A Message From the Publisher, David G. Mayer

1. Deflation Threat Poses Unique Challenges for Lessors

The Federal Reserve Bank (Fed) recently lowered the federal funds target rate by a quarter of a percent to one percent, representing its continuing effort to boost the economy and prevent the insidious effects of deflation. The Federal Reserve’s press release regarding the rate change stated that in contrast to any potential for growth in the economy, “a probability, though minor, of an unwelcome substantial fall in inflation exceeds that of a pickup in inflation from its already low level.” In other words, the Fed has recognized that the risk of deflation somewhat outweighs the risk of inflation in the U.S. economy. Although the economy may stabilize and even grow slightly this year, Federal Reserve Chairman Alan Greenspan has reportedly said that the Fed will “lean over backwards” to prevent deflation. He described the Fed’s move on deflation as one to create a “firebreak” - a reference to clearing land to prevent the spread of a forest fire. See: U.S. and Europe Signal That Rates May be Cut Soon, The Wall Street Journal (S.W. Ed.), Page A:1, Col. 6, June 4, 2003.

Lessors have every reason to cheer the Chairman’s efforts because deflation can undermine leasing opportunities, increase defaults and erode economic returns.

The Meaning of Deflation

Deflation occurs when prices decline over time. When the inflation rate goes negative, the economy enters a deflationary period. See: What is deflation and how can it be prevented, by What You Need to Know About Economics.  In general, “deflation is dangerous because falling prices make it hard for companies to repay debts, and may lead to falling wages….” See: Citing Deflation, Fed Cuts Rates By Quarter Point, The Wall Street Journal (S.W. Ed.), Page A:1, Col. 6, June 25, 2003. Deflation squeezes profit margins.

Specific Deflation Risks For Lessors

For lessors, deflation presents unique risks:

1. Default Risk. Lessees may experience falling prices and tightening profit margins. Those who do may be unable to pay rent, maintain equipment, keep insurance in effect or generally meet their obligations to their creditors, including equipment lessors or lenders. In short, deflation may put pressure on lessees to perform under their leases and force some lessees into default.

*Tip: As a lessor, you should monitor the economic condition and financial statements of the lessee more actively than usual if the lessee operates in an industry prone to the adverse effects of deflation. You may want to restructure your leases to reduce the pressure of rent obligations, if necessary, to keep property on lease until the current deflationary risk passes. Unfortunately, the best remedy for deflation is not to let it happen--an effort the Federal Reserve has undertaken in earnest. Japan has experienced a low level of deflation for several years. Such deflation in the U.S. would be disastrous for the U.S. economy in general and leasing in particular, so it’s important to structure and price leases in a defensive posture against deflation to mitigate the impact of possible deflation in your business.

2. Opportunities Lost. The uncertainty of the economy alone has curbed capital spending and a desire of many lessees to acquire or lease any new equipment. Falling prices make it desirable for some lessees simply to wait for prices to hit bottom to get more value for their capital-spending dollar. With interest rates so low, lessees who have capital spending budgets may, on one hand, elect to buy property rather than lease it. The lease-buy decision may favor buying especially if lessees can use the tax benefits under the new bonus depreciation rules to improve their economics. 

On the other hand, lessees may elect to lease equipment to cause their lessors to take the risk of downward spirals on values of equipment. If deflation continues for any extended period of time, lessees with fair market value purchase options may find that they can buy their leased property for less than expected at the end of the lease term. While this situation is good news for lessees, it creates potentially negative economics for lessors.

*Tip: As a lessor, consider the tax and economic implications of putting a minimum value on all purchase options to mitigate the impact of deflation while taking advantage of any potential inflation. For example, to avoid losses on purchase options, you could say that a purchase price in a tax lease equals fair market value but in no event less than 20 percent of original cost. While the lessee could return the equipment to avoid too high a price, you can offset that risk by electing to lease property that a lessee is unlikely to return.

3. Unpredictable Residual Values. In any deflationary environment, residual assumptions take two hits for lessors. First, the bottom may fall out of existing residual assumptions. As a lessor, if you assume a certain residual, you may find that you cannot realize that value at the end of the lease because of falling prices. Second, in a default, if you fail to act quickly to dispose of an asset that comes off lease due to a lease expiration or termination, you may be unable to recover the expected residual value at the default date. Deflation may continue to erode the value of your leased property after default and before sale or other disposition. Some dispositions can take a year or more to complete. This residual value pressure compounds the effect of the already slow economy, which has significantly reduced the value of certain leased property such as business and commercial aircraft.

*Warning: Don’t assume that the usual approach to determining residual values will work today. Closely evaluate the potential for deflation in making residual estimates on new deals. In other words, as a lessor, you may want to take a lower residual in your pricing until evidence that inflation has not abated in favor of a deflationary economy. Work with lessees as early in the acquisition process as possible to confirm that you obtain manufacturer residual support or the lowest acquisition prices in the new or used equipment markets. Confirm with appraisers and equipment managers that their methodology in valuations considers the impact of deflation.

No one can predict the likelihood that deflation will take hold in the U.S. economy. However, the defensive reduction in the interest rate by the Federal Reserve Bank should give lessors pause about traditional pricing and assumptions in leasing. Despite today’s challenges in finding and closing leasing transactions, the same deals will be even less appealing in years to come if lessors do not confront the risks of deflation today. It’s a “win-win” situation for lessors who do. If deflation occurs, the lower residual assumptions should mitigate reduced residuals. If deflation does not occur, the potential for upside may be enhanced for lessors as sales or other dispositions fetch higher than anticipated prices. Lessors who plan accordingly may be rewarded by their caution. Ultimately, lessors will doubtlessly strike a balance based on market forces to win deals and build volume.

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2. States Blunt Bush Growth Plan with New Taxes

Federal tax cuts under the Jobs and Growth Tax Relief Reconciliation Act of 2003 have reduced revenue to the states. The states already face deficits of more than $70 billion dollars in 2003. To alleviate budget shortfall, around June 2003 at least 20 states had raised taxes with another 11 states considering increases. These tax increases effectively blunt the value of the new growth plan. The state plans either take away the benefit of the Bush plan or offset the benefit with new taxes. See: State Tax Boost Pick Up Steam, Undermining Bush Stimulus Plan, The Wall Street Journal (S.W. Ed.), Page A:1, Col. 5-6, June 9, 2003. In short, the Bush growth plan worsens the massive state budget deficits that already exist. See: Bush “Growth Plan” Would Worsen State Budget Crisis, Center on Budget and Policy Priorities (January 30, 2003).  

Some of these tax increases will directly impact leasing both positively and negatively: 

• A positive impact is that the states may need to lease more property to make ends meet due to lack of cash to buy property. However, credit quality of the states has suffered. According to Standard & Poor’s, “(t)o preserve state revenues coming from dividends, states would be required to decouple current state income tax structures from the federal system…” Due to credit pressure from tax reductions, Standard & Poor’s warned that states would receive lower ratings. These lower ratings would mean immediately higher interest costs for the states, which would further increase fiscal stress. See: No Relief For States Under Bush Proposal; Credit Outlook Remains Bleak, Standard & Poor’s (January 9, 2003). 

*Tip: As a lessor in public finance (state and municipal leases), evaluate credit more closely than usual before entering lease transactions with any state, municipal or other taxing jurisdiction within the state. Consider the ability of the state to collect tax revenues to balance its budget and pay your rent.

• One negative impact is that increased taxes on lessees may make the state property, sales and tax exposure for lessors more acute. In other words, if lessees fail to pay or reimburse lessors for property, sales or use taxes, the states dire need for revenue may result in more aggressive enforcement against leased property. In many states the state tax liens can attach to assets and prime lenders. These attachments can reduce the value of leased property for lessors by the amount a lender or lessor may have to pay to remove tax liens. 

*Tip: Lessors should take several steps to manage the new state tax regimes:

• Recheck state taxes when pricing new leases and drafting lease documentation. Be sure your pricing reflects any changes in taxing rates, taxing methods and tax payment enforcement in states affected by Bush’s growth plan or other otherwise falling short of critical revenue needs. 
  
  
• Monitor the calculation and payment of state property sales and use taxes by lessees to avoid tax liens. Confirm that your lessee’s credit will hold up under the weight of new state taxes. As I said in my book, “(a)s a lessor, these taxes combined, as a percentage of your lessor’s cost, may far exceed your yield.” Consequently, if a state enforces higher taxes, your yield may be reduced or turn negative upon payment of these taxes (without lessee reimbursement). See: Dealing with State Sales, Use and Property Taxes, Chapter 14, at page 195, Business Leasing for Dummies (BLFD)®, David G. Mayer.
  
  
• Insist that your lessee report the location of mobile assets, such as business aircraft, trucks and rail road rolling stock at appropriate times each year because any state in which the property has taxable situs may tax the property. For example, states may impose property tax business aircraft based on the amount time it spends on the ground during a tax year in the taxing jurisdiction, departures as a percentage of all departures in a tax year or other tax allocation methodologies. As a result, you can have a multi-state problem with states trying to fill their revenue gap with taxes on your leased property. 

With state budget deficits for 2004 representing between 14.5 percent and 18 percent of all state expenditures, lessors and lenders should not underestimate the potential impact of state tax laws and enforcement on their transactions. See: State Budget Deficits For Fiscal Year 2004 Are Huge and Growing, by I.J. Lav and N. Johnson, Center on Budget and Policy Priorities (January 23, 2003). Lessors should also evaluate the offsetting impact of state tax schemes on the Bush growth plan to get the correct pricing in today’s lease transactions. 

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3. Venture Capital Survey: Investments Continue Decline, But Potential Survives

The “MoneyTree Survey”™ from Pricewaterhouse Coopers (PwC), Thomson Venture Economics and the National Venture Capital Association revealed unsurprising, but significant, news about venture capital investing in the first quarter of 2003. While venture capital investing was down, it was by no means out. Some experts have suggested that investment levels have now returned to historical norms before the market peaked in 2000. See: The Thrill of the Chase, Entrepreneur Magazine, July 2003 at page 56.

The Survey in a Nutshell

The survey indicated that venture capital investing in 2002 fell to a total of $21.2 billion --its lowest level in five years. In the first quarter of 2003, investments totaled $3.8 billion dollars-- down from the prior quarter of $4.3 billion. The smallest number of companies received funding since 1997. Although most industries experienced a decline, software remained the top segment in terms of dollars invested. One hundred sixty-six software companies received $790 million in funding, down 13 percent from the prior quarter. Biotechnology, telecommunications, networking equipment and semiconductors trailed as the category leaders, most attracting lower or flat investment dollars. See: MoneyTree™ First Quarter Report.  According to the survey, “(t)here was a slight shift to later stage investing as existing portfolio companies continued to mature without a foreseeable exit strategy.” Preliminary numbers for the second quarter indicate a continuing decline with only $3 billion invested for the period of April through June 2003. See: Venture Capital Shows Signs of Life, The Wall Street Journal (S.W. Ed.), Page C:14, Col. 4, July 1, 2003.

*Terms to Know: A later stage company is one that, although not necessarily profitable, has a product or service and generates continuous revenue, often with positive cash flow. For more terms from the survey, see: PwC Definitions. 

Characteristics of Venture Capital Investing Today

Although investments have declined, the leading 100 venture capital firms in the survey featured by Entrepreneur Magazine remained active. However, a few salient characteristics of their investment approaches illustrate the current relationship between companies and their venture capitalists (VCs): 

• Patience prevails. Venture capitalists remain willing to make investments, but few contenders will qualify for funding. A VC’s selectivity does not suggest pessimism as much as it does prudence. A VC must select the right companies and will take its time in doing so. As part of its investment decision, the VC usually anticipates backing the venture company for many years through several rounds of investment (even a more likely occurrence in the current environment).
  
  
• Deals take longer to close. In the peak period before 2000, VCs may have processed and closed deals on a very accelerated pace. In the current market, VCs often perform an extensive due diligence over a longer period of time and spend more time on deal terms. During the height of the market frenzy, deals may have been completed in six weeks, but it is not unusual now that a single investment may take months to close.
  
  
• Pricing is up for VCs. As a contrast to the boom days in which VCs would pay high multiples of potential earnings for a prospect’s stock (5-6x earnings), today VCs command a lower price for their stake (2-3x earnings) and still acquire a large, if not controlling, piece of the venture company. 

*Tip: To understand pricing, you need to understand the VC’s business model. VCs typically look to an IPO or acquisition of a portfolio company as a way to get liquidity from the investment and return money to the investors in the VC’s investment fund. Lower multiples in the public markets, the absence of a clear “window” for IPOs, less merger and acquisition activity cause VCs to reevaluate, and often reduce, the value they place on a company. Lower valuations mean the VC acquires more of a company for less money invested than in the boom period or even the recent past.

Venture Leasing and Lending

Though not addressed in the survey, venture leasing and venture lending tend to follow VC investments because these leasing and lending deals depend on the existence of VCs to fund and support the venture companies. However, venture leasing and financing can also provide more flexible and frequent infusions of cash when VCs have already invested in the growth company. 

*Terms to Know: Venture leasing generally refers to leasing of a venture capital-backed company and usually involves financing of equipment or specific assets. The venture leasing company seeks a higher yield and an “equity kicker” (often in the form of preferred stock warrants) to provide incentive to a leasing company to take the significant risks of leasing property to a venture company. Venture lending ordinarily refers to working capital or other secured financing by venture company lending specialists rather than general bankers. See: Bonus Round, Entrepreneur Magazine, July 2003 at page 52.

While venture capital, venture leasing and venture lending may have slowed down dramatically since 2000, VCs remain ready and willing to make the right investments, with venture lessors and lenders following closely behind or beside them. 

*Prediction: As the economy strengthens, a select few emerging growth companies should find support from VCs based on realistic business plans and innovative products. Despite the deep and long downturn, look for successes in large and small companies to appear in, among other areas, nanotechnology, wireless products and cell phone software. See: There’s life left in the Valley, by Fred Vogelstein, Fortune Magazine at page 33 (July 7, 2003). Expect leasing and financing resources to find the emerging companies with potential, equipment needs and well-regarded VCs in their camp. 

I would like to thank my partner, Tom Nelson, for his assistance in writing this article. Tom’s practice focuses on high-tech and emerging growth industries, representing entrepreneurs and start-up companies at all phases of their growth as well as venture capitalists and other investors.

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4. Lessors and Lenders Have Mixed Success with Pre-Petition Bankruptcy Waivers

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5. FASB Clamps Down on Qualifying SPEs

The Financial Accounting Standards Board (FASB) recently expanded its drive to control off-balance sheet transactions and entities. FASB issued a proposed statement in the form of an “Exposure Draft” on accounting for transfers of financial assets from a company to certain off-balance sheet partnerships, limited liability companies, trusts, corporations or other entities. Each such structure may be referred to as a qualifying special purpose entity or QSPE. The Exposure Draft, is titled “Qualifying Special-Purpose Entities and Isolation of Transferred Assets, an amendment of FASB Statement No. 140” (“Proposed Statement”). 

In its June 10, 2003 press release, FASB stated that the “purpose of this proposal is to provide more specific guidance on the accounting for transfers of financial assets from a company to an off-balance structure known as a qualifying special purpose entity (QSPE).”  By issuing the Proposed Statement FASB aims to supplement its previous Interpretation governing “variable interest entities (VIEs),” sometimes referred to as ”FIN 46.” FIN 46 is formally called “FASB Interpretation No. 46 - Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51." FIN 46 attempts to reign in the allegedly abusive use of off-balance sheet entities and transactions. FIN 46 requires the identification of a controlling financial interest based on a party’s exposure to expected losses and rights to residual returns. See: Paragraph A10 of Proposed Statement. However, FIN 46 excludes from its scope any controls on QSPEs. The current effort by FASB addresses QSPEs where FIN 46 does not. For more, click on FIN 46. 

Purpose of FAS 140 

FASB Statement No. 140, formally called “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (FAS 140), underpins the Proposed Statement. FAS 140 establishes standards for distinguishing transfers of financial assets that constitute sales from transfers that constitute secured borrowings. In general, under FAS 140 an entity recognizes or puts on its balance sheet the financial and servicing assets it controls and the liabilities it incurs. By contrast, when an entity surrenders control it can remove the asset from its balance sheet (that is, “derecognize” the asset). Similarly, when an entity terminates liabilities, it can remove the liabilities from its balance sheet (that is, “derecognize” the liabilities when extinguished). FASB has developed the conditions for QSPEs to permit derecognition of assets in certain securitization transactions. See: Paragraph A5 of the Proposed Statement. For a further summary by FASB of FAS 140, click on FAS 140 Summary. 

The Proposed Statement 

When completed, the Proposed Statement will amend FAS 140. As described in Paragraph A4 of the Proposed Statement, the new guidance relates to the powers of QSPEs to issue beneficial interests and to obtain necessary financial support to facilitate issuance and reissuance of beneficial interests. A beneficial interest refers an interest of an investor or other stakeholder in a QSPE. The interest may take various forms such as debt instruments, partnership interests, undivided interests or commercial paper or other securities. The ability of a company to pledge and repledge assets its transfers to a QSPE raises questions about consolidation and effective control of the assets. The Proposed Statement clarifies when such control disqualifies an SPE from being treated as an QSPE. The consequence is critical. The transferor may not be able to push the SPE’s assets and liabilities off its balance sheet, which is a major goal of using QSPEs.

*Tip: FASB’s stated intention is to “prohibit any party from being in a position to enhance or protect the value of its own interest in a qualifying SPE by providing financial support for or making decisions about reissuing beneficial interests.” In effect, FASB wants to minimize the different outcomes under FIN 46 and the Proposed Statement. FASB intends to prohibit certain specified combinations of rights or concentrations of risk combined with decision-making. See: Paragraphs A12 and A13 in the Proposed Statement. It seeks to prevent transferors from remaining in control of assets transferred to a QSPE. In short, the guidance is supposed to improve the accounting for QSPEs. It changes the requirements that any entity must meet to be considered a QSPE. It limits the relationship between the transferor of assets and a QSPE.

Specifically, FASB would prohibit an SPE from being a QSPE if the following circumstances or conditions exist:

• A company enhances or protects the value of its own interest in a QSPE. If a company can protect its interests by making a commitment to provide financial support for the SPE to enable the SPE to fulfill the SPE’s obligations to holders of a beneficial interest in the SPE, the SPE won’t be treated as a QSPE. In effect, the QSPE won’t qualify for the exception from FIN 46. The support may include cash, a financial guarantee or commitment or total return swap in favor of a holder of a beneficial interest. See: Paragraphs A8, A9 and A12 of the Proposed Statement.
  
  
• A company retains control of the QSPE. If a company retains effective control of assets transferred to an SPE by providing financial support or making decisions about issuing and reissuing beneficial interests, the transferred assets won’t be removed from the balance sheet of the transferor (derecognition would be denied). Financial support or liquidity commitments include providing cash, options, guarantees or other financial undertakings that enable a QSPE to fulfill its obligations on or related to the issuance or reissuance of beneficial interests in a QSPE. See: Paragraph A8 of the Proposed Statement.

*Technical Point: The Proposed Statement says that (1) no party other than the “most senior” beneficial interest holder can provide financial commitments; (2) no party that makes decisions about reissuing beneficial interests can provide such commitment; and (3) no party can provide such a commitment with a fair value exceeding half of all such commitments. See: Paragraphs A11-A13 of the Proposed Statement. 

• A QSPE holds equity interests. If the SPE holds any equity instruments such as shares or interests in a partnership, it cannot be a QSPE. See: Paragraph A14 of the Proposed Statement.

The Proposed Statement would also clarify (1) how assets should be legally isolated from the consolidated group that includes the transferor of assets to the QSPE. The QSPE should be far enough removed legally not to be pulled into the bankruptcy of the transferor (a bankruptcy remote entity); and (2) issues on surrendering control of assets. See: Paragraph A15 of the Proposed Statement.

*Action Item: You can submit written comments on the Proposed Statement through July 31, 2003. Comments received after that date will not be considered. This Proposed Statement may significantly impact billions of dollars of securitizations and other transactions that involve the transfer assets to a QSPE. 

Effective Dates and Transition

Under Paragraph A17, the Proposed Statement would apply prospectively after its final issuance. The Proposed Statement would be effective with respect to transfers of financial assets occurring after the beginning of the next interim period for public companies and with respect to such transfers after the beginning of its next annual period for private companies. Certain existing structures that remain unchanged will therefore be permitted to stay in effect without impact from the final guidance (“grandfathered”). 

*Warning: This Proposed Statement contains a wide array of complex issues affecting more transactions than securitizations. Consult a knowledgeable group of accountants at a national level accounting firm who track FASB’s process, and knowledgeable lawyers, to understand its meaning to your business and how to properly structure affected transactions.

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6. Leasing 101: What Is an "Account Control Agreement"?

An “account control agreement” is one mechanism used by a secured party, including a lender or lessor, to perfect a security interest in a securities or deposit account and in the cash or securities in the account (“see:  investment property” under UCC §9-102(a)(49)). Though the name of this agreement sounds official, neither Article 8 nor Revised Article 9 of the Uniform Commercial Code (UCC) defines it. 

An account control agreement ordinarily does not grant a security interest. A related, but separate, security agreement generally does that job. An account control agreement has three parties: the customer (such as a lessee/borrower), the creditor (such as a lessor/lender) and depository bank or brokerage firm (sometimes referred to as the intermediary, bank or depositary). An account control agreement differs from a tri-party blocked account agreement. In the blocked account arrangement, a lender typically exercises dominion over all of a customer’s sales or other proceeds remitted to the blocked account (it sweeps up all checks and funds in the lock box or account). A creditor may exercise dominion over a blocked account at all times after a closing or upon the occurrence of an event such as a default. However, a creditor can get double duty out of these two agreements by combining them to serve the purposes of control and dominion over a customer’s investment property/proceeds.

A creditor perfects its security interest in the deposit or securities account by “control.” See: UCC §9-314(a). A creditor achieves control in the account subject to the agreement if the broker or bank holding the account agrees to comply with orders by the creditor without further consent by the customer. If a customer defaults under a lease or loan, the creditor may order the depository bank or broker through a “notice of exclusive control” to transfer the investment property to the creditor. This move is curtains for the customer’s account because, if properly perfected by control, the creditor has the first priority claim to the funds or other investment property in the controlled account.

*Tip: Lessors use control account or deposit agreements to hold additional collateral for performance of lease obligations such as maintaining the leased property or paying rent on time. Lenders similarly use the account control agreement to provide a means to mitigate the risk of default by a borrower. Click on ABA Model “Account Control Agreement” for the American Bar Association’s account control agreement “model” form. Revised Article 9 changed the rules of how to perfect an interest in a deposit or other account by control. You should consult your legal advisors about whether to correct your existing tri-party blocked account, dominion or similar agreements to maintain a first priority security interest in account and its proceeds. You should ask specifically about an account control agreement in all new deals involving investment property as collateral for performance or payment of obligations in the primary transaction.

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A Message From the Publisher, David G. Mayer

Which Way is the Economy Going?

If you ever wanted to draw a contrast in our economy, first evaluate the risk of deflation discussed in Article 1 of this issue and its potential negative impact on leasing. Then, consider that 70 percent of corporate chief financial officers feel more optimistic about the economy than they did three months ago. See: Consumer Confidence Held Steady in May as Expectations Improved, The Wall Street Journal (S.W. Ed.), Page A:2, Col. 3-4, June 25, 2003. At that time, the CFO Outlook Survey of Financial Executives International and Duke University’s Fuqua School of Business found that only 25 percent felt more positive about economic improvement. 

However, on average, surveyed financial and other senior executives expect capital spending to rise only 1.5 percent in the next 12 months. Although 26 percent of the companies have been spending at normal levels, two-thirds of companies have been spending at depressed levels, if at all. Only 6 percent have been spending aggressively. While the depreciation of the U.S. dollar has helped hiring, the survey says that it has done little to effect and improve capital spending. 

Lenders feel a bit more bullish, according to a survey of the Phoenix Management “lending survey”. The survey is titled “Lending Climate in America.” It indicates that 75 percent of the lenders expect a dramatic improvement in the economy in the next 18 months, with 40 percent indicating that a recovery will occur by year-end. Another 36 percent thought the recovery will start in 2004. Despite the decline in capital spending on equipment and software, cautious optimism seems to be spreading at banks and businesses. See: Hints of Upturn Begin to Ease Gloom at Banks and Businesses, by Daniel Altman, New York Times Online, June 18, 2003. 

For equipment lessors and lenders, volume has been anything but robust in most lines of business other than healthcare. In his Leasing Gems publication, dated June 30, 2003, Jeff Taylor, a noted lease trainer, summarizes Commerce Department statistics that show business spending remains weak. Perhaps it’s wishful thinking, but I prefer to think that better times lie ahead for the leasing industry in the not too distant future. Have a good rest of July. I hope you see stronger business soon! I am available to help you move ahead or cope with today’s difficulties.

Feedback From You 

Here are four comments I received recently about BLN: 

• One reader commented on articles in June’s BLN: “I thought this issue was excellent and I believe your newsletter is a superb way to inform the leasing industry of these type of changes (referring to the tax cut for small businesses).”
  
  
• Another June BLN reader e-mailed to say: “Just read the current version of BLN........it is GREAT! You continue to provide significant value to the industry and the players in that industry by offering insightful, informative, and easy-to-understand analysis and information."
  
  
• A third reader, with tongue in cheek, said: "Will you please add me to the distribution list for your newsletter? I hate to admit to you, but I do find it very informative. 
  
  
• Finally, a reader thanked BLN as follows: “Your newsletter is first-rate. Many thanks for including me in your e-mail mailing.” 

Thanks for your kind remarks! And, as always, thanks for reading BLN and for your feedback. 

About the Web Site of Business Leasing News 

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All the best, 

David 

David G. Mayer 
Patton Boggs LLP
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