1. Rudolph
Giuliani Inspires ELA Convention with His Six Principles of
Leadership
His leadership,
action and courage on and after the tragedy of September 11 inspired
the world. Rudolph Giuliani, the man and the former mayor of New
York, likewise inspired the members of the
Equipment Leasing
Association (ELA) during his speech at the 41st National
Convention. Giuliani brought his skills, sense of humor and concepts
of leadership, honed by his life-changing experiences in New York
City, to the ELA membership as the keynote speaker on the first day
of the convention. Consistent with the ELA's theme, "Leadership
Matters," Giuliani shared his six principles of leadership with us.
Giuliani developed many of his ideas
before September 11, reflecting his experiences growing up, serving
as a prosecutor, U.S. Attorney and mayor of New York. But the events
of September 11 melded and reshaped some of his thinking, helped him
communicate his emotions and enabled him to pull upon his gifts to
act effectively as a leader to a city in great need of direction.
The ELA members appreciated him and
his words. As an industry, leasing faces enormous challenges
including consolidation, funding shortfalls, maturing products and
markets, talent losses and increasing credit problems. Fostering new
leaders and acquiring fresh talent ranks high among industry
priorities. The members listened intently as Giuliani described the
following six principles of leadership:
1. Establish values,
philosophies or beliefs at your core from which you will not
deviate.
2. Have Courage. Courage is
not the absence of fear; it's the management of fear. When you
feel fear, said Giuliani, you are just human, but you manage your
fear to accomplish your objectives.
3. Develop and express optimism.
Giuliani said, using his dry sense of humor: "You can be an
optimist or a pessimist. A pessimist says: "Things are awful;
things are terrible, follow me…Who," he asked, "will let that
person lead?" He expressed optimism on September 11 that New York
would rebuild and overcome the terrorist attack. He urged people
to get out, go to restaurants and stores. He implored New Yorkers
not to allow fear to hold them inside.
4. Prepare relentlessly.
Accordingly to Giuliani, leadership does not just emerge, it's
created. From his perspective, leaders think harder, prepare
harder and plan for the worst. Then they can handle whatever
happens.
5. Surround yourself with great
people. Giuliani said that being in charge of something is "a
time of ultimate humility."You look at yourself and see your
weaknesses. You surround yourself with great people to deal with
your weaknesses and balance your strengths. By gathering his
commanders physically in one place on September 11, together they
managed an escape from a collapsing building at the area of the
World Trade Center. Giuliani demonstrated the collective value of
having the right people.
6. Know how to communicate.
This is the easiest part if you adhere to the principles above.
Communication naturally follows and his remarks showed how he has
learned to communicate with sincerity and effectiveness.
*Comment:
The test for the leasing industry is to apply Giuliani's six
principles of leadership everyday to meet the challenges at hand. I,
for one, have seen this industry overcome difficult times and thrive
through hard work, intelligence, creativity and communication.
Strong leadership is part of the mix, and by bringing Giuliani
before the membership the ELA clearly recognizes that "leadership
matters."
You can learn more about Giuliani in
his new best selling book titled
Leadership. Giuliani wrote most of his book before September 11.
Disrupted by those events, he did not resume work on the book until
several months later. That disruption gave him time to cope with the
crisis in New York and to rethink and rewrite some of his most
important thoughts. His book records some of the harrowing events he
faced during the crisis.
[Top]
2. IRS Condemns "LILOs"
as Abusive Tax Shelters
The Internal Revenue Service (IRS),
in
Revenue Ruling 2002-69 released in October, reaffirmed its 1999
conclusion in
Revenue Ruling 99-14 that a taxpayer may not deduct rent or
interest paid in connection with a lease-in/lease-out or LILO
transaction. The 1999 ruling was based on the lack of pre-tax profit
potential or business purpose. The new ruling takes a different and
possibly more troubling approach.
Deductions Denied; Broad Scope
The new ruling denies deductions on the grounds that LILOs in
substance confer only a future interest in property to the head
lessee (that is, the lessee of the top or initial lease). The IRS
asserts that a LILO confers only a future interest because in the
early stages of a LILO, the head lessee confers in a sublease all of
the rights and obligations that it received under the head lease.
*Remember:
The IRS's word is not necessarily law. Revenue rulings reflect
the IRS's view of law; courts do not have to follow revenue rulings.
Nonetheless, courts often give great weight to published
administrative positions unless they clearly conflict with statutes,
statutory intent, or case law.
*Warning:
The scope of Revenue Ruling 2002-69 is broad - so broad, in fact,
that the IRS' position could be applied to a sale and leaseback
transaction. The ruling states that its "analysis and holding apply
as well to LILO transactions that involve or include domestic
tax-exempt or tax-indifferent entities."However, Revenue Ruling
2002-69 notes legal authority for distinguishing sale and leaseback
transactions. Any person structuring or participating in a
lease-leaseback transaction should take a close look at the ruling.
Transaction Structure
In Revenue Ruling 2002-69, a foreign municipality (FM) in the head
lease leases property that it has owned and used to a U.S.
corporation (X). X immediately subleases the property back to FM.
The head lease has a 40-year term. The sublease has a primary term
of 20 years. The head lease requires X to make two payments to FM, a
large upfront payment and a post-payment at the end of 40 years that
has a low discounted present value. X makes the upfront payment by
borrowing 60 percent of it from Bank 1 and 7 percent from Bank 2 and
using its own resources for the remainder. Both loans are
non-recourse and are fully amortized over the 20-year primary
sublease term. The amount and timing of the debt service payments
mirror the amount and timing of the sublease payments.
Upon receipt of the head lease
payment, FM deposits 60 percent in an account with an affiliate of
Bank 1 and 7 percent in an account with an affiliate of Bank 2. The
interest earned on the deposits equals the interest due on the loans
(often called "defeasance accounts"). The deposit with Bank 1 is
pledged to pay the Bank 1 debt. The Bank 2 deposit is not pledged,
but the parties understand that FM will use the account to pay the
rent.
*Tip:
The exact matching of interest rates does not appear to be a
crucial fact. The principles of the ruling would appear to apply if
FM deposited a greater sum that earned interest at a lower rate, but
in an amount sufficient to allow the deposit and accrued interest to
cover the rental payments used to pay debt.
Ruling Finds No Economic Risk
The ruling asserts that as a result of this arrangement, "X's
obligation to make the property available under the 20-year primary
term of the Sublease is completely offset by X's right to use the
property under the Headlease."The ruling states that X's economic
risk under the Bank 1 loan is eliminated through the defeasance
arrangement and the economic risk under the Bank 2 loan "is
substantially reduced. Revenue Ruling 2002-69 observes, that
"neither bank requires an independent source of funds to make the
loans, or bears significant risk of nonpayment."
The transaction also includes
provisions that effectively place a "collar" around the post primary
term risk. FM has a fixed payment option that if exercised would
extinguish the final head lease payment to FM. If that option is not
exercised, X can compel FM to rent the property for 10 years.
After legal analysis, the ruling
asserts that the head lease and sublease "impose offsetting
obligations that must be disregarded, regardless of whether other
components of the LILO transaction are respected." The ruling states
that the sublease interest retained by FM is of the "same nature as
the Headlease interest conveyed to X. "Therefore, the transaction
remains at best "a transfer of funds from X to FM in exchange for
FM's obligation to repay those funds and provide X the right to
begin to lease the property in 20 years."
No Current Leasehold Interest
Exists Despite Structure
X is denied a current deductions for the head lease rent because X
does not have a current leasehold interest in the property. The
ruling allows the equity portion of the head lease payment to be
deducted over 20 years beginning after the end of the primary
sublease term. The ruling also holds that under the circumstances of
this case, the loans are also disregarded.
*Warning:
The denial of current rental deductions appears to turn
almost exclusively on the lease-leaseback arrangement. The financial
arrangements do not seem to affect the ruling outcome. The ruling
arguably puts at risk the rental deductions of a head lessee in any
arrangement in which property is leased back to a head lessor.
*Prediction:
The IRS' legal analysis - and the extent to which it can be applied
to transactions other than LILO transactions that are similar to the
one described in the ruling - is likely to trigger challenges in the
coming months. The IRS apparently intends to freeze the market for
these transactions. However, despite the fuzzy scope and intent of
the IRS, a standard leveraged or single source lease, subject to
subleases, should not be affected.
Thanks to my tax partner,
George Schutzer,
for his assistance in writing this article.
[Top]
3. FASB's
Consolidation Project Clouds the Meaning of a "Special Purpose
Entity" or "SPE"
Enron allegedly used and abused
special purpose entities (or SPEs) in its off-balance sheet
partnership structures. Investors and employees have suffered untold
losses from Enron's alleged actions. The Financial Accounting
Standards Board (FASB) intends to stop these abuses under pressure
from the Securities and Exchange Commission and private sector
critics. The FASB's tool for change is the SPE consolidation
project, which will cause many SPEs to be consolidated into the
so-called "primary beneficiary" (the entity the receives the primary
benefits and takes the predominant risks of the SPE). To effectuate
its goals, the FASB expects to issue a final
"Interpretation" of ARB 51 by the end of 2002 after further
ongoing deliberation of its terms.
A special purpose entity involves
many legal, tax and accounting concepts, and the term defies precise
definition. An SPE may also be called a special purpose vehicle (or
SPV). In securitization transactions, you may see the term QSPE (or
qualified special purpose entity). QSPEs meet special rules under
Financial Accounting Statement No. 140 created by the FASB to keep
the entities off balance sheet.
In the recent effort by the FASB to
issue a new
Interpretation on the consolidation of SPEs, the FASB describes
a "substantive operating enterprise" (SOE) as any entity other than
an SPE. An SOE, according to the FASB, "conducts business operations
other than those performed for it by an SPE, has employees, and has
sufficient equity to finance its operations without support from any
other enterprise or entity except its owners. A substantive
operating enterprise usually issues financial statements of its
own." An SPE must therefore be something of the opposite, but the
real meaning of the term remains unclear. To keep you confused, the
FASB has now reportedly dropped its use of the terms SOE and SPE,
but the concepts will arise in determining who the "primary
beneficiary" is in a transaction, and for other purposes. Despite
the actions on the FASB's part, the FASB does not intend in the
consolidation project to change the valid legal purpose for creating
an SPE, even though many
SPEs will be consolidated with another entity for accounting
purposes.
So what legal form does an SPE take?
In leasing or financing transactions, you most often see SPEs in the
form of grantor trusts, limited partnerships or corporations. Other
types of entities work as SPEs such as limited liability companies,
business trusts or general partnerships.
An SPE is an entity with separate
existence and a limited purpose. For example, a corporation or
limited partnership (SPE) may lease and operate a power plant or a
facility. A grantor trust (SPE) frequently acts as the owner/lessor
of an aircraft which it leases to an airline. SPEs usually serve as
the vehicle for structured-finance transactions such as
securitizations or credit tenant leasebacks. These entities
typically operate separately from their sponsors. This remoteness
often protects the entity from being "substantively consolidated" in
bankruptcy of its sponsor and reduces credit risk for its lenders.
In financial terms, lower credits risk often translates into the
cheaper borrowing or leasing costs. The SPE also can shield the
sponsor and others from potential liability for operations of the
SPE.
*Remember:
An SPE exists solely for a limited purpose, often as stated in its
charter and transaction documents. An SPE is often a tax neutral,
off-balance sheet, pass-through vehicle, which isolates assets from
its sponsors and reduces liability, credit and bankruptcy risk for
its lenders and lessors (among others).
[Top]
4.
Credit Crisis in Electricity Industry Jolts Lenders
as More Defaults Are Expected
Time may be running out for merchant
energy and other electricity companies according to a recent report
by Standard & Poor's. The report, covering 320 companies, discloses
that credit agencies downgraded 135 utility holding companies and
their subsidiaries this year. The downgrades amount to nearly four
times the number that occurred for the same period last year. The
credit crisis seems to be accelerating as 57 out of the 135
downgrades have occurred since July 2002. See: Electricity
Industry Hits Credit Crisis, The Wall Street Journal
(S.W. Ed.), October 15, 2002; Section A:2 (Col. 3).
Part of the problem results from
energy companies receiving lower than expected prices from wholesale
energy sales. With less cash flow, debt has been growing as a
proportion of the capital structure of energy companies and energy
companies have had increasing difficulty in servicing their
costly debt.
As a reaction to this credit crisis,
energy companies are beginning to break themselves up into parts.
These parts include highly leveraged merchant plants, specialty
companies and regulated utilities. As illustrated by TXU Europe's
recent
sale of assets in Europe, energy companies are selling assets to
avoid debt covenant triggers, defaults and bankruptcies. See: TXU
sells most of U.K. operations, The Dallas Morning News
(October 22, 2002; Section D:1 (Col. 2).
The prospects for the electricity
industry seem troublesome at best given "the current cash crunch,
investor malaise and poor prospects for assets sales." See: S&P
Predicts New Defaults at Merchant Energy Firms, Poor Asset Sale
Prospects, Global Power Report, September 5, 2002, Page 1. Even the
States have increased their scrutiny of utilities such as NRG Energy
Inc. in Minnesota as more utilities have been downgraded to "junk"
status. See: States Step Up Watch on Utilities, The Wall
Street Journal (S.W. Ed.), August 10, 2002; Section A:2 (Col.
1).
*Tip:
Although not all utility companies face such difficult credit
issues, the general distrust of the energy industry can partially be
tied to the collapse of Enron Corp. In response to the current
crisis, both energy companies and their creditors should evaluate
their respective credit risks and communicate with each other ways
to address problems before more defaults or bankruptcies occur. As a
lender or lessor, you should immediately consider initiating the
following due diligence review steps to manage a credit crisis:
- Identify troubled projects
or investments in energy companies in your portfolio. Subject each
project to a full credit and risk management review (including
insurance coverage).
- Review each off-take contract
such as a power purchase contract. Determine the extent of your
credit exposure for non-payments. Validate operational projections
and business plans.
- Reassess the value of your
plant. The value of power
plants has fallen dramatically in some cases, and the collateral
value represented by the "hard" assets may be impaired from a
business and accounting sense. Know what to expect in an orderly
liquidation or sale scenario of a troubled project.
- Confirm the availability of
support services and other
resources should you have to foreclose or repossess on a project
and need to operate the project separately from its current
sponsor and/or operators.
- Request a legal review of real
estate and other project documents.
Focus on correcting any errors that may strengthen your position
in a bankruptcy or default. Be certain you have a complete set of
fully-executed project documents. Confirm that all permits,
approvals and consents remain current.
- Recheck your transaction
documents to assure that
your ownership rights or security interests in the energy assets
remain in tact. Remember that Revised Article 9 has changed some
methods of perfection of security interests in certain collateral
such as deposit accounts. Recheck reserve accounts to ensure that
you have taken necessary steps, due as of July 1, 2002 in most
states, to correctly perfect existing or future security
interests.
As you know, these projects take many
disciplines to structure and close. You will need the same and
additional skills to cope with a credit crisis.
*Warning:
As a lender or lessor, do not wait for a notice of trouble from your
customer. Consult with your project teams now, including tax, legal,
insurance, credit and other resources, to manage through these
challenging times. Consider doing an independent, outside review of
your transactions that takes a comprehensive approach to protecting
your business investment. As an energy company (borrower or lessee),
talk to your lenders and lessors at the earliest sign of trouble.
Avoid surprising them. Work on covenant waivers. Avoid rate,
covenant or repayment triggers if possible. Provide a realistic
assessment of your business plans, including your current
projections. Given the general distrust in the industry, consider
the adverse consequences of less than full and accurate disclosure
to your lenders and lessors.
[Top]
5.
Businesses Do More with Less as they Reduce Capital Expenditures
Companies continue to significantly
reduce capital expenditures. (Capital expenditures refer generally
to investment in plant (structures), equipment and technology.)
These reductions result not only from weak demand for their products
but also from over-capacity in their operations from previous
capital expenditures.
Due to this over-capacity, investment
activity often means that companies consolidate the use of plant and
equipment, reduce square footage in their operations, reuse old
equipment, acquire smaller equipment and improve efficiency and
quality to cut costs. For example, General Motors (GM) has
reportedly reduced factory square footage. This reduction enables GM
to use smaller equipment called tuggers to move parts. These tuggers
eliminate the need for more expensive forklifts required for larger
factory areas.
Other companies spend less because
they have created production processes that bypass the use of
various types of machinery. For example, United Electric Controls
avoids spending money on machinery by making special parts out of
plywood and then developing something more permanent without
intermediate production equipment.
What does this mean for the leasing
and financing business? The news, of course, isn't encouraging. When
businesses do more with less machinery and equipment, leasing and
financing companies naturally have fewer assets to finance. In 2001,
capital spending declined 5 percent and is apparently on track to do
so again this year. In September manufacturing companies in the
United States operated at 75 percent of capacity. Production is down
by 30 percent from pre-recession peaks in aerospace and oil and gas
drilling. See: A Cloud Over the Recovery: Businesses' New Frugal
Ways, The Wall Street Journal (S.W. Ed.), October 16,
2002; Section A:1 (Col. 3). Most chief executive officers think
commercial construction and
capital spending at best will stabilize or even fall next year.
*Deal
Opportunities: Although overall capital spending is down,
leasing and financing companies can still find deals if they look in
the right places and for the right types of assets. You may find
opportunity by looking for:
- sale-leasebacks where businesses
need to raise cash;
- capital improvements to older or
existing equipment to make it more efficient;
- smaller, more efficient factory
and moving equipment (such as the tuggers used by GM);
- cheap technology
equipment/software with potential upside and attractive rate
spreads that your customer may cherry-pick from failed telecom
companies; and
- overseas transactions where
companies shift capacity to obtain cheaper production costs.
As the economy expands, the
over-capacity should diminish. However, you may have to focus your
efforts in the near term on identifying deals that enable frugal
companies to their increase efficiency and productivity.
*Tip:
If you want to explore economic data from 12 business districts
around the country, including your markets, look at the Federal
Reserves
Beige Book (last updated October 23, 2002). Collected by the
Federal Reserve, the book summarizes comments received from business
and other contacts outside the Federal Reserve. The Beige Book is
not a commentary on the views of Federal Reserve officials. In
general, business remains sluggish, but the Beige Book offers
information that you may use in your business planning.
[Top]
6. Leasing
101: What is a "Power of Attorney"?
A
power of attorney is a legal instrument by which one person
delegates legal authority to another person. The person who signs a
power of attorney is sometimes called the principal. The person who
accepts the power of attorney is sometimes called an agent or
attorney-in-fact.
A principal can authorize the agent to exercise broad legal
authority, or to complete specific actions. The power of attorney
may remain effective for a lengthy duration or a limited period of
time.
You see this legal instrument used in domestic and international
transactions. For example, in some non-U.S. jurisdictions, an agent
can exercise the general management of a company through a power of
attorney. You may also find powers of attorney granted in lease or
loan documents that grant a lessor or lender certain specific rights
and remedies after a default such as repossessing an aircraft
without additional authorization by the lessee or borrower. A power
of attorney can be used in personal matters such as directing health
care or estate planning.
*Warning: Many web sites
offer forms of powers of attorney for your use. Ask your legal
advisors for assistance before selecting or using a form. The
effectiveness and enforceability of a power of attorney depends on
the correct interpretation and application of laws governing these
special instruments.
[Top]
7. Events
and Speeches; Training Offered
Coping with Change: The Effect of
the New Off-Balance Sheet Rules on the Energy Service Industry.
Sponsor: National
Association of Energy Service Companies (NAESCO) Event: Annual
Convention, luncheon keynote address, November 14, 2002; 12:00 p.m.
in Orlando, Florida at the Hyatt Regency Grand Cypress. For
information/registration, contact:
NAESCO or call 202/822-0950.
How the New (Accounting) Rules
Will Affect Lease Financing Transactions. Sponsor: Infocast.
Event:
Unwinding, Restructuring & Consolidating Special Purpose Entities
Under the New FASB Guidelines. Dates and Times: Wednesday,
February 12, 2003; 3:15 p.m. - 4:45 p.m. in New York City (location
to be announced). For information/registration, contact
Infocast
or call (818) 888-4444.
Revised Schedule.
Training Offered. To help
improve your business functions and cope with change involving such
topics as synthetic leasing, 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) ®. We can customize a format
for your training needs ranging from a three-hour seminar to a
two-day course. As a cost savings, we can offer these courses (even
as lunch specials for one hour) by video teleconferencing at a fixed
cost. For example, I can conduct training session on the current
changes at the FASB regarding off-balance sheet financing. Clients
receive more in-depth help in advance planning and structuring of
existing and future deals (an evolving process with FASB).
*Comment:
I understand your inclination to defer staff training during the
budget-constrained times that we now face. But here's the good news:
Your interest in training seems to be increasing, and I am
encouraged that you want to gain the benefit of training without
further delay. The financial services industry is now in the midst
of tumultuous change. Understanding and using change can benefit
your business. Feel free to call me at (214) 758-1545 if you would
like to discuss your needs or interests. Even if you don't train
with me, perhaps I can recommend another training program that works
for you. Training is critical in any event!
[Top]
8. BLN
Briefs
BLN Brief presents
short-takes and updates of current issues. For more information on
these stories, just e-mail me at
dmayer@pattonboggs.com:
- Terrorism
Insurance Deal Approved, Yet Uncertainty Remains. On October
17, 2002, White House and Congressional negotiators reached a deal
"in principle" on federal terrorism insurance. The passage of
bills under H.R. 3210/S. 2600
(insert H.R. or S. bill number) would clear the way for an
estimated $13 billion in new construction projects presently on
hold. See: White House, Congress Reach Agreement On Terror
Insurance, With No Damages Cap, BNA's Banking Report,
Vol. 79 Number 15, October 21, 2002 at page 636 (subscribers
only). Around October 23, 2002, the deal began to break down,
apparently related to the lack of punitive damages caps, making
the completion of terrorism insurance legislation far less certain
this year. See: Terrorism Insurance Still an Uphill Battle
Following November Congressional Elections, BNA's Banking
Report, Vol. 79 Number 16, October 28, 2002 at page 681
(subscribers only).
- FAA Grants Extension of Small
Business Aircraft Exemption. On September 30, 2002, the
Federal Aviation Administration granted an exemption allowing
members of the National Business Aviation Association, Inc. (NBAA)
to conduct certain continuous aircraft inspections and to operate
small aircraft free of certain regulatory restrictions. These
inspections are consistent with FAA safety requirements but free
of certain regulations under the Federal Aviation Regulations.
*Technical
Point: Often referred to as the "NBAA Small Aircraft
Exemption," the
FAA Grant of Exemption 7897 constitutes relief (with conditions)
from 14 CFR Sections 91.409(e) and 91.501(a) to the extent necessary
to:
- allow NBAA members to operate
small civil airplanes and helicopters of U.S. registry under the
operating rules of 14 CFR 91.503 through 91.535; and
- select an inspection program as
described in 14 CFR Section 91.490(f).
This exemption does not authorize
operations to be conducted that are required under Part 135. The
two-year exemption terminates on September 30, 2004. It does not
apply to large or turbojet-powered, multi-engine aircraft. NBAA
members may obtain more information by clicking on:
NBAA
Small Aircraft Exemption.
- Security Interest in
Unregistered Copyrights Perfected Under the UCC.
Judge Andrew Kleinfeld of the 9th Circuit Court of Appeals
(California) recently handed down a surprise decision affecting
intellectual property collateral. He held that a secured party can
perfect its security interest in unregistered copyrights by filing
a financing statement under the Uniform Commercial Code (UCC).
See: Aerocon Engineering v. Silicon Valley Bank, 2002 U.S.
App. LEXIS 18642 (9th Cir. 2002),. In this case, Silicon Valley
Bank maintained its security interest in certain unregistered
copyrights relating to aircraft designs of Aerocon Engineering
despite challenges in bankruptcy court that it did not perfect its
security interest by filing under the UCC. See: Court eases use
of IP to back loans, National Law Journal, September
16, 2002.
*Tip:
Unregistered copyrights may increase in value as collateral for
loans or other obligations because security interests in such
property may be perfected under the UCC (at least in California).
Financing intellectual property may even provide an area of growth
for the leasing industry. See: Intellectual Property: The Leasing
Industry's Future? by Richard D. Crawford, Journal of
Equipment Lease Financing, Volume 20/Number 2 (Fall 2002) at
page 18.
[Top]
A Message From the
Publisher,
David G. Mayer
The ELA Convention
Revisited
I am very pleased to have attended and been selected as a speaker at
the 41st Annual Convention of the ELA held in mid-October in San
Francisco. The leasing industry faces unprecedented challenges. It
has become a mature industry while some of its popular financial
products such as synthetic leases have become subject to intense
public scrutiny, thanks to the Enron debacle. The words "off-balance
sheet" and "special purpose entity" have taken on such a negative
connotation that their valid purposes seem to be escaping us.
According to several members, business is slow for many leasing
companies. Health care leasing seems to be alive and well and some
small-ticket players seem to be having a good year. The results
otherwise vary widely for other companies.
Regardless of these challenges, I
have faith in the intelligence and resourcefulness of the people who
participate in and provide leadership to the leasing industry. At
this convention, Joe Lane stepped down as Chairman of the ELA and
Edward A. Dahlka, Jr. took the reins. Joe is a results-driven and
energetic leader. Joe wrote the foreword to my book,
Business Leasing for Dummies (BLFD)®, and we have worked
together on many projects. His insightful direction will be missed.
Ed Dahlka has a strong track record of sincere, enthusiastic and
effective involvement in the ELA. From my perspective, Ed's
involvement is matched or perhaps exceeded only by his proven
success in the leasing business as the current President of LaSalle
National Leasing Corporation. The ELA is lucky to have leaders such
as these gentlemen. I admire their efforts and those of the many
other qualified and capable leaders in the industry.
Feedback From You
As I spent time talking with members of the ELA at the convention
this year, many of you made an effort to approach me to praise this
newsletter and my book. I truly appreciate your interest. You seem
to like BLN for its content and attractive appearance. It has been
gratifying, to say the least, to watch Business Leasing News
climb the ranks among a large group of quality newsletters. It is
your input that keeps me going and encourages me to continue making
improvements in the quality and presentation of BLN.
In the last few days of October, Alexa.com
indicated that the BLN web site has received more than one million
visitors over the past three months. Stay tuned for some
enhancements on the BLN web site. You will soon be able to access
BLN's home page by clicking on BLN Home.
As always, thanks for reading BLN and for your feedback.
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 almost 400 lawyers located in several US cities with
extensive capabilities in over 50 areas of legal practice that
include leasing, secured transactions, project and mezzanine
financing, bankruptcy, public policy, technology law and much more.
Through my efforts and the efforts of
many others at Patton Boggs, we engage in the legal aspects of
buying, selling, financing and leasing property of all kinds,
including aircraft, energy, facility, technology, real estate and
other transportation assets. We also structure, negotiate and close
fractional ownership of business aircraft, vendor programs and
underlying transactions, tax-exempt and federal leasing deals,
portfolio acquisitions, syndications of all sizes, and much more.
Given the state of the economy, we often assist our clients with
troubled deals and bankruptcies.
Please feel free to call me at (214)
758-1545 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 with you.
Thanks to the BLN Team
I extend a special thank you to my editors at Patton Boggs LLP for
their comments on this edition: Adrian Nicole McCoy, Julie Rivard,
Sheila Pedersen, Steve Reagan, and Tom Stumpf. The technical team of
George Barber and Winston Jackson has provided invaluable support.
Last but not least, Patton Boggs has selected some partners who look
over BLN before it is posted to our website to make it the best it
can be for you. I appreciate their guidance and assistance.
[Top]
All the best,
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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The "For Dummies" part of my book,
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