|
Hire a debt arbitrator
|
 |
August 19, 2000: 7:00 a.m. ET
Arbitration can keep debt from sinking a small or struggling business
|
NEW YORK (CNNfn) - At 10, Robert "Bobby" Blumenfeld was already working the sales floor of his parents' retail stores in the Catskill Mountains. At 12, he was selling men's suits. So Blumenfeld isn't bragging when he says he knows every aspect of the retail business.
He's worked both inside and outside of companies as an investor, owner, and consultant. Through the years, he's seen too many companies drown in debts when they could have been saved.
 He said many creditors misinterpret a company's failure to pay as a lack of desire to pay. These misunderstandings lead to costly litigation and aggravation. That's when he steps in to help.
"I always enjoy trying to save a business, versus shutting the door on them," said Blumenfeld, who now works as a debt arbitrator, negotiating settlements to help both sides resolve their financial distress.
As a debt arbitrator, Blumenfeld sorts through the situation to negotiate a settlement. He works on a contingency basis for debtors, earning a percentage of the savings he creates. For example, if you owed a creditor $100,000 and Blumenfeld settles the debt for $30,000, you would pay him about 35 percent of the $70,000 you saved.
"A settlement provides creditors with immediate cash and avoids the enormous financial and human costs of litigation," said Blumenfeld. "Debtors have the opportunity to reduce their debt burden, improve their balance sheet, and increase cash flow."
Arbitration can often save a small, struggling business from disaster.
Blumenfeld can also help clients locate financing and sort out other financial problems as part of the process.
"Large companies can turn to an army of internal specialists who can often negotiate highly favorable terms with creditors," he said. "That leaves small- to medium-sized businesses without the resources to assist them in debt negotiation."
Blumenfeld said American business owners are often in a cash crunch because they aren't paid for 30 to 60 -- or even 90 -- days after they deliver the goods. In Europe, terms call for payment in 15 days, which really keeps the cash flowing.
Blumenfeld has been very busy lately because the apparel industry is in tough shape. On a recent visit to the children's apparel building in New York City's garment district, he was sad to see the showroom floors half empty.
"There is massive consolidation and a whole new set of rules in retailing," he said.
Debt arbitration, he said, is very common in Europe and slowly catching on in this country. You can find a good arbitrator by contacting the International Association of Business Mediation Consultants at (800) 549-2128.
Excerpted from 201 Great Ideas for Your Small Business, Copyright 1998 by Jane Applegate. Published by arrangement with Bloomberg Press. Excerpts appear on Saturdays on CNNfn.com. 
|
|
|
|
|
|
SBTV.com
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
