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Questionnaire re: Leasing News Editorial by Kit Menkin Seventy-two percent of Leasing News readers believe our trade publication (electronic newspaper should take a stand and write an editorial for leasing companies to make every effort to make an amicable settlement with NorVergence. Only those in the leasing industry votes were accepted, and only when an e-mail was attached. There are a number of comments that expressed the writer not be identified, and we will honor that as they did sign the questionnaire. In the twenty-three percent who said “no,” many of these are from people who are not happy with Leasing News—period. It appears, the issue is not as important as their dislike of the publication itself: “Sorry Kit but your continued obvious bias on the news makes editorial statements meaningless. Your bias still makes you fun to read but leave editorial comment to the unbiased experts.” -- “Who cares ? We don't need or want the view from the dust farting old timers, get back to reporting the news and let your readers form their own opinion. What are you now, Leasing Views? Guess what, nobody cares what Lester and Baker think.” -- “Since you don't have access to all of the facts you could mislead many people. Frankly, a lot of your prior comments and antics on this mess have been slanted against some of the individuals involved. I wonder how aggressive and quick to judge you would be if one of your name dropping cronies were involved. Report the facts and the developments as they surface and when the issue is resolved then you should editorialize. And there were others in this group, who said “no,” with a somewhat different slant, but similar to the first group above: “This situation is messy enough without any media source adding commentary. Both sides have valid arguments, but it is up to the courts to decide should a funder or customer wish to go that route. As with most sensationalist media "experts", I would appreciate your positions more if you had "skin in the game". Leave it alone.” -- “In the humble opinion of this writer, sticking your "power-of-the-press" nose into this fray might possibly be viewed as an attempt to gain notoriety and exposure for Leasing News as opposed to actually facilitating a resolution of this very complex issue. -- “Leasing News certainly has a right to express it's opinion but it is crossing the line when it undertakes to give advice.” --- “Let the trial and judge and jury do their job in the Norvergence case. I don't ask my local newspaper writers/editors to give their personal opinions about a lawsuit or business-misprecedures and I don't ask that of you either. I think you would get less angry emails if you stated the facts versus stating your opinions. Your newsletter sometimes reads as if your selling versus reporting. Now everyone on your listserv including myself appreciates the Leasing News but sometimes your reporting comes off as being too nosy or trying to solve something you have no control over.” Both groups were in a small minority , especially compared to those in favor of making a stand: “You have never shirked from your opinion before - why start now! We need an organ such as yours that's not afraid of telling people what they think - especially when what you think is always along the lines of decency and fair play.” “Every good newspaper takes editorial positions on the big issues even to the point of endorsing political candidates.” clester@lpifinancial.com “There is so much fraud and nasty folks in the leasing industry I think that you are doing a great service for the consumers of leasing products! Keep up your good and ethical work!” Charles Ledgerwood “I believe that you can take editorial stance. Keep it short, simple and to the point. Otherwise you lose the reader. It is always good to see someone stick up for what they believe.” Pat McCann universal5@cox.net The overwhelming majority, over two-thirds, were in favor of Leasing News writing an editorial, and most were not afraid to sign their real name, something different than the first two groups: “Settlement will be the best remedy for the industry.” stan@columbialeasing.com “There will be no winners in this debacle - and any court remedy that favors the leasing industry will lead to adverse legislative action. Both sides are at fault. . . Lenders for not performing due diligence on the vendor. . . Lessees for taking the bait and not acknowledging the oldest business axiom on record. . . which is. . Caveat Emptor. . . The purchaser "buys" at his own risk and is responsible for their decision process. . . . Pretty sad and disappointing for all those who make a living in this industry.” Greg Williams - 925-838-3900 gregw@ampaccapital.com “If the parties don't settle, it will be a blood bath for sure in our industry.” Rosanne@1stindependentleasing.com “While the leasing industry will most likely win the court battle, we will most likely lose the war of public opinion unless this ‘goes away'.” craley@fpcleasing.com “Norvergence is not much different than the OPM scandal of the late 70's and early 80's. Lessors are in love with investment grade or equivalent credits with higher than market returns. “A settlement is in everyone's best interest, especially the Lessors involved.” Dick Myers “I don't' think the leasing industry can afford the bad press that will issue from a long court battle. anything that can help resolve this will help everyone involved. except maybe the lawyers” gsaulter@chaseindustries.com “It's clear that both lessors and lessees failed in the most elementary way to understand what they were getting into. The lessees looked no further than "big savings" and the lessors only saw lots of volume for very little effort. Given that both sides share fault and that the only winners from protracted litigation are the lawyers, I'd say both sides should work to settle. Of course, the class action vultures won't see it that way.” “We did minimal business but enough to impact us. We stopped funding Norvergence early due to some warning signs and poor customer service. All our NorVergence Lessee's had their equipment installed and operational. Most of our lessee's were paying on their lease. We did not do private label. All are deal were assigned and we billed the customer under our name. We did verbal confirmations on all deals and explained to these customers that the lease was non cancelable and that we were the company offering the financing and we do not warrant the equipment. We based our financing on their credit worthiness. Now having said all that this is a unfortunate mess and I would like the parties involved to come to amicable settlements. I like to see our lessees' take responsibility for their actions. We are willing to negotiate with those who want to resolve the matter. If a customer does not want to face up to any responsibility for making a bad business decision then we pursue them as we would any other lessee. Its time for everyone to accept some blame. We are spending to much valuable time and money. Lets learn our lessons what ever they may be to each of us and move on. On a further note I think the AG's of the states looking for the leasing company's to surrender need to look for amicable and reasonable settlements. We offered a 50/50 split to one AG's office and they did not know what to say. Lets be reasonable. - name withheld at request of sender- “Let's not make a bad situation worse by making the attorneys richer by going to court...but settlement is not going to be simple and may be impossible should be tried. Just my opinion. The “Old” Leasing Guy Russellsr@aol.com “I pretty much agree with Charlie Lester - I think that there was too much "greed" involved that caused otherwise cautious lenders to overlook the smoke signals & the fraud being committed. The chase after the quick buck led many down a path that had they stopped for a moment to reconsider, would have given them many red flags. - Please do not publish my identity. Thanks.” -- “Everyone should settle, with the funders taking the biggest hit. every funder has an asset dept. How did funders not know they were leasing services not equipment? Since copier service contracts in the 1980's funders have not leased services. Of course they learned that lesson again with pay phones and table top ATM's in the 1990's.” jeff@mesaleasing.com On the other side, there are those who disagreed with Charlie Lester, for instance, and voted no: “...think that this needs to be settled in court. In my opinion the banks and leasing companies involved in this were remiss in their duties to investigate the vendor. As I wrote before and as Charlie Lester succinctly state, any good third party originator would have discovered this scam. This whole story typifies the greed that drives some of these banks and large "direct" lessors. For so long they have portrayed the third party broker as dishonest, unethical, and greedy. Any honest broker or independent third party whose business has been refused by one of these lenders should feel a little vindication in watching them squirm. On the other hand, the people who bought this service were obviously looking for a "free lunch". The reason commercial transactions aren't as highly regulated as consumer transactions is because the "business person" is, theoretically, supposed to be sophisticated enough to avoid scams of this nature. So much for that theory!” Bob Rodi, CLP “As hard as it may be to understand, many BIG leasing companies are victims as well as the Lessees. As between the two victims, the Lessees and the Leasing Companies, it was the Lessees who were involved with NorVergence at the inception of the Lease, not the Leasing Companies, and it was the Lessees who signed Delivery & Acceptance Certificates upon which the Leasing Companies relied when taking assignment of the Leases - therefore - as politically incorrect as it may seem - it was the Lessees that participated in defrauding the Leasing Companies - not the other way around, and therefore, it should be the Lessees that take the loss by performing their contractual obligations under the Leases.” ( name with held ) “When it comes to maintaining and/or advancing ethical practices in our industry, I see Leasing News as an important forum. In trying to separate the facts in a situation, perception of our industry by consumers and regulators is a critical factor. This is where the scales tip in favor of "settlement" in the NorVergence case. I trust the judgment of your editorial board and its representative cross-section of practitioners in our industry. I trust that this is not Kit's opinion.” Interesting Paul Menzel, CLP, should ask. The vote from the readers is very similar “ percentage- wise” to the Leasing News Advisory Board: as only three out of sixteen (not counting the chairman) stated they were not in favor of an editorial: 19%. I would like to quote Leasing Advisory Board Member, Paul Weiss, President of ICON Capital, New York and San Francisco, who I have found not only to have great insight, judgment, but always have enjoyed his wit: “I am a believer that you should go with YOUR instinct, survey the board and then ignore us. It's the Kit show for a reason.” When in doubt, survey the readers, who voted in the same proportion of the Leasing News Advisory Board, further giving indication as to their representation of our readers, and should answer Mr. Menzel's question.
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