Royal Links and the Lessors to meet Thursday
"December 15, 2005, the Royal Links principals will be questioned at length by the Trustee in Ohio , by some equipment Lessors, and certainly by the Class Action lawyers who have sued the company. We hope to establish that the salesmen who spread the lies about the now famous beverage cart were not authorized to represent the equipment lessors. This is the classic dual agency issue, and if the equipment lessor has good documents, good underwriting procedures, and favorable testimony from the principals, they, the lessors may actually see light at the end of the tunnel and the portfolio may have some prospects of being mined, e.g., collected. Thought you would want to know. Keep up the good work, Kit. Regards, Tom McCurnin Visit our Web Site at www.bkolaw.com Eleven lessors, entered into leasing over 5,000 carts. The National Golf Course Owners Association, via a group of hired the Chicago law firm of Lord, Bissell and Brook for a class action suit. Jay Karen, Director of Membership for the National Golf Course Owners Association web site, summed up the matter: “ Royal Links USA entered into written agreements with over one thousand golf courses throughout the United States , in which golf courses would use Royal Links' beverage caddies to display and sell food and beverage items on the golf course. This “no cost beverage caddy” program involved golf courses leasing the caddies from third-party leasing companies, and Royal Links USA agreeing to reimburse the golf courses for their lease obligations. Royal Links USA proposed to make their revenue from advertising display panels on the beverage caddies. According to a golf course general manager who contacted Leasing News about the story, “Royal Links USA, Holland , Ohio , had salesmen call on golf courses to offer free beverage carts. (cold beer, wine, soda's, snacks.) The courses would use them and allow advertising panels to be displayed by Royal Links. Various national merchandisers would pay Royal Links for ads. Royal Links supplied products for free with delivery, and also paid the courses a lump sum (normally $1000) to initially stock the cart with startup merchandise. “Courses entered into an agreement whereby Royal Links paid the course about $300 per month in sponsorship money, which was then sent back to their leasing arm as a lease payment. This arrangement was simply explained as their accounting procedure. The general manager thought he was signing a contract with Royal Links finance, which in turn were sold off to the eleven leasing companies from $11,000 to $12,500 each. It was similar to a Ponzi scheme, which evidently forced Royal Links into Chapter 17 bankruptcy on August 19,2005. Leasing News is also trying to determine if the Royal Links contracts contained a residual clause for the golf courses. In a letter to Leasing News, a reader claims that the contracts did have a residual. The attorneys for the golf courses have printed on line the contracts, and they appear to be "fair market value." They also have what are known as "evergreen clauses," that the contracts are automatically renewed at the conclusion. One of the lessors involved stated the residuals were $1.00, and the claim that there was a "residual" value is false. Here is a copy of the letter written to Preferred Capital, which also has a copy of the private label leasing contract: http://leasingnews.org/PDF/Royal_Links_Preferred_Capital.pdf Here is a copy of the complaint, 42 pages, 30mb download in pdf format (Please be aware, this is a long down load as it is a very large file and will be five minutes even on a T1 line): http://leasingnews.org/PDF/Royal_Links_Comp_040105.pdf Previous articles are located here: http://www.leasingnews.org/Conscious-Top%20Stories/11_Lessors_in_the_rough.htm |
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