Tuesday, August 28, 2012
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NAELB Joins ICBA
NAELB Board of Directors
The National Association of Equipment Leasing Brokers (NAELB) has announced it has become an approved "Associate Member" of the Independent Community Bankers of America (ICBA). As of July 31, 2012, NAELB was composed of 423 brokers, 85 funding sources, 21 associates, and 4 additional brokers. Only NAELB "broker members" can vote on issues as the association is primarily dedicated to broker members.
It was noted in the announcement with an asterisk: " * NAELB is an Associate Member of ICBA, but only broker members who have joined ICBA directly can represent that they are members themselves. Call NAELB Headquarters for further clarification."
The announcement also stated:
"NAELB Funding Sources LOVE applicants that were referred to you by bankers.
"Community bankers are EXTREMELY RELUCTANT to turn down bank customers' requests for funding. When banks cannot fund, due to credit, collateral or limitations in the bank's lending policy, YOU CAN BE EVERYONE'S HERO.
"Show your banker how working with NAELB brokers is a win/win for the banker and their customer!"
Jim Borland, 71, President/Founder of U.S. Energy Capital, Greensboro, Georgia, as well as co-founder and first president of NAELB, noted his company is an active member of One World Business Finance (formerly One World Leasing), a leasing co-up, and March 16, 2011 announced the co-op had been selected by ICBA ", as a Preferred Service Provider (PSP) for community bank equipment leasing and financing opportunities:
“ICBA is pleased to announce OneWorld Business Finance as a Preferred Service Provider,” said Dan Clancy, ICBA senior vice president of services. “OneWorld will enable ICBA member banks to compete for leases and equipment finance transactions from its customers through OneWorld’s leasing exchange, an ICBA leasing resource, and allow them to fund loans secured by equipment leases.”
Borland told Leasing News they had been introduced to some "significant funding sources," which has made a profound impact on members business and abilities, as well as relationships with community banks.
He said One World relationship is two way, meaning they receive inquiries from banks whose customers are in need of loans and leases the banks need to help their customers. In fact, Bill Mapes of One World is full time in coordinating requests and assisting co-op members in the program. Members also refer business as well as new customers to their local banks.
In the March 16, 2011 announcement: Lou Manitzas, president of OneWorld Business Finance said, “OneWorld will provide ICBA member banks with competitive advantages in the marketplace. We are able to accomplish this by insisting on the highest ethical standards and business practices, which have been used to negotiate preferred and unique funding channels and programs with a wide national network of commercial lenders, banks and independent businesses.”
In addition to belonging to ICBA, One World is also a member of the Equipment Leasing and Finance Association, National Association of Equipment Leasing Brokers as well as the National Equipment Finance Association.
One World Business Finance is part of ICBA Preferred Service Providers, listed under "Funding" as well as "Lending," and "Compliance & Bank Operation Solutions"
There are 377 Corporate Associate members
The Equipment Leasing and Finance Association is listed as a one of the Select Corporate Members (They have also been actively seeking bank members, particularly from the American Bankers
Joining the group now is the National Association of Equipment Leasing Brokers, listed also as one of the Select Corporate Associate Members:
Neither the Commercial Finance Association nor National Equipment Finance Association belong to the Independent Community Bankers Association.
Offer to community banks:
Lessor Gets Revenge on First Payment Default Lessee
by Tom McCurnin, Esq.
First Payment Default Held to Constitute a Non-Dischargeable Debt
First payment defaults. I hate them. Sure you can sue the guy and get a judgment, but what if he’s uncollectable and the equipment is gone? What if he files Bankruptcy?
A New Mexico case exacted revenge on the first payment default, based on false pretenses. The case is In re Slade, 471 B.R. 626 (Bkrtcy. D. N.M. 2012).
The problem is that once the lessee files Bankruptcy, the lessor has to prove fraud. Fraud, short of submitting false financials is difficult. Proving fraud, that the lessee never intended to pay the lessor anything is challenging. Proving that kind of fraud in a Bankruptcy Court is just impossible. But in Slade, the lessor had some good facts, good documents, a slippery lessee, and a good judge. In short, the stars lined up for the lessor.
While there are some similar decisions regarding credit card advances (which are more obvious), this is the first decision of its kind to hold that a first payment default can justify a non-dischargeable judgment in Bankruptcy.
CAGO was a financial institution financing equipment through leases. Raymond Slade operated a gravel mine and entered into an equipment lease for a Trackhoe in 2005 with CAGO. Mr. Slade did not make a single payment on the lease, and the Trackhoe mysteriously disappeared. Mr. Slade filed a Chapter 7 Bankruptcy shortly thereafter.
CAGO filed an adversary action to declare the debt non- dischargeable, claiming that Mr. Slade misrepresented his intention to make payments under the lease, essentially obtaining property under false pretenses.
It was clear that Slade made the promise to pay, but his mental state was at issue. Did he have the intent to perform? Slade argued that it was just bad luck he couldn’t pay.
The lessor proved that Slade had an ongoing business with revenue and receivables. Slade was also paying his other creditors and employees at the time of the lease. In addition there were some incriminating conversations with Slade’s employees who wanted no part of this guy.
The Court therefore found Mr. Slade made the representation with knowledge of its falsity and with intent to deceive. Once that was established, the other elements of justifiable reliance and damages were easy to prove.
The Court could not locate another decision which justified a non-dischargeable judgment for a first payment default, so this may be a first. The only thing close to this is the case of In re Sutherland Minor, 345 B.R. 348 (Bkrtcy. D.Colo. 2006) [Obtaining public assistance based on false statement].
For equipment lessors making hard money loans of this type, the lessons of this case are two-fold. First, know your customer. The lessor should underwrite the deal to build in costs of collection and/or chasing the equipment. Second, always get current financial statements, operating statements, and other financial records. Those records played an important role in this case, so the lessor could prove that Slade made a promise that he could easily perform, but he never intended to pay the lessor a cent.
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Question: When interviewing, can I ask upfront about compensation?
Answer: In short, NO! Never bring up compensation unless the hiring manager/potential employer does. They typically will have your current (last) compensation information from the application you have filled out. Make sure these numbers are accurate – as they can be verified!
A first interview is ALL about what you can bring to the table and the value you can provide the company. It is about presenting yourself as a potential asset to the company. If handled correctly, this will lead to a second interview! Remember, the goal is the second interview.
You can then approach the second interview with such questions and inquiries about what the company can do for you …. This is when you can bring up compensation---but only IF they have not done so already; lead gently into the conversation towards the end of the interview. I would also state if the interviewer hasn’t brought it up in the second interview, which may mean they are not interested or a further interview or process is required.
Also note: most applications address your salary (current compensation/desired salary). To avoid getting yourself “kicked” out of the running, I suggest leaving that area “open”; e.g. “open to competitive salary offerings.”
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#### Press Release #############################
PacTrust Bank Awards Lease Portfolio Service Contract
GIG HARBOR, WASH., - Orion First Financial, LLC confirmed today that it has contracted with Pac Trust Bank to begin servicing equipment lease and loan contracts. Servicing of the PacTrust accounts became effective August 1, 2012.
PacTrust Bank's (formerly Pacific Trust Bank) expansions into the small ticket equipment finance space meant that teaming with an expert servicer of these accounts was on the horizon—enter Orion First Financial. PacTrust expects its small ticket portfolio volume to grow to eight digits by years end.
“PacTrust Bank is excited to partner with Orion First Financial for servicing of our growing equipment leasing business. We are confident that the strong knowledge, skills and abilities of Orion’s staff are a great fit to partner with PacTrust in delivering Service, Choice, Value and Trust to our customers,” said David Normandin, Senior Vice President of PacTrust Bank.
Orion First Financial, located in Gig Harbor, WA, is an independent servicer for the equipment finance industry. “We are proud of our role in supporting small business lending and our reputation for service quality. We are very pleased to see that reputation growing among banks,” said Shannon Green, CLP, President of Orion First Financial.
Orion First Financial is a highly regarded independent servicer for the equipment finance industry. Orion differentiates itself from other lease servicing companies through its experience and expertise in small business credit, using proven management processes to minimize portfolio delinquencies and reduce losses for maximum profitability.
About Orion First Financial, LLC
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Jeff Rudin announces 2013 June Jazz Cruise
Join leasing colleague Jeff Rudin friends, family, and jazz fans on his first annual Divine Jazz Cruise featuring the world renowned Clayton-Hamilton Jazz Orchestra and the incomparable Barbara Morrison with her trio aboard the beautiful Celebrity Solstice to Alaska. Roundtrip from Seattle June 21-28, 2013.
This is a one of a kind cruise with exclusive private concerts and one of a kind experience with our musicians not to mention the wonderful cruise to Alaska.
“Legal Contract Issues”
Article 2A (A2) deals with requirements only on “legal leases” therefore any lease that does not meet the definition of a legal lease becomes an article 9 disguised sales agreement. The difference in the two Articles is the question of ownership and the rights of ownership. The lessor is an owner under 2A and a lender under Article 9 where the lessee is considered the owner. This is very important, as readers may have seen in recent articles by attorney Tom McCurnin.
Ownership also carries responsibilities. 2A views two types of leases: two party leases and three party leases (referred to as finance leases). If you are the owner of the equipment then are you responsible for the equipment’s performance, during the lease term, and how does this affect your documentation?
If you are a three party lease, it is assumed that there is a lessee, a vendor (equipment vendor), and a lessor (providing the cost of the equipment for the lessee and takes ownership). Therefore, it is called a finance lease. One of the requirements for a lessor (with a net lease), who becomes the owner. A good way is to avoid responsibility for equipment performance is to make the maintenance warrantees (supply contract), provided by the vendor, available to the lessee.
Just because the lessor includes a phrase in the lease agreement that passes the supply contract to the lessee does not allow the lessee to handle a claim for equipment performance unless the vendor has agreed to accept it. This is usually handled in the purchase order with a requirement that the vendor provide the supply contract to both the lessee and the lessor.
If you are writing a two party lease then the lessor is also the equipment supplier and responsible for equipment performance. This usually does not come into effect in net leases offered by lessors under a three party lease. Therefore most two party leases are only offered by vendors. Many vendors establish captive lessors as separate companies to move to a three party lease to protect the financial source form performance issues.
It should be noted that if a lessor attempts to lease returned off lease equipment they will be the equipment supplier and will be a two party lease and take on the risk of equipment performance unless the lease agreement has language that has the lessee agreeing to “as is, where is” and then it is not totally protective. This is why most after return equipment is sold under Article 9 requirements.
To be a legal 2A lease the term must be lower than 80% of the equipment’s useful life and must not have a bargain purchase option. Return requirements may not be so onerous that it is cheaper to purchase the equipment than to return it.
The advantage to a 2A legal lease comes when default occurs and ownership issues are paramount. I recommend that your lease contract be reviewed at least once a year by an attorney who specializes in leasing and finance. It is also a very good idea when learning about a legal case, or having a hunch about some situations you are observing, to contact your lease attorney as in protecting your own health, early prevention is the best cure.
Mr. Terry Winders, CLP, has been a teacher, consultant, expert witness for the leasing industry for thirty years and can be reached at firstname.lastname@example.org or 502-327-8666.
He invites your questions and queries.
Previous #102 Columns:
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Top Stories August 20--25
Here are the top ten stories opened by readers
(1) Archives August 20, 2002
(2) Lessor of POS machines Snared in Class Action Suit
(3) Leasing 102 by Mr. Terry Winders, CLP
(Tie) (4) Brief Background on CMC
(Tie) (4) CMC Attorney Back in the News
(5) New Hires---Promotions
(6) Jeff Taylor's Leasing Predictions, Spring, 2006
(Tie) (7) 500 Registered for ELFA October 21 Conference
(Tie) (7) Nullmeyer is back! Who is he?!
(8) CLP Spotlight - Shervin Rashti, CLP
(9) Lessor Prevails Against Chutzpa Defense
(10) Guilty to $1 Million Investment Fraud Scheme
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Orange County Attorney Sentenced to Six Months
Los Angeles- Kevin J. Mirecki, 53, was sentenced to six months federal custody, one year of supervised release, and ordered to pay restitution of $206,419 to the Internal Revenue Service (“IRS”). Mirecki was also fined $20,000 by U.S. District Judge Dale S. Fischer for his failure to file Federal income tax returns.
On February 9, 2009, Kevin Mirecki pleaded guilty to three counts of failing to file Federal tax returns. Mirecki failed to file an individual federal income tax return (Form 1040) and two corporate income tax returns (Forms 1120) for his companies Kevin J. Mirecki, Inc. and American & International Corporate Services (AICS). According to the plea agreement, Mirecki admitted he failed to report over $1.3 Million in personal income for years 2000 through 2003. Mirecki also admitted in the plea agreement that he created Genesis Fund Ltd. as a Nevis corporation and created trusts for four individuals charged in the March 2005 indictment.
On March 30, 2005, nine defendants were indicted in the investigation of the Genesis Fund in an 83-count Indictment charging violations of conspiracy, wire fraud, mail fraud, tax fraud, money laundering, obstruction and forfeiture statutes. Eight defendants pleaded guilty and one defendant was convicted of tax evasion after a jury trial in September, 2011. Sentences for these defendants ranged from 12 months probation to 62 months imprisonment.
According to court documents, the criminal investigation of Mirecki was initiated because of Mirecki’s persistent pattern of failing to file tax returns and pay income taxes even after IRS intervention. During this investigation it was learned that Mirecki had performed trust-related work for individuals involved with the Genesis Fund. Genesis Fund was marketed as an investment in foreign currency trading.
Mirecki received a lighter sentence today than many defendants in related cases due to his substantial assistance and testimony in the investigation and prosecution of criminally culpable individuals related to the Genesis Fund. Mirecki testified at a Federal criminal trial in another judicial district and testified for the government.
“Kevin J. Mirecki’s cooperation was valuable to federal law enforcement and assisted in the successful prosecution of multiple defendants and orders of restitution to investors and the IRS. Notwithstanding this cooperation, those who intentionally fail to file their tax returns and fail to pay taxes must know that there is a price to be paid, including time in prison. Today’s sentence reflects the nature and severity of the tax crimes committed by Mirecki, while at the same time reflecting the scope of his cooperation with the government. Mirecki’s sentence is meant to restore integrity and faith in the nation’s tax system”- Leslie P. DeMarco, Special Agent in Charge of IRS Criminal Investigation Los Angeles Field Office.
The investigation of Kevin J. Mirecki was conducted by IRS – Criminal Investigation in the Los Angeles Field Office and prosecuted by the Department of Justice Tax Division
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Peter wins best Kona Coffee Poem
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