Corporate credit

From CaseyPedia

Corporate credit is a term generally referring to any form of credit given to a corporation, rather than to a private individual. Generally, corporate credit is used by legitimate companies in furtherance of equally legitimate business-related activities.

In the case of Casey Serin, when his personal credit cards had all reached their credit limit, Serin opted to purchase a shell corporation called Hammar Investments. He then applied for corporate credit under the Hammar name, purportedly to advance sweet business deals, but in actuality to pay personal expenses such as rent and food. While this practice is not strictly illegal, it is unwise, as mixing personal and company business can negate many of the benefits of maintaining a corporation as a seperate entity and may expose the corporate directors and shareholders to charges of fraud.

In May of 2007, Casey suggested paying off one of his existing debts using corporate credit, suggested that the practice was legal, and that so long as the corporation has a real purpose other than supplying him with credit, it's all good. But he then admitted that, to date, the corporation has done nothing besides borrow money:

There is nothing technically wrong with taking a draw or or borrowing from the corporation according to my attorney. As long as the corporation was not created with the sole purpose of transferring debt. For everything to be “kosher” the corporation needs to be making money and carrying on some kind of legitimate business activity.

I bought the corporation in order to continue doing real estate and other types of investing inside it. Not just to get corporate credit. However, I’m not quite there yet. We’ve already been approved for some starter credit which allowed me to pay off (refinance) the seed money.

We’re finally in the process of getting our first set of juicy lines and investing that money. But it hasn’t happened yet. So the corporation is not making any money, just borrowing. That’s why I’m not sure I want touch it yet.^[1]

Hater BelowTheCrowd commented:

It’s going to pretty much make it obvious that the primary goal of the corp was to get you credit. Sorry to be blunt again, but most corporations start with a business plan, not a plan to get loans... You saying “that’s not the goal” isn’t going to do a thing for you if your actions suggest otherwise.^[2]

On June 30th, 2007, Duane LeGate revealed on Exurban Nation that Serin's own family members had footed a $23,000 cash advance from his corporate credit. An additional line of credit was summarily denied.^[3]

[edit] References

1. ↑ Debt Settlement… Settle Debt From Corporation?, IAFF, May 24th 2007
2. ↑ It's going to pretty much make it obvious..., comment by BelowTheCrowd on IAFF, May 24th 2007 at 11:24 am
3. ↑ Caseyworld™ vs. Reality Pt 3, Exurban Nation, June 30th, 2007.