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Kit Menkin's Leasing News www.leasingnews.org Friday,
September 13, 2002 Accurate, fair and unbiased news for the equipment Leasing
Industry --posted daily at www.leasingnews.org--- Tuesday Leasing News posted at 10:15 am PDT at www.leasingnews.org----other features, such as classified
ads, are posted at different
times of the day ------------------------------------------------------------------------------------------------------ e-Mail Removal
Form: \http://65.209.205.32/LeasingNews/removalform.asp ----------------------------------------------------------------------------- Pictures from the Past
(I thought readers
would like to see how I looked, and also my significant other
for 18 years!!! I had more hair
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bankruptcy and problem accounts resolution. Decades of experience. 10-lawyer
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"ELA " NY Metro and National: Hackensack, NY Attorney specializing in equipment lease matters for at least
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"ELA" National: http://www.leaselawyer.com/ "ELA" "NAELB" Full staff of attorneys and legal assistants work with Group
Leader Barry S. Marks to ensure prompt, cost-effective responses to client
needs: Email:bsm@blik.com Headlines---- “Top
Gun" Salesmanager Mark McQuitty Business
Leasing News Now On Line Rates
on 30-year and 15-year mortgages move up U.S.
Reviewing Banking Conflicts Equipment
Leasing Association Newsletter Highlights Former
Tyco Executives Plead Not Guilty---New Charges Filed Cards'
Bryant was 12th overall choice in draft Monday---Sept 11, 2001 and 2002 Economy Most
Likely--Reaction to Richard Shapiro Controversy -------------------------------------------------------------------------- by Christopher Menkin Hi Kit, A lot has changed since I last spoke with you. I have ended my Leasing career. My Wife & I sold our Home in Anaheim and we have moved
to Marina Del Rey with our 19 month.old son named Westin. We made great money on the sell of our home and we had good
savings already so we have changed gears and along with 9/11 have
put life more in prospective, Linda will be going back to school in Feb toward
a LVN License and I'v started a street Vending Business selling
coffee and juices, I start my first location 9/16/02 in front of the West Los
Angeles Courthouse. Saddleback Financial really took the wind out of my sail,
they still owe me for my last (5) deals, over $425,000 of business and a
lot of commissions and they’re not the only company that got me,
American Medical Capital which was owned by Tony Ricco filed for BK a couple of months
ago and I had (1) deal in funding with them for $86,000, I will never see
any of these commissions, over $16,000. As an ex-commission salesman, I plan on paying my own paycheck
for a while! Kit, to be honest, starting next week I'm going to be Street
Vending 5-7 days a week and now
that I'm not working in Leasing I'm not emotional connected, If the Conference is on the Weekend I can do it. Let me know. Rich --- At one time he was the top salesmen out of fifteen at Saddleback
Financial. At the beginning of the year, I went through several lists
of salesman from readers for the San Diego United Association of Equipment Leasing Association Fall “Top Gun” Conference. There were over two-dozen on the list, all in a category
of making over $250,000 in 1990, perhaps 1991. One
current salesman made $2 million in commissions, but did not want to fly from Florida (confirmed by his sales
manager.) He doesn’t attend conferences;
doesn’t have the time, but call him again, if it is another date.
Another who it was verified from an employer had made $750,000,
but was going to a wedding on October 5th. Shawn Giffin would make it, but it appears
he is going to the same wedding. Most turned me down. One who did not was Richard Shapiro. He was full of enthusiasm. In the original group that I asked were three considered
by Convention Chairman John Kruse and the UAEL executive board as “too
controversial.” People will not
turn out, I was told, because they are hated in the industry. I knew this was from people who were jealous or believed the rumors. I had not only chosen them from the list, but invited them. My position was very simple, not a bluff. If you want me to “dis-invite” them, I would not only pull out from
doing the workshop, but resign as a director. You invited me to do the workshops,
gave me no restrictions, these were people I respected, and had “talked into” appearing.
They didn’t volunteer. It took me many conversations, e-mails, and having others
also call them to say “yes.” After a “trade,” I was allowed to keep them on the workshop
panel, with the understanding this was Leasing News, and would “not soil”
the association. When it was learned Richard Shapiro was no longer in the
leasing industry, I was told by the UAEL Convention Chairman John Kruse it
was not “appropriate” to have him appear. The
UAEL Executive Board was also taking this “opinion” and I was to “dis-invite” him. “People will walk out of the workshop if you have Shapiro
there, “ I was told in one e-mail. My position was this should be his prerogative, not ours,
as I felt his opinion and story and feelings were still valid, perhaps even more
so. I felt it would be not polite to “dis-invite” him. Again, I stood my ground...but before doing
so, I consulted the Leasing News Advisory Board. Thirteen people serve,
and one of the things they do is “keep me in line.” I cannot think of
a time I have not followed their consensus of opinion.
In fact, there are several I disagreed, but I deferred to them. Due to the time difference, I was not able to get permission
to quote all them ( When you see an e-mail printed in Leasing News, it
is after I received permission from the sender to quote them). ------------------------------ I see no harm in letting Richard Shapiro participate on the
panel, at his option. Leasing
is an entrepreneurial business and all great commission sales people are literally, "self employed".
The same sales techniques that made me a hugely successful copier salesperson translated well to the leasing industry when I made the switch.
I am still the top producer in our company and the person that
everyone comes to when it is actually time to close the sale. The ability to close is what separates the pretenders from the contenders and the
champions. As far as "speakers" being in the leasing industry,
since when did that become a requirement. Maybe some people would like to hear exactly why a Top Gun
like Richard Shapiro has lost his passion for the industry. Maybe it will stimulate some thinking with respect to ethics as the lapse of ethics
at Saddle Back appears to have a lot to do with driving a Top Gun sales
rep out of the Biz. Maybe some people will think twice about the way
they treat their sales people or other good employees. Maybe some others
will want to ask him why he left and why he seems to have lost his
passion for the business. Personally, I think
that his story demonstrates that "Top Gun" sales people are
motivated by far more than money. He
could have made the same money elsewhere but instead he decided to work
a Kiosk selling coffee and juices?? Huh??
This guy has a story that we can learn from. The last time I checked,
the opportunity to learn from the successes and/or mistakes of others
was one of the best reasons for attending an industry conference. The
willingness to share those experiences with each other was always a hallmark
of the UAEL/WAEL group that I never saw at other associations. Bob Rodi President LeaseNOW, Inc. drlease@leasenow.com www.leasenow.com 1-800-321-LEAS (5327)x 101 ---- I agree with John Kruse that someone who has left the industry
does not belong on a UAEL panel. I can appreciate your frustration with UAEL; I find it typical
of trade associations that few people are willing to do the hard work
but many are eager to criticize if things don't go the way they would
like. The leasing industry is made up of many very intelligent people, each
with their own ax to grind. I have
often followed the policy of biting my tongue and backing off from potential confrontations. Of course, unlike you, in my business it is important to try to maintain good relations with everyone
in the leasing industry. Is it worth having a big fight to keep Shapiro on the panel?
Life is too short! ----- Kit , why are you wasting your time on this nonsense ? Phil Dushey "Global Financial Services 17 State Street new York
NY 10155 Phone 212-935-4370 Fax 212-935-4378 Web www.globaleasing.com
email global@globaleasing.com" <dushey@mindspring.com> ----- I wonder what the reaction of the Executive Committee would
be if ex-WAEL presidents Hal Horowitz or Bob Jacobson, both now
out of the leasing business, wanted to appear on a similar panel and talk about
their successes while they were in equipment leasing? I think they would be welcomed. There are a lot of people who have skills which can be useful
in any business. Sales skills don't recognize any industry limitations.
The way I see it, your panelists will be talking about how to get sales,
not how to write leases. Tell 'em that! Bob Teichman, CLP Teichman Financial Training 3030 Bridgeway, Suite 213 Sausalito, CA 94965 Tel: 415-331-6445 Fax: 415-331-6451 e-mail: BoTei@aol.com "Providing education and training to the equipment leasing
and financing industry."
“Top Gun” Salesmanager Mark McQuitty 1993 Mark and CarolAnn McQuitty The Republic Group, Inc. (of Anaheim, CA) ---Mark comments at the time they had one child, and now they have three more--- October 5, 2002 San Diego United Association of Equipment
Leasing Annual Conference
and Exhibition "Top Gun" Leasing News will
present two workshops 9:45am "Top
Gun Salespeople" 11:00am "Tom Gun " Sales Managers The first session will include the Urban Legend Jim Raeder,
star of stage, screen, and outer space. Many people are jealous of his success and
started rumors about him. Ex-salesmen who worked for him love him or hate him.
At one time, he had salesmen making $750,000 and a million dollars a year
in commissions. It will also include Igancio Sanchez, Tri-Star Capital, Richar
Shapiro, Anthony “Tony” Sherwin, Pacifica Capital, and Eric Sidebotham,
Gensis Capital. The second session: “Top
Gun” Sales Managers: Richard Baccaro, American Equipment ( formerly Sierra
Cities/American Business Express Finance), Brad Kissler, Balboa Capital,
and Mark McQuitty, Capitalwerks. McQuitty is a genius, in my opinion, who foresaw the demise
of the dot.com industry and internet leasing ( he has letters to former Sierra Cities
Tom Depping “warning” him about it---I have copies of them.) He was also instrumental, along with Jim Raeder, in modernizing equipment leasing sales. “Old Timers” have their view, and people new to the industry,
only now rumors. Here is the real history of how Mark McQuitty got into leasing,
tracing his involvement and “life” until today. I suggest you download it, print it out, and take home to
read over the weekend. It is very worthwhile reading about someone people consider
“controversial.” http://www.leasingnews.org/PDFFiles/Mark's_BIO.pdf If you haven’t read our feature article from last year, you
might want to take it along, too. Whatever Happened to Republic Leasing of Anaheim. http://www.leasingnews.org/articles.doc/newsletterMcQuitty.htm ( see you in San Diego, I hope ( www.uael.org ). Kit Menkin ----------------------------------------------------------------------- Please send to a colleague as they may not be receiving due
to technical difficulties, or perhaps they do not subscribe. Thank you for your support. Business Leasing News Now On Line It looks like have made a big upgrade in your technology.
I hope it's working well for you. Just to keep you up to date, the September edition of Business
Leasing News (BLN) just launched and is available at http://www.pblaw.com/newsletters/bln. I am pleased let you
know that the BLN web site now has both a new search engine and new subscribe
feature to allow readers and new visitors to subscribe to the direct e-mail
of BLN each month and to search any of BLN's articles. This Business Leasing
News also includes a new section called "BLN Briefs: Updates and
Short Takes on Issues of the Moment" and other improvements. Keep up the good work on your reporting. All the best, David David G. Mayer Patton Boggs LLP 2001 Ross Avenue Suite 3000 Dallas, Texas 75201 Tel: (214) 758-1545 Fax: (214) 758-1550 Author of: Business
Leasing For Dummies Publisher of: Business
Leasing News (Thank you. We hope to migrate to the Sun Cobolt machine
over the weekend. We have found Microsoft to not be very secure to hackers
and other internet problems, such as sending out our newsletter. We are going totally Unix for the internet. Editor ) Rates on 30-year and 15-year mortgages move up ''We are not only forecasting total home sales in 2002 will
exceed last year's volume to reach an all-time record number, but also
that mortgage rates will average only slightly above current levels in
2003,'' he said. By Associated Press WASHINGTON (AP) Rates on 30-year mortgages nudged up this
week but still hovered near the lowest level seen in 32 years of record
keeping. In a nationwide survey released Thursday, Freddie Mac, the
mortgage company, reported that the average interest rate on a 30-year
fixed-rate mortgage rose this week to 6.18 percent. That was up from last
week's 6.15 percent, the lowest rate since Freddie Mac began its survey
in April of 1971. Last week's rate marked the third new low on 30-year mortgages
this year. Mortgage rates have been falling amid growing signs of a sluggish
economic recovery and a turbulent stock market that has sent investors
to the bond market, helping to push long-term rates down. Rates for 15-year fixed-rate mortgages, a popular option
or refinancing, also moved up to 5.59 percent this week. That compared
with 5.56 percent last week, the lowest level since Freddie Mac began
tracking these rates in August of 1991. However, for one-year adjustable mortgages, rates dipped
to 4.32 percent, from 4.35 percent last week. This week's mortgage rates do not include add-on fees known
as points. Each loan type carried an average 0.6 point fee this week.
A year ago, 30-year mortgages averaged 6.86 percent, 15-year
mortgages were 6.39 percent and one-year ARMS stood at 5.62 percent. Frank Nothaft, Freddie Mac's chief economist, said low mortgage
rates are supporting the housing market and providing more fuel to the
current refinancing boom. ''We are not only forecasting total home sales in 2002 will
exceed last year's volume to reach an all-time record number, but also
that mortgage rates will average only slightly above current levels in
2003,'' he said. On the Net: ------------------------------------------------------------------------------------------------ U.S. Reviewing Banking Conflicts Regulators Focus on Tying of Loans to More Profitable Services By Kathleen Day Washington Post Staff Writer Federal regulators have launched a major review of the nation's
top banks to ensure compliance with rules barring firms from linking the
price or availability of loans to a corporate client's use of the bank
to underwrite its stock or bond offerings. Companies covered by the review include Bank of America Corp.,
Citigroup Inc., JP Morgan Chase & Co., Bank One Corp. and Wachovia
Corp. Each owns a commercial bank that makes traditional business loans
and an investment bank that provides securities services such as selling
stocks and bonds to the public. The government's interest in the tying of loans to securities
underwriting stems from fears among regulators and legislators that bankers
are being pressured to weaken their lending standards to win other, more
profitable business from commercial clients. Regulators worry that weaker
loans could imperil the overall health of the banking industry, whose
deposits are insured by an industry-funded reserve run and backed by the
federal government. The review coincides with broader scrutiny of financial conglomerates
and their tying of services, such as issuing favorable analyst reports
to help win stock and bond business. The review by banking regulators was detailed in a Aug. 3
letter, made public yesterday, from Federal Reserve Board Chairman Alan
Greenspan and Comptroller of the Currency John D. Hawke Jr. -- the nation's
two top banking regulators -- to Rep. John D. Dingell (D-Mich.), the ranking
Democrat on the House Energy and Commerce Committee. The Aug. 3 letter was a response to a July letter from Dingell
asking about tying and whether it was a problem. The regulators had begun their review several months earlier,
government sources said, after reading in media accounts that banks were
tying the issuance of loans to the purchase of other services. The law governing tying is complicated, bank executives say,
and contradictory. In general, investment banks can tie their services
to a loan from an affiliate bank, but banks cannot require customers to
use affiliate investment bank services. In the early 1990s, regulators reviewed lending practices
after receiving complaints that banks were tying loans to the purchase
of other non-loan services, but found few violations. But new complaints in recent years from non-bank-affiliated
competitors in the securities industry -- and instances of bank executives
appearing to boast of the practice in public statements -- prompted regulators
to refocus their attention on the issue a year ago, sources said. By spring, after talking to business borrowers and financial
industry executives, regulators decided to launch what they call a "targeted
review" to examine policies, training materials and internal compliance
procedures at the largest bank companies, according to the letter and
to government sources. Charging interest on loans was once the primary way banks
made money, and they pushed aggressively to expand lending to corporate
customers. But in recent years there have been significant changes in
federal law, allowing banks to go into different kinds of business. Loans
also have become less profitable. To target the best customers and boost profits, banks are
supplementing their loan businesses with investment-banking services,
such as helping corporations issue stocks and bonds to the public. Investment
banking can be far more lucrative than traditional lending. For decades, selling investment-banking services was largely
off-limits to banks. In 1933, in response to allegations that investment-banking
activities contributed to thousands of bank failures during the Great
Depression, Congress passed legislation prohibiting banks from underwriting
most corporate securities. By November 1999, Congress decided that the financial world
had changed enough to warrant removing that barrier, which had been eroding
anyway. It passed the Gramm-Leach-Bliley Act, which made it easier for
companies to sell banking, brokerage and insurance products under one
roof. The 1999 law appears to be at odds with two other federal
statutes that prohibit linking a bank loan to a customer's purchase of
non-banking products, industry lawyers say. Some Wall Street firms say tying occurs through carefully
worded sales pitches from banks that don't explicitly link loans and securities
services but nonetheless get the point across. Bankers deny the allegation. "Given the historic concern about the tying of commercial
and investment banking services, we have always stated that it's an area
where banks should be particularly careful," said Edward L. Yingling
of the American Bankers Association. "The law is very clear and provides
strong protections, and certainly the type of review the regulators are
undertaking is appropriate." -------------------------------------------------------------------------------------------------------- Equipment Leasing Association Newsletter Highlights ************** The E-Leasing Newsletter is SPONSORED by:
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hour reporting via Web *Highest resale prices Call Nassau now
for a complete assessment of your needs!!! http://www.nasset.com ******************************************************************** ****************************** 1. Are You in
the Latest Leasing "Who's Who?" ****************************** The pre-registration list for the ELA Annual Convention,
October 13-15, is available online, TODAY, at http://www.elaonline.com/events/2002/annconv/attendees.cfm These "movers and shakers" of equipment leasing
will be in San Francisco speaking, learning and building relationships. Will you? If you want to be included in the final version of this prestigious
list, register by October 3 for the ELA Annual Convention on-line
at http://www.elaonline.com/events/2002/annconv/registration.cfm But don't wait! The cut-off date for hotel reservations at
the special ELA rate is September 17. ****************************** 2. FASB Member
Tells Lease Accountants Consolidation of SPEs on Fast Track ****************************** Financial Accounting Standards Board (FASB) member Michael
Crooch told attendees at the ELA annual Lease Accountants Conference in
Washington, DC on September 10, that it is the Board's intention to finalize
by the end of this year a controversial proposed standard on the consolidation
of Special Purpose Entities (SPEs). Citing
the need for the FASB to quickly address the recent spate of high-profile
corporate accounting failures, Crooch outlined a scenario by which the
Board would act with uncharacteristic speed in its efforts to develop
guidance regarding consolidation of SPEs.
Stating that the Board's objective is to not restrict the use of
SPEs but to improve financial reporting by enterprises involved with SPEs,
Crooch nevertheless acknowledged that more debt undoubtedly would be put
back on corporate balance sheets as a result of this proposed rule.
(To download a copy of the ELA comment letter on the consolidation
project, visit ELA Online, http://www.elaonline.com. Go to Industry Data/Accounting.)
Crooch told the 200 conference attendees that the FASB is
attempting to improve the accounting standards-setting process in a number
of ways, including adoption of a procedure in which a simple majority
of the 7-member Board is required to adopt a final standard. In addition, he stated his and his fellow Board colleagues' support
for the transition to principles-based vs. rules-based standards. Rules-based accounting guidance such as those
governing leasing (FAS 13) have come under heavy criticism by the Board
and others as offering a "cook-book" approach to standards-setting.
He stated that the move toward principles-based standards would
improve financial reporting if they were consistent with a conceptual
framework, contained a clear statement of objectives, and included sufficient
guidance through examples. He said that developing principles-based rules
would enable the FASB to be more responsive and agile in responding to
the needs of its many constituents. Crooch told attendees that, in addition to rules covering
the consolidation of SPEs, other projects dealing with Guarantees, Liabilities
and Equity, and Stock Options would be finalized by the end of the year..
****************************** 3. The Marketplace
Looks Like A Workout! Large Ticket Steering Committee Meets ****************************** The LT Business Council met September 9 at ELA Headquarters.
The agenda included a broad range of action items but the condition
of the large ticket marketplace, particularly aircraft leasing, dominated
the meeting. A confluence of two lines - a downturn in the economy including
less airline travel occurring as the number of major carriers (large number
of aircraft) face near disparate financial circumstances. This overcapacity in a supply dominated marketplace
is leading to events such as US Airways rejecting leases in its bankruptcy
and terrific pressure on lessors to accept temporary or permanent rate
reductions on current leases or face getting planes back. In most cases, The Debt is in the key position
to determine the outcome. This
is placing aircraft lessors in a tough negotiating position. The only support will be all parties remembering
that there will be a time when the airline wants financing again. In other action, the Steering Committee: Reviewed the status of terrorism insurance and activities
to provide coverage long term. The
committee agreed to have ELA Government Affairs arrange for a White Paper
on the current status of liability by Finance Lessors. Looked at pending accounting statements on guarantees and
SPE's and their impact on the various large ticket products and structures.
The Synthetic Lease appears most endangered depending on final
standards. Members agreed that
the accounting companies have greatly increased clout in putting transactions
together. The issue will be addressed
in accounting sessions at the ELA Convention and in Audio Conferences
later this fall when final standards are issued. Reviewed status of action and ELA positions on FSC ETI repeal.
It is very important that transactions already done have their
provisions grandfathered in repeal legislation. Reviewed the general status of Treasury and IRS work / positions
on LILO transaction audits. Lessors
are waiting for a reply from the Treasury following a presentation and
meeting earlier this summer that was done to provide some education and
obtain some clarity about where IRS initiatives are going. Apparently the IRS continues to work within
a model that does not reflect any reality. Agreed that suspension of the 4th quarter depreciation provisions,
which were also suspended by the Treasury in 2001, would be a good idea
and could help some transactions. ELA
is working the issue currently. Laid out the plan for the 2003 Large Ticket Conference to
be held April 26 - 29 in Dallas. The
LT Conference has grown continually and is now one of ELA's most successful
events. The conference program
will focus heavily on Financial Accounting changes, tax , and overview
of structuring techniques, current market issues such as bankruptcy and
insurance and will focus on a
particular industry. The conference
also will include presentations by national affairs / economics professionals. The final program with speakers and sessions
should be available by January. The committee agreed to meet again later in the fall by teleconference. ****************************** 4. Printable
ELA Member Directories Now Available ****************************** Do you have a need for a printed ELA member directory at
the office or while traveling? If
so, you may purchase a copy of the entire member directory, including
individual contacts, for only $290. The updated corporate listing contains all 840+ member companies
by market type, size, annual volume, geographic areas, types of equipment
leased, lease products offered, and funding programs. The individual listing
contains an alphabetical listing of 9400+ member contacts including full
name, title, company, address, phone, fax, e-mail, business council affiliation
and job function. For a full description and to purchase the directory online,
go to: http://www.elaonline.com/ELAstore/index.cfm?fuseaction=view_product&prod_id=102 Remember that the most up-to-date directory can always be
found online at: http://www.elaonline.com/MemberDir/ Please contact database@elamail.com with any questions. ****************************** 5. ELA's Principles
of State Sales & Property Taxation Conference scheduled for September
17-18 . . . it's not too late to REGISTER! ****************************** It's not too late to register for ELA's Principles of State
Sales & Property Taxation Conference, scheduled for September 17-18,
2002 at the Four Point's Hotel - Chicago O'Hare in Schiller Park, Illinois.
This entry-level program is designed to assist the less experienced
state tax professional acquire a better understanding of issues necessary
for efficient tax planning and compliance.
Whether you are a new company entering a single market or a national
lessor with multi-state issues, this conference is a primary source of
basic information you need to keep abreast of the changing landscape of
state sales and property tax enforcement. ****************************** 7. Join the growing
list of corporate and individual donors to the Equipment Leasing and Finance
Foundation! ****************************** The Foundation is in the homestretch of its annual fundraising
campaign and your support would be greatly appreciated. Foundation contributors will be recognized
during ELA's Annual Convention in October.
Funds raised by the Foundation support ongoing research projects
such as the Annual State of the Industry Report (to debut at the Convention),
Annual Industry Future Council Report, Journal of Equipment Lease Financing
and issue-related studies such as Leasing of Intellectual Property, The
Securitization Marketplace, Leasing Strategies in the Semi-Conductor Industry
and much more. Each of these studies
will be available at the Convention or visit the Foundation website, www.leasefoundation.org.
To help support these worthy endeavors, please contact Lisa Levine,
Executive Director, at llevine@elamail.com, or 703-527-8655. New Founders for 2002 Citicapital Midwest Regional Association of Equipment Lessors Corporate Sponsors GE Capital De Lagen Landen Financial Service Republic Financial Corporation Corporate Sustainers Us Bancorp Piper Jaffray, Inc. Wells Fargo Financial Siemens Financial Caterpillar Financial Services First American Equipment Financial Orix Financial Services, Inc. Key Equipment Finance Corporate Supporters Boston Financial & Equity Corp Financial Federal Ober, Kahler, Grimes & Shriver M & I First National Leasing Corp Great American Leasing Brentwood Credit Corporation Hitachi Credit America Sentry Financial Corp. Sterling Bank Thoughtworks Summit Funding Group Help & Profit Corp LFC Capital Macrolease International Corp. Canon Financial Services Inc Ivanjack & Lambirth Jenkens & Gilchrist Parker Chapin Corporate Contributors Lombard/Royal Bank of Scotland VGM Financial Service MARCAP Corporation Berkowitz, Lefkovits, Isom & Kushner Groen, Lamm, Goldberg & Ruben The Alta Group Northern Consulting, LLC Z Resource Group Johnson & Johnson Financial Corp. Rentech Financial Service Inc. ABB Financial Services PAYNET, Inc. Individual Benefactors D. Paul Nibarger Edward A. Dahlka Robert P. Rinek Matthew D. Shieman James H. Possehl Many thanks to Foundation donors for 2002! Amy J. Miller, ELA's Vice-President of Communications, edits
ELT's E-leasing Newsletter. If you have questions or comments relating
to ELT's E-Leasing Newsletter, please email her at amiller@elamail.com. This newsletter is free to ELA members. Forward it to a co-worker!
Copyright 2002 by the Equipment Leasing Association http://www.elaonline.com/ Phone: 703/527-8655 Fax: 703/527-2649 ----------------------------------------------------------------------------------- Former Tyco Executives Plead Not Guilty---New Charges Filed NEW YORK (Reuters/Washingon Post) - Former Tyco International
Ltd. executives L. Dennis Kozlowski and Mark Swartz on Thursday afternoon
pleaded not guilty to charges unveiled earlier in the day that they were
behind an elaborate scheme to defraud the company and investors of some
$600 million. Also, Tyco's former general counsel, Mark Belnick,pleaded
not guilty to charges he falsified documents to hide $14 million in loans
to himself from the Bermuda-based manufacturing conglomerate. Kozlowski, the ex-chief executive who is already facing a
14-count indictment for evading sales taxes on millions of dollars in
art purchases, was released on a $100 million personal-recognizance bond,
of which he must secure 10 percent, or $10 million, with his personal
assets, within a week. Swartz, former chief financial officer, was released on $50
million bail, and must secure with $5 million of his personal assets within
a week. Belnick, meanwhile, was released on $1 million bail. The three men, who were marched into the Manhattan courtroom
in handcuffs, must return to court on Sept. 19. Trading in the stock was halted this morning. Manhattan District Attorney Robert M. Morgenthau today said
the new Tyco charges indicate that the Securities and Exchange Commission
and prosecutors are working together to punish a wave of corporate wrongdoing
that has spooked investors and chilled the markets. "These guys got away with this for a significant amount
of time but they did get caught," he said. "I hope that there
are a lot of corporate officials out there who aren't going to sleep so
well tonight." Also today, Tyco filed suit against Kozlowski, seeking hundreds
of millions of dollars in damages, including repayment of five years'
salary, benefits, loans and bonuses and payments made to other employees.
The amount includes at least $20 million in personal expenses that, according
to the suit, Kozlowski charged to the company. The company has already
filed suit against Belnick, accusing him of failing to disclose $35 million
in compensation and loans. Morgenthau announced the new charges shortly after the SEC
filed a companion civil suit against the former executives, saying they
failed to disclose millions of dollars in loans taken from the company. The 94-page indictment describes Kozlowski as "the boss"
and Swartz as "chief of operations" of a criminal enterprise
that manipulated Tyco's stock price through false public statements and
fraudulent accounting entries. It also says Kozlowski and Swartz "concealed
thefts and other wrongdoing by corrupting key employees with lucrative
payments to influence their behavior." Prosecutors also say Kozlowski and others sought to persuade
a large securities brokerage to replace an analyst with an individual
whom Kozlowski viewed as more friendly to Tyco. Kozlowski and the new
analyst then allegedly "exchanged presents worth thousands of dollars." At Morgenthau's request, a judge signed a temporary order
freezing $600 million in assets belonging to Kozlowski and Swartz, Bloomberg
News reported. In its civil suit, the SEC asks that Kozlowski, Swartz
and Belnick be forced to repay all money received as a result of the alleged
fraud, including loans, salary, bonuses, stock options and stock losses
they avoided. "Kozlowski, Swartz and Belnick treated Tyco as their
private bank, taking out hundreds of millions of dollars of loans and
compensation without ever telling investors," SEC enforcement director
Stephen M. Cutler said in a statement. Morgenthau said he decided not to charge Tyco as a corporation
because he felt it would be unfair to punish the firm's 270,000 employees
for the deeds of a few. But both Morgenthau and SEC officials said the
investigation was ongoing and could lead to new charges. The theft charges allege that Kozlowski and Swartz abused
two corporate loan programs -- one intended to help executives pay taxes
on stock grants, the other to help them relocate to the New York area.
While the loans were being made, Kozlowski and Swartz allegedly signed
sworn documents saying they had no indebtedness to the company over $60,000. Kozlowski and Swartz are also charged with fraudulently transferring
$55 million from Tyco's sale of its ADT Automotive business to their own
accounts. Prosecutors also say Kozlowski committed fraud by publicly
expressing confidence in Tyco's future while selling thousands of shares
at prices inflated by the company's false financial reporting, making
$280 million in the process. Swartz allegedly sold over 2 million shares
worth $125 million. ---------------------------------------------------------------------------------------------------------- Cards' Bryant was 12th overall choice in draft By Len Pasquarelli and John Clayton ESPN.com The Arizona Cardinals on Thursday afternoon reached a five-year
contract agreement with first-round defensive tackle Wendell Bryant, ending
a long dispute and leaving just one unsigned draft choice. The financial details of the agreement were not available. "I'm glad the deal is done,'' coach Dave McGinnis said.
"Now he'll get some of that damn good coachin' he's been missing.'' The accord between the two sides leaves only Minnesota Vikings
first-round choice Bryant McKinnie, an offensive tackle from the University
of Miami, unsigned among all drafted players. McKinnie has said he will
sit out the '02 season rather than sign a below market contract. Bryant, who turned 22 on Thursday, was the 12th overall choice
in the draft. The former Wisconsin star appeared in 48 games and started
37 of them for the Badgers. He had 189 tackles and 24 sacks. The Cardinals said Bryant would arrive in Phoenix in time
to practice Friday. The Cardinals, who play at Seattle on Sunday, will
request a two-game roster exemption for the addition. Len Pasquarelli and John Clayton are senior NFL writers for
ESPN.com. The Associated Press contributed to this report. -------------------------------------------------------------------------------------------- E-Mail Removal Form: \http://65.209.205.32/LeasingNews/removalform.asp +++++++++++++++++++++++++++++++++++++++++++++++++ Subscribe, Unsubscribe, Make Changes E-Mail. You may subscribe
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