BCJMay2012 by NACM Oregon

NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

In This Issue BAPCPA Revisited................. 1 Chair’s Message.................... 2 President’s Message.............. 2 Legal Corner........................ 3 Annual Meeting.................... 4 New Designee’s.................... 7 International Corner............. 9 ITSBM Scholarships.............. 10 NOF Scholarship Funds......... 11 BCLC Webinars..................... 12 Education Schedule.............. 12 New Members...................... 13 Job Postings......................... 14 DSO Results......................... 16 Contacts.............................. 20

2012

BAPCPA Revisited: A Three-Part Series Analyzing Retail Restructurings Before BAPCPA, Since BAPCPA, and the Future of Retail Bankruptcies Under the Bankruptcy Code by Lawrence C. Gottlieb, Brent Weisenberg, and Michael Klein Retailers today almost invariably commence the Chapter 11 process with little hope of emerging as a stand alone entity. Numerous economic factors over the years – the credit crunch, the subprime lending crisis, the slowdown of the housing market, and the eroding value of retail leases – have clearly contributed to this downward spiral. But pinning the disappearance of retail reorganizations solely on one or more of these economic factors ignores the devastation on the reorganization process wrought by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”). This article is the first in a three-part series describing retail reorganizations before BAPCPA, the effects of BAPCPA on retailers filing for Chapter 11 relief, and the future of retail bankruptcies under the Bankruptcy Code. This article briefly discusses the Bankruptcy Code as it existed prior to BAPCPA and some of the more meaningful changes it made to corporate reorganizations. Part two of this series discusses the effects of BAPCPA on retailers seeking to reorganize under Chapter 11 of the Bankruptcy Code. Part three of this series projects what’s in store for struggling retailers and discusses the future of retail bankruptcies under the Bankruptcy Code. BAPCPA’S Amendment to a Debtor’s Time to Assume or Reject Non-Residential Real Property Leases Prior to BAPCPA, Section 365(d)(4) of the Bankruptcy Code afforded a debtor 60 days after the bankruptcy filing to assume or reject its unexpired non-residential real property leases, which deadline was subject to open-ended extensions for cause. Although the practice of obtaining these ...continue on page 18

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

Message from the Chairman

Message from the President

It’s hard to believe that it’s been

As you know, the Credit Congress

a year from when I sent my first newsletter message to the membership. I want to thank the membership, the Board, and NACM Oregon staff for a very rewarding past year as your chairman. It has been an honor to represent you. This past year’s Board has been very engaged, active, and passionate towards this organization and its membership. They along with the NACM Oregon staff have tackled every challenge that has come their way. Many ideas and visions have been discussed to help continue our growth as an organization and to be an NACM affiliate leader for our industry. I’m proud to have been a part of this great membership as your chairman and look forward to our future. Congratulations to John Hardy, your new 2012-2013 NACM Oregon Chairman. Raeann Binau, CICP, RGCP Airgas - Norpac Inc. raeann.binau@airgas.com

2012

will be held June 10-13 in Dallas. The program looks outstanding this year, and we hope you will join the NACM Oregon delegation. More information may be found at http://creditcongress.nacm.org/. For those who attended the Annual Meeting last week, I want to provide a clarification. The membership approved a change to the Articles of Incorporation that included removing the requirement of twelve directors. Although there wasn’t any discussion, the intent of the Board in recommending this change was provide flexibility and for the Board to operate with eight to twelve directors. Subsequent to the membership meeting, the Board changed the Bylaws to state: The number of directors shall be not less than 8 and not more than 12 (Article II, Section 1). I apologize for any misunderstanding regarding this change.

Rod Wheeland, CCE, CAE Direct: 971.230.1158 rwheeland@nacmoregon.org

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

Legal Corner

2012

with this agreement, we can file a Motion with the Court and obtain our judgment without further action.

by Brenda Terreault, JD, CBA

Small Claims Mediation In February 2012, I stepped back into a courtroom after five years for a mediation session in Small Claims Court. Small Claims Court provides an informal process to resolve small civil disputes involving money or damages of $10,000 or less. The only required “formality” in Small Claims Court is mediation which is also an informal process. Sometimes mediation occurs several weeks before. Sometimes it is the same day as the hearing date; if the parties can’t mediate, they go to trial that afternoon. Some creditors enjoy the thought of being heard in court, winning, and receiving righteous vindication in the form of a judgment. Mediation hearings may not provide the same thrill, but still are very beneficial to the parties.

For instance, during that mediation session in February, the defendant debtor denied personal liability because the debt belonged to the business. The business filing went inactive with the State’s Corporations Division in 2008, and the debt was incurred in 2011. The defendant admitted that the business had continued operations until 2011. He claimed his attorney had said he didn’t have to maintain his State business filing. No matter what I said about the State law and regulations, he adamantly denied personal liability because of what he said his attorney told him.

In this case, mediation brought about several benefits. The creditor has a payment plan. If the defendant does not make payment as required, the creditor has the right to an immediate judgment without further court action. The defendant had the opportunity to be heard, albeit before a mediator instead of a judge. He also opened himself up to new information, so had a learning experience as well. Upon consideration of that information, presumably with his attorney, he offered a reasonable payment arrangement to pay off the account in full.

Brenda Terreault, JD, CBA, is the Collection Services Manager for NACM Oregon and an Oregon attorney. She has more than 18 years’ experience as an attorney, investigator, and operations manager in governmental, corporate, and law firm settings. Brenda is a regular instructor for NACM Oregon classes/seminars and webinars and a contributing writer in the monthly NACM Oregon Business Credit Journal newsletter. She earned her CBA designation in March 2010. You can contact her at 971.230.1196 or bterreault@nacmoregon.org.

But the seeds of doubt had been planted. The defendant said he was going to talk with his attorney again. I agreed to send him the State statutes and our research. Instead of forwarding the case to set a trial date, the mediator continued the mediation hearing to another day. When the mediation was reconvened, the defendant was more agreeable. He agreed to make payments and signed the mediation agreement. If he does not comply

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

2012

A monthly newsletter published by NACM Oregon

NACM Oregon’s Annual Meeting A look at the 2012-2013 Board Members At the Annual Meeting held April 26, John Hardy, Corporate Credit Manager, Emerson Hardwood Co., was named Chairman of the Board for the 2012-13 term. Marsha Johnson, CCE, Corporate Credit Manager, TEC Equipment, was named Vice Chairman; Pat Swope, CCE, CICP, Pacific Seafood Co., Inc., was named Secretary/Treasurer; and Raeann Binau, CICP, Airgas-Norpac, Inc., is Counselor. The Board of Directors also includes: Kimi Shelton-Muller, CCE; Lori Jones, CCE; Linda Bishop, CCE, CICP, Tektronix Inc.; Paula Cooley, CBA, American Metals Corp.; Sue Hein, President, Rapid Bind Inc., Steve Amiel; Will Campbell, President, Standard Supply Co., and Tony Ceniga, Corporate Credit Manager, Industrial Finishes & Systems.

Front row (l to r): Kimi Shelton-Muller, CCE; Lori Jones, CCE, Linda Bishop, CCE, CICP; and Paula Cooley, CBA; and Sue Hein. Back row (l to r): Pat Swope, CCE, CICP; Steve Amiel; Marsha Johnson, CCE; Raeann Binau, CICP, RGCP; John Hardy, and Will Campbell. Not pictured: Tony Ceniga.

The event featured an educational session presented by Wanda Borges, Esq., Borges & Associates, LLC. Wanda brought us up-to-date on current bankruptcy law for 2012. Special guest speaker, Cindy Robert, NACM Oregon lobbyist, discussed current legislative information and what has been done in Salem during this last session on creating jobs, reducing unemployment, and improving education and healthcare. Also, several member firms were recognized for long-term NACM Oregon membership.

Wanda Borges, Esq., Borges & Associates, LLC 7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

25-Year Members

The following firms receive their plaque from Raeann Binau in recognition of 25 years of membership in NACM Oregon. From (l to r): Paula Cooley, CBA, American Metals Corp., accepted the plaque on behalf of Lampros Steel (subsidiary of American Metals Corp.); representing Kai USA Ltd., Pam Pliska; representing Rapid Bind, Inc., Sue Hein; representing Barbo Machinery Company, Inc., Rand Robinson; and Raeann Binau, CICP, RGCP.

2012

Guest Speaker

Newly elected Chairman, John Hardy, Emerson Hardwood, with guest speaker, Cindy Robert, NACM Oregon lobbyist.

 Raeann Binau, CICP, RGCP, (left) congratulates new CBA (Certified Business Associate) recipients, Jeff Butterfield, Pacific Seafood, and Bonnie Dunham, S R Smith, LLC. Raeann Binau, CICP, RGCP,  accepts the Chairman’s gavel from John Hardy, in recognition of her service of the past year.

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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CONGRATULATIONS

to these Long-Standing Members 75-Year Member Eoff Electric Supply Company

50-Year Member Jubitz Corporation

25-Year Members

Air Commodities, Inc. Barbo Machinery Co. Buckeye Pacific, LLC Carlton Farms EC Company General Tool & Supply Co. Gensco, Inc. Hardwood Industries, Inc. Kai U.S.A., Ltd. Lampros Steel LTX Credence Corp. MLS, Inc. Rapid Bind, Inc. Service Paper Company Tarr, LLC Tembec, Inc.

NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

2012

New Designee’s Congratulations to the following recipients who earned their Registered Global Credit Professional (RGCP) designation.

Every time you participate in the Credit Managers’ Index (CMI), you are contributing to a leading economic indicator. You hold the power to elevate the status of the credit profession today.

Raeann Binau Airgas - Norpac Inc.

The CMI has been featured in these publications and many more!

Jeff Deiss U.S. Small Business Administration Alice Knight Paper Products Marketing (USA) Inc. Marilyn McEvers Paper Products Marketing (USA) Inc. Larry Rock LTX Credence Corp. Jonna Russell Noramex LLC Member Korab Int’l.

• Aerospace Manufacturing and Design

• Mississippi Business Journal

• AgriMarketing

• Monitor Daily

• Ameriquest Transportation Industry Symposium

• New Orleans City Business

• Business Information Industry Association

• OnGuard

• Business Journal Central New York • CCRMagazine.com • Central Valley Business Times • CFO • Engineering Maintenance Solutions

Marilyn McEvers also received her Certified Global Credit Executive (CGCE) designation. Congratulations, Marilyn, on your accomplishment. Congratulations also are in order for Maren Anderson-Wymore, CBA, Blount Inc., on her recent Certified International Credit Professional (CICP) designation. Way to go Maren! NACM Oregon recognizes and applauds everyone’s success.

• FleetOwner • Highbeam Business • Industry Week • InsideArm.com • Kansas City Star

• PRWeb • News to Watch • North Korea Times • Tech Journal • Springfield Business Journal Online • TheFabricator.com • The Wall Street Journal Blog • Wisconsin Business News Source • Supply Chain Brain • Thomas Net • USA Industry Today • 24/7 Wall St.

SIGN UP TODAY! Simply sign up for the CMI and you will receive a monthly reminder to take this quick survey. There is no math involved, you just have to indicate whether something is better, the same or worse than the month before. It’s quick and easy! Help raise the status and respect of the credit profession. Your participation is the solution! Learn more about the CMI here.

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

2012

Top 5 Things to Know about a Customer Knowing your customer is the best way to prevent future payment problems. If you have all the details down and know everything you need to know, then it’s easier to conduct a collection proceeding, should one be necessary, and easier to protect yourself and your company in court, should the customer file for bankruptcy protection. Most of this information will be collected in the initial credit application, which needs to be bulletproof and complete to ensure that nothing gets missed and eventually comes back to bite the selling company. Here are the top 5 things that you need to know about your customer before extending credit: 1.

Name: While this is pretty much a no-brainer, it’s still the most important piece of information that you could have about your customer. The correct, legal name of the credit applicant ensures that everything else that follows it will be legally binding in a court of law. An incorrect name essentially makes a credit application meaningless. Moreover, having an appropriate legal name, or “doing business as” additions, becomes handy when searching for any suits, tax liens, mechanic’s liens or judgments. It ultimately allows the creditor to verify all of the information that will come from the customer on the rest of the application.

Address Information and Phone Number: Another no-brainer, but these both need to be collected and verified through directory assistance. The sales department can also help by verifying address information. Collecting a physical address not only serves to pinpoint a customer’s location, but also gives a creditor an idea of where there assets will be (which is why creditors should always be wary of a customer listing a mail drop as their address, as this is how most fraud occurs). Verifying this information is a simple, necessary step that could uncover

irregularities and inconsistencies.

Legal Status of Company: The creditor needs to know the legal structure of the applicant before they can do anything, as this will affect any potential collection or bankruptcy proceeding. It determines who is liable for what the company owes if they default. If a creditor is selling to a sole proprietorship, then the owner of the business is, literally, the business and liable for the entity’s debts (this may necessitate a personal credit report on the owner too). When dealing with a general partnership, each partner can be held equally liable for all the debt incurred. Things change if the company is a corporation, limited liability company (LLC), or other entity, and creditors need to be aware of these differences before making the sale.

4. Principals, Owners, Officers, and Members: Collecting social security numbers, the home address and telephone information from each person involved in the ownership of the entity is necessary, but creditors must remember that it adds another step to the process because now they are holding personal information, and must keep it safe in accordance with privacy laws.

Creditors should also seek ownership history information, in order to ensure that the management of the company is sturdy and worthy of the creditor’s confidence.

Bank Information and Other Creditor Security Interests: This information can be found at offices of the Secretary of State and elsewhere. Using UCC-1 filing reports the creditor can determine if lenders are willing to continue loaning money to the customer and, perhaps more importantly, determine if the customer is too heavily leveraged to meet the potential credit grantor’s needs. If the customer files, the bank will in all likelihood be paid before you, so this information is necessary to ensure that the customer has the capacity to live up to both the creditor company’s expectations, and the bank’s.

To learn more about how to make your credit application airtight, contact your account executive.

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

2012

International Corner, by Alice Knight, RGCP “The only constant is change”

Heraclitus 500 B.C. 500 B.C? That cannot be right! It’s a new insidious problem and no one understands how difficult it makes my job! Let’s have a reality check—change happens. This has been officially recognized for over 2,512 years. The speed of change may vary but change is an intrinsic part of life. Change is particularly important in the area of international business. A change in administration, tax structure, or general business regulations may take months or even years to actually become effective in the United States. In many countries of the world this may happen overnight. Your company may have detailed policies and procedures for dealing in certain countries but they can suddenly become obsolete if the underlying business structure or laws change. It is vital to have a source of continuous input concerning your business exposure in various countries. ICTF’s Global Professionals Symposium was held April 15-17 in New Orleans. This was an excellent opportunity for an in-depth look at global conditions. With attendees from Brazil, Canada, The Netherland, The United Kingdom, and the U.S. a wide view of global economics was presented and discussed. A continuous theme throughout the symposium was that international trade must be a two-way street. A simple focus on “exporting” is ultimately self- defeating. The keynote speaker, Dan Ikenson, Director, Herbert A. Stiefel Center for Trade Policy Studies, CATO Institute, focused on 20th century trade policies that hamper 21st century trade realities. Dan Joseph, Global Advisor for China, PNC Bank and Richard Clark, Director of

Corporate Credit, Parker Hannifin Corp., provided a detailed overview of doing business in China and practical “how to” tips for business in China. Both speakers emphasized that China is not a “one-size-fits-all” country. It is getting somewhat easier to do business in China but that there are still many challenges and that relationships and having the right people are key for success. Richard discussed the growing use, and challenges, of BAD’s (Bankers Acceptance Drafts) in China. Peter Holewinski, Head of Credit & Collections, Alcatel-Lucent; Brenda Jalowiec, Global Director Credit and A/R, Nidec Motor Corp.; and Jim Youse, VP Global Risk Management, Elizabeth Arden; gave updates on Best-in-Class Global Credit, Collections, and A/R Management. Peter did an overview of drivers for change, where they were, what they did, where they are now, and lessons learned. Brenda detailed centralizing order-to-cash and managing shared services across different countries. She shared their journey from “outsourcing” to “offshoring” and the trend of many companies to “nearsourcing.” Jim provided their shared services project which included business efficiencies in supply chain, distribution, logistics, IT, and finance areas. David Marsh, International Credit Solutions, provided practical tips based on forty-plus years of international experience in assessing the credit worthiness of foreign customers with and without financial statement. David provided examples of seemingly innocent hidden red flags on financial statements.

Monday closed with a presentation, “ Monday Morning Motivation” by David Cottrell. Generally, I am not a fan of motivational speakers but David was excellent. He was not only energizing but also very practical. He championed teamwork but focused on personal responsibility. The challenge – stuff happens! It is how you respond to “stuff” that makes the difference. He quoted John Wooden, “Things turn out best for people that make the best of the way things turn out.” He stressed that continuous education, networking, and preparation are necessary to face ongoing change. You have to juggle internal customers, external customers, your team, and your boss. This requires continual evaluation of changing needs and expectations. He advised adopting the quote from Darrell Zanuck “eat change for breakfast.” Change happens. Continuous input is needed for us to effectively react to change in the international arena.

Alice Knight is Vice President of Finance & Administration for Paper Products Marketing, Inc. Ms. Knight has more than 45 years' of experience in International Finance and is an active member of ICTF and NACM. She has served as Co-chair, Panel Member, and Presenter at Annual Global Conferences, as President of FCIB Forest Products Group.

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

2012

nt e m

e c n ou

or f e l b Ann ips Availaved in rsh vol a n l I o s ade r Sch nesse T l a Busi rnation Inte

The Small Business Development Center (SBDC) has some exciting news—we are able to apply 10 scholarships from federal grant dollars to the next International Trade Small Business Management (ITSBM) course starting the fourth Wednesday of June (Wednesday, June 27) from 6-9 p.m, at the CLIMB Center.* Companies in the ‘advanced manufacturing’ and ‘clean-technology’ traded sectors, who can benefit from an in-depth educational and advising program may qualify for a scholarship. Referrals are the best way to help engage companies in getting help to improve their bottom line. And, with Portland’s Metropolitan Export Initiative in full swing, the scholarships and the program remain timely. The program is known for the quality of content and presenters. Entrepreneurs and companies with 9 to 99 employees who have successfully been in business for at least three to five years in these two industries and who could grow internationally with help from the ITSBM program can qualify. The ITSBM program is also open to having other industry entrepreneurs and companies participate as well. To view the instructors, topics, and participant profile, click here. Please have interested entrepreneurs and company leaders contact Deniel Banks at deniel.banks@pcc.edu or 503.805.6718.

*The Climb Center is located diagonally across from OMSI at 1626 SE Water Ave., Portland, OR 97214

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

2012

A monthly newsletter published by NACM Oregon

NACM-Oregon Foundation The NACM-Oregon Foundation grants scholarships to credit professionals for continuing education, professional designations, and conference expenses. The Foundation manages two scholarship funds: the NACM-Oregon Scholarship Fund and the Phylliss Clark Memorial Fund. The Foundation offers scholarship to the following events: • All NACM Oregon educational courses • Portland Community College courses within the Credit Administration and Advanced Credit Administration Programs in preparation for professional designation • Self-study courses in preparation for professional designation • Registration and exams fees for the National NACM Professional Designation Program • NACM/CFDD Pacific Northwest Credit Conference • National Credit Congress and Exposition • NACM National schools such as Credit Management Leadership Institute, Mid-Career School, and the Graduate School of Credit and Financial Management If taking a course or pursuing your certification seems like an expensive proposition, think again. These scholarship funds are a benefit to you as a member, so please take advantage by applying for next year.

To apply— To apply for scholarship funds, or for more information, contact Lourdes (Lou) Rice, NOF Scholarship Committee Board Director, Pacific Metal Company at 503.454.1051 or lrice@pacificmetal.com. Submit applications to: Lourdes (Lou) A. Rice, NOF Scholarship Committee Board Director Pacific Metal Co. 10700 SW Manhasset Dr. Tualatin, Oregon 97062 p: 503.454.1051 f: 503.454.1065 e: lrice@pacificmetal.com

Small Claims Actions Made Easy

June 12, 8:30 - 10:30 a.m. Presented by Brenda Terreault, JD, CBA, Collections Manager, NACM Oregon

Complimentary to members! Whether in Oregon, Washington, or any other state, anyone can bring a claim in Small Claims Court so long as they meet certain legal guidelines. It’s not hard, but handling a small claims action may be a bit daunting at first. Who are you filing against? What do you say in your complaint? How much can you recover? What do you need to do after the case is filed? Do you need to be Perry Mason? Then there are some business considerations. Is it worth your time? Does the defendant have the means to pay? Are you throwing good money after bad? Let’s get ready for your day in Court!

You don’t want to miss this session. Space is limited, so sign up today! Contact Elizabeth Heintz at 971.230.1120 or eheintz@nacmoregon.org!

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

Business Credit Learning Center Webinars Advanced Financial Statement Analysis May 8  9-10 a.m. (PT) UCC Article 9 May 10  9-10 a.m. (PT) Surviving in Today’s Economy May 16  9-10 a.m. (PT) Construction: 2012 Oregon Lien Law May 17  9-10 a.m. (PT) Bond Claims & Prompt Payment Penalties May 18  9-10 a.m. (PT) The Art of Credit Management: A Checklist for Success May 23  9-10 a.m. (PT) Construction: 2012 Washington Lien Law June 14  9-10 a.m. (PT) Real World Best Practices for Collecting Bad Checks July 12  9-10 a.m. (PT) Construction: 2012 Idaho Lien Law July 12  9-10 a.m. (PT)

2012

A monthly newsletter published by NACM Oregon

Webinar fee: $79 each—member $109 each—nonmember For a complete list of webinars and descriptions, please visit www.busi-

nesscreditlearningcenter.com. If you have any questions on any of the webinars, call Elizabeth Heintz at 971.230.1120, or eheintz@nacmoregon.org. Schedules are subject to change.

Education Class Schedule Certification Roadmap Introduction May 10  11:30 a.m. - 1 p.m. NACM Oregon Classroom Free to members—lunch included! Guest Speaker: Marilyn Rea, CCE, Pacific Architectural Wood Products Credit Applications and Personal Guarantees May 16  7:30 - 8:30 a.m. NACM Oregon Classroom CEU: .1, Course Level: Intermediate $41/member, $95/nonmember Guest Speaker: Rick Baroway, Esq., Farleigh Wada Witt

Behaviors that Drive our Decisions on Risk Taking and Ethics June 28  7:30 - 9 a.m. NACM Oregon Classroom CEU: .15, Course Level: Intermediate $41/member, $95/nonmember Guest Speaker: Greg Saliba, Sr. Vice President, Capital Pacific Bank

Documentary Collections June 7  7:30 - 9 a.m. NACM Oregon Classroom CEU: .15, Course Level: Intermediate $41/member, $95/nonmember Guest Speaker: Brian Welsh, President, George S. Bush Co., Inc.

Building Blocks to Successful Credit Management October 9  8:30 a.m.-4 p.m. NACM Oregon Classroom CEU: .65, Course Level: Core

Small Claims Actions Made Easy June 12  8:30 - 10:30 a.m. NACM Oregon Classroom Free to members; space limited. Guest Speaker: Brenda Terreault, JD, CBA, NACM Oregon

How Do I Manage Risk and Maximize My Company’s Revenue Opportunities? October 25  8:30-11:30 a.m. NACM Oregon Classroom CEU: .3, Course Level: Advanced Guest Speaker: Robert S. Shultz, Founding Partner, Quote to Cash Solutions (Q2C)

Registration To register for on-site classes, please call Elizabeth Heintz at 971.230.1120 or email eheintz@nacmoregon.org

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

Business Credit Journal May

A monthly newsletter published by NACM Oregon

2012

New Member Introduction NACM Oregon extends a warm welcome to the following new members:

Collins Companies, The

Oregon Seed Services, Inc.

Marilyn Hendrick

Larry Dean

503.471.2206 1618 SW 1 Ave., Ste. 500 Portland OR 97201

541.995.6168 33200 Mt. Tom Dr. Harrisburg OR 97446

The Collins Companies, which began operations in 1855, is a family-owned American forest products company. Headquartered in Portland, Oregon, Collins was the first privately-owned forest products company in the United States to have all of its hardwood and softwood forests certified by the Forest Stewardship Council (FSC). In addition to its forests and sawmills, Collins also manufactures siding and trim, particleboard, hardwood, and softwood lumber, and operates retail hardware and lumber yards in northern California. The Collins Companies include: Collins Pine Company, Collins Hardwood LLC, Collins Products LLC, Collins Builders Supply, and the Almanor Railroad.

Founded in 2004, by Larry Dean, Oregon Seed Services, is a distributor of grass seed.

Leupold & Stevens, Inc. Kristy Prouty 503.526.1608 14400 NW Greenbrier Parkway Beaverton OR 97006 Leupold & Stevens, Inc. is a manufacturer of telescopic sights, red dot sights, spotting scopes, and binoculars located in Beaverton, Oregon. The company started in 1907 under the name, Leupold & Voelpel. In 1942, the company name was changed to its present form, Leupold & Stevens. It is family-owned and has been run by five generations of the family.

Schetky Northwest Sales, Inc. Jeff Hrdina 503.382.3124 8430 NE Killingsworth St. Portland OR 97220 The Schetky family first became involved with transportation in 1931 when Jack Schetky assembled what was rumored to be the first School Bus assembled west of the Mississippi River. In 1942, Jack Schetky and a business partner formed Roots & Schetky. In 1950, Jack Schetky and his son, John, purchased Root’s half of the business and changed its name to Schetky Equipment. In the ensuing years, John Schetky took a larger role in the business and helped write the official School Bus Codes for the states of Oregon (1950), and Alaska (1959). John Schetky also lobbied for and helped launch a bill in the state of Oregon which simply read, “School districts shall have the authority to lease school buses.” In 1975, John and son, Randy, changed the business’ name once again to Schetky Northwest Sales, Inc., and continues to be the No. 1 bus dealer in the Northwest since 1942.

Wicked Quick Eric Kappel 503.747.2852 14695 NW Springville Rd. Portland OR 97229 Wicked Quick is a premium clothing line of apparel for men and women. Tailored around the concept, “Built for Speed,” the motor-centric brand combines vintage graphics with super soft, hand-sewn garments. Dedicated to making clothing that feels as good as it looks, Wicked Quick embodies the independent spirit of quality American-made goods. Whether printed or a basic, dress them up or down, their timeless quality and effortless style always comes through. Wicked Quick can be found in retailers such as Nordstrom, Dillards, the Buckle and boutiques around the country.

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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NACM Oregon

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2012

Job Postings This networking tool is offered free of charge to NACM Oregon members. You may include your resume in our resource pool, or utilize it to fill an opening in your credit, accounting, or collection department. To participate in this program, please call Barbara Salazar at 971.230.1182 or 866.359.1182.

Are you currently seeking a position? Check out the listings below. Position Open:

Position Open:

Senior Account, Project Cost Full Time Permanent (Monday - Friday)

Benchmade Knife Co., Credit Analyst

Portland area Construction Materials Supplier and Contractor seeks Senior Accountant, Project Cost. Position will require a wide range of accounting and business administration functions in a diverse operations environment. Duties include but are not limited to general accounting up through financial reporting, including accounts receivable, accounts payable, project (job) accounting, inventory, cost accounting (manufacturing), and payroll.

A well-established manufacturing company located in Oregon City, is currently seeking qualified candidates for a credit analyst position. If you are an energetic, self-starting individual who welcomes a challenge, then the Benchmade team may be the place for you. For more information about this job and to apply, visit Benchmade today.

Requirements • Bachelor’s degree in accounting, finance or business administration. • Minimum four (4) years accounting experience • Valid driver license and insurable driving record • Experience in use of Microsoft Excel, Word, Outlook, database and bookkeeping software. • AS400 Experience a plus. Drug Screen and Background check required. Please email resumé to: tstahly@riadmin.com. EQUAL OPPORTUNITY EMPLOYER

Position Open: Marc Nelson Oil Products Credit & Collection Specialist Looking for a highly organized, detail-minded individual to take responsibility for the credit and collection function within our organization. For more information about this job and to apply, click here!

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7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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Employment, continued from page 14

Are you an employer looking for staff? Check out the listings below. Seeking Position:

Seeking Position:

Summary Qualifications

I am a self-motivated, forward thinking person who enjoys

• 23+ years progressive experience with customer service, cost accounting, invoicing, all facets of payroll, data entry, accounts receivable and credit/collections. • Ability to work well under various deadlines, able to multi-task between projects. • Self-motivator, hard worker, quick learner and detail-oriented. Team Player that works well with others or independently. • Experience with Abra Payroll Systems, MAS90, Hagen OA, POS Partner, Pay Simple, Microsoft Word, Excel, Zimbra and gmail. Work Experience • 1988 - January 2012 My Little Salesman Inc. Responsible for all aspects of payroll, timecards, processing garnishments, deductions, 401(k), workers comp, quarterlies and year-end. Accounts receivable, credit and collections, along with invoicing for both catalogs and Inventory Mover accounts. post cash and process bank cards daily. Telephone backup. • 1988 - 2008 Industrial Publishing Inc./Koke Printing/MLS, Inc. Responsible for all aspects of payroll: timecards, processing garnishments, deductions, 401(k), quarterlies and year-end procedures for two companies. Maintain credit and collections for Industrial Publishing Inc., along with cost accounting, invoicing and cash receipts. • 1986-1988 Farmers Insurance Company-Office Assistant Handled customer service by phone or walk-ins. Data entry and cash posting. Managed office when owner was away. Education

challenges. Seeking long-term employment where my abilities are utilized to achieve internal objectives. My background includes all phases of credit/collection functions; correspond with sales departments and customers; and financial statement analysis. Please call Diana at 503.405.2018 or di08@hotmail.com.

Seeking Position: I am seeking a Finance Analyst position. Currently, I am

working with Columbia Machine, Inc., as an International Credit Specialist. While I enjoy using my financial and bilingual skills in this position, the position is temporary in nature and was created to cover a medical leave. My goal is to establish a career in Finance, with a particular ambition to be a financial analyst. Obtained my undergraduate degree in May of 2011, from Washington State University with a BA in Business Administration and minors in Finance and Spanish. My quantitative, qualitative, and interpersonal skills make me a great candidate for this position. Feel free to contact me with any questions at 360.513.2372 between 5-10 p.m., or 360.694.1501 ext. 609 between 8 a.m. to 5 p.m., or by email at cris.canseco@hotmail.com.

• Thurston High School Graduate, Springfield Oregon • Lean Manufacturing • CQI-Continuous Quality Improvement Please contact bonnieangco@comcast.net.

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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Ten Tips on Deduction Management 1. Recognizing that your customer’s accounts payable group typically does not have authority to repay deductions, send supporting documentation proving the deduction was sent in error in writing. This can be a letter, a fax, or an email. Follow up after the supporting documentation is delivered. 2. In your preliminary discussion(s) with accounts payable, ask who must approve repayment. You may not want to contact that person immediately, but you may need to speak to that person eventually. 3.

Track the number and type of deductions you receive each week and each month. This way, you can see trends.

Track trends involving mistakes made by your company. Generally speaking, any deduction that is credited off represents an error by someone in your organization.

Publish your findings monthly. The best way to get other departments to tighten up their processes and procedures is to highlight through publication the number, dollar value, and types of errors being made internally.

Once you have documented that a deduction was taken in error, you should expect repayment on the customer’s next check. If payment is not made promptly, the collector should follow up for payment as stridently as they would with a past-due invoice.

Do not allow customers to withhold payment of the entire amount of an invoice because you owe them a credit for a small amount of that invoice. Instead, insist they short pay the invoice and pay the amount not in dispute.

Develop or purchase software that allows you to track the status and the actions taken to address and resolve customer deductions.

9. If your company owes the customer a credit, make certain that these credits are issued promptly by tracking how long, on average it takes for the credits to be issued. If the wait is unusually long, this is a problem that the credit department needs to address. 10. Remember that the credit department is the only party with an interest in resolving deductions. From the customer’s perspective, once the deduction is taken they would prefer never to deal with the issue again. From the perspective of your sales department, deductions are problems from the past and they need to focus ahead. © 2010. Michael C. Dennis. All Rights Reserved

2012

National Summary of Domestic Trade Receivables Results 1st Quarter 2012 We have received the results of the National Summary of Domestic Trade Receivables (DSO) for the first quarter of 2012. This quarterly survey will begin again on July 1, 2012. Please circulate this link among your peers to get responses in your industry. The Credit Research Foundation (CRF) has been producing this valuable quarterly report for more than 50 years. DSO slightly decreased from the prior quarter to 39.30 from 40.19. A year ago the measure was 40.00. Best Possible DSO increased to 32.00, as compared to 31.10 last quarter and 31.07 a year ago. Average Days Delinquency decreased to 5.30 from 6.30, as compared to 5.00 a year ago. The percent reported over 90 days past due decreased to 0.40 as compared to last quarter at 0.66, as compared to 0.66 a year ago. Medians for 30 different industries are included in this summary. If any SIC code has less than three responses, it will not appear in the report. Please contact Customer Service or your Account Executive for a copy. Now that you’ve done the NSDTR, if you really want to see how you’re doing, you’ll want to participate in CRF’s comprehensive Benchmarking survey. You can do that at: http://www.crfonline.org/surveys/ benchmarking/benchmarking.asp. Get the $1,500 report FREE!

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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Manual of Credit and Commercial Laws, 103rd Edition— Four Volume Set . . . Special Introductory Price $69.95 NACM has re-envisioned and revitalized its flagship publication, the Manual of Credit and Commercial Laws. Not only will the new edition continue to provide essential information for credit and finance professionals, it will do so in a highly flexible and more affordable format. The latest version of the Manual of Credit now comprises four volumes that either may standalone ($29.95 each plus S&H) or continue to serve as a cohesive and comprehensive set ($69.95 plus S&H). Chapters and appendices from the book have been reorganized under the following headings: Volume I: General Business Law, Related Statutes, and Collections Volume II: Commercial and Consumer Credit Topics Volume III: Construction Issues Volume IV: Bankruptcy and Insolvency Issues Contact Barbara Salazar at 971.230.1182 or 800.622.6985 ext. 182 or email to bsalazar@nacmoregon.org to order your copy.

2012 Credit Congress & Exposition NACM’s 116th Credit Congress & Exposition in Grapevine, Texas, June 10-13, 2012. We invite you to join us in Grapevine, Texas, nestled between Dallas and Ft. Worth, to share in our bigger than life Lone Star State experience in June 2012 at our national Credit Congress & Exposition. This community, which is historically rich and rooted in tradition yet distinctly modern, welcomes NACM members to the Gaylord Texan Resort and Convention Center. Credit Congress is the largest gathering of credit professionals in the country so don’t miss your chance. To register click here. Register five or more from a single company at the same time and receive Team Discount savings! The Team Discount applies only to NACM members.

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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BAPCPA, continued from cover extensions was often met with significant backlash from landlords, a debtor’s ability to regularly obtain extensions was crucial to its lender’s willingness to extend sufficient financing to fund the reorganization process. In 2005, BAPCPA amended Section 365(d)(4) by providing that a debtor now has only 210 days to decide whether to assume or reject its non-residential real property leases. As we’ll discuss in part two of this series, the compressed time frame for the assumption or rejection of leases under the new statute has had a devastating impact on the efforts of large retail debtors that need a business cycle of up to a year or more to analyze their performance and business plan prior to determining the final store configuration which is needed to promulgate a successful plan of reorganization. BAPCPA’S Amendment to a Debtor’s Exclusive Period to File a Plan of Reorganization Before BAPCPA, Section 1121 of the Bankruptcy Code granted a debtor the exclusive right to file a plan for the first 120 days of a Chapter 11 case. Another interested party, such as a creditor or an official committee, could file a plan only if the debtor had not done so within the 120-day period, or the debtor’s plan had not been accepted by each impaired class of claims and interests within the first 180 days of the case. The bankruptcy court could increase or reduce these periods for cause, and any party with a stake in the case had standing to make or object to such a request. In most large, complex business cases, the court found cause to increase the exclusive periods, frequently granting multiple extensions either without objection or after the debtor negotiated and reached agreement with its creditors. United Airlines took three years to confirm its plan in 2005; Adelphia took more than four years. BAPCPA eliminated the court’s power to extend these exclusive periods for a total of more than 18 months, no matter what creditors or other parties want. After 18 months, the plan process now abruptly opens up. As we’ll

2012

see in Part two of this article, any party could file a plan, with inherently unpredictable results, upon expiration of the debtor’s 18 month exclusive period. BAPCPA’S Amendment to Granting Utility Providers Administrative Claims as Adequate Assurance of Future Payment Because many utilities are monopolies that provide services that a debtor could not survive without, Section 366 of the Bankruptcy Code has always required a utility to continue to provide service to a debtor immediately after it files for bankruptcy and requires the utility to continue service on an ongoing basis if the utility is provided “adequate assurance of payment” for future services. Pre-BAPCPA, courts generally found that a projection of strong postpetition cash flow, a history of timely prepetition payments, and the assurance of an administrative expense for postpetition services constituted “adequate assurance of payment” and often did not require the debtor to make a cash deposit or post additional security. BAPCPA’s revision to Section 366 expressly forbids the granting of administrative claims as a means to assure utility providers of the debtor’s future payment. Section 366 now requires a debtor, within the first 20 days of the filing, to provide its utility providers with adequate assurance in the form of a cash deposit or other security (in an amount generally ranging from two weeks to two months of service) in order to prevent the provider’s discontinuation of services. A debtor with a significant number of store locations is now required to disburse what could be millions of dollars to utility providers within the first 20 days of the case (a time when its liquidity is most constrained) without any corresponding offset to its obligation to pay such providers on account of their postpetition services. The Addition of Section 503(b)(9) Prior to the 2005 amendments to the Bankruptcy Code, a debtor’s failure to pay for goods received within the 20 days preceding the commencement of its case gave rise to an unsecured prepetition claim, subject to very limited ...continue on page 19

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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BAPCPA, continued from page 18 reclamation rights. These prepetition claims would ordinarily be paid by a debtor on the same pro-rata basis as other unsecured claims under a confirmed plan and often at a severe discount. BAPCPA’s addition of Section 503(b)(9) to the Bankruptcy Code created an administrative claim for trade vendors whose goods were actually received by a debtor within the 20 days prior to the Chapter 11 filing. Although trade vendors have generally enjoyed being awarded this new priority treatment, it has some disadvantages which sometimes are not plainly apparent. Unfortunately, in several cases the debtors’ lenders were disinclined to finance a debtor’s bid for reorganization in light of the fact that a debtor must now pay in full at confirmation a potentially massive class of claims traditionally entitled to no more than a discounted unsecured distribution. To the extent that lenders continue to refrain from providing sufficient postpetition financing, the benefits of Section 503(b)(9) may not be reaped by trade vendors simply because retailers will be deprived of the requisite funding needed to attain administrative solvency at confirmation. Time and Manner of Payment of Tax Claims Under a Plan Before the Bankruptcy Code was amended by BAPCPA, one of the requirements for confirmation of a plan was that the plan provide that the allowed unsecured claims of governmental units “[r]eceive on account of such claim deferred cash payments, over a period not exceeding six years after the date of assessment of such claim, of a value, as of the effective date of the plan, equal to the allowed amount of such claim.” Section 1129(a)(9)(C). BAPCPA significantly revised this section by providing that a taxing authority must not receive less favorable treatment than other non-priority unsecured claims provided for under the plan.

2012

Under the new provision, debtors are no longer permitted to pay more to unsecured creditors in a shorter time frame than they are to the taxing authorities. For example, assume a plan proposes to distribute 50% cash on confirmation to the unsecured creditors. The tax claims are $120,000 and the unsecured claims are $1.0 million. Under the old law, the debtor could pay the tax claim in quarterly installments of $5,000 in principal over 6 years with interest and also pay $500,000 to the unsecured creditors on confirmation of the plan. Under BAPCPA, however, if the debtor pays 50% of the unsecured creditors’ claims on confirmation, the debtor must pay $60,000 to the taxing authority on confirmation. This, in turn, reduces the funds available to pay unsecured creditors up front and yields either a lower recovery for those creditors or a greater uncertainty in recovery created by a need to stretch out unsecured creditor payments under a plan. With the advent of BAPCPA, Congress unwittingly stripped distressed retailers of the Code’s significant powers and protections previously used by them to resuscitate their businesses. Indeed, the constricted time frames and liquidity problems created and imposed by BAPCPA has effectively eliminated the “debtor-inpossession.” Rather, the process has become controlled almost exclusively by prepetition lenders, essentially assuming the role of “creditor-in-possession.” Part two of this series will take a closer look at this fundamentally changed reorganization dynamic, examining the wide-ranging and far-reaching effects of BAPCPA both prior to and during the Chapter 11 case. Lawrence C. Gottlieb is a partner in the Bankruptcy & Restructuring Group of Cooley, LLP. Brent Weisenberg and Michael Klein are each associates in the Bankruptcy & Restructuring Group at Cooley.

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 • Fax 503.257.0247 • www.nacmoregon.org

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Board of Directors Chairman John Hardy Emerson Hardwood Co. jhardy@emersonhardwood.com Vice Chair Marsha Johnson, CCE TEC Equipment, Inc. mjohnson@tectrucks.com Secretary/Treasurer Pat Swope, CCE, CICP Pacific Seafood Co., Inc. pswope@pacseafood.com Counselor Raeann Binau, CICP, RGCP Airgas - Norpac, Inc. raeann.binau@airgas.com

Directors Steve Amiel steven.amiel@gmail.com Linda Bishop, CCE, CICP Tektronix, Inc. linda.j.bishop@tek.com Will Campbell Standard Supply Co. willc@standardsupplyco.com Tony Ceniga Industrial Finishes & Systems t.ceniga@industrialfinishes.com Paula Cooley, CBA American Steel pcooley@american-steel.com Sue Hein Rapid Bind, Inc. sue@rapidbind.com Lori Jones, CCE ljdangermouse@gmail.com Kimi Shelton-Muller, CCE EKC Consulting, LLC kimimuller@comcast.net President Rod Wheeland, CCE, CAE NACM Oregon rwheeland@nacmoregon.org

NACM Oregon Customer Service/ Credit Reporting 971.230.1220 services@nacmoregon.org

Industry Groups Richard Browning, CGA 971.230.1188 rbrowning@nacmoregon.org

Data Contribution Shannon Abnal, CGA 971.230.1166 sabnal@nacmoregon.org

Kristen McBride, CGA 971.230.1176 kmcbride@nacmoregon.org

Member Services Kathy Linscott, CGA 971.230.1164 klinscott@nacmoregon Member Services Account Executives Clara Nemeth, CGA 971.230.1144 cnemeth@nacmoregon.org Denise Redding, CGA 971.230.1178 dredding@nacmoregon.org National Account Executive Caroline Anderson, CGA 971.230.1168 canderson@nacmoregon.org

Collection Services Brenda Terreault, JD, CBA 971.230.1196 bterreault@nacmoregon.org Billing Marmie Carpenter 971.230.1146 mcarpenter@nacmoregon.org Meeting Room Rental Elizabeth Heintz 971.230.1120 eheintz@nacmoregon.org Newsletter Editor Barbara Salazar 971.230.1182 bsalazar@nacmoregon.org

Education Elizabeth Heintz 971.230.1120 eheintz@nacmoregon.org

7931 NE Halsey, Suite 200, Portland, Oregon 97213 Tel 503.257.0802 or 800.622.6985 â&#x20AC;˘ Fax 503.257.0247 â&#x20AC;˘ www.nacmoregon.org

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