5150 Business Strategy

Life in the Corporate Fast Lane and Still Remaining Intelligent

Archive for the month “December, 2018”

Animal Farm

Let’s all put in $75,000 to purchase a building and share in the wealth as the building appreciates in value. What a great idea and at least several of us thought the idea was worthy of investing in under those conditions. Little did we realize that those making the proclamation of equality, as in Animal Farm, thought equality meant something different based upon who you were.

Almost immediately Napoleon tried to change the terms under which the investment group was formed. No, I don’t think the original $75,000 was completely invested by the LLC members. It comprised $35,000 from the operating company which needs to be paid back. WTF, are you on drugs?? That was never the case as it was understood, and documented, in the LLC documents that the source of the entire $75,000 was from each individual member. No, no says Napoleon, all my minions agree with me that the LLC was formed for the original founders primarily and those who came along afterward are not of equal standing. Really? Now that was news to me and, as it turned out, to the attorney brought in to kick some pig ass. Indeed, this was an egalitarian investment group until some saw an opportunity to exploit other members. From each according to his ability, to each according to his needs – except when one group decides to define needs in line with their own self interest with no regard to established contracts and agreements. Just as in Animal Farm there was a hierarchy, albeit unknown, that all animals were created equal, except that some were created more equal to others. Unfortunately for those trying to exploit the “minority” they failed to realize that even the “minority” were able to hire pit bull attorneys that could eviscerate them and serve them up as pork chops, LOL.

This same scenario played out in a variety of different transactions. Do as I say, not as I do was the golden rule with this group. Being egalitarian only meant something to the chosen few and everyone else be damned.

Let’s build a warehouse for the operating company and then deduct the value from the LLC partnership members accounts. Why, you might ask. Well because the operating company majority owners wanted to pass the expense on to the LLC where they had less of a financial interest and, therefore, essentially see a greater profit for the operating company. Of course this neglects the fact that the operating company was the driving force for building the warehouse. Again, all animals are created equal, but some animals are created more equal than others. Except for the fact that this foolishness was squashed before it could gain momentum.

Then there was the ad nauseam open proclamation of the senior manager that the LLC investment should not benefit all equally. There was no explanation as to why they felt this could be supported, only that it was the way it should be. Funny how the value fell along the ownership percentages of the operating company – the greater ownership of the operating company, the greater your “equality” in the LLC regardless that all members in the LLC were legally equal members.

There was a universal deceit by senior management that sought delegitimization of the equality of members in the LLC. It came in the form of outright declarations and in the form of subtle intimidation. To the point where telling the truth was, indeed, a revolutionary and noble act. Animal Farm as a parable which is played out daily in the business environment is as valid today as when George Orwell wrote it. Sadly the masses of men continue to lead lives of quiet desperation and religion, and one could argue equality, are the opiates of the masses. There are those who utilize the utopian promise of equality as a way to divert attention from their ultimate goal – to prove that all animals are created equal but some are created more equal then others, and they just happen to be more equal.

Lesson learned: beware of claims of equality from those who have much to gain by diverting your attention from the dangers of them being more equal and feathering their nest at your expense.

This is a work of fiction. Names, characters, businesses, places, events, locales, and incidents are either the products of the author’s imagination or used in a fictitious manner. Any resemblance to actual persons, living or dead, or actual events is purely coincidental.


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