Thursday, March 12, 2015
Today's Equipment Leasing Headlines
U.S. Business Funding Attorneys to Sue Leasing News
Broker/Funder/Industry Lists | Features (writer's columns)
You May have Missed---
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U.S. Business Funding Attorneys to Sue Leasing News
Mr. Asnen, Leasing News welcomes any comments or statements regarding the complaint from William Willis of Global Stone DBA Umpqua Stone, Roseburg, Oregon. Leasing News will print them in their entirety, without editing. As I wrote to US Business Funding Peter Ribeiro on February 20, 2015, “My role is to determine if the complaint is legitimate to be posted on the Leasing News Bulletin Board, as well as give the parties involved the opportunity to resolve the matter..."
William Willis has been pursuing getting his deposit back since June 26, 2013. He emailed:
"First let me say... My credit is excellent... not one late payment in 30
What brought this Bulletin Board Complaint to my full attention was the Private Label Contract to be assigned to a funder was a Equipment Leasing Agreement (EFA) with a separate "purchase option" for "0" dollars. First, EFA's are a finance agreement, where the debtor is the owner of the equipment, and at the conclusion, owes nothing. (1) There is no need for a "Purchase Option." In addition, in reading the contract, it is full of "Lease" and "Lessee", see paragraph 10, 11, and others. In an EFA contract the debtor is not referred to as a "Lessee" nor the document as a “Lease.” Bottom Line: Didn't look like a legal Private Label Contract. Looked homemade. (2)
Also, and even more suspicious: the less than 1% EFA rate. With two advance payments of $2710 on $159,029, according to TValue, it was less than 1%: .093847%
Both Private Label Contract documents sent from US Business Funding and Umpqua Stone did not have a corporate resolution, unusual for this size of a transaction. The company also appears to be closely held, and perhaps a personal guarantee would have been called for. I don't know if US Bank was requiring that, but the main point was no corporate resolution. In summary, the absence of the resolution, the "purchase option" for an EFA, the rate, and apparent homemade contract were revealing. Any long time reader of Leasing News who looked at the Private Label Contract would have picked up the mistakes of having "lessee" and "lessor" in it. (3)
I also did not see any alterations in what US Business Funding sent to William Willis (copy sent to Leasing News by US Business Funding) and the signed copy sent to Leasing News by William Willis (see footnotes).
After acting as an Ombudsman for 15 years, perhaps 3700 complaints, something was not right. In my first telephone conversation with US Business Funding Managing Director Chris Wilcox, I had LinkedIn.com open, so I looked him up while talking. He said he never heard of Leasing News, nor did he care. I asked him if he had heard of Kit Menkin, and he said, no, and didn't care. This really made me sit up, as LinkedIn showed he was on my "1st" list and was connected; therefore he knew about Leasing News, no matter how he denied it on the telephone.(4)
In addition, both Peter Ribeiro and Chris Wilcox were both adamant the Oregon Attorney General had declared that Mr. Willis provided fraudulent invoices, repeating it several times. US Business Funding’s Chris Wilcox even sent this February 20th email:
"...the state of Oregon has not only seen the complaint file against us but cleared us of any wrong doing based on the customer providing a fraudulent invoice to us. Unless you seem to think your opinion Is larger than the state of Oregon’s Justice Department I suggest you kindly back off of US Business Funding and focus your attention to companies who actually are acting on fraudulent practices."
The job of a journalist is to verify what is told to you. In contacting the
"We determined this was a business-to-business matter, and the Oregon Department of Justice is not the appropriate jurisdiction. Our file on this matter is closed."
Then the excuse about invoices being over the $159,029 figure. I know from my personal experience as a broker, discounter, and funder, when I was active in leasing, most, if not all, funders have a 10% edge that can go up from the approval. In addition, it would not be uncommon if the funder did not want to increase the approval, to allow the debtor to pay the difference in an EFA. Why would Mr. Willis not be willing to do this instead of going through the hardship he has encountered and been put through? And how were they making any commission if the interest rate was less than 1%?
In many of the complaints, the documents themselves, or the party involved, are aware of the funding source, and it common for me to contact the funding source to verify the approval and circumstances, as well to determine if the funder would give the 10% difference, or a higher dollar approval, or allow the debtor to pay the difference from the original dollar approval, to make the transaction work. The funding source was not revealed.
U.S. Business Funding was not licensed as a California Finance Lender: "In addition to the lending authority provided by the law, the California Finance Lenders Law provides limited brokering authority. A ‘broker’ is defined in the law as "any person engaged in the business of negotiating or performing any act as broker in connection with loans* made by a finance lender." Brokers licensed under this law may only broker loans to lenders that hold a California Finance Lenders license."
An email dated February 20, 2015 by Leasing News asked Mr. Ribeiro to return the deposit because US Business Funding was not licensed as a California Finance Lender in California. In addition, the US Business contract stated the issue will be legally in California (Paragraph 10, section 12 "You expressly and unconditionally consent to the jurisdiction and venue of any court in the State of California and waive the right to that by jury for any claim or action arising out of or relating to the Agreement of the Equipment.")
Again, if there is any statement or comment that you or US Business funding would care to make, Leasing News would like to publish it in entirety without editing.
US Business Funding, Newport Beach, California
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True Leases and Agricultural Livestock Leasing
As Leasing Moves to Farming, Equipment Lessors Lease Cows,
In re Purdy 2014 WL 3953729 (6th Cir. 2014)
Here’s a short case which tries to apply the Uniform Commercial Code test for a true lease to a cow herd. It’s a bit of a square peg in a round hole, and I’m not altogether sure that leasing is a good fit for agricultural livestock leasing. The bankruptcy court, district court, and the Sixth Circuit Court of Appeals struggled with the definition of a true lease and trying to make if fit to a cow herd. The facts follow.
Sunshine Heifers is a lessor of dairy herds. Lee Purdy is a farmer who leased the dairy herd, milked the cows and paid rent. Purdy received a total of 435 cattle for fifty months in exchange for a monthly rent. The lease was non-cancellable and there was no purchase option. Purdy promised to replace any cows that were culled from the herd with newer, younger cows. For you city folks, “culling” a herd means to replace those cows which have died or been slaughtered for meat. The lease required Purdy to apply Sunshine's brand and a yellow ear tag to the original cows and their replacements.
While the lease was ongoing, Citizens First Bank loaned Purdy money secured by Purdy's equipment, farm products, and livestock. Their collateral was supposed to be tagged with white ear tags.
Purdy filed bankruptcy. Most of the cows did not have yellow tags, and instead had white tags evidencing collateral of Citizens First Bank. The Bank first argued that the “leases” between Lessor Sunshine and Purdy were disguised security agreements, that Purdy actually owned the cattle, and that the subsequently acquired livestock were covered by the bank's security interest. The bankruptcy court ruled in favor of Citizens First, finding that the leases were per se security agreements. Lessor Sunshine appealed.
On appeal the Sixth Circuit looked at two tests to determine whether the lease of cattle was a “true lease.” UCC § 1-203 which provides that a lease of equipment which is longer in time than the useful life of the goods is a disguised security agreement. The bankruptcy court fixated upon the fact that the 30% of the herd would be culled every year, meaning the entire herd would turn over in forty months. As a result, the bankruptcy court held that the lease term exceeded the economic life of the cattle and, therefore, that the lease was a per se security agreement.
On appeal, the Sixth Circuit focused not upon the economic life of the individual cows, but instead focused on the life of the entire herd which would be supplemented with newer, younger cows. Given the practice of replacing cattle, it was clear to the 6th Circuit that the relevant “good” is the herd of cattle, which has an economic life far greater than the lease term, in other words, a perpetual self-renewing asset. Thus, the lease was a true lease. Also contributing to the holding was the fact that there was no purchase option.
One of the Justices issued a rare dissent, arguing that a South Dakota case held that a cow herd is not a perpetual self-renewing asset.
What are the lessons here for equipment lessors?
First, I’m not sure I follow the perpetual renewing asset analysis of the Sixth Circuit. If new cars are added to the inventory of a car dealership, they are subject to the bank’s blanket lien. If one wanted to scoop up new inventory into a lease, they would have to be separately identified and placed on schedule.
Second, agricultural livestock leasing is a new business model, and full of uncertainty, as evidenced by the conflict between the bankruptcy court and the court of appeals, and the dissenting opinion within the Sixth Circuit Court of Appeals. If readers desire to enter the foray of agricultural livestock leasing, do so at your own risk. I’m not sure the Uniform Commercial Code’s definition and analysis of a useful life of “good” fairly encompasses cows in an economic analysis. Agricultural livestock leasing is a bit of a square peg in a round hole.
Tom McCurnin is a partner at Barton, Klugman & Oetting
Previous Tom McCurnin Articles:
Winter Spring CLFP Circular
Sales Make it Happen
The Zen of Selling
"Don't laugh, but I think my customers can read my mind! When I meet with them, I try to have a positive thought. In my mind, I purposely think: 'This is the best I can do for you.' 'I like you.' 'I am proud to be helping you.' 'I am doing the best I can.'
"'---Never negative, never not doing the best I can, and when I leave, I always make it a positive thought to say, 'What a great guy.' 'What a great company.' 'I did the best I could for him.' Being positive in my thought as I really think my customers can read what I am thinking."
Zig Ziglar, Dale Carnegie, and the sales master’s talk about "positive thinking,"--- "look at the traffic light as being green, not red."
Perhaps what makes one salesperson better than another is their ability to "transmit" their thinking, their sincerity, their message.
Have you ever had the experience of talking with someone and you say to yourself, and perhaps out loud, "Did you read my mind?"
Books have been written about body language, and listening, which is trying to hear, feel, understand what the other party is communicating. Perhaps more important is what you are "transmitting."
While it is often thought the choice of words, or how you are dressed, the expression of your face, maybe it is much more. Maybe it is Zen, referred to as a special transmission outside of words.
The customer picks up you don't believe what you are saying. The customer may even pick up thoughts that you don't like them, or are trying to "trick" them, or can't wait to leave. Or you are only thinking about your commission, about yourself.
You are not being positive in what you are selling.
Expressions like "getting your head on straight," or "getting in the mood," thinking "positive" rather than "negative," believing you can do it rather than doubting, believing in yourself, your company, or what you are proposing is being transmitted.
How many top sales people have you heard who say? : "If I believe in it, I can sell it"--- and they do.
Why? It's Zen---They are transmitting positive emotions, positive thinking, no doubts, not negativity, wanting to be a friend, wanting to be helpful, believing this is the best deal I can offer, take it, almost as if they were speaking it---but better than words, the customer heard your thoughts!!! They were all positive.
Leasing Conferences – Update
Wednesday through Friday
Renaissance Long Beach Hotel
Exhibitors to Date:
The Women in Leasing LinkedIn Group would like to cordially invite you to our March luncheon at Parker’s Lighthouse in Long Beach, California, on Wednesday March 18th from 1:00pm – 3:00pm. The lunch is being co-sponsored by ECS Financial Services and Financial Pacific Leasing.
If you would like to attend please RSVP by March 9th to Shari Lipski at 847.897.1711 or via emailSLipski@ECSFinancial.com.
Funding Source Exhibitors as of March 3, 2015
For more information about this event, you may contact Lesley Sterling at (202)238-3435
Talking Stick Resort
Scottsdale’s newest resort destination offers something for everyone, including Vegas-style gaming and entertainment, a relaxing spa treatment, world-class cuisine, and that famous Arizona sun.
Reserve your room today by calling 866.877.9897 by March 31, 2015. Please reference the booking ID #7773 to receive a discounted rate.
The 2015 NVLA Golf Outing will take place on Wednesday, April 22 at 11:30 a.m. This year’s event will be conveniently held at Talking Stick Golf Club, which is located on the grounds of Talking Stick Resort. Designed by Bill Coore and Ben Crenshaw, Talking Stick Golf Club has been recognized as a top public golf course in Arizona by Golfweek magazine.
Cost of the event is $95.00 per player, which includes green fee and cart. Rental clubs are available at the club for an additional fee.
If you’re interested in participating in this year’s outing, please contact Rick Damush (Miller Ford) at 609-261-6842 or via email at firstname.lastname@example.org.
The NVLA Conference presents vehicle leasing industry partners with a unique opportunity to make and solidify relationships with independent lessors.
NVLA is pleased to offer exhibit tables for member and non-member companies at affordable rates. Each exhibit table package includes a 3’ x 6’ skirted table, complimentary conference registration, and listing on the NVLA website and conference program.
The Public Sector Finance Forum is a joint venture of the Association for Governmental Leasing and Financing and the Equipment Leasing Finance Association. The 2015 Forum will be held at the Sheraton Denver Downtown Hotel in Denver, CO on May 6 through May 8, 2015.
8th China Leasing Summit 2015
The event is strongly supported by leading companies
The China Leasing Summit is based on over 10 years’ of research into the Chinese leasing industry and will provide an effective platform on which attendees can familiarize themselves with the current status of the market and the latest policies and regulations in order to gain a better understanding of China’s leasing market, thereby optimizing their development strategies. Furthermore, speakers from the government, as well as from the leading leasing companies, will share their invaluable experiences and opinions on the state of China’s leasing industry.
For more information, please go here:
2015 Eastern Regional Meeting
2015 Western Regional Meeting
Top 50 US banks and thrifts in Q4'14
Asset growth; Citigroup Inc.'s ongoing restructuring; and the return of an old competitor, Royal Bank of Canada, from the north made a splash in SNL's fourth-quarter 2014 pro forma top 50 U.S. bank and thrift rankings.
The "Big Four" — JPMorgan Chase & Co., Bank of America Corp., Citigroup and Wells Fargo & Co. — maintained their positions quarter over quarter, but Wells Fargo closed some of its gap with Citigroup. Wells Fargo's total assets grew by 3.07%, or $50.30 billion, while Citigroup's assets fell 2.66%, or $50.04 billion.
Further down the list, SVB Financial Group moved up two spots to No. 38, buoyed by 9.17% quarter-over-quarter growth in assets. Gross loans, inclusive of held for sale loans, at the company jumped 16.46% to $14.38 billion in the fourth quarter, thanks in large part to higher-than-usual utilization of existing capital call facilities by private equity clients.
Signature Bank also enjoyed significant asset growth, 5.27% quarter over quarter, which helped it leapfrog Synovus Financial Corp. and take the No. 48 spot. The bank boosted its gross loans, inclusive of held for sale loans, by 9.24% to $18.41 billion as of Dec. 31, 2014, helped by an upswing in commercial real estate, multifamily loans and specialty finance.
Pro forma adjustments
In compiling rankings, SNL calculated pro forma assets for companies with pending M&A deals or deals that have closed since Dec. 31, 2014. To be used in calculating adjusted assets, the deal must be worth at least $200 million or involve assets in excess of $5 billion. Multiple companies in the top 50 ranking have pending deals that qualified for adjustments.
Citigroup continued its divestment drive in the fourth quarter of 2014 and in early 2015. Over the last six years, the company has reduced the size of Citi Holdings, home to the bank's "non-core assets," by more than $500 billion. According to a transcript of the company's March 2 presentation at the Raymond James Institutional Investors Conference, CFO John Gerspach said a further $30 billion in non-core assets was moved from Citicorp to Citi Holdings and would be mostly exited by the end of 2015.
On March 3, Citi announced that it was selling OneMain Financial Holdings to Springleaf Holdings Inc. for $4.25 billion in cash. This sale will remove almost $10 billion in assets from Citigroup's balance sheet.
Furthermore, Citi's deposits were adjusted down by slightly less than $3 billion due to the pending sale of its retail banking and credit card business in Spain to Banco Popular Español SA, which was announced June 2014.
On Jan. 22, Royal Bank of Canada announced that it would acquire No. 43 City National Corp. in a deal that is considered the most expensive U.S. bank transaction by price-to-tangible book ratio since the financial crisis. The deal puts Royal Bank of Canada back among the top 50 for the first time since 2011, before the company sold RBC Bank (USA) to PNC Financial Services Group Inc.
Huntington Bancshares Inc.'s pending acquisition of Macquarie Equipment Finance Inc., a unit of Macquarie Group Ltd., announced Feb. 24, boosted the buyer's assets to $67.20 billion, from $66.30 billion reported for Dec. 31, 2014. Huntington maintained the No. 32 spot in the fourth quarter.
BB&T Corp.'s $367.4 million deal for Crestview Hills, Ky.-based Bank of Kentucky Financial Corp. and $2.50 billion deal for Susquehanna Bancshares Inc. could push its assets up by $20.59 billion to $207.41 billion, based on pro forma adjustments by SNL. Bank of Kentucky Financial's 32 branches, mainly in the Greater Cincinnati area, would introduce BB&T Corp. to a new market. Meanwhile, the acquisition of Susquehanna Bancshares would add 252 branches split between Pennsylvania, Maryland, New Jersey and West Virginia. The company maintained its No. 12 spot from the third quarter.
SNL adjusted the assets of M&T Bank Corp. to depict the long-delayed acquisition of Hudson City Bancorp Inc., which was originally announced in August 2012 and is still pending. The deal would see M&T add Hudson City's $36.57 billion in assets as of Dec. 31, 2014, pushing the company's pro forma assets to $133.25 billion. M&T Bank Corp. fell to the No. 18 spot from No. 17 in the third quarter.
Meanwhile, CIT Group Inc.'s pending acquisition of IMB HoldCo LLC, announced July 22, pushed the buyer's pro forma assets up to $69.74 billion from the $47.88 billion reported for Dec. 31, 2014. The company moved up to the No. 30 spot from No. 31 in the prior quarter.
Some noteworthy deals were not considered in this analysis as they either did not meet the aforementioned criteria or did not disclose sufficient financial information to make pro forma adjustments. Citigroup announced in late December that it would sell the retail banking operations of Tokyo-based Citibank Japan Ltd. to Sumitomo Mitsui Banking Corp. in a transaction that involves the transfer of more than $20 billion in deposits. Also, in early September, Citi announced that it would sell 41 Texas branches to BB&T. Both deals did not meet our criteria for pro forma adjustments.
Late in the afternoon Feb. 27, the FDIC announced that it had entered into a purchase and assumption agreement with Banco Popular de Puerto Rico, a subsidiary of Popular Inc., to acquire the banking operations and all deposits of the failed Doral Bank. Banco Popular de Puerto Rico will operate eight of the failed bank's 26 branches and assumed $1.0 billion in deposits and $848 billion in Puerto Rico-based performing residential and commercial loans. The company entered into three separate agreements with two other banks and its fellow Popular subsidiary, Banco Popular North America, who served as alliance co-bidders in the failed-bank transaction.
FirstBank Puerto Rico, a unit of First BanCorp., will operate Doral's other 10 branches in Puerto Rico and assumed $600 million in deposits and a $300 million mortgage portfolio. Home BancShares Inc.'s unit, Centennial Bank, will operate Doral's five branches in the Florida Panhandle and assumed $466 million in deposits, $42.2 million in loans before discounts and a "significant cash settlement to balance the transaction," according to a press release from the parent company. Lastly, Banco Popular North America will operate all three of Doral's New York City locations and assumed $1.3 billion in deposits and acquired $931 million in performing commercial loans primarily in the New York City metro area.
Popular Inc.'s assets and deposits were not adjusted since the deal did not meet the minimum criteria for adjustment. Doral, First BanCorp. and Home BancShares Inc. were not large enough to be ranked in the top 50 list.
SNL ranks the largest banks and thrifts operating in the U.S. with a deposits-to-assets ratio of at least 25% for each relevant quarter. Some financial institutions that are regulated as bank holding companies, such as Goldman Sachs Group Inc. and Morgan Stanley, did not meet this criteria and thus were excluded from the analysis.
In addition, industrial banks, such as UBS Bank USA, were not considered in this analysis.
German Pinscher Cross
“My health has been checked.
“Our very handsome friend here is Bullet. This rock star wants to please, loves bouncing toys and stuffed, fuzzy, squeaky play things. Bullet takes his time getting to know people, especially men, but once he's decided you're A-OK, he shows you his sweet side with snuggles and cuddles.
“Bullet will benefit greatly from crate training. Dogs who find even the mundane worthy of scrutiny often take refuge in a crate - it's their happy, go-to place (sort of like this writer in a cruise ship state room). Another benefit of crate training is the reinforcement of good house training. Bullet hasn't always been the best at this and we feel strongly that a solid routine that includes a crate will help him be his best indoor self.
“Bullet's new family members should be thirteen years old or older, mature enough to handle his concerns with sensitivity. He is too interested in cats - not in a good way - to live with one right now, and he would also do best as the only resident dog. Training classes are one of the best ways to insure you and your new dog are on the same page about rules and manners. The bonus is the bond that forms when you are working with your dog and it's all clicking (pun intended for those into clicker training). Training is fun for dogs and that fun translates into a great relationship. We think Bullet has so much to offer an active, loving family. Get to know this playful, gorgeous, sweet dog and you'll know what all the fuss is about.
Marin County Humane Society
Adopt a Pet
Attorneys Who Specialize in
Willis Lease Finance Reports $7.2MM Profit
2015’s Best Banks for Record Keeping
Texas Lender Details His Reluctant Move to Shadow Banking
U.S. Banks Pass Stress Tests, Some With an Asterisk
This is historic:
Cut U.S. Rates, Launch Territorial Tax System, Reports Contend
Consumers still watching the same old channels
SparkPeople--Live Healthier and Longer
Beware the ides of March.
Men at some time are masters of their fates:
— Cæs. The ides of March are come.
How much every NFL team can spend in free agency
Chip Kelly explains why he's not trading up to draft Marcus Mariota
The rest of the NFL is baffled by what Chip Kelly is doing to the Eagles
Wide receiver Torrey Smith signs five-year deal with 49ers
Frank Gore, Andre Johnson sign with Colts
NFL Experts Weigh in on Fox Sports’ Pam Oliver About-Face:
New Charger Statium in Mission Valley
Bears Commit to Cutleras Starting Quarterback
California drought: Big water rate hikes considered
Buyer Nixes Purchases of South Bay Hospitals;
Napa County examines ways to regulate winery expansion
Monterey Wants Conjunctive Wine Labels
Mike Wolf Named Napa Valley Grower of the Year
Free Mobile Wine Program
Wine Prices by vintage
US/International Wine Events
Leasing News Wine & Spirits Page
This Day in American History
1609 - Quite by accident, Bermuda was colonized as part of the British Empire. The ship of Admiral Sir George Somers, taking settlers to Virginia, was wrecked on the reefs of Bermuda. The islands had been discovered in the early 1500s, but were uninhabited until 1609. It actually saved the crew,
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