May 2001 Topics
Cough Syrup, Defeasance, Fayuca, Loophole, Mock Jury, Tar Baby, and Yakuza
 

Yakuza, the Japanese criminal organization, gets its name from a bad hand in a card game.
 

Cough Syrup
Money that is given to another so that he will not inform.
Jay Robert Nash, Dictionary of Crime, Paragon House, New York, 1992, page 82.
 

Defeasance
An accounting gimmick used by a company to understate its total debt on a balance sheet, report bigger earnings, and improve its credit ratings. An “in-substance defeasance” occurs when a company irrevocably deposits cash or other assets into a trust for the sole purpose of making the principal and interest payments on a debt as the payments become due. The investment in the trust and the debt are removed from the balance sheet. Although the debt is not legally satisfied, the trust ensures the company is not likely to make future payments. If the cash is used to purchase bonds at a discount, the discount is reported as a profit - without receiving a dime. Exxon was one of the pioneers using this technique in 1982 to defease $515 million of debt, report a gain of $132 million, and improve its debt-equity in one fell swoop. In November 1983, the Financial Accounting Standards Board (FASB) issued Statement No. 76 to provide guidance for the extinguishment of debt. The word defeasance comes from the 15th century Old French defesance, the transitive verb defaire, and medieval Latin disfacere, meaning to undo.
Howard M. Schilit, Financial Shenanigans: How to Detect Accounting Gimmicks and Fraud in Financial Reports, McGraw-Hill, Inc., New York, 1993, pages 107 - 110.
 

Fayuca
Stolen or pirated merchandise sold in the busy street markets of Tepito, one of Mexico City’s toughest barrios. The contraband includes cheap foreign goods smuggled in to avoid high tariffs. Bootleg producers sew American and European designer labels on Mexican jeans, repair old Mexican irons and then glue General Electric face plates on them, or fill empty Parisian perfume bottles with cheap substitutes. Fayuca, which includes new merchandise, has no warranty in this gray market.
Harry Cleaver, “The Uses of an Earthquake,” http://www.geocities.com/Athens/Forum/9061/
mexico/earthquakemex.html, February 25, 2001.
Photo: http://stevefilipiak.com/mexico/tepito/, August 1, 2004.
 

Loophole
Today, a loophole is a small mistake or omission in a rule, contract, or law that allows it to be circumvented. In the 16th century, castles and fortress walls were designed with narrow vertical openings or windows called loopholes. Arrows and other missiles could be shot through a loophole with little worry that the foe could shoot back through the opening, which was very narrow on the outside of the wall but considerably wider on the inside. Earlier it was simply called a loop, from the Middle Dutch word lupen, meaning to peer or lie in wait. The loophole was also a means of escape. Although loopholes in architecture have gone the way of medieval castles, these escapes are still found in laws and contracts.
Craig M. Carver, History of English in Its Own Words, Barnes & Noble Books, New York, 1991, pages 108 - 109.
Image: Lisa Thurston, http://www.macs.unisa.edu.
au/lisathurston/europe03/pages/47_The%20Loop
hole%20in%20Caesaria.htm, August 1, 2004.
 

Mock Jury
An unofficial, make-believe jury used for practicing and testing. A mock jury is a trial preparation exercise used by an attorney, well in advance of an actual trial, to help parties assess strategy, determine the manner of presentation of a case, and evaluate settlement as an alternative to litigation. Volunteer jurors are selected by a market research firm, based on demographic attributes requested by the attorney. Twelve to twenty-four jurors are invited to a conference room for two or three hours and paid $35 - 50 each. The attorney presents some key facts of the case, bits of testimony from a witness, or an opinion of an expert. Other attorneys or assistants watch the mock jury’s discussions through one-way mirrors or on live-feed monitors or on videotape. Several times during the session, the jurors are asked to complete opinion questionnaires about facts and witnesses, so the lawyers can gain insight as to how real jurors at an actual trial may react. The reactions and decisions of the mock jury help the attorney and witnesses to present a clearer, more focused picture during the actual trial. A mock jury is similar to the mock trials used in law schools to critique and grade the students’ courtroom performances. Sometimes a mock jury is called a focus group.
http://expertpages.com/news/mock_jury_1-1-99.htm, February 25, 2001.
 

Tar Baby
A tar baby is a very troublesome situation that is extremely difficult or impossible to get out of. A litigation case is called a tar baby when it takes a long time, has contradictory or ambiguous evidence, and is difficult to resolve to the satisfaction of any parties. Joel Chandler Harris published “Tar-Baby”, a fable of tricksters and wits, in the Atlanta Constitution in 1879. In this classic story narrated by Uncle Remus, a doll smeared in tar was used by Brer Fox to catch Brer Rabbit.
Robert Porter, focus group, Phoenix, Arizona, February 22, 2001.
Image: Walt Disney, http://www.disneyana
exchange.com/Photobin/Ale-Sos.Tar.jpg
 

Yakuza
An all-male Japanese criminal organization or mafia involved in illegal activities. The mid-20th century Japanese word yakuza means 8-9-3. Ya means 8, ku 9, and za 3. The sum of 8, 9, and 3 is 20, which is a worthless hand in Oicho-Kabu, a card game similar to blackjack. A winning hand is 19 in Oicho-Kabu, and 21 in blackjack. Likewise, the misfits, the poor, and criminals who become members of yakuza are regarded as worthless for society.
Oxford Essential Dictionary of Foreign Terms in English, American Edition, Berkley Books, New York, 1999, page 473.
 

ã Copyright 2001 Larry C. Adams.
All rights reserved.
 

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