Resource America/LEAF Moving in Different Directions
by Christopher Menkin

It is best to wait until the actual SEC quarter filing than rely on the press release, as often only the items wanted to make the company look good are emphasized. This is the purpose of the public relations document. Many companies also don't file the actual SEC filing until after the standard telephone conference with analysts (and many of those chosen for questions are more friendly than not). They want you to report the news from the press release, not the SEC filing.

In the Resource America (NASDAQ: Rexi) the press release leads off with a second fiscal quarter and six month GAAP net loss of $2.3 million and $2.1 million, the financial statements paint a much grimmer picture. It looks like the Cohen’s are moving in another direction with their personal assets and influence.

Resource America company’s assets decreased by $636 million (5%) from March 31, 2011 to March 31, 2012.

More serious, especially to those who invested in their subsidiary their leasing subsidiary with LEAF Funds, here are the numbers for the consolidated statement of operations that show the actual breakdown of the losses:

The consolidated balance sheet is as alarming showing from September 30, 2011 to March 31, 2012: total assets decreased from $422.5 million to $168.5 million. Borrowings were also down $222.6 million, bringing the liabilities down, yet the total equity dropped from $157.7 million to $117.5 million.

The press release from the president, who families are billionaires from gas and other investments, gives this rosy picture that is not reflected in the actual financial numbers:

“Jonathan Cohen, CEO and President, commented, ‘The recent completion of our transaction creating CVC Credit Partners demonstrates the quality and value of our asset management platforms. We will recognize a gain of approximately $53 million, received gross proceeds of $25 million in cash, retained the right to collect substantial incentive fees and own 33% of a world-class global credit management business that we think will grow and prosper. Our other platforms are also advancing robustly. In real estate, both Resource Opportunity REIT and Resource Capital Corp. are growing and performing well. We end our second quarter very strong -- our businesses are doing well, we are growing, our balance sheet is in excellent condition and we are exploring opportunities to leverage those strengths to enhance shareholder value’."

It is interesting about LEAF Financial in the company press release, as the Resource America "deconsolidated" the company, which has spun into LEAF Commercial Capital.

There is nothing to support the numbers for the comments. The last SEC filing had:

(In thousands, except per share data):

Yet the comment reads:

From "New Hires" in Leasing News, most of the announcements are transfers of personnel from the old company to the new company, with a few changes in title. Perhaps those who read these press releases so often begin to believe in them. Maybe even LEAF has the same dilemma, actually starting to believe the press releases being disseminated.

Resource America) doesn’t own the majority of Leaf Commercial anymore. The single largest owner is now EOS Partners (Leaf1). Resource America's equity stake in Leaf Commercial is down to 15.7% (see Leaf6).

Resource America is not reporting Leaf Commercial on its financials anymore (Leaf2).

Leaf Financial is down to only managing the wind down of the remaining 4 funds. However, there is at least (-$38M) of losses (accounts over 181 days delinquent) still not charged off (Leaf3). As Leasing News has been reporting in previous articles, this means the investors are going to get hit big again and their equity investment reduced or loss completely, depending on what fund the losses occur. Several investors contacted Leasing News on changes requested, but there were too many questions, such as how almost $12M of property & equipment vanished from the books of Leaf between September 2011 and December 2011 (Leaf4).

Interesting how LEAF was actually losing money in the quarter (Leaf5). I think this shows LEAF was always losing money. The $8,749M gain (Leaf6&7) was not cash or revenue but rather how they decided to record Resource America investment down to zero (smoke and mirrors).

The question is how a real estate based company like Resource America can turn itself around. There’s no growth there. Originally they tried to diversify by creating a commercial finance arm (LEAF) but that proved to be a flop. Looking back, for the first 3 years, LEAF was losing money and reportedly had to borrow $9 million from the parent to cover expenses. Cash was being covered by Robert Moskovitz ability as CFO, who was having trouble even paying attorneys (he reportedly is still the man controlling the cash flow and responsible to the new investors). Reportedly he is the go-between the new investors and LEAF

What was most revealing was the first "on the record" comments from Dwight Galloway, CLP, who described what happened in "Why I Became a CLP" to his company: "In late 2007 our parent bank was closed by the FDIC. We were auctioned off to LEAF Financial and over the next three years we had to dismantle the fantastic team of dedicated professionals that had worked together for two decades. A heart-rending task many in leasing experienced during the recent recession. Respected? I have been around a long time, learned by making a lot of mistakes, and was merely the public face of a team of great people that worked hard and treated folks fairly." (2)

Even when LEAF got lease originations up to $15 million a month they still couldn’t cover expenses and had to rely on the parent for cash. From reports from ex-employees and current employees, the new Leaf Commercial Credit starts up they will run into a similar negative cash situation like before. One email was quite explicit in the delays of returning security deposits to lessees and other such activity.(3)

Almost everyone tells this writer that the equipment lease business is tough potatoes right now. With a higher cost of funds, the evergreen clause in the copier division is what is keeping the company going.

So how can Resource America get going to get back in the black? If they hadn’t sold off assets for a profit they would be showing heavier losses. I bet we’ll see their net worth burn below the $100 million mark before the end of their year. Their initial paid in capital was over +$200 million. There is no way Resource America can risk pumping real money into Leaf again. The upside potential isn’t there anymore, thus they are "discontinued."

Last year the file period on 3/31/2011 was not filed until May 10, so the March, 31 2012 statement 10Q should be published soon. Unfortunately the public will not be able to track the shenanigans of LEAF, to see what is really behind the spin of the many press releases; however, the story on the 4 LEAF Funds will continue. With the same old management and style, and the economies slow recovery, the investment firm (EOS) will have a tough road trying to build LEAF and sell it off later. It certainly appears Resource America tried. It certainly appears with their expertise, they bred the assets from LEAF Financial and bulletproofed it from lawsuits. According to emails to Leasing News, what remains are many LEAF Funds unhappy investors.

Leaf1
http://leasingnews.org/PDF/Leaf1_562012.pdf

Leaf2
http://leasingnews.org/PDF/Leaf2_562012.pdf

Leaf3
http://leasingnews.org/PDF/Leaf3_562012.pdf

Leaf4
http://leasingnews.org/PDF/Leaf4_562012.pdf

Leaf5
http://leasingnews.org/PDF/Leaf5_562012.pdf

Leaf6
http://leasingnews.org/PDF/Leaf6_562012.pdf

Leaf7
http://leasingnews.org/PDF/Leaf7_562012.pdf

(1) Resource America Year-End 10K PDF:
http://leasingnews.org/archives/Dec2011/12_16.htm#deconsolidates

(2) CLP Spotlight Dwight Galloway, CLP
http://leasingnews.org/archives/May2012/5_02.htm#clp

(3) Employee Tells All in this article
http://leasingnews.org/archives/Feb2012/2_06.htm#leaf

Three/Six Month Press Release:
http://leasingnews.org/PDF/ResourceAmerica_8K_20120504_562012.pdf

Previous Stories:
http://www.leasingnews.org/Conscious-Top%20Stories/leaf_resource.html

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Classified Ads---Legal

(These ads are “free” to those seeking employment or looking
to improve their position)

San Diego , CA 
Experienced in-house corporate, equipment leasing and financial services attorney seeks position as managing or transactional counsel. Willing to relocate.
Cell Phone: 760-533-4058;
Email:marshallrosenberg@gmail.com | Resume

Free Posting for those seeking employment in Leasing:
http://www.leasingnews.org/Classified/Jwanted/Jwanted-post.htm

All “free” categories “job wanted” ads:http://www.leasingnews.org/Classified/Jwanted/Jwanted.htm

It's Evergreen Again with Marlin's Profits
by Christopher Menkin

Marlin Business Services three month ending net income was $1.6 million compared to $754,000 for the same period in 2011.

"Renewal income net of depreciation totaled approximately $1.9 million and $2 0 million for the three-month periods ended March 31, 2012 and March 31, 2011, respectively."
   (10K, page 38)

Putting the puzzle together again, as for the previous Marlin Business Services’ SEC reporting periods and year-end SEC filings, it is the Evergreen Clause that provides the net income. Should California declare that Evergreen clauses are illegal, meaning automatic payments continue, especially prevalent in ACH payments, or require notification to the lessee, it will be a serious blow to the company's profit. Should this occur in Pennsylvania, where the company domiciles is operation, it would be a knock out punch (unless them move the operation to another state. Marlin makes no note of this in their SEC filing, by the way.

At this time, these states require the lender or lessor to inform the borrower or lessee regarding the termination of the initial lease contract:

New York
Rhode Island
Texas
Illinois
(In Illinois, Consumer law, but may affect commercial,
especially a proprietorship, partnership or personal guarantee)

"RESIDUAL PERFORMANCE

Our leases offer our end user customers the option to own the equipment at lease expiration. As of March 31, 2012, approximately 66% of our leases were on e dollar purchase option leases, 32% were fair market value leases and 2% were fixed purchase option leases, the latter of which typically contain an end-of-term purchase option equal to 10% of the original equipment cost. As of March 31, 2012, there was $32. 3 million of residual assets retained on our Consolidated Balance Sheet, of which $25.6 million, or 79.3%, were related to copiers. As of December 31, 2011, there were $32.7 million of residual assets retained on our Consolidated Balance Sheet, of which $26.5 million, or 80.9%, were related to copiers. No other group of equipment represented more than 10% of equipment residuals as of March 31, 2012 and December 31, 2011, respectively. Improvements in technology and other market changes, particularly in copiers, could adversely impact our ability to realize the recorded residual values of this equipment."
    (10Q, page 38)

Again, not mentioned in the SEC disclosure, the change in Evergreen clause laws by states as is occurring due to the abuse by many companies, including Marlin Leasing.

Once known for its broker market place, indirect sales, the company exited the mode, but recently has gone back to it with an alleged twenty brokers, who rave about the service, approvals, easy application up to $50,000, except they note, no copier leases (it appears that remains with the Evergreen division.)

The number of direct (company) sales account executives has increased by six from December, 31, 2012:
    (10Q, page 27)

Despite the lower cost of money via Marlin Business Bank (Utah industrial bank based), the Evergreen continues the companies profit:

"Since its opening in 2008, MBB has served as a funding source for a portion of the Company’s new originations through the issuance of FDIC-insured certificates of deposit. We anticipate that FDIC-insured certificates of deposit issued by MBB will represent our primary source of funds for the foreseeable future. As of March 31, 2012, total MBB deposits were $238.8 million. As of March 31, 2012, $32.8 million, or 44.6%, of our total long-term borrowings of $73.7 million were fixed-rate term note securitizations."
    (10Q, page 27)

'During the three months ended March 31, 2012, we generated 5,658 new leases with a cost of $72.4 million, compared to 3,984 new leases with a cost of $47.0 million generated for the three months ended March 31, 2011. Sales staffing levels increased from 94 sales account executives at March 31, 2011 to 99 sales account executives at March 31, 2012. Approval rates also rose from 56% for the quarter ended March 31, 2011 to 66% for the quarter ended March 31, 2012 due to the improved credit quality of the applications received and adjustments made to credit policy in light of the continued strong performance of recent years’ lease originations.

"… Other expenses increased $1.0 million, or 10.4%, for the three-month period ended March 31, 2012 compared to the three-month period ended March 31, 2011, primarily due to increased sales compensation expense and additional compensation related to the achievement of certain performance criteria determined annually."
    (10Q, page 31)

Leasing News has substantiated the net income profit from extra payments for three years without the disclosure that should other states adopt lease notification requirements, especially for Evergreen and Wintergreen clause leases, it will affect Marlin Business Service net income dramatically.

All it takes is California and Florida or Pennsylvania to adopt to make an impact. This should be disclosed on their SEC filings regarding the extra payments on leases received, especially for the copier leases.

SEC 10Q filing
http://leasingnews.org/PDF/Marlin10Q_562012.pdf

Previous Marlin Leasing Stories:
http://www.leasingnews.org/Conscious-Top%20Stories/Marlin_Leasing_2008.htm

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Nine Lawyers Against Evergreen Clause Abuse

Jim Coston
Coston & Coston LLC
105 W. Adams Street
Suite 1400
Chicago, Illinois 60603
(312) 205-1010
jcoston@costonlaw.com

(In 1998, he was elected to the United Association of Equipment
Leasing Board of Directors, and in 2003-04 was the first
attorney to become UAEL President, very active in his political party.)

Ronald J. Eisenberg

Schultz & Associates LLP
640 Cepi Drive, Suite A
Chesterfield, MO 63005
(636) 537-4645 x108
(636) 537-2599 (fax)
www.sl-lawyers.com

(Proven Leasing Litigator, well respected
by all sides)

Ronald P. Gossett

Gossett & Gossett, P.A.
4700 Seridan Street, Building I
Hollywood, Florida
954-983-2828
Fax: 954-983-2850
rongossett@gossettlaw.com

(Many cases including NorVergence,
Brican, among others, a winner)

BARRY S. MARKS

MARKS & WEINBERG, P.C.
Financial Center - Suite 1615
505 North 20th Street
Birmingham, Alabama 35203
P. O. Box 11386
Birmingham, Alabama 35202
bmarks@marksweinberg.com
www.leaselawyer.com
205.251.8303
Fax 278.8905 (Direct) 251.8305 (Main)

(Well-known to the leasing industry,
also Alabama Poet)

Tom McCurnin

Barton, Klugman & Oetting
350 South Grand Ste. 2200
Los Angeles, CA 90071
Voice: (213) 617-6129
Fax: (213) 625-1832
Cell: (213) 268-8291
Email: tmccurnin@bkolaw.com

(Leasing News Advisor/Well-Known top Leasing Litigator)

Frank Peretore

Peretore & Peretore, P.C.
191 Woodport Road
Sparta, New Jersey 07871
www.peretore.com
(973) 729-8991
peretore@peretore.com

(Experienced leasing attorney, aggressive, author,
secretary, National Equipment Finance Association, ELFA, too)

Ellen Stern

Ellen Michele Stern
17630 El Mineral Rd
Perris, CA 92570
951-443-4000
leaselaw@msn.com

(Long time Southern California leasing attorney, well-respected)

Kevin E. Trabaris, Principal
Trabaris, P.C.
707 Skokie Boulevard, Suite 600
Northbrook, IL 60062
Direct: (847) 205-4377
Mobile: (847) 840-4687
Fax: (848) 260-5768
kevin@trabaris.com
www.trabaris.com

"In my career, I’ve repeatedly seen this provision misused
by unscrupulous lessors and think it’s a bad idea for both
the lessee and the lessor.”

Michael J. Witt, Esq.
MICHAEL J. WITT LAW OFFICES
4342 Oakwood Lane
West Des Moines, IA 50265
Tel: (515) 657-8706
Mobile: (515) 868-1067
Fax: (515) 223-2352
witt-law@live.com

(Former Advanta Leasing
and Wells Fargo Equipment Finance attorney)

The original intention of the Evergreen clause in an equipment leasing contract was to have an alternative to when the lessee did not exercise the residual at the end of the contract. Often the clause calls for an automatic additional twelve months when the residual is not resolved.

In most cases, the lessor notifies the lessee that the residual will be due, often ninety days in advance. However, often there is nothing in the contract that requires the lessor to notify the lessee regarding the expiration of the contract.

Contrarily, many small ticket lessors do not notify the lessee, and automatically continue the lease, often via an ACH or continued billing, which often goes unnoticed until many payments have already been made.

Leasing News would like to see an industry standard that lessees are notified in advance of the expiration of their contract regarding its termination. We support the clause, and the notification requirement is wide open, meaning 90, 60, even 30 days and by telephone or mail.

This list of attorneys agrees with this and will be available to lessees, sometimes able to help them without a fee, or at a reduced rate, in an effort to end the abuse of Evergreen clause leases.

kitmenkin@leasingnews.org

Companies who notify lessee in advance of lease expiration
   and require their discounter to also notify lessee in advance
http://www.leasingnews.org/Pages/lease_expiration.html

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Leasing Industry Help Wanted

Credit and Syndication Manager Carlsbad, California Analysis of credits and Syndication to funding partners or for booking into our in-house portfolio. Experience with Vision and Salesforce.com a plus. Please click here for more information. www.ilslease.com Established in 1986, ILS specializes in small-mid ticket equipment financing and working capital. Our Vendor-centric approach values long term relationships with our Lessee, Vendor and Funding partners.

Leasing Sales Representative Long Island, NY Hiring experienced or new to business sales reps. Transactions in all states / all industries. Send resume to: info@sterlingcap.net or fax 631-414-7571. About the Company: Sterling Capital Leasing, LLC is a national small ticket/middle market leasing company

www.sterlingcap.net

For information on placing a help wanted ad, please click here:
http://www.leasingnews.org/Classified/Hwanted/Hwanted-post.htm

Please see our Job Wanted section for possible new employees.

Career Crossroad—“Recruiter calls me too much!”

Question: I have been contacted numerous times by a recruiter re: other opportunities. This person doesn’t take not interested, but he keeps on calling, it seems almost every other week.

(The person is not from your company, RII)

Answer: Be courteous – you never know what the future holds! I don’t think you should be rude with anyone, as you don’t know what bridges you will be burning behind you. I would suggest emailing/or texting the recruiter back and letting them know that you are currently not interested in exploring opportunities, and you will keep his number in case things change.

If the person still persists contact the Managing Director of the firm; as most recruiters will understand your situation.

A good/rue recruiter will check in with you once in awhile to see how you are doing in your career, but not every other week or what appears to be every other week.

You know situations are consistently changing (e.g. moving / lay-off / comp decrease, looking for better quality of life, etc…)

As a recruiter, I know we appreciate when a potential Candidate is a straight shooter – someone, who won’t go down the interview road and then say – well I am not really interested in exploring an opportunity; it is a waste of everyone’s time.

Don’t forget, there are firms (such as ours) that have developed long-term relationships with companies; often these companies weigh hiring decisions on recruiters’ feedback! Reputation is very important in being respected in the community.

My viewpoint is your relationship with your recruiter should be LONG-TERM – a Recruiter that is only interested in a one-off placement is not a Recruiter planning to be in the industry for a period of time.

My advice: ONLY work with recruiters that are more relationship-driven!

Emily Fitzpatrick
Sr. Recruiter
Recruiters International, Inc.
Phone: 954-885-9241
Cell: 954-612-0567
emily@riirecruit.com
www.riirecruit.com

Previous Career Crossroad columns:
http://www.leasingnews.org/Conscious-Top%20Stories/crossroad.html 

Why Leasing News is Different
By Christopher Menkin, Publisher/Editor

*

Leasing News in its "News Briefs" and other sections below has links to other news, but our main effort comes from five writers who contribute columns, twenty regular contributing writers/columnists plus three investigators, who can dig up the facts that even an FBI head district agent told us they can't obtain even with a subpoena.

Most of our stories are written by our writers, and press releases are few as most are advertisements and often of little interest to readers, in my opinion.

We also have leasing association members who cover their events exclusively for Leasing News. All leasing associations are treated equally and their news is important.

In addition, our web master is an ex-newspaper reporter, who has experience not only writing and covering stories, but inside work in both print and internet production, as well was a photographer for events. He is the publisher for Rivals-Yahoo of the Stanford Cardinal Sports news, as well as also does statistical work for ESPN Sports, among his other activities, including coaching baseball teams on the side.

Our graphic designer does all the graphics, creates cartoons, placards, and contributes the visual insight of stories.

Leasing News acts as an ombudsman and learns much about various leasing companies from this activity; very few of the complaints make the edition as they are resolved, but the background information is invaluable from broker, funder, lessor, and lessee. There are normally five complaints going on each week.

In addition, we have an advisory board, who while not involved in editorial (stories) contributes ideas, business opinions, and acts as a group in giving direction to the publisher regarding many non-editorial subjects and discussions.

The advisory board and staff make a difference as news is gathered and written---but the number one difference are our readers.

A great many of the stories originate from our readers who give us inside information, tips, stories to confirm or have denied; often requiring "investigation." We keep all the information confidential and I can report they are concerned about their industry.

#1 Our readers have made us successful in reporting the news.

Mission Statement:
http://www.leasingnews.org/Mission_Statement.htm

Policy Statement:
http://www.leasingnews.org/policy.htm

(Published in every news edition and remains on
the face of our web site.)

* The Gadsden flag has been flying in our masthead
since we started, way before the Tea Party adopted it.
http://en.wikipedia.org/wiki/Gadsden_flag

(Leasing News provides this ad as a trade for investigations
and background information provided by John Kenny)

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Leasing 102
by Mr. Terry Winders, CLP

Part I--What is a Legal Lease
http://leasingnews.org/archives/Apr2012/4_23.htm#legal

Part II---What is a Legal Lease
http://leasingnews.org/archives/Apr2012/4_30.htm#legal_part2

What is a legal lease ---Part III (Final)

To determine if a transaction is an Article 2A lease it must comply with this definition and if it does not then it is an Article 9 Loan:

Par. 1-201 (37). GENERAL DEFINITIONS: “SECURITY INTEREST”

This opening statement indicates in a negative fashion that a security interest is subject to termination at any time but by reference a lease must be the opposite, therefore, noncancelable A lessee agrees to the term of the lease and may not have rights to terminate it at will. Many lessors prefer this arrangement, because they can match fund the transaction with fixed rate funds and not have to suffer swings in the cost of money. It is also hard to establish traditional payoff amounts in transactions that have a mismatch during the term from accelerated depreciation benefits and a conventional investment recovery.

    (a) The original term of the lease is equal to or greater than the remaining economic life of the          goods.

This requirement looks to the term of the lease and restricts it to 80% of the equipments economic life. Economic life is defined the same as for tax purposes: How long can an asset be productive for any business judged by the current use of the lessee. Again the issues revolves around the idea that if someone extracts most of useful life of an asset and it’s remaining value to someone else is very little then the customer made the capital investment in the asset by paying the rent and transaction will be considered a loan and not a lease.

    (b) The lessee is bound to renew the lease for the remaining economic life of the goods or is        bound to become the owner of the goods.

This prevents game playing with the term to get around the useful life requirement and it prevents the lessor from creating a situation where the lessee is forced or required to purchase the equipment upon termination of the lease. Anytime the lessee is compelled to use the asset for its useful life or it is mandatory that they purchase the asset at termination then the transaction takes on the requirements of a loan and not a lease.

    (c) The lessee has an option to renew the lease for the remaining economic life of the goods for       no additional consideration or nominal additional consideration upon compliance with the lease       agreement, or

The economics of the transaction cannot create incentives for the lessee to continue the lease and pass the economic life test. It also prevents or establishes that game playing to get around the rules will not be acceptable. The economic life test is a strong component of the decision to determine disguised loans from leases.

    (d) The lessee has an option to become the owner of the goods for no additional consideration or       nominal additional consideration upon compliance with the lease agreement.

Any purchase options that are too low or contain an automatic transfer of legal title at lease termination will be judged to be a loan and not a lease. Many Municipal leases contain an automatic transfer of legal title and are not legal leases.

A transaction does not create a security interest merely because it provides that:

    (a) The present value of the consideration the lessee is obligated to pay the lessor for the right to       possession and use of the goods is substantially equal to or is greater than the fair market value       of the goods at the time the lease is entered into.

The present value of the rent stream may be higher than the purchase price of the asset to the lessor. This definition prevents arguments being made that judge the markup of the lessor as being to high or containing something more than just the rent for the equipment. It also indicates that a Lessor may charge what ever the market will bear unless the transaction is judged by some other failure in this list to be a loan and then standard usury laws will prevail.

    (b) the lessee assumes risk of loss of the goods, or agrees to pay taxes, insurance, filing,       recording, or registration fees, or service or maintenance costs with respect to the goods.

This allows the lease to be a “net lease” with the lessee being responsible for insurance, maintenance and all assed taxes without concerns that all risks except credit have been passed to the lessee so it takes on the trappings of a loan. In fact all of these costs are paid to an outside service provider, or the government, and if the lessor provided it the only change would be a net increase in the rent requirement without changing the lessor’s equipment risk.

    (c)The lessee has an option to renew the lease or to become the owner of the goods.

    (d) The lessee has an option to renew the lease for a fixed rent that is equal to or greater than       the reasonably predictable fair market rent for the use of the goods for the term of the renewal       at the time the option is to be performed, or

    (e) The lessee has an option to become the owner of the goods for a fixed price that is equal to        or greater than the reasonably predictable fair market value of the goods at the time the option         is to be performed.

Fixed price purchase options or renewal options are acceptable if they meet the requirements of being for the “reasonably predictable fair market value” at the time the option is exercised. Also it requires proof or documentation, in your folder, that an investigation was performed to determine the future value of the asset based on its reported use. Recording Guide books results for “like use” aged assets or documented conversations with secondary market vendors is necessary to provide fixed price purchase options and be an article 2A lease.

These definitions are surly going to be tested and better defined as we see additional court cases, so the reader needs to be aware of the changes and modifications of the current legal process and find ways to be kept informed.

Mr. Terry Winders, CLP, has been a teacher, consultant, expert witness for the leasing industry for thirty-five years and can be reached at leaseconsulting@msn.com or 502-649-0448

He invites your questions and queries.

Previous #102 Columns:
http://www.leasingnews.org/Conscious-Top%20Stories/Leasing_102/Index.htm

(This ad is a “trade” for the writing of this column. Opinions
contained in the column are those of Mr. Terry Winders, CLP)

Bank Beat---Another Coastal Bank in Florida Closes

The three branches of Security Bank, National Association, North Lauderdale, Florida, were closed with Banesco USA, Coral Gables, Florida, to assume all of the deposits. Founded July 1, 1980 the bank had 43 full time employees as of December 31, 2011 at their two offices in Miami and one in North Lauderdale. December 31, 2008 they had 56 full time employees.

Tier 1 risk-based capital ratio: .0266%

Security Bank was the 23rd FDIC-insured institution to fail in the nation this year, and the third in Florida. Last year Florida has 13 failures. Georgia had 23 bank failures. Between them both they had almost 40% of last years banking failures.

The OCC states they acted “…after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices. The OCC also found that the bank incurred losses that depleted its capital, the bank is critically undercapitalized, and there is no reasonable prospect that the bank will become adequately capitalized without federal assistance.”

The bank was located 1450 South State Road 7Located across the street of Our Lady Queen of Heaven Cemetery. Manny of the banks had their problem in Florida start in 2006, and it seems the board of directors was trying to take a new direction.

June 1, 2007, Harold L. Connell, chairman of Security Bank's board of directors and head of the directors' presidential search committee, announced that Floyd D. Harper became the Bank's president and chief operating officer effective June 1, 2007.

http://www.thefreelibrary.com/Security+Bank+Names+Floyd+D.+Harper+President+%26+COO.-a0165740244

The year of the first loss came at year-end 2008. Prior the bank had received on April 3, 2008 an order regarding unsafe and unsound banking practices. The bank had agreed to a written agreement with the OCC, but ran again into problems in 2009 where the year-end post a $5.6 million loss.

March 19, 2010 OCC issued another consent order:
http://www.occ.gov/static/enforcement-actions/ea2010-097.pdf

May, 2010 another consent was issued:
http://www.occ.gov/static/enforcement-actions/ea2010-097.pdf

The orders carried the same charges. After Security Bank was given a written agreement from the OCC in 2008.

In November, 2010 the OCC fined former Security Bank President and CEO Harold Connell $6,500 for failing to comply with a regulatory order, although Blas I. Betancourt, was named president and ceo April 21, 2010 But the bank was still not in compliance, so the OCC issued fines of $6,500 each against Security Bank directors Manuel Fernandez, Timothy Kenney and Robert Diez, along with former directors Floyd Harper and Larry Serlo. All five agreed to the fine without admitting or denying violations of banking law.

The 2010 year-end loss was $19 million and then $7.4 million year, 2011. Non-current loans were $16.5 million 2009, $24.1 million 2010 and $13.7 2011. The equity had dropped from $16.5 million in 2009 to $2.3 million year-end 2011.

March 23, 2012 critically undercapitalized--order to secure books and financial information following a March 19, 2012 response to the March 8, 2012 notice of to issue Prompt Corrective Action Directive

http://www.occ.gov/static/enforcement-actions/ea2012-076.pdf

Florida banks along the coast had run into overdevelopment, foreclosures, and owners not making mortgage payments. The problems for the small bank was not just the non-current loans, but the serious charges offs, primarily to first and second mortgage with $6.65 million in 2010 and $2.4 million in 2011. Good evidence of the downturn in the area comes from this site on houses for sale in North Lauderdale mostly around $100,000
http://www.leadingre.com/UnitedStates/Florida/NorthLauderdale

Charge Offs

( in millions, unless otherwise noted)
2006 $128,000 ($128,000 commercial and industrial loans)
2007 $310,000 ($357,000 construction/land dev.,-$39,000 commercial, -$8,000 personal)
2008 $626,000 ($514,000 construction/land, $112,000 multifamily)
2009 $6.65 ($2.4 construction/land, $2.1 1-4 family homes, $626,000 multi-family, $684,000 nonfarm, $421,000 commercial)
2010 $9.0 ($2.7 1-4 family homes1.7 construction/dev.,$1.7 nonfarm, $1.3 other loans, $586,000 commercial)
2011 $2.4 ($1.2 1-4 family homes, $714,000 nonfarm, $272,000 multi-family, $172,000 commercial, $160,000other loans)
3/31 $431,000 ($245,000 1-4 family, $146,000 commercial-industrial, $40,000 other loans

Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential loans.

(in millions, unless otherwise)

Net Equity
2006 $13.8
2007 $15.3
2008 $14.8
2009 $16.5
2010 $7.8
2011 $2.2
3/31 $1.5

Profit
2006 $1.24
2007 $1.27
2008 -$602,000
2009 -$5.6
2010 -$19.0
2011 -$7.4
3/21 -$707,000

Non-Current Loans
2006 $397,000
2007 $8.0
2008 $14.8
2009 $16.5
2010 $24.1
2011 $13.7

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10.8 million.

http://www.fdic.gov/news/news/press/2012/pr12052.html

[headlines]
--------------------------------------------------------------

Top Stories April 30--May 4

Here are the top ten sorties opened by readers:

(1) Archives April 30, 2001
Leasing Salesman Pay Survey
http://leasingnews.org/archives/Apr2012/4_30.htm#archives

(2) 1st Enterprise Bank Leasing Joins Funder List
and Funder Look for New Brokers
http://leasingnews.org/archives/May2012/5_02.htm#1st

(3) Operation Lease Fleece--Updates
http://leasingnews.org/archives/May2012/5_04.htm#fleece

(4) Ten Cars that Americans are not buying
http://leasingnews.org/archives/May2012/5_04.htm#cars

(5) Rosanne Wilson, CLP, Award +Lifetime Membership
http://leasingnews.org/archives/May2012/5_02.htm#wilson

(6) Former Lt. Gov. & Chairman Republican Nat. Party Bank Fails
Palm Desert Springs succumbs, FDIC Can't find acquirer in MD
http://leasingnews.org/archives/Apr2012/4_30.htm#bank_beat

(7) NAELB Conference
---High Energy - High Optimism - High Value
http://leasingnews.org/archives/May2012/5_02.htm#naelb

(Tie) (8) Leasing 102 by Mr. Terry Winders, CLP
What is a legal lease (continued)
http://leasingnews.org/archives/Apr2012/4_30.htm#legal_part2

(Tie) (8) New Hires---Promotions
http://leasingnews.org/archives/May2012/5_04.htm#hires

(9) Career Crossroad—“Non-compete, but I want to leave!”
http://leasingnews.org/archives/Apr2012/4_30.htm#crossroad

(Tie) (10) $250 Million Tax Fraud Scheme
http://leasingnews.org/archives/May2012/5_02.htm#fraud

(Tie) (10) Leasing Association 2012 Conferences
http://leasingnews.org/archives/May2012/5_02.htm#conferences

Six Cities Where Rents are Skyrocketing

6.
Colorado Springs, Colorado
Change in rent: +10.2%
Change in sales price: +4.3%
Price drop from peak: -11%
Job growth, 1 year: +0.53$

5.
Indianapolis, Indiana
Change in rent: +11.1%
Change in sales price: +1.7%
Price drop from peak: -6.6%
Job growth, 1 year: +1.49%

4.
Warren-Troy-Farmington Hills, Michigan
Change in rent: +11.8%
Change in sales price: +6.9%
Price drop from peak: -35.5%
Job growth, 1 year: +2.53%

3.
Miami, Florida
Change in rent: +12.3%
Change in sales price: +16.1%
Price drop from peak: -45.5%
Job growth, 1 year: +2.34%

2.
San Francisco, California
Change in rent: +13.2
Change in sales price: -0.5%
Price drop from peak: -22.1%
Job growth, 1 year: +2.92%

1.
Edison-New Brunswick, New Jersey
Change in rent: +15.6%
Change in sales price: -4.7%
Price drop from peak: -18.2%
Job growth, 1 year: +0.69%

Full Story:
http://247wallst.com/2012/05/04/six-cities-where-rents-are-skyrocketing/

German Sheppard
Philadelphia, Pennsylvania-- Adopt-a-Dog

Ginger
#: 4411578
Breed: German Shepherd Dog
Color: Black - With Tan, Yellow Or Fawn
Age: Two Years old
Size: Large 61-100 lbs (28-45 kg)
Sex: Female

“I am already spayed, housetrained, purebred, and up to date with shots.”

Ginger's Story..
“Ginger is a beautiful German shepherd with papers her birthday is April 20th, she will be 2 years old. She is up to date with all of her shots. Ginger is a sweet girl who likes nothing more then attention and chasing a ball. In fact she is even a little ball obsessive.

“Ginger has anxiety and is a little skittish with strangers, but she's your best friend when she gets to know you. She's also a good watch dog. Ginger is a second dog in the household where two dogs are 1 too many, so ginger is looking for a permanent home with a loving family.“

Contact This Rescue Group...
Rescue Group: Cares4Pets
Pet ID #: 4411578

E-mail: cares4pets@hotmail.com
Let 'em know you saw "Ginger" on Adopt-a-Pet.com!
Address: Philadelphia, PA 19104

http://www.adoptapet.com/pet6964359.html



Adopt-a-Pet by Leasing Co. State/City
http://www.leasingnews.org/Conscious-Top%20Stories/Adopt_Pet.htm

Adopt a Pet
http://www.adoptapet.com/ 

##### Press Release #######################

More Behind City National’s purchase
of First American Equipment

The Alta Group Announces Funding of One of Largest M&A Deals in Years--

RENO, NEVADA, — The Alta Group, a global financial consultancy, announced that one of the equipment finance industry’s largest merger and acquisition transactions in years was completed last week. The 100 percent cash purchase of First American Equipment Finance of Rochester, N.Y., by City National Bank of Los Angeles is not only one of the largest M&A transactions in this niche in several years, but it also fulfills growth strategies on both sides.

Representing City National, The Alta Group was instrumental in helping the bank identify acquisition prospects, performing due diligence, and providing financial advisory services and support in arranging and closing the deal, which was completed on April 30, 2012, said Paul Bent, a senior managing director of The Alta Group. “The bank already had a successful equipment leasing and finance operation and they approached Alta initially to explore various paths to expand that business,” he added. The Alta Group has specialized in management consulting, as well as merger and acquisition advisory services, in the equipment leasing and finance industry for more than 20 years.

This transaction breaks the virtual barrier to mergers and acquisitions that was in place since the financial crisis, said Bruce Kropschot, a senior managing director who leads Alta’s M&A practice. He has been reporting within the industry that more such deals are anticipated this year because many corporations and banks have substantial liquidity and a number of attractive independent leasing companies withstood the recession soundly

Kropschot said the City National transaction was accomplished swiftly, with a definitive agreement finalized shortly after the execution of a letter of intent. He said First American Equipment Finance has a great reputation in the industry and this was not the first time that First American owners William Verhelle and Guy Klingler were approached by firms interested in acquiring a national leasing company. Verhelle also found in the selection of City National that leadership styles and growth interests were compatible. It was reported that by joining forces, First American expects to provide better access to capital, as well as broaden client services.

Bent said it is “a perfect cultural fit” because both are headed by leaders who take a personal interest in their businesses and their customers and have high standards of integrity.

City National was founded in Los Angeles by a group of entrepreneurs in 1954. Today it is a wholly owned subsidiary of City National Corporation and backed by $24 billion in total assets.

First American Equipment Finance, a privately held mid-ticket equipment leasing company, owns and services approximately $325 million in assets. It leases technology and office equipment nationwide and has approximately 100 employees. Its clients include educational institutions, hospitals and health systems, large law firms, insurance underwriters, enterprise businesses, professional service businesses and nonprofit organizations.

Since 1992, The Alta Group has represented equipment leasing and finance companies, banks, manufacturers and service providers, offering management consulting and expertise in global market entry, vendor finance, professional development, and mergers and acquisitions. The full array of practices in North America is described at http://www.thealtagroup.com/north-america

###### Press Release ########################

News Briefs----

Fitch: Scrutinizing Topical Accounting Issues
http://leasingnews.org/PDF/Fitch_562012.pdf

List of Banks Examined for CRA Compliance
http://www.fdic.gov/regulations/community/monthly/2012/cram

Oil Plunges Below $97 on US Demand, Europe Votes
http://www.nytimes.com/aponline/2012/05/06/business/ap-oil-prices.html?_r=1&hp

Barry Bonds Defends 'Rambling' in Appeal of Conviction
http://www.courthousenews.com/2012/05/04/46255.htm

76-Year-Old Mom Claims Son Swiped $51 Million Lottery Jackpot
http://www.courthousenews.com/2012/05/04/46240.htm

Encinitas broker was 'AzScam' convict
http://www.utsandiego.com/news/2012/may/04/don-kenney-legislator-realtor/

"Avengers" now biggest opener in history...
http://www.deadline.com/2012/05/avengers-now-260-5m-overseas-could-reach-585m-worldwide-through-sunday-with-u-s-canada-russia-china-openings/

[headlines]
--------------------------------------------------------------

You May Have Missed---

'Sully' Sullenberger on being a national hero and making a difference
http://www.contracostatimes.com/bay-area-news/ci_20562794/sully-sullenberger-being-national-hero-and-making-difference

[headlines]
--------------------------------------------------------------

SparkPeople--Live Healthier and Longer

6 Unconventional Ways to Treat Sore Muscles
http://www.shape.com/lifestyle/mind-and-body/6-unconventional-ways-treat-sore-muscles

[headlines]
--------------------------------------------------------------

Sports Briefs----

Miami Heat falls to New York Knicks, Knicks force Game 5 in Miami
http://www.miamiherald.com/2012/05/06/2787147/miami-heat-falls-to-new-york-knicks.html

Hawks face playoff elimination after Celtics rout
http://www.ajc.com/sports/atlanta-hawks/hawks-face-playoff-elimination-1432582.html

[headlines]
--------------------------------------------------------------

Baseball Poem

Three Short Ones

End of Winter

by Eve Merriam

Bare-handed reach
to catch
April's
incoming curve.
Leap higher than you thought you could and
Hold:
Spring,
Solid,
Here.
Published: A Sky Full of Poems (1964)

Short One by
Alan Cohen

Baseball
Baseballs flying
Fans cheering loud and clear
Innings pass, pitchers striking fast
Baseball.

Haiku Baseball 
by
Mike Schacht

Ricochet foul ball
Scatters fans like bowling pins
Souvenir bruises

[headlines]
--------------------------------------------------------------

California Nuts Briefs---

Occupy group plans response to UC on Albany land
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/06/BAQK1OE350.DTL

Santa Clara County Supes Clamp Down on Payday Lenders
http://losgatos.patch.com/articles/santa-clara-county-supes-clamp-down-on-payday-lenders?ncid=newsltuspatc00000001

Caltrain Rolls Toward Electrification
http://losgatos.patch.com/articles/caltrain-rolls-toward-electrification-e5608fe4?ncid=newsltuspatc00000001

Marin History Museum fetes Golden Gate Bridge at annual garden party in San Rafael
http://www.marinij.com/sanrafael/ci_20563541/marin-history-museum-fetes-golden-gate-bridge-at

[headlines]
--------------------------------------------------------------

“Gimme that Wine”

http://www.youtube.com/watch?v=EJnQoi8DSE8 

Easter Boosts Wine Sales 11%
http://www.winesandvines.com/template.cfm?section=news&content=100319&htitle
=Easter%20Boosts%20Wine%20Sales%2011%25&

Gallo Pays Record Price for Monterey Vineyard
http://www.winebusiness.com/news/?go=getArticle&dataid=100340

Australian wine grape production down
http://www.thedrinksbusiness.com/2012/05/australian-wine-grape-production-down/

Coppola releases first Inglenook since 1964
http://www.thedrinksbusiness.com/2012/05/coppola-releases-first-inglenook-since-1964/

Free Mobile Wine Program
http://leasingnews.org/archives/Feb2010/2_26.htm#mobile

Wine Prices by vintage
http://www.winezap.com
http://www.wine-searcher.com/

US/International Wine Events
http://www.localwineevents.com/

Winery Atlas
http://www.carterhouse.com/atlas/\

Leasing News Wine & Spirits Page
http://two.leasingnews.org/Recommendations/wnensprts.htm

   1700-The population of the colonies was sparsely scattered over the large area of the colonies with poor roads and communications. Below the Delaware River, an isolated farm was the usual settlement, save for Charleston, which had about 250 families. Philadelphia had approximately 700 houses, New York about 5,000 inhabitants, Newport less than 2000, and Boston, the largest city, 7000. There were approximately 275,000 inhabitants in the colonies.
    1700—William Penn beings monthly meetings for Blacks advocating emancipation.
http://xroads.virginia.edu/~CAP/PENN/pnintro.html
http://www.2020site.org/penn/
    1763 - Pontiac's Rebellion begins when a confederacy of Native American warriors under Ottawa chief Pontiac attacks the British force at Detroit. After failing to take the fort in their initial assault, Pontiac's forces, made up of Ottawas and reinforced by Wyandots, Ojibwas, and Potawatamis, initiated a siege that would stretch into months. As the French and Indian Wars came to an end in the early 1760s, Native Americans living in former French territory found the new British authorities to be far less conciliatory than their predecessors. In 1762, Pontiac enlisted support from practically every Indian tribe from Lake Superior to the lower Mississippi for a joint campaign to expel the British from the formerly French lands. According to Pontiac's plan, each tribe would seize the nearest fort and then join forces to wipe out the undefended settlements. In April, Pontiac convened a war council on the banks of the Ecorse River near Detroit. It was decided that Pontiac and his warriors would gain access to the British fort at Detroit under the pretense of negotiating a peace treaty, giving them an opportunity to seize forcibly the arsenal there. However, British Major Henry Gladwin learned of the plot, and the British were ready when Pontiac arrived in early May, and Pontiac was forced to begin a siege. At the same time, his allies in Pennsylvania began a siege of Fort Pitt, while other sympathetic tribes, such as the Delaware, the Shawnees, and the Seneca, prepared to move against various British forts and outposts in Michigan, New York, Pennsylvania, Maryland, and Virginia. On July 31, British relief expeditions attacked Pontiac’s camp but suffered heavy losses and were repelled in the Battle of Bloody Run. Nevertheless, they had succeeded in providing the fort at Detroit with reinforcements and supplies, which allowed it to hold out against the Indians into the fall. The major forts at Pitt and Niagara likewise held on, but the united tribes captured eight other fortified posts. At these forts, the garrisons were wiped out, relief expeditions were repulsed, and nearby frontier settlements were destroyed. In the spring of 1764, two British armies were sent out, one into Pennsylvania and Ohio under Colonel Bouquet, and the other to the Great Lakes under Colonel John Bradstreet. Bouquet's campaign met with success, and the Delawares and the Shawnees were forced to sue for peace, breaking Pontiac's alliance. Failing to persuade tribes in the West to join his rebellion, and lacking the hoped-for support from the French, Pontiac finally signed a treaty with the British in 1766. In 1769, he was murdered by a Peoria Indian while visiting Illinois. His death led to bitter warfare among the tribes, and the Peorias were nearly wiped out.
    1769 - Revolution was in the air on this day in 1769, as George Washington launched a legislative salvo at Great Britain's fiscal and judicial attempts to maintain its control over the American colonies. With his sights set on the British policy of "taxation without representation," Washington brought a package of non-importation resolutions before the Virginia House of Burgesses. The resolutions, drafted by George Madison largely in response to England's passage of the Townshend Act in 1767, also decried parliament's plan to send American criminals to England for trial. Though Virginia's Royal Governor promptly fired back by disbanding the House of Burgesses, the revolutionaries were undeterred: during a makeshift meeting held at the Raleigh Tavern in Williamsburg, Virginia's delegates gave their support the non-importation resolutions. As a result, Virginia sealed off a good chunk of its trade with England pending the repeal of the Townshend Acts. This proved to be a contagious maneuver, as the other American colonies spent the summer adopting their own non-importation resolutions.
    1789-Celebrating the inauguration of George Washington, the first Presidential Inaugural Ball was held at New York, NY., the Assembly Rooms, on the east side of Broadway, a little way north of Wall Street. A medallion portrait of President George Washington in profile on a fan was presented as a souvenir to the ladies.
    1818- Juliet Ann Opie Hopkins birthday - Although she actually did the job of supervising the Chimborazo Hospital during the Civil War, her husband got the title of hospital supervisor (and the money) because the Alabama legislature refused to recognize a women in any professional capacity. She actually went onto the battlefields to minister to the Confederate wounded and was wounded herself. She was buried with full military honors at Arlington National Cemetery.
http://www.arlingtoncemetery.com/jhopkins.htm
    1840 - The Great Natchez, Mississippi Tornado, the most deadly and destructive in early United States history, left the city in ruins. 317 people were killed, most of them along the water front.
    1864—Until May 20th, General Grant continued to hammer at General Lee’s waning forces; known as the Spotsylvania campaign. After the Wilderness, Grant’s and Meade’s advance on Richmond by the left flank was stalled at Spotsylvania Court House on May 8. This two-week battle was a series of combats along the Spotsylvania front. The Union attack against the Bloody Angle at dawn, May 12-13, captured nearly a division of Lee’s army and came near to cutting the Confederate army in half. Confederate counterattacks plugged the gap, and fighting continued unabated for nearly 20 hours in what may well have been the most ferociously sustained combat of the Civil War. On May 19, a Confederate attempt to turn the Union right flank at Harris Farm was beaten back with severe casualties. Union generals Sedgwick (VI Corps commander) and Rice were killed. Confederate generals Johnson and Steuart were captured, Daniel and Perrin mortally wounded. On May 21, Grant disengaged and continued his advance on Richmond. While considered inconclusive as there were no winners, Lee did not stop Grant's march toward Richmond and the overall plan to cut off supplies to troops from all ports. Grants 100,000 troops met Lee's 52,000 and the Northern politicians were not happy there was not a victory. The causality count for the Union Army was 18,000 and the Confederate: 12,000. With little money, no support from Europe, ports from Texas, Louisiana, Florida, and going up the coast being captured by the North, including Mississippi, what little supplies could not reach the dwindling number of soldiers. Almost 1/2 of Confederate soldiers were wounded, captured, killed, or died from disease. By war's end, over 2,000,000 volunteers had joined the Union army. Of the 425 Confederate generals, 146 were graduates of West Point. Almost 1/3 of US Army officers resigned to serve the Confederacy. In reality, the Southern army was ill-equipped, had limited supplies ( even shoes as many found dead at Gettysburg were shoeless), and was greatly outnumbered. In addition, many were not in favor of slavery controlled mostly by large plantation owners. The issue to secede was controversial in many Southern states.
    1873 - US marines attacked Panama.
    1877 - Indian chief Sitting Bull entered Canada with a trail of Indians after the Battle of Little Big Horn.
    1878-African-American Joseph R Winters patents the mobile fire escape to be placed on “fire engine trucks.”
http://www.ncat.edu/~childres/fireescape.html
    1892-birthday of Archibald MacLeish, American poet and Librarian of Congress (1939-44), born at Glencoe, IL. MacLeish, who was also a play writer, Pulitzer Prize winner, editor, lawyer, professor and farmer, died at Boston, MA, April 20, 1982.
http://memory.loc.gov/ammem/today/may07.html
    1894- Pioneer country musician George Riley Puckett was born in Alpharetta, Georgia. Puckett was one of the most popular hillbilly singer- guitarists of the 1920's and '30s. He was the first hillbilly artist to yodel on record - he did so at his debut session in 1924. Puckett was a member of the Skillet Lickers, the best-known hillbilly band of the period.
http://www.vh1.com/artists/az/puckett_riley/bio.jhtml
    1901-birthday of Gary Cooper, Frank James Cooper, Helena, MT. He changed his name to Gary at the start of his movie career. He is best known by baseball fans for his portrayal of Lou Gehrig in The Pride of the Yankees. Other films included Wings, The Virginian, The Plainsman, Beau Geste, Sergeant York ( for which he won this first Academy Award), High Noon ( winning his second Oscar for best actor ), the Court Marital of Billy Mitchell and Friendly Persuasion. He died May 13, 1961, at Hollywood, CA.
http://themave.com/Cooper/
    1907-Bloody Tuesday in San Francisco. The Street Car-men were among the most militant of San Francisco workers as they struck in five of the six years from 1902 to 1907, leading to the violent gunfight that erupted on this day, with two deaths.
    1915-Birtish passenger liner Lusitania on its return from New York to Liverpool, carrying nearly 2,000 passengers, was torpedoed by a German submarine off the coast of Ireland, sinking within minutes. 1,198 lives were lost. U.S. President Wilson sent note of protest to Berlin on May 13, but Germany, which had issued warnings in advance, pointing to Lusitanai’s cargo of ammunition to Britain. US maintained “neutrality” for the time being.
http://memory.loc.gov/ammem/today/may07.html
    1922- Darrin McGavin Birthday Darrin McGavin is perhaps best known in the movies for his role in “Man with the Golden Arm, “ and for the first television series, “Mickey Spillane’s Mike Hammer” but is perhaps remembered for his short lived series as a reporter named “Kolchak” on the “Night Stalker.”
    1922-birthday of pianist Roy Hall, Big Stone Gap, VA
    1926-tenor saxophone Herbie Steward born, Los Angeles, CA. 
    1926-birthday of drummer Kansas City Red ( Arthur Stevenson), Drew, MS
    1927--Birthday of Ruth Prawer Jhabvala, German-born American author whose Heat and Dust (1975) won the Brooker award for fiction. She won academy awards for best adapted screenplay for her script of Room with a View and for Howard's End.
    1931- 1950's pop vocalist Teresa Brewer was born in Toledo, Ohio. She was a radio star on the "Amateur Hour" at the age of five, and was only 19 when she had her first million-seller, "Music, Music, Music," in 1950. Her other million-selling hits in the pre-rock 'n' roll era included "Till I Waltz Again With You," "Ricochet" and "Let Me Go Lover
http://www.teresafans.org/ 
    1933-birthday of John Constantine ( Johnny) Unitas, pro Football Hall of Fame quarterback, born Pittsburgh, PA.
    1941 - Glenn Miller records, "Chattanooga Choo Choo" ( Bluebird).http://www.mamarocks.com/chattanooga_choo_choo.htmhttp://www.parabrisas.com/m_millerg1.html
    1941-Paul Quinchette birthday
http://www.vh1.com/artists/az/quinichette_paul/bio.jhtml
    1942 - In the Battle of the Coral Sea, Japanese and American navies attack each other with carrier-launched warplanes. It is the first time in the history of naval warfare where two fleets fought without seeing each other. Two crucial battles in 1942 marked the turning point of the war in the Pacific.
    1942--PETERSON, OSCAR VERNER Medal of Honor
Rank and organization: Chief Watertender, U.S. Navy. Born: 27 August 1899, Prentice, Wis. Accredited to: Wisconsin. Citation: For extraordinary courage and conspicuous heroism above and beyond the call of duty while in charge of a repair party during an attack on the U .S .S. Neosho by enemy Japanese aerial forces on 7 May 1942. Lacking assistance because of injuries to the other members of his repair party and severely wounded himself, Peterson, with no concern for his own life, closed the bulkhead stop valves and in so doing received additional burns which resulted in his death. His spirit of self-sacrifice and loyalty, characteristic of a fine seaman, was in keeping with the highest traditions of the U.S. Naval Service. He gallantly gave his life in the service of his country.
    1942--WAINWRIGHT, JONATHAN M. Medal of Honor
Rank and organization: General, Commanding U.S. Army Forces in the Philippines. Place and date: Philippine Islands, 12 March to 7 May 1942. Entered service at: Skaneateles, N.Y. Birth: Walla Walla, Wash. G.O. No.: 80, 19 September 1945. Citation: Distinguished himself by intrepid and determined leadership against greatly superior enemy forces. At the repeated risk of life above and beyond the call of duty in his position, he frequented the firing line of his troops where his presence provided the example and incentive that helped make the gallant efforts of these men possible. The final stand on beleaguered Corregidor, for which he was in an important measure personally responsible, commanded the admiration of the Nation's allies. It reflected the high morale of American arms in the face of overwhelming odds. His courage and resolution were a vitally needed inspiration to the then sorely pressed freedom-loving peoples of the world.
    1943-birthday of Thelma Houston, Leland, MS
http://www.soulwalking.co.uk/Thelma%20Houston.html
    1943-The Liberty Ship George Washington Carver launched.
http://ssbn656.20m.com/liberty_frighter_gwc.html
http://inventors.miningco.com/library/weekly/aa041897.htm
    1945 - Baseball owner Branch Rickey announced the organization of the United States Negro Baseball League, consisting of six teams.
http://memory.loc.gov/ammem/jrhtml/branch.html
http://creativequotations.com/one/1492.htm
    1945- Russian, American, British and French ranking officers crossed into a second-floor recreation room of a small red brick schoolhouse ( which served as General Eisenhower's headquarters ) at Reims, Germany. Representing Germany, Field Marshal Alfred Jodl signed an unconditional surrender of all German fighting forces. After a signing that took almost 40 minutes, Jodl was ushered into Eisenhower’s presence. The American general asked the German if he fully understood what he had signed and informed Jodl that he would be held personally responsible for the any deviation from the terms of surrender, including the requirement that German commanders sign a formal surrender to the USSR at a time and place determined by that government.
http://www.nytimes.com/learning/general/onthisday/big/0507.html#article
    1945---SCHWAB, ALBERT EARNEST --- Medal of Honor
Rank and organization: Private First Class, U.S. Marine Corps Reserve. Born: 17 July 1920, Washington, D.C. Entered service at: Tulsa, Okla. Citation: For conspicuous gallantry and intrepidity at the risk of his life above and beyond the call of duty as a flamethrower operator in action against enemy Japanese forces on Okinawa Shima in the Rykuyu Islands, 7 May 1945. Quick to take action when his company was pinned down in a valley and suffered resultant heavy casualties under blanketing machinegun fire emanating from a high ridge to the front, Pfc. Schwab, unable to flank the enemy emplacement because of steep cliffs on either side, advanced up the face of the ridge in bold defiance of the intense barrage and, skillfully directing the fire of his flamethrower, quickly demolished the hostile gun position, thereby enabling his company to occupy the ridge. Suddenly a second enemy machinegun opened fire, killing and wounding several marines with its initial bursts. Estimating with split-second decision the tactical difficulties confronting his comrades, Pfc. Schwab elected to continue his l-man assault despite a diminished supply of fuel for his flamethrower. Cool and indomitable, he moved forward in the face of a direct concentration of hostile fire, relentlessly closed the enemy position and attacked. Although severely wounded by a final vicious blast from the enemy weapon, Pfc. Schwab had succeeded in destroying 2 highly strategic Japanese gun positions during a critical stage of the operation and, by his dauntless, single-handed efforts, had materially furthered the advance of his company. His aggressive initiative, outstanding valor and professional skill throughout the bitter conflict sustain and enhance the highest traditions of the U.S. Naval Service.
    1945--FARDY, JOHN PETER Medal of Honor
Rank and organization: Corporal, U.S Marine Corps. Born: 8 August 1922, Chicago, Ill. Accredited to: Illinois. Citation: For conspicuous gallantry and intrepidity at the risk of his life above and beyond the call of duty as a squad leader, serving with Company C, 1st Battalion, 1st Marines, 1st Marine Division, in action against enemy Japanese forces on Okinawa Shima in the Ryukyu Islands, 7 May 1945. When his squad was suddenly assailed by extremely heavy small arms fire from the front during a determined advance against strongly fortified, fiercely defended Japanese positions, Cpl. Fardy temporarily deployed his men along a nearby drainage ditch. Shortly thereafter, an enemy grenade fell among the marines in the ditch. Instantly throwing himself upon the deadly missile, Cpl. Fardy absorbed the exploding blast in his own body, thereby protecting his comrades from certain and perhaps fatal injuries. Concerned solely for the welfare of his men, he willingly relinquished his own hope of survival that his fellow marines might live to carry on the fight against a fanatic enemy. A stouthearted leader and indomitable fighter, Cpl. Fardy, by his prompt decision and resolute spirit of self-sacrifice in the face of certain death, had rendered valiant service, and his conduct throughout reflects the highest credit upon himself and the U.S. Naval Service. He gallantly gave his life for his country.
    1945--HANSEN, DALE MERLIN Medal of Honor
Rank and organization: Private, U.S. Marine Corps. Born: 13 December 1922, Wisner, Nebr. Accredited to: Nebraska. Citation: For conspicuous gallantry and intrepidity at the risk of his life above and beyond the call of duty while serving with Company E, 2d Battalion, 1st Marines, 1st Marine Division, in action against enemy Japanese forces on Okinawa Shima in the Ryukyu Chain, 7 May 1945. Cool and courageous in combat, Pvt. Hansen unhesitatingly took the initiative during a critical stage of the action and, armed with a rocket launcher, crawled to an exposed position where he attacked and destroyed a strategically located hostile pillbox. With his weapon subsequently destroyed by enemy fire, he seized a rifle and continued his 1-man assault. Reaching the crest of a ridge, he leaped across, opened fire on 6 Japanese and killed 4 before his rifle jammed. Attacked by the remaining 2 Japanese, he beat them off with the butt of his rifle and then climbed back to cover. Promptly returning with another weapon and supply of grenades, he fearlessly advanced, destroyed a strong mortar position and annihilated 8 more of the enemy. In the forefront of battle throughout this bitterly waged engagement, Pvt. Hansen, by his indomitable determination, bold tactics and complete disregard of all personal danger, contributed essentially to the success of his company's mission and to the ultimate capture of this fiercely defended outpost of the Japanese Empire. His great personal valor in the face of extreme peril reflects the highest credit upon himself and the U.S. Naval Service.
    1946-William H. Hastie is inaugurated as the first Black governor of the Virgin Island.http://www.tnstate.edu/library/digital/hastie.htm
    1947-The first regularly scheduled television drama was “Kraft Television Theater, “ telecast on the National Broadcasting Company’s network form May 7, 1947 to October 1,1958, from 7:30pm to 8:30PM. The program ran for eleven years, during which time it present 650 plays that required 5,236 sets and the participation of 3,955 actors. The first drama was “ Double Door,” starring John Baragrey. The shows were live.. Among the playwrights getting their big breaks were: Rod Serling, Paddy Chayefsky and Tad Mosel. Some of the show’s most notable plays included: “ the Easy Mark” (1951) with Jack Lemmon,” Double Ivory” (1953) with Lee Remick, “ To Live in Peace(1953) with Anne Bancroft,” “The Missing Years,”(1954) with Anthony Perkins and Mary Astor, “ Alice in Wonderland” (1954) with Robin Morgan, Art Carney, Edgar Bergen and Charlie McCarthy,” and “ A Profile in Courage,”(1956) with our neighbor on Latimer Road in the Pacific Palisades James Whitmore. The last play was based on a book by Senator John F. Kennedy, who also appeared on the program to introduce the drama.
    1949---KAYS, KENNETH MICHAEL Medal of Honor
Rank and organization: Private First Class, U.S. Army, Headquarters and Headquarters Company, 1st Battalion, 506th Infantry, 101st Airborne Division. place and date: Thua Thien province, Republic of Vietnam, 7 May 1970. Entered service at: Fairfield, Ill. Born: 22 September 1949, Mount Vernon, Ill. Citation: For conspicuous gallantry intrepidity in action at the risk of his life above and beyond the call of duty. Pfc. (then Pvt.) Kays distinguished himself while serving as a medical aidman with Company D, 1st Battalion, 101st Airborne Division near Fire Support Base Maureen. A heavily armed force of enemy sappers and infantrymen assaulted Company D's night defensive position, wounding and killing a number of its members. Disregarding the intense enemy fire and ground assault, Pfc. Kays began moving toward the perimeter to assist his fallen comrades. In doing so he became the target of concentrated enemy fire and explosive charges, 1 of which severed the lower portion of his left leg. After applying a tourniquet to his leg, Pfc. Kays moved to the fire-swept perimeter, administered medical aid to 1 of the wounded, and helped move him to an area of relative safety. Despite his severe wound and excruciating pain, Pfc. Kays returned to the perimeter in search of other wounded men. He treated another wounded comrade, and, using his own body as a shield against enemy bullets and fragments, moved him to safety. Although weakened from a great loss of blood, Pfc. Kays resumed his heroic lifesaving efforts by moving beyond the company's perimeter into enemy held territory to treat a wounded American lying there. Only after his fellow wounded soldiers had been treated and evacuated did Pfc. Kays allow his own wounds to be treated. These courageous acts by Pfc. Kays resulted in the saving of numerous lives and inspired others in his company to repel the enemy. Pfc. Kays' heroism at the risk of his life is in keeping with the highest traditions of the service and reflects great credit on him, his unit, and the U.S. Army.
    1951-one of television’s earliest popular game shows “Strike It Rich” premiered. The downtrodden and the poverty-stricken showed up on this game show to tell their sob stories. Whoever received the most votes from the studio audience was declared the winner The losers were able to receive help form sympathetic viewers through a telephone “heart line.” Warren Hull hosted the program. The show got in trouble with the New York City Welfare Department in 1954 when 55 of the show’s hopeful contestants remained in New York and sent on welfare. 
    1950-Tim Russert born Buffalo, New York. After 16 years as the longest-serving moderator of NBC's “Meet the Press.” He died at the age of 58 on June 13, 2008 ("Go Bills!!!")
    1951- Janis Ian birthday, U.S. singer and songwriter won the 1975 Grammy when she sang so poignantly of her alienation "At Seventeen." Later she came out of the closet as a lesbian and the lyrics of the song were poignantly illuminated. She became a columnist for The Advocate magazine.
http://www.janisian.com/
http://www.nauticom.net/www/hyperguy/janis.html
http://www.siliconvalley.com/mld/siliconvalley/3914595.htm
    1951 - Russia was admitted to participate in the 1952 Olympic Games by the International Olympic Committee. 
    1951-Birthday of, Janis Ian, U.S. singer and songwriter, who won the 1975 Grammy when she sang so poignantly of her alienation "At Seventeen." Later she came out of the closet as a lesbian and the lyrics of the song were poignantly illuminated. She became a columnist for The Advocate magazine.
    1954- Vietnam’s victory over France at Dien Bien Phu ended the Indochina War. This battle is considered one of the greatest victories won by a former colony over a colonial power. It is said that General Eisenhower was the first president to authorize U.S. military action following Dien Bien Phu’s
fall from power.
    1955--Ray Charles reaches the top of the US R&B chart for the first time with "I Got A Woman". It was a revamped version of a gospel standard called "It Must be Jesus." It was later ranked #235 on Rolling Stone's list of the 500 Greatest Songs of All Time.
    1958 - Pianist Van Cliburn signed an artist’s contract with RCA Victor Records. 
    1959---Top Hits
Come Softly to Me - The Fleetwoods
The Happy Organ - Dave ‘Baby’ Cortez
Sorry (I Ran All the Way Home) - The Impalas
White Lightning - George Jones
    1959 - 103 fans packed the LA Coliseum for an exhibition game between the Los Angeles Dodgers and the New York Yankees. Sandy Koufax pitched for the Dodgers. It was Roy Campanella Night. The star catcher for the Dodgers, paralyzed in an automobile accident, was honored for his contributions to the team for many years. A three time Most Valuable Player in the National League, Campanella was permanently paralyzed in an automobile accident in December, 1958. The evening’s ceremonies preceded the game, won by the Yankees, 6-2.
    1961-Tony Orlando makes his first appearance on Billboard's Hot 100 with "Halfway to Paradise", which peaks at #39. He'll have one more hit next year and then won't be heard from until 1970 when he reappears with his group, Dawn. 
    1966 - The Mamas and The Papas made the climb to the top of the "Billboard" pop music chart with "Monday, Monday". For three weeks "Monday, Monday" stayed at the top of the pop music world. The tune was the second hit by the group -- just two months after their first, "California Dreamin’". These two songs would be the only number one hits for the group, though they made it to number two with "Dedicated to the One I Love". 
http://www.angelfire.com/ma2/mamasandpapas/
    1966- Simon and Garfunkel's "I Am a Rock" enters the Hot 100 -- the folk-pop duo's third chart entry. In its eleven weeks on the chart, it will peak at #3
    1966-Del Shannon enters the Billboard Hot 100 for the 16th time with "The Big Hurt", which will stall at #94.
    1967—Top Hits
Somethin’ Stupid - Nancy Sinatra & Frank Sinatra
The Happening - The Supremes
Sweet Soul Music - Arthur Conley
Need You - Sonny James
    1969 -Another beautiful day in the park in San Francisco: Grateful Dead and the Airplane performed at the Polo Field in Golden Gate Park .
    1970--KAYS, KENNETH MICHAEL Medal of Honor
Rank and organization: Private First Class, U.S. Army, Headquarters and Headquarters Company, 1st Battalion, 506th Infantry, 101st Airborne Division. place and date: Thua Thien province, Republic of Vietnam, 7 May 1970. Entered service at: Fairfield, Ill. Born: 22 September 1949, Mount Vernon, Ill. Citation: For conspicuous gallantry intrepidity in action at the risk of his life above and beyond the call of duty. Pfc. (then Pvt.) Kays distinguished himself while serving as a medical aidman with Company D, 1st Battalion, 101st Airborne Division near Fire Support Base Maureen. A heavily armed force of enemy sappers and infantrymen assaulted Company D's night defensive position, wounding and killing a number of its members. Disregarding the intense enemy fire and ground assault, Pfc. Kays began moving toward the perimeter to assist his fallen comrades. In doing so he became the target of concentrated enemy fire and explosive charges, 1 of which severed the lower portion of his left leg. After applying a tourniquet to his leg, Pfc. Kays moved to the fire-swept perimeter, administered medical aid to 1 of the wounded, and helped move him to an area of relative safety. Despite his severe wound and excruciating pain, Pfc. Kays returned to the perimeter in search of other wounded men. He treated another wounded comrade, and, using his own body as a shield against enemy bullets and fragments, moved him to safety. Although weakened from a great loss of blood, Pfc. Kays resumed his heroic lifesaving efforts by moving beyond the company's perimeter into enemy held territory to treat a wounded American lying there. Only after his fellow wounded soldiers had been treated and evacuated did Pfc. Kays allow his own wounds to be treated. These courageous acts by Pfc. Kays resulted in the saving of numerous lives and inspired others in his company to repel the enemy. Pfc. Kays' heroism at the risk of his life are in keeping with the highest traditions of the service and reflect great credit on him, his unit, and the U.S. Army.
    1971-Miles Davis played at the San Francisco Fillmore West
http://www.wolfgangsvault.com/miles-davis/concerts/fillmore-west-may-07-1971.html 
    1972- After trying and failing seven time since moving from Minneapolis in 1960, the Los Angeles Lakers won their first NBA championship, defeating the New York Knicks, 114-100., to win the series, four games to one. As the Minneapolis Lakers, the team had won five titles, the last one coming in 1954.
    1973-George Harrison releases "Give Me Love", which will become his second #1 single in the US and reach #8 in the UK.
    1975---Top Hits
He Don’t Love You (Like I Love You) - Tony Orlando & Dawn
Before the Next Teardrop Falls - Freddy Fender
Chevy Van - Sammy Johns
Roll on Big Mama - Joe Stampley
    1977- Steven Bishop's "On & On" is released.
    1977-Ten weeks after entering the Billboard singles chart, The Eagles' masterpiece, "Hotel California" became the band's fourth US #1 hit. It made #8 in the UK. In 2009, the song was certified Platinum by the RIAA for sales of 1,000,000 digital downloads.
    1978 - No. 1 Billboard Pop Hit: "If I Can't Have You," Yvonne Elliman.
    1978-The 90,000 tickets on sale for Bob Dylan's upcoming concerts at London's Wembley Empire Pool sell out in less than eight hours.
    1982-A federal jury decided that the National Football League was in violation of antitrust laws when it attempted to prohibit the Oakland Raiders from moving to Los Angeles. The Raiders, an original team in the American Football League, played in Oakland from 1960 through 1981, and in Los Angeles form 1982 through 1994 after which they returned to Oakland. Owner Al Davis is still suing everyone, this time for broker promises made to get them to return. Rumor is he wants to go back to Los Angeles, and perhaps a Super Bowl win may be the key to see the Raiders stay or they leave.
    1982-Diana Ross receives a star on the Hollywood Walk of Fame at 6712 Hollywood Blvd.
    1983---Top Hits
Beat It - Michael Jackson
Jeopardy - Greg Kihn Band
Let’s Dance - David Bowie
Jose Cuervo - Shelly West
    1984-In San Francisco, American veterans of the Vietnam War reached an out-of-court settlement with seven chemical companies in their class-action suit relating to use of herbicide "Agent Orange." 
    1985 - The Edmonton Oilers set a National Hockey League record for playoff wins (12). Edmonton won its second Stanley Cup with a 7-3 win over the Chicago Black Hawks. 
    1985 - No. 1 Billboard Pop Hit: "Crazy for You," Madonna.
    1987 - Shelly Long made her last appearance as a regular on the popular “Cheers” TV show.
    1987-Thirty-one cities in the western U.S. reported record high temperatures for the date. Highs of 93 degrees at Portland OR and San Jose CA were the warmest of record for so early in the season. The high of 92 degrees at Quillayute WA was a record for the month of May. The temperature at Sacramento CA hit 105 degrees, Fresno hit 103 and Bakersfield had a high reading of 101.
    1987 - Top Hits
Anything For You-- Gloria Estefan & Miami Sound Machine
Shattered Dreams- Johnny Hates Jazz
Wishing Well- Terence Trent D'Arby
One More Try- George Michael
    1988-Winning Colors, ridden by Gary Stevens, became the third filly and the first roan to win the Kentucky Derby. Forty Niner finished second, and Risen Star was third.
    1989-A record setting May snowfall occurred At Buffalo, New York, Shattering Records Held For Over 80 Years. The 7.9 Inch Amount Was The Greatest For May 7th In Buffalo, the greatest for any day in may, the greatest snowfall in 24 hours, and the greatest amount of snow so late in the season.
    1990 - No. 1 Billboard Pop Hit: "Nothing Compares 2 U," Sinead O'Connor. The million-selling single is the Irish rocker's only top 40 hit. It is written by Prince.
    1991---Top Hits
Baby Baby - Amy Grant
Joyride - Roxette
I Like the Way (The Kissing Game) - Hi-Five
Rockin’ Years - Dolly Parton with Ricky Van Shelton
    1991 Darryl Strawberry returns to New York as a Dodger with mixed results. A crowd of 49,118 mostly booing fans watch him hit a two-run home run, and they cheer when he makes the last out of the game with the potential tying and winning runs on base in the 6-5 Met victory
    1992-the 27th amendment to the Constitution was ratified, prohibiting Congress from giving itself midterm pay raises.
    1994- 1,322 guitarists, led by Randy Bachman, gathered in Vancouver to play Bachman-Turner Overdrive's "Takin' Care of Business" for 68 minutes and 40 seconds. The outdoor strumathon set two world records - the greatest number of guitarists and the longest mass guitar jam session.
http://www.randybachman.com/index.php?choice=1
    1998—Top Hits
Too Close- Next 
My All- Mariah Carey
You re Still The One- Shania Twain 
Everybody [Backstreet s Back]- Backstreet Boys 
    1999 -- In the biggest comeback in Jacobs Field history, the Indians score 18 runs in the final three innings to overcome a 9-1 deficit to beat the Devil Rays, 20-11. Tampa Bay's first baseman Fred McGriff sets a major league record by homering in his 34th park.
    2002—Top Hits
Foolish- Ashanti
Murder Inc.-Def Jam 13
What's Luv?- Fat Joe Featuring Ashanti
I Need A Girl (Part One)- P. Diddy Featuring Usher & Loon
U Don't Have To Call- Usher
    2006-- As Barry Bonds takes up his position in left field, the Phillies fans in the stands behind him unfurl a section-long banner which leaves no doubt about their sentiments concerning the Giants' outfielder pursuit of the Babe. The message displayed briefly during first inning informs the unpopular superstar "Ruth did it on hot dogs & Beer - Aaron did it with class."
    2009: Dolly Parton is awarded an honorary Doctorate of Music from the University of Tennessee at Knoxville.

NBA Finals Champions This Date

    1972-- Los Angeles Lakers