her birthday with a sitter and BM didn't even go to school because she was already drunk when we came to get SD that night unless she was drinking in school).

Thanks for the help.

Ref

[Stirling]

"DH's business started in January 2006 after he was laid off the October before.

He didn't get a distribution until April 2006 and the last one Dh received was in August. What Dh's lawyer is saying is that the judge will take the total distributions and divide them by 5 months instead of the 10 months to get the monthly amount.

Dh just received a small distribution in October, so maybe this will move the judge to 7 months."


What your attorney wants to do to seems to me to distort the CS calculation.  If the business was started in Jan. and the first distribution occured in Apr. I would think that the income distributed is related to the business activities that occurred from the start of the business to the date of distribution.  Accordingly, the monthly income should be calculated from the Jan. date the business began until the most recent distribution.

Has your attorney given you a reason why he wants to ignore the business activities that were conducted from Jan. to Apr. which resulted in the distribution?

Can your husband prove through company records etc. that the Jan. trough Apr. business activities generated the money that was used for the distribution?  One of the foundations of accounting is to match revenues with expenses.  To be consistent with this principal you would need to match the Jan. through Apr. business activity with the distribution that was made.  

This is a simple matching of the business activities to the funds distributed.  I would think that it is reasonable to average the total distributions from the date the business started to the most recent distribution.  

Also, how did the business receive its cash at the beginning of the year?  Did it recievecustomer payments from Jan. to Apr. but retained in the business until the business's cash flow allowed for a distribution in Apr?  This would support including the months of Jan. through Apr. in the averaging.  

Or,

Did the Business receive it's first customer payment in Apr which was used to make the distribution?  Please note, if such an Apr payment was made based upon business activities that occured in Jan. through Apr. you still have an argument to include the months of Jan. through Apr in the average.  However, if the Apr. customer payment related solely to business activities conducted in Apr. it makes the argument tougher to make.

One final thought.  I beleive you said the business is an LLC.  For federal tax purposes will this LLC be treated as a C corporation or a flow through entity similar to a partnership or S Corporation?  If it is to be treated as a flow through entity, and the LLC is expected to have a loss for the year, then your husband should be allowed to include his share of the expected loss in the CS calculations.  Just a thought.

[mistoffolees]

'Think out of the box' means to think about creative solutions - and trying something different. Your current approach isn't working, so try something else - and be open to considering all sorts of ideas.

[Ref]

I am a public accountant and it makes perfect sense to me to annualize income from the inception on the business (and yes, sales receipts came in during January through April).

I think a person with no business experience would see that as a reasonable way to calculate. I must be wrong though, because Soc and the attorney seem to think that it will be annualized starting April.

I am so confused. I don't think that the way I am looking at calculations is extemely sophisticated, is it?

What kinds of ways does he mean by thinking out of the box?  

Thanks
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