Sucky Restraunteur is Sucky (Still)

[Raveni]

The worst part is that employees are just another unsecured creditor.

Luckily, payroll is pretty high up on the priority of unsecured claims.

[tropicsgoddess]

Wow...that ship is sinking and fast with Betty! I would haul ass for one and report her too. I mean wow....I've never heard of somebody being overdrawn so much and kiting their own account.

[Ghel]

Yeah, there's only so much we, as the bank, can say because of privacy laws. All we can tell Betty's employees is that we can't cash the check. We can tell them that there aren't funds available, but we can't tell them Betty's account is overdrawn.

When Betty didn't have any insurance on the restaurant, we "force-placed" insurance to cover the bank's mortgage. Which meant that, if there was a fire, the loan would be paid off but Betty wouldn't get anything. The force-placed insurance also doesn't include liability, which meant that, if one of Betty's employees or customers was injured on the property, Betty would be personally liable. It cheesed me off that I couldn't tell anyone this.

[PepperElf]

If the employees are being paid in cash, there's a near 100% certainty that she isn't withholding. Which isn't necessarily bad for the employees since it's the employer's job to do this

It depends. if she's not even taking the income tax out from their pay then they might really get fucked come tax time.

[Gizmo]

Isn't check kiting bank fraud? What are the consequences for this (with your bank, not the law)? Also, isn't it kinda useless when you're using just one account?

Depending on your bank it would work like this:

Opening balance £100.
1/6 Bank Cheque for £300 - Bank kindly allows you to draw on it so - Balance £400
1/6 Pay out Salary payment for £250 - Balance £150.
3/6 Cheque "clears" taking £300 from your account - Balance neg£150

Result: Bank has just been stitched up into extending your overdraft with them and you paid your salaries and get to pretend that all is wonderful to your employees.

[Merriweather]

. The force-placed insurance also doesn't include liability, which meant that, if one of Betty's employees or customers was injured on the property, Betty would be personally liable. It cheesed me off that I couldn't tell anyone this.

Is the fact that you can't tell anyone because of a law or bank policy?

Just wondering, because it sure seems like both employees & customers of a business have the reasonable assumption that if the business does something unsafe, they would have insurance to cover the consequences (i.e. a doctor bill for a person who breaks a leg falling on a rotted floor board), and that it only seems right they know if the business doesn't have that insurance. Can you imagine having a wedding reception at a venue, something collapsing or something, lots of people hurt, and finding they had no insurance to cover it

[Ghel]

Is the fact that you can't tell anyone because of a law or bank policy?

It's privacy laws. Here in the US, we have various laws and regulations that forbid a bank or other financial institution from discussing customers' information with others. The only exceptions are where it's required in order to complete a transaction for a customer, with the customer's consent, or by court order. There's also various things that we're required to share with government agencies, such as reporting interest earned to the IRS.

[Merriweather]

It's privacy laws. Here in the US, we have various laws and regulations that forbid a bank or other financial institution from discussing customers' information with others. The only exceptions are where it's required in order to complete a transaction for a customer, with the customer's consent, or by court order. There's also various things that we're required to share with government agencies, such as reporting interest earned to the IRS.

I figured it probably was (I am in the US, but never worked in banking, so though I knew specific details can't be given out due to the privacy laws, I wasn't sure about this). Logically, you'd think a business would have to post a notice if they don't have liability insurance, that customers aren't covered, sort of like they have to post the rating they get from the health department. Let everyone know what the risk is on either

Just a "that's interesting how it works" observation, honest, not meant to start a discussion on privacy laws or anything else that's not appropriate here.

[suburbandecay]

I figured it probably was (I am in the US, but never worked in banking, so though I knew specific details can't be given out due to the privacy laws, I wasn't sure about this). Logically, you'd think a business would have to post a notice if they don't have liability insurance, that customers aren't covered, sort of like they have to post the rating they get from the health department. Let everyone know what the risk is on either

If liability insurance for a business is anything like car insurance, you may not be required to have it in some locales. However, you would be required to have a specific amount of money set aside in lieu of insurance. I personally would rather have the insurance myself.

[Ghel]

I'm not sure what the laws are in Minnesota, but we require insurance covering the building to protect our interest in the real estate, as mortgagee. That's why the force-placed insurance covers the property but doesn't provide liability insurance.

However, you would be required to have a specific amount of money set aside in lieu of insurance.

Betty has neither.

[Ghel]

Betty's still doing the same sort of BS with her deposits. This morning, in the night deposit, was $200 cash and a $300 check drawn on Betty's checking account with a note saying to make her personal mortgage payment (which is almost $500). There was another deposit, too, but even with that, Betty's account didn't have $300 in it.

So the teller called Betty, and Betty's reaction was, "oh, really!?" Like she didn't know. She has, and uses, internet banking, so she knows exactly where she's at. Then she asked if one of her employees was able to cash his check yesterday. No, your account was overdrawn. Then she tried to blame it on her accountant. "He's so expensive." Well, then do payroll yourself!

[BrenDAnn]

Wait a minute....This woman has an accountant and STILL can't handle her banking? What? My mind still boggles at how she even owns a business to start with!

[Krysalis]

Wait a minute....This woman has an accountant and STILL can't handle her banking? What? My mind still boggles at how she even owns a business to start with!

Unless she's the accountant, which would make sense, expensive etc.

[taxguykarl]

This woman has an accountant and STILL can't handle her banking? What?

It's entirely possible that the accountant was appointed by the bankruptcy trustee. The have a lot of discretion when it comes to managing such an estate. With Betty's shenanigans it would be a disservice not to order an accounting of this business.

[Ghel]

It sounded like she only uses the accountant to calculate the numbers for payroll. She hand-writes all the payroll checks. I could speculate that she's too embarrassed to have the accountant do any more than that, But I don't know.