Wednesday, October 27, 2010
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#### Press Release ############################
Official!!! Financial Pacific Leasing Acquired by Flexpoint Ford
Chicago, IL, - Flexpoint Ford, LLC, a private equity firm dedicated to the financial services and healthcare sectors, announced today that it has acquired a majority interest in Financial Pacific Leasing, LLC from Ares Capital Corporation. Financial Pacific is a specialized commercial finance company focused on providing leases for essential business equipment to small businesses nationwide.
In conjunction with the closing of the acquisition, Financial Pacific has extended and increased its syndicated credit facility, led by Bank of America, from $155 million to $192 million. The company has also renewed its existing $100 million structured warehouse facility with WestLB.
“Financial Pacific has an excellent history of success as a niche lessor in the specialty finance industry, and we are excited by the opportunity to partner with the company’s experienced management team”, said Chris Ackerman, Principal of Flexpoint Ford.
“The company’s excellent underwriting and servicing platform, combined with its nationwide origination network, makes Financial Pacific a unique platform investment in the small business credit marketplace.”
“It is a great feeling to bring together the proven business model of Financial Pacific with the capital and expertise of Flexpoint Ford, along with the support and confidence of our lenders”, said Paul Menzel, CLP, President and CEO of Financial Pacific.
“We are looking forward to leveraging the expertise of Flexpoint Ford in the financial services and risk management industries to capture the exciting market opportunity in front of Financial Pacific today. We are better positioned than at any time in our history to be able to provide critical access to capital for equipment acquisition by small businesses in the United States through our network of third party origination partners, together with their equipment vendors.”
About Financial Pacific Leasing
About Flexpoint Ford
##### Press Release ############################
Leasing News story: Financial Pacific is Sold!
Direct Capital Now 100% Employee Owned
"Good morning Kit. It’s true, DCC has no relationship with Allied/Ares Capital as the management team led a buyout of Allied’s interest in the company a couple months ago. We bought back all the ownership of Allied and now we’re 100% employee owned.
"Our business is strong and in growth mode---sales are up over 60% from last year."
Allied Health Care Services 123 pages of Creditors
In the alleged $87 million fraud by Charles K. Schwartz regarding respirators for his company, Allied Health Care Services, Orange, New Jersey, the bankruptcy filing shows a list of 123 pages of creditors claiming $40,491,000. (1) Many of the amounts by the creditors are not given, and most likely the dollar amount will be considerably higher, perhaps as high as the FBI estimates of $87 million.
The list looks like no one was overlooked in being a creditor to Allied Health Care Services. Unfortunately not only does it appear that every company a member of every leasing and finance association is mentioned, but as well as many small and regional banks from around the country that also have claims. There are 123 pages (2) (3). The mailing list with addresses is 109 pages (4)
The list of items for sale is not very large or indicative of what was claimed on the balance sheet. An ex-employee stated there were about 50 patients and perhaps 100 respirators.
AtHome is servicing them, or perhaps has replaced some of them.
“Notice of Information for Public Auction re: 11-30-10 date: 2003 GMC Savanna cargo van, 2008 GMC Savanna cargo van, 2009 GMC Savanna cargo van, 2007 GMC Savanna cargo van, 2008 Buick Enclave 4 door SUV, 2006 GMC Savanna cargo van, 2004 GMC Yukon 4 door SUV, 2001 GMC Yukon Denali 4 door SUV, 2007 Pontiac Torrent 4 door SUV, 2007 GMC Savanna cargo van, 2008 Pontiac Torrent 4 door SUV; 12-1-10 date: miscellaneous office furniture and equipment, inventory consisting of life care/Respironics ventilators, wheelchairs and other healthcare equipment and supplies; 12-7-10 date: miscellaneous healthcare equipment and supplies. filed by Richard Honig on behalf of Eric R. Perkins. Hearing date if Objection filed: 11/22/10 @ 10:00 a.m. Objections due by 11/15/2010.” (5)
There is not $87 million in respirators in the equipment to be auctioned. Charles K. Schwartz on his personal financial statement to Sun National Bank valued Allied Health Care Services as worth $16,990,584. (6)
(1) Allied creditor claims
(2) Allied creditors, part 1, 63 page list
(3) Allied creditors, part 2, 60 page list
(4) Allied Creditors mailing list, 109 pages
(5) Allied Auction
((Please Click on Bulletin Board to learn more information))
Equipment Acquisitions Resources BK Up-Date
Readers ask what is going on with the Equipment Acquisitions Resources, Palatine, Illinois and has ex-convict Sheldon Player been arrested by the Federal Bureau of Investigation. At this date, the bankruptcy hearing is scheduled for 3/29/2011 at 10:00 AM at 219 South Dearborn, Courtroom 680, Chicago, Illinois 60604.
There is much going on with complaints by the trustee filed against Harrah's Entertainment, Luxor Hotel, Wynn Las Vegas, as Sheldon Player is a gambler, playing at this clubs, and as reported by a previous story was intercepted at a Colorado airport with a duffle bag of $900,000 in cash that he claimed he won while playing at the clubs in Las Vegas, Nevada. (1)
Most likely the FBI continues to build its case, also waiting for the BK trustee to finish his role in asset recovery, as well as most likely trying to get an insider to turn evidence for a reduced sentence, such as Mark Anstett, former president of E.A.R.
(1) Sheldon Player Caught w/$900,000 Cash in Duffle Bag http://leasingnews.org/archives/November%202009/11-16-09.htm#sheldon_player_caught
Previous E.A.R. Stories:
Leasing Industry Help Wanted
Please see our Job Wanted section for possible new employees.
Big Jump in Leasing Business from August to September
The Equipment Leasing and Finance Association (ELFA) Monthly Leasing and Finance Index shows new business volume is up 34.8% from August to September, 2010: $4.3 billion to $5.8 billion. September also brings a rise in the third quarter to $5.2 billion which matches the 3rd quarter of 2009.
It appears August has been a soft month $3.7 billion in 2009. September, 2010 is certainly higher than the September of 2009 which was $4.7 billion.
What do these new numbers mean? According to the ELFA press release:
“The new business volume increase is indicative of a positive business outlook,” said Steve Grosso, President, and Chief Operating Officer, CoActiv Capital Partners, Inc. located in Horsham, Pennsylvania.
“While it’s not time to claim we are in a robust environment, clearly businesses are starting to invest in capital equipment. In many cases, we see older equipment that is worn out being replaced, or newer technologies being installed. We haven’t seen great large-scale expansion. The technology sector and healthcare seem to be strong versus infrastructure and manufacturing which still remain flat.”
The ELFA press release further states:
"The percentage of credit approvals decreased to 72 percent in September, a percentage point down from August credit approvals, which matched the highest approval ratio since September 2008. Fifty-six percent of participating organizations reported submitting more transactions for approval during the month. Finally, total headcount for equipment finance companies was flat during from August to September. Year-over-year employment is down almost five percent. Supplemental data shows that construction and trucking assets lead the underperforming sectors. "
Here are the charts from the ELFA Press release:
click image to make larger
ADP Credit Corporation
Previous Monthly reports
IFC Credit Corporation BK—Update
Hearings and motions continue in the IFC Credit Corporation, Morton Grove, Illinois bankruptcy, with funding through February 11, 2011, so it is easy to see this will continue through next year, too.
The case against Rudy Trebels, as an individual, continues by C0-Active Co-Active Capital Partners, where Steve Grosso President and COO is attending the ELFA Conference (he was quoted above.)
"1. In the present matter, IFC and IFCI, through Trebels and Langs, did not merely breach a contract by failing to remit to CoActiv the funds owed under the lease agreements. To the contrary, they also fraudulently concealed the termination of leases and wrongfully withheld the proceeds from those lease terminations. Further, Defendants used those proceeds to enrich themselves, stabilize the positions of Langs and Trebels within IFC, and to misrepresent and falsely inflate the financial condition of IFC and IFCI."
Previous IFC Credit Stories
ELFA Boca Raton Conference Report
The 49th edition of the Equipment Leasing and Finance Association (ELFA) Annual Convention in Boca Raton, Florida kicked off Sunday night with the traditional reception. While the mood was not necessarily ebullient, it definitely was upbeat. Many wondered whether the lightened mood over last year’s event was due to better economic conditions, or the fact that there was no hurricane in the near future (those with longer memories will recall Wilma, the Class 4 hurricane that roared through Boca Raton the last time ELFA held its convention here.)
After spending all day Monday on the convention floor, however, I would have to say that the higher spirits were due to more confidence in the future, rather than the lack of a hurricane. It seemed that exhibitor numbers were up and comments indicated that, although there is concern around the continued uncertainty of the economy, lessors are gaining optimism about the future. In spite of the fact that things are looking better, however, many still expect the going to be slow in the near term.
Of course, one of the biggest topics on everyone’s mind is the impending changes to the lease accounting rules. Opinions are divided as to their impact, however, with some crying gloom and doom while others are gearing up for what they see as opportunities. There are several rumors swirling around in this regard, one of which is that the changes will be pushed further out into the future. Another rumor posits that the lessor rules as proposed will not stand. Attendees will get a better idea of what the changes will mean during several Tuesday sessions, although time will only tell as to what actually happens
Attendance at the breakout sessions also was reflective of the lightened mood, as many chose to attend one or more sessions rather than desperately scrambling for business in the hallways. This is not to say that there were not the normal business opportunities that the convention always provides, as networking was going strong. You definitely can tell that there are more people here than last year, though, with ELFA reporting close to 850 attendees, up 40% over last year.
The Equipment Leasing and Finance Foundation also unveiled its report on the state of the industry during its luncheon and awards presentation. Other studies presented today included a report on the lease accounting changes and one on social media. A question and answer panel led by former chair Joe Lane added insights to the compiled data. The day finished strong for everyone with several invitation-only cocktail receptions and more intimate client/relationship dinners.
The clock struck ten, the music stopped, the bar was shuttered, and like that, it was over. Although a Boca Raton noise ordinance put a quick end to the ELFA closing reception, not everyone wanted to retire for the evening, however, as the optimism of the past several days carried all the way through the convention. Woody Sutton, the new ELFA President, put it well stating that, “attendance is strong, the sessions well-attended, and there is a buzz of confidence in the air.” Based on my experience here, I would have to agree.
This confidence has been buoyed not only by increased margins and volumes, but also by a slight loosening of the credit markets. While it is true that advance rates and terms have changed, lines are becoming more available and securitizations more acceptable as investors move from away from some of the real estate investment options. The changing times also were reflected in the introduction of the new ELFA leadership, as David Merrill of Fifth Third Leasing steps into the chairman’s role and Crit DeMent becomes Chairman-Elect.
Other positive indicators observed at the hallways included plans by several lessors to better define their market activity, focus more on specialty niches, and seek out ways to differentiate their products. Not all was rosy, however, as the potential impact of the accounting changes remained front and center in the form of two separate breakout sessions. There was an evident level of frustration with the proposed rules, however, and not just because of their ramifications. On a more fundamental level, lessors are struggling to understand the reasons behind being forced to change how they account for their leases, as no one sees the new rules as either fixing something that is broken or improving the current system.
All in all, though, this year’s convention represented a definite turnaround from the past several years, which bodes well for the industry. Yes, there are challenges, especially in the form of new regulatory and accounting requirements, but the equipment leasing and financing industry now appears to be taking the offensive and moving the business forward, rather that taking a defensive stance – and that is a good sign.
About Mr. Halladay:
New ELFA Officers, Directors elected for 2011
David A. Merrill, President, Fifth Third Leasing was elected Chairman with Crit DeMent, Chairman and CEO of LEAF Financial, was named Chairman-elect of the Equipment Leasing and Finance Association 2011 Board of Directors.
Merrill is a long-standing member of ELFA. He previously served on the ELFA’s Board of Directors and as Treasurer, Chair of the Funding Exhibition and Chair of the Capital Access Committee.
The new members of the ELFA Board of Directors include:
Tom Askounis, President/Shareholder, Askounis & Darcy, P.C.
Stan Herkelman, President, GreatAmerica Leasing Corporation
Fred Sasser, President, Chicago Freight Car Leasing Co.
Jud Snyder, President, M&I Equipment Finance
Elected to serve as ELFA Vice-Chairs:
Rick Remiker, President, Huntington Equipment Finance
Adam D. Warner, President, Key Equipment Finance
Robert J. Rinaldi, Executive Vice President, CSI Leasing,
Thomas M. Jaschik, President, BB&T Equipment Finance, continues to serve as treasurer.
Kenneth R. Collins, Jr., Chairman and CEO, Susquehanna Commercial Finance, Inc.,
In addition to Askounis, Herkelman, Sasser and Snyder, the following are also members of the ELFA Board of Directors:
Kent Adams, President, Caterpillar Financial Services Corporation
AZELA Fall Meeting
The Arizona Equipment Leasing Association had its fall meeting with 10 in attendance at Coco's Bakery and Restaurant. After a lively commentary of the current state of the finance business by each attendees, the program followed that could positively add to the broker's individual cash flow streams.
Ray St. Clair, V.P. U.S. Bank S.B.A. Division discussed the current lending criteria for S.B.A., changes that went into effect in October, and those that may occur at year end. An overview of the various programs was also given and information how to potentially use them for our clients.
NAELB Broker Exchange Grows to 18
According to a National Association of Equipment Leasing Brokers spokesperson, "There are 18 unique brokerages listed on the exchange, however many of them cover several or all the states in terms of areas their funders will service."
The listing are geographical where NAELB brokers have indicated that they have discovered special funding sources, perhaps not known to others or available to others. These brokers may be able to help other NAELB brokers secure funding. They may charge a fee for their services. The advantage, and purpose, is to help both new and experienced brokers with transactions as they have specific sources they believe would have a better chance of approval as they are not “cookie cutters.” Also what in reality comes with experience is knowing who takes what and why and placing them in these sources that they have cultivated.
It is only available to NAELB members and they do not plan to open to non-members.
NEFA Names Tara Aasand 2010 Member of the Year
The National Equipment Finance Association (NEFA) recently named Board member Tara Aasand of Great American Insurance Group the 2010 NEFA Member of the Year.
Her involvement with the NEFA began in 2004, when she volunteered to be a member of the Regional Committee of the United Association of Equipment Leasing (UAEL). In addition to her Board position, she currently serves as co-chair of the NEFA Regional Committee, where she is responsible for focusing the committee's efforts on organizing regional and local meetings for networking, socializing and educating NEFA members. She has also been instrumental in ensuring the content on the NEFA Web site is up-to-date and highlights the various initiatives of the association.
"I think I speak on behalf of the entire NEFA Board of Directors when I say that Tara has been an outstanding addition to the Board, and we greatly appreciate her dedication and service to the NEFA," says NEFA President Randy Haug of LeaseTeam, Inc. "Tara truly embodies our purpose, core values and mission and is a model NEFA volunteer. We are certainly grateful for the support that both Tara and Great American Insurance Group consistently give our organization."
### Press Release ############################
CIT Reports Third Quarter 2010 Net Income of $131 Million
NEW YORK----CIT Group Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market companies, reported net income for the quarter ended September 30, 2010 of $131.5 million, $0.66 per diluted share. CIT also announced that, after a review of fresh start accounting (“FSA”) balances and processes, it has revised its first and second quarter results higher. As a result, second quarter net income was revised from $142.1 million ($0.71 per diluted share) to $171.4 million ($0.85 per diluted share), while first quarter net income was revised from $97.3 million ($0.49 per diluted share) to $115.4 million ($0.58 per diluted share). Additional details on the revisions are provided in the “Prior Period Revisions” section and tables that follow. All comparisons to prior 2010 quarters are to the revised results.
“Our balance sheet remains strong and capital ratios rose, as we paid down high-cost debt, further optimized our portfolio and improved our funding flexibility. Our increased business volume provided much needed credit to the small business and middle market companies that remain the backbone of the U.S. economy.”
“We continued to make steady progress advancing our key priorities in order to increase shareholder value,” said John A. Thain, Chairman and Chief Executive Officer. “Our balance sheet remains strong and capital ratios rose, as we paid down high-cost debt, further optimized our portfolio and improved our funding flexibility. Our increased business volume provided much needed credit to the small business and middle market companies that remain the backbone of the U.S. economy.”
Summary of Financial Results
Net finance revenue1 (which includes operating lease rentals and depreciation) decreased $110 million from the second quarter as the revenue impact of a $2.7 billion contraction in average earning assets more than offset the interest savings from reducing high-cost debt. Net operating lease revenues were essentially flat. As a percentage of average earning assets, net finance revenue in the third quarter was 3.28%, down from 4.12% in the second quarter, and included a 2.62% benefit from FSA. Excluding FSA and the effect of prepayment penalties on high-cost debt in both quarters, margin was 0.92%, up 23 basis points from the second quarter, as the reduction in funding costs was partially offset by the lower asset yields that resulted from a change in the composition of interest-earning assets and lower yield-related fees.
Other income (excluding operating lease rentals) decreased from the second quarter primarily due to lower recoveries on receivables charged-off prior to the adoption of FSA. Results also reflect slightly higher factoring commissions on seasonal volume build.
Operating expenses decreased from the second quarter reflecting lower employee retention plan and benefit costs. Headcount declined 5% from June 30, 2010 to approximately 3,800. We recorded $6 million of restructuring charges in the third quarter for facility consolidation and severance costs. Improving operating efficiencies and lowering expense levels remains a priority
The 31% year-to-date effective tax rate results from taxes in international operations and valuation allowances recorded against U.S. losses.
Total assets at September 30, 2010 were $53.0 billion, down $2.0 billion from June 30, 2010, reflecting the sale of $1.5 billion of non-core assets and portfolio run-off in excess of new business activity. Significant asset sales during the quarter included a $0.6 billion liquidating consumer portfolio in Vendor Finance, $0.6 billion of Corporate Finance loans, $0.2 billion of other Vendor assets and approximately $100 million of Transportation equipment. Assets held for sale at September 30, 2010 include essentially the entire private student loan portfolio, some government guaranteed student loans and certain energy-related Corporate Finance assets.
Preliminary Tier 1 and Total Capital ratios improved to 18.7% and 19.6%, respectively, up from 17.5% and 18.2% at June 30, 2010, benefiting from both growth in common equity and a decline in risk-weighted assets. Book value per share at September 30, 2010 was $44.09.
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#### Press Release #############################
Maxim Commercial Capital, LLC Completes Credit Facility
Maxim Commercial Capital, LLC is pleased to announce the completion of a revolving credit facility with Cathay Bank, N.A.
Doug Houlahan, Managing Partner
"This credit facility is a testament to what Maxim has been able to accomplish in just under two years in the Equipment Finance business. We were fortunate to bring together the right people and the right product at exactly the right time" stated Doug Houlahan, Managing Partner of Maxim Commercial Capital, LLC.
Shervin Rashti, Managing Partner
"This line of credit guarantees Maxim the capital necessary to hit our growth targets and continue to provide creative funding solutions for our clients" added Shervin Rashti, Managing Partner. We are confident Cathay will prove to be a great partner as we expand our line and our relationship over the years to come.
Maxim Commercial Capital, LLC, with offices in Los Angeles and San Francisco, CA, provides creative and flexible asset-based financing solutions to third-party originators. For more information visit www.maximcc.com or call 877-77-MAXIM (62946).
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Puget Sound, Washington---Adopt a Dog
Meeka Husky: An adoptable dog in Auburn, WA
“This sweet girl is looking for her forever home -- preferably in a calm, not too hectic, environment without kids. She is shy at first but quickly warms up to people and is eager to show you her cuddly side. She is a little underweight but is otherwise healthy and would thrive in a home where she can get lots of TLC and be your closest companion. Meeka is housebroken, great with other dogs and walks well on the leash. Her adoption donation is $250 .
Phone: Please use email
Adopt-a-Pet by Leasing Co. State/City
Adopt a Pet
Lease agreement reform will show the true state of the balance sheet
Interview: Air Lease CEO Steve Udvar-Hazy
Restaurant stocks are on a roll as chains recover nicely
Ellison vows evidence will implicate HP's new CEO
Californians cut spending, indicating permanent behavioral shift
Audrina Patridge eliminated from Dancing with the Stars
Google appears close to buying the trophy 111 Eighth Ave. building NYC
Rangers unfazed by AT&T Park's quirks
Tony Romo expected to miss 6-8 weeks because of broken collarbone
City by the Bay Braces for World Series
Whitman, refusing to pull negative ads, jeered at women's conference
Foreclosures: 1,500 homes lost this year in Sonoma County
Summer Wine Sales End with a Bang
Howell Mountain Appellation Collection tasting in St. Helena November 6th
Raise Your Glass to Texas Wine History
60 growers file for bankruptcy amid Muscadet 'meltdown'
Wine Prices by vintage
US/International Wine Events
Leasing News Wine & Spirits Page
This Day in American History
1659-William Robinson and Marmadue Stevenson, English Quakers who had come to America in 1656, were executed for their religious beliefs, hanged from an elm tree on Boston Common, Boston MA. They were condemned by the Massachusetts General Court under a law passed on October 19,1658 that banished Quakers from the colony under pain of death. Also condemned, but reprieved at the last moment, was Mary Dyer, who returned to Boston the following year and was hanged on June 1, 1660.
World Series Champions This Date
1985- Kansas City Royals
WHY BASEBALL WALTZES WITH LETTERS
by Tim Peeler
A Faulkner sentence is an extra inning game, Simply and finally playing through its Will and exhaustion.
Third Base Coach signals are ee cummings poems-
The prisons play contests of Bukowski prose,
Weird killers load the bases at a
Although Poe would never sit through nine,
Finally, Wolfe who wrote slugfest
--- with the permission of the author, from his
“Waiting for Godot's First Pitch”
available from Amazon or direct from the publisher at: www.mcfarlandpub.com
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