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The
Problem:
A client was having trouble meeting mortgage payments on a hospitality
industry property. He had accumulated over $7 Million in debt,
pushing his business to the brink of insolvency. The client
wanted to get his company back on solid footing, but did not
have the cash resources to alleviate the debt burden.
The SRG Solution
We negotiated a $7 million debt reduction for the client, which
saved his business. Of course, the company would now be saddled
with a tax burden on the $7 million. Because SRG Partner Drew
Grey knew the client so well, he was aware the client was also
looking for a succession plan for the business. He planned to
pass it on to his heirs, but also wanted to avoid saddling them
with a huge estate tax. We developed an estate plan in which
the children purchased the company's debt of $7 million. As
a result, they avoided the 55% estate tax they would have faced
through a simple inheritance of equity. We're proud to say we've
helped many family businesses navigate difficult financial situations.
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