Hogwash Volume 40

Hogwash! Issue No. 40

August 2015
Welcome to Hogwash!


Rosi and Gardner

If this is the first edition of Hogwash! you’ve received it’s because someone you know thought that you would like to receive it and perhaps pass it on to a friend.


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The Ballad of the Bankrupt Millionaire

Unless you have been living under a rock, you probably know that Presidential candidate Donald Trump has made a media splash over recent months. One of the recurring topics of discussion is Mr. Trump’s seemingly-magical ability to declare bankruptcy four different times – most recently in 2009 – yet maintain a net worth of billions of dollars. How does he do it?
Well, he doesn’t. Trump himself never filed for personal bankruptcy. Rather, “his” four bankruptcy episodes actually involved the corporate bankruptcy of various business enterprises in which Trump had an ownership interest. And the owners of specific types of business entities-such as corporations, limited partnerships, and LLCs-enjoy the legal benefit of “limited liability.” This means that the owner’s financial liability is generally limited to a specific amount (usually, the amount of that owner’s investment in the business). As a result, the failure of an individual business venture does not necessarily equal personal ruin for the business owner.
As you may imagine, lenders know this, and they often protect their corporate/commercial loans by requiring that the business owner sign a personal guarantee; that way, if the business entity fails to repay the loan, the creditor can go after the owner’s personal fortune. Over the last two decades, Trump has somehow avoided putting too much of his personal fortune “on the line” in that manner, which has contributed to his emerging out of several corporate bankruptcies relatively unscathed although he probably still lost millions, as did his lenders.
Issues involving “limited liability” and “personal guarantees” affect small, mom-and-pop businesses across America every day. For example, it is not uncommon for commercial property vendors or landlords to require small business owners to personally guarantee a purchase and sale agreement or commercial lease. Here at Rosi & Gardner, we can help small business owners understand and reflect on the personal financial consequences of signing on the dotted line… preferably before it’s too late.

Issue: 40 
In This Issue

Hogwash Humor

Rand Paul
Senator from Kentucky:

“The fourth amendment was what we fought the Revolution over!”
Ben Carson

“The thing that is probably most important is having a brain.”

Donald Trump 


“I have so many websites.  I have them all over the place.  I hire people, they do a website.  It costs me $3.”

Lest you think that we like to poke fun only at one side:

Hillary Clinton:

“”We are going to take things away from you on behalf of the common good.”


“I have to confess that it’s crossed my mind that you could not be a Republican and a Christian.”

Joe Biden:

“Folks, I can tell you I’ve known eight presidents, three of them intimately.”

What is a Durable Power of Attorney? 

A long accepted practice for many individuals is to execute a Durable Power of Attorney designating another person to handle their personal and business transactions should they be absent, for instance on vacation in a foreign country, or become incapacitated due to age, injury or illness. The form and content of documents are usually defined by state statute as they are in Michigan through MCL 700.5501.
Allowing Another to Act in Your Behalf
If you execute a durable power of attorney you’re designating another person to act on your behalf as your attorney-in-fact.
Typically a durable power of attorney will include language similar to the following:
  1. This power of attorney is not affected by the principal’s subsequent disability or incapacity, or by the lapse of time, or
  2. This power of attorney is effective upon the disability or incapacity of the principal.
It is essential to show whether your intent is to confer authority on another, immediately or only after you may become disabled or incapacitated. Once the power is effective, unless the document specifies a termination date, the power of attorney remains in place until your death, unless you affirmatively terminate it.
As with any legal document, an appointment of an Attorney in Fact in a Durable Power of Attorney should be dated and signed voluntarily, witnessed and acknowledged before a notary public. Michigan law is specific on these matters. A durable power of attorney should be handled by one or both methods listed below:
  1. Signed in the presence of two witnesses, neither of whom is the attorney-in-fact, and both of whom also sign the durable power of attorney.
  2. Acknowledged by the individual who is seeking the durable power of attorney before a notary public who endorses on the durable power of attorney a certificate of that acknowledgment and the true date of taking the acknowledgment.
Spelling Out the Authority
A durable power of attorney will usually spell out in some detail the scope of the powers being conveyed to the attorney-in-fact such as the authority to purchase or sell a specific parcel of real estate or to handle affairs of the individual when he or she is out of the country or in a hospital.
Occasionally an individual, having designated one person as their attorney-in-fact, decides to terminate that position and designate someone else. Problems may arise when (a) the first designee does not want to be replaced or (b) when a third party has been acting pursuant to instructions from the first designee and refuses to comply with instructions from the successor designee. There may be claims that the decision by the principal to discharge the first designee was void because the principal was not competent due to dementia or the like. Such claims would potentially lead to complex and expensive litigation.
An individual or an institution faced with competing durable powers of attorney where either it or the former attorney-in-fact contends that the second durable power is void due to the incompetence of the individual must decide whose instructions to follow, creating potential liability if it chooses wrongly.
Three Key Points to Remember
As you can imagine, we could fill and entire issue of Hogwash! with detail on durable power of attorney, what it does and the potential pitfalls in changing one. Instead, let us leave you with three key principles to keep in mind;
  1. The fact that a person may be mentally ill and require treatment, even if such treatment is authorized by a court, such authorization does not mean that the individual is incompetent to make important decisions including who he chooses to be his attorney-in-fact. (MCL 330.1489, the Michigan Mental Health Code)
  2. The principal who executed the second durable power of attorney, as a matter of law, is presumed to have been competent do have done so.
  3. The burden of showing that an individual is incompetent is upon the person seeking to set aside or ignore the second durable power of attorney.
Should the question of battling powers of attorney arise, we recommend that you promptly seek legal counsel. The result of choosing the wrong attorney-in-fact may have serious legal and financial consequences.

Is it “Logrolling” or is it Corruption?

What do you do if you are behind bars for corruption and an appeals court throws out five of your 18 convictions? Why, you ask for the full Court of Appeals to review your convictions and hope that it will throw out some or all of the other 13, of course!
At least that’s what you do if you are Rod Blagojevich, former Illinois Governor. A three-judge panel of the U. S. Court of Appeals for the Seventh Circuit reversed five of his 18 convictions, and directed that he be re-sentenced. Even though he might end up with precisely the same 14 year sentence, he has now filed a request for en banc hearing of the Seventh Circuit Court of Appeals.
What convictions did they set aside?
1. Attempted Extortion
2. Corrupt Solicitation of Funds
3. Wire Fraud; and
4. “. . . other attempts to raise money in exchange for the performance of official acts.”
Why did they set aside these convictions?

The Seventh Circuit found that the jury instructions given at Blagojevich’s trial were ambiguous, and could have allowed the jury to conclude that he offered to trade the open Illinois seat in the U.S. Senate, which was just vacated by Barack Obama, for an appointment for Blagojevich himself in the Cabinet.

That, the court said, is inherently different from offering to sell, for “campaign contributions” or outright cash, an appointment to fill the open Senate seat. The latter is, of course, flatly illegal. But, the former is called “logrolling” and although it may sound distasteful to us, trading one public, official act for another is not illegal; it is just politics, as they say. Or so says the Seventh Circuit.

Stay tuned to see if he gets that en banc review of the other convictions . . .

Now is the Time to Pucker up 

Greetings, all you harbingers of gripes and quarrels, you will be pleased to know somewhere in the past, those who foist such decisions on each of us, have established August 25 as
Although I, as a contributor to Hogwash, find it somewhat limiting to restrict the kissing and making up to only those to whom I may have a serious gripe or quarrel, if that is what our leader (whoever that may have been) has limited National Kiss and Make Up Day to, I guess that I, like you, must follow.
Of course, just because we all must en masse KISS AND MAKE UP with everyone within our own personal orbits, that does not mean that on August 26 we cannot each find new gripes and quarrels that we can relish and enjoy for the next 364 days.
August Special Offer


Free Contract Review!
Have a written agreement that you are wondering about? Call us, say “Hogwash!” and we will review your contract with you, up to 45 minutes, with no charge or obligation.


(231) 941-5878

Offer Expires 09/15/2015

Karen’s Home Cooking 


This has been the best summer for eating. We’ve enjoyed our late dinners outside almost every day. Now we are lighting candles to eat by because our days are getting shorter but that also means my favorite foods are coming in season. Right now, it’s all about corn and blueberries!
Blueberry Almond Salad
Arugula, spinach, lettuce mixture
White Balsamic
Sugar (or honey)
Almonds, chopped (they taste better if you heat them for a couple minutes in a cast iron pan)
Cottage cheese (or chevre or feta)
Simmer blueberries on medium heat with a little sugar and white balsamic vinegar. Add fresh squeezed lemon juice and a little more sugar to taste. Let it cool down before adding to salad greens. Top with a tablespoon of cottage cheese and chopped pistachios. Final touch – fresh blueberries.
Shrimp Soup
½ a head of cabbage
2 cups chopped heirloom tomatoes (if you don’t have fresh tomatoes you can use canned)
1 chopped onion
1 cup finely chopped potatoes and carrots
16 oz. (more or less) of shrimp broth. You can substitute chicken or vegetable broth if you don’t have shrimp broth
Chop cabbage and onion finely, add a little water, and lots of butter to cast iron pan. Season with curry spices and salt and cook for about seven minutes. Add tomatoes. In separate large pan add one inch of water and add chopped potatoes and carrots. Cook for about five minutes then add the sautéed cabbage, onions and tomatoes to soup pan. Add shrimp stock. Simmer on low for 20 minutes. Adjust seasonings to taste. Add saffron (soak a few threads in 2 Tbsp. hot water first).
Meanwhile, marinate your shrimp in lime juice, garlic, black pepper, red pepper. Grill and add to soup.
We ate this soup with biscuits and served with a sharp cheddar cheese and buckwheat honey.
Garbanzo Bean and Corn Salad
Sunflower seeds
Cooked Corn
Red Onion (or green)
Cumin, garlic powders
Toast sunflower seeds in a little olive oil. Set aside. In same pan add corn, cumin, garlic. Cook until blackened. Add garbanzo beans and a touch of olive oil and cook for a couple minutes. Cool. Add avocado, green (or red) onion, olive oil and lemon juice. Top with chopped chives and the toasted sunflower seeds.

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Rosi & Gardner, P.C.
735  S. Garfield Avenue
Suite 202
Traverse City, Michigan 49686

Philip R. Rosi

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Gary Allen Gardner

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