Saturday, February 28, 2009

Tweets and Twitters?

You have probably heard about Twitter and, if you are like me, initially dismissed it as a toy for kids who think people actually care about what they ate for breakfast. Who has time to write, much less read, such nonsense? More importantly for me, what if people actually do read (and remember) it? Will it come back to haunt me years later?

But there is actually a lot more to this system than even its creators envisioned and you may want to take a second look. Here are two articles that do a great job showing a higher purpose for tweets on Twitter—and some great ideas you can use for your organization or business. They have me re-thinking my initial resistance, I admit.

The first is by Randy Cassingham, the world-famous author of "This is True." This blog post gets all the credit for my change of heart.

The second has good tips to help you get more out of Twitter than just a trail of tweets. It is a post by Ellen Naylor, one of my LinkedIn Connections, on the Cooperative Intelligence site.

If you have seen a creative use of Twitter, post a comment with the link. I am definitely looking for inspiration, especially for online advocacy groups.

Friday, February 27, 2009

Why Is SPAM So Bad?

Why does email spam offend us so much? Assuming you have your email set to TXT only and there are no hacking risks, what makes unwanted commercial email so much more distasteful than junk mail in your mailbox?

You probably receive grocery store circulars, NetFlix postcards and packages of coupons along with “great deal” offers for gutters, credit cards, siding, tires, brakes, massages, magazines, etc. Have you done anything to cut down on those?

Unsolicited credit card offers, for one, pose as much a risk to us as many email threats, but most people have not checked their credit reports in years (do it free here each year—no memberships required) or opted out of getting them (do that here) in their unsecured, public address receptical (i.e., mailbox). People will register for the “do not call” list (do that here) but never even read those pamphlets from merchants and credit card companies that explain how to prevent having your name and address re-sold to “business partners.”

So what pushes our buttons about these electronic offers to enlarge, reduce, enlighten, entertain or enlist us?

Thursday, February 26, 2009

Poor Employer-Sponsored Retirement Plans

In an effort to cut costs, employers are looking for cheaper alternatives in their benefits packages. “You get what you pay for” is very often true when it comes to retirement plan administrative services. Those with the best plan options probably charge some of the highest fees. Yet if your employer sponsors a plan, you are generally ineligible for a personal Individual Retirement Account.

Which is worse, then? Not offering an employer-sponsored retirement plan to your employees such as a 401(k), 403(b) or Roth 401(k), or providing one that has poor investment options within it?

With new laws and SEC regulations in 2008, there are likely to be important court decisions over the rest of this year, especially on the topic of the employer's obligation to make decisions "prudently."

Is it a breach of duty to the employees if the employer switches to or continues to use a company that repeatedly trails the industry average in terms of performance? What if the company’s products are average or above, but the specific package of investment vehicles in the plan are sub-par? For a discussion about a recent court decision that implies potential liability of employers as "functional fiduciaries" based on the employer's role in selecting the investment products available to employees, see Jamie Laplante's post.

Beyond the legal liability issues, I assert that there is a significant morale boost when an employer displays diligence in helping its employees plan and invest wisely for their retirement. Higher morale means happier employees and we know that generally means more satisfied customers. Employers should minimize their exposure by making prudent decisions about the plans and products available within sponsored plans both from a pro-employee perspective (i.e., what they would want for their own money) and from a risk management perspective (i.e., is the savings worth the exposure to employee lawsuits and adverse publicity?).

For a good discussion of steps employers can take to minimize exposure in this area, see Dodd S. Griffin's discussion.

Wednesday, February 25, 2009

Organizing Volunteer Disaster Response Efforts

After Barak Obama's renewed emphasis on NOT simply growing government plus his commitment to putting more volunteers to work in service to America, this program appears to fit nicely into the mix. With a minimal staff contingent and a constant emphasis on organized volunteerism, C-DROMO would be designed to:

• Form a bridge between the National Guard, State Guards, local emergency first responders, local government officials, the Federal Emergency Management Agency and civilian volunteers
• Inventory, assess and direct the skills of volunteers in each event according to the needs of professional relief personnel in the field
• Create and manage "flightline logistics" in and around the bases of operations
• Keep the public notified of specific skills needed in each particular disaster response
• Orchestrate food, shelter, transportation and appropriate tools for volunteers who are under the direction of coordinators
• Identify and effectively manage VISTA-type volunteers who can earn college tuition credits for service to America
• Direct and conduct inter-agency communication exercises to prepare for the challenges that a major disaster can present to communication between responders

Tuesday, February 24, 2009

Balancing the Equities in Securitized Mortgages

One of the arguments against allowing bankruptcy courts the power to reform mortgages for individuals in Chapter 13 cases similar to those powers available for businesses in Chapter 11 or 15 cases is that the lienholders would be unfairly affected adversely. This is a specious argument, especially given the public whining that mortgagee servicers make about how their hands are tied by the securitization contracts that prevent any modification of the terms of these mortgages. Mortgagors never signed up to be held hostage to derivative financing instruments and never contemplated that such absurd layers of ownership and control would be added to their agreements.

In a traditional two-party contract, if one party seeks a modification of terms, they simply attempt to negotiate with the other party. In the modern, derivative securitization world, the consumer may never be able to locate anyone with even apparent authority to negotiate on behalf of the innumerable interest-holders on the other side.

To those who argue that it should be against public policy to allow a court to harm innocent investors who legitimately helped finance these loans and took no part in the unfortunate events that created the upside-down mortgage, I offer the counterpoint that it should also be against public policy to sit idly by while another family becomes homeless, another house is struck off to the lienholder at auction and yet another straw is removed from the bundle of collateral that theoretically props up someone’s definition of “value.”

When the equities are balanced, a bankruptcy court should have the power to give that asset and that borrower an opportunity to perform rather than fail through an appropriate contract reformation.

Saturday, February 21, 2009

Reasonably Prudent Hiring Decisions

Do charitable organizations have a duty to spend their grants and donations the way a reasonably prudent business person would spend his or her own money? Do they have any obligation to buy supplies as inexpensively as practicable, for example, or obtain donated supplies to avoid using operational funds except on their primary missions?

Most would agree that charitable organizations should use as much of their financial resources as they can on their primary mission. Donors and grantors have given money, you could argue, to the mission, not the people in the organization, so the more mission per dollar that is obtained, the better. Does that same argument extend to personnel decisions? Is there a similar duty to hire qualified people—and terminate inadequate staff? Charitable organizations typically “settle” for less in many ways, such as used furniture, less-than-ideal office space, scarcity of supplies and limitations on services. The pay in charitable organizations is accepted as generally lower than the private sector, so these employers offer non-financial perks such as extra vacation, flexible work hours, etc.

What about staff who are barely competent to do their jobs, then? They show up at work on time, put in their hours, avoid serious mistakes and leave on time. Their supervisors wouldn’t trust them with anything important, but they continue to occupy their positions—and draw their paychecks—as if they were excellent performers. They are generally nice people and no one would want to see them fired, really. Yet everyone knows they are either limited or unwilling to excel.Should a charitable organization be a dumping ground for people who cannot find suitable employment in “the real world,” then? Is there a higher calling here that says “we exist to _[fill in primary mission], but we also want to help those who are abandoned by the private sector as unfit?” Do they get a pass because they are poor, underfunded nonprofits who try to do good things in the world?

Or is there an unpleasant duty that goes ignored because charitable organizations are used to operating with less than full staffing, with insufficient funding, with inadequate facilities and, by extension, with whatever they can get and keep in personnel? Is it an excuse by people who are typically more sensitive than their private sector counterparts and feel some obligation to keep people on their payrolls even though the employees may never learn to use a computer or that new-fangled phone system, forget the difference between faxing and scanning, or fall asleep during software training class because, “someone will do it for me once I get back to the office?”

Is a duty owed by management to the funders to demand a reasonable effort by employees of charitable organizations to step up, to keep up, to measure up?

Thursday, February 19, 2009

C-DROMO: It is time

In the aftermaths of 9/11 and hurricanes Katrina and Rita, Americans mobilized in the form of thousands of volunteers and floods of donated goods. Local officials and government disaster response personnel were overwhelmed with the number of untrained but well-meaning civilians, many of whom had valuable skills to contribute to the efforts. By the time Ike hit, people were discouraged about trying to volunteer after disasters.

A new program is needed to prepare for the next major disaster. Rather than send volunteers away frustrated and unused, we need trained coordinators who can organize unpredictable numbers of volunteers with unknown skills into an orchestrated army acting in support of the professional first responders and other relief organizations.Why not create a sub-agency of FEMA called the Civil Disaster Response Operations Management Organization, with a mostly-volunteer staff trained by experienced disaster response professionals? This organization would function much like the Civil Air Patrol, an auxiliary of the U.S. Air Force that trains volunteers how to organize other volunteers and work with First Responders.

Let's put some serious "walk" behind all the small government "talk" while doing something meaningful!

"Cram down" Rights for Consumers

Bankruptcy Help (from Bloomberg)

Loan modifications will be combined with a push for more authority from
Congress, including a proposal that would let bankruptcy court judges cut loan rate for borrowers, the person said. The Obama administration also wants to permit modifications on Federal Housing Administration and Veterans Administration loans, which currently can’t be changed.
Community groups support efforts to let judges cut mortgage rates for borrowers in bankruptcy, a provision that the banking industry opposes. Investors have said this provision could cripple the secondary mortgage market and raise interest rates for all borrowers.

During all of last year, more than 2.3 million homeowners faced foreclosure proceedings, an 81 percent increase from 2007, and analysts say that number may soar to as much as 10 million in the coming years.

President Obama’s plan to help homeowners includes loan modification powers for Freddie Mac and Fannie Mae mortgages. There has already been a push by some for more tools within consumer bankruptcy cases.

There is a lot of resentment in the business sector toward the “cram down” option that many consumer advocates want to see given to homeowners. Businesses get to take advantage of that power in Chapter 11 cases. Homeowners want it. The trick is finding a way to help those who need it without opening the door for abuse. What is the solution?

Homeowners should have access to this tool within a Chapter 13. To prevent abuse and unfairness, though, why not set some criteria such as:

1) Relief must be approved by the court
2) Homeowner must not be at fault in causing the devaluation
3) Debtor must be paying as much as reasonably possible into the plan for the maximum plan duration
4) Unsecured creditors can receive no payments until the secured creditor is fully paid according to the plan
5) Value adjustment cannot be below the total of (a) present appraised or stipulated value and (b) sum of payments to the lender under the plan
6) Discretion should be available in the court to grant partial relief where the property value is reasonably expected to recover over the life of the
debtor’s expected occupation of the property, so that the stripping down is not all-or-nothing relief; this could be in the form of other loan modification reasonably expected to give similar cash flow relief to the borrower such as interest rate reductions.
7) In cases where the loan originator is shown to have created, caused or substantially contributed to the problem, then the present holder of the debt should be given far less consideration, but allowed to pursue its contractual remedies against those upstream on the loan without
needing relief from stay (or by getting it within the plan confirmation
8) This “cram down” right should be an expiring one, targeted to
end with new cases that are filed on or before December 31, 2010 by debtors who have not had a completed bankruptcy within the past 3 years.

Bankruptcy cases do not need to become more complicated (and expensive), but some constraint is needed on requiring evidence that a judge and trustee can review to decide whether the cram down should be granted.

Wednesday, February 18, 2009

Update on Facebook TOS Scare

Apparently, the Facebook CEO got the message:

Here is his blog post where he announces that they temporarily reverted to the old TOS:

The lesson for us all is: READ the boilerplate TOS that you have habitually clicked through. It is sage advice from every lawyer to every client (though lawyers are just as bad).

Beware of Your "Online Self!"

With this news flash, many are starting to think about something they have typically clicked through: the terms and conditions of usage on internet community sites:

Once a Facebook member, always a member.
The Consumerist blog noticed Sunday that the social-networking giant had quietly
made a change to its user Terms of Service (TOS) on Feb. 4.
Facebook now declares that it has a perpetual license to use anything you post to your own Facebook page — even if you terminate your account. More...
The Fox News post has direct links to the TOS documents as well as the Consumerist post.

Safe browsing (and pass the Maalox)!