Leasing News

February 15, 2001

LEASING NEWS 02/15/2001

to regularly receive Leasing News kitmenkin@leasing news.org

---also ON LINE ( to be posted soon ).

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Headlines----

Sierra Cities/Amex---More Like Christmas!!!

Rodi Doesn't Take it Standing Down-----Hits Back

United Capital---Leasing News Would like to hear from Steve Dallas

( We have e-mail, phone messages to his cell phone, plus have

spoken to United Capital attorney to obtain a comment, verify

or deny the many broker complaints we are receiving.editor )

"Smartmoney" Expects Finova to Fold along with other large leasing companies )

" the truth is no one really knows how bad the credit-quality issues are

at the nation's banks ( leasing companies)."

"DowJones" Sees It the same way as "Smartmoeny" re: Finova

( "When Will the Bad News End???" )

Lyons Capital--Remembered ( List to be Corrected )

U.S.Capital, Santa Barbara--makes "Customer Complaint" List

http://www.leasingnews.org/bulletin_board.htm

Bay View Capital Reports fourth quarter 2000 net loss of $92.5 million

CIT Freezes Broker Business--But They Want the Fashion Industry:

7thOnline Provide Financial Services to the Fashion Industry via CIT

Sterling Bancorp Declares 221st Consecutive Quarterly Cash Dividend

Penske/Rollins Truck Merger Deal Gets Clearance

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Not a Valentine Day Massacre! More Like Christmas!!!

First Sierra---Amex Merger

You have to be kidding. This is the best possible news I can think of.

What, exactly, is American Express buying? Are they buying

SierraCities' proprietary software? American Express already offers

leases to customers holding their corporate card., so I assume they have

their own software. Is American Express buying Sierra Cities' customer

list? How many of SierraCities' customers already have American Express'

corporate card? Is American Express buying SierraCities' lease

portfolio? As far as I am aware the portfolio has already been

securitized.

As far as I am concerned SierraCities, far from becoming more formidable as

part of Amex, is in fact being taken "off the table." SierraCities has a

good group of inside sales people. Is Amex going to let them sell?

If not what do they have to sell?

I see this climate as being similar to the climate in 1997. In 1997, and

into 1998, all the small leasing companies were getting bought up by First

Sierra, UniCapital, and the other "roll ups," taking these lessors off the

table. It made it that much easier for new companies to get up with

funding sources that either might not have looked at a new company, or

would not have wanted to upset one of their existing brokers.

Far from being the St. Valentine's Day Massacre for leasing companies I

think it is more like Christmas.

(name withheld)

+ + +

Regarding the First Sierra Purchase by American Express:

I don't think anyone needs to worry about AMEX. All you have to do is take a

look at what they did when they purchased Rockford Industries several years

ago. At the time, there were over 50 top leasing reps with solid vendor

relationships who were all producing big numbers. AMEX came in and tried to

turn leasing into a credit card process and all the reps left taking their

vendors with them. We have been very successful when competing against an

AMEX approval and I think anyone reading your newsletter will find what we

have found. They know credit cards, they don't know leasing.

Regards

Chris Aragon

caragon@mpcleasing.com

+ + +

American Express' current attempts at small ticket leasing have been

very clumsy. It is very hard to get a quote from them and if you can the

rates haven't been anything special. Wasnt there a major overnight carrier

getting into leasing? I haven't run into them either. First Sierra aka

Sierracities' back room was never very impressive. The only deals I lost

were ones I tried to fund through FirstSierra. Bigger is not better and

there will be plenty of room below their radar for quality service at

competitive products. Bring it on!

Paul Knowlton

Bank of Walnut Creek

<knowlton@bowc.com>

+ + +

Knowing First Sierra has lost all of its legs over the past 12 months, I

find the "Massacre" theme comical. Which Baccarro wrote the piece? This is

still a viable market for all of us. Bring it on baby!!!Knowing First Sierra has lost all of

its legs over the past 12 months, I find the "Massacre" theme comical. Which Baccarro wrote the piece? This is still a viable market for all of us. Bring it on baby!!!

name with held

+ + +

I agree that money is tighter along with credit criteria in general. I also

agree that the strong brand name, ample cash, and customer base that

American Express enjoys is a competitive advantage. However, we compete

with AMEX now in several markets and have competed with BTOB in the past.

We have won and lost both deals and vendors from each.

You are correct that BTOB/AMEX will be a competitive force to be reckoned

with. They will be a player, but will not (in my opinion) provide the

proverbial straw breaking the brokers back. If brokers can still thrive in

the face of competitive giants like GE/Colonial and flash in the pans like

Bankvest, we'll still be around after BTOB/AMEX.

My point(s)... 1. Competition is a part of the industry, it keeps us

sharp. 2. Seasoned brokers have the tools to thrive in the face of even the

largest competitors. 3. I don't agree that this merger spells a massacre

for the broker, use it to enforce your existing relationships. 4. There is

a long journey between hype and facilitation (e.g. LeaseExchange,

UniCapital).

Kit, my comments are global in scope and are/were not directed to how you

conduct business at American Leasing. Nor was my intention to "bury my head

in the sand". My intention was to provide a reinforcing viewpoint to the

many brokers receiving your newsletter.

Finally, Kudos to Mr. Depping for a strong comeback. Even if he is a

competitor, you've got to admire his business acumen.

Andrew S. Nere

<ils@ilslease.com>

Innovative Lease Services, Inc.

(800)438-1470 Ext. 216

+ + +

Is this not a similar press release that they came out with

when VerticalNet was going to buy them? At this point the deal is not inked

yet. Many things could happen before the close date. Although I must admit it

appears to be pretty firm at this point. The next question is if there will

be consolidation and where, which could result in the loss of key employees

and the ability to provide quality service.

name with held

( We print all comments. The press release was issued by American Express.

That is one major different than the VerticalNet. Another is the marketplace

squashed that deal. It was really never a good one, in my opinion. The

American Express makes a lot of sense, solid logic, and yes, I have lost

deals as a broker to UPS Leasing, American Express Leasing, Sierra Cities,

among others. The pie is smaller and any loss is a loss, even if one deal.

I am telling you to be prepared for stiffer competition from the surviving

leasing companies, brokers, and customers who are more rate conscious than

ever. Now is the time for relationship salesmanship. editor.

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Hello, Steve Dallas. Leasing News Calling!

( We have e-mails, phone messages to his cell phone, plus have

spoken to United Capital attorney to obtain a comment, verify

or deny the many broker complaints we are receiving.editor )

Another Ex-United Capital Broker Complaint

When United Capital shut down it's broker operations, it cost us $4K to $5K

in unpaid commissions (by way of canceled checks). Not a lot of money by

any means - so we consider ourselves lucky.

We did not pursue this by legal means for 2 reasons:

1. we honestly wanted to see United come back from the dead and felt we

could absorb this opportunity cost with the idea they might make it up to us

if they survived.

2. if they did not make it, we would be wasting our time filing.

Now, it appears that they might make it - but at our expense.

If you are able to confirm that they are soliciting our lessee/vendor

database, please make it publicly known. At that time we will pursue United

Capital for these unpaid commissions by every legal means available.

Further, I invite other brokers to contact me so we can combine our efforts

on this.

Hopefully there are people at United who keep up with your newsletter and

might think twice if they see a grassfire starting. Then again, they might

not care.

Christopher Simpson

chris@creditleaseonline.com>

CreditLease, Inc.

800/398-4067

fax 888/436-0386

While you, and almost everyone else, wants desperately to see a silver lining in at least one

leasing cloud, it is dangerous to interject you personal hopes when reporting a

conversation, in this case, the conversations with Steve Dallas. I remember

your comments asking readers to give Mr. Dallas the benefit of the doubt when

he claimed he was working hard to dig United out of the hole they were in.

As it turns out, apparently, he and his team were maneuvering to fund deals

behind the backs of his brokers. As things continue to deteriorate for

lenders and brokers, and they will I think, you might want to be extra

careful not to buy into the spin doctoring that you'll hear almost daily.

Finally, here's the bottom line on United: They have no lender, with Old

Kent Leasing Services exiting the market. Their last, best hope, at least at

this point in time, is to broker business through their retail company.

Name With Held

( Steve Dallas had a leasing company with his brother in Santa Clara, where we

are located. I tried to get them in the Chamber of Commerce, but they moved

to San Jose. I think his brother still runs a leasing company there. And yes,

I think Steve Dallas is remise in not actively doing "damage control." I am

sure he is not having a happy time, and I can tell when I call that his voice

box is full on his cellular telephone, meaning he probably doesn't have time

even return his wife's telephone calls. It appears things are getting "out

of his control" at United Capital. editor ).

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Lyons Capital

In your list of demised leasing companies you show that Lyon Credit

Corporation was acquired by Hudson United Bancorp in September, 1999. I was

with Lyon Credit at the time of the sale. Hudson renamed Lyon Credit

Corporation as "United Capital, A Division of Hudson United Bank". (Not to

be confused with the Steve Dallas United Capital operation located in

Austin, Texas.)

Operations continued normally as "United Capital" until June 2000 when the

bank demanded that United cut its overhead. United did that by laying off

all of the personnel in its Irvine, California and Atlanta, Georgia regional

offices on August 4, 2000. The Dallas office, where I was located, was to

remain open until October 27, 2000. However, the company offered a severance

package to any Dallas personnel who wanted to leave early. Come August 7 and

it was only myself and my region manager (who was responsible for marketing)

left in Dallas and one person who also stayed on in Atlanta to handle the

portfolio collections.

I left the company October 27. My region manager left in January, 2001 and

the fellow in Atlanta left the company February 9, 2001. The company

president (and founder of Lyon Credit Corporation), John Bowes, left the

company February 2, 2001.

The remaining corporate staff from the Stamford United Capital headquarters

moved into one of Hudson United Bank's office buildings in Westport,

Connecticut at the end of January of this year.

>From what I hear, the bank is now trying to force the remainder of the

executive staff to resign and is trying to renege on the balance of their

employment contracts, which have about two years to run. One EVP, as I

understand it, was offered six months severance (vs. the 24 that would be

due under the contract) and the rest of the corporate clerical staff, not

covered by an employment contract, if and when they are let go, will not get

the more lucrative severance package myself and others received (three

months) but rather the bank's severance package of one week for each year of

service.

Although the company technically is still in business, they have not

accepted any new business since last August, they honored existing

commitments through December 31, 2000 and the remaining few personnel are

running off the portfolio at the present time.

I'd say, "Stick a fork in 'em; they're done."

And, as Paul Harvey says, "That's the rest of the story."

Ronald J. Brodt

National Equipment Capital

ronbrodt@nationalecapital.com

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One item in your Today In history section that was left out.

Irv Ellis

irv@leasecor.com

( Did not mean to overlook Arizona, especially since you now will

have a new stadium for Cardinals. editor ).

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Rodi Doesn't Take it Standing Down-----

Dear Mr. Goodman,

I sincerely doubt that I would ever have to worry about "outselling" you.

I'm fairly certain that my customers don't travel anywhere near the same

circles that yours do. You are right about one thing, however. My

customers don't care about customer service because when they deal with our

company it's a given. You are also the one who's lost touch with reality.

If "price" were the only issue those dot.com companies would have had a much

more prosperous run. Their entire business plan revolved around getting the

lowest price. We all now know how effective that strategy was.

With respect to my tenure as the UAEL president it is now obvious to me that

you harbor some bad feelings toward me since I emphatically declined to let

you teach your fee income "tactics" to the UAEL membership. Sorry Mr.

Goodman, but I'm one of those "holier than thou" types that actually

believes in the UAEL standards, and I'm damn proud of it. We do our best to

operate within the context of those standards. You don't think that would

have anything to do with the fact that we've prospered somewhat in this

industry, do you?

By the way, when my bank recently began collecting a "fee" for a service

they performed, we were notified as to the nature of the fee, why it was

being added, and the amount of the fee. The explanation and reason made

sense therefore I had no quarrel with it. It was all above board and yes,

it was done in an ethical, up front manner. It's fairly obvious from your

comments that you would prefer to generate fee income in whatever

clandestine manner you can fabricate. If the customer complains or refuses

to pay it, then you can employ "scare" tactics and threaten them with

collection activity.

I dare say Mr. Goodman, that you are a dinosaur in this industry. As such it

won't be long until your species is totally extinct. Incidentally, I think

you spelled "guerilla" wrong. You meant "Gorilla", didn't you?

Bob Rodi

<drlease@leasenow.com>

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no dates on these changes:

We keep reducing this list, thanks to readers. Anyone who has approximate

dates on these changes, please let us know.

American Business Leasing ( gone )

The Bancorp Group, Inc. (Southfield, MI) (Not accepting news business. The BOD of the parent bank is assessing what to do with the leasing subsidiary.....currently servicing portfolio

but not originating. no longer in business )

Imperial Credit Industries (ICII) ( sold portfolio )

Merit Leasing ( gone )

Prime Leasing, Minnesota ( no longer doing business )

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Up-Date to our Bulletin Board: Customer Complaints

http://www.leasingnews.org/bulletin_board.htm

Customer Complaints

( We have received many complaints from many brokers and super brokers about

this company. This is only one of the many we have received. editor ).

U.S. Capital, Santa Barbara, California 2/14/2001

A short while ago JDR Capital Corporation received a faxed communication from U.S. Capital

Corporation of Santa Barbara, California in which the latter was informing the leasing community of a new program it was offering. In its correspondence it described a leasing line of 30

million dollars which it was offering to brokers to fund their leases. It included full details

as to credit criteria and rates.

For a period of years prior to the receipt of the aforesaid fax JDR had received a great deal

of business from U.S. Capital. Its representative, Ken Nelson, never demonstrated any cause for

concern. When the fax arrived, updated due diligence was performed which also did not indicate

any cause for concern. Consequently, JDR offered the program to its customers.

Not long after JDR received numerous approvals and, in some cases, had documents prepared and

forwarded to U. S. Capital for funding, U. S. Capital and Ken Nelson appeared to drop off the

face of the Earth. Although we were able to leave voice-mail messages we had no success in

speaking to a live person. We received no return phone calls or any other communication. As

quickly as possible we notified our broker customers that a problem appeared to exist and we

suggested that they try to get their deal funded elsewhere. As we have many other funders we are in the process of attempting to find alternative financing for those transactions

In the last week or so we have received numerous calls from other super brokers and brokers that are experiencing an identical problem with U.S. Capital. It seems that they have created a very

widespread problem in a very short period of time. We are sure that there are a great many

brokers and/or vendors that have been affected by this. The leasing community should be aware of the problem. As to JDR we are doing our best to assist those that we dealt with.

If you desire further information please feel free to contact me.

Very truly yours,

Don Forman

JDR Capital

<dforman@jdrcapital.com>

note: Please do not confuse Lease Capital, Inc of Alabama, Bo Bohannon, with Lease Capital,

California, Martin Baraeske. They are not affiliated

----Lease Capital---Martin Bareske Complaint

Mr. Marteske---

This came to us originally as a complaint on November 28 for the Leasing News Bulletin Board.

You responded by e-mail on several occasions, the last being December 2, that the funds would be returned. Here it is 13 days later, and according to lessee, the money has not been returned.

Here is what Keith Ahearn as to say.

They are again asking me to post this, from very beginning, and I would like to know if there is anything new you would like to add before posting this on LeasingNews, which we will do after

January 2 as 30 days from your promise date is a reasonable period of time.

Mr. Menkin,

I would like to inform you of the status of my failed sales / leaseback commitment with Mr.

Barteske. I realize that Sheila has been corresponding and has informed you of all of the lies

and misdirection that Lease Capital has done. Realizing that not doing the proper research

caused the majority of my problems. When I was contacted by Mr. Barteske, on the footer of his

fax was , Member of the NAELB and even the last fax received still has it . Below this is the

Better Business Bureau of So. Cal.

Atleast when you pull them up on their web site they inform you that doing business with Lease

Capital is pretty risky. As of this date I have not received the $3,825.00 and it looks like I

never will. Meanwhile I watch my business slowly slipping away, not just from the loss of

revenue but from losing 6 weeks of valuable time. Most of my vendors have had enough of waiting

for me to find the funding necessary to continue on. I'm getting close to losing every thing

i've worked for and pretty much lost hope. I don't intend on this letter to sound like I'm

crying the blues, quite the contrary. It's a shame that a piece of "work" like Barteske can

topple small business owners with cash flow problems so easily while riding on the coattails of

brokers who work hard at their profession.

Thank you,

Keith Ahearn

1unicorn2@PRODIGY.NET

Precision Diagnostics Plus Inc.

Kit, As of today, Jan 6, 2001, We have not heard or received any of the money that we were

supposed to have returned to us from Mr. Barteske. He last told us that he was looking into the

situation and would let us know something, but we have not heard a thing. He can write a good

letter when he needs to cover his butt, but when it comes down to it he just a bunch of lies and excuses.

Keith Ahearn

1unicorn2@PRODIGY.NET

NAELB Expels Lease Capital Corporation/Principal Martin J. Barteske

( PLEASE PLACE A NOTE IN YOUR LETTER THAT LEASE CAPITAL, INC OF ALABAMA , BO BOHANNON PAST BOARD MEMBER AND VICE-PRESIDENT OF NAELB, IS IN GOOD STANDING WITH NAELB AND IS NOT AFFILIATED WITH

LEASE CAPITAL OF CALFORNIA .

THANKS

BO BOHANNON, PRESIDENT )

Martin Barteske, CEO

20902 Brookhurst Street, Suite 204,

Huntington Beach, CA 92646-6637

Toll Free Phone: (866) 836-5600 (866) 964-8350

Toll Free Fax: (866) 834-5600 (800) 964-2140

www.LeaseCapital.net / ceo@leasecapital.net

TO: ALL MEMBERS OF THE NAELB

FR: JOE BONANNO, ESQ., NAELB LEGAL COUNSEL

DT: NOVEMBER 15, 2000

To All Members of the NAELB:

This correspondence is to advise all members of the NAELB that the Board of Directors, in

conjunction with the NAELB Ethics Program, has taken action against a member of the NAELB. The

Board of Directors takes this action after there is a process of a complaint being filed against a member, a response process taking place, a review by the NAELB Ethics Committee and a referral by the NAELB Ethics Committee to the Board of Directors. Therefore, this is a process whereby

there is ample time for the resolution of the matter, review by multiple individuals and finally a review by the Board of Directors. Every benefit of the doubt is extended to the parties

involved and there is a specific procedure that is followed along the way.

A matter that did reach the Board of Directors involving a company called Lease Capital

Corporation located at 20902 Brookhurst Street, Huntington Beach, CA of which an individual

known as Martin J. Barteske is the principal. The Board of Directors, in accordance with the

Ethics Procedure voted in place by the voting membership of the NAELB, has voted to expel Lease

Capital Corporation from membership in the NAELB effective immediately.

As always, the NAELB encourages our members to conduct business with members and in the event

there is difficulty between members, the NAELB can attempt to resolve the matter or in the