I’ve said before that I have learned about some of the cleverest asset protection tools from my clients. An new asset protection client owned a very successful internet based business. The business generated revenues of over $ 1 million each month- that’s $12 million or more annually.
Because the business was entirely online, revenue is entirely credit card payments. the bank processing credit card payments “holds back” a cash reserve against disputed charges. The hold-back money belongs to the client and eventually would be paid to him if he discontinues his relationship with the bank processing his credit card receipts.
The margins are small so that the merchants fee for credit card transactions charged by the credit card bank are significant. In addition, a smaller hold-back reserve would release cash which the business could either distribute as profits or invest in marketing.
If the client’s business is sued the judgment creditor could garnish the business bank account and any credit card payments held as part of a reserve. There may be a way for a U.S. creditor to garnish a merchant bank in Estonia, but it cannot be easy. I don’t know if U.S. judgments are valid in Estonia or whether that country permits garnishment of bank funds. I think it would be difficult (not impossible) for a judgment creditor to make a case that a debtor’s affiliation with a merchant bank offering better financial terms is voidable under fraudulent transfer statutes.