Financial Scandal to order?

Look at the mortgage collapse. There probably were old money families that were invested in mortgage bonds, and many such bonds became worthless.

This is a lot simpler than you think.

Business have basically two types of costs -- fixed and variable. Fixed costs are exactly that -- fixed. You have no customers in your store, and you must pay your fixed costs. You have 10,000 customers in your store and the fixed cost cost change a bit. However, your variable costs go up with an increase of customers. Purchase price of the real estate is an example of fixed costs and employees are a variable cost.

This making sense?

So selling price is fixed costs + variable costs + profit. (I am trying to keep this simple.) If business drops off, you can cut your variable costs and not have a profit, but the fixed costs need to be paid. Basically in an upturn of business, your profits should go up, while with a downturn in business could cause you to have to borrow money to stay afloat.

In your situation, the previous generation has a business. Some of the largest corporations are family owned like Wal-Mart. The previous generation borrows lots of money to expand. Things are going good, family is making money, everybody is happy. Then the market drops out, like for Kodak. Or there's a downturn in the economy, like 2008. All that borrowed money has to be paid on schedule or the banks take over the business. Soon the family business is in the toilet.

You want some fraud in this, have people lie in the loan documents. Lots of time this isn't noticed until people start checking when the payments become a problem.

There's a lot more and a lot of variations of this approach, but this is a basic model that has brought down a lot of businesses.

Best of luck,
Jim Clark-Dawe

Her father was best friends with a Bernie Madoff-type fraudster & steered all his friends into the fraudster's plausible scheme (even the very rich are not immune to the lure of Making Easy Money Fast) -- as a result a lot of their circle lost a bundle & blame Dad (who may or may not have known anything, and may or may not have lost a bundle himself).

If you need more social stigma, have the family business compelled to file for bankruptcy--for many in certain social circles that is deemed in and of itself a scandal beyond repair.

A few ideas.


She's the official spokesperson of a popular product which is later found to cause injury or the product is marketed under false claims.

The family elder - who made tons of money for decades selling goods to the government - is under investigation for corruption.

The family trust is rumored to be selling its century-old branded chain of high-end retail stores (ex: Sacks 5th Avenue, etc.) to a Chinese conglomerate.

The sister (or cousin) - who happens to be physically similar to the heroine - is using family money to produce XXX movies in which she is the star.


-cb

ironmikezero said:

If you need more social stigma, have the family business compelled to file for bankruptcy--for many in certain social circles that is deemed in and of itself a scandal beyond repair.

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Used to be, but I don't think it is anymore. Among the moneyed business classes, bankruptcy is a temporary administrative inconvenience that doesn't impact social standing much. If the family portfolio was sufficiently diversified, the family business going bust might not even put much of a crimp in their personal style.

At the dawning of the industrial revolution, money was being widely invested in business speculation. Charles Dickens' Little Dorrit is all about this kind of stuff.

caw

blacbird said:

At the dawning of the industrial revolution, money was being widely invested in business speculation.

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Still is. Today we call it hedge funds. Many of them are extremely exclusively, and many are devoted to extremely high-risk investments. (Because high risk = potentially very high returns. Or not.) Hedge funds are always going belly up when they make the wrong bet. And everybody involved generally pick themselves up, dust themselves off, and start all over again.