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| Whatever Happened to ....Stu Kahn Stu was a fun guy, had a good heart, got many deals done for me, and added color to our industry." Louis Funston, Western States Leasing, Mill Valley California "When I first met Stu Kahn, he told me that I was at the right place because "he approved every deal he saw" "I used to send in leases to Stu and watched him grow in the leasing business. He was unique as he wasn't only a good credit man (anyone can turn down a deal, but he found a way to make it work,) but he was a marketing man---unique in our industry. Even if he turned down a deal, he would call you up the next day and ask when I was going to send him another---that he would approve." Kit Menkin, American Leasing " Stu is really Smart, plus a Happy person to be around, very Intelligent and a Tireless worker. I'm glad we've stayed friends all these years." Russ Hindin, Hindin/Owens/Engelke, Woodland Hills, California Stewart Kahen Current: Executive Vice President and Chief Operating Officer of Prospect Medical Holdings, Inc. Prospect is a managed care management company which contracts with HMO's in California on the one side; and then contracts with physicians to provide primary care health services on the other side. Prospect provides health care to approximately 110,000 people located in Orange County, Downey, Sherman Oaks and the Antelope Valley. 1987-1997:
President and CEO of Legend Capital Corporation. Legend provided loans and related
services primarily to the health care industry. Legend placed approximately $150
million in loans between 1992 and 1997. Legend's largest customer was Prospect
Medical Holdings, Inc. His story: I was about 22 years old and had just moved to San Francisco from where I was reared, Denver, Co. It was October, 1973. I had spent about 2 years as a management trainee at a couple of banks in Denver, and was educated well beyond my intellectual capacity! :) In San Francisco, I met a guy named Herb Saltzman who had a company called SHW Capital Corporation (SHW was actually the initials of the original founders, but the employees always believed the initials really stood for "Send Herb Work."). I knew nothing about the leasing business, and Herb offered to "teach" me the business. So, he told me that if I wanted to learn the leasing business, I would have to sit at the reception desk where all the telephone calls came in, and ask a lot of questions. Thus, I started in the leasing business as the receptionist at SHW earning $400 per month (gross!). I moved along in my educational process rather quickly and soon became the credit manager at SHW. I was taught that it was easy to turn deals down, and tough to put them on, and I should always look for a way to complete a lease, being cognizant of the fact that the transaction still had to be "sold" to a lender. We were the original creative Lessor, and we always found a way to get a deal done, usually by secure the transaction with a myriad of secondary collateral: 2nd trust deeds, stocks and bonds, certificates of deposits, and even the cash surrender value of life insurance. I stayed with SHW, which subsequently became Westguard Leasing Corporation until 1979, when management decided that it could no longer compete with the banks. As you may recall, big banks like Bank of America were keeping the then Investment Tax Credit for their own account, which allowed them to reduce the rate to the lessee. As a result, the big banks were coming in with rates of 3% per annum, and a third party leasing company, at the time, was left the paper which was not wanted by the banks. In 1979, I joined Intercoastal Leasing Corporation. ILC was a joint venture of two large shipping agencies, and was well capitalized. I took to ILC the programs, which were developed at Westguard and SHW. Those programs were the financing of companies that rented equipment (party goods, medical equipment and construction equipment). It was a highly successful program. I stayed with ILC for a while into the 1980's, and then had an opportunity to get involved in some real estate development in Brookings, Oregon. I didn't stay long. One thing which can always be said about Oregon-it's where the men are men and the sheep are always smiling! In the mid-80's, I joined Westinghouse Business Credit in their asset based loan group located in Tustin, Ca. Westinghouse was like being in the Army. I was not, at the time, a team player and simply did not like working for a big organization. By 1986-87, what had become very clear was that I had a problem with alcohol and drugs. I believe that most people during the 70's knew it, and I guess we are always the last to know. I had to do something about it, due to the severity of the problem and I am grateful to say that as a result of a 12-step program, I haven't had a drink or a drug since February 2, 1987. While working on my recovery, I was lucky enough to find a small equipment lease brokerage firm in San Rafael, Ca, which would allow me to work with them. The firm was called Golden Gate Leasing. I stay with the firm for about 2 years, before moving to Los Angeles and developing my own company, Legend Capital Corporation (www.legendcapital.com). Legend specialized in financing the health care industry and during the early and mid-90's, business was booming. Unfortunately, managed care hit, and physicians were quickly going broke. By 1996 and 1997, it became clear that Legend had to switch it's focus from financing physicians to arranging mergers and acquisitions in the then swinging PPM market (physician practice management companies, such as MedPartners, FPA and Phycor). Legend became involved with a company called Prospect Medical Holdings, Inc. and arranged 4 acquisitions and an 8-figure line of credit for Prospect. In 1998, the CEO of Prospect invited me to join Prospect as its COO. I was 47 years old, and had never had the opportunity to run a large company. Prospect was in the process of attempting an IPO when I joined it, and I had the opportunity to write part of the S-1, including the MD&A (Management Discussion and Analysis). Unfortunately, two of the three big competitors went bankrupt during that period and the IPO was aborted. But the experience was incredible. Today, I am still with Prospect, and it has grown from a $50 million company to what will be a $100 million company by this fall when we complete our latest acquisition. It has not been all roses and cherries since joining Prospect, and I've had to be involved in divestitures of unprofitable operations, consolidation of facilities and mass employee terminations. I can simply say that I would not be where I am today, had it not been for two things. First and foremost was getting sober, and second was my leasing experiences which afforded me the opportunity to learn about business, financial analysis and credit. There were a whole lot of people I met along the way, but there are a few people that I've always been fond of, some of whom are still around and some who are no longer with us. I recall a WAEL convention in San Diego one year where Russ Hindin, Armand Kamesar and Micky and Norma Parker (I understand that Micky passed away recently) and I hijacked a jitney to Tijuana. I still do business today with Russ Hindin (Hindin/Owen/Engleke). And, of course, one of my first introductions to doing business with a broker was with none other than Kit Menkin of American Leasing. I can say with all honesty that I never did a deal from Kit that went bad! Although I no longer speak to Herb Saltzman, I can even say that, for many reasons, I am very grateful to him too... On the personal side of things, I was at a party about 3 years ago, and a younger woman named Cory introduced herself to me. We dated and then lived together for a while, and then on August 9, 1999, we got married. Three months later, we sold my house in Marina del Rey, and bought our house in Redondo Beach, where we live with our beautiful, red haired boxer, Lucy. Cory graduated from UCLA with a degree in biology, and went onto USC School of Medicine and graduated from their Physician Assistant program last year. Today, she works under a Dermatologist in Torrance. Her license allows her to do the same procedures as a Physician; only she must always be under that physician's license. I'm very proud of her. I don't know what the future holds in store for me with the business I am currently in, but Cory and I have a great life today, which we live one day at a time.
Stewart
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