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1. After Blackout, Prospects Brighten for New Investments in Grid, Distributed GenerationIn nine short seconds on August 14, 2003 at 4:11 p.m., about 50 million people located in a 9,300 square mile area of the United States and Canada discovered a known problem with the electrical grid. They were rapidly cast into an extended period without electricity due to a massive, cascading blackout. Though generally good-natured about this massive blackout, it did not take long before people began to question why the most reliable electrical power system in the world failed so dramatically. Shortly thereafter, politicians, economists, investors, lessors, lenders, venture capitalist and experts in electrical power began to focus on a truly pressing opportunity and need to invest in the transmission infrastructure located in the United States or find other solutions to avoid similar mishaps. "This is the fourth catastrophic failure of the central power grid within the last decade," said Kyle Datta, Managing Director of Rocky Mountain Institute's consulting practice, "and yet decision makers are not learning the right lessons from these crises." In this blackout, like others in the past, the power failure spread quickly when generated power could not reach the demand for it due to inadequate or overloaded power lines or other transmission problems. When this occurs, power plants shut down automatically to avoid damage to generation equipment. That reaction creates a domino effect. In this blackout, early analysis suggests that a problem occurred somewhere in Ohio. The grid transmission capacity apparently became inadequate to carry power on the lines generated by plants. This overloading of power apparently triggered a rapid and automatic shutdown of dozens of generation plants, including nuclear facilities. See: Power Failure Reveals a Creaky System, Energy Experts Believe, The New York Times (online), August 15, 2003. *Terms to Know: Transmission refers to the “highway system” that moves electricity from power plants to the distribution systems that deliver power to electricity users over varying distances. According to the Edison Electric Institute (EEI), “the U.S. electric transmission grid consists of nearly 160,000 miles of high-voltage transmission lines. Transmission lines carry electricity from generating plants to areas where electricity is needed.” Transmission constitutes a key part of bulk-power reliability. For more help with energy terms, see CA Energy Terms. New Transmission Capability: The Obstacles to Investment According to other industry experts, this crisis involved an old and very complex issue. Ken Silverstein, Director of Industry Analysis, UtiliPoint International, Inc., said that the problem is crystal clear: “The transmission capacity has been insufficient to support the increased demand while the infrastructure that carries the electrons is outdated.” See: Blackouts Were Crystal Clear, UtiliPoint Issue Alert, August 15, 2003. Eric Hirst, Ph.D, a leading consultant for over 30 years on electric industry restructuring issues, said in an August 2000 report: “Transmission is a vital element in the nation’s electric system. In addition to connecting generators to loads (the transportation function), transmission is essential for maintaining bulk-power reliability. If the amounts, types and locations of transmission equipment are insufficient, transmission elements can overload, leading to major interruptions in the power supply.” Expanding U.S. Transmission Capability, by Eric Hirst, Ph.D (August 24, 2000). In short, both experts pointed out the critical importance of reliable transmission of electrical power. With modern transmission capacity and capability, power generators can enhance reliability of power deliveries to consumers on a cost-effective basis while minimizing disruptions like the August blackout. According to Dr. Hirst, significant obstacles exist to building “robust transmission networks.” Obstacles include:
While the blackout carried a cost of an estimated $6 billion, the economy won’t suffer a serious setback. See: Economy Won’t Likely Be Derailed, The Wall Street Journal (S.W. Ed.), Page A:6, Col. 1, August 18, 2003. However, early lessons learned from this blackout suggest a powerful need for new investment in transmission grids. The economic costs of transmission outages like the one that occurred recently, when coupled with the cost of restrictions of delivering available power to electricity markets that need it, will likely exceed the costs of building or updating transmission systems. Expanding U.S. Transmission Capability, by Eric Hirst, Ph.D (August 24, 2000). *Tip: The key challenge for the energy industry is to upgrade transmission lines. Regulatory and other hurdles create difficult obstacles to overcome. Lessors and lenders should primarily seek out opportunities to meet equipment needs related to upgraded or new transmission grids to minimize the impact of heavy regulation, local opposition and low returns on investments in grids. Through the adoption of mandatory reliability standards and other proposals, Congress hopes to soon adopt a comprehensive energy bill that may contribute to a solution. Legislators across the political spectrum have recognized the “desperate need” for more investment in transmission equipment. See: New Pressure Arises for Energy Bill, The Wall Street Journal (S.W. Ed.), Page A:6, Col. 4, August 18, 2003. According to EEI, the legislation already contains five key provisions needed to bolster U.S. electric transmission capacity and help ensure power system reliability. The provisions include mandatory reliability standards, accelerated depreciation to stimulate investment in transmission facilities, pricing incentives to attract capital investment, and simplified permitting and siting processes for transmission lines. *Opportunity Point: The opportunity to build and finance improvements is very significant. Some experts claim that to modernize the current transmission system, the energy industry would have to expend $30 billion to $100 billion over 10 years. See: Investigations in Full Swing, UtiliPoint Issue Alert, August 21, 2003. U.S. power lines need huge investment, analysts say, Reuters - August 17, 2003. Lessors and lenders with capabilities to participate in the power industry should stay tuned to developments of those opportunities and consider programs now for solutions to this energy transmission crisis. Non-Transmission Solutions: Distributed Generation and Local Power Plants All of the challenges and enormous costs of modernizing transmission lines and related equipment may lead to non-transmission solutions. Generally, if transmission is questionable, then building new, local resources may be optimal. Blackout May Mean More Power Plants, Associated Press, August 19, 2003. One solution may be distributed generation (DG). This concept involves the strategic placement of smaller, modular and diverse electrical devices (generally, 5 killowatts-25 megawatts) near the location of the power demand. For example, large office buildings, hospitals, hotels, manufacturers and even shopping malls may be suited to this type of generation on or near their respective properties. Distributed generation uses such energy sources as fuel cells, cogeneration plants, solar panels and other photovoltaic technology, wind power and micro turbines. In the proper application, this equipment can provide power at lower cost with greater reliability than the centralized power grid. DG can offer acceptable or even desirable levels of pollution controls. Distributed energy sources can be organized into modules, such as powerparks (a grouping of generation devices), that enable the consumers to isolate the system when necessary to manage noise, air pollution and visibility. See: RMI’s Statement on the Blackout, Ecologic Investor, August 18, 2003. DG can lower costs, improve reliability, reduce emissions or expand energy options. DG may add redundancy that increases grid security even while powering emergency lighting or other critical systems. It may be profitable over the long-term based on energy savings, increased reliability and selling excess power. See: Small Is Profitable: The Hidden Economic Benefits of Making Electrical Resources the Right Size, by RMI CEO Amory Lovins, and six coauthors (named a “Book of the Year” in 2002 by the Economist). The book argues that properly valuing the benefits of DG brings great economic advantages. The authors and the American Gas Association have forecast that DG will account for 20 percent of all new capacity by 2020, or 5 percent of all energy generation. The cost of a single disruption, such as the blackout, could equal the or exceed the cost of an entire DG system. For more on the rationale for, status and illustrations of, distributed generation, see CA Distributed Energy Resource Guide While DG sounds enticing, and has significant potential as a partial solution to transmission problems, it too faces a fundamental challenge. As a nascent industry, DG needs investors that include venture capitalists, lessors and lenders that will provide financing to expand the industry. The industry must reduce technology costs and increase efficiency relative to central generation from the grid. However, the blackout may be the elixir that stirs up more interest in DG. See: Distributed Generation Could Heat Up, UtiliPoint Issue Alert, August 29, 2003. Many companies involved in DG so far seem to be relatively small to midsize public or private firms, with a large group of entrepreneurs and less attractive credits from a lessor’s or lender’s viewpoint. These businesses often overcome their size and credit limitations by structuring their financings to rely on the credit of the end-user of the DG, which may be solid or even investment grade credits. A few utilities such as Intergy and DTE Energy, and industrial firms like General Motors and Dow Chemical, have also taken an interest in DG. See: Energizing Off-Grid Power, The Wall Street Journal (S.W. Ed.), Page B:1, Col. 2, August 14, 2003. *Opportunity Point: The stand-alone nature of the equipment makes sense for lessors and lenders seeking small to middle market transactions. The equipment cost in many transactions may extend well into the large ticket category - in excess of $5 million. For example, lessors can seek out financing or leases for diesel-powered generators, cogeneration systems, micro-generators, wind power and even fuel cells as viable transactions. These transactions may range in dollar size from $50,000 to more than $25 million. Some lessors have already built expertise in DG. Many industry associations exist to promote alternatives to the challenging world of grid investments. For example, see: Energy Info Source - A Guide to Distributed Generation Associations. To put transmission grid problems in perspective, the Edison Electric Institute expects that 27,000 gigawatt-miles of transmission lines will be required over the next ten years. However, at present only 6,000 gigawatt-miles of transmission lines are planned. It’s obvious from this small number alone that serious solutions will be needed to avoid more blackouts like the one the U.S. just experienced. Under the circumstances, lessors, lenders, venture capitalists and other investors should take a hard look at possible opportunities to finance transmission lines and distributed generation in the coming years. 2. States Authorities Blast Tax SheltersThe federal government has made it clear that it dislikes and will shut down tax shelters. Until recently, states have not had tax shelters on their radar. But states desperately need tax revenue and plan to join the Internal Revenue Service (IRS) in a crackdown on tax abuse. California seems to lead the effort to address abusive tax shelters. It has begun to share data with the IRS and jointly target tax shelter promoters. See: California, Other States to Join IRS in Tax-Shelter Crackdown, The Wall Street Journal (S.W. Ed.), Page A:2, Col. 5, July 16, 2003. It estimates a loss of $600 million to $1.3 billion in taxes per year on sheltered revenue. According to the Multistate Tax Commission, state revenue losses totaled between $8 and $12 billion in 2001. See: The High Cost of Tax Shelters, CFO.com, July 17, 2003. On one extreme, the states chase individual promoters. On the other extreme, states reckon with some of the largest U.S. banks. Banks have allegedly used “regulated investment companies” to convert interest income to tax-free dividends. SEC records indicate that banks have shifted $17 billion into investment funds that did not sell shares publicly but paid tax-exempt dividends to banks. To meet the fund’s shareholder rule of 100 shareholders, some banks distributed shares to employees or charities. Referred to by the state of California as “outrageous” or “egregious” maneuvers, the banks may now face state audits and demands for back taxes from such states as California, New York and Massachusetts. See: Bank Shifted Billions Into Funds Sheltering Income From Taxes, The Wall Street Journal (S.W. Ed.), Page A:1, Col. 5, August 7, 2003. *Warning: The federal government has already begun a crackdown on tax shelters. See: Expanded Tax Shelter Rules Affect Leasing, Business Leasing News, April 2003. Now that states have joined the effort, the leasing industry must remain even more cognizant and responsive to a potential threat to leasing. The threat exists as a result of attention focused on the combination of aggressive shelter techniques in a post-Enron era and massive budget deficits. The upshot: leasing may be targeted as a tax shelter. For example, Congress nearly implemented a new version of the “economic substance doctrine” in May 2003 in the President’s $350 billion tax cut legislation. Such action threatened leasing. You may expect Congress to consider that doctrine again. Given the search for tax revenue by the federal and state governments, think twice before using aggressive tax shelter structures in U.S. or cross-border leases regardless of what the law permits. Be ready to oppose legislative efforts that may shut down or limit some of the most attractive and long-time features of tax leasing. Develop cogent, if not conservative, arguments for your tax structures. 3. Federal Leasing Under Attack: Criticism Mounts Against Boeing 767 Tanker DealA most unusual and significant federal leasing transaction is encountering strong resistance. The Boeing Company has been negotiating with the U.S. Air Force for a long time to build and deliver 100 767 KC-767A aerial refueling aircraft for use in combat, training and other missions. These aircraft would replace the 40-year old fleet of KC-135 aircraft currently in use by the Air Force. Both political and non-partisan voices have joined in criticism of the lease that would arguably cost taxpayers billions more than an aircraft purchase. Structure of Transaction The structure of the Boeing 767 fuel tanker lease resembles a standard leverage lease. According to an August 26, 2003 report of the Congressional Budget Office (CBO), Boeing will form a special purpose trust (Trust). The Trust will purchase the aircraft from Boeing and then lease the aircraft to the Air Force. The Trust will use funds from three tranches of bond debt borrowed from public markets and the government rent payments will serve as collateral. The Trust will make purchase price payments to Boeing and lease the aircraft to the Air Force essentially as follows:
The Trust will use the Air Force's lease and purchase payments to remit $161 million in principal and interest to the bondholders. See: Figure 1 in the CBO Report. Higher Cost to Lease While the Air Force acknowledges that the lease program would cost somewhat more than purchasing the aircraft, the Air Force has argued that it urgently needs to replace the aging KC-135 tankers and must avoid a massive up-front payment required to purchase the aircraft. See: Air Force Said To Understate Lease Costs, Washingtonpost.com, August 27, 2003, Page E:1. The pricing for this transaction is complex, and analysis varies depending on who runs the numbers. According to the non-partisan CBO report, the lease proposal would cost $1.3 billion to $2 billion more in present-value terms, or 10 percent to 15 percent more than a purchase. The CBO says that, “[o]n average, the Air Force would spend $161 million per plane in 2002 dollars to lease and then purchase the aircraft, compared to a cost of $131 million per plane for an outright purchase.” The Senate Budget Committee explains that the six-year lease, combined with a purchase option at that time, indicates a cost for the lease program of $21.5 billion dollars as compared with $15.9 billion to purchase the tankers. The Air Force has calculated the cost of the lease at $150 million more than a purchase (on a present value basis). Senator John McCain has frequently criticized the program as a corporate subsidy for Boeing even before considering the newest numbers. He is now being joined by other members of Congress who either fault the deal or want to consider some scaled-down version. Alternative to Boeing Tanker Deal Proposed, Washingtonpost.com, September 5, 2003, Page A:04 An investigation of Boeing’s alleged improper use of proprietary information to win the award over Airbus Industrie has commenced. See: Pentagon confirms probe of Boeing tanker lease, Reuters, September 3, 2003. Off-Balance Sheet Lease in Question Another significant, if not understated, issue involves Boeing’s off-budget characterization of the deal. The CBO has concluded that the transaction, which is structured as a lease with a purchase option, nonetheless constitutes a purchase and not an operating lease. As such, the deal costs more than would have been the case under the appropriations process and constitutes a purchase rather than an operating lease for federal budgeting purposes. The CBO letter and report to the Honorable Don Nickles Chairman, Committee on the Budget, dated August 26, 2003, states in part:
To comply with section 8159 (in Title VIII of the Department of Defense Appropriations Act, 2002, H.R. 3338, Public Law No: 107-117) and to be treated as an operating lease in the budget, the CBO report states the lease must meet the following six criteria:
The requirements bear several similarities to Financial Accounting Standards Number 13 for off-balance sheet leases in the private sector. When CBO applied these standards, it concluded that the arrangement between Boeing and the Air Force failed to meet at least the first four of these criteria or to comply with the spirit of the fifth. *Tip: When structuring a federal lease, watch for the application of these government accounting rules that may treat your lease as a lease purchase instead of an operating lease. If you want to obtain operating lease treatment, apply the accounting rules to the pricing and structure of your deal. Avoid questions like Boeing faces about the lease transaction constituting a loan (that is, a lease purchase) subject to federal appropriations and procurement rules as contrasted to an operating lease payable out of a year-to-year operations (funding) budget. High Stakes Game Boeing has significant stakes in this high-flying game. It reportedly would have to shut down its 767-production plant if it does land this contract with the Air Force. Boeing is not alone in its challenges. The Air Force has the duty to provide air defense for the U.S. and asserts that it must have operable, well-maintained aircraft to do so. Although the Air Force typically buys aircraft, three of the four military budget committees have already approved this lease transaction and it has been included in the President’s budget. See: Air Force Lease With Boeing Seen Adding Billions to Cost, nytimes.com, August 27, 2003. *Comment: Although the application of the off-budget/balance sheet treatment has not yet been hotly debated, this issue may create an unfortunate connection in the public’s mind to the alleged wrongdoing of Enron Corporation. See: Senators Voice Doubts on Plan to Lease Boeing Planes, nytimes.com, September 4, 2003. The CBO analysts must do their job, but the critics seem to have lost track of the Air Force’s view of our national security. The Air Force has said clearly that it requires faster aircraft delivery than under a normal budget process to replace the existing obsolete and broken down equipment. The lease accomplishes that objective and does not immediately use federal funds to do so. Little discussion focuses on the cost of funds of the government to purchase the aircraft. While cost of funds for the federal government may be cheap, it is not free. Moreover, no one has suggested in any report that, given the current deficit projections of well over $400 billion, the Air Force can expect the government to write a big check anytime soon for such critical defense equipment. Despite the extra costs of the program and the advantage to Boeing, Boeing is the only game in town for this job (other than Airbus Industrie); it can execute the job with accountability and quality. The analysts should not lose sight of national defense challenges and the relatively small cost differences compared to the big picture of the U.S. budget. However, the deal must be fair to both parties if it is to win approval. As part of the process, Boeing should answer well-founded questions from Congress and the Pentagon. Given the high-profile nature of this deal and the increasing outcry in Congress, Boeing should also support its answers with appropriate disclosures. See: Under the Radar, The inside story of a Pentagon deal that will cost taxpayers billions, usnews.com, September 8, 2003. The Boeing tanker deal still has a long way to go to reach final approval. On one hand, national security arguably compels the use of the leasing program to acquire the aircraft quickly. On the other hand, the off-book and excess cost issues present serious challenges to leasing the aircraft. Despite this difficult balancing act, lawmakers will ultimately determine the fate of the Boeing lease program in what Boeing hopes will be the not too distant future. 4. ABA Empowers Lawyers to Reveal Client SecretsThe American Bar Association (ABA) has increased lawyer responsibility in ways that will affect every lessor and lender. Corporate responsibility has been a subject of heated debate within the ABA over the past two years. The ABA’s interest has peaked due to the alleged events at Enron Corporation, the subsequent passage of the Sarbanes-Oxley Act of 2002 and initiatives by the Securities and Exchange Commission (SEC) on requiring lawyers to report corporate wrongdoing. See: SEC Requires Lawyers to Report Wrongdoing, Business Leasing News, December 2002. On August 11, 2003, previous opposition gave way to changing the ABA Model Rules of Professional Conduct. With this change, the ABA empowered lawyers to disclose client secrets to prevent a crime or fraud that would likely result in financial harm. In an earlier survey by LexisNexis of 100 U.S. lawyers, 62 percent of lawyers expected these changes in the ethics rules to affect them. Twenty-five percent predicted that the changes would increase legal costs. See: Update - U.S. corporate lawyers fret as new rules kick in, Reuters, August 4, 2003, 3:40 p.m. Rules Affect Senior Management The revised rules impose new responsibility on lawyers to report to “higher authority” or the “highest authority” wrongdoing of an individual within an organization. Senior management must therefore expect not only to face new scrutiny by its lawyers, but also to bear joint responsibility in passing judgment on potentially significant violations of law or corporate rules that may be reported by their lawyers. Lawyers must act in the best interests of the organization. From the ABA’s viewpoint, these rules “would significantly enhance the effectiveness of lawyers in the system of checks and balances necessary to restore public trust in corporate responsibility.” See: ABA House Oks Rule That Would Allow Lawyers to Report Financial Wrongdoing, ABA Journal e-Report, August 15, 2003. Two Revised Rules to Understand Lawyers and business people should understand Model Rule 1.6 (Confidentiality of Information) and Model Rule 1.13 (Organization of Client).
*Tip: Watch for the application of SEC, state and ABA Model rules to any given situation. The scope and enforcement of rules will differ. As a businessperson or lawyer, recognize the additional responsibility you bear to the organization you represent. As a client, you probably won’t face a forfeiture of the attorney-client privilege if you develop and enforce appropriate safeguards and rules of corporate conduct. Lawyers can help organizations draft rules of corporate responsibility, provide training on how they work, investigate violations of the rules and of law, as well as assist in enforcing the rules.
*Tip: The terms “reasonable” and “reasonably” provide latitude to determine proper action to take. When considering what action best serves an organization, a reasonable determination depends on the amount of the lawyer’s time needed to assess the situation, expertise in the matter and previous experience with the client. See: Comment 3. As a client, select counsel who has a high level of expertise in the areas of your needs. Consult your counsel regularly. Gain a basic understanding of these rules and the impact on your counsel. Communicate openly with your counsel on how to best serve the interests of your organization within these rules. Although the ABA has expanded its rules, the SEC may not be done expanding its rules for lawyers to report wrongful acts of public entities. The SEC has adopted the “up the ladder” reporting, but may adopt the even more controversial rule of “reporting out” wrongdoing. The responsibility of lawyers has clearly expanded despite opposition that the rules infringe on the attorney-client privilege. With more SEC changes still pending, the jury is out on whether these rules will be good for corporate America and the legal profession. 5. Business Jet Numbers Still Grounded by the EconomyDespite signs of an improving economy, aircraft deliveries in general aviation have failed to take flight. According to AIN Alert, published on July 31, 2003 by Aviation International News, “[m]anufacturers delivered 222 business jets in the first half of 2003, compared with 352 deliveries in the first half of last year, a 36.9-percent drop. The second-quarter 2003 numbers were not much more favorable, with a total of 184 deliveries, compared with 264 business jets delivered in that period last year – a 30.3-percent decrease.” I have received mixed reports about the market. With the exception of Gulfstream V jets, there seems to be little new life in larger business jet transactions. The General Aviation Manufacturers Association reported recently that shipment of general aviation aircraft totaled 1,031 units in the first half of 2003, a drop of 13.80 percent from 2002. Single engine piston aircraft deliveries remained steady. However, industry billings for the first six months of 2003 fell 32.3 percent from 2002 to $4.05 billion. The only good news seems to indicate that shipment numbers line up with production schedules, which reflect the weakness in the economy for general aviation. 6. Leasing 101: What is a “QTE Lease Transaction”?A QTE lease transaction refers to a lease to a foreign lessee by a U.S. lessor covering qualified technological equipment (QTE). Section 168(i)(2) of the Internal Revenue Code of 1986 (Code) defines QTE and other parts of Section 168 dictate depreciation rules for QTE. QTE includes computers or related peripherals, aircraft simulators, emergency crew training equipment, energy, manufacturing or production control systems, digital switching equipment and phones, and air traffic control equipment. It also includes automated mail sorting, ticketing and revenue collection equipment, telecommunications equipment, and high-technology medical equipment. The asset classes of QTE continue to evolve with the application of new technology and lessor ingenuity. As investment in health care leasing grows, medical equipment seems to fit the QTE bill if lessors can make the economics work for lessees. The lessee can be either a foreign governmental entity or private foreign corporation. A lessor can recover the cost of QTE on a straight-line basis over five years under Section 168 of the Code. This leasing product generally attracts sophisticated industrial finance companies, banks, insurance companies, and utilities that act as a passive, equity investor and probably want tax benefits that shelter their income unrelated to the QTE transaction (and an acceptable return on their investment as a passive investor). Multiple parties participate in the transactions including trustees, non-recourse lenders, equity participants, equity and debt collateral providers, appraisers and equipment/QTE experts. For more on QTEs, see: QTEs: Past, Present and Future, Asset Finance International PLC, November 2002. 7. BLN Briefs: UCITA Bites the Dust; Leveraged Lease Accounting Survives FIN 46.UCITA Bites the Dust. The Uniform Computer Information Transactions Act (UCITA) hit the legislative garbage heap recently. According to the National Conference of Commissioners on Uniform State Laws (NCCUSL), UCITA did not make progress legislatively and faced strong criticism as favoring licensors. UCITA would have provided a comprehensive set of rules that would govern contracts for licensing computer information, such as software, databases and music. Article 2A of the Uniform Commercial Code covers goods. UCITA therefore would have filled a gap in the rules for software transactions where Article 2A fell short. Maryland and Virginia did adopt UCITA. They may be stuck with it, for now. No other similar statutory scheme has surfaced yet and seems unlikely to appear in the near term. *Tip: NCCUSL finished significant revisions in Article 2A (leasing) and Article 2 (sales) of the Uniform Commercial Code. See: Final Articles 2 and 2A. Leveraged Lease Accounting Survives FIN 46. Lessors breathed a sign of relief when the Big Four accounting firms recently accepted the FASB Staff Position on leveraged lease accounting in relation to FIN 46. FIN 46 refers to FASB Interpretation No. 46 - Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51" (FIN 46). The staff indicated that if a lessor used leveraged lease accounting before it analyzed a grantor trust for deconsolidation from lessor (and consolidation with the lessee), it could continue to use leveraged lease accounting afterwards. For lessors, the action on the part of the Big Four helped insulate leveraged lease portfolios from one key risk of FIN 46, but lessee’s may still face questions of consolidation of the same transaction. 8. Training Offered/ Recent Publications/ SpeechesTraining - Substance the Easy Way! To help improve your business operations, deal processing and risk management, I offer private training seminars tailored to your specific needs at your designated location. My interactive and informative approach relies, in part, on my book, Business Leasing for Dummies (BLFD)® and subjects I cover in BLN. I customize the format and content for your specific training needs - no canned programs. Feel free to call me at (214) 758-1545 to discuss the possibilities. Recent Publications Besides BLN, I write other articles. Check these out:
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A Message From the Publisher, David G. MayerChanging Roles For Corporate Lawyers I spent more than 12 years at GATX Capital Corporation as in-house counsel. GATX gave me the opportunity to learn and apply almost every aspect of the leasing business from pricing to closing all types of transactions. GATX invited me from time to time to sit on the Finance Committee, and vote for or against deals. The responsibilities I held seemed significant and important. Corporate lawyers can play an invaluable role within companies in which they serve. They can help organize teams, frame the issues, facilitate communication, effect policy changes, negotiate documents and close deals. They can provide unique insight, seasoned analysis and pathways to success. But like those of us who practice in law firms, lawyers now face even greater corporate responsibility to implement complex rules of corporate responsibility than I did when I was at GATX. As the post-Enron era continues to unfold, corporate lawyers (like outside counsel) must report on the wrongdoings that may occur with their clients. As I mentioned in Article 4 above, the American Bar Association just increased the stakes in this regard with new, broader rules allowing lawyers to judge and report actions that violate the law and result in financial harm. As corporate lawyers embrace the rules imposed on them, they undertake a balancing act and hold a special position of trust. Everyone in an organization should recognize the changing roles of lawyers, continue to take their counsel seriously but not allow the new rules to chill them from relying on their lawyers in all aspects of the enterprise. Feedback From You Most months I share comments I receive on Business Leasing News and my book Business Leasing For Dummies (BLFD)®. Here’s a comment I received on the August edition of BLN:
As always, thanks for reading my publications and for your feedback. My kids thank you for buying Business Leasing For Dummies (BLFD)®. Please do so, often, with my personal thanks! About the Web Site of Business Leasing News If you have book-marked BLN, please change your bookmark to BLN’s new address at Patton Boggs LLP: http://www.pattonboggs.com/newsletters/bln. Please stop by and see the BLN web site any time. It not only offers past issues but also speeches, a link to my book and various helpful search tools. About Patton Boggs LLP and My Practice As you may be aware, I am a part of the Patton Boggs LLP Business Transaction Group in the Dallas office. Patton Boggs LLP is a law firm of about 400 lawyers located throughout the United States with extensive capabilities in over fifty areas of legal practice that include leasing, secured transactions, securitizations, syndications, project and mezzanine financing, bankruptcy, public policy, litigation, intellectual property and technology law and much more. The leasing practice regularly involves the legal (and business) aspects of buying, selling, financing and leasing real and personal property of all kinds, including aircraft, energy, facility, production, technology and other transportation assets. We also structure, negotiate and close specialized transactions such as vendor and venture leasing programs, municipal, state and federal leasing arrangements, as well as corporate and portfolio acquisitions, to name of few. Given the state of the economy, we extensively assist our clients with troubled deals and bankruptcies, including repossessions, lift stay actions, deficiency litigation and forbearance agreements. Please feel free to call me at (214) 758-1545 or e-mail me at dmayer@pattonboggs.com for information about any of these areas or the many others available at Patton Boggs LLP, or to discuss anything I have written in Business Leasing News. I welcome opportunities to build relationships. 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 McCoy, Steve Reagan, Julie Rivard, Tom Stumpf and Jeff Turner. The technical team, consisting in part of George Barber and Winston Jackson, continues to provide talented skills and support to BLN. All the best, David David G. Mayer The "For Dummies" part of my book,
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