The Battle Between the Effort to Create Wealth and Character/Integrity

We learn by sad experience (and a thorough reading of history) that “position” in this world is established in only three ways: Rank, which we don’t recognize very well in the U.S., Wealth, which we do recognize, and the Sword, which we see in 1930s Germany, Russia for most of the 20 Century and, today, in the Middle East.

Here in the U.S., almost all of the positioning is accomplished through wealth. We see it in reporting (everyone knows how wealthy Bill Gates is and what companies’ Warren Buffett invests), in our business affairs and even in our neighborhoods (why does it cost more to live on the ridges of San Diego County than it does to live on the valley floor?).

For those of us in the Western World, balance between personal character and integrity as we pursue at least a modicum of wealth is both the hardest thing we do and the most rewarding.

We see this headlong rush toward wealth especially strong in the investing world. Where the large amount investors have controlled vehicles in which to place their resources, smaller investors are limited to fewer prolific producers of profit. Until you get greedy and believe the line some “promoter” is laying down.

For instance, real estate, especially more expensive real estate, is often developed using “private” capital. That usually takes the form of someone with a few hundred thousand dollars combining with someone who has purchased a property (or an option on property) where the combined effort of the group will develop and sell the project and split the profit. That system isn’t particularly fraught with problems, unless someone gets greedy.

I recently ran into a development, being conducted through an old fashioned limited partnership (because there is a special tax on LLC’s in California). The General Partner and manager of the project was, itself, an LLC. The Managing Member of the LLC wanted me to draw in a provision that allowed him to take the Limited Partners’ cash and put it in his pocket, whether he performed well in the development of the property or not.
When I explained to him that such a move would be a violation of the fiduciary duty of the General Partner over the funds of the Limited Partners, he was not happy, but realized that taking that money was an invitation to a lawsuit.

Remember, balance. Wealth and position in the world we live in are important, but not as important as maintaining, daily and hourly, your personal character and integrity.

Categories: Business Law

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Before opening the doors of Wade Law, San Diego attorney Jessica Wade spent almost ten years as a corporate attorney at two large, prominent law firms in Los Angeles and Silicon Valley. Her work centered on tackling complex transactional matters and… Read More
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Jay W. Henderson began practicing law in California in 1971. Now Of Counsel to Wade Law, Jay led our predecessor firm, Jay W. Henderson, Ltd., for over 40 years. Jay attended Church College of Hawaii, Laie, Hawaii from 1959 to 1961, where he studied… Read More
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Shuky Ng is the Secretary of the firm. Her work includes assisting our attorneys with the preparation of legal documents and business structures. Shuky has lived in San Diego since 2000 and has lived in Montreal, Canada and Hong Kong so she speaks Ca… Read More

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