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Promissory Note Issues

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Apr 6, 2010 3:55 pm

Hi All -

Just curious on an issue than has be greatly concerned.  I left MSSB in January for Independence and am loiving it.  I've had a great transition and am actually brining in new accounts.

Well, I was one on the unlucky ones -- if I had stayed at MSSB, my payout would have gone from 34% to 20% (probalbly a little less due to the payout cut on accounts < $100k).  I had 3 notes -- the largest coming due in June 2010 (4.5 months before leaving) and others with varying amounts of time.  Clearly, they are saying they did not want me.

On advice of my attorney before leaving (recommended from my new firm) - all should be straight forward.  I am valid on my "proration" of my time there.

Now they are coming after me for the amounts as of last June (not the date of departure of January)!  My attorney (current)  is now waffling in saying that the contract / note did not stipulate "proration" and my point is how could they argue otherwise (there is no doubt I worked there from the times I did) and then cut my pay by 40%+.   How could I possibly stay there?   I'm not saying I don't own anything, I'm just saying I want credit for the time I did work there.  It was not a privilege.  Am I wrong here?  Anyone have experence?

The numbers work out to be double of what I believe I owe.  To add insult to injury, my attorney has gone through 80% of my retainer and litterally has not talked with the other side yet.  This is not at all what he represented himself (although I'm probalby screwed because it was via the telephone).

I had numerous operations issues (including SA's being fired, accounts wrongly terminated, etc).  Frankly, I'm really happy to be gone, I don't think I could have survived another year there under the frequest ops screw ups.  With the daily attention to problem resolution (vs. acquiring) - my numbers drifted just below the newly raised mendoza line of $250k.

Does anyone have any experience with regards to prorations of a promissory note?  My point is that since nothing was mentioned at all in the legal-ese of the note - they must allow for it for they cannot argue my work dates.  Secondly, if they provided a good place to work, I could have grown my book more than I did.  Frankly, I had a very bad relationship with the manager (well documented).

Thanks -

Happy in Indy Land.

Apr 6, 2010 5:22 pm

More like Happy, but poorer in Indy Land.

Apr 7, 2010 3:24 am

I'm not exactly sure what you are asking, but i'll try to share some insight....

In general, the contracts are written that if you leave prior to an anniversary date, you do not get credit for any part of the year that you worked.......But, that should clear in the contract and you say it isn't......

If you choose to fight it, you can go to arbitration.......If you take a lawyer through the whole process, it will get pretty expensive just in legal fees, so it really depends on what the numbers look like.

if it is doable, determine what you think you owe them through proration........list the other issues that didn't work out, and hope that the attorneys on the other side will be ok with a settlement that can be paid over time (standard in these cases).....I have a friend who paid about 50 cents on the dollar, equal monthly payments over 2 years......

It's either settle or arbitrate........and that decision depends on your defense and your financial position.

Good Luck.....

PS: If you search the net, there is a class action filed not too long ago that basically tries to invalidate all the contracts associated with these deals......I have no idea how that will work, or how long till it gets decided, but i guess you can either try to delay until that case seems to be nearing conclusion or even join that class action.......i forgot the attorneys name, but just spend some time searching and you'll find it.  i think it's one of the guys who started the overtime lawsuits that the firms all settled over the last 5 years or so.

Apr 7, 2010 10:18 pm

Thanks for your comments -


Apr 8, 2010 3:10 pm

Thanks Bill,

If this gets nasty, I think I might be in touch.  My preference is to deal with this in a resonable fashion.   My feeling, is they are not.