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Balboa Capital, Irvine, California
Bulletin Board Complaint--II & III

by Christopher Menkin, editor

A draft of this “complaint” was sent to all parties, requesting corrections and/or comments. Leasing News here includes e-mail from Balboa Capital CEO and co-founder Patrick Byrne, CLP, from the first complaint.

Actually the first Balboa Capital complaint received regarding "Evergreen clauses" was July 6, 2005 from Kandy Wang, General Manager of Eagle Bag Corporation in Oakland, California.

It now becomes II and III.

During this time, she had been speaking with Citicorp, Balboa, and Leasing News regarding the lack of residual, the blanket lien and "interest rate." She had never heard of an “Evergreen” lease and was told by the Balboa company salesman her company would own the equipment at the end of the lease. She speaks with a heavy Asian accent and discussed the inability to fully understand the contract, relying primarily on what the Balboa salesman told her, and appeared quite embarrassed about her communication skills. She also mentioned the small type size of the contract, as John Byk did in the Reche Canyon equipment lease. She definitely appeared embarrassed as to understanding what had happen.

Her complaint went into "Limbo." As it turned out, she eventually told us she was more worried about the second lease and its residual, specifically terminating it in time.

Both leases had been assigned to American Equipment Leasing in Reading, Pennsylvania, who's company was eventually purchased by Citicapital, where she was making the payments. In the course of learning the attorney and estimated court costs and other fees in the first Balboa Capital lease, she “settled” the first “Evergreen lease,” paying a purchase option, rent, penalties, late charges, and had trouble coming up with all the money, too, she said, as it was not expected. She realized such leases were legal in California. She believed it was a communication problem and accepted the responsibility to what had occurred. She also told us it was her goal not to let this happen to the second lease.

She told Balboa Capital verbally, sent an e-mail and fax, thinking she was meeting the contract provisions. She did not want to renew the lease, but wanted to terminate it. She did not want to make the same mistake that was evidently made in the first one, she told Leasing News. The response from Balboa Capital was continued invoicing for payments. Finally, over the telephone (not in writing) that “the attorney told me they only accepted a certified letter” and therefore she owed the additional payments.

From Kandy Wang to Leasing News:

"Here is the support documentation and the lease contract. I fax it on the Nov.9 and mail the copy on the same date (forgot to certify it), but obviously they would not accept the fax copy and deny receiving the letter. So they keep sending me the bill by ignoring my emails for return instruction. I had sent two emails to their legal on the 29th of June (as follow.)”

There may be some other aspects in reference to the first lease that may affect the second lease, but Balboa Capital appears not to be issuing any formal statements to Leasing News on the "Evergreen clause" issue, except for what we printed, " “Everything I see with regards to this transaction is above board...standard operating procedure...We can debate evergreen all day but its existence in the marketplace is fairly standard to some level."

Most likely is more to the story, and Leasing News would like to print it, according to internet netiquette and our published policy. We have requested Balboa Capital to provide any information that would like to share.

A copy of the lease in the third complaint may be seen at the bottom, but to better understand this, the first complaint sent in by Kandy Wang may illustrate what happened. It states with e-mail between Leasing News and Patrick Byrne, CEO, of Balboa Capital ((note: none of the correspondence was "off the record, nor were there any "one sided" statements that the e-mail was "confidential." (This is another issue about a bi-lateral agreement with a news publication, but our position is anything is "on the record,” unless both parties in advance agree that it is "off the record." These e-mails were not “off the record.”))

On August 8, 2005 , Leasing News sent an e-mail to Patrick Byrne:

"You can read what I told this head of Eagle Bag, Oakland, California

"She basically did not understand what he was signing, and admits that responsibility, and now understands that it was her responsibility to what she signed.

"If there is a way that Leasing News can negotiate a better 'payoff" or work out a more favorable solution to this, it would be appreciated by Ms. Wang particularly."

Byrne, July 10th , 2005 :

"This was a tough deal. Here are some notes from the file.

"-Time in business at the inception of the lease was only 4 years
- Only one solid trade for the lessee at the time
- PG's had good credit, but no home ownership
- PG's had excessive inquiries on their credit report, and explained that they had shopped the deal around and could not get the deal approved elsewhere
- The equipment was located in Taiwan and according to our asset manager there was a limited U.S. resale market for the equipment
- A vendor check out could not be done
- A wire transfer was sent to an overseas bank.

"The deal was declined at every debt source we presented to including ******* *********...

"Having said all that, we are not pleased that we have an unhappy customer and we would be more than happy to extend a "Leasing News" discount.

"Let me know if you require any additional information and thanks for your help on this Kit,


Byrne, July 11th , 2005 :

(After receiving an e-mail from Leasing News acknowledging his involvement.)

"...We will work it out with Ms. Wang.



Byrne, July 16th , 2005

(After receiving an e-mail from Leasing News that nothing had happened to date)

"Two people in our portfolio management department had overlapping vacations and we dropped the ball. No excuses though, we should have managed this better.

"Ms. Wang, our contact at Eagle Bag will receive a generous offer from us before day's end.

"Kind regards,"


Copy of e-mail, July 17th , 2005

"Hello Ms. Wang-

In order to resolve this matter in an amicable manner, Balboa Capital has carefully reviewed the above referenced lease agreement. The lease is currently eight months delinquent. If funds are received with five business days, Balboa is prepared to accept four of the eight renewal payments due on the lease and you will have the option to (1) purchase the equipment or (2) return the equipment to Balboa Capital. We will also waive the late charges.

"The equipment was valued by at third party, Nassau Asset Management. The Fair Market Value for the purchase of the equipment is $20,110.00 plus applicable sales tax.

"If you wish to purchase the equipment please send a check for a total of $37,152 ($20,110 buyout, $1,759 tax, $15,283 four renewal payments). Upon receipt of good funds, Balboa Capital Corporation will forward a bill of sale which will pass all title, rights, and interest in the equipment.

"If you do not wish to purchase the equipment please send in a check for the four renewal payment of $15,283. Upon receipt of payment, we will then forward you the return instructions for the equipment. I look forward to hearing from you by August 23.

"Please feel free to contact me with any questions you may have.


Balboa Capital Corporation

949.399.6320 Direct
949.224.2720 Fax"

This was the same offer made the first time to Ms. Wang, no change.

Byrne, e-mail response, July 17th , 2005 :

"The offer provides for a discount of $15,283 in payments and $4,585 in late fees for a total discount of $19,868. In my world, this is generous.

"The offer provides for a discount of $15,283 in payments and $4,585 in late fees for a total discount of $19,868. In my world, this is generous."


Byrne, e-mail response, July 17th , 2005:

"This is the first time any discount has been offered so I would think they would be ecstatic with a $19,868 reduction, not to mention using the equipment rent free for eight months.

"I feel I have done everything I can do on this and, if you don't mind, I am going to pass this back to *********.

"Sorry, we were not all able to wrap this up and move on."


Kandy Wang, July 18th , 2005 :

"I really don't know what to say but thank you for all your hard work on our case. We are now consulting with attorney and will let you know next day or two. BTW, the machines are here and we don't intend to keep them for that market value they had appraised. Those are all in good working condition and here in my plant. Thanks. Kandy" Again, Leasing News requested a statement or comment from Balboa Capital, but to date has not received one.

The role of Leasing News is to see if a complaint can be resolved between the parties. When it cannot, the next step is to consider if it is a legitimate complaint for the Leasing News bulletin board.

Leasing News does not state who is right or who is wrong, but tries to present both sides fairly and leaves the matter for each reader to decide the merits of the complaint.

American Equipment Lease (Citicorp)

American Equipment Lease, (Citicorp)

Reche Canyon Equipment Complaint (Wells Fargo Leasing)

Readers on Evergreen leases