Damage Compensation / circular: In case of wanted damage compensation for financial losses, you can try circular agreements with bank customers who are unable to pay their debt. This uses assignments, the cession of rights.

This is a sample sase.

Example: How to obtain damage compensation for investment losses by circular agreements

Let us suppose that a small business SMALLB Ltd. is in financial difficulties.

Let us suppose that Richbank suddenly cancelled a loan maintained during 15 years, of 20 000 Euro. Let us suppose a typical reason for such unexpected bank behavior:

Let us suppose that Richbank has lost much money by international casino gaming on financial markets. Let us suppose that Richbank is therefore obliged to reduce its loan volume to a tolerable level related to its own funds, as required by law. It is a typical behavior of certain banks in such periods to bring small business customers into bankruptcy risks.

This is not known to the public because politicians mostly do not care what is frequently done by certain banks to small businesses,

Journalists typically do not have enough economic understanding for the impact of this on economy.

Nobody cares...

Let us suppose that a small investor, Mister Cust, a customer of Richbank, invested 20 000 Euro
of his savings one year ago into some risky certificates. Let us suppose that this was based on false consulting by Richbank.

Let us suppose that most or all of this money had to be considered as vaporized one year later.

It was known to the consultant concerned of Richbank that the most probable purpose was a totally secure investment for personal needs after retirement. In this case and without any doubt, the consultant of Richbank violated law, no matter in which country this happened.


If Mister Cust would sell the damage amount for 50 % to SMALLB Ltd.,

He would reduce the initial loss to 50%, and would not need to go to court. For the payment of the 50 %, instalments over the next 10 years could be agreed, increased by usual interest rates for business loans, resulting in 100%.

Mister Cust would get all his money and loose nothing (excepted interest rates). He would be better off, compared with share investment during critical periods on the financial markets.


The SMALLB Ltd. could now cover the loan of 20 000 Euro

by paying Richbank with the 20 000 Euro of damage compensation.


Now Richbank would be in a difficult situation:

To get the loan from SMALLB Ltd., Richbank would have go to Court. Richbank would then have to prove proper consulting by its consultant to the small investor Mister Cust. Mister Cust would not any more be a directly interested and involved person because he has abandoned his personal implication. He would be witness against the bank in this upcoming dispute. He would than not be a totally uninterested witness. But it is left to the judge to evaluate the reliability of his declarations.


If Richbank would go to Court,

it would probably loose. But the outcome is not fully predictable.

This construct is probably valid for all developed countries, hence with an advanced legal system.


Richbank could try to apply special clauses of the loan agreement.

Possibly it authorizes Richbank to claim instant payment of the 20 000 Euro, hence without waiting for the final Court decision. It depends from national legislation if such clauses are allowed and how efficient they are. A good lawyer might typically have success by opposing to this all aspects in favour of SMALLB Ltd..


The best for Richbank would be to settle the circular problem by some peaceful agreement.

This is a relatively probable result. So everybody would be lucky.


Even Richbank has reason to feel lucky.

Instead of paying to Mister Cust significant expenses for Courts and lawyers on top of 100% of the damage, Richbank would close both matters.

While SMALLB Ltd. has apparently proven some financial weaknesses by its exceptional battle strategy, Richbank can now close this loan involvement without any loss risk.

Richbank can cancel in its balance sheet the loan loss provisions related to SMALLB Ltd. and the damage compensation provisions related to Mister Cust. So it might for Richbank result in additional profit on the accounting level. The intended balance volume reduction is obtained, too.


Consultant

If you need any consulting related to this, kindly send a mail to: ok @ jus7.com

The first mails will only concern fee aspects. There is no free consulting available.

For amounts above 1 million Euro or USD

For high amounts, there are also possible circular compensation solutions in case of illegal attempts of over-taxation; or in case of accumulated tax debt resulting otherwise in bankruptcy.

For damage and loan cases above 1 million Euro or USD without evident partners, a search of fitting compensation partners can be ordered. This requires to cover corresponding fees,

For amounts above 1 million Euro or USD, please contact: ok @ mrmio.com

The first mails will only concern fee aspects. There is no free consulting available.

► Suggestions for rectifications to: ok @ jus7.com ► Consult / tariff? Please communicate the subject for a suggestion to: ok @ jus7.com (Typical per hour rates: Like those for lawyers.)