I’m going to go through this one more time, just for Daniel Madera, because he’s almost as dumb as Karen Lee. They don’t get it.
Maybe I’m just not a good explainer. I have to consider that possibility.
But I frankly think they are just dumb.
Here’s Daniel’s hilarious little rant.
I’m not sure why Daniel refers to this piece as “particularly nasty.” I also don’t understand why, if Daniel bothered to read that piece, he didn’t get the point, but obviously he didn’t.
One other thing I’m going to nitpick about, and that’s Lisa. Lisa didn’t “advise” me about anything. She simply answered my questions about the use of straw names in real estate, and pointed me in the right direction to look up stuff about LLCs and why they were invented in the first place. And really, you guys need to stop with the insinuations that Lisa somehow did something wrong and that’s why her law license is suspended.
On the little screen shot you provided it quite clearly says that Lisa has not paid her dues and that she has not met the CLE requirements (continuing ed). Duh. She’s retired.
Are you aware that former President and Mrs. Obama both have suspended law licenses?
I have a suspended nursing license.
I assure you that neither the Obamas nor I did a single thing wrong. We simply let our licenses expire because we knew we’d never work again in the field. Or at least, I knew I wouldn’t. They, and Lisa, could reinstate their law licenses in a second if they wanted to, simply by paying the reinstatement fee. (It’s a wee bit more complicated than that, but that’s the basic idea. The exact wording and the exact series of steps to reinstatement are different in different states.)
Your insinuations, along with the insinuations that you are making regularly and often on your very public social media outlets about Richard Harris and everyone connected with Cleo’s estate in any way, are libelous. Be aware of that.
But here’s the deal.
Daniel’s idiotic little scenario is not at all what I described.
Here’s what I said about it.
Prior to the establishment of the law allowing limited liability companies (LLC), people like Cleo often found themselves between a rock and a hard place. If Cleo wanted to shield her farm, for instance, from being seized because a tenant in one of the Phildelphia properties fell down the back steps due to a rotten board and sued her for more than the property was worth, she could do that by incorporating the property in Philly. So far, so good. Then if the tenant fell down the stairs, that tenant couldn’t sue for more than the Philly property was worth.
But incorporating would have created a problem.
Because the corporation was seen as a separate entity for tax purposes, that meant that when the tenant paid his rent, the corporation would have to file an income tax return and report that rental income and pay taxes on it.
And then when Cleo needed to pay Cathy’s tuition at the Christian school, and took some money out of the corporation for that purpose, that would create another taxable event. That money would be income to Cleo and have to be reported as such on Cleo’s tax return.
What Cleo wanted was a way to limit liability and at the same time, make the IRS not “see” all those separate entities as separate, so she only paid income taxes once.
Nothing like that existed until 1977.
This isn’t even hard. Seriously, it’s not.
Cleo was trying to limit her liability. Anyone who owns a small business today knows all about this. If you have any sense, you form an LLC for your business, so that if a customer falls and breaks his back in your store, your liability will be limited to the value of the business itself and any insurance you carry on it. The customer will not be able to take your business and your house and your wife’s new car and the savings account that holds your son’s college money.
That’s why they call it a “limited liability corporation.”
In practice, what Cleo did didn’t work out all that well, simply because the courts knew people did this and so did the lawyers and they’d just look and see that Cleo Smith paid all the taxes on that property and so Cleo Smith was actually the owner. But it was the only choice she had at the time. Because it didn’t work very well, somebody invented the LLC.
If Cleo Smith had lived until 1995, she would likely have transferred all that rental property into one or more LLCs and protected it that way and then Cathy would have one more hell of a time trying to come up with something to accuse her about. But she didn’t. LLCs were nonexistent before 1977 and even then, they were only available in limited places. Cleo probably didn’t know there was such a thing.
We can argue all day about the morality of LLCs and whether corporations are people or not and whether Citizens United was a good decision or a very bad one and about whether or not corporate entities have skewed the legal system to benefit themselves and screw the little guy, but that’s a whole different conversation.
Cathy and her idiotic friends are trying to make Cleo into this terrible person that engaged in the most godawful shit you can imagine, based on almost nothing except Cathy’s overactive imagination. She has implied for years and years that because Cleo used aliases, she was doing something illegal. She never says what exactly (except for her claim that Cleo ran whorehouses in Philly), but it was shady and bad, and therefore, everything else she says about Cleo has to be true.
Well, here’s a question for Cathy.
Exactly what did Cleo gain by using those aliases?
If her purpose was not exactly what Richard Harris said it was – to limit liability – what was the purpose?
What? Be specific. In what way did she defraud anyone, or hurt anyone, or do anything illegal? Show me where it is illegal to use a fake name. Show me the law.
What would have been her purpose? How would it have worked? Why did the probate court not bat an eyelash at the straw name thing? Why did the probate court (as I’ll show later) question every little thing you can imagine, but never have a single question about those straw names?
Oh, and why did you bother with all those screen shots from here, but not bother to make the images large enough to be read? You do that a good bit, don’t you? You could just link here, you know, and it would all be available in nice big type and nice big images. But then, of course, the newbies would come here and you don’t want that, do you?