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Court enters judgment in film distribution suit; victor is actor Steve Buscemi and the estate of director Luis Fernandez de la Reguera

MIAMI, FLORIDA – The producers of the independent film Rockets Redglare! were awarded $1.75 million in damages by a U.S. District Court in Miami, Florida. Robbins Equitas, P.A. represented the producers in the two-year legal battle.

According to the court’s order, which was entered by consent of the parties on September 5, Mike Broder of Small Planet Pictures, based in Fort Lauderdale, will be liable after he failed to market, promote, and pay advance fees relating to the distribution of Rockets Redglare!, a motion picture which premiered at the Sundance Film Festival in 2003.

The plaintiffs were late producer-director Luis Fernandez de la Reguera and actor Steve Buscemi, who also produced the film. All rights to the film have been returned to Fernandez de la Reguara’s estate. Mr. Fernandez de la Reguara died in a tragic motorcycle accident in August of 2006.

“This is the day we were looking forward to. We wish Luis could have been alive to share it,” said attorney J. Christopher Robbins.

William Murchu, a producer of Rockets Redglare! and longtime friend of Mr. Fernandez de la Reguera, says that he and Mr. Buscemi plan to re-release and redistribute the film. “Steve and I continued Luis’ lawsuit after he passed away because this film is Luis’ legacy and we wanted people to be able to see his work.” “All any of us want is to get this movie out there,” Buscemi stated.

Rockets Redglare! is a documentary that chronicles the tragic life of actor Michael Morra a.k.a. Rockets Redglare, who was a gifted actor and performance artist as well as a notorious New York City hustler. In a review of the film, Kevin Thomas of the Los Angeles Times says that “Rockets comes across as brilliant, funny and outrageous as he is self-destructive.” The documentary features interviews with Willem Dafoe, Matt Dillon, Steve Buscemi, and independent film director Jim Jarmusch. The official web site is www.rocketsredglare.tv.

Buscemi and Fernandez de la Reguera were represented by the law firm Robbins Equitas, based in St. Petersburg, Florida, www.floridalawyer.com.

For more information and for distribution inquiries, contact: J. Christopher Robbins, Esq., Robbins Equitas, (866) 862-6878.

American Revolutionary History and Early American Law and Government

Chris Robbins presented a series of lectures at Hengyang University, in Hunan Province, Hengyang, China[1] on May 8, 2007


Documents include:


Professor: Good evening. Tonight we are very honored to have with us J. Christopher Robbins. He will be speaking on the subject of American history during the revolutionary era. Some of you heard his lecture yesterday on entrepreneurship. What you did not know is that in addition to being a lawyer in the United States, Chris is a professional writer who knows a great deal about American history and government. He studied this subject for four years at the University of Pennsylvania, where he graduated in 1997. Since then, Chris has written extensively about American politics, business, and history. He has had articles published in the U.S. and in other countries. One of his articles-about China’s death penalty-was published in the Hong Kong Apple Daily. Tonight, Chris is going to speak about American government. Please welcome J. Christopher Robbins.

Robbins: Thank you. Thank you so much. It is an honor to be here in Hengyan in Hunan Province. This is a great opportunity for me to be able to come all the way from the U.S. to talk to you about my country’s history. Thank you. Thank you again.

So much has happened in the last 20 years between our countries. My presence tonight simply would not have been possible until recently. The relationship between China and the United States is strong. China and the United States are one of biggest trading partners in the word. Billions of dollars of goods and services cross between our borders. It is a wonderful thing. That was the subjects of yesterday’s lecture.

Tonight, we are going to discuss the history of my country. It is a big subject to squeeze into the space of one hour. But luckily for all of us, the history of the United States is a lot shorter than the history of China.

Indeed, there were relatively few people in the United States before the 17th century. In fact, even as late as the early eighteenth century, there were only 1.5 million people.[1] Can you imagine 1.5 million compared to the population of China?[2] Yes, a whole country not much larger than your city.

So how did it all begin for the United States? It is perhaps fitting for a country that depends today so much on technology that the U.S. was founded in part because of technology. For the first time in human history, man were able to cross vast oceans. At a crossroads in time, there met simultaneous advances in navigation[3] and ship building.[4] But this was not enough, of course, Christopher Columbus, who discovered the so-called new world – as well as the millions of men who would cross the ocean soon thereafter – also had courage and vision, too.

Other explorers to this new land soon followed mostly from Spain, France, Italy, and England. These included John Cabot,[5] Amerigo Vespucci,[6] Juan Ponce de León,[7] Hernando de Soto,[8] Giovanni da Verrazano,[9] Jacques Cartier,[10] Francisco Vásquez de Coronado,[11] Walter Raleigh,[12] and Henry Hudson.[13] But there were countless other men, too. All of these men had different motives. Some sought new worlds and new opportunities. Some were cartographers and professional mariners, the astronauts of the day, charged professionally with pushing the limits of the human experience on a yet partially unknown and unsettled planet. And still others, primarily the Spaniards, were “conquistadors,” who sought treasure, political power, and sometimes even the brutal subjugation of native populations.

Whatever their motives, they were followed by their countrymen. Arriving in increasing numbers beginning at the turn of the seventh century, they would establish the first permanent settlements. These were the towns of Jamestown,[14] Plymouth Rock,[15] New Amsterdam (now New York City),[17] St. Mary’s City,[17] Boston,[18] and other communities.

It is interesting to note that while the majority of settlers to the new world were of English ancestry, most of the land was claimed by other powers. France claimed nearly two-thirds of the continent, from the Gulf Coast to Canada. Nearly one-third of the land, including all of modern day Texas, California, Florida, and the southwest was claimed by Spain.

Why did they come?

Think back to the seventeenth century. This is the time when some Europeans were beginning to make the decision to relocate to settlements in America. And before long, they flooded in. The population of the U.S., excluding native populations, was a scant 250,000 around the turn of the Eighteenth Century. By 1776, it was 2.5 million.[19]

The trip to the new world involved crossing an ocean. And this fact alone was enough to keep the feet of most Europeans planted firmly on the ground.

At its best, travel by sea during the Seventeenth and Eighteenths century was a hardship. Ships of the day were small, slow, and claustrophobic. Vessels smelled of sweat, bilge water, excrement,[20] slop buckets, and the men aboard. They leaked. On long voyages, food and fresh water was carefully measured out to avoid shortages in the event that the vessel was becalmed and stranded for long period. And when it was plentiful, food, such as hardtack and salted meats and fish, was far from palatable. The voyage usually took two months or more[21] and that assumed favorable winds and weather.

At its worst, however, sea travel was unpredictable and deadly. Accurate weather, wind and surf forecasts were non-existent in the 1600s. And while the mercury barometer was invented in 1643,[22] mariners did not widely use or understand this instrument until nearly two centuries later.[23] Thus, every voyage away from shore was a passage into an abyss.

Another great uncertainty was navigation. While mariners made significant inroads since Columbus’ voyage a century before, finding a distant destination across the ocean was far from a certainty in the 1600s. In addition to compass, Seventeenth Century mariners relied on rudimentary sextants, hourglasses filled with sand, and nautical charts. While the first accurate marine chronometer prototype was invented in 1735,[24] it was not typical equipment on sailing ships until 1800.[25] Precision instruments were therefore not available. Celestial navigation instruments[26] were imprecise on a good day. On an overcast day, they were useless. And their inaccuracy was compounded when decks pitched and heaved in the seas. Hourglasses, crucial for dead reckoning, were crude timekeeping devices and prone to errors. And the charts of the day, whhen they were available, were frequently misleading with wide gaps in coverage.

A captain pointing his ship towards the Hudson would therefore not be disappointed if land was first sighted near the Chesapeake Bay. And arriving anytime within a week of a given prediction would not be unusual.

Disease was another risk. Ships rarely had doctors. And even if they did, the treatments of the day were next to useless. Lesser ailments were common, too. Cholera, typhus smallpox, yellow fever, tuberculosis, scurvy, and dysentery plagued ocean going passengers. In 1588, for example, the Spanish lost more men – perhaps some 10,000 aboard 65 ships in their Armanda – to disease than to the guns of the English.[27] Even 100 years later, in the Eighteenth Century, the most common killer at sea was disease, not drowning or even naval warfare.[28]

The only current analogy to a voyage by ship to the new world in the 1600s would be a trip to moon. It was a venture into the unknown, and one that every voyager would have to make his peace with prior to departure. Those boarding vessels en route to the new world in the 1600s were playing dice with their lives. Indeed, tens of thousands of men and women died at sea en route to the new word. So I should point out that in the U.S., many of our early ancestors deserve great credit for their bravery.

All of this information leads to another questions: If it was such a risk and so expensive to strike out in the new world, why did they come?

The answer lies in the place they left, Europe. The Europe they departed was often embroiled in war, internal conflict, and religious persecution. Consider the lives and times of one generation in England that had the misfortune to come of age during the English Civil war.

This group endured war against France,[29] a long and bloody civil war,[30] many years of martial law and the use of Star Chamber,[31] an autocratic king, the dissolution of their Parliament and despotic rule,[32] and oppression of religious minorities.[33]

Making life worse for this generation was a resurgence of the bubonic plague which killed 16% of the population of London[34] And for those unlucky enough to live in London, the plague, was followed by a fire a year later that consumed two-thirds of the city.[35]

While somewhat improved compared to other ages, it was a dark time indeed. In 1650, life expectancy for an Englishman was 37 years. About 18% of infants died within the first year of their lives. Only 69% of children made it to their fifteenth birthday. Living conditions were dismal for most. This existence was close to one of “continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.”[36]

As it turns out, the statistics by which we measure human health were not better in the new world. Often, they were much worse. But those fleeing Europe didn’t know that. Even if they did, it is the numbers that measure human happiness that count. Let’s discuss this point.

The arrival in the United States of new settlers marked a significant change from their lives in Europe. Many who came were seeking religious freedom. In Plymouth Rock in 1620, the settlers were part of a religious group. So, to, were settlers in Pennsylvania. Just about every religious group – even mainstream protestants and Catholics – was oppressed somewhere in Europe as some time during the Seventeenth Century. Many came across the ocean to escape this.

When they arrived, they were usually free from restrictions and oppression they left behind in Europe. It was an opportunity to start fresh. Indeed, the arrival of many early colonist coincided exactly with the run-up to the English civil war. It is therefore easy to imagine that they sought the same limits on government, human rights, and freedom of action their counterparts in Parliament sought, but could not attain.[37]

As a convenience to Colonists, however, the obstacles of distance and time made control and governance of new world communities by the crown unwieldy, if not impossible. And while there was no movement towards secession from England until much later, the pattern of life in America was following – sometimes wittingly, usually unwittingly – the counsel of a new breed of political philosopher. A very famous one was John Locke who lived between 1632 and 1704. Locke wrote that all of mankind is “equal and independent. No one should harm another in his life, health, liberty or possessions…”[38] Don’t forget the name John Locke. I might ask you if you see any parallels between what he said and what happens next in our story. All over the new continent men were organizing new political entities that did not following the authoritarian model common Europe. They were picking up on the best – not the worst – that they learned from the European experience. In most cases, that was the model of a parliament.

The early settlers in Virginia embraced this model. They formed an assembly called the House of Burgesses. This was the first one to come into existence in 1619. The term “burgess” means a Parliamentary representative. Participants included men and landowners who were 17 years or older who were allowed to vote and make the law.

In Massachusetts, the Puritans operated under a charter that granted to the Massachusetts General Court[39] the authority to elect officers and to make laws for the colony. Although it had a rocky beginning, in 1634 it provided for elected leadership.

In the same year, the settlers of Maryland St. Mary’s City formed an elected General Assembly of freeman. Fifteen years later, the assembly would enact the first measure formally allowing people of varied faiths to freely worship in the territory.

In 1636, excommunicates from the Massachusetts Bay Colony[40] settled in what would later become Rhode Island. They set up a democratic government under the Portsmouth Compact two years later. The subsequent crown-chartered colony came later. Established in 1663 it also permitted landowners to vote for their leadership.

By 1650, many of the 50,000 or so settlers in America – at least the ones who were not still indentured – were living as free men under democratic governments, Most still lived in Virginia or Massachusetts. By 1700, after the arrival of another 200,000 colonists,[41] nearly early every colony in the future United States has an elected form of government, and one with real and not titular authority.

There were still governors, and often ones with significant ruling authority. But this power was checked by elected bodies, just like Parliament.

As period contemporary, Sir Isaac Newton wrote in 1687, “to every action there is an equal and opposite reaction.”[42] And the reaction to increasing independence in the colonies was a slow but steady clamping down on power by England.

One theory is that the crown never intended to be an absentee landlord. It just so happened that the time that saw the development of democratic institutions in the colonies conveniently coincided with war in England, attacks by the Irish and Scottish antagonists, various internal battles over succession to the throne, and a downturn in the fortunes of the royal treasury.

Much to the misfortune of colonists, the distractions mostly ceased in 1713, when a peace treaty ended another decade of war and turmoil,[43] after Scotland laid down its arms and joined the United Kingdom,[44] and after a male heir, George I, ascended to the throne and left no remaining doubts over who controlled the government. England now had the time and inclination to turn its attention to its affairs in the colonies.

From the crown’s point of view, men’s freedom of action in the colonies was unthinkably unregulated. Most colonists did not pay the crown taxes, including quitrent. During the early years, England did not have the means to collect it. The lands of the new world were vast and in nearly all cases without property titles. And some colonists, freshly freed from their indentures, were glad to push the frontiers ever westwards, striking out on their own, beyond the authority of any man.

England had its reasons for increasing its control in the Colonies. Following the conclusion of the French and Indian War, many thought the colonists should pay their part of the bill for the conflict. It was, after all, fought largely on their soil and for their protection. Britain also wanted the colonies to contribute money and pay more and more taxes and other obligations.

As the colonists’ numbers grew, the feeling of independence from the home countries nearly certainly increased. After several generations lived alone without any meaningful contact between foreign government and governed, it was not unimaginable that some would question the divine right of kings and the role of central government in the new world.

Beginning in the early 1700s, a conflict started to develop. It was not a military conflict, it was an intellectual conflict. Here was the dilemma. In Europe, for many, many, many centuries – as in China – it was accepted that the will of the prince had the force of law.[45] Let me explain. In many of these older societies a king or a government made the rules.

But after one sees for several generations, as in the colonies, that no king is necessary, and that government can function through small and purely democratic institutions, what conclusion would follow? The conclusion is that matters of law and public policy which affect all people must be approved by all people.[46]

British restrictions starting taking shape in the mid-1700s. Among the things that the British did was, beginning in 1763, taxing various colonial interests and goods. They taxed molasses, which was the central products of the colonies. They also taxed publications and legal documents in what was called The Stamp Tax so that every time you bought a newspaper, you had to pay money to the British government across the ocean, thousands of miles away.

The colonies thought of these acts as censorship. They also set up prohibitions on westward expansion and their ability to print their own currency. So after 160 years of little or no supervision and unregulated growth and a frontier spirit and the development of democratic institutions, the British step in and change the rules.

As restrictions increase, so did colonial opposition. Influential colonial leaders, including Benjamin Franklin, Thomas Jefferson, and John Adams, started speaking and writing about the predicament. In time, opponents to British policy organized.

One central rallying point was that the colonist were freeman with all of the privileges and rights of English subjects. And one of those rights was representatives in English parliament. Parliament in England is the democratic or elected group, but the colonists were not able to send their own people to Parliament. And since the crown and Parliament were imposing laws on the colonists without giving them an opportunity to vote in Parliamentary elections, these provisions were of dubious validity.

Instead of negotiating with the colonists, as Ben Franklin suggested as early as 1750, the crown went in the other direction. King George sent soldiers to Boston, which is in the northeastern part of the United States and in 1770, in what might have been an accident, some of the soldiers shot and killed a number of American colonists. It was soon called the Boston massacre. There was a great upsurge of emotion when that happened. In response, the British clamped down even further.

Next, they took away trial by jury in some areas and they imposed new taxes in 1773. And they started treating the Americans like rebels. And that is pretty much what they got.

In 1774, the Americans met at the First Continental Congress. This was a meeting at which influential leaders for the various colonies met. The objective of the meeting was not to pour salt upon the wounds of British-colonial relationship. It was not yet a rebellion. The purpose of the meeting was to talk about how to fix the problems and perhaps patch the relationship.

The result of this was a resolution that had been crafted at the end of the meeting. It contained requests that the colonies should have self-governance as well as rights to life, liberty and property. These were not unrealistic demands for the colonists. For 160 years, the colonists had been more or less free to regulate their own laws, to run their own governments, to elect their own people in some places. The colonists were mostly English subjects who considered themselves British citizens. The rights that they said they wanted they thought they already had and indeed some of those rights had been specifically delegated when the kings of England had provided colonists – and in some cases corporations – with land grants and various powers. So the colonists really were not thinking that they were asking for something unreasonable.

King George III probably could have compromised. When the colonists started getting very, very passionate in their demands, he likely could have come to a resolution by which America still might be part of England. But the King was stubborn. There was no compromise and in 1776, diplomacy looked out of the question.

In January of 1776, a writer in Philadelphia, Thomas Paine, wrote a book. Thomas Paine was a common man with very little education. He worked in a print shop. He wrote a book which called “Common Sense.” In a short time he sold 100,000 copies of his book. That was an amazing circulation for this historical era. It is estimated that as many as one in every seventh or eighth person alive at the time bought the book.

Thomas Paine wrote that a self-sufficient, independent republic is necessary – that there should be a break with England. His verse was passionate. He urged the people of the United States to break their ties and become an independent nation.

While Paine cannot be credited with causing revolution, he was one of the most poignant supports of the time. And his work marks the beginning of a torrent of political commentary on the subject.

Prelude to war

The movement turned from words to action six months later. On June 7, 1776, Richard Lee of Virginia introduced a resolution for the Continental Congress. In the resolution, he said wrote:

“Resolved: That these United Colonies are, and of right ought to be, free and independent States, that they are absolved from all allegiance to the British Crown, and that all political connection between them and the State of Great Britain is, and ought to be, totally dissolved.”

On July 4, 1776, only one month later, after extensive deliberations and meetings by the founding fathers of the United States, Thomas Jefferson wrote the Declaration of Independence. The United States is a country which has largely framed and memorialized its values in written documents. And the next document is perhaps the most well-known and powerful statement of the rights of men in history. In the Declaration, Thomas Jefferson wrote:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. –That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

Now, who here remembers the name of the man I mentioned earlier in this lecture who wrote similar words? Any hands? Correct, that was John Locke. He was one of several thinkers whose forward-looking vision for the worlds was embraced by the founders of the United States.

Returning to the Declaration, this was pure revolutionary. What Jefferson wrote – and the others signed -was also treason! King George had an army, and the biggest navy in the world. Thomas Jefferson and the other Americans had no such force. This was a very risky thing to do. And these men, taking such risks, were in many cases very wealthy professionals. They all had property. Many had business and commercial interests. Others – a disproportionate number – were lawyers. When they signed their names to the Declaration of Independence – they put everything at risk, including their lives.

On July 4, 1776, John Hancock was the first man to ink his commitment – and his life, fortune, and sacred honor – to U.S. independence.[47] I want to point out that when his signature dried on the Declaration he probably knew he would die either a hero or a criminal.[48] Male traitors in Britain were hanged, drawn, and quartered. Looking around this lecture hall tonight I wonder how many of us would have the courage to die for the cause of freedom if it were necessary? I am not going to ask for a show of hands.

The Government We Formed

Since this is a story to which nearly everyone knows the ending, I am going to fast-forward. Most of you know that there was war. That the American’s almost lost. That after many defeats, and hard winters, starvation, and even soldiers without shoes — the army was so poorly supplied, they pulled through. This is largely due to the leadership of General George Washington and with special thanks to the French for joining the war on the Americans’ side.

Let’s talk about the government that was created. The first unified U.S. government was actually created after declaring independence. And like most things in which human beings are involved, the effort got a shaky start.

The current U.S. Constitution was not the first attempt at defining the role and limits of government power. The first attempt was in 1777. It was called the Articles of Confederation and Perpetual Union. It had a few problems. The biggest was the new government’s nearly impossible task when it came to raising funds. Several years after the war was won, in 1787, a Constitutional Convention was held in Philadelphia, to try once more at devising an intelligent Republican form of government.

After months of deliberation in hot and humid Philadelphia, a plan emerged. The government created is a very complicated one, but it is also elegant. Power is carefully balanced among competing governing bodies. There are three principal branches of government, the legislative, executive, and judicial branches. And the legislative branch is further broken down into two units, a so-called bicameral system. We call the two legislative units the House of Representatives. The founders borrowed heavily from the Roman Republic in many ways, including calling the second unit the “Senate.”

The Constitution of the United States delegates power in a number of ways. First of all, the constitution recognizes – just as the Declaration of Independence did – that all of the power in the United States that the government has comes from the people. There is no king. The sovereign is the people. If people don’t like what happens, people can take it away. They vote. The government – at least when it’s doing what it is supposed to — serves at the people’s pleasure, not the other way around.

And power is carefully controlled under the Constitution. Checks and balances, we call them. The executive’s authority is laid out specifically. And should the President of the United States exceed that power, it is subject to controls by the Judicial branch, or in some cases to restrictions imposed by the legislative branch. Similarly, the legislative branch cannot exceed its power without running afoul of the executive. Laws cannot, for example, be passed without executive approval. And to keep the Judicial branch – the only unelected division — in check, Judges, including of the Supreme Court, are appointed by the executive and must be confirmed by the legislature (or at least the Senate). In certain cases, the executive branch is even checked by its own executive agencies, to whom power has been delegated with its consent. Another example: when the legislative branch passes a law, and it is approved by the executive branch, it is still subject to judicial review by the judicial branch. They can strike it down if it offends the Constitution.

It is elegant. It is deliberative. It is slow. It is sloppy. But despite our complaints and protestations, it is a viable and unique system. When my good friend and colleague Hunter Chamberlin and I get frustrated with the judicial branch of our government, in which we work every day, he will often quote former British Prime minister Winston Churchill. The Prime Minister said that “democracy is the worst form of government except all others.”[49] It is worth noting that this phrase contains a mistake. Neither the U.S. nor Britain is a democracy. Each is a republic.

As an attorney and a writer, I have long noticed that one of the most elegant aspects of our system in the United States is that it is nearly impossible for the government to do much quickly of efficiently. Some in my country criticize this and blame our leadership. But I think this was by intentional design. Remember our founders’ experience prior to the Declaration. Remember their ancestors’ experiences in Europe. Government was not your friend or ally, in this era, it was your foe. And I submit that in setting up our government, our founders sought to impose careful restrictions on power that would endure long into the future. Some of these measures, such as appointment of Senators (as opposed to their directly election), have been abolished. Another unusual institution that serves this purpose, the Electoral College, I believe will likely be abolished at some point in the future.

The Bill of Rights

But even this carefully planned system was not enough to satisfy some founders. The Constitution is a blueprint for the operation of a government. And while it clearly obtains its authority through elections, legal appointments, and thus consent of the nation’s people, it does not contain specific protections for the people. James Madison embraced this view, and in 1789 he proposed the Bill of Rights.

This Bill of Rights memorializes various other essential human freedoms in relation to their governments. These include freedom of religion, speech, the press, and peaceable assembly, the right to keep and bear arms, the protection of your property from forced interference by the army (Quartering of troops was the concern at the time), protection from unreasonable search and seizure, the right to trial by jury, and freedom from cruel and unusual punishment in criminal proceedings. I recommend you read this document. Never before had such a clear enumeration of the rights of humankind been expounded in one place.

Two sovereigns

After all this time discussing the complexities of the United States federal government, you might expect me to be just about finished. I am not. I have only explained half of it. In the U.S., we have two sovereigns. The federal government is one. The fifty states constitute the others. A citizen of New York City, for example, is a resident of New York States. New York State has its own laws, courts, and governor. It is not too unlike your provincial system.

But unlike China’s system, where the central government always wields the greater authority, in the U.S. certain issues are the traditional prerogative of states, not the federal government. Such issues include chartering of corporations, marriage and families, the handling of elections, regulation of and titles to real estate, regulation of alcohol, governance of most professional occupations, and much more. The state governments have their own elected legislatures, their own governors, and their own courts.

Conclusion

No system is perfect. But the U.S. system of government has the advantage of having learned from the mistakes of those nations we emigrated from, particularly Britain. When the founders of the U.S. had the opportunity to start anew, they sought to build a just society and a just government. But they also sought to curtail the government’s powers and make it impossible, or at least very unlikely, for the abuses they knew too well in Europe.

That said, I am not going to tell you that America is utopia – a perfect place – because no such place exists. In directly contravention to the founder’s intent, the government of the United States is large and sometimes unwieldy. A lot of the lines that the founders drew to curtail federal government power have blurred in recent time. And the burden to the people in the U.S. has grown to support the size and weight of both state and federal governments. In fact, while it seems incomprehensible to me, we actually pay far more for our government that you do. Our taxes are higher than China, and your government is Communist. If anyone can explain that to me, I would love to understand how this could be.

Thank you for coming to listen to me tonight. I am flatter by the attendance. I wish there were more chairs to accommodate you all. You have been a great audience and I would be glad to take questions now.

Question & Answer Session

(This is a composite of questions from several lectures)

Professor: Thank you Chris. Mr. Robbins is now going to take questions. Please write your questions down and raise your hands and I will be glad to collect them.

Robbins: I already have two questions from the earlier lecture that I did not have time to answer. I will start with them and I look forward to reading your other ones today. Please also feel free to write your email addresses on your questions so that if I do not have time to get to them, I can answer them later in the week.

Question: In China sometimes we have to have special relationships with the government to get what we want for our business. Is this common in the United States also?

Answer: That is a very good question. I know something about business practices in China. The current situation is nothing new. While bribery is not always the norm, there is great historical precedence, going back to the Emperors, of what we would describe in the United States as irregular government involvement. Money changes hands. While the United States is not perfect, it is far different in my country.

Bribes, “gratuities,” and “squeeze” is illegal in the United States. Both businessmen and government employees face long prison sentences if they give or accept bribes.

While I will not tell you that every civil servant in the U.S. is infallible, we have a strong preference for transparency and honesty. Our laws even apply this tradition when our companies transact business in China or other nations. A law called the Foreign Corrupt Practices Act[50] and the International Anti-Bribery Act even prevent U.S. businessmen from bribery when they are operating in China and other countries. And at home “greasing the wheels” is strictly prohibited. When you do business in the United States, there are no gratuities, there are no bribes, there is no way to gain advantage with the government.

The good news is that you don’t need this type of influence. In the US, as in all truly free societies, the government has very little part in business. Most industries are only very lightly regulated, if at all. So you probably don’t need the government and you therefore don’t need to gain influence with them.

I want to speak briefly about the temptation towards bribes, “gratuities,” and “squeeze” here in China, too. As long as Chinese citizens are willing and ready to turn to these tactics to gain advantage, your government will continue to attract the type of men willing to accept such hospitality. Your former premier, Zhu Rongji, started an anti-corruption campaign in 2002. This needs to be reinvigorated. There is a direct correlation everywhere in the world between the transparency and fairness of governments and the prosperity of the governed.

But anti-corruption efforts are not enough. Governments, whether communist or capitalist, need boundaries. Everyone has a right to know where these boundaries are. Right now, China has robust regulatory power at both the national and provincial levels, but who knows where these powers begin or end? How do you stay within the confines of business regulations if they are not always written down? If you do not know which agencies or bureaucrats have the right to enforce them? There is great muddiness currently. This deserves its own lecture, I am afraid. Thanks for your question.

Question: “What do you think of the current relationship – and the future prospective – between China and the US.”

I am so glad to have the opportunity to answer that question. Relationships are everything. Business is not just about money, but about people. As I said earlier, this is really, in many ways, a dream come true; not just for me but for everyone. The dream is free exchange of ideas among people and it just wasn’t possible not too long ago.

I think the current relationship among people and businesses is and will remain very strong. I think the current relationship between governments, however, is not strong enough, but will become stronger with time.

On the business side, there are so many people in our country every day who are connected with China in many ways – the clothes they wear, the parts in their cars, the electronics they use. And there is much that connects you with the U.S. From the jets in your airways, to the software on your computers, to the softdrinks served in your restaurants. We are partners in trade, as I discussed earlier.

But while our people are content to do business with one another, there are very real differences of opinion between our governments. And while that is a lecture for another day, there, too, I see constant improvement. This is not the China of our childhoods. It is not even the china that I visited just a few years ago. Let’s hope that the prospects are indeed excellent.

Question: “How did the American economy develop so quickly?”

I will assume you left off three words: “Compared to China.” And if this is so, the question is amusing because the rest of the world is marveling at China and wondering how China’s economy has developed so quickly, compared to the rest of the world.

In any event, whether you are considering the case of America or China, the answer is the same. Development depends upon several key factors. They are the same everywhere. They work together in a formula I have made up. I doubt this is scientific, but it is social scientific. So here’s the Robbins Economic Development Formula:

D (Total Net Development) = [(N)(E)(I)](F)

“N” stands for natural resources, such as minerals, petroleum, fish and wildlife, and forests. These are the raw materials of industry. But while they contribute greatly to economic development, there can still be significant development without them. Look at Japan.

“E” is a country’s education, and includes the sophistication of its teachers, the access citizens have to schools and universities, and the existence of an ethic that puts a high value on near universal education – an intelligent populace – and is able to execute on that objective.

“I” stands for infrastructure. To become a world economic superpower, a nation must have world class infrastructure, such as highways, canals, water systems, public waste treatment facilities, airports, and ports. Infrastructure serves not only export commerce but the quality of life of citizens. So it therefore must also mean good hospitals, public parks, and clean streets.

Now take those factors, multiply them and then raise them to the power of F. What is F and why is it so important? F is the freedom index. Consider an enslaved people working for a tyrannical emperor on the richest land on earth? Do you think there will be much economical development? Not much incentive to make such a king rich – or any king – wealthy, is there?

The “F” factor is multi-faceted. It means more than just the absence of abject slavery. It means having a just and effective government, fair courts and judges, elections and control over your own destinies. It also means being free from coercion, force, and brutality, free from conscripted labor or military service, and choice. Read James Madison’s bill of rights, and you’ll see a number of other elements that make up the “F” factor.

Question: “What does the role of law play in the economic development of the U.S.?”

This question is what we call a “softball” in the U.S. – a question that gives me an opportunity to talk about something I am comfortable with.

I can briefly answer this, as it’s part of the “F” factor I just discussed. When men and when groups have disputes there are several ways to resolve them. War and violence is one way. Coercion and the treat of violence, brutality, or depravation is another. Chance, lottery, and mysticism is another way to resolve disputes. But the best way is courts, judges, and justice.

This is the fundamental issue. If you pick the last option – the only option if you want to enhance the “F” factor – you must go even further. The law must be consistent and fair. The law must be known and published and accessible to the highest and lowest members of society. The law detests surprises. And when you have such a consistent system, everyone, especially business, knows what to expect and can thrive in such an environment.

The U.S. had such a system from its inception. It is interesting to note that the U.S. actually adopted British common law – and was even following such legal precedents while we were firing our guns at British soldiers.

Question: “What do you think of the U.S. Declaration of Independence? Do you think it is still applicable to today’s society?”

I think I already covered this. This document is applicable. It is timeless. I think that whenever you are dealing with such basic questions – what rights do human being have? Where do these rights come from? To what extent can other human beings take them away? – I think the answers to these questions are timeless, immutable, and ever-relevant, especially when the worldview of a document like the Declaration is challenged.

Question: “How do you vote for your president? Does everyone have the right to vote?”

Yes. Everyone over 18 years old can vote. On election day, which is every four years for president, we all go to assigned “polling places.” These are locations usually run by volunteers.

Question: “What do you think of the two-party system in the U.S. and the supervision system in China? We have one party as a leading party and it is the communist party. Many other parties involved in supervision.”

Well, first of all, we don’t have a two-party system. That’s a myth. We have many parties. But two are dominant. I’ll point out that several times in the last 100 years there have been third party candidates. But the last time a third party presidential candidate received more votes than a democrat or republic was 1912, Theodore Roosevelt. Since then, there have been other third-party candidates, such as Ross Perot and Ralph Nader. And sometimes their parties are very powerful. But they are not dominant. As to the second part of your question, I do not think I should answer it right now.

Question: “What’s your opinion of the policies of the Bush government?”

I’ve been asked this question all throughout my travels, and even in my own country. I generally support the president. And while I know there is some controversy over the war in Iraq and Afghanistan, I remember one operative fact: the government’s objective after 9/11 was to prevent another 9/11. And guess what? There hasn’t been another 9/11. Is president Bush perfect? Hardly. Are any of us?

Question: “Do you have a period of history in the U.S. that you hate the most?”

I don’t like suffering, so any period involving warfare. The most brutal in our country’s history was the U.S. Civil war, 1861 to 1865. 625,000 men died, more than even in World War Two. But such suffering does not even begin to compare to the suffering experienced in Asia this century. I will not discuss this further.

Question: “As a lawyer, how can you defend a man you know to be guilty?”

Having seen several Chinese court cases, this is an understandable question. Our system is much different that yours. The guilty – even when we know they are guilty – are still entitled to a defense before the court. It is expense. It is time-consuming. It is emotionally taxing upon their victims. But I submit it is the only humane procedure.

The theory is that the government has the burden of proof. And in practice, the government is indeed like a freight train. It will level everything it rolls over, unless something can stop it.

That something is an attorney, whose job it is to defense the accused and ensure that the government proves its case beyond a reasonable doubt. What is the alternative? I have heard many other ideas and have seen other systems. They are much less expensive, but without a defense attorney and trial by jury justice is left to chance. It’s left to chance sometimes even with these features.

Question: “What’s the situation of racial discrimination now?”

Before I answer, I want to point that U.S. treatment of minorities has been an issue raised for decades by educators in China and in the former Soviet Union. The message being sent was that we are no example for the world – we are hardly civilized at home.

This is simply not the case. While the U.S. has had an embarrassing legacy with civil rights, I submit that like the other liberal democracies – Canada, the U.K., Australia – people get along with one another better in the U.S. than anywhere else.

Are there still examples of racism? Yes, of course. Are there in China? Well, this is a subject I am not permitted to speak about so I will conclude there.

Question: “So many Americans have cars, as I understand it. Therefore, how can you protect the environment? What is the U.S. doing?”

This is such a controversial topic, it would not be useful to discuss it at any length. You can research this on the internet. I suggest looking at photographs of our cities and national parks, reviewing at emissions data and our laws, and then comparing us to the rest of the world.

As with many things, the U.S. is always the whipping boy for international hot-button issues. It’s flattering in a way: People expect more from us. They expect us to be a leader. They criticize sharply, and sometimes unjustly. There is a popular issue relating to the signing of the Kyoto Protocol, an amendment to the International Treaty on Climate Change. China has not signed it either. I think our countries are making the same decision on this treaty, but for different reasons.

Question: “What the next century going to bring for the U.S. in your opinion”

Good. The U.S. is very consistent, because of the N, E, I, and F factors. But I am a little concerned about the “E” factor, education. It seems that we spend a tremendous percentage of our nation’s wealth on education, but we are simply not getting a large enough return. China does far better with far less capital.


 1760 U.S. Census.

 About .1% of China’s population today.

 While the basic invention of a Compass needle floating in a bowl of water was Chinese, Europeans made the device more reliable. By the Fifteenth Century, model were sold in which a compass-card was seated in a box frame with a dry pivot needle. By the year of Columbus’ voyage, navigators had developed requisite skill and experience in the use of these navigational aids aboard ships and the art of chart making was fast turning into a reliable practice, too.

 Two of the three ships Columbus sailed in, the Nina and the Pinta, were Caravels which probably represented the very height of shipbuilding technology at the time And there had been other significant advances in the overall seaworthiness of sailing vessels at this time, too, including advances in rigging, waterproofing, sailcloth, deck planking, and hull reinforcement.

 Born Giovanni Caboto, Italian, his major explorations occurred during the 1490s.

 Italian, his major explorations occurred in 1497, 1499, and 1502.

 Spanish, his major exploration occurred in 1510s.

 Spanish, one of the most successful pioneers, whose explorations spanned from 1514 to 1542.

 Italian, his major explorations occurred during the 1520s.

 French, his major explorations occurred during the 1530s and 1540s.

 Spanish, his major explorations occurred in the 1540s.

 English, his major exploration occurred in the 1580s.

 English, his major explorations occurred during the turn of the seventeenth century 1600s.

 1607 by the English. The first Virginia settlement was Roanoke Island in 1584, but this community was unsuccessful and most of its inhabitants mysteriously disappeared.

 1620 by Puritans from England. A group from an earlier settlement, Popham Colony, arrived in 1607, but this settlement was abandoned.

 1613 by the Dutch.

 1634 by Catholics from England.

 1629 by Puritans.

 It should be noted that before 1820, precise population figures are always estimates. One statistic is not in dispute, however: about 50,000 of the new world’s residents, or about 2%, were British convicts who had been relocated to the new world as part of their prison sentences.

 So-called seats of easement, piss-dales, and other early marine heads were not standard equipment on even some Naval vessels until the mid-1600s. It is probable that amenities only recently available to Royal Navy officers would not find their way into common usage until later. [21] The Mayflower required 63 days to cross, and this was considered a quick passage at the time.

 By Evangelista Torricelli.

 In fact, it took two centuries and the development of the compact aneroid barometer (using a spring balance instead of a liquid) by French scientist Lucien Vidie in 1843 before they were common (and soon after required) equipment on ocean-going vessels. See, e.g.,)

 By John Harrison 1693-1776.

 While acceptance of the Chronometer was much quicker than the barometer, the inventor and the technology faced several decades of unwarranted skepticism by both mariners and politicians until, in 1773, King George III intervened. Still, due largely to prices, it was not until the turn of the next century that ocean-going sailing ships would be expected to have an accurate ship’s chronometer, and thus a way to accurately estimate longitudinal position.

 The rudimentary sextant was called a cross staff. Another device of the day was the astrolabe. Sextants and octants, with their intricate optics, were not available yet.

 http://www.britishbattles.com/spanish-war/spanish-armada.htm.

 See e.g., http://txspace.tamu.edu/bitstream/1969.1/3765/1/etd-tamu-2006A-ANTH-Flynn.pdf at page 108.

 1627.

 1642 (commenced).

 Star Chamber Court sessions were held in secret, with no indictments, no right of appeal, no juries, and no witnesses.

 1629.

 1637-8.

 1665. It started in 1657 in Italy, struck France in the 1660s, Holland in 1663, Austria and Germany in the 1670s.

 1666.

 Leviathan, 1651, Hobbes, Thomas, xiii.

 The establishment of both the Massachusetts Bay Colony and the St. Mary’s City community followed immediately after Lord Coke and Parliament, in 1627, presented their Petition of Right to Charles I of England. The petition demanded limits on government, the stop to arbitrary arrests, restrictions on taxation without representation, trial by jury, and many other examples of human rights protections.

 Two Treatises Of Government, John Locke, Chap. ii.

 Eventually to be become the state’s legislature.

 Including Roger Williams and Anne Hutchinson.

 http://merrill.olm.net/mdocs/pop/colonies/colonies.htm.

 Philosophiae Naturalis Principia Mathematica, 1687.

 The Treaty of Utrecht.

 1707.

 Quod principi placuit, legis habet vigorem, literally, “the will of the prince has the force of law.”

 Quod omnes tangit omnem approbatur, literally “what touches all must be approved by all,” a principle dating back to the days of Magna Carta.

 Most of the 56 signers did not sign until August 2, 1776, after New York State ratified the Declaration of Independence.

 In fact, various accounts indicate that he and Benjamin Franklin joked about going to the gallows on August 2 with Hancock stating that “Gentlemen, we must be unanimous; there must be no pulling different ways; we must all hang together.” Franklin replied, “Yes, we must indeed all hang together or most assuredly we shall all hang separately.”

 Attributed to a speech in the House of Commons on November 11, 1947. The author did not verify this source, and several other sources indicate the speech might have been earlier.

 15 U.S.C. §§ 78dd-1, et seq.

Entrepreneurship in China

Chris Robbins presented a series of lectures at Hengyang University, in Hunan Province, Hengyang, China[1] on May 8, 2007
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Professor: Good evening. Tonight we are very honored to have with us J. Christopher Robbins. He will be speaking to us on the subject of entrepreneurship and starting and running a business. Chris is a business owner himself. He owns Robbins Equitas in Florida, one of the fastest-growing legal services companies in the southeastern United States. He is also an attorney. He specializes in business, aviation law, and mergers and acquisitions. Before he opened his own company, Chris worked as an employee of the federal judiciary in the United States. He served as a law clerk to the Honorable Tu M. Pham, United States Magistrate Judge. Chris holds two academic degrees. He earned a bachelors from the University of Pennsylvania. His law degree was awarded by the University of Miami, with honors. Chris is also a writer and a airplane pilot. As to his writing, he has written articles about law, politics, and business for major international newspapers. One of his articles—about China’s death penalty—was published in the Hong Kong Apple Daily. Please welcome J. Christopher Robbins.

Robbins: Thank you. Thank you again. It is good to be here. Thank you. I want to begin by telling you how thrilled I am to be present tonight at Hengyang University. In all of my years in business, in law, as a student, and before, I never imagined that I would be able to come to China and speak to university students at a Chinese University. Just a decade ago, this would not have been possible. And in keeping with the subject of tonight’s lecture I am pleased to tell you why I can be here with you tonight and why we can share this time together:

It is possible because of business; because China and the United States are trading partners like no others; the trade relationship between our two countries is one of the strongest among nations in history. $342 billion in goods – ¥2.6 trillion – were traded among Chinese and American companies in 2006.[2] That is more than the U.S. trade relationship with Germany, England, Japan, or even our next-door-neighbor to the south, Mexico.[3]

Imagine that number for a moment. Think about what is beneath it. Consider all of the people, relationships, joint ventures, wealth creation, innovation, and trust that is required for $342 billion in trade. That number is not a blip or an anomaly. It is the product of years of intellectual and financial investment – people working for common goals – on both sides of the pacific. Don’t ever let anyone tell you that trade is bad for a country, yours or mine. Trade – in goods, services, or ideas – is good for everyone.

And so is business. Many of you are business students. You all have your reasons for wanting to enter the business world. The impression I get from many of you is that business and management is a highly respected career in China. And with good cause.

Businesses, when successful, mean profit and sometimes wealth for owners. Business also means jobs and careers for employees, growth for local economies, development for nations, sales and revenue for vendors and suppliers, and stability for families. Every Renmibi [4] you and your business earns has a tangible impact upon your life and the lives of people around you. Indeed, when you start a business, you are making the most significant contribution imaginable to your community or your country. This is why so many intelligent and ambitious people become businessmen and businesswomen.

Time is short, so let’s move on to some of the theories and important practices relating to entrepreneurship. I would like to leave you with some concrete advice tonight.

How many people here want to start their own business someday? Let me see a show of hands. Okay, about 1/3 of the auditorium. How many people in the room want to work for other businesses? Let me see your hands. Okay, about half.

The reality is that most of us in this room will either start their own businesses or work for an existing enterprise. What are the alternatives? Government? Academia? Consider this: A private university is a form of business, too. Even good government, if it is fair and respectful of taxpayer dollars, must be run like a good business. So while not everyone here will necessarily be an entrepreneur, most of us in this room will spend our careers working for some enterprise or another. These may be family-owned, owned by shareholders, owned by individuals, or otherwise.

As you know from walking through the Hengyang marketplace to class, businesses are everywhere, large and small. And that brings me to the next topic: competition.

Odds are, whatever business you start or go to work for is not going to be the only one in the market offering its particular goods or services. Competition is almost everywhere. With 1.3 billion people in China, competition is a reality. The opposite proposition to competition is monopoly, as you know. But there are degrees of competition along the way.

Despite your first impression, a competitive business is actually often a very good business to start. Sure, you have lots of other companies selling the same product and competing for customers. But you probably also have a steady supply of consumers who are interested in the products. A grocer never goes hungry. Nor does a carpenter, a tailor, or most craftsmen, as the demand for their services is generally constant. Starting a construction company in Shanghai is an example of entering a competitive market, but one where you will likely find customers. There are more construction cranes in the air over Shanghai today than Pigeons.[5]

I am in a competitive business. I am a lawyer. There are lots of lawyers in the United States. There are about the same number of lawyers in my home state of Florida – population 18 million – than in all of China. So lots of lawyers are competing for the same customers. The good thing about a competitive business is that there is usually a strong demand for your services.

The drawback is that a competitive marketplace leaves little room for being second best. You have to work hard. Whatever business you chose, you will always be fighting for market share and customers. You will be measured against your competitors. You must be able to excel, lest the competition surpass you.

So, the first lesson is do not be afraid of starting a business, even if lots of other people already have done it before. If you are committed and you are willing to work hard and you are willing to provide something that people want, you will succeed and prosper and make money. It does not matter that other people are already doing it, as long as you are willing to do it and work hard at it.

With that said, let’s discuss non-competitive businesses. Those are enterprises which exist in marketplaces with fewer competitors. But there are 1.3 billion people in your country and 300 million in mine. Assume that there is usually a reason why other companies are not competing. Some of these reasons weigh in your favor. Others do not.

For example, if you have a clever idea, a new invention, innovative high technology, a software application, or something just unique, these assets can sometimes be leveraged to create an enterprise that will not have many competitors – at least not at first. Intellectual property, as it is called, is often a foundation for great wealth, as it can sometimes enable you to create a market for a product that did not exist before. If you are one of a few firms competing over a large supply of customers, you can imagine that it would be lucrative.

Do not ever assume that just because no one is trying their hand at a new type of business, it is a bad idea. There is a limitless expanse of ideas, inventions, and enterprises available in the human experience; sometimes you are the right person and the right time with the right concept.

Another thing to consider is that some business are less competitive because of capitalization requirements. Others may be very expensive to start or operate because they require large assets. Some examples include the banking and insurance sectors. Both typically require significant capitalization, a natural barrier to entry for would-be start-up companies. Other companies, such as airlines, steamship companies, and real estate investment firms, are asset-based. That sounds great, assuming you can procure the assets. It is not easy to run an airline without a fleet of jets.

In any event, let’s assume you know what business you wish to start. What’s the next step? The answer is the business plan. I recommend something called a business plan. What is a business plan?

A business plan is a document that discusses the structure of your new enterprise, its budget, its capitalization requirements, it marketing strategy, and financial projections and estimates relating to your expected profits and losses in the first year, and several years thereafter. The more specific this plan is, the better. Other items you need to discuss in the plan are suppliers and vendors. Let’s start with that topic:

If you want to open a business that will manufacturer brooms, like this one conveniently located here in the corner of the auditorium, you are obviously going to need to find someone to sell you hay or straw and you are going to need someone to supply you with the wire. Those are examples of your vendors. A broom is obviously a very easy thing to manufacture. If you want to manufacture jet airplanes, you have a far more complicated task. Your vendors will range from jet engine manufacturers – General Electric, Williams, Pratt & Whitney – to aviation lawyers, like me.

So the whole point of this exercise is to pin down these issues, long before you sell goods or services to your first customers.

There are forms you can use to make this easier. I have a few I have used, including for my business. I would be glad to provide them to students if you email me. My address is crobbins@robbinsequitas.com.

Let’s next talk about finances for a new enterprise. If numbers bore you, as they once did me, let me tell you that you need to straighten up and fly right. The devil is in the details, and the details are in the numbers. Ok, I just used two English idioms in a row. While I know most of you are accomplished English students, many of you are shaking your heads. Let me translate: The number are critical and you need at least a basic understanding of accounting. No one can fool you if you understand numbers. Let’s discuss.

The best way to judge the viability of your idea is to include in your business plan a cost model. That will enable you to isolate all of the costs that are involved with your product or your idea. A cost model is a simple ledger where you will identify all of the various things that you need to do in order to start your business.

Do you have to hire employees? If so, how many? How much do you need to pay them? Do you need to find an office? If you do, where is it going to be located and how much is the rent going to cost? Do you need to order raw material? If so, from whom? And how much will it cost? How many deliveries per week or month? Do you need to rent equipment? License intellectual property? Pay for government permits? And so on. The lists of items will be quite long, but you need to be precise and pinpoint the costs. And you also want to project over time – over one year at least, and then for the next several fiscal years – how much money you are going to spend and on what, in order to operate and satisfy your production objectives.

On the other side of the cost model, you’ll have projections – estimates – on how much money you think you are going to make based upon your business in its first year. So, going back to our friend the broom, if you have to spend ¥30,000 on hay ¥50,000 on steel wire to manufacture them, and in your first year, you are going to make ¥100,000, is that a good business? Yes it is. But if you have to spend ¥70,000 on hay ¥$90,000 or steel wire and you only make ¥50,000, is that a good business? That’s right, it’s not. This is simplified, but even in more complicated enterprises, you can see that the cost model is a powerful tool.

We don’t have time to talk about all the sections of the business plan, but here are some other issues you will need to resolve:

Do I have the funds to capitalize the business? If not, where will I get them? Do I need other managers? If so, who will help me manage? Do they have the skills and credentials to do so? How will I get customers? What type of marketing will likely succeed in reaching them? Do I need employees? How will I find qualified employees? How do I retain them over time? Who are my vendors going to be? What are their prices? What is the competitive environment like for my goods or services? How will my new business remain competitive? Does the new company need any special technology to succeed? This list is not comprehensive, but it is a good start.

Let’s move on to execution. A good idea is only a good idea unless you can execute on it. Execution has many meanings in the English language. It doesn’t mean to kill the idea. The other meaning in English is implement; to put an idea into practice; to take your idea and to make it happen.

There are many good ideas that never become businesses because they are too complicated or people cannot get enough money to make them work, or people do not want to work hard enough to make them happen. The execution part of a business requires you to work very hard and to think about what you want your business to be a year or two years or even five years down the road. A successful businessman or woman is one who works hard and doesn’t just think about good ideas, but actually puts them into good practice. That’s the hardest part.

There are lots of things that contribute to good execution. I’m afraid I don’t have time to talk about all of them. But I will mention one. Communication. To execute well, you must communicate well. To the extent that you need other people to make your new business successful you must be able to give them clear instructions. You must be able to communicate your vision. You need to understand your objectives and relay your mission to the people around you. It’s harder than you think. If people are not doing what you want them to do, it’s probably because you have not explained your goals. If there are follow-through, quality control, or salesmanship problems, it’s more often than not your fault. Either you have the wrong people or you have not adequately communicated the company’s objectives and vision to them.

Let me talk about management. If you start your own business, you are going to be responsible for people. You are probably going to have employees. China is first and foremost a manufacturing economy right now. To produce most goods you need people, often a lot of them.

As an entrepreneur, people are going to look up to you for guidance and for leadership. In order to be good at what you do and in order to get the respect of the people who work for you, you have to work very hard, you have to treat the people who work for you very well, and you have to treat them with respect and dignity.

Few entrepreneurs work alone. Few business are build without a team. Teams need leadership, and if you are the force behind the idea and the founder, you will probably end up manager, too, overseeing the work and performance of others.

I wish I had more time to speak about my management ideas in greater depth. It is a subject that needs not only its own lecture, but many of them. All successful CEOs have their own strategies and outlooks. Managers like Jack Welch who led General Electric, Lai Chee Ying of Next Media, and Warren Buffet of Berkshire Hathaway; they all have unique ways – philosophies even – about what motivates people, how to provide effective leadership, and how to get from point A to point B.

There is no recipe for a perfect manager; no formula; no magic potion. But there are common qualities. I think you will find that most successful managers, whether they are running multinational organizations with 50,000 employees, or just a popular local restaurant with 20 staff members, have a few things in common.

They are fair, because no rational employee wants to work in an unjust environment for an unjust person.

They are hard-working. You cannot demand excellence from your employees while rendering mediocrity yourself.

They are independent. A good manager seeks and obtains information from all directions and must be able to tell apart truth from fiction, and good ideas from bad ones. A leader makes the best decisions he or she can, even amid pressures and hardships.

They are resolved. A good leader sets high expectations and does not tolerate poor performance, idleness by colleagues, or rude or unprofessional conduct.

They are personable. A good manager knows his employees and his co-workers, and has good working relationships with his co-managers.

Let’s also speak about culture. In the United States, there are a lot of companies who are very successful because they have cultures. A corporate culture must be fair. It also must reflect the best norms of its society. Whether it is a Chinese company or an American company, the lesson is the same which is that the company has to be motivated by good things. Making money is a good thing in itself. But we all go to work everyday for far more than just money. We go to work to be part of something bigger, to be and feel productive, to leave a mark on this great earth in the short time we get to occupy it. We are motivated by many things, such as respect, love, and success. The corporate culture must be able to satisfy these needs.

Let me conclude with these remarks. Your dreams of new ventures and products are only dreams until you turn them into reality. Execution is the hard part. The good news is that you are living in a time and place where, for the first time you can achieve these dreams.

Indeed, whether you are born in the United States, as I was, or Hengyang as most of you were, there is real opportunity. Our freedom to choose our destines increases inversely to the government’s influence over the economy. And while there is still a long way to go, for the first time in recent memory everyone in this room is generally more free to choose his or her own career and lead the productive life of his or her own choosing. This is an exciting time.

Speaking of outside influences, don’t let anyone tell you that you can’t start a business. While the factors discussed here are necessary in selecting the right business, have confidence once you set yourself on the right course. It will be the toughest thing you perhaps ever do, but if you work hard you will probably succeed. Thank you, and once again, it was an honor for me to have this special opportunity to talk to you. The attendance tonight honors me and my family, and this will surely be the greatest highlight of my visit to your country.

Question and Answer Session

(This is a composite of questions from several lectures)

Professor: Thank you Chris. Mr. Robbins is now going to take questions. Please write your questions down and raise your hands and I will be glad to collect them.

Robbins: I already have two questions from the earlier lecture that I did not have time to answer. I will start with them and I look forward to reading your other ones today. Please also feel free to write your email addresses on your questions so that if I do not have time to get to them, I can answer them later in the week.

Question: In China sometimes we have to have special relationship with the government to get what we want for our business. Is this common in the United States also?

Answer: That is a very good question. I know something about business practices in China. The current situation is nothing new. While bribery is not always the norm, there is great historical precedence, going back to the Emperors, of what we would describe in the United States as irregular government involvement. Money changes hands. While the United States is not perfect, it is far different in my country.

Bribes, “gratuities,” and “squeeze” is illegal in the United States. Both businessmen and government employees face long prison sentences if they give or accept bribes.

While I will not tell you that every civil servant in the U.S. is infallible, we have a strong preference for transparency and honesty. Our laws even apply this tradition when our companies transact business in China or other nations. A law called the Foreign Corrupt Practices Act [6] and the International Anti-Bribery Act even prevent U.S. businessmen from bribery when they are operating in China and other countries. And at home “greasing the wheels” is strictly prohibited. When you do business in the United States, there are no gratuities, there are no bribes, there is no way to gain advantage with the government.

The good news is that you don’t need this type of influence. In the US, as in all truly free societies, the government has very little part in business. Most industries are only very lightly regulated, if at all. So you probably don’t need the government and you therefore don’t need to gain influence with them.

I want to speak briefly about the temptation towards bribes, “gratuities,” and “squeeze” here in China, too. As long as Chinese citizens are willing and ready to turn to these tactics to gain advantage, your government will continue to attract the type of men willing to accept such hospitality. Your former premier, Zhu Rongji, started an anti-corruption campaign in 2002. This needs to be reinvigorated. There is a direct correlation everywhere in the world between the transparency and fairness of governments and the prosperity of the governed.

But anti-corruption efforts are not enough. Governments, whether communist or capitalist, need boundaries. Everyone has a right to know where these boundaries are. Right now, China has robust regulatory power at both the national and provincial levels, but who knows where these powers begin or end? How do you stay within the confines of business regulations if they are not always written down? If you do not know which agencies or bureaucrats have the right to enforce them? There is great muddiness currently. This deserves its own lecture, I am afraid. Thanks for your question.

Question: What should be in the business plan?

We already covered this but I’ll add simply that business plan needs to set out a completed road map for your company. It needs to take a snapshot – a photograph – of what the first year – and then maybe the first three years – of the corporation’s existence will be. You probably can’t spend too much time or make this document to long or comprehensive. As I mentioned before, I have some model business plans at my office and you can email me at crobbins@robbinsequitas.com if you want obtain copies.

Question: What is the right time to start your own business? Is it right after you graduate for University?

That is a very good question. Someone asked it earlier today as well. I do have an answer based on my experience.

When you just graduate college you have a lot of information and a lot of skills that you have developed from being in school, but you don’t have all of the practical experience I think you need to be confident in success. I’ll explain.

I started a company right after graduating college in 1997. The company had a very good concept. We were doing Internet in the United States when the Internet was still very young. Particularly, we hope to wire large high rise apartment buildings and condominiums and then let residents subscribe to the service. The phone companies were nowhere to be found at the time. And we joked that the Cable companies were as dumb as fireplugs. We might have been smart, but we were green on everything except the technology.

While we had a very good idea, we had no experience. We opened the business in Philadelphia. We spent over one year trying to make it work. We changed course several times when we could not get customers. The more we worked at this business the more confused we seemed to get. This business failed. It failed because we didn’t have a lot of practical experience. Neither I nor my partners had ever worked for someone else before. We didn’t under sales and marketing. We were not as strong with accounting principals as we should have been. I was young – 21 years old – and was immature, and thus had trouble managing my employees.

What I learned from this experience is that it makes a lot of sense to go to work for someone for a little while before striking out on your won. Try it for at least one year. This is the same advice my father, Irwin Robbins, gave me before I started. But it also turns out that failure in business is not a bad think. Most entrepreneurs do not succeed on the first try. And every failure teaches more lessons than a whole year in college.

I know that a lot of you have terrific ideas and will make wonderful entrepreneurs and will do so very soon, but if my experience can be a guide, I recommend that you pick a company that you respect and can learn a lot from. Spend at least one year working there. During that year pick up every skill you can. Learn about doing business, about office management, about salesmanship, people, marketing, and accounting. You’ll find that it is a lot easier to learn this way than alone. When you start your own company you are indeed alone. There is usually no one to show you the correct way. It is very isolating being in business for yourself, especially in the beginning. You are the only person you can rely upon and you better know what to do.

Question: What are some qualities in managers of corporations that make them successful?

We covered this before, too, but I’ll add a few thoughts. I think that a good manager is more than just good at his or her job. A lot of people can do well at their work and a lot of people can meet their objectives and come up with good ideas and sell products and impress customers. That’s expected when we get paid a nice salary to manage in a business. It is assumed that we are going to be good at what we do.

What makes a good manager of people is leadership; someone who has the courage to make the tough decisions and someone who is not shy and who can do the right thing at the right time despite opposition or hardship.

I think that you also need to be resolved as a manager. You need to let your employees know that you are serious about your job. I think the most successful managers are the ones who win respect because they are competent and because they treat people with dignity and they are effective as well. The other issue is a word I’ve used before. Execution. I think that a good manager doesn’t just come up with good ideas. A good manager takes those ideas and puts them into practice. A good manager will take an idea off the blackboard or the computer and turn it into money and that’s what makes him or her more successful.

Question: What are the qualifications of American managers? What skills should people who want to work for you have? What do you look for in applicants?

There are a few questions here. Let me start a common qualification: academic achievement. I think someone that works hard in school will probably work hard in business. When it comes to lawyers at my company, I think that is very important to be a top student. Our profession – the law – requires extremely hard work and diligence. If you didn’t work hard in school why should one expect you to work hard in the profession and for clients?

Let me say, however, that for businessmen and women it is not a absolute rule. Entrepreneurs are often not academically successful. Some of the most successful people in the world never even went to college. And some dropped out, like Bill Gates, the founder of Microsoft.

For any position, I look for people who have work experience that is very similar to the job they are applying for. I am also interested in hiring independent thinkers. I don’t get along with people who can’t speak their minds or who are afraid of authority. And we’ve spoken a lot about execution tonight. I look for people with follow through. The ones who don’t just talk, but do.

Aside from that, personality is very important. A corporate culture needs a balance of people and managers to be most successful. The company should be filled with good, generous, and fair-minded people and managers who will bond together into an effective team.

Question: What classes should I take in school if I want to be a good businessman?

Those of you who don’t like math are not going to like this answer. Take a little accounting. I didn’t, and I regretted it as soon as I started my first business. Learn the numbers. If you take an accounting class, no one is ever going to be able to fool you with numbers. You will also be more secure and comfortable, having greater confidence in your new company. And without a basic understanding of accounting, you will not be able to observe and react to important data.

Question: “What do you think of the current relationship – and the future prospective – between China and the US.”

I am so glad to have the opportunity to answer that question. Relationships are everything. Business is not just about money, but about people. As I said earlier, this is really, in many ways, a dream come true; not just for me but for everyone. The dream is free exchange of ideas among people and it just wasn’t possible not too long ago.

I think the current relationship among people and businesses is and will remain very strong. I think the current relationship between governments, however, is not strong enough, but will become stronger with time.

On the business side, there are so many people in our country every day who are connected with China in many ways – the clothes they wear, the parts in their cars, the electronics they use. And there is much that connects you with the U.S. From the jets in your airways, to the software on your computers, to the softdrinks served in your restaurants. We are partners in trade, as I discussed earlier.

But while our people are content to do business with one another, there are very real differences of opinion between our governments. And while that is a lecture for another day, there, too, I see constant improvement. This is not the China of our childhoods. It is not even the china that I visited just a few years ago. Let’s hope that the prospects are indeed excellent.

Question: I work at a company whose management does not like doing business with or hiring people of African descent at any of its locations inside or outside China. What do you think of this?

Talent has no color. It isn’t black or white. Human beings look different on every continent. It is the power of reason and judgment – not skin color – that makes us what we are.

Your story is shocking. Discrimination is wrong. It is small-minded and bad for business, too. Discriminating against a group of people based on religion, or race, or sex limits the number of qualified people you can hire. Why would they do that? Talent is talent and smarts are smarts and it’s wrong to discriminate.

If you can afford to, I would find another job.

Question: Please tell me a few unforgettable experiences you’ve had in business and some lessons you have learned.

I had a customer about a year ago who was interviewing my company to handle a case filed in court. The customer is a publicly traded company. They had interviewed several of the other large law firms in my state. They had previously done business with one of the largest firms in my state, a nationwide law firm with thousands of lawyers. My company was the smallest contender. We were also the youngest company. The customer seemed skeptical.

During the interview, the customer spoke about his case, their strategy so far, and their expectations. It became clear to me that they were making a big mistake. And I said so. I told them that I thought their strategy was foolhardy. I told them my opinion. I was sure that I had sabotaged the opportunity.

In fact, it was the best possible thing to do. By being honest and giving an independent opinion, we showed the customer that we could think on our feet and make decisions. They hired us.

Ok, I see we are out of time. Once again, it was a pleasure to speak to you tonight. You can email your questions to me. My address is on the projection screen. Good luck to you all.
——————————————————————————–

[1] http://www.hynu.edu.cn/index.jsp.

[2] http://www.census.gov/foreign-trade/balance/c5700.html#2006. The U.S.-E.U. relationship was €1.5 trillion or ¥15.6 trillion, but that is for all European Union nations.

[3] http://www.census.gov/foreign-trade/top/dst/2006/12/balance.html. There is only one partner larger than China, which is Canada with $533 billion in total trade between the nations, but up to 40% of that figure is intra-company trade, wherein a corporation is sending goods between its own factories.

[4] Slang for one Yuan, equal to about .13 U.S. dollars as of May, 2007.

[5] But it is a myth that one-third, one-fourth, or one-fifth of the world’s construction cranes are there. There were about 40 in May, 2007. See also, http://www.npr.org/templates/story/story.php?storyId=6600367

[6] 15 U.S.C. §§ 78dd-1, et seq.

The Legal Side of VLJ Ownership, Part I:

There are important legal considerations for the individual VLJ owner; fractional share owner; VLJ fleet owner; and the VLJ block-hour card owner. We are not in the business of law at Very Light Jet Magazine so we enlisted the services of J. Christopher Robbins, Esq., senior partner of Robbins Equitas, to guide us through the maze. Part I will deal with some of the legal considerations for the individual VLJ owner.

Chris is a lawyer, a private pilot, an NBAA member, and an aircraft owner. He serves as counsel to many companies in the aviation sector, including air charter companies, aircraft brokers, FBOs, corporate flight departments, and aircraft manufacturers. In addition to handling transactions and legal compliance, Chris’ firm has defended air-crash litigation. Chris is also a published author and he frequently lectures on aviation law and entrepreneurship.

VLJM: Chris, tell us about the legal structure of VLJ ownership as it applies to the Individual VLJ owner. Should the jet be titled to a corporation?

CHRIS ROBBINS: Regrettably, there is no easy answer to the question of how one should structure the ownership of a new VLJ. Thanks to conflicting government regulations and a policy battle between the FAA and the IRS, this remains a touchy subject for many aircraft owners.

When confronted with this issue, most corporate attorneys will have a knee-jerk reaction and advise you to title an aircraft in the name of a single-asset or “pass-through” entity. That is a company that will own the aircraft and likely nothing else, a strategy to minimize your exposure in the event of a loss. This corporation or LLC, they would further urge, will then provide the aircraft to you or your core business as needed.

And your lawyer and accountant will probably further advise you to run the new aircraft-holding company business as if it were an earnest for-profit venture, so that you may satisfy current IRS regulations that stand between you and the fruits of depreciation. This is incomplete advice and a trap for the unwary.

As it turns out, government, like turbojet aircraft, sometimes follows Sir Isaac Newton’s Third Law of Motion. For every force there is an equal and opposite force. In this case, the force of the IRS is opposed by that exerted by the FAA.

In stark contrast to the IRS regulations are tough FAA rules. Under these rules, a corporation, LLC, or other entity cannot operate an aircraft for hire unless it first obtains a commercial operating certificate under parts 121 or 135.

At first blush, you would not be out of line to wonder how you are providing aircraft “for hire” when you are piloting or riding in your own jet. Indeed, the regulations at issue once focused only on bona fide commercial operators like airlines and air taxi services

No longer. On the theory that nearly anyone providing air-transportation should be subject to the world’s most comprehensive safety and operating regulations, the FAA has redefined what “for hire” means. FAA regulations, including the so-called “major enterprise test,” have determined that your single-asset entity is providing you air transportation for hire, even if no money changes hands and you are the only passenger or pilot. Making matters worse, these regulations are vague and almost always construed against owners.

Luckily, there are clever workarounds that often satisfy both federal government agencies, as well as your liability insurance carrier. They are, however, largely fact-driven and will be determined by the nature of your business, the intended use of your aircraft, the number of anticipated users and investors, taxation objectives, and other issues.

Traditional Considerations

As most of us know, the primary motivation to go through these hoops is to secure limited liability protection. This concept is the centerpiece of any question posed by your risk-management department that starts with the words, “what if?” What if my plane crashes? What if my passengers are injured during a turbulent flight? What if there is damage to personal property? When these things occur, you – and your core business – need to be insulated from claims.

Whatever structure your new company takes, there are traditional considerations, driven by the laws of your state or the state of incorporation. To achieve your risk-management objectives, you and your partners, if any, must adequately capitalize the company, observe corporate formalities, abstain from commingling corporate funds with personal funds or funds of other entities, file corporate tax returns, pay payroll taxes when applicable, document corporate decisions, and much more. Failure to do so can spell peril in the event of a loss or catastrophe.

Similarly, an aviation sector corporation or LLC needs special bylaws or articles of organization (mentioned below). These are to your company what the Constitution and Bill of Rights were to the nation. Your aviation attorney will help you craft these.

We often hear that the LLC is the device of choice for aircraft ownership. Does this option actually protect an owner from liabilities relating to use and operation of the VLJ?

While LLCs are very popular, they are not right for everyone. Let’s briefly review the benefits and drawbacks of the limited liability company:

An LLC provides its owners with the potential protection against personal liability and an option to be taxed as a corporation or to exist as a pass-through entity. In addition, with an LLC, profits and losses can be distributed in a variety of ways; the distribution is not limited to percentage of ownership.

An LLC also offers flexible management structure. Founders are free to organize them in nearly any fashion they see fit. In some states, there is also less ongoing paperwork than a corporation; An LLC is not required to hold annual meetings or to keep formal minutes, while an S Corporation is required to do so.

Whereas only U.S. citizens and resident aliens may own an S Corporation, an LLC can be owned by any combination of individuals or business entities. There is also no limit on the number of investors.

That said, LLCs have certain drawbacks, too. While they require less on-going paperwork in most states, they require far more to get started – at least correctly. Since there are few state-imposed guidelines, LLC founders must draft comprehensive operating agreements to address many basic issues and to minimize the likelihood of future disputes.

The dearth of established state law precedents has indeed made LLCs conflict- prone. I have handled a disproportionate number of disputes between LLC owners who failed to draft meaningful (or logical) operating agreements to govern their relationships. Categories of disputes have included whether owners can sell their interest, what their obligations are to cover cash shortfalls or operating losses, whether the manager can divest the LLC of major assets, the fiduciary duties of owners and managers who seek to establish competitive enterprises, and much more.

As you can see, the LLC is hardly foolproof. A lawyer with an aviation law background will be able to tell you whether the LLC is best for you and set it up properly.

What if the owner is also planning to pilot the plane. What are his legal concerns?

This is known as the Owner-Pilot Problem. VLJ operation poses a major pitfall for some of us. Under the law of most states, individuals are always personally responsible for their own negligent acts. It is the same rule applied on the road. For example, if you borrow your brother’s automobile and cause an accident on the road, you and your brother can both be held liable for the damages. The rule is the same in the sky. If, as pilot of your company’s VLJ, you cause a loss, you could be liable together with the aircraft’s owner. And it does not matter that you own the company that owns the VLJ.

If you own the aircraft in a separate entity, you will need to ensure that you are personally covered by insurance when piloting. Since many VLJ owners and users will likely be their own pilots, this is a concern to bear in mind, especially when you start shopping for liability insurance.

How does your firm work with the individual owner and individual owner- pilots of VLJs and what service options do you offer?

Our work includes drafting offers and contracts, negotiating terms, sealing deals, and overseeing closings. We also review aircraft financing and insurance proposals for our clients. We work for buyers, sellers, fractional managers, and corporate flight departments.

Chris – thank you for that valuable information.

Click here to read more about aviation law at Robbins Equitas

The Legal Side of VLJ Ownership, Part II will discuss some important legal aspects of the increasingly popular VLJ fractional share owners and VLJ block hour purchases. Send questions and comments on this series to legalside@verylightjetmagazine.com.

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