Let me set aside the reason the man who uttered the phrase “get your money upfront,” was being asked his opinion. He was describing dealing as an independent contractor with the various companies under one owner using a common way of saying don’t trust them, get paid before you start. He prefaced his comments with “the word on the street,” to define it is not just him who is having these issues.
If you heard this about anyone, your first reaction, would be to hit the pause button. It could be due to bullying contractors to pay them less or it could be due to companies having cash flow issues. There are two sure-fire ways to see if a company is in trouble. The first red flag is they extend their Accounts Payables from 30 days payment to 45 days or more, e.g. The second bigger one is when they stop paying people altogether, be it contractors or employees. They invent reasons to delay or not pay, begging for a lawsuit, to be forced to pay.
Per a USA Today article on June 1, 2016 (see link below), the owner of these companies has had over 3,500 lawsuits and settled at least 100 of them. Usually, when a settlement occurs, there is no admission of guilt or innocence, but it is my experience companies settle when they have a lesser case. The cases range from stiffing contractors, employees, buyers and co-investors, suing to force the eviction of people from their homes under various local clauses of eminent domain and aggressive or fraudulent misrepresentation.
The sad part is many of the folks who sued this owner went out of business or lost significant portions of their wealth. Another sad part is those who could not afford to sue or would get overwhelmed by the owner’s high-priced lawyers, just went away without getting paid or accepted being defrauded and bullied. It easier for the owner to pay $5,000 in legal fees to make a larger Accounts Payable problem go away.
As we speak, one of those lawsuits is not paying a painter contractor $250,000. The reason is the owner did not like the work. I understand that is a fair claim, but a project that large should have had some milestone payments and checkpoints on quality measures and progress. Again, it gets back to the above statement, “the word on the street is get your money upfront.” But, these failure to pay claims do not even speak to the fraudulent or legal wording lawsuits where the owner takes advantage of unwitting buyers, which are a subject in their own right.
The man who uttered this statement was giving a two-part reason of why, as a Republican voter, he will not be voting for Donald Trump. It is far more than his first reason that Trump is an abhorrent candidate based on his comments and positions. It is also due to this man’s dealings with Trump’s companies. He is not alone and it continues to this day. And, it will continue after the election.