Wednesday, April 1, 2009

Homeschooling Today and Distorted Facts Concerning Debt

Recently, an individual on an ongoing quest to defame the McDonalds published online a letter filled with errors regarding an outstanding debt owed by the LLC the McDonalds are members of.

Until February 2007, Homeschooling Today® magazine was owned by Family Reformation® LLC, a corporation comprised of several investors. James and Stacy McDonald were two of the shareholders. James McDonald was the managing director of Family Reformation LLC and, up until 2007, the publisher of Homeschooling Today magazine. All of the investors participated in the original purchase of the magazine. However, only James and Stacy McDonald invested in its daily operations.

Over the five years Family Reformation LLC owned Homeschooling Today magazine, James and Stacy McDonald invested all of their savings in an attempt to make the magazine a success. However, the operation of the magazine was daunting. Houston was an expensive base for a business. Family Reformation LLC also tried to expand with a new magazine and a card deck. Neither delivered needed revenue. Printing and mailing costs soared. James McDonald struggled to maintain enough committed and competent help. James, Stacy, and their children began to burn out. Go here to read more about their time in ministry.

But they continued to invest in the magazine, even taking out two large personal lines of credit from their own bank to keep the operation afloat. In the midst of this, James was offered a pastorate position in Illinois. While most of the McDonald family moved north, the magazine headquarters remained in Texas, where their oldest son still lived. But in the end, they were not able to keep up the pace. Another LLC offered to purchase the magazine and move the operations to a more cost effective community in Virginia. They agreed to a purchase price which consisted of a down payment and annual payments spread out over a number of years.

In 2007, when the magazine operations were closed, Family Reformation LLC engaged an attorney to help coordinate the satisfaction of the remaining debts. One of these debts was a printing broker. The printing broker was informed that the attorney would be the agent for Family Reformation LLC. The attorney attempted to negotiate a settlement with the printing broker that included a down payment and a payment plan, but the offer was refused. During this time, the attorney’s address and contact information were provided to the printing broker.

Although settlement efforts failed with the printing broker, Family Reformation LLC used the downpayment to pay other business debts. The plan was to continue to pay the printing broker in payments, as the purchasing LLC paid its yearly installments.

When the first installment came in from HST’s purchaser, James McDonald wrote a check to the printing broker for $7000 (this amount included the entire first payment from HST’s purchaser, minus estimated taxes). The check was dated February 18, 2009. It was cashed February 23, 2009.

In summary, here are the facts…

1. Homeschooling Today magazine was owned by a corporation representing several individuals.

2. James and Stacy McDonald invested in the original purchase of the magazine, and then over the years invested significant personal funds to keep the magazine solvent.

3. Upon the sale of the magazine, the printing broker was given the address of the legal representative of Family Reformation LLC and was in communication with him. He was not given the McDonald’s home address.

4. According to plan, Family Reformation LLC sent the printing broker a payment as soon as the funds became available from the first installment.

The LLC is paying its debt as it is able, which has always been its intention. The assertion that the McDonalds ignored the outstanding debt of Family Reformation® LLC and left no contact information to the debtor is absolutely false.