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The major airlines won’t be flying the “Friendly Skies” if discount air carriers have anything to say about it.  In fact, the numbers indicate that low-cost carriers now account for nearly 20 percent of U.S. domestic capacity, up from 6 percent during the downturn in the early 1990s, according to UBS Warburg, a well-known investment banking firm.  Unlike those early days of discount air travel, David Grizzle of Continental Airlines recently told an aviation conference that “a low-fare network in this country that did not exist previously…has reached the point, perhaps, where [its] penetration may be fatal.”  See: Treasury Seeks Curbs on Tax Havens, The Wall Street Journal, (S.W. Ed.), 2002 June 18; Section A:1 (Col. 5).  

A fundamental shift in the business air travel market may be underway.  The advantages of low-cost travel on discount air carriers for business passengers may render obsolete the existing model of major airlines of trading high-cost tickets for frequent travel times and amenities for business travelers.  This shift in the market paradigm may be a function of the cyclical economy.  However, some experts predict that “this is a permanent shift to lower-priced tickets and, therefore, airlines will continue to see reduced revenues.”  See: A Roller Coaster Ride in Aviation. 

This change could also precipitate a massive restructuring of the airline industry.  American Airlines has reportedly recognized this trend and is rethinking its entire operation.  American and other majors have been spurred by present data that shows their passenger traffic fell 10 percent in May while the discount air carriers increased by 11 percent in the same month.  Although some experts believe that the outlook is rosy over the next 12 to 24 months for air travel, the future remains uncertain for the competition between the majors and the discounters.

For now, discounters such as Southwest Airlines Co., Jet Blue Airways in the United States and Ryanair and Easy Jet Plc in Europe have four advantages over the majors airlines.  For comparison, the major airlines include American Airlines, Delta Air Lines, United Air Lines, Continental Airlines and Northwest Airlines (and perhaps their European counterparts).  Here are the advantages for the low cost guys that fill their coffers as well as their seats:

1.  Lower Labor Costs.  The majors have high and intractable labor costs as compared to the low-cost carriers.  For example, discounters such as Frontier Airlines, Jet Blue and American Trans Air, Inc. have labor costs of 25 percent of revenue while the majors such United and Delta spend 40 percent of revenues on labor.

2.  One Aircraft Type.  While the majors have multiple aircraft types in service, the low cost carriers try to manage with one type, minimizing their relative maintenance, training and operating costs. EasyJet is reportedly engaged in negotiations to buy 120 jetliners of the same type valued at $6 billion. 

3.  Transparent Fares.  Savvy consumers can locate the inexpensive fares and compare them to the full-service competition.  In the past, consumers could not find lower fares to make price comparisons.  Even when business travelers use the majors, 56 percent of the biggest companies are flying on discount tickets.

4.  More Reliance by Business on Low Cost Travel.  According to a study by the influential Business Travel Coalition, 74 percent of the respondents said that their companies have made some permanent reductions in business travel; and 68.5 percent of them plan to increase the use of low-cost air carriers.  The Wall Street Journal reports that business travel is being “Wal-Marted” by low-cost carriers, showing that business travelers can’t resist a bargain.

Tip:  The growth of discount carriers may produce new opportunities for financing their aircraft where the majors will remain less desirable credits for at least another year.  Experts confirm the axiom that when setting residual values, passenger traffic drives the demand for, and the value of, aircraft. See: A Roller Coaster Ride in Aviation that addresses residual value and other equipment issues.  Aircraft should continue to be valuable assets where passenger travel remains strong.  For now, therefore, take a close look at low-cost carriers as increasingly viable competitors and financing candidates.

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2. No Hiding in Tax Havens: Congress Acts to Restrict Offshore Tax Avoidance by US Companies

A series of new legislative proposals from the nation's capitol seek to cure international tax avoidance and condemn tax shelters.  The Senate Finance Committee approved two bills that would limit the so-called “inversion transaction” (S. 2119) and impose broad curbs on corporate tax shelters (S. 2498).  For an in-depth description of the current law and proposals in the current tax reform, see: Inversion Transactions, Tax Shelter Background and Tax Shelter Proposal, prepared by the Staff of the Joint Committee on Taxation.  On June 28, 2002 the Senate Finance Committee issued a report and analysis of S. 2119.  

However, these efforts could be trumped by comprehensive reform of the international taxation rules in the United States.  House Ways and Means Committee Chairman William Thomas (R-CA) on June 28, 2002 announced a legislative proposal for international tax reform called the “American Competitiveness Act of 2002.”  This tax reform package purports to accomplish the following three objectives: 

*Crack down on the use of abusive tax shelters;

*Reduce the use of inversion transactions; and

*Replace the Extraterritorial Income Exclusions (known as the ETI).

The plan supposedly alleviates anti-competitiveness in the U.S. system of taxation and levels the playing field of international taxation that exists in other countries.  In other words, the initiative may cut to the core tax issue for many multinational companies located in the U.S.  The U.S. tax code imposes such a heavy tax burden on U.S. companies that they often can’t compete with foreign companies in business conducted worldwide.

*Background on International Taxation in the U.S.:  The United States uses a “worldwide” tax system.  Under this system, a domestic corporation generally pays tax on income derived inside and outside of the United States.  By contrast, the taxation used in other countries relies on “territorial” principles that greatly reduce income tax outside of their borders.  As a result, U.S. taxpayers often pay higher taxes than taxpayers located in other countries.  

*The Fate of the ETI:  To offset the taxation burden the U.S. has created a system of tax credits and exclusions such as the Extraterritorial Income Exclusion (ETI) discussed in June’s BLN.  The ETI is the successor to Foreign Sales Corporations (FSC).  The World Trade Organization (WTO) has ruled that the ETI constitutes an illegal subsidy, and is demanding over $4 billion dollars in damages.  See: WTO Seen Allowing EU Sanctions Versus US In Tax Break Row, June 14, 2002 Brussels (Dow Jones).  The ruling has caused the U.S. to consider the current overhaul of its international taxation system. See: Treasury Seeks Curbs on Tax Havens, The Wall Street Journal, (S.W. Ed.), 2002 June 7; Section B:4 (Col. 1).  The American Competitiveness Act of 2002 would repeal the ETI regime and replace it with more than 20 reforms of the Internal Revenue Code that would supposedly enhance U.S. competitiveness.  For example, this Act would: 

*Simplify the complex foreign tax credit rules designed to prevent double taxation; 

*Increase expensing for small businesses; 

*Reform complex interest allocation rules; and 

*Remove punitive rules that reduce a company’s ability to defer taxes on active income earned abroad. 

*Reform of The Inversion Transaction:  U.S. companies have not waited for action in Congress to reduce their income tax burden worldwide.  They frequently use the currently reviled approach to lessening U.S. taxation by engaging in an “inversion transaction.”  The inversion transaction occurs when a U.S. corporation reincorporates outside the U.S. to obtain lower tax rates in a foreign jurisdiction like Bermuda.  Tyco International Ltd. is one highly publicized example of such a move.  An inversion transaction provides two U.S. tax benefits. It enables a domestic company to (1) avoid paying U.S. taxes on income earned offshore (outside the U.S.) and (2) use the “income stripping” to reduce or eliminate its U.S. taxes.  For example, a company can strip income out of U.S. taxes by making excessive payments of deductible interest or royalties to a new foreign parent.  

Tip:  Before attempting a corporate relocation offshore, consult international tax experts on the availability of desired tax benefits.  However, if you transfer intellectual property offshore, note that drug firms, computer companies and others have cut their taxes 5 to 20 percent.  They achieved the savings because companies can receive royalties tax free in entities incorporated offshore (such as in Bermuda).  The proposed legislation described above may have no effect on these transfers. See: A New Twist in Tax Avoidance: Firms Send Best Ideas Abroad, The Wall Street Journal, (S.W. Ed.), 2002 June 24; Section A:1 (Col. 5).

Thanks to my tax partner, George Schutzer, for locating some critical source material for this article.

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3. Surveys Demonstrate That Leasing Meets Needs of Business

Two recent surveys confirm that leasing equipment meets several key needs of businesses today.  In a study conducted by Financial Executive Magazine and The Equipment Leasing Association (ELA) 85 percent of the companies responding confirmed that they now lease or have leased equipment to meet their business needs.  The survey relied on a range of executives from chief financial officers to purchasing managers.  In a second survey, Compaq Financial Services retained Hill and Knowlton to poll the information technology industry.  That survey found that 74 percent of the 700 respondents planned to lease the same or more information technology assets in 2002.  Just over half of the respondents said that the downturn would affect their leasing while 49 percent said that the downturn would not affect their plans.

In marketing leasing as a financial tool, these surveys provide invaluable insights and interesting comparisons. The surveys in part focus on the benefits of leasing to business.  Each survey asked the main reason why companies lease.  Here are some data points and general (not empirical) comparisons:

Tip:  As a lessee, in deciding whether to lease, examine the benefits of leasing set out in the chart above.  As a lessor, consider asking your lessee about his or her financing needs and use the findings in these surveys to demonstrate the value of leasing.  Discuss and demonstrate how leasing can create more cash flow and assist in managing assets. Keep in mind that both surveys found strong support that leasing helps lessees obtain and manage the latest business equipment while lowering costs. 

Remember:  Perhaps the most important point in these surveys is that leasing is widely accepted and used, even in a slow economy, for good business reasons.

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4. Will the Bad Acts in Corporate America Ever Stop?

 “A startling stream of accounting scandals and worries about jobs helped push Americans' confidence in the economy down in June to a four-month low.  Economists worry that fallout from the latest accounting scandal, involving telecommunications giant WorldCom Inc., could not only jolt confidence but also chill consumers' willingness to buy.” 

*Editorial Comment:  This statement in a Wall Street Journal Online News Roundup illustrates the enormous negative impact of corporate America’s propensity to hide the truth and break the law.  The fallout continues with the indictments in June alone of former chiefs of Tyco International Ltd. (state tax evasion), ImClone Systems Inc. (insider trading) and Rite Aid Corp. (overstating earnings).  According to the New York Times, commercial bankers also face investigations for financing Enron’s “off-the-books partnerships” in which some of the bankers were themselves investors.

The bad news has apparently diminished the availability of top candidates for chief executive officer positions.  The reluctance by some executives results in a brain drain of talent and experience from corporate suites.  Many executives who consider jobs as corporate titans of public companies, once a dream job, have started to conduct extensive and unprecedented due diligence of companies before taking the position.  See: Fearing Scandals, Executives Spur CEO Job Offers, The Wall Street Journal, (S.W. Ed.), 2002 June 27; Section A:1 (Col. 1).  The sheer volume of bad acts has led commentators and investors to question whether we have just seen the “tip of the iceberg” of undisclosed wrongdoing. See: Why the Bad Guys Of the Boardroom Emerged en Masse, The Wall Street Journal, (S.W. Ed.), 2002 June 20; Section A:1 (Col. 6).  It seems as though the travesties of Enron and Arthur Andersen have unleashed a torrent of corporate bad news that will never end.

A great toll that we have suffered in this crisis is our loss of confidence in our institutions.  At a time of increasing challenges in our economy and national security, Americans distrust the integrity and reliability of U.S. corporate executives, brokers and government entities. See:  Americans Distrust Institutions in Poll, The Wall Street Journal, (S.W. Ed.), 2002 June 13; Section A:4 (Col. 1).  Many proposals and regulatory reforms have been, and will continue to be, made to solve these problems.  But the proposals may fail to address the critical issues. The standards of behavior for executives should be refocused on basic values of integrity, accountability and adherence to the rules. We should demand that businesses operate honestly and disclose performance accurately.  Compensation should reward true results. 

Rededicating our efforts to these ideas is not merely a matter of doing "good;" it is also very much about making money by doing what’s "right."  As Felix Rohatyn, former managing director of Lazard Freres and a former U.S. Ambassador to France, recently said: 

“Of course, ultimately rules are no substitute for ethics.  I believe that our corporate world and our financial markets will ultimately reward ethical behavior -- and (as we are now seeing) punish those who are guilty of questionable practices.  Ethics will turn out to be more than a moral imperative; it will turn out to be good business. It will sell at a premium.”  See: An Agenda for Corporate Reform, The Wall Street Journal, (S.W. Ed.), 2002 June 24; Section A:16 (Col. 5).  

Mr. Rohatyn has a good point.  Our economy and companies would benefit by taking his views seriously. 

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5. Rating Agencies Extend Review Beyond the Numbers to Evaluate Credit Quality

The continuing wave of accounting, disclosure, fraud and energy trading scandals has forced the rating agencies to find better ways to judge the risks of rated companies. 

Moody’s Investors Service has decided to look more at quality of financial accounting and of corporate governance.  Moody’s will also focus on the “transparency” of corporate disclosure.  To do so, Moody’s plans to form special teams that will write up each rated company on issues including the independence of directors and the depth of the auditing committee’s oversight. See: Moody’s Rethinks Evaluation Process (Dow Jones Newswires), June 14, 2002. 

Tip:  As a lessor or lender to rated credits, look for Moody’s to provide additional reports that you should use in your credit write-ups to avoid surprises on the true creditworthiness of your customer.

Moody’s is not alone in this struggle to cope with surprises from rated issuers.  Doubts about the energy trading business have triggered intense scrutiny by each of the rating agencies.  Standard & Poor's, Fitch, Inc., and Moody’s have all had to reconsider their approach based on the trading abuses by Dynegy Corporation, Williams Corporation and Reliance Resources Inc.  See: Doubts Emerge on Business of Trading Electricity, New York Times, June 17, 2002  

Standard & Poor’s has indicated that it would enhance its analysis of an energy company’s liquidity, scrutinize its capital structure and view energy trading based on the origin of the company.  See: Credit Agencies Find Obstacles In Effort to Rate Energy Traders, The Wall Street Journal, (S.W. Ed.), 2002 June 13; Section A:4 (Col. 1).

Prediction:  As the rating agencies try to cope with the crisis of confidence, watch for new subjective and far-reaching rating methods.  Some industry representatives believe that the rating agencies are over-reacting to the abuse of the system by a limited segment of the industry. Don’t expect the increased scrutiny to subside anytime soon.  

Tip: As a lessor or lender, consider loan and lease structures that adjust your rates or fees for downgrades or upgrades in credit risk.  Remain alert to potential energy trading activity or merchant energy power plant structures that don’t offer you reliable cash flow.  When making investments, bear in mind that some analysts see power companies as corporations with heavy debt and weak cash flow.

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6. Five Stages of a Successful Turnaround: Saving a Company From Bankruptcy

The economy has produced vastly different views of the success or failure of private companies this year.  On one hand, PriceWaterhouseCoopers estimates in its Phoenix Forecast that 10,800 private companies will file for Chapter 11 protection in 2002.  On the other hand, The Grant Thornton Survey of Middle-Market Business Owners (Spring 2002) suggests that 92 percent of the middle market businesses are optimistic about the growth of their businesses in 2002.  In any event, according to the Turnaround Management Association (TMA), lenders have continue to maintain tight credit for under-performing or distressed businesses.

For troubled businesses, the key to averting bankruptcy is early intervention by the right turnaround managers.  Decisive action must be taken by a troubled company to avoid massive drain of cash flow, loss of key personnel, defaults under loan or lease agreements and defections of important customers.  

Remember:  No two companies are alike.  One formula does not fit all companies.  The appropriate steps and stages of a turnaround depend on the individual company.  You must factor in the nature of the business, the skills and personalities of the senior management, the timing of the intervention, the economic underpinnings of the industry of which the troubled company is a part, and the particular obstacles the company faces.

The TMA suggests five stages of a turnaround.  The following list covers the fundamentals of a turnaround based in part on the TMA approach and personal experience:

1. Stage One: Replace Top Management.  After hiring an appropriate turnaround manager, quickly review the performance of top management and board members who presided over the trouble situation without identifying and implementing appropriate solutions.  Replace them with people who have the experience to lead the turnaround and, ideally, lead the company into a successful future thereafter. 

2. Stage Two: Analyze the Troubled Company.  Promptly evaluate the chances for the company to survive and the reasons for its distress.  Identify the core businesses, arrange adequate financing, and assess the personnel needs.

3. Stage Three: Implement an Emergency Plan.  Make the changes immediately that preserve cash.  For example, reduce costs, trim debt, increase working capital, sell assets, and stop offering unprofitable products or services.

4. Stage Four: Restructure the Company.  Once you stop the losses and stabilize or even increase cash flow, then you adjust operations to become competitive and profitable again.  For example, you should correct the mix of products or services and continue to correct the mix of people who can add the most value to the company as it recovers and returns to profitability.

5. Stage Five: Pursue Growth and Normal Operations.  Once you have reached this stage, the company should be improving its financial ratios, shifting its psychology to success instead of survival, and implementing growth strategies.

For more detailed discussion of these five stages, see Stages of a Turnaround from Fleet Capital, a FleetBoston Financial Company. 

Tip: The TMA maintains a list of sites of services relating to trouble companies.  These services include accountants, appraisers, liquidation companies, lenders, collection groups, lawyers, investment advisors, turn around managers and even venture capital investors who can help in a turnaround or liquidation.  For more information, you can contact my partner, Bruce White, who practices bankruptcy law and has extensive experience in turn around management situations.

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7. Leasing 101: The "Hell-or-High Water" Clause: A Critical Provision in Leasing

If I were going to pick one provision in a lease that lessors don’t negotiate, or rarely do, it’s the so-called “hell-or-high water” clause.  Sometimes referred to as the “net lease” provision, this clause says that lessees must pay their rent no matter what (that is, come hell or high water!) 

A very short form of this clause may read as follows:

“this Lease is a net lease and Lessee cannot cancel this Lease except as expressly set forth in this Lease.  Lessee’s obligations shall be absolute and unconditional.  Lessee shall pay rent without reduction, abatement, diminution, counterclaim, set-off, defense, recoupment, deferment or other limitation, regardless of the acts or omissions of Lessor, any failure of the property to perform, any interruption, prohibition or loss of use of the property or for any other reason whatever.”

Why do lessors or lenders care so much about this clause?  In short, this clause enables lessors to enter into leases or buy leases from other lessors with the assurance that lessees must pay them for their financial investment regardless of any problems with the equipment or the actions of vendors or lessors.  Similarly, lenders make loans secured by leases and the property covered by leases because the lenders can depend on a stream of reliable, uninterruptible lease payment to service their debt.  Their willingness to lend money greatly increases the availability of money for leases in the marketplace.  This clause enables lenders to stay in the money business and stay out of the equipment business.  In short, the hell or high water clause makes leases “financeable” for lenders. 

Article 2A of the Uniform Commercial Code sanctions this concept for finance leases in Section 2A-407 with the following words:

In the case of a finance lease that is not a consumer lease the lessee's promises under the lease contract becomes irrevocable and independent upon the lessee's acceptance of the goods (such as equipment). 

A finance lease has special attributes beyond being a lease under Article 2A.  It involves a lessee, lessor and supplier and limits a lessor to the financing function.  

Here is the key under Section 2A-407: Once a promise by the lessee becomes “irrevocable and independent,” the lessee can’t undo its obligation to the lessor no matter what.  The lease is “effective and enforceable between the parties, and by or against third parties including assignees of the parties.”  In other words, when a lessor assigns (transfers) a lease or its rental stream to someone else like a lender or a lessor, the assignee (the recipient) knows that the lessee must pay rent in all circumstances.  As stated in Section 2A-407(b) the lease “is not subject to cancellation, termination modification, repudiation, excuse, or substitution” without the consent of the lessor.

Though this result may seem harsh for lessees, the courts do enforce the hell-or-high water obligation.  In Leasetec Corporation v. Orient Systems, Inc., 85 F. Supp. 2d 1310 (S.D. Fla. 1999), the lessee entered into a lease with a hell-or-high water clause in it.  Although the lessee did not take actual delivery of the equipment, the court required the lessee to make the payments.  Score one for the hell-or-high water clause! Also see: Colonial Pacific Leasing Corp. v. McNatt, et al., 268 Ga. 265, 486 S.E.2d 804 (1997).

Tip:  As a lessor, do not enter into a lease without a strong hell-or-high water/net lease provision.  As a lessee, make sure you:

*Really want to lease the property (leasing has many advantages);

*Fully accept the risk that you cannot stop paying your lessor rent no matter what; and

*Have recourse against the vendors or sellers if your (new) leased property doesn’t work right.

Remember:  A lessor usually only makes one promise or warranty - to let a lessee quietly enjoy the use and possession of the leased property so long as the lessee doesn’t default.  If a lessor breaches this promise, a lessee may still sue the lessor for damages even if a hell-or-high water provision appears in a lease.  

Reality Check:  Despite these requirements, if the lessor is also the manufacturer or a close affiliate, lessees have been known successfully to negotiate a solution to equipment or service problems, in part, by refusing to pay rent. However, I would not suggest that approach as lessors often respond with default notices and the exercise of remedies, such as repossessing the leased property, as a result of non-payments of rent under a net lease.

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8. Events and Speeches on Business Aviation; Training Offered

*Mayer and Slater Speeches on Business Aircraft Worldwide:  My partner, Rodney Slater, Former Secretary of Transportation, and I will be speaking at the 7th Annual business aircraft conference entitled “Evaluating Corporate Aircraft Transactions & Fractional Ownership Interests.”  Sponsored by the Strategic Research Institute (SRI), this conference will be held on Thursday, July 11 and Friday, July 12 in New York City."  On Friday, July 12, 2002, I will be moderating an international panel on “Exploring Foreign Markets: Asia, Europe and Latin America” and Rodney will be delivering the luncheon Key Note Speech.  Please join us.  For information/registration, contact SRI at http://www.srinstitute.com/cx352 or call (888) 666-8514 or (646) 336-7030. 

*Training Offered.  To help you improve your business, I offer private training seminars at your designated location tailored to your specific needs.  My interactive and informative approach relies, in part, on my book, Business Leasing for Dummies (BLFD)®.  You can propose a customized format for your training ranging from a three-hour course to a two-day course.  The course covers a broad range of topics from the basics of leasing for beginners to strategic planning for senior leasing executives.  Just call me at (214) 758-1545 or e-mail me at dmayer@pattonboggs.com to discuss your needs or interests

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9. Web Sites and Other Good Stuff

Here are some informative and useful sites that combine technical information on aircraft with general corporate and personal interest sites:

*Passports in a Hurry.  Summer is here and you plan to leave for Europe or beyond, that is, until you realize that you don’t have a passport or a current one.  Solution: panic? Nope. At “Passport Information” available at http://www.travel.state.gov/passport_services.html you can find locations, forms and rules about passports.  You can usually get a passport in six weeks.  However, if you live in one of the 13 large cities with passport agencies you can visit http://www.travel.state.gov/passport_expedite.html and obtain passport information about expedited processing within two weeks for $75.  Just show up in person at your local Passport Office and demonstrate that you will be leaving soon.

*Market Values Galore on Commercial Aircraft. Do you need some in-depth information about aircraft values and costs?  At http://www.aircraftvalues.net/ you can get desktop appraisals, lease rate analysis, historical value data and value trend analysis about commercial aircraft.  You can subscribe to a detailed monthly report called Aircraft Value News for $897 (25 issues).  For more information, call (888) 707-5812.  This publication is a part of PBI Media, LLC available at http://pbimedia.com/site.htm which writes about nine industries including aviation finance, defense, broadband and telecommunications.

*Fortune’s 100 Best Companies.  In spite of the difficult time of cuts and layoffs, Fortune Magazine has once again identified companies at http://www.fortune.com/lists/bestcompanies/ that fit its profile of the 100 Best Companies to Work For.  Fortune gave companies credit for coming up with creative ways to keep employees satisfied, and for offering generous severance and compassion when they had to make cuts.  This site also includes the Fortune 500, the Global 500, the America’s Most Admired Companies (a challenge to find in today’s world) and the 100 Fastest Growing Companies.

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10. A Message From the Publisher, David G. Mayer

*Issue of the Month.  

This month I offer my editorial comments in Item 4 on one of the most significant and publicized corporate sagas that I have ever seen--the continuous disclosures of fraud, abuse and wrongdoing in corporate America.  I thought long and hard about discussing these issues in BLN, but decided that they merit special attention.  Please let me know your thoughts about my comments and if you want me to continue to offer my editorial views from time to time on important issues.

I have also broken down my message in three parts to make it easier to read. The other two parts consist of an update on BLN and a playback of your recent feedback on BLN.

*About Writing BLN 

This month marks the 7th issue of BLN.  This newsletter has been a real challenge to present each month.  Like my book, it has taken more time than expected.  But I enjoy this work.  It keeps me very current on legal and business issues, including leasing and financing. It also enables me to provide you, my clients, colleagues and friends, with useful business and legal strategies. Feel free to call me to discuss your views.  I value the opportunity to build relationships with you. 

As you may be aware, I spend a substantial part of my legal practice in business transactions that include buying, selling, financing, developing and leasing property of all kinds.  The property includes aircraft, energy, facility and technology assets. At Patton Boggs we also negotiate fractional ownership of business aircraft, close vendor programs and underlying transactions, handle tax-exempt and federal leasing deals, complete portfolio acquisitions, assist in syndications of deals of all sizes, and much more.  We also spend a substantial amount of time working out troubled deals and appearing in bankruptcy cases.  For example, my partner, Clifton Jessup, has played a significant role in the Arizona Baptist Foundation Bankruptcy case against Arthur Andersen LLP.  The Foundation settled with Andersen for $207 million in damages due to Andersen’s failed audit.

*What BLN Readers Have to Say 

Thanks again for reading BLN and for your feedback. One BLN reader wrote recently: "I was given a copy of your e-mail [newsletter].  It was very informative and I would like to be added to your distribution…."  Another BLN reader wrote: "You have an excellent, well-written, entertaining […newsletter].  It’s easy to recommend it." 

Keep the comments and suggestions coming!

I extend a special thank you to my editors at Patton Boggs LLP for their comments on this edition: Sheila Pedersen, Adrian Nicole McCoy and Jennifer (Surles) Miller.

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David 

David G. Mayer 
Patton Boggs LLP
2001 Ross Avenue
Suite 3000
Dallas, Texas 75201
(214) 758-1545 (phone)
(214) 758-1550 (fax)
E-Mail: dmayer@pattonboggs.com
© David G. Mayer 2002

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