Relaunching TheExpressive Blog to Focus on the Entrepreneurial & Community Spirit of Nashville

What a great Sunday!  Big white flakes of snow are falling outside my window, the Christmas tree is lit and our baby is napping upstairs.  I mention the baby napping for two reasons: first, it's amazing having a baby in my life; and second, it gives my wife and me a few minutes off.

In these few minutes before our baby wakes up, I'm excited to tell you that TheExpressive is re-launching.  Instead of focusing on the law, this blog will highlight the incredible entrepreneurial and community spirit we have in Nashville.

People hear "Nashville" and they think Grand Old Opry, HCA, Vanderbilt/Fisk/Belmont or the Titans.  (Well, they think of the Titans when they're playing well, which isn't lately.)  But that talent is in so many other places, too.  It's in restaurants like Burger Up, the coffee beans of Drew's Brews, the books by Alice Randall, and the businesses like Emma and Griffin Technology.  That spirit is also in our non-profits like Conexion Americas and Community Food Advocates; in our art galleries like Zeitgeist; and our drop-in clinics like United Neighborhood Health Services.

A year and a half a go, I started something called WaterCooler with a friend, Renata Soto.  We meet once a month to hear from young entrepreneurs.  We've had a lot of fun, and met some inspiring people: Chris Ferrell of SouthComm spoke on the changing media landscape; Nashville Captial Network's Sid Chambless spoke on the availability of venture capital funds; Laura Creekmore spoke on social media; Linus Hall gave us a tour of Yazoo Brewery; and Becca Stevens introduced us to two women who graduated from her program at Magdalene House after surviving on the streets as prostitutes.

Tomorrow, we're headed to Olive & Sinclair to tour Nashville's own chocolate factory and hear the story of founder/chocolatier Scott Witherow.  Olive & Sinclair is a great example of all of the above: people with a vision who take a risk, enjoy great success, and benefit their communities in many different ways.  Their stories are inspiring to me and I hope you find them inspiring, too.

Stories like these are the ones I plan to highlight in this blog.  I hope to feature a different entrepreneur or community leader each week.  Hopefully, by finding what inspired and motivated them, we can learn something to apply to our own jobs, neighborhoods and community groups.

I hear the baby -- she's awake and I've had my break.  Back to my most important job and favorite pastime... fatherhood.

Charles Bone Named One of Sumner County’s Top 30 Most Influential People

Bone McAllester Norton is proud to announce that Charles Bone has been named one of Sumner’s 2010 Most Influential People.

Featured in the Tennessean, this list “reflects the diversity and variety of those who stand out as genuine movers and shakers in and around Sumner.”  No vote or survey was taken rather the editorial staff of The Hendersonville Star News, The News Examiner and Sumner A.M. selected these influential people that “one, either live in or work in, (or both), Sumer County and, two, that what they do touches the lives of many others.”

Charles Bone is currently active with the Transit Alliance of Middle Tennessee and the Tennessee Higher Education Commission, as well as many other civic and charitable organizations.

Bone McAllester Norton congratulates Charles Bone on this well-deserved recognition.

Jackalope Brewing Company Opening in 2011

In spring of 2011, Will Cheek’s client, Jackalope Brewing Company, LLC, will open a craft brewery and taproom at its new location on 8th Avenue South, near the Gulch.

Operated by Bailey Spaulding and Robyn Virball, this will be the first entirely female run commercial brewery in Tennessee.  The taproom will feature four different draft brews including a rotating tap for experimental and seasonal beers to be available at Nashville bars and restaurants.

Click for more on this story at, "Local women plan to open brewery downtown."


Congratulations to Dean Institute Award Winner Trace Blankenship

Bone McAllester Norton Chairman Charles W. Bone and attorney Trace Blankenship congratulate Jack O. Bovender Jr. on receiving Lipscomb University’s first annual Dean Institute Award for Corporate Governance and Integrity.

“Jack Bovender is a perfect example of the type of leader we had in mind when Charles Bone, Trace Blankenship and I established the Dean Institute in 2008,” said Turney Stevens, dean of the Lipscomb University College of Business.

The Dean Institute for Corporate Governance and Integrity at Lipscomb University is a national forum for integrating best practices in governance with integrity and faith to benefit public and private company executives, board members and other top-tier corporate leaders. The institute seeks to address the root issues at play, namely, how character and integrity inform the decisions, actions, culture and performance of corporations.

Click here to read more.


November 2010 Newsletter Features New Attorney, Anne Sumpter Arney

Bone McAllester Norton is thrilled to welcome Anne Sumpter Arney to the firm.  To read the rest of our newsletter click here.

James Crumlin Named Young Leader of the Year

Bone McAllester Norton congratulates attorney James Crumlin on receiving the Young Leader of the Year Award from the Young Leaders Council. This award is given in recognition of the achievements and contributions of an outstanding Alumni of Young Leaders Council.

Congratulations to James on this well-deserved recognition.

Popcorn Sutton’s Moonshine Legacy

This week, Will Cheek’s client J&M Concepts, LLC placed the first Tennessee White Whiskey, aka moonshine, in Nashville bars.  Partners Jamey Grosser, a former professional Supercross motorcycle racer, and Hank Williams Jr. are partners in J&M Concepts, LLC along with Marvin “Popcorn” Sutton’s wife.  After Popcorn committed suicide at age 62 rather than go to jail for selling untaxed liquor Jamie was determined to pass along Popcorn’s legacy and his moonshine methodology.

“You’ve still got to be careful, though,” Hank Williams Jr. said. “It tastes exactly the same as what Popcorn made, and it’s so smooth you sometimes don’t realize what you’re drinking. Like I’ve heard Jamey (Johnson) say, there’s at least one famous Tennessee whiskey, and now there are going to be two. This one will be in a Mason jar.”

Click here to read more about Popcorn Sutton in the November 12, 2010 Tennessean front page article, “Hank Williams Jr. helps continue Popcorn Sutton’s moonshine legacy.”


Artrageous Benefits Nashville CARES

This years Broadway-style event Artrageous® 23: Gems & Jewels, the annual fundraiser for Nashville CARES which supports HIV/AIDS education, will take place on November 13, 2010 with participating art galleries donating 10 percent of its sales to Nashville CARES.

A few words from Bone McAllester Norton attorney and Artrageous Corporate Sponsorship Chair, Anne Martin:

“Founded in 1987 as a benefit for Nashville CARES, Artrageous has raised more than $2 million for the support of AIDS/HIV education and services in Middle Tennessee.  A group of Nashville's most prominent gallery owners began the event as a response to the AIDS epidemic and its devastating impact on the arts community. Artrageous attracts the most diverse mix of glamorous partygoers from across the nation, and was named "Best Charity Event" of 1999, 2000, 2001, 2005, 2006, 2007 and 2010 by the Nashville Scene Reader's Poll.  Bone McAllester Norton is proud to be a corporate sponsor for Artrageous this year and a number of its attorneys have taken leadership in organizing the event this year and in the past, and look forward to attending.”

Bone McAllester Norton attorney Will Cheek is general counsel to Artrageous and provides legal help at no cost.


Anne Arney Adds Healthcare Expertise to Bone McAllester Norton

Anne Sumpter Arney, an experienced attorney in health care law, has become a partner of Bone McAllester Norton, Chairman Charles W. Bone announced today.

“Anne is one of the leading Nashville attorneys in health care law, and we are pleased to have her expertise and guidance in this area,” Mr. Bone said.  “Nashville is recognized nationally and internationally as a health care industry mecca with a local impact of nearly $30 billion and over 200,000 jobs.  We’re privileged to have Anne’s leadership in this ever-growing field.”

Ms. Arney has been practicing law for nearly 30 years, serving clients in general business and the health care industry.  Ms. Arney represents clients in matters ranging from general corporate to complex transactions.  She has extensive experience with the health care industry, representing businesses and health care providers in corporate, operational, and regulatory matters.

“I look forward to practicing law with Bone McAllester and Norton,” Ms. Arney said.  “I have had the opportunity to work with many of the attorneys at the firm and I know the high quality of services they provide to their clients.”

Ms. Arney is a member of the Nashville, Tennessee and American Bar Associations, the American Health Lawyers Association, and is a Fellow of the Nashville and Tennessee Bar Foundations.  She serves on the Board of the Nashville Bar Association and is a member of the American Bar Association’s Section on Health Law and the Tennessee Board of Medical Examiner’s Committee on Physician’s Assistants.

She has been a guest speaker on the topics of health care and corporate law for industry and professional associations and has authored a number of articles for medical and legal publications.

A native of Livingston, Overton County, Tennessee, Ms. Arney is an alumna of Vanderbilt University where she graduated cum laude with a bachelor of arts in English.  She received her law degree from Washington & Lee University School of Law in Lexington, Virginia.

She is married to Steven L. Gilpatrick.


Charles Bone, Charles Robert Bone, John Branham and Will Cheek recognized in Nashville Post's 2010 "In Charge" List

Nashville Post magazine launched its inaugural issue by featuring the 2010 “In Charge” list of “businesspeople and community leaders who are writing Music City’s success story.”   Among those recognized in the March/April edition as “making things happen in the Nashville area” are four Bone McAllester Norton attorneys.

As a leading authority on “gun ownership issues” and as “one of the city’s most well-rounded attorneys,” Will Cheek was named to the Nonprofits list.

Recognized for his legal career and as a “major player in Tennessee Democratic politics,” Charles Bone was named to the Legal list.

“A political force behind the scenes,” Charles Robert Bone was named to the Government / Politics list.

Recognized for his civil litigation practice,” John Branham was named to the Legal list.

Bone McAllester Norton Wins $1.55M Jury Verdict in Plaintiff’s Case

Bone McAllester Norton attorneys David Briley, John Branham and Charles Robert Bone prevailed at trial for the parents of an 18-month old boy who were denied the opportunity to see their son after he died suddenly in June 2008 while with a caregiver.

The jury awarded a verdict of punitive damages in the amount of $1.25 million and $300,000 in compensatory damages against Forensic Medical Management Services PLC, the firm that handles medical-examiner duties for Metro Nashville.


Click here to read the full article.


“Sumner Should Remember Neal, Willis With Pride”

Charles W. Bone’s article was published in the "Tennessee Voices" section of the Tennessean on October 29, 2010.

Sumner should remember Neal, Willis with pride
By: Charles W. Bone

With the passing this week of Jim Neal, 2010 has seen the deaths of two of Nashville’s leading lawyers, both of them natives of Sumner County. William R. Willis Jr. also died this year, at the end of July.

Bill and Jim were born 18 months apart on farms only a dozen miles apart at the beginning of the Great Depression when the total population of Sumner County (now over 160,000) was only 33,000.

As a student at Vanderbilt in the 1960s, and a Sumner County native myself, I was privileged to meet Jim and Bill on separate occasions and found both of them proud of their Sumner County heritage.

Both had been raised on farms, as I had been. Jim grew up in Oak Grove in northern Sumner County and Bill’s family lived between Gallatin and Hendersonville.

Both had been outstanding students and veterans. Both were graduates of Vanderbilt University Law School where they had outstanding scholarship achievements.

As a college student, I found both of these men to be especially warm and encouraging about the legal profession, and their enthusiasm for not just the law but for politics, the community and their profession.

A few short years later, as a new young lawyer, I found them to be welcoming and challenging, depending on whether we were working together or on opposite sides of legal matters. Whatever the case, I always found I learned something about law and life from these prominent men.

The good works of Jim Neal and Bill Willis are well-known in this community. We know of Bill’s outstanding legal representation of The Tennessean, his service to the legal profession as the chair of the Board of Professional Responsibility, and his commitment to the work of Nashville Memorial Hospital and the Memorial Foundation.

Lives of great service

Jim became known around the world for his prosecution of Jimmy Hoffa, his participation in the Watergate trials, and the many other famous cases of his great career.

Both have been recognized for their many accomplishments by many different professional and civic organizations.

Men of this caliber can be tempted by success to become arrogant and disinterested in the lives of others, especially the lives of young people. Not so with Bill Willis and Jim Neal. I am especially thankful that these two fine lawyers took an interest in one other young man from Sumner County.

I was blessed by their willingness to befriend and mentor me as a person, and I know I am only one of many lawyers today who will always remember Bill Willis and Jim Neal as heroes of our profession and our community.


Charles W. Bone Featured in the Nashville Business Journal’s “Lessons from the Great Recession” Series

Community matters: Bone says leadership carries on beyond the bottom line

Nashville Business Journal "Lessons from the Great Recession"
October 29, 2010
By Brian Reisinger

Charles W. Bone started practicing law in a small office in Gallatin’s historic downtown, believed to be where President Andrew Jackson first hung his shingle as a country lawyer.

“I think that’s a lie,” Bone joked, still relishing the thought.

From those beginnings, the 64-year-old has built a career in law and local politics that has fueled change in the region and left him with a clear view of what matters in a battered economy. From a conference room overlooking downtown Nashville at his law firm Bone McAllester Norton – the ninth largest in the Nashville market – Bone took stock of the economy and Middle Tennessee’ future.

Two years out from the severe deepening of the Great Recession, Bone talked about the importance of reaching beyond what’s right in front of you. That can mean brokering a common goal or drawing a line on a controversial issue. The point is to take action.

His lessons:

1.  What’s good for your neighbor is good for you.

It wasn’t always as easy for Bone to make people sit up and listen as it is today.

One of his first prominent gigs was as attorney for Sumner County, a position that left him feeling Middle Tennessee was too fragmented in its thinking about economic development. He aimed to change that.

“What frustrated me ... was the lack of attention we got from Nashville,” Bone said.

He reached out to area leaders, building relationships and pushing common goals. Today, for instance, he’s a major force in the efforts of Mayor Karl Dean and others to pursue regional transit options.

From Bone’s perspective, Nashville isn’t competing with Franklin for corporate relocations or economic development projects. It’s competing with Austin, Texas, or Charlotte, N.C., and trying to make the world notice, he said.

That means moves like Jackson National Life Insurance Co. of Michigan expanding to Franklin or Nashville’s new Music City Center are a boon for everyone.  They provide jobs at the most critical time, he said, even if other parts of Middle Tennessee feel they’d better benefit from their own new company or project.

If that argument seems to have momentum among some leaders, it’s not for lack of players in government and economic development who think their particular area deserves more love. That, after all, is how it started out in Sumner County for Bone.

2.  Diversify your business.

Bone started as the proverbial “country lawyer” taking criminal cases, litigation and whatever else came his way. The high-rise office hasn’t changed his philosophy.

“My practice has been very diversified,” Bone said.

Therein lies a lesson that many business people value: Diversify your products, services or clients so you’ve got several streams of income. If one stumbles because of a change in the market, another may sustain you, even in an environment in which almost everyone is making less money.

From his roots as an attorney and official in Sumner County, Bone joined other firms and eventually started his own with colleagues in 2002. Bone’s practice has served bankers, entrepreneurs and nonprofits, and major clients of the firm include Fisk University.

Of course, many firms in the area pitch their range of services – arguing that they can meet a client’s every need – while others promote specialties. In general, law firms have found litigation and other work is sustaining them while the number and size of deals has languished in the poor economy.

With about 30 lawyers in his firm, Bone argues that his people can meet almost every need at a fair value. The point is to find a blend that works.

3.  Focus on community.

Community outreach may sound like what you do with your spare time, or money.

For Bone, it’s central to bolstering the regional economy – and it’s not always a feel-good pursuit.

He says it’s “amazing” to see all the varied nonprofits that help the area, with clear evidence in the flood response. Helping “people in great turmoil,” he said, improves their lives and in turn benefits everybody else participating in the same regional economy.

The same goes for issues fewer agree on. Bone thinks it’s important to oppose “English-only” workplace laws or Arizona-style immigration reform.

Those are economic development issues,” he said.

Bone joins other business leaders in opposing those proposals, but legislators pursuing such efforts have argued they protect business interests. In a way, Bone is used to a bit of political tumbling; he’s a Democrat, often serving clients who may be wary of his party’s intentions despite the pro-business work of some moderates locally.

Charles Bone
Title: Chairman
Company:  Bone McAllester Norton
Career highlights:  Attorney with various firms; Sumner County attorney; past president, Sumner County Bar Association; past member, Nashville Bar Association board of directors.

About the series
The Nashville Business Journal is talking to some of the most respected business leaders in Nashville about their most valuable business lessons learned from the Great Recession. 

Rob Pinson to Present Top 10 Year-End Tax Planning Strategies

Bone McAllester Norton attorney Rob Pinson will present the Top 10 Year-End Tax Planning Strategies on November 18th from 8:30am – 10:30am.

  This event is designed for business owners and hosted by KraftCPAs, Accelerent and Bone McAllester Norton.

Topics Include (but not limited to)
• Best ways to take cash out of the company
• Rules for related party deductions
• Research & development tax credits you might have overlooked
• Accelerated depreciation options and strategies
• Using retirement plans to their full tax benefit potential
• Tennessee state tax issues and opportunities
• Update on new and/or expiring tax legislation
• The pros and cons of Roth IRA conversions this year
• Gifting strategies to avoid taxation
• Making charitable contributions from retirement plans

Location: KraftCPAs’ Nashville Office, 555 Great Circle Road (Metro Center)


Push for “Tylers Law” After Lawsuit Victory

Bone McAllester Norton attorneys David Briley, John Branham and Charles Robert Bone prevailed at trial for Don and Sarah Sinclair, the parents of an 18-month old boy who were denied the opportunity to see their son after he died suddenly in June 2008 while with a caregiver.

The jury awarded a verdict of punitive damages in the amount of $1.25 million and $300,000 in compensatory damages against Forensic Medical Management Services PLC, the firm that handles medical-examiner duties for Metro Nashville.

Along with four of the twelve jurors, Bone McAllester Norton is pushing to pass “Tylers Law,” a law to ensure no family is ever denied the opportunity to see their deceased child.  This follows a Florida law which guarantees a family the right to see their child after death and before autopsy.

"The circumstances indicated that there was no reason to prevent the parents from seeing their son," said David Briley.

"It's unfortunate that you have to change the law to impose common sense on people. Families need to make that visual connection and begin the process of healing and putting things in order. That's very important. It happened. But to them it is still not real. It's not real until they actually see their son." ran a story, "Lawsuit Victory Could Pave the Way for New State Law," on this case.


Trace Blankenship Presented "Private Placements in Tennessee: Anatomy of an Early-Stage Investment"

Bone McAllester Norton attorney Trace Blankenship presented a webcast titled “Private Placements in Tennessee: Anatomy of an Early-State Investment” for the Tennessee Bar Association on October 13, 2010.

Here is a description of the presentation:

As opportunities continue to increase for Tennessee companies to pursue and obtain capital investments, the company’s management and advisers have much to consider as they structure and document the investment.  This session is designed to provide an overview of what exemptions are available under the federal and state securities laws for Tennessee companies obtaining capital from outside investors and what risks need to be considered, along with practical guidance for how to properly document the investment transaction.  Join Trace Blankenship, a securities and M&A attorney at Bone McAllester Norton PLLC, Nashville, Tennessee, in this session to hear about the changing legal landscape for raising capital and best practices for companies considering a private placement offering in Tennessee.


Congratulations to 37 of our Clients for Winning in 53 Categories of the Nashville Scene’s Best of Nashville Reader’s Poll

The Alcoholic Beverage Group at Bone McAllester Norton PLLC congratulates 37 of our clients for their well deserved recognition in the Nashville Scene’s 2010 Best of Nashville Reader’s Poll.

  These are the winners in an impressive 53 categories:

Arnold Myint
Best Chef

Best Strip Club

Best Charity Event

Baja Burrito
Best Burrito
Best Fish Taco

Best Move Theater
Best Place for a Cheap Date

Beyond the Edge
Best Sports Bar
Best Place to Throw Darts

Black 13
Best Tattoo Studio

Best Liquor Store

Café Coco
Best Late-Night Eats
Best Patio
Best After-Hours Hang

Five Guys
Best French Fries
Best Cheeseburger

Best Steakhouse

Frist Center for the Visual Arts
Best Museum
Best Art Show - Chihuly at Cheekwood
Best Art Show - Golden Age of Couture at Frist
Best Place for a Cheap Date
Best Place to Take Kids When its Raining

Gigi’s Cupcakes
Best Place to Buy Cupcakes

Gold Rush
Best French Fries
Best Cheap Eats
Best Late-Nights Eats
Best Neighborhood Bar
Best Happy Hour
Best Sports Bar
Best Bar to People-Watch
Best Bartender, Patrick Noles

Grace’s Wine and Spirits
Best Liquor Store

Hutton Hotel
Best Boutique Hotel

Best Music Industry Hang

Best Family-Friendly Restaurant

Best Place to Meet Single Women

Midtown Wine & Spirits
Best (most knowledgeable service) in a Wine Store

Nashville Symphony
Best Performing Arts Group

Nuvo Burrito
Best Burrito

Best Gay Bar
Best Lesbian Bar
Best Place to Dance

Best Place to Buy Fresh Seafood

Pure Gold’s Crazy Horse
Best Strip Club

Red Rooster
Best New Bar or Club (opened since October 2009)

Ruth’s Chris
Best Steakhouse

Best Place for a Romantic Dinner
Best Restaurant Ambience
Best Service in a Restaurant

Best Restaurant in Sumner County

Sunset Grill
Best Dessert
Best Late-Nights Eats
Best Wine List in a Restaurant

Suzy Wong’s
Best After-Hours Hang

Trader Joe’s
Best Health Food Store
Best Grocery Store

Best Bartender, Loy Carney
Best Martini
Best Pickup Bar
Best Gay Bar
Best Lesbian Bar
Best Place to Meet Single Men

Best Sushi Bar/Japanese Restaurant

Whole Foods
Best Health Food Store
Best Grocery Store
Best Place to Buy Fresh Seafood
Best Place to Shop Green
Best Specialty/Gourmet Store

Woodland Wine Merchant
Best (most knowledgeable service) in a Wine Store

Best Brewhouse

Zumi Sushi
Best Takeout


Roundtable Led by Will Cheek: “State ABC Mergers with Other State Agencies”

Will Cheek led a roundtable discussion entitled “State ABC Mergers with Other State Agencies” at the annual meeting of the National Association of Licensing and Compliance Professionals.

  Missouri recently merged its ABC with its Revenue Department, getting rid of almost all its agents in the process.  Tennessee, Texas and other states have been looking at mergers to save costs.

NALCP is an organization of in-house hospitality licensing and compliance professionals specializing in retail liquor licensing.   Mr. Cheek has been an active supporter of the organization and serves as general counsel to the nonprofit.


Stephen Zralek’s WaterCooler Networking Event to Feature “Molding Your Image in a 24/7 World”

The next WaterCooler event is set for Monday, October 11, 2010 from 5:30 to 7pm at Fish & Co.   Co-hosted by Stephen Zralek of Bone McAllester Norton, Renata Soto of Conexión Américas and Wade Munday, WaterCooler is an open invitation, informal networking group for young entrepreneurs.  Bring your friends and please RSVP to Kristi at This email address is being protected from spambots. You need JavaScript enabled to view it..

Join us for after-work drinks and networking as we welcome WKRN anchor Christine Madella.  In addition to serving as an anchor, Christine is also a media consultant for entertainers, athletes and organizations.  She will lead a discussion on molding your image in a world where we are constantly connected, as individuals and organizations, whether through social media or traditional media.

Christine was one of the early reporters to use Twitter as a journalist, and is credited for having broken the news of Steve McNair's death on Twitter.  With over 4,000 followers on Twitter, you can follow her here:

We will meet at Fish & Co. (formerly Miro District), near Vanderbilt.  Come check out the new restaurant, which has garnered great reviews.  When you enter, go upstairs and to the back of the room.

Please RSVP to Kristi at This email address is being protected from spambots. You need JavaScript enabled to view it. by Friday, October 8, so that we can give Fish & Co. an accurate headcount.  Feel free to invite your friends.

WaterCooler Presents
Christine Maddela
"Molding Your Image in a 24/7 World"
Monday, October 11, 2010
5:30- 7:00 PM
Fish & Co.
(1922 Adelicia Street)
$10 includes food with cash bar

WaterCooler is an informal networking group for young entrepreneurs in their 20s, 30s and 40s that meets the second Monday of every month from 5:30-7pm for cocktails, networking and the chance to hear vibrant speakers on a variety of topics.  There is no official membership and no dues -- just come when the speaker interests you.

WaterCooler began in September 2009 and has featured the following speakers/topics:

September 2009: Kimberly Pace (Owen School): "Personal Marketing"
October 2009: Clint Smith (Emma): "The Art of Everyday Innovation"
November 2009: Chris Ferrell (SouthComm): "The Changing Delivery of Information"
December 2009: Becca Stevens (Magdalene/Thistle Farms): "Walking in Gratitude"
January 2010: Freddie O'Connell (SearchViz): "Search Engine Optimization"
February 2010: Bob Bernstein (Bongo Java)/Jose Gonzalez (Belmont): "Entrepreneurship with Heart"
March 2010: Sid Chambless (Nashville Capital Network): "Investment Capital for Young Entrepreneurs"
April 2010: Networking for WaterCooler attendees
June 2010: Laura Creekmore (Creekmore Consulting): "Using Social Media as a Young Entrepreneur"
July 2010: Alan Young (Armor Concepts LLC): "Secrets of Starting a Successful Company"
September 2010: Ed Nash (Oxford Fine Arts): "The Art of Buying Fine Art"


Time is On Your Side: 4 Tips for Collections in a Recovering Economy

By David M. Anthony

Despite the constant reports of rising foreclosure rates and bankruptcy filings, the news world was abuzz last week about the report from the National Bureau of Economic Research (NBER) that the Great Recession had ended…in June 2009. This surely came as a surprise to loan officers and small businesses everywhere who are seeing their fair share of loan defaults and increasingly uncollectable accounts receivable.

Anticipating this response, the NBER explained that, while the economy had not yet returned to operating at normal capacity, the worst was behind us. While this good news doesn’t put money into hands today, here are some things any creditor should bear in mind while we wait for the economy to fully recover.

There’s time to be patient.  In Tennessee, the statute of limitations for collection on an unpaid debt is six (6) years, pursuant to Tenn. Code Ann. § 28-3-109. Then, once you sue and obtain a judgment (within six years from the date of the default), your judgment is valid for ten years, pursuant to Tenn. Code Ann. § 28-3-110.  Plus, if your judgment remains unpaid at the end of the ten years, Tennessee judgments can be renewed pursuant to § 28-3-110 for another ten year period.

Don’t wait to act.  In some instances, it may make sense to take no action on unpaid debt. Maybe the customer is a company that has gone out of business and has no remaining assets, or maybe they’ve filed a liquidation bankruptcy.  This is where you make the “don’t throw good money after bad” decision and possibly decide to write this debt off.

But, remember, the first creditor to obtain a judgment is the first in line to seize assets. Granted, you could be the first in line and discover there are no assets, but you should nevertheless record your judgment as lien in the real property records. For less than $25 in filing fees, a creditor can record a certified copy of its judgment in any and all Tennessee counties where the debtor owns real property, and that judgment becomes a lien on any real property owned by the debtor.

Even if they don’t have any equity in their property today, the situation could well be different in ten years (judgment liens remain valid as long as the underlying judgment is valid). What’s more, your lien’s reach will capture any real property they obtain during the life of the lien. In the end, sooner or later, your debtor will have to deal with you, whether it be as part of a purchase of new property, a sale, or a refinance.

Bend, don’t break. Sometimes, it’s important to recognize when a debtor truly lacks any assets to pay toward your debt. When this is the case, aggressive collections—whether it be seizing a work truck or all funds out of a bank account—may put that debtor out of business and, possibly, into a bankruptcy filing. A judgment creditor can take depositions and request financials from their debtor, and this information may assist you in determining whether they aren’t paying anybody…or just aren’t paying you.

Bankruptcy doesn’t mean the process is over.  If your debtor does file a bankruptcy case, there’s still a chance of monetary recovery. In addition to the benefits to the debtor, the secondary point of the bankruptcy process is to maximize return for creditors prior to granting the debtor a discharge of his or her debts. But, in most instances, a creditor in bankruptcy only receives pennies on the dollar in the process.

Keep in mind, however, the success rate in Chapter 13 bankruptcy cases (where debtors repay a percentage of their debts over 3 to 5 years) can be as low as 20%, meaning that most of those cases end with a dismissal. A dismissal is good for a creditor, because there is no discharge of the debt. Instead, the full amount remains due and owing. Debts are eliminated only when debtors receive a “discharge.” That’s an important distinction to know.

Finally, remember that a bankruptcy discharge only discharges “debts”—not “lien” rights. So, if you’ve already obtained a judgment and recorded it as a lien, then your lien on the debtor’s property survives the bankruptcy discharge. As a result, even though you can’t collect your debt, you can enforce your lien in the event of an attempted sale or refinance.

In the end, collection is a process that rewards the patient, especially in a recovering economy. But, a successful creditor must be prepared, and being prepared means having a valid judgment in place and exhausting all enforcement remedies before giving up. We all hope that the reports are right, and, if they are, the steps you take today will help make sure you’re paid in the future.

David M. Anthony practices with Bone McAllester Norton PLLC in the firm’s Creditors’ Rights practice group, and he regularly writes about issues impacting bankruptcy, judgment collection, and lien litigation at his blog, Creditors Rights 101,