Weekly Bulletin Board Report

We have three that are active. All the previous ones have been resolved
( checks have cleared the bank). Often we act as negotiators, getting a settlement from both sides. There are also times that we take the side of the leasing company.

#1 This excellent credit, according to the broker and funding source involved, submitted an application for over $30,000. The original approval was for “corporate only” based on the submission that the president was not the sole shareholder, one side says, and it is approved without a personal guarantee. But when the contract came to be signed, there was a personal guarantee form.

The applicant contends this was the approval and the understanding of all the parties. The funding source says the president is 100% shareholder and therefore should sign on a closely held corporation, even though the credit is excellent.

A deciding point is a signed form allowing the broker and funding source to run credit on the president.

#2 The next is a repeat customer where the broker panicked and perhaps rightfully so, but not necessarily so. The terms and conditions change, so the dollar amount was reduced, lease signed for a large dollar amount, and site inspection held. The problem, some of the equipment was attached to the building. The building was owned by the trust and a search found a loan to the company not on the financial statement in putting together a mortgagee lien.

A new financial statement was made. The broker originally thought the “super broker” was playing games, but the actual bank approval gives them the right to make changes if there are any changes in the financial condition. The lessee is not happy, nor is the broker, and the “super broker” is trying to hold it all together.

We helped get it down to a “punch list” and now only the copies of the checks remain to substantiate the loan portion. #3 This is another repeat customer to the Bulletin Board, and it again involves a church, this time in Houston, Texas. I just returned from Houston for a “medical graduation” at the St. Regis, followed the next day at one of my favorite restaurants in the world—Mark's.

Back to the subject:

“March 30...forwarded a down payment check in the amount of $2,814.10 followed by the signed lease agreement. Since that time, they have failed to either process the lease or issue a refund of the down payment amount. No one at the company will respond or return phone calls. On 6/20/05 we faxed a written request to refund the down payment.”

The company responded: “ I believe this to be a disguised sale lease back and the client is fully aware of this.   I will send ****** check back less the doc. fees and I'll notify our lenders of the potential problem with the vendor.    She is using you as leverage because the vendor knows the business and knows who you are.  I'll get you the vendors name to put on your watch list if it comes up again.   For now I'll be glad we passed on this transaction.”