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July 2008 - by John A. Palumbo
Interesting Assets: Find ‘Em, Liquidate ‘Em
You just left the 341 meeting and you have a thousand things on
your mind, including getting back to the office in order to get
some things done before the end of the day. On your list -
returning half a dozen phone calls, reviewing and responding to
too many emails, and finalizing dinner plans. But something
keeps tumbling around in your head - one of the assets from an
earlier case that you find interesting, but your left wondering
how to liquidate it in order to make a meaningful distribution
to creditors. So let’s get started. Below you will find ten
strategies to boost your salability of assets in a profitable
and timely manner.
1. Boost your listings on NABT
NABT is an outstanding venue to list your assets for sale, and
very effective. However, without a good description, the
appropriate documents, and clear photographs or images, you’re
wasting your time by not giving your asset a fair chance to
sell itself. Take the extra time and effort to post thoroughly.
Then sit back and wait patiently for the inquiries.
2. Learn how to write copy
Let’s face it - you can’t sell all of your assets face to face
or over the phone (and if you are, you are greatly limiting
yourself to the traffic that other online and print medias can
offer). Therefore, it doesn’t matter how well you’ve mastered
the spoken word, learning to write good copy is imperative. You
will always be faced with the difficult task of catching the
buyer’s attention amongst the clutter of advertisements and
other assets/investments. With excellent copy writing skills,
you will be much more effective and amazed by the inquiries you
receive, whether from eBay, your local newspaper, or NABT. For
help, seek advice from a number of experts who’ve written books
on how to write great copy: Breakthrough Advertising
by Eugene Schwartz; Ogilvy on Advertising by
David Ogilvy; My Life in Advertising and Scientific
Advertising by Claude Hopkins; Method
Marketing by Denny Hatch.
3. eBay on eBay
Some trustees find eBay to be a very successful way to auction
off the more simple assets. However, selling on eBay is a skill
that must be acquired. Before you list on eBay, study eBay.
Research what others are listing, the copy and photos they’re
posting, whether or not they’ve set a reserve, how they
calculate shipping. Focus also on the key words they’ve chosen
to use in the title in an effort to increase SEO (Search Engine
Optimization). Visit www.ebay.com/education for free tutorials
and suggestions on how to increase your sales. If you don’t
have a few months to spend learning the site, hire someone who
knows what they are doing to get you started and walk you
through it for a small fee. Help is everywhere, but begin right
at the source and learn about eBay on eBay.
4. Notice the sale NOW!
Too often, trustees will receive an offer, but hold off on
noticing the sale in hopes of receiving a higher bid. In the
meantime, the asset could deteriorate and lose value. If you
receive a reasonable offer, notice the sale and notice it NOW!
If the asset is worth more money, the debtor or associates of
the debtors will come out of the woodwork. The longer you wait,
the more you risk running into problems so I suggest you get
the ball rolling!
5. 10 Quick Timeshare Strategies
Most Bankruptcy Trustees will eventually have to dispose of a
timeshare condominium. For strategies proven to increase your
chances of creating money for the estate and effectively
eliminating the timeshare, refer to my article “Ten Strategies
to Triumph Over Timeshares”, which is available at
www.Chapter7Assets.com.
6. Should you shop ‘till you drop?
It’s natural to want the highest bid possible for the estate
and there are many assets that warrant shopping for competing
offers that will net the estate the most money. However, there
are assets that will require more sophisticated buyers who are
willing to take on higher risk for unusual assets. I would
suggest that shopping an offer should be extremely limited to
those cases where you know there will be competing bids.
Otherwise, don’t shoot the hand that feeds you. When you
finally get an interested party in those unusual or complicated
asset cases, refer back to Number 4 and notice the sale
NOW!
7. FU, FU, FU, FU!!
Alright, clam down … it’s not what you’re thinking. Follow Up
is the key to getting things done in this business. Follow up
with debtors. Follow up with buyers after you’ve sent the
information, again after they’ve looked at it, and then again
after they’ve placed a bid. Success will come from taking the
initiative and following up.
8. Dialing for dollars
This falls in line with Number 7 and the importance of follow
up. Oftentimes, sending an email is not enough! It’s okay to
pick up the phone and call potential buyers - in fact, it might
be the only way you can actually get a hold of them. Don’t be
afraid to call them, tell them what you have, send them the
information, and then call them again. Don’t depend on email
alone.
9. Lower your threshold
A lot of cases become no asset cases because the trustee is
holding out for a high threshold. While that may seem prudent
in certain situations, over the years I have learned that some
of the most profitable trustees are the ones that lower their
thresholds in order to make things work for the case. When in
doubt, lower your threshold. Sometimes you just have to take a
risk in order to get more money. By lowering your threshold you
may find that you can get more money out of the asset in the
long run once you get some competitive bidding going.
10. Create more paper?
Next time you have a case where the asset has the highest value
to the debtor and it calls for more than just a few payments
stretched out over a few months, consider increasing the price
of the asset by structuring a secured or unsecured promissory
note for the asset over a much longer period of time. Then sell
the paper to the open market. Oftentimes, it will be much
easier to find a private investor willing to buy the paper than
to try to sell an asset that may have marginal value in the
open market. The debtor may be glad to pay a few hundred
dollars each month for the next 5-6 years in order to keep
ownership of the asset. Creating more sellable paper will
generate immediate distributions for the estate. If you have
questions in setting up the paper or for guidance on making the
paper sellable in the open market, you are always welcome to
contact me.
If you follow some of these 10 guidelines, you’ll surely be
able to make more meaningful distributions to creditors and
create better opportunities for each asset case.
John Palumbo is the principal of
Bankruptcy Asset Management, based in Jacksonville, FL, and one
of the nation’s leading authorities on the evaluation and
liquidation of unusual assets in bankruptcy. His uncanny
ability to recognize value in items oftentimes deemed unworthy
has transformed his asset analysis into an extraordinary art
form. To speak with John personally, contact him at
904-641-2043 or PalumboJ@aol.com.
Source: http://www.chapter7assets.com/interestingassets.pdf
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