Two weeks ago, the doors of a Rotorua, New Zealand gas station were shuttered. Its owners, rather than cashless, were likely already out of the country with over $2 million their bank accidentally made available to them. Though perhaps bringing a grin to the faces of many small businesses whose recent experience with banks has not involved the dolling out of millions, the case shows us one way, a bad way, to close up shop.
As reported by the New York Times, Leo Gao asked his bank, Westpac Bank, for increased overdraft protection. Instead of $62,000 in overdraft, a slip of a bank teller's finger resulted in $6.2 million being made available to Mr. Gao. Westpac's motto is "Make the most of life." Mr. Gao and his girlfriend Cara Young did just that.
They had been running an ailing gas station. The Guardian reports that after withdrawing as much of the money as they could, the pair told neighbors they were going on holiday, quietly shuttered the gas station, and took off. The manhunt is now reportedly focused on Hong Kong.
Many can empathize with Mr. Goa's tale. His business had been struggling, debts mounting, and suddenly saw a stack of cash and a ticket out. Though few will face the choice he made, many small business owners have and will continue weighing the prospect of closing their businesses.
Rather than closing the shutters and heading to the airport, consider these steps in closing down a business. Key issues to consider include taking care of business debts and obligations, preparing final taxes and filing dissolution papers with the state (if required for your business structure). As sad as the end of a business can be, it's even worse when lawsuits relating to your old business come back to haunt you. Taking care while closing up can help reduce this risk.
- Accidental millionaire Leo Gao 'dreamt of getting rich quick' (Independent UK)
- Bank hits back at millionaire runaways (New Zealand Herald)
- FDIC: Bank overdraft fees hit young, low-income customers (USA Today, 12/2008)
- Closing a Business (IRS)
- Articles on Closing a Business (FindLaw)