Mine Host requested an advice from a lawyer. He contacted his (then) current law firm and was directed to a smart young lawyer specialising in the field in question.
The requested advice was: "What are the implications and downside to winding up "Shelf Company X"?
Shelf Company X was a small company that had been used by Mine Host in the past. It had no assets, had not traded for several years, yet had suddenly become the target of a massive claim by the Tax Office, for a figure well into Six digits. (How Shelf Company X got into this predicament will be covered in another post)
At the time Mine Host was thousands of miles away in a new career, working more hours than a human should be awake, and did not want to engage in litigation against the ATO.
If he won: He got nothing except a massive legal bill.
If he lost: He had to pay the massive Six figure sum and he got a massive legal bill.
The smart young lawyer sent Mine Host a very long written advice. He covered many topics, but made no mention of the implications of winding up the company.
Mine Host phoned & wrote to the lawyer, restating the initial request.
The Smart Young Lawyer sent Mine Host another long written advice, covering many topics, but again made no mention of the implications of winding up the company.
Mine Host contacted the Lawyer again, ensured the lawyer understood his simple request and once again the Smart Young Lawyer sent a long written advice.... (and so on and so forth).
This went on for several exchanges. Mine Host grew rapidly more impatient. Time was wasting.
Eventually in exasperation Mine Host contacted the overseeing partner at the law firm and in-a-manner-that-could-not-be-mistaken instructed the partner that he was-sick-to-death-of-the-Smart-Young-Lawyer giving advice-on-everything-under-the-sun-except what he had been asked.
Shortly thereafter Mine Host received the advice he requested.
The advice: (abridged) "If the company is dissolved nothing will happen. The sole creditor is the ATO, and they won't be able to grab anything. Your troubles will be over"
The time take to produce the Two Paragraph Advice: One Month
The bill: $20,000.00 (due to the large amount of written advice provided)
Mine Host severed relations with that law firm just as soon as Shelf Company X was dissolved.