1. New Financing Opportunities Grow in Indian Country The course of history and commerce is changing for Indian tribes in America. In the past, and even as change occurs today, tribes have experienced a lack of access to credit, capital, information and technology, which has prevented them from starting and/or growing tribal businesses. Today, tribes engage more actively in all types of commerce. As a consequence, opportunities have expanded for lessors and lenders to finance and lease property to tribes in what is often known as “Indian Country.” It is well publicized that some Indian tribes have enjoyed significant success in developing gaming operations located across the country. According to Merrill Lynch, these businesses will take in $15 billion this year. Representing 36 percent of the national gaming revenue, that figure is expected to rise to 40 percent by 2006. See: Boom times for Indian casinos, IndianCountry.com (July 10, 2003). But tribal interests extend beyond gaming to real estate development, mining, government contracting, banking and finance, telecommunications, wholesale and retail trade, and tourism. Indeed, most gaming tribes actively seek to diversify their tribal economies. In 2001, tribal businesses contributed $32 billion in revenue to the U.S. economy. Tribal Sovereignty and Tribal Businesses Tribal governments recognized by the federal government enjoy certain sovereign powers and immunities (somewhat analogous to the sovereignty enjoyed by state governments). Tribal governments can do business directly with other businesses, but often they conduct business via corporate alter egos. These tribal corporations may be set up under federal law (see 25 U.S.C. § 477), state law or tribal law. Tribes often encounter a conservative lending environment that limits their access to capital for reservation-based businesses and tribal corporations. In fact, unique legal and financial challenges exist when doing business with tribal governments and tribal corporations. As a result, tribes will frequently agree to limited waivers of sovereign immunity to facilitate contractual relationships with non-Indian business partners. Further, experienced legal counsel can help potential business partners and tribal organizations navigate through federal, state and tribal regulations or business transactions in Indian Country. Experienced attorneys also can offer useful input on tribal business practices and structure limits on sovereign powers of Indian tribes. Entering Into Finance/Lease Transactions Indian tribes enter into a wide variety of commercial transactions involving real property, personal property, or both. Often transactions “relative to Indian lands” require approvals from the Bureau of Indian Affairs (BIA), a part of the US Department of the Interior. The development of gaming facilities ranks among the most highly regulated of Indian Country business transactions. Potential development partners need to be aware of the complex scheme of federal and tribal approvals and requirements necessary to the acquisition, leasing and financing of lands on which tribal gaming activities may occur. See, e.g., 25 U.S.C. § 81; 25 U.S.C. §§ 2701 et seq. *Warning: Failure to obtain required federal and tribal approvals might render contracts completely void. In addition, Indian tribes can lease a variety of personal property under various structures. For example, a tribe may enter financing leases, or lease purchase transactions, with a term of two to fifteen years and customized payments periods. The leased property may include modular buildings, vehicles, heavy machinery, energy management systems, gaming equipment, computer, video and telecommunications equipment, signs and even low-cost housing. Parties to Deals in Indian Country The federal government has recognized about 550 Indian tribes (including some 250 Native Villages in Alaska), all of which appear on the “official” BIA list. All tribes have certain powers to enter into leases, loans or other business transactions. Of course, as in any credit transaction, some tribes will present more desirable partnership and credit attributes than others. Developers who work with tribes may be required to enhance or even guarantee tribal payments and performance obligations to lenders and lessors. Several well-known lenders/lessors engage in transactions in Indian Country. They include Bank of America, The CIT Group, Inc., Fleet Boston, US Bank, Wells Fargo Bank, and Washington Mutual. A number of tribes and Alaska Native Corporations have collaborated to form the federally chartered Native American National Bank, headquartered in Denver, Colorado. Several tribes have established their own banks or have acquired other banks and rechartered them. These institutions often finance tribal projects, or lend to the developer-partners of tribal casinos rather than to the Indian tribes directly. See: Gambling Beyond Nevada, Reviewjournal.com (Feb. 18, 2003). In the casino world, significant casino operators emerge as investors, guarantors and developers of casinos in Indian Country. The developer with the most Indian casinos under management (four) is Harrah’s, and more recently Station Casinos has teamed with tribes on two casino projects in California. Other operators have worked on development projects for casinos, with various levels of success. See: Boom times for Indian casinos, IndianCountry.com (July 10, 2003). Key Structuring Considerations For those who seek to finance or lease property of any kind in Indian Country, consider several key legal and structural protections: · Business Risk. A transaction with an Indian tribe creates a unique business relationship and may have business terms with some significant risk. If available, lenders and lessors may ask for additional credit support for the obligations of an Indian tribe in the form of a letter of credit, guaranty, bond or insurance. Developers or other interests often provide the credit support. · Waivers of Sovereign Immunity. A limited waiver of sovereign immunity is advisable in almost any business transaction between a tribe and a non-Indian business partner. This waiver serves the interests of both parties. It gives the non-Indian partner comfort that the terms of the transaction will be enforceable, thereby making it easier for the tribe to attract outside investment while still respecting the tribe’s inherent sovereignty. · Applicable Law and Court Jurisdiction. Contracts between tribes and non-Indian business partners also should include an express provision stating what law applies to any disputes that may arise (generally state or tribal), and which court (federal, state or tribal) will have jurisdiction. Alternatively, parties also may wish to consider use of an arbitration provision. · Perfection and Enforcement. Lenders and lessors should carefully evaluate how to perfect their respective interests under the Uniform Commercial Code or other law, if applicable, and how to enforce their leases or loans. *Opportunity Point: By correctly structuring transactions with Indian tribes, lessors and lenders can participate in a niche area of financing that has significant growth potential. This opportunity, however, is neither for the weak of heart nor the uninformed. Armed with knowledge of the rules and practices that pertain to business transactions in Indian Country, lessors and lenders may find that doing business in Indian Country presents numerous opportunities for growth and profit. Thanks to my partners Katharine R. Boyce, Walter T. Featherly, V. Heather Sibbison, and Jeffrey T. Smith of our Federal Indian Law Practice Group, for editing this article. 2. Corporate Tax Relief Proposal Offers New Tax Benefits at a Cost Key members of Congress have recently introduced tax legislation that will amend the Internal Revenue Code of 1986 (IRC) to comply with controversial rulings of the World Trade Organization (WTO). On July 25, 2003, Ways & Means Committee Chairman William Thomas introduced the American Jobs Creation Act of 2003 (H.R. 2896), This act would repeal the foreign sales corporation (FSC) and extraterritorial income (ETI) exclusion provisions of the IRC. Congress would replace those provisions with a bevy of corporate tax benefits to domestic manufacturers and other corporate taxpayers with a net cost to the U.S. Treasury of $120 billion. See: Corporate Tax Cuts Are Proposed In Place of Disputed Export Credit, The Wall Street Journal (S.W. Ed.), Page A:3, Col. 1, July 28, 2003. Over 125 members of the House of Representatives have co-sponsored the Job Protection Act of 2003 (H.R. 1769) This act is another bill that would amend the IRC to comply with the WTO rulings and provide different tax benefits to domestic businesses. Senate Finance Committee Chairman Charles Grassley and Ranking Democrat Max Baucus have announced their intention to introduce legislation to address the WTO rulings and provide offsetting tax benefits. Senator Hatch has introduced the ''Promote Growth and Jobs in the USA Act of 2003'' (S. 1475). Background of Export Credits As in many countries, the tax law in the U.S. has long provided benefits to exporters. For most of the last two decades, these tax benefits were provided under the FSCs. The FSC had a predecessor, the Domestic International Sales Corporations regime (DISC), and a successor, the ETI. Our trading partners have successfully challenged all three regimes as illegal export subsidies. Last year the WTO ruled that the ETI exclusion is an illegal export subsidy. If it's not ended by next January 1, 2004, the Europeans could impose $4 billion in punitive tariffs against products of U.S. exporters such as The Boeing Company, Caterpillar, Inc. and Microsoft Corporation. For further background on the history of this dispute, see: Building a Level Playing Field for U.S. Exporters, Tax Foundation. The Menu of Tax Benefits If Congress adopts Chairman Thomas’ bill, corporations could enjoy new tax benefits in place of the disputed export credits that include the following: · Reduction in the corporate tax rates for small corporations; · Extension of bonus depreciation for one year and increased expensing for small business for two years; · Extension of carryback period for certain net operating losses (NOLs); · Relief from the alternative minimum tax through changes in various rules; · Drop in the tax rate for six months from 35 percent to about 5 percent to allow high-technology companies to repatriate an estimated $350 billion of foreign income; · Shortened depreciation periods for manufacturing property, leasehold improvements and restaurant property; · Reform and simplification of S corporation rules; and · Reduction of the effective tax on income earned abroad through a variety of reforms. *Warning: The Thomas bill also includes a variety of revenue raising provisions relating to tax shelters and anti-tax avoidance provisions. The leasing industry should remain vigilant and proactive as the revenue raisers could take a bite out of the favorable tax attributes of leasing. Thanks to George Schutzer, one of my tax partners, for editing this article. 3. FIN 46 Forces Companies to Consolidate Nearly $400 Billion of Off-Balance Sheet Deals Nearly half of S&P 500 companies will consolidate approximately $379 billion in assets and $377 billion of liabilities on their balance sheets as a result of the immediate impact of FIN 46, according to Credit Suisse First Boston. Approximately ten financial-services companies will account for 65 percent of these consolidations, including General Electric ($50B), Citigroup ($5B per a Forbes report but revised down from Citigroup’s original estimate of $55 billion), Bank of America, Bank One ($39.5B) and J.P. Morgan Chase ($26B). See: Raising the Bar on Off-Balance-Sheet Finance, TheStreet.com, July 4, 2003. Also see: Off-Balance Sheet Operations Are Focus of New Regulations, The Wall Street Journal (S.W. Ed.), Page C:5, Col. 1, July 15, 2003. These firms have plenty of notable company from entities with real estate interests which face accounting issues. So far, the restaurant chain Ruby Tuesday, which ended its fiscal year on June 3, expects to charge its earnings with between 60 cents to 62 cents a share when it consolidates a number of franchise partnerships onto its books. Media General, the publisher of the Tampa Tribune and Richmond Times, will charge 35 cents per share to consolidate several SPEs that have leased real estate to it. Even networking giant Cisco Systems plans to take a non-cash charge of up to $500 million because of FIN 46. See: Balance Sheet Shuffle Proves Costly, TheStreet.com, July 18, 2003. An Explanation of FIN 46 FIN 46 constitutes the latest and greatest attack on off-balance sheet deals that started by alleged abuses of Enron Corporation. Published by the Financial Accounting Standards Board (FASB), the official name of FIN 46 is “FASB Interpretation No. 46 - Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51”. On July 1, 2003, public companies began to book existing (pre-February 1, 2003) off-balance sheet deals that they did not or could not restructure to remain off-balance sheet. By the end of the year, private companies may face a similar fate. For an explanation of FIN 46 in more detail, see my article titled: Final Off-Balance Sheet Rules Make a Significant Impact on Leasing? BLN (February 2003). The Ramifications of FIN 46 Unfold The ramifications of these changes remain far from clear. Financial services companies, including lessors and lenders, should do the following when considering the impact of FIN 46: · Observe the broad sweep of FIN 46 to every special purpose entity that you may finance, especially any lease, partnership, limited liability company or other special purpose entity (SPE). · Understand that real estate transactions, synthetic leases of personal property (see article 5 below), conduit financings and other structured-finance transactions must be scrutinized under FIN 46. See: New FASB Rule Shifting Billions in Real Estate Back to Bottom Line, by Jack Lyne, Site Selection Executive Editor of Interactive Publishing (Week of July 21, 2003). · Learn the new lexicon of FIN 46. For example, a “variable interest entity” or VIE is an entity that may be consolidated. A VIE may include far more transactions or entities than SPEs. The party that consolidates the VIE is called the “primary beneficiary.” A primary beneficiary holds the majority of the risk of loss or the upside/residual returns. A “voting interest entity” controls an entity through voting interests and generally holds at least 10 percent more in real equity. · Evaluate the potential impacts of FIN 46. A short list of concerns includes: (1) adverse changes in a balance sheet resulting from the consolidation of debt and assets; (2) breaches of loan/lease covenants that trigger a need for waivers from, cause exits by, and result in fees or higher rates payable to, other lenders or lessors; (3) surprises as to which enterprise may have to consolidate a VIE (that is, which one is the primary beneficiary); (4) regulatory and reporting changes based on new rules from the Securities and Exchange Commission (SEC), including separate reporting on off-balance sheet transactions in the Management Discussion and Analysis (MD&A) of SEC reports; (5) substantial charges to earnings per share in the third quarter; and (6) charges to capital ratios of banks. *Tip: FIN 46 is not thoroughly understood yet. Even within the same accounting firm, you can get conflicting advice on the same issues. FIN 46 supposedly uses principles rather than rules to determine the right outcome on the issues. Use common sense in deriving an answer to your consolidation questions. Form interdisciplinary teams to help analyze and structure transactions. Engage knowledgeable accountants (preferably at national offices of the Big Four firms), lawyers, appraisers and other experts to assist you in evaluating current and future structures for transactions. Be prepared to convince your accountants, or your lessee’s/borrower’s accountants, why you should get your desired accounting treatment. For at least the next several months, don’t be frustrated by the unavailability of consistent advice from accountants and lawyers. These professionals are often struggling to comprehend and apply a new approach to off-balance sheet transactions. For some strategic analysis of FIN 46, see my article titled: With FASB Consolidation Deadline Approaching, Will You Act in Time? BLN (March 2003). 4. Lessors Take Action to Comply With the USA Patriot Act Signed on October 26, 2001 by President Bush, the USA Patriot Act of 2001 (Public Law 107-56) (Act) contains sweeping provisions affecting lessors, in part, because lessors generally constitute financial institutions subject to the Act. Final regulations will presumably clarify, if not complicate, compliance efforts by the leasing industry; but such regulations are still pending. Nonetheless, lessors must now take steps to satisfy the basic requirements of the law. *Technical Point: A "financial institution" is a very broad term that includes institutions subject to federal regulations (such as banks, mutual funds and hedge funds), loan or finance companies, trust and insurance companies, investment banks, commercial banks and leasing companies, vehicle sellers (automobiles, aircraft and vessels), persons engaged in real estate closings and settlements, and even casinos. See: Section 352 of the Act and 31 U.S.C. Section 5312(a)(2) and (c)(1). This definition leaves little doubt that most (if not all) lessors and lenders qualify as financial institutions. See: 31 U.S.C. 5312(a)(2)(P) and (c)(1)(A). Basic Framework of the USA Patriot Act The Act is sometimes referred to by its formal name: the "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001." The fundamental intent of Congress is to create comprehensive measures to combat domestic and international terrorism. 18 U.S.C. 2331. See: Section 802 of the Act. Section 352(a) of the Act, which became effective on April 24, 2002, amended section 5318(h) of the Bank Secrecy Act (BSA). As amended, Section 5318(h)(1) requires every financial institution to establish an anti-money laundering program that includes, at a minimum: (i) the development of internal policies, procedures, and controls; (ii) the designation of a compliance officer; (iii) an ongoing employee training program; and (iv) an independent audit function to test programs. The Secretary has delegated to the Director of FinCEN the authority to administer the BSA. Lessors and lenders also need to take (and have taken) certain actions in their transactions to comply with the Act. Following the lead of other financial institutions that have more regulatory guidance, lessors and lenders should consider some of the following questions in each transaction involving any potential or actual involvement of non-US citizens: · Exposure to risk. Do our transactions or the ways in which we conduct our business expose us to the risk of money laundering or terrorist activity such as in cross-border or other international deals? · Adequate provisions and procedures. Do we have adequate contractual provisions in our lease/loan documents and sufficient internal procedures to identify our lessees or borrowers (know our customer)? See: CIP Rules. for regulations on customer identification programs that may form a model for regulations yet to come for leasing and other financing companies. · Reporting by lessees and borrowers. Do we have lease reporting that keeps us up to date and in compliance with the broad rules of the USA Patriot Act? Do we manage any reserve, control or deposit or other account, avoid laundering the funds of terrorists? · Compliance procedures. What compliance procedures in our transactions and business operations will enable us to comply with the broad provisions of the law? See: USA Patriot Act Preparedness Check-Up, by the Office of Thrift Supervision of the Department of Treasury (Attachment 2 to CEO 175). *Comment: The thrust of regulations is one based on risk - the more perceived risk, the more regulation. The leasing industry’s typical transaction would seem to present little risk of money laundering, and therefore lessors should not have to cope with complex regulations that don’t achieve the essential purpose of the Act. As evidence of the industry’s effort, on July 29, 2003, the Equipment Leasing Association commented on proposed customer identification regulations. ELA generally opposed the rules on a minimal risk when applying a risk-based approach. The ELA’s pragmatic thinking deserves the support of the leasing industry. 5. Making Its Mark, Sarbanes-Oxley Reaches Its First Anniversary The Sarbanes-Oxley Act of 2002 (Act), celebrated its first anniversary on July 30, 2003. The Act has arguably made some of the most significant changes to the federal regulation of corporate governance and reporting obligations of public companies. The changes include: (1) increased independence of auditors and audit committees (Section 301),
(2) certifications by senior corporate officers of financial statements (Sections 302 and 906),
(3) enhanced financial disclosure (Section 404),
(4) prohibitions on loans to corporate officers (Section 402),
(5) increased SEC powers (Section 1103), and
(6) the creation of the Public Company Accounting Oversight Board (Title I). *Tip: The Securities and Exchange Commission (SEC) recently released exhaustive regulations with regard to Section 404 of the Act. All issuers should familiarize themselves with these rules and consult counsel about how to interpret and apply them. See: the “Client Alert” coming soon on the Patton Boggs website for a discussion of these new regulations. For a further summary of the Act as it affects lenders and lessors, see my article titled: The New Corporate Law and Order: Will Lessors and Lenders Benefit? BLN (August 2002). Sarbanes-Oxley has created new and difficult challenges for directors, officers and audit committees. For example, directors are apparently struggling to meet the letter and spirit of the law while they still maintain links to corporations that raise concerns for corporate governance experts. See: Boardrooms Under Renovation, The Wall Street Journal (S.W. Ed.), Page B:1, Col. 1, July 22, 2003. Even private companies feel the pressure to clean up their act. Though Sarbanes-Oxley doesn’t govern them, private companies feel the heat to elect more independent directors and to improve audit practices. See: Private Companies Also Feel Pressure to Clean Up Acts, The Wall Street Journal (S.W. Ed.), Page B:1, Col. 1, July 22, 2003. *Warning: Sarbanes-Oxley affects myriad areas of corporate finance and governance, with evolving complexity. Whether you hail from a private or public company, at a minimum, you should: · Consult knowledgeable legal counsel about the appropriate level of independence and care that the Act requires of your company directors and officers; · Understand the risks of failing to comply with the Act; · Reform your corporate governance practices to meet the new requirements and don’t assume that practices from more than a year ago will work; and · Watch out for conflicts of interest that may potentially trigger significant civil and criminal penalties. To review a detailed treatment of Sarbanes-Oxley prepared by Patton Boggs LLP click on: SEC Filing Requirement - Sarbanes-Oxley Act: New Corporate Responsibility and Disclosure Rules. For assistance with this Act, contact Joseph Passaic at (202) 457-6104 or Philip Feigen at (202) 457-6142 (both in Washington, D.C.). Several other lawyers at Patton Boggs in the Denver and Dallas offices can also help you in this area. Feel free to call me, David G. Mayer, at (214) 758-1545, if you would like to find an advisor and even a crisis manager at Patton Boggs LLP who, so to speak, has his or her Act together. Thanks to Philip Feigen, one of my partners in corporate finance, for editing this article. 6. Leasing 101: What Is “Net Present Value”? Net present value is a method used to compare investment alternatives such as the decision to lease or buy equipment. It is the sum of discounted cash flows minus the related costs of the investment. See: Harvey’s NPV. This approach requires that you calculate the time value of cash flows at the time they occur to a certain earlier date such as the date a lease commences. You discount the cash flows you receive in the future because cash received a year from now, for example, is less valuable than cash you receive today. According to the Equipment Leasing Association (ELA), present value is the current equivalent of payments or a stream of payments to be received at various times in the future. The rate that you use to discount cash flows is often referred to as the discount rate. It often equates to the borrowing rate of the party performing the present value calculation. These calculations can be done with or without tax benefits. For a formulaic discussion of net present value, see Personal Finance: Lease Versus Buy Analysis: General Theory, by Vandeplas, Mathsoft, Inc. (1997). Lessors worldwide use a similar discounted cash flow analysis to value a transaction such as a lease in today’s dollars. See: Evaluation Techniques (New Zealand). 7. BLN Briefs: Boeing Tanker Lease; Lease Strips Nailed; FASB Issues Staff Positions-FIN 46 Onward and Upward for the Boeing 767 Tanker Lease. On July 25, 2003, the powerful Senate Armed Services Committee endorsed the proposal by the Secretary of Defense to lease 100 KC-767 aerial refueling tankers from the Boeing Company. See: U.S. House panel approves Boeing tanker lease, Reuters (July 26, 2003). At $17 billion or so in cost, a big battle remains to be fought with John McCain who has opposed the program as a corporate handout. McCain Says May Subpoena Boeing Over Tanker Deal, Reuters (July 17, 2003). IRS Nails Lease Strips as Tax Shelters. In a reversal of previous policy, on July 21, 2003 the IRS declared in Revenue Ruling 2003-96, that Section 482 of the Internal Revenue Code of 1986 may not be used to reallocate income and deductions arising from a lease-stripping transaction. In general, such a transaction takes place when parties who are unrelated until the transaction occurs allocate the deductions to one party and income to another party (hence stripping the lease of these components). Section 482 relates to common control of parties involved in a transaction. This action arguably furthers the plan of the IRS to shut down abusive tax shelters. At the same time in Notice 2003-55, the IRS added lease strips to its listed tax shelter transactions. FASB Issues Final FASB Staff Positions under FIN 46. FASB issued FASB Staff Positions called “FSPs” on five mind-numbing details of FIN 46. Four FSPs cover the (1) identification of deemed VIEs, sometimes called “silos,” (2) application (or not) of expected losses to a VIE, (3) application of transition rules under FIN 46 and (4) the calculation of “expected losses” arising from a VIE. These FSPs became effective on July 24, 2003 and will be reportable in the first period ending after that date. 8. Training Offered; Recent Publications; Upcoming Speech Training - Substance the Easy Way To help improve your business operation, deal management and risk management, I offer private training seminars tailored to your specific needs at your designated location. My interactive and informative approach relies, in part, on my book, Business Leasing for Dummies (BLFD)® and subjects I cover in BLN. I customize the format and content for your specific training needs—no canned programs. Feel free to call me at (214) 758-1545 to discuss the possibilities. Recent Publications Besides BLN, I write other articles. Check these out: · Conducting a Lease Review, by David G. Mayer, ELT, The Magazine of Equipment Leasing and Finance, The Equipment Leasing Association, June/July, 2003 (Side Bar). · Managing Terrorism Risk: The Business Approach for Lessors, by David G. Mayer, ELT, The Magazine of Equipment Leasing and Finance, The Equipment Leasing Association, June/July, 2003. · Lessors Use Lease Structures and Terms to Mitigate Terrorism Risk, by David G. Mayer, Equipment Financing Journal (online), June 16, 2003. · Passive Lessor Liability from Terrorism: A New Era of Higher Risk, by David G. Mayer, Equipment Leasing Newsletter, American Lawyer Media, Inc., May 2003. · Leasing 101: Understanding the Operating Lease, by David G. Mayer, Technology Asset Manager, May 2003. Upcoming Speech · 2003 ELA Annual Convention, Manchester Grand Hyatt, San Diego, CA, Tuesday, October 14, 2003, 10:30 a.m. to 12:00 p.m., titled: Mitigating Risk, Protecting Lessor's Rights and Making Sense of the Terrorism Risk Insurance Act of 2002. A Message From the Publisher, David G. Mayer Turning the Corner Sometimes I think that we need a few cheerleaders for the economy. After all, we have lived through a few underwhelming years since 2000, to say the least, especially in the leasing industry. In its Survey of Industry Activity for 2002, the Equipment Leasing Association reported that business volume dropped 4.6 percent in 2002 from 2001. See: ELA Industry Survey, Monitordaily (July 25, 2003). Fortunately, there seems to be some hope on the horizon. On July 25, 2003, the Commerce Department reported that orders for durable goods rose to a stronger than expected 2.1 percent, the largest gain in almost a year. Transportation orders rose 3.9 percent, with a leap in non-defense aircraft and parts of 20 percent. Overall capital-goods orders increased by 3.5 percent. The U.S. economy, supported by business and consumer spending, grew at a 2.4 percent annualized rate. The Federal Reserve Board reported in the July 30, 2003 Beige Book, that “twelve Federal Reserve districts provided additional signs that the pace of economic activity increased a notch during June and the first half of July.” Major business publications herald the improving earnings as a leading positive indicator. See: Profits: "The Fog Is Beginning to Lift," Business Week (online). In short, the economy may be turning the corner and the initial signs seem to be good for leasing. If rising interest rates don’t snuff out the potential, the fourth quarter could produce a meaningful increase in business. See: Rise in Durable-Goods Orders Offers Hope for Manufacturing, The Wall Street Journal (S.W. Ed.), Page A:2, Col. 5, July 28, 2003. When it comes to the leasing industry and the economy, I keep saying the most positive things I can in BLN, hoping, in some small way, to help talk us back into the good times. I guess that means I qualify as a cheerleader of sorts. So be it! Have a good August. Feedback From You Most months I share comments I receive on Business Leasing News and my book Business Leasing For Dummies (BLFD)®. Here’s a comment I received recently on my book: “I’ve been in the equipment leasing business…for 18 years and have used lots of leasing guides and textbooks over the years. Just wanted you to know that your [BLFD] is by far the best. I can’t count the number of times I’ve use(d) it to help explain some leasing related issue…. David, you really have a knack for making—the potentially complex and confusing—simple and straightforward! My copy is well worn and I’ve given your book to several of my customers. All of my customers have thoroughly enjoyed the book and use it in their different types of businesses.” As always, thanks for reading my publications and for your feedback. My kids thank you for buying Business Leasing For Dummies (BLFD)®. Please do so, often, with my personal thanks! About the Web Site of Business Leasing News If you have book-marked BLN, please change your bookmark to BLN’s new address at Patton Boggs LLP: http://www.pattonboggs.com/newsletters/bln. Please stop by and see the BLN web site any time. It not only offers past issues but also speeches, a link to my book and various helpful search tools. About Patton Boggs LLP and My Practice As you may be aware, I am a part of the Patton Boggs LLP Business Transaction Group in the Dallas office. Patton Boggs LLP is a law firm of about 400 lawyers located throughout the United States with extensive capabilities in over fifty areas of legal practice that include leasing, secured transactions, securitizations, syndications, project and mezzanine financing, bankruptcy, public policy, litigation, intellectual property and technology law and much more. The leasing practice regularly involves the legal (and business) aspects of buying, selling, financing and leasing real and personal property of all kinds, including aircraft, energy, facility, production, technology and other transportation assets. We also structure, negotiate and close specialized transactions such as vendor and venture leasing programs, municipal, state and federal leasing arrangements, as well as corporate and portfolio acquisitions, to name of few. Given the state of the economy, we extensively assist our clients with troubled deals and bankruptcies, including repossessions, lift stay actions, deficiency litigation and forbearance agreements. Please feel free to call me at (214) 758-1545 or e-mail me at dmayer@pattonboggs.com for information about any of these areas or the many others available at Patton Boggs LLP, or to discuss anything I have written in Business Leasing News. I welcome opportunities to build relationships. |