After months of effort and uncertainty, the Financial Accounting Standards Board ( FASB) issued its final off-balance sheet guidelines on January 17, 2003, called FASB Interpretation No. 46 "Consolidation of Variable Interest Entities" (FIN 46). Created in response to the Enron debacle, FIN 46 provides a complex set of rules and principles interpreting Accounting Research Bulletin No. 51. FIN 46 affects a broad array of assets, entities and transactions (including leasing). It will undoubtedly cause many consolidations that may materially alter financial statements of many companies.

With specific exceptions, virtually every existing or new entity formed in a structured finance transaction, including trusts, special purpose entities and partnerships, must be evaluated to determine whether such an entity should be consolidated by another enterprise. Even certain off-balance sheet assets (without an associated entity) may be subject to consolidation. To read FIN 46 and a related press release, click on FIN 46. Paragraphs referenced here appear in FIN 46.

*Tip: The big four accounting firms have begun to devote substantial resources to understanding and developing consistent applications of FIN 46. You should watch for their publications over the next several months to figure out how FIN 46 works and whether the guidelines affect you and your business.

The new guidelines, as applied primarily to leasing, include the following key provisions:

Purpose: The stated purpose of FIN 46 is to improve financial reporting of "variable interest entities" (VIEs) without restricting the use of VIEs. FIN 46 explains how to spot VIEs and how an enterprise determines whether it should consolidate a VIE (in its financial statement).

Scope: FIN 46 covers a wide variety of entities, assets and transactions including synthetic leases, leveraged leases, single investor leases in VIEs, credit tenant leases and commercial paper conduits, but excludes certain securitizations, non-profit organizations and other interests.

Key Terms to Know: Many new terms have been defined by FIN 46, with the following being essential within the limits of this article:

• variable interest entity or VIE - the entity that an enterprise may consolidate under FIN 46. See: "Leasing 101" below for a more complete description of this term. See: Paragraph 6.
  
  
• primary beneficiary - the enterprise that consolidates a VIE. See: Paragraphs 2(d) and 15. A primary beneficiary absorbs the majority of the expected losses or receives at least a majority of the expected residual returns. See: Paragraph 2(d) and 6.

  Examples: Generally, a senior debt holder with fixed rate returns does not have much variability of returns. Therefore, such a lender appears unlikely to be a primary beneficiary. See: Paragraph B3. On the other hand, a lessee in a synthetic lease often bears the downside risk of the implicit residual guarantee (in favor of lessor) and the upside gain of increased value in the leased property on its sale. In such a transaction, the lessee is the likely primary beneficiary.

  Note: If the holders of variable interests widely disperse expected losses and residual returns, then no single enterprise would be the primary beneficiary (that is, none of the enterprises with an interest in a VIE would have a majority of such losses or returns in that VIE). In such a case, it is possible that none of those enterprises would consolidate the VIE. Wise to possible structuring games, the FASB also noted that you can't avoid consolidation by "arranging for other parties with interests in certain assets to hold small or inconsequential interests in the entity as a whole." Paragraph 12, note 10.

• variable interests - contractual, financial or ownership interests in a VIE that change with changes in such entity's net asset value. Paragraphs 2(c) and 12 and B4. Examples:
  • Equity interests in a VIE
  • Credit risks (including guarantees and puts options to be called on if expected losses occur)
  • Subordinated debt or subordinated beneficial interests
  • Residual guaranties (including implicit ones of a lessee in a synthetic lease) or a subordinated residual interest in leased property
  • Ownership of a beneficial interest in a trust
  • Fee payment rights or a share of residual upside

Fundamental Issues: In the context of leasing, the fundamental issue is whether a lessee, lessor, lender or other participant (adding the interests of related parties of each under Paragraph 16) must consolidate an entity involved in the lease transaction based on:

• Voting control or similar rights in that entity (see: Paragraph 5), or
• In the absence of voting control, whether an entity is a VIE and, if so, whether any of these parties is the primary beneficiary that consolidates the VIE. See: Paragraphs 2(d), 5 and C38.

*Tip: The distinctions between a voting interest entity and a variable interest entity will be critical because that issue determines which standards apply to the consolidation decision. If voting control or similar rights exist, you analyze consolidation based on the guidance that existed prior to FIN 46 on that issue.

Where to Start: For every leasing deal, structured finance asset, portfolio or related entity, take the following four-steps:

• Identify and set aside entities controlled by voting or similar rights (that is, non-VIEs)
  
  
• Examine every other entity used in a lease or financing transaction, each asset with non-recourse obligations (that is, a "silo") and other variable interests, to spot VIEs
  
  
• Determine whether a holder of variable interests in a VIE is the primary beneficiary of the VIE
  
  
• Consolidate or restructure the VIE (that is, the primary beneficiary must restructure the affected interests either to consolidate the variable interests or restructure them, if possible, to keep the variable interests, entities and/or transactions off its balance sheet)

*Warning: Beware of any of the following changes that may shift from one enterprise to another enterprise the status of primary beneficiary of a VIE (such as one beneficial owner in a lessor grantor trust to another lessor beneficial owner in the same trust):

• Significant amendments to charter documents and core transaction agreements
  
  
• Return of equity or subjecting other parties to expected losses
  Example: Assignment of rights or participating interests in a lease transaction by a lessor
  
  
• An entity undertakes additional activities or acquires additional lease assets that may cause other parties to become subject to expected losses
  Example: A VIE acquires a lease portfolio that includes leveraged leases, loans and synthetic leases where other lenders or lessees have potential for expected losses or upside gain

*Remember: You do not consider long-term leases with a VIE in determining a primary beneficiary of that VIE if the lease is made on market terms at the inception of the lease with no residual guarantee or similar feature. See: Paragraph B10. This critical rule should spare properly structured operating or true leases, including credit tenant leases and leveraged equipment leases, from consolidation within a VIE. As a lessor, expect to negotiate requests from lessees to limit or prevent you from transferring or participating your variable interests in lease transactions (such as a beneficial interest in a grantor trust). Lessee will want to avoid changes in the primary beneficiary or reconsidering who is the primary beneficiary. As a lessor, you, of course, often need to have the unfettered right to manage and sell your interests in your financial assets such as leases.

Measurement: FIN 46 requires initial measurement of the assets, liabilities and non-controlling interests of a newly consolidated VIE at its "fair value" at the date the enterprise becomes the primary beneficiary. See: Paragraph 18.

Disclosure: Disclosure is required as to the nature, size, purpose and activities (among others) of the VIE. You must also disclose whether an enterprise constitutes the primary beneficiary or just has a significant variable interest. See: Paragraph 23 and 24.

Result: More information will have to be disclosed by primary beneficiaries regarding leasing and other transactions.

Effective Date: For new VIEs, FIN 46 is effective January 31, 2003. For VIEs created before February 1, 2003, subject to a transition rule in Paragraph 26, public companies apply the provisions in their first interim or annual reporting beginning after June 15, 2003 (that is, July 1 for most public companies). Private companies apply the provisions in their first year-end reporting after June 15, 2003. See: Paragraph 27.

*Warning: FIN 46 presents many new and complex concepts. This article discusses only a few of them, and attempts to suggest examples and applications that require more analysis and discussion. You should promptly involve your accountants and lawyers with knowledge of FIN 46 in an evaluation of your current transactions, portfolios and entities in which you have an interest. Don't forget the effect of the Guaranty Project (See Article 4 below). Start this evaluation now, whether you are a lessee, lender, subordinated debt investor, investment banker, residual interest player, equity investor or a lessor, to assure that, as of the effective dates, you have met the requirements of FIN 46. If you think you may have to consolidate a VIE (or a silo), then you should further consult your advisors to consider alternative structures to minimize the impact on your balance sheet. We have developed some alternative structures and restructuring models. Feel free to call me at 214 758-1545 with any questions you may have.

The National Venture Capital Association reported recently that "(t)he continued weak fundraising levels (in venture capital) reflect the …reserves committed to venture capital funds but not yet committed of …$US 90 billion." In other words, venture firms have a lot of money looking for a good home.

Venture funding generally fell by 35 percent in 2002, finishing at 1998 levels, according to the PriceWaterhouseCoopers/MoneyTree Survey. Venture capitalists remain gun shy about making more mistakes like recent ones on emerging growth companies. As a result, new companies have been forced to offer investors sweet deals they can't refuse. See: Venture Capital's Foul Weather Friends, Manager's Journal, The Wall Street Journal (S.W Ed.), January 14, 2003 Section C:13, (Col. 1).

Universities have pulled back on funding. For example, Yale University recently announced a $10.5 billion cut in endowments for private-equity capital. The lack of investments often comes from a lack of attractive investment opportunities rather than a fear of losses. See: Universities Decline as Reliable Source Of Venture Capital, The Wall Street Journal (S.W Ed.), January 21, 2003 Section C:1 (Col. 6). The flow of deals has been so slow that "(m)any funds are now straddling the line between being able to eventually start another fund and shutting down." See: A Freeze Settles on Some Venture Capital Firms, The Washington Post, December 19, 2002, Section E:5 (Col. 2-4).

*Prediction: Don't expect to see venture capital investing to regain much momentum while the stock market remains shaky and war looms with Iraq. Watch for existing venture-backed companies to require restructuring and some add-on fundings. Another select group of software and life sciences companies should attract limited growth capital in 2003. Beyond these companies, slow but steady growth in 2003 may come from more mature (non-technology) companies with some balance sheet strength, quality management and established market strategies. See: Venture Capital Investing Flat in QIV.

President Bush has proposed a massive dividend tax cut under his "growth" plan for the economy, but little new incentive for capital investment in equipment. The only benefit seems to be a proposed write-off of up to $75,000 per year for small business equipment. This write-off may only assist micro and small ticket debt financing deals. Some experts even worry that his plan could undermine existing capital investment tax breaks, including the value of depreciation deductions for plant and equipment. See: Business Fears Dividend Tax Cut Could Undermine Popular Breaks, The Wall Street Journal (S.W Ed.), January 17, 2003 Section B:4, (Col. 1). Other experts expect extensive revisions to the plan and will take a wait and see attitude. See: Ignore Bush Plan.  The Equipment Leasing Association  plans to lobby for an extension of bonus depreciation and other benefits for capital investment. See: ELA on Bush Plan. 

*Comment: The Federal Reserve suggested in December that capital expenditures remain sluggish. Does it follow that businesses do not need any additional tax breaks to encourage investment in equipment? Based on my experience over more than a few years in the leasing industry, leasing volume usually lags growth in the economy by six to nine months. By my count, it would not surprise me if leasing experiences little growth until 2004 (assuming the situation in Iraq settles down and the one in North Korea doesn't flare up) provided the economy starts sustained growth real soon. It would be nice to see a boost for capital expenditures through an increase in or an extended period of bonus depreciation; but don't hold your breath. In any event, perhaps the ELA will at least get clarification on current bonus depreciation rules to facilitate syndications.

With both the Guaranty Project (FIN 45) and Consolidation Project (FIN 46) on the books (as described in Stories 1 and 6), you can now start to assess their full effect on synthetic leases. While synthetics have taken a beating in the post-Enron era, they have, in part, survived these FASB rulings. For more on the description of the controversy on synthetics, click on Synthetic Leases.

The synthetic lease acquired its name by "synthesizing" inconsistent provisions of Financial Accounting Standard No. 13 (FAS 13) and the true lease rules arising under Federal income tax law. A synthetic lease is an off-balance sheet "operating lease" under FAS 13 and, concurrently, a conditional sale for federal income tax purposes. As a result, the lessee takes the tax benefits as the tax owner of the leased property under Federal income tax law while keeping the same lease off its balance sheet as an operating lease under FAS 13.

In efforts to correct the alleged wrongs by Enron, the FASB struck several blows in FIN 46 against synthetic leases in variable interest entities (VIEs). First, it nullified portions of Emerging Issues Task Force (EITF) Issue Nos. 90-15 and 96-21. This EITF guidance essentially allowed a special purpose entity (SPE) to remain separate from (that is, not be consolidated with) its sponsor if equity players invested 3 percent (or more) in the SPE. See: Appendix Paragraphs D(1)(a) and D(2)(b) of FIN 46. Second, as discussed in Article 1, the new guidance will test VIEs with standards designed to discern their ability to stand alone and self-finance their existence. As evidence of that ability to stand alone, the FASB substituted a 10 percent equity requirement for the 3 percent rule, but did not create a presumption that 10 percent equity will suffice.

*Tip: In other words, you should be able to show that 10 percent equity (more or less) suffices for a VIE to remain unconsolidated and operate independently and cover its expected losses.

Further, the FASB said that equity investor/lessor must stand to lose the first dollars in a synthetic lease. Contrast this dramatic change to previous rules in which the lessor would take a loss on the last dollars after the lessee paid its residual guaranty (of up to 89.9 percent of the original equipment cost). At the moment, it is not expected that synthetics leases with 10 percent first loss equity will attract much, if any, interest from lessors in the absence of new investors taking the 10 percent first loss piece of a synthetic lease equity.

On the other hand, FIN 46 should not impose barriers to a voting interest entity (such as an operating leasing company) directly offering synthetic leases to its lessee-customers. The challenge for these deals lies in the Guaranty Project. In that project, the implicit residual guarantee of the lessee must be disclosed and recognized (that is, booked on a balance sheet) by a lessee at its "fair value." The Guaranty Project did not define "fair value." However the amount actually booked should be far less than the maximum or face amount of the residual guarantee.

*Prediction: I expect the synthetic lease to re-emerge in the coming months as cost-effective financing tool. However, I do not expect the synthetic lease to regain its pre-Enron popularity. Many companies have shunned this "operating lease" product due to the Enron taint and the public furor over companies allegedly hiding their obligations off-balance sheet. This negative perception (the so-called "optics") transcends the fact the FASB rules have (previous to the Enron case) required companies to disclose these leases in reasonable detail in the footnotes of their financial statements.

The surviving synthetics will be more extensively disclosed than under prior rules and generally will be used by voting interest entities (that is, non-variable interest entities described in Article 1). Private companies will lead the way as public companies shy away for a bit longer due to the negative optics affecting their shareholders' views.

It is too early to know the best methods of calculating "fair value" with respect to the various types of guarantee (that is, the amount lessees will recognize (book) with respect to "guarantee" obligations). Once the market more fully evaluates this concept, the level playing field on booking "fair value" should have little negative effect on the revival of synthetic lease structures. Don't be surprised if these deals rise again like the phoenix under different names like "non-tax oriented leases."

As sale-leaseback transactions gain popularity, they may also raise red flags for investors and lessors. Lessees in need of cash may sell valuable assets for lack of other funding. Lessors in search of volume may accommodate these lessees by entering into sale-leasebacks with them, even though these lessees represent for less than ideal credits.

Risks and Rewards of Sale-leaseback Deals

Williams Communications Group, Inc. entered into a sale-leaseback in 2000 of its 15-story, 750,000-square foot Technology Center in downtown Tulsa. Along with other ancillary assets, this sale-leaseback helped increase its liquidity and capital resources. See: page 20 of William's Form 10-Q for March 31, 2001. Williams later filed for bankruptcy. It emerged from bankruptcy in October 2002 and, since that date, has retained its office tower lease (reportedly) as its only substantial monetary obligation (as of October 2002).

In a bankruptcy Informational Brief dated December 9, 2002, United Airlines, Inc. stated that it was unable to "tap into new sources of capital." It also said that it had "exhausted all available sources of liquidity." One source of cash involved a sale-leaseback during the third quarter of 2002 that raised approximately $72 million. United remains entrenched in a complex, high stakes bankruptcy that no doubt will affect the sale-leaseback.

Sale-Leaseback Deals Solve Financial and Accounting Problems

Sale-leaseback transactions involve the sale of real or personal property by the owner to an investor. As the buyer and lessor, the investor then leases the property back to the lessee-seller. You can use this fundamental structure to perform a myriad of useful financial functions. For example, it can increase the cash flow of a lessee by "monitizing assets" and improve a lessee's earnings by cashing out equity in real and personal property. PG&E National Energy Group, Inc. cashed out $340 million last year in a sale-leaseback of an energy asset. It used some of the proceeds to repay debt.

A sale-leaseback transaction may, if properly structured, help resolve some accounting issues arising out of the FASB's FIN 46 described in Article 1 above. Lessees may be able to use sale-leasebacks to restructure offending synthetic leases and other off-balance sheet transactions. Lessees, lessors and other holders of variable interests have until June 15, 2003 to put certain leases on their books. A "variable interest entity" could use a sale-leaseback to restructure its transactions subject to consolidation. Also see: "Leasing 101" below.

At the same time, a sale-leaseback can increase a lessor's volume of quality lease investments with acceptable yields in the current slow economy. Lessors may also enjoy a unique opportunity to enter into relationships with lessees who otherwise would select bank or other debt or equity financing.

*Warning: As a lessor, you should closely examine a selling lessee's financial condition, operations, cash flow and business prospects before you buy an asset in a sale-leaseback transaction. In the United and Williams examples, the transactions may have come at a very high price for the lessors. You should be cautious about entering a transaction that a lessee uses as the last ditch effort to raise capital when other sources of liquidity have been exhausted. To assure that your new lessee will perform its obligations, choose an asset to buy and lease back that your lessee considers "mission critical." For such an asset, the lessee will tend to prioritize making payments to you if cash flow is tight. As part of your approval process and write-up, chart out the residual value curve (that is, the expected value of the leased property) from the inception of your lease to expiration. This chart will create a picture of your collateral exposure if the lessee fails to pay the rent and you must repossess the leased asset to exit the lease.

Sale-Leasebacks as a Mainstream Funding Source

Sale-leaseback transactions no longer constitute a last-ditch funding device as some critics have suggested. See: When Creative Leases Are a Red Flag, BusinessWeek online, December 31, 2002. Credit tenant leases for real estate and equipment or facility leases for personal property offer viable methods for companies to unlock equity and reallocate capital to their core businesses. Because synthetic leases have come under greater scrutiny and restrictions in FIN 46, many lessees may need to restructure or refinance synthetic leases. True tax leases may provide a solution for some of the lessee's accounting issues while enabling the lessee to retain the use of its property. Tax-lease lessors, such as C.I.T. Leasing Corporation, General Electric Capital Corporation and Merrill Lynch Capital, have the capacity to provide such tax leases and other financial solutions using sale-leaseback deals.

*Tip: As a lessee, promptly take a close look as soon as possible at sale-leaseback transactions as a means to resolve accounting issues under FIN 46. Be prepared to offer a good financial story to a lessor of why you want to enter a sale-leaseback and how your cash flow will support the new fixed rent cost. Compare the cost of a sale-leaseback to your other available financing, if any. Lessors will compete for good financing opportunities with acceptable creditworthiness and/or solid asset values.

A "variable interest entity," or "VIE," is a new concept invented by the Financial Accounting Standards Board (FASB) as part of its effort to achieve better disclosure of previously off-balance sheet transactions and entities. It is not just a special purpose entity or SPE. A VIE may be any kind of an entity (such as a partnership, corporation, limited liability company or trust), or even a "silo" that may be subject to consolidation under the new FIN 46 describe in Article 1 above. See: Paragraph 1(a). A silo is a specified asset of a VIE where a creditor has recourse only to the asset and not the general credit of another entity for payment of liabilities or other interests. See: Paragraph 13 and note 11. (Paragraphs referenced in this article appear in FIN 46.)

A VIE is an entity that, by design, possesses either or both of the following characteristics:

• Total equity at risk insufficient. The entity has insufficient equity at risk to cover its expected losses without subordinated financial support from other parties. In other words, no enterprise has a controlling financial interest in that entity. See: Paragraph 5(a)(1)-(4).
  
  An enterprise lacks a controlling financial interest in an entity if the enterprise has equity of less than 10 percent of the assets of the entity, unless the enterprise can demonstrate that it can operate without such subordinated financial support and can absorb losses in excess of the expected losses. See: Paragraph 9(a)-(c). At a 10 percent stake, the FASB still will not presume the equity is sufficient. See: Paragraph C23. However, it at least acknowledges that the equity is not insufficient to cause an entity to stand on its own without being consolidated with another enterprise.
  
  
• As a group, the equity investors in the entity do not have any one of the following:
  
  
  • Decision-maker. The ability to make decisions through voting or similar rights. See: Paragraph 5(b)(1). Current Practice: Charter documents, for example, in a single purpose facility leveraged or synthetic lease and related agreements may restrict equity holders from making decisions about the entity or its operations.
    
    
  • Obligations to cover first losses. See: Paragraph 5(b)(2). Current Practice: In a synthetic lease, for example, a lessee often pays up to the first 89.9 percent of losses and the lessor thereafter pays the balance of losses, if any.
    
    
  • Uncapped residual returns. See: Paragraph 5(b)(3). Current Practice: A lessor often agrees to fixed-price renewals or purchase options that may limit its returns.

*Tip: You should assume that the scope of the term, variable interest entity, has not yet been fully defined. Remain vigilant that almost any entity, asset or transaction in a structured finance deal may constitute a VIE and be subject to consolidation as described in Article 1 above.

BLN Briefs present short-takes and updates of current issues. For more information on these stories, just email me at dmayer@pattonboggs.com or follow the links:

SEC Adopts Off-Balance Sheet Disclosure Rules for MD&A. The Securities and Exchange Commission (SEC) has acted again under the Sarbanes-Oxley Act. See the summary and text of the new law - Public Law 107-204 (the "Act"). This time the SEC has implemented rules under Section 401(a) of that Act described in its Release 2003-10. This rule requires disclosure in a separate part of the "Management Discussion and Analysis" of SEC reports of "all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the issuer with unconsolidated entities or other persons, that may have a material current or future effect on financial condition, changes in financial conditions, results of operations, liquidity, capital expenditures, capital resources or significant components of revenues or expenses." In other words, reporting companies will have to disclose significant off-balance sheet items like those subject to the new FASB guaranty and consolidation interpretations described in Articles 1 and 6 above.

*Tip: Lessors and lenders should read these disclosures closely when performing credit reviews of these entities relating to new leasing or lending opportunities.

Heath Care Equipment Leasing is Alive and Well. While leasing has generally remained slow in 2002, the heath care market for equipment financing is booming. Experts predict that the market could grow in new volume from $5.8 billion in 2002 to $7.4 billion in 2005. See: Healthcare Outlook.

*Deal Opportunity: Equipment leasing opportunities should expand with the aging U.S. population and the proliferation of independent health care organizations. As a lessor, consider intensifying your efforts in this area to increase your volume. Retain equipment specialists to assist you in valuing equipment residuals. Vendor leasing programs may offer a good source of deal flow.

SEC Adopts Attorney Conduct Rule Without "Noisy Withdrawal." The SEC issued its final (yet incomplete) attorney conduct rules under Section 307 of the Sarbanes-Oxley Act on January 23, 2003. The rule requires attorneys representing public companies to report evidence of a material violation "up-the-ladder" within such companies. The other shoe has yet to drop, though, as the Commission also approved an extension of the comment period on the "noisy withdrawal" provisions of the original proposed rule. The noisy withdrawal refers to circumstances in which attorneys withdraw from representing a public company and notify the Commission that they have withdrawn for professional reasons. The final rules will become effective 180 days after publication in the Federal Register.

*Comment: The noisy withdrawal rule raises serious doubts about attorney-client relationship in public companies. Consider submitting comments to the SEC that you want to protect the open and trusted dialogue between attorney and client. This provision arguably goes too far in response to Enron's case.

Training Offered. To help improve your business functions, 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. We can customize a format for your training needs ranging from a three-hour seminar to a two-day course. For example, we can discuss such topics as the FASB's changes in accounting rules affecting synthetic leasing. 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!

Expert Witness Services. Check out my message this month. Because I had such a good experience being an expert witness, I have decided to offer the service for selected clients. Call me for details if you need some help in cases involving leasing issues and concepts.

A New Experience as an Expert Witness

For the first time last month, I served as an expert witness in a complex sales tax case on behalf of a large multinational company. The tax authority needed to improve its understanding of leasing as it applied to the case. It alleged that the vendor leasing transactions closed by the company's captive finance subsidiary and manufacturing unit amounted to loans. This conclusion led to a higher sale tax on interest rather than a lower tax, based on apportionment issues, if the payments constituted rent (instead of interest).

The case strongly suggested the importance and value of a better understanding of leasing in general. As states struggle to recover drastically reduced revenue in this economy, it would be wise to err on the side of more complete documentation (even between related entities) to avoid potentially expensive and extended fights with state tax authorities.

I enjoyed this experience, which involved over two and one half-hours of direct and cross-examination on leasing. Leasing has its challenges, and if you don't structure and document deals correctly, it also can carry some steep (and unexpected) costs.

Feedback From You

Most months I publish some of your comments on Business Leasing News. In January, one reader said: "Many thanks for putting me back on the BLN list. I appreciate your efforts to keep me educated and up-to-date." Another reader added a thought about Business Leasing for Dummies (BLFD)®: "Just a quick note to say I bought a copy of your book … you did an excellent job. I also enjoy your eNewsletter…quite informative!" 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.

Patton Boggs engages in the legal aspects of buying, selling, financing and leasing real and personal property of all kinds, including aircraft, energy, facility, technology 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 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 with you.

Thanks to the BLN Staff

I extend a special thank you to my editors at Patton Boggs LLP for their comments on this edition: Adrian Nicole McCoy, Sheila (Pedersen) McCoy, Julie Rivard, Steve Reagan, and Tom Stumpf. The technical team of George Barber and Winston Jackson continue to provide 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.

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