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Customers want to change alarm company / When collections are futile / buy-sell webinar tomorrow
June 15, 2020
WEBINAR: Sign up for webinar now
Title:  Understanding the buy-sell process
When:  June 16, 2020  12 PM ET
Description:    Webinar will explain the process.  How to prepare for sale (contracts, proper entity, etc), understand RMR, attrition, the NDA process, negotiating the deal, responding to the LOI, due diligence, etc
Presented by:  Mitch Reitman and Dennis Stern,Esq
Hosted by:  Ken Kirschenbaum,Esq
Who should attend:  owners
Customers want to change alarm company
          Recently a SE regional alarm company's CEO got in some hot water for his comments on the current protesting and what should be done.  We are receiving calls to change that company's services to ours.   The NFL, NBA, University of South Carolina, NC State and a few more prominent universities and business have announced publicly the dropping of contracts with that company.  Should we be concerned with taking over these accounts that are calling to drop this company?
    In a pickle in South Carolina
          Customers leave one alarm company for another all the time.  You are not obligated to ascertain whether the customer is under contract, what complaints they have or why they want to change alarm companies.  You should however inquire if the customer owns the alarm system because if it’s leased you can’t do a simple take-over; you would need to install a new system, or risk being sued for conversion of the equipment, and that includes wiring.
          You can hardly be accused of tortious interference of contract if the customer calls you, especially unsolicited.  But that doesn’t mean you can use the other alarm company’s equipment or wiring, provided it belongs to the other alarm company.  Ask the customer who owns the alarm equipment.  You can rely on the customer’s statement, though I would include that information in either your All in One contract or the Disclaimer Notice.  
When collections are futile 
          With businesses opening up the sad reality is that some just won’t; they won’t survive the shutdown.  Others, possibly fueled by the PPP or other stimulus money may open up only to find that people are not willing to resume their pre-pandemic routines and pass-times.  Movie theaters are anticipating hard times; so are sports stadiums, concert halls and restaurants.  Just about every type of business shares a common provider, the alarm company.  The alarm industry is bracing for subscriber defaults and how that will impact RMR, the lifeblood of the alarm industry.  As vital the alarm system may be to the subscriber’s operations the cost of sustaining the alarm system is not likely to be a factor in the subscriber’s survival.  For example, a day care facility may require an alarm system to maintain its license, yet the $50 a month isn’t a significant monetary issue influencing whether the day care center can stay in business.  More likely parents not willing to allow their children to be in that environment, back rent and other fixed expenses will be the downfall of the operation.
          Those of you with Standard Form Agreements have the option of referring the account to K&K’s collection department where the first step in collection will be to commence arbitration.  That process is relatively cheap, efficient and quick.  Success in getting a monetary award very likely.  But, collecting that award could be the real issue.  Collecting from a defunct business entity is nearly impossible.  Collecting from a individual, whether on the contract as subscriber or guarantor, also difficult, especially if the individual doesn’t own property.  A bankruptcy filing will put an end to the collection process [more on that in another article].  
          If your subscriber has remained in business then by all means you should enforce your contract and pursue collection proceedings if the subscriber fails to make the required payments.  It’s a bit too early to tell, but I suspect that the old procedure of sending several in-house letters demanding payment before declaring a default is probably outdated.  A more aggressive approach is likely in order. The sooner you begin formal collection proceedings and the firmer you are, the more likely you are to keep your contract or recovery under it.  
          You need to scrutinize why a subscriber isn’t paying and determine if the subscriber has permanently closed its operation.  There is no point pursuing an entity with no assets.  If referring a matter to K&K first ascertain that the business is still open and in business.  If it is, get a move on the collection process; don’t wait until the subscriber is out of business and gone.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301