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Kit
Menkin’s Leasing News
www.leasingnews.org Wednesday,
April 24, 2002 Accurate,
fair and unbiased news for the equipment Leasing Industry
Headlines---- Steve
Geller on ELA Funding Exhibition, Chicago Tyco Rethinks Planned Sale of Its Plastics Operation Fitch/ABS Equipment Leasing Delinquency Index—pdf AOL's $50-Billion Loss Is One From the Books U.S. Places 3rd in Capital Markets Alliance Financing Group selected by IBM Canada
SNL Financial Y-Merge Moves Smoothly Equipment Leasing Recruiters’ Debate Wednesday---Odds and Ends Irwin Financial First Quarter Earnings Advanta First Quarter Earnings After Losses Greystone Solutions Taps Barry Wolfield as New VP MicroFinancial First Quarter to Previous Not “Great” Hilton Hotels posts 38 % drop in 1Q net (Waikoloa Village) GATX Reports Q1 Results Really Not “Great” Congress Panel Agrees to Limit Home Shield in Bankruptcy ###
Denotes Press Release -------------------------------------------------------------------------------------------- Steve
Geller Special Report: Equipment
Leasing Association Funding Exhibition, Chicago, Illinois April
23-24 Special
Report from Leasing News Advisory Director Steve Geller, CLP I
believe that there were over 500 attendees registered at the ELA funding
exhibition, although a lot of people on the roster, who I know, were
not seen there. This
would mean either I did not see them (I doubt) or they did not come.
The number of funders with a booth were down. There
were 41 exhibitors, including 6 service providers. For the
most part, all exhibitors were busy most of the time. Perhaps an exhibitors
reaction on the quality of the interviewees is warranted. What
was very noticeable is that the exhibitors were in the same ballroom
that is used every year and in previous years the aisles were much
smaller. This
year there were four aisles and the space was very wide,
with cocktail tables set up in each aisle. I do think that the industry
needs to get away from thinking that a conference is a failure if
there are fewer attendees than the prior year. Gerry
Egan, president of the National Association of Equipment Brokers (NAELB)
said it last week at NAELB that the smaller attendance did not mean
the conference
was not as good. I think the same was true at ELA Chicago. We
are seeing a change in industry as far as funding goes. There are less
of the traditional bank funders around. Their place is being taken partly
by what we have known as "super brokers." I
do not like that term: Super Broker. I think of a super broker as
one who does not purchase deals for their own account and then resell
them. They are those who will take in a deal from a broker, "sanitize"
it and send it under their own name to a
funding source to discount it and keep a lion's share of the profit. They
represent to both parties, the funder and the broker, that they are principals.
We
are now seeing, and there were a number of them at ELA Chicago,
those companies that have bank lines of credit and they take deals
from brokers and fund under their own lines. This is a more sophisticated
approach. These
types of funding sources represent to the broker their source of funding.
With a dearth of funding these types of sources will become a more
important part of the industry. I would have no trouble working with
them, because for the most part, the rates being charged are reasonable. We
may see banks come back in as traditional lenders, but I believe they
won't come back very soon. We will need to rely on these leasing
companies. In
conclusion, if one goes to conference with major expectations, even in
the best of times, he(she) will be disappointed. If
you go limiting your expectations, this funding exhibition was quite
successful. I
targeted a number of funders to visit and believe that I came away
with two
to three new funders who I can utilize. Steven
B. Geller, CLP Leasing
Solutions LLC 20
Dike Drive Wesley
Hills, New York 10952 845-362-6106 fax
845-354-2803 cell
914-552-0842 (
P.S. I hope to see many of my friends at the joint Eastern Association
of Equipment
Lessors and United Association of Equipment Leasing. Please visit:
www.eael.org or www.uael.org.
It is not too late to sign up. First timers
and those who worked for leasing companies who were members, can
join us for only $425. That is quite a bargain. ) Tyco Rethinks Planned Sale of Its Plastics Operation ( “...has so far failed to find a buyer for all or part of the CIT Group”) By ANDREW ROSS SORKIN and ALEX BERENSON New York Times Tyco International is reconsidering the sale of its plastics unit and plans to announce tomorrow that it may suspend the auction for the business because no potential buyer has expressed willingness to pay Tyco's asking price, executives close to the company said yesterday. A decision to give up on the sale of the plastics business may also indicate a partial reversal of its recent plan to split into four parts. In addition, Tyco has so far failed to find a buyer for all or part of the CIT Group, its financial division, and is making plans to spin that unit off if a sale is deemed impossible, the executives said. Tyco plans to detail the proposed spin-off plan tomorrow when it releases its second-quarter earnings, the executives said. A spokesman for Tyco declined to comment. If Tyco cannot sell any part of CIT, the company would spin off the company in an initial public offering as a way to generate cash to help reduce debt. Shares of Tyco skidded for the third consecutive day yesterday, falling $1.36, or 4.9 percent, to $26.69, on new concerns that the company's breakup plan may be floundering. Tyco, which is based in Bermuda and has headquarters in Exeter, N.H., has 240,000 employees worldwide and makes everything from syringes to security systems. Tyco shares have plunged this year on investor concerns about its accounting practices and cash position, as well as the disclosure that its two top executives have sold more than $500 million in stock over the last three years while telling investors that they rarely sell shares. Since the beginning of the year, Tyco has fallen 54 percent, erasing $63 billion in shareholder value. Since January, analysts have steadily reduced their estimates of how much CIT is worth. In February, analysts said they expected Tyco to receive $7 billion to $8 billion for CIT, which Tyco bought for $10 billion. The sale of Tyco's plastics attracted interest from teams of buyout groups, including Bain Capital; Thomas H. Lee Partners of Boston and the Blackstone Group of New York; the Carlyle Group of Washington, and Madison Dearborn Partners of Chicago; and Clayton Dubilier & Rice Inc. of New York and the Texas Pacific Group in San Francisco. However, none offered more than $2.5 billion in the first round of bidding, the executives said. Tyco has been asking for $3 billion to $4 billion, they said. A second round of bidding has been held up because Tyco has not delivered an audit of the unit, which was supposed to be delivered about a month ago. Separately, Tyco is moving quickly to shed CIT so that the operation, unburdened from the rest of Tyco's balance sheet, can regain access to the commercial paper market, a crucial source of financing for financial companies. But spinning off CIT will make Tyco's balance sheet look much weaker, some analysts contend, because it will leave Tyco without the $11 billion in equity that it has put into CIT. Nick Heymann, an analyst at Prudential Securities, said Tyco's debt-to- capital ratio would rise to 48 percent from 38 percent if it spun off CIT without getting cash for the company, he said. In addition, Tyco may take other write-offs that would shrink its equity, he said. As a result, he added, Tyco could come close to violating its agreements with its lenders, which require it to have a debt-to-capital ratio of no more than 52 percent. "You're getting close to triggering that 52 percent covenant," Mr. Heymann said. If Tyco does violate its covenants, it would have to renegotiate $13.5 billion in bank loans, he said. Tyco would almost certainly be able to do that, but it might have to pay a higher interest rate, he said. (Leasing News had reported the thinking was to sell the CIT "division" in the units of specialization. At one time, they reportedly had an offer from Ford Motor Credit, and also General Electric. The financial losses of the car company and the bond condition, plus accounting questions, of GE "scared" off these suitors. Tyco International went back to trying to sell the "division" as "one group," but has not found any buyers at a "decent price" and those seeking the Plastic division, also know this. It puts Tyco International in what is called in New Hampshire " a White Mountain's place full of hard rocks and snow". Or as they say in Bermuda, " between a rock and a hard place, plus cold even in Springtime.” editor ) ____________________________________________________________________ http://www.leasingnews.org/PDFFiles/fitch%20abs%20equipment%20expo.pdf Fitch/ABS
Equipment Leasing Delinquency Index--pdf Fitch
Ratings-Chicago-: Fitch Ratings on Monday unveiled a new index that
benchmarks the delinquency performance of equipment lease-backed
securities. Rating approximately 80% of all equipment lease securitizations
since 1997, Fitch designed the ABS Equipment Lease Delinquency Index
to become a leading indicator of ABS equipment lease delinquencies
and, ultimately, act as a barometer
of credit quality within the leasing industry. Featured
in the inaugural issue of ‘The ABS Equipment Expo’, a quarterly
newsletter, Fitch’s delinquency index provides investors with
new tools and strategies in assessing current and future credit risk
within their ABS portfolios. In addition to highlighting the equipment
lease delinquency index, the newsletter will also include industry
commentary and analysis. Readers
who could not download this newsletter, turn on your “Adobe”
program, and
then go to this url to download the newsletter: http://www.leasingnews.org/PDFFiles/fitch%20abs%20equipment%20expo.pdf ----------------------------------------------------------------------------------------------------- AOL's $50-Billion Loss Is One From the Books Media: Accounting rules could yield a record for red ink, two years after a once- heralded merger.
By JAMES BATES, Los Angeles Times Staff Writer Sometime this afternoon AOL Time Warner Inc. probably will earn the dubious honor of spilling more red ink than any company in U.S. corporate history. With a quarterly loss expected to exceed $50 billion, in one fell swoop the world's biggest media company will lose more than the annual gross domestic product of Ecuador, Croatia, Uruguay, Kenya or Bulgaria. The loss--which is largely on paper and reflects new accounting rules--essentially acknowledges that the merger between Internet giant America Online Inc. and media conglomerate Time Warner Inc. has fallen dramatically short of expectations. Two years ago when the deal was announced, the two companies had a combined stock market value of $290 billion. Today, AOL Time Warner's stock is worth about $85 billion. "It's an appalling number, bigger than the [gross domestic product] of some countries," said entertainment analyst Harold Vogel of Vogel Capital Management in New York. "Most analysts will dismiss it and say it's now behind them and doesn't matter because it's noncash. But it's an admission of a humongous mistake." For the most part, Wall Street already has factored in the loss. AOL Time Warner's shares have fallen 41% this year, partly because the company telegraphed the eye-popping losses a few weeks ago and because of the slowdown in advertising that is hurting its properties. An AOL Time Warner spokesman declined to comment. The accounting losses are a morning-after hangover of the wild run-up in the stock market in the late 1990s. Many companies, including America Online, used their inflated stock to buy other companies. Now, new accounting rules set by the Financial Accounting Standards Board are forcing companies to more accurately state the fair market value of those acquired assets. Often, the result is huge write-offs. AOL Time Warner has said it expects its asset write-down to be $54 billion. The new rules have been especially tough on industries such as entertainment, technology and telecommunications. Their stocks were hyped in the '90s, when promise often meant more than profit. As a result, last year fiber-optics company JDS Uniphase Corp. posted a $50.6-billion annual loss because of write-downs in its assets. Telecommunications equipment maker Nortel Networks Ltd. adjusted its books to the tune of $19 billion. Vivendi Universal, which owns Universal Studios, in 2001 posted the largest loss ever for a French company at $11.8 billion, reflecting its recent acquisition spree. "It's difficult for the typical investor to sort these numbers out. These companies are very complicated, so huge, and the accounting and reporting of the numbers is so complex," said Brian Mulligan, who had to compile similar figures when he was chief financial officer for Seagram Co. before it was acquired by Vivendi. For more than a decade, entertainment companies often have pushed the creative boundaries in how to portray their financial results, in much the same way they creatively sell movies and TV shows. After the 1990 merger of Time Inc. and Warner Communications to form Time Warner, investors were steered away from traditional forms of financial performance measures such as net income and earnings per share. Instead, an array of often convoluted financial yardsticks including "EBITDA," "cash flow," "free cash flow" and "pro forma" numbers were touted by entertainment companies. "It's become like a sleight-of-hand routine at a carnival," analyst Vogel said. " 'Don't watch this hand--watch my other hand.' " Companies such as Time Warner and Rupert Murdoch's News Corp. rarely posted a sizable annual profit but nonetheless often were lauded by Wall Street if other measures exceeded expectations. In the February news release announcing its 2001 financial results, Viacom Inc., owner of CBS, Paramount Pictures and MTV, waited until the third page to reveal it lost $224 million. At a time when corporate earnings are coming under more scrutiny in the wake of the bankruptcy filings of Enron Corp. and Global Crossing Ltd., some critics say companies are too often downplaying profit as a measurement so they can look better to investors. Entertainment companies, often with Wall Street's blessing, have embraced the financial measure EBITDA. It is a "profit" number that excludes many kinds of expenses, including debt interest, taxes, depreciation and amortization. The theory was that traditional financial measurements don't accurately portray the health of companies that have invested in big projects such as cable systems, broadcast networks, technology and telecommunications networks. Mario Gabelli, one of the nation's biggest media investors, said the numbers are merely the tools needed to evaluate a company's health, adding that an investor can't simply rely on any single one. "It's like valuing a big diamond ring. You have to look at color, clarity and carats," Gabelli said. One problem is that different companies use different criteria, much as if speaking different dialects of the same language. Walt Disney Co., for example, is one of the few entertainment companies that still regularly highlight corporate earnings per share of stock. In recent years, though, it also has highlighted free cash flow because of its continuing theme park construction programs. "We try to report our numbers in a way that is most meaningful and most clear, and I can only assume other companies present what they think is meaningful," Disney Chief Financial Officer Thomas Staggs said. "But it ends up being a hodgepodge." U.S. Places 3rd in Capital Markets AP Business Writer LOS ANGELES –– The collapse of Enron Corp. and the technology sector's bust helped knock the United States from the top spot in an annual ranking of worldwide capital markets, landing the country behind Hong Kong and the United Kingdom. The United States placed third out of 98 countries in the openness and efficiency of those markets in the ranking released Tuesday by the Milken Institute. Access to capital is considered a key indicator of economic health because it determines whether entrepreneurs are able to get the money they need to create and grow new businesses that generate jobs. The Santa Monica-based think tank used more than 50 measurements in its ranking, including tax rates, inflation, amount of government regulation and general economic conditions. Access to money tightened in most areas of the world, with more than two- thirds of the countries scoring weaker results than a year earlier due largely to the recession that hit this country in March 2001. "There isn't the money or the demand to build new businesses," said Susanne Trimbath, a research economist at the Milken Institute. The United States has experienced a decrease in venture capital funding, initial public offerings and foreign investment because of the economic downturn, the survey said. In addition, concerns about the U.S. accounting system after Enron and the failure of so many tech companies that went public in the last few years has tightened the flow of business funding, said Glenn Yago, director of capital studies at the Milken Institute. Economic experts said the national economy has nevertheless proved remarkably strong under these pressures. "That the U.S. should retain a position at the top of the ranking shows it has deep and resilient markets that can withstand profound shocks," said Walter Russell Mead, a senior fellow at the Council on Foreign Relations. "We've had this great historic meltdown, and everything has kept rolling," he said. One example of the U.S. financial system's flexibility is the orderly bankruptcy process that has preserved assets and jobs, Mead said. In contrast, France has a bankruptcy system that fails to protect bond holders. Without a strong bond market, the country fell to 24th spot from 18th a year earlier, Trimbath said. Hong Kong improved its ranking by decreasing the concentration of assets in its banks and by reducing the volatility of its financial markets, according to the survey. Even though Hong Kong operates in the shadow of communist China, it's ranked apart from China because the international community still views its economy separately. China ranked 35th in the survey, up from 42nd a year ago. --------------------------------------------------------------------------------------------- Alliance
Financing Group selected by IBM Canada Ltd. to Provide Consumer Financing
to IBM Customers Toronto
–– Alliance Financing Group Inc. (CDNX symbol “YFG”)
has been selected by IBM Canada Ltd. to provide consumer financing
for Canadian customers that purchase IBM’s NetVista desktops,
ThinkPad notebooks, eServer xSeries and Options by IBM. The
IBM Consumer Finance Program is currently available and will enable
IBM Canada to offer attractive, fixed rate term financing to customers
across Canada through IBM’s call centres, in both official languages
and right at the point of sale. “Transitioning
our financing options to Alliance allows us to provide consumer financing
options to our customers and leaves us to focus on what we do best,
differentiating our IBM PC products through investments in key technology
areas, primarily wireless and security,” said Ayman Antoun, Director
of the Personal Computing Division, IBM Canada. This
unique program features credit approvals in minutes, and is structured
to provide credit to the widest possible range of consumer credit
profiles. In addition, unlike most retail consumer financing programs,
the IBM program has been designed to offer flexible rates, geared
to each individual customer’s credit profile. To
facilitate this program, Alliance Financing utilizes Creditwave Corporation’s
state of the art financing technology, called CreditworxÔ. Creditwave’s
unique solution provides web-based, automated credit adjudication,
documentation preparation, documentation audit and transaction funding
for Alliance. “Based
on my own experiences with several major Canadian financing programs,
I am confident that the IBM Consumer Finance Program will be very
popular with consumers, and will prove to be a real value-add to the
excellent products and services currently offered by IBM,” said
Peter Knight, Vice-President of Operations of Alliance Financing. “We
are delighted to have been selected by IBM Canada to develop and manage
this program,” said Bernie Shimkovitz, CEO of Alliance Financing.
“Our business model, technology and delivery systems allow us
to offer Canadian consumers one of the best computer financing programs
in the marketplace today”. About
Alliance Financing Group Inc. Alliance
Financing is proving itself as a leader in providing a broad base
of leasing and financing solutions for both businesses and consumers
in both the traditional bricks and mortar marketplace, and since early
2000, the Internet marketplace. Alliance Financing maintains a “high-tech,
human touch” philosophy; utilizing a combination of proprietary
technology - such as its private labelled online financing tools,
selected ASP technologies, and a dedicated staff of finance professionals
to deliver a comprehensive suite of end-to-end financing fulfilment
solutions. For
more information about Alliance Financing Group Inc. please visit
www.YourFinanceSource.com,
or contact: Bernard
Shimkovitz
Chief
Executive Officer
Alliance
Financing Group Inc
Tel:
905-660-3660 ext. 225 Toll Free: 877-660-3660
Fax:
905-660-3078
Email:
bernie@alliancefinancing .com ###
############################## ########################
CHARLOTTESVILLE,
VA - SNL Financial LC (“SNL”) acquisition of Y-Merge.com
LLC (“Y-Merge”) is operating successfully.. Under the terms
of the deal, Y-Merge has become a wholly-owned subsidiary of SNL.
SNL,
based in Charlottesville, is the leading provider of data and news
on the banking, insurance, financial services, real estate and energy
sectors. Y-Merge, based in New York, sells an Internet-based system
that allows financial institutions and investment banks to evaluate
and analyze a full range of corporate finance and transaction alternatives.
“We
are very excited about the addition of the Y-Merge application suite
to our product line and the Y-Merge principals and employees to our
talented staff,” said Mike Chinn, President of SNL. “Y-Merge
will significantly increase our ability to serve our Wall Street and
public company clients by increasing the analytical horsepower of
SNL’s electronic products and services. With the addition of
Y-Merge, we will continue to supply the financial sector with best-of-breed
data, news, research, and now corporate finance analysis for years
to come.” “Joining
the SNL team solidifies our goal of providing unmatched corporate
finance analytics for the banking industry,” said William Pappas,
President of Y-Merge. “SNL’s superior data and information
will not only allow for expansion of our current financial institution
analytics, but also foster development of a similar analytics platform
for all the industries tracked by SNL. The combined SNL/Y-Merge platform
will increase our ability to serve public companies, investment bankers
and fund managers, forming a truly unbeatable combination and a win-win
for our clients and for the principals of Y-Merge and SNL.” As part
of the transaction, Will Pappas will join SNL’s six-member board
of managers, which also includes: Edwin T. Burton, Professor of Economics
at the University of Virginia; Michael Chinn, President of SNL Financial
LC; Mark Feldman, President and CEO of the Cold Spring Group; Reid
Nagle, Chairman of SNL Financial LC; and Robert Wong, Managing Partner
of McCabe Heidrich & Wong. LeClair
Ryan provided legal counsel to SNL Financial and Sullivan & Cromwell
represented Y-Merge. Financial terms were not disclosed. About
SNL: Founded
in 1987, SNL Financial (www.snl.com)
is the premier information and research firm covering the banking,
insurance, specialized financial services, real estate and energy
industries. SNL collects and standardizes all relevant corporate,
financial, market and M&A data — plus breaking news and analysis
— and then disseminates this information through a variety of
database and online services, news services, data publications, and
custom research. Leading
investment banks, investment managers, corporate executives, rating
agencies, government agencies, consulting firms, law firms, and media
such as The New York Times, The Wall Street Journal, and Barron’s
rely on SNL for the most timely, accurate, comprehensive, and relevant
information on the companies in our sectors. About
Y-Merge: Y-Merge
(www.ymerge.com) delivers sophisticated
corporate finance analysis via the Internet to depository institutions,
investment banks and fund managers. The product suite includes Capacity-to-Pay
M&A Analysis, Comparable Group Analysis, Discounted Cash Flow
Model, Projected Earnings Model and Branch Mapping. Since its founding
in 2000, Y-Merge has increased the efficiency of corporate finance
analysis for more than 300 clients ranging from community bank CFOs
to leading investment bankers. ###
################### ############################# Equipment
Leasing Recruiters’ Debate “Live
Job Fair” in the works. I
see no more argument between Teri's position and Fred's than I do
between the
argument for or against Super-brokers. We each have an idea of our
own value.
But do we each know what our perceived value is? If we are good at what
we do, we'll know it by the repeat business and referrals we get.
If we
are not, we may try to fool ourselves into thinking otherwise, but
we'll know
the real truth when the time comes to make the mortgage payment. (Sound
familiar, brokers and lessors?) Like
all professional services, we are under pressure to demonstrate our value
to our existing and potential clients. Like all professionals, we must
be proactive in doing so, or we will not be able to respond quickly enough
to an actual need. Example, I am working with a leasing guy in the Southeast
who has demonstrated an ability to write over $10 million in equipment
cost with a backlog of an additional $12 million for machine tools,
printing and textile equipment with an average transaction size of $50,000
to $200,000. He is the victim of recent M&A activity and is looking for
a stable environment. I take the initiative of introducing him to
a leasing
company who says he's great at what he does, but they're in an altogether
different market and need someone with that specific background. I
now try to identify and then focus on that need. As Teri said, that includes
assessing the chemistry fit. So I don't make the placement this time.
Next time that company has a need, I've already eliminated over half the
resumes I'll be looking at to fill it. They save time, they make
money. That
has value. When
a good recruiter works with a firm, they try to understand the needs
of that
firm, how the individual will fit into it, what their role will be, what
performance standards are expected of them, and the budget with which they
have to work. (Sound familiar, leasing guys and gals?) We don't
mind "one-off"
placements, but we'd rather have a solid business relationship. This
reduces the time to hire (think approval time) and the time to start (think
funding date), and that translates to efficiency. We made something happen
that would not likely have happened as efficiently. When a client says
I want a GE person, or I want someone who understands the difference between
collateral credits and cash flow credits, we either know what that means
or we ferret it out - fast, and we identify and then surgically remove the
organ from the donor and transplant it to the patient with the need.
We do
it enthusiastically, we sell up the value of working for our clients,
and there
is value in that. Should
everyone use a recruiter? Depends. Upwards of certain levels it definitely
makes sense. Think of professional people as equipment rather than
as supplies. Your customers wouldn't lease their pencils, but they certainly
might their copiers, their computers and their production equipment.
They could go out and pay cash, they could finance certain equipment
acquisitions through their bank, or even in some cases, on their credit
cards, but is that efficient for them? Maybe, maybe not, but if it's not,
it's your function as a lessor to show them how and why leasing makes cents. If
price is the basis for buying I might say, "Mr. Employer,"
(you might say,
"Mr. End User"), "while the traditional Cost-Per-Hire
metric may provide
some level of indication of efficiency, it doesn't take into account such
variables as the level of the position, labor market conditions, or
the availability
of immediate talent. Perhaps you should consider the Staffing Efficiency
Ratio as a more meaningful test. Determine
your total costs (internal G&A and external costs of posting ads,
contingent and retained recruiting fees, research costs, etc.) and
divide that by the total sum of the
base salaries for each external hire during the first year. While
a recruiters
fees may be a third of the first year's estimated income (or starting
salary), it may only equate to five or ten percent of your total costs.
On the other hand, when posting ads and calculating the time spent in
sorting through resumes and bringing in people who have not been prescreened,
your cost per hire may be somewhere more in the 15 to 20 percent
range. Now, notwithstanding the time you save, the quality of the candidates
you interview and your satisfaction as a hiring manager, doesn't it
make sense to let me help you meet your staffing needs? (Sound like
a lease-buy
analysis? You bet it does.) Recruiters
definitely fill a need in the market. We're every bit as important
to a company's getting things done fast and efficiently as a lease broker
or an account exec. Yes, we charge a fee (you do too, don't you?) and
yes, we don't always score a perfect match (you've never recommended
or underwritten
a bad deal?), but we certainly do have value. Teri and Fred each
have their own way of looking at what they do and the value they provide,
as do I. We each believe there is a high perceived value for our service.
We are not here to fit an "A" width shoe to an "EEE"
width foot. We're
in it for the long haul, for the relationship. I think between the three
of us, we've said it all - or maybe not, after all, we do like to
talk (again,
sound familiar leasing people?) Hal
T. Horowitz Account
Executive Search
West 340
North Westlake Blvd., Suite 200 Westlake
Village, CA 91336 Phone:
805-496-6811 ext. 231 Fax:
805-496-9431 Cell:
818-730-0645 hal.horowitz@searchwest.com http://horowitz.searchwest.com "It
is my mission to collaborate with my clients in order to further their success
by identifying professionals of uncommon ability to whom my clients might
not otherwise have access and who will make a valuable contribution
to my
clients' goals." To
find superior people You
must first define superior performance. ----------------------
Maybe
we do need a recruiter forum! I
think that Jonathan Zigman had a great idea. I
am sure there are questions people have that could be answered in
a forum... (Yes
I said, "I don't believe that anyone can educate a CEO, President
or Owner
about what it is a recruiter can do for him or her." That doesn't
mean that
there are not questions.) One
step further would be a forum for Recruiters, by recruiters, to invite recruiters
from within the industry to attend a forum for industry "mindshare". There
is no place to go to share the frustration, philosophy or insight
on a peer
level among recruiters. To
have input from the corporate recruiter side would also be an exciting aspect
for many of us I am sure. I
would like to make it clear that my posting on Monday was not directed
at Teri
Gerson or her firm. I was really making broad-brush strokes, painting
a "big
picture" view of the recruiting industry as a whole. Obviously
Teri Gerson's
firm is successful because of her dedication to her client relationships
and to the standards she has set within the industry. A
couple of comments meant to clarify: 1)
Teri Gerson disagrees with me about recruiters being "glorified
HR people."
Well I agree with Ms. Gerson! The reason her firm is successful is that
they are not trying to replace HR, but instead supplement, or enhance them.
I was addressing the firms in trouble today. So I think we really
are making
the same point here. 2)
Ms. Gerson disagrees with me about educating clients. Well I agree
with her.
I believe that we as recruiters do indeed educate our clients about
the industry
and our process continually. My comment was obviously not clear on this
point. I should have said that I don't believe that I as a recruiter,
I can
change someone's thinking. If a CEO has a belief system that does
not include
the use of recruiters, I will not invest much of my energy in trying to
change that belief system. (You can lead a CEO to water but you can't make
them thirsty.) I
hope this clarifies my stance on these issues. Fred
St Laurent Senior
Account Manager Financial
Services Division MSI
International, Inc. 321-952-1422 321-952-5643
Fax fstlaurent@cfl.rr.com PS. I
had a nice chat with Teri Gerson today. She is so nice. (
Leasing News is arranging to have a “Meet the Leasing News Maker”
with four
equipment leasing recruiters where readers may ask any question, and perhaps
turn it into a “live job fair.” Date and time to be chosen.
editor ) Wednesday---Odds
and Ends ------------------------
In
reading the "signature", an interesting fact is that Shakespeare
also died
on April 23rd (1616). Also,
Hank Aaron actually hit 755 homers! However, not only did he raise the
bar for home runs, but he also established 12 other major league career records,
including most games, at-bats, total bases and RBI's. Aaron won three
Gold Glove awards, earned National League MVP honors in 1957, and appeared
in a record 24 All-Star Games. Thanks.... Chris
Cooper Alternative
Capital "Equipment
Leasing Specialists" 1-800-351-2120
x/205 (Wow...I
got the Hank Aaron out of a book of baseball facts, but “on line”
verifies you
are correct at 755 home runs. http://members.djcafe.com/hankaaron/ (And
verified death as being the same day of the month we celebrate his
birthday. Now that is a real trivia fact! http://www.shakespeare.org.uk/ (Thank
you. editor). ----------------------------- Thought
you'd like to know that when you put my note about
funding small ticket deals in your newsletter we were truly swamped
with inquiries. Thank you. Bob Krause Sterling Bank Leasing Robert.Krause@sterlingbancorp.com -------------------------------------------------------------------------------- Kit-The
"consumer debt at an all time high" piece was un-attributed.
That $10,000
figure is most disturbing. However, for most of us who look at credit
every day we know there are much higher and lower extremes. The
quote merely tells us what is charged. It doesn't tell us what's repaid and
the average balance carried which is much more significant. Also,
it doesn't
specify whether it includes debit cards. I personally have a citibank
debit card which carries a MasterCard logo and ditto a Prudential visa
card. These suck money right out of a cash account creating no debt. Last
but not least, by being a good boy, I now have a regular Visa card
on which
purchases (but not cash advances) are carried at prime, guaranteed
for as
long as I have it, and as long as I don't pay late. Yes, that's prime, not
prime+whatever. As
relates to the credit process, we dig hard on large revolving balances. In
some cases, small business owners and real estate investors use their personal
credit cards to run their businesses without realizing the harm it can
do to their credit scores. ------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------------- ###
################################### ################### Irwin
Financial Corporation Announces First Quarter Earnings
Equipment
Leasing About
Irwin Financial ################
######################################### Net
income (loss) $ 8,452 $(2,112) $(2,106) $ 4,234
total profits---“A” Venture Capital Other loss is “Other”
most
likely “leasing”---bottom line is $4.234,000 (
from their financial statement---here is their Press Release ) Advanta
First Quarter Earnings After Losses SPRING
HOUSE, Pa--Advanta Corporation
(NASDAQ:ADVNB; NASDAQ:ADVNA) announces Business Card net
income of $8.5 million for the first quarter of 2002, compared to $8.3
million first quarter last year. Operating results from continuing
business segments were $0.30 per diluted share for Class A and
Class B shares combined, as compared to $0.29 for the first quarter
of 2001, consistent with previously announced guidance that earnings
in the first half of 2002 would be comparable with the first half
of 2001. Advanta reported consolidated net income for the quarter of
$4.2 million or $0.16 per share on a diluted basis for its Class A and
Class B shares combined. This compares to a net loss of $29.4 million
or $1.17 per share on a diluted basis reported for the first quarter
of 2001. "During
the quarter we furthered our initiatives designed to capitalize
on the tremendous opportunity presented by the small business
market," said Chairman and Chief Executive Officer Dennis Alter.
"Talent has been drawn from all disciplines across the organization
to develop new customer-centric ways to approach the market
and our existing customers. The resulting products and services will
be more finely attuned to our customers' individualized needs and preferences." Business
Card results for the quarter reflect risk-adjusted revenues
of 12.5% as compared to 12.4% for the quarter ended March 31, 2001.
Consistent with the Company's expectations, charge-offs for the first
quarter were 9.6% on an annualized basis and over 30 day delinquencies
were 7.2% at March 31, 2002. The on-balance sheet loan loss
reserve as a percent of owned receivables was 10.7% at March 31, 2002.
Business Cards managed receivables ended the quarter at just over
$2 billion, as compared to $1.8 billion for first quarter 2001. Consolidated
net income for the quarter includes an asset valuation charge
associated with the Company's venture capital portfolio and net interest
expense not associated with continuing business segments. Includes
net income of the Advanta Business Cards segment and
expenses, net of tax, of the venture capital segment. Excludes
venture capital valuation adjustments, net income of the Other
segment and results of discontinued operations. CONTACT:
Advanta
Corporation David
Weinstock, 215/444-5335 dweinstock@advanta.com or Catherine
Reid, 215/444-5073 ##########
################################## ###################### Greystone
Solutions Taps Barry Wolfield as New VP of Client Services; Seasoned
Industry Executive to Drive Sales and Marketing, Manage Customer and
Partner Relationships WOBURN,
Mass--Greystone Solutions, an application development firm and Microsoft
Gold Certified Partner for E-Commerce Solutions, today announced that
veteran consulting-industry executive Barry Wolfield has joined the
company as vice president, client services. Wolfield
has worked in the information technology industry since 1984, including
senior executive and management positions at Razorfish and Accenture.
As an integral member of Greystone's executive team, he will manage
the development and execution of client relationships for the seven-year
old firm. In addition, he will lead sales and marketing activities
and continue developing the company's strong relationship with Microsoft. "We
believe that Barry's proven abilities will be instrumental in positioning
Greystone for continued growth," said Bob Shear, president and
CTO. "In addition, his consulting and strategy expertise will
be invaluable in developing new service offerings and providing an
even greater value to our clients." Prior
to joining Greystone, Wolfield was a senior executive at Syncline,
where he managed the venture-backed start-up's market strategy and
client relationships. Previously,
as vice president at Razorfish, Wolfield held a number of positions
in global alliances, sales and solution delivery. During this time,
he delivered many successful eBusiness solutions for both Fortune
500 and Internet start-ups. In addition, he developed strategic relationships
with Microsoft, Intel and Hewlett-Packard. His
additional experience includes Accenture, where he started and ran
the Northeast Internet Center of Excellence. This business unit focused
on defining and executing Accenture's entry into electronic business
consulting services. Prior to consulting, Wolfield spent ten years
developing software products in the high-tech industry. Wolfield
earned an M.S. in computer science from Rensselaer Polytechnic Institute
and a B.S. in computer science and mathematics from the State University
of New York at Albany. Wolfield also has held an adjunct professor
position at Hartford State Technical College. About
Greystone Solutions Located
in Woburn, Mass., Greystone Solutions (www.greystone.com) builds custom
applications and integrates enterprise applications. Development skills
encompass a wide range of database, application and development environments.
Solutions include Web services, custom applications, portals and database
integration. Greystone Solutions clients include Boston University,
Compaq, eRoom Technology, Fleet Capital Leasing, Metcalf & Eddy,
LeaseForum, Microsoft, MIT, OneBeacon, National Semiconductor and
Thomson Financial. Greystone
is a Microsoft Gold Certified Partner for E-Commerce Solutions and
conducts training on Microsoft's new Web Services offering: .NET. CONTACT:
Greystone
Solutions Barry
Wolfield 781-937-9000
ext. 275 bwolfield@greystone.com
www.greystone.com
or
Sterling
Hager, Inc. Jon
Rucket 617-393-4289
jrucket@sterlinghager.com
www.sterlinghager.com
################
########################### ######################## (Net
income $5,419 $3,216 comparing last
year quarter with this one, and now you know why the president is
not taking his “bonus.” ) MicroFinancial
Incorporated NYSE-MFI-- Announces First Quarter Results WALTHAM,
Mass.--( --MicroFinancial Incorporated (NYSE:MFI) announced the financial
results for the first
quarter. Net
income for the first quarter ending March 31, 2002 was $3.2 million,
an increase of $1.1 million or 52% over the fourth quarter of 2001.
This represents quarterly earnings of $0.25 per share on a fully diluted
basis of 12,853,061 outstanding shares. Net
income decreased by $2.2 million or 41% as compared to the first
quarter ended in 2001. The decrease in first quarter net income is
primarily the result of lower revenues for the period. Revenues decreased
by $4.1 million or 10% as compared to the same period ended March
31, 2001. The lower revenues relate primarily to management's decision
in the third quarter of 2000 to tighten credit approval parameters.
This decision resulted in lower origination volumes during 2001.
However, management anticipates that the long term effects of this
decision will result in improved credit quality and ultimately lower
delinquencies and credit losses. Compared
to the same period last year, net interest expense decreased
by 37% to $2.7 million resulting from a decrease in the company's
cost of funds and an overall decrease in the level of debt borrowings.
Selling, general and administrative expenses increased by $671
thousand or 6% primarily related to increases in legal expenses, marketing
programs and professional service fees. The company recorded an
$11.0 million provision for credit losses for the first quarter vs. actual
net write-offs of $11.3 million. For the same period last year the
company's provision for credit losses was $10.3 million. Origination
volumes were $22.6 million for the first quarter, down $3.2
million or 12% for the same period ended March 31, 2001, net of the
acquisition of the Resource Leasing Portfolio in January of 2001. The
variance is due primarily to management's decision in 2000 to actively
tighten the credit approval process. Investment in leases and loans,
estimated residual value, service contracts, and rentals was $461.4
million at March 31, 2002, down from $470.6 million at December 31,
2001. "As
we continue to improve on the overall credit quality of our portfolio
we will continue to focus on margin vs. volume. Through the first
quarter our annualized after tax return on average assets is 3.6%,
with a pre-tax return on revenues of 15.2% and an annualized after
tax return on average equity of 11.5%. As has been our practice over
our 16 year history we have achieved these results without using Gain-on-Sale
accounting and with essentially all of our assets on our books,"
says James Jackson, CFO. "We
continue to see high delinquency rates primarily associated with
the lower credit quality business that we underwrote at higher prices
primarily through the third quarter of 2000. We will continue to
analyze our delinquency rates and collection trends and make the appropriate
provision to our allowance account," adds Richard F. Latour,
President and COO. "Planning
for a recessionary environment since the middle of 2000, we
have continued to move away from underwriting the lowest-grade business
and focused more on higher rated business. This has resulted in
a lower origination rate during 2001, but with the benefit of lower expected
delinquencies on the recently written business. We believe that
in adverse times like today, strong competitors like MicroFinancial,
while not immune to the negative effects of an economic
downturn, come out ahead of weaker competitors. MicroFinancial
has a strong balance sheet and a unique platform tailored
to effectively manage microticket financing for superior profitability
and we believe, will come out ahead of competitors with weaker
balance sheets, operations and less sophisticated long-term collection
efforts on delinquent accounts," concludes Dr. Peter Bleyleben,
Chairman and CEO. ##################
############################################### Hilton
Hotels posts 38 percent drop in 1Q net ( acquires Hilton Waikoloa
Village) BEVERLY
HILLS, Calif. (Dow Jones/AP) Hilton Hotels Corp. on Tuesday reported
first-quarter net income that fell 38 percent, hurt by a still-sluggish
United States economy, weaker demand from independent business travelers,
and fewer international visitors. The
hotel chain also announced that it has agreed to acquire the 87 percent
interest in the Hilton Waikoloa Village in Hawaii that it doesn't
already own from an unnamed foreign partner in a cash-and-stock deal
the company valued at $155 million. Hilton believes the acquisition,
set to close in the second quarter, will add slightly to 2002 earnings
and partly offset an expected decline in second-quarter revenue. For
the first quarter, Hilton reported net income of $34 million, or nine
cents a share, compared with $55 million, or 15 cents a share, a year
earlier. Analysts were looking for earnings of five cents a share,
according to Thomson Financial/First Call. Revenue
fell 14 percent to $921 million from $1.07 billion. Revpar, or revenue
per available room, at the hotels the company owns or operates in
the United States fell 14 percent. Occupancy declined 4.6 points to
66 percent and the average daily rate fell 7.6 percent to $130.67.
At
the same time, Hilton trimmed total expenses 14 percent to $645 million.
Cost cuts resulted in strong margins and sales were robust at the
Hilton Grand Vacations timeshare business. Market share increased
for all Hilton brands. For
the second quarter, Hilton expects revenue to decline 5 percent to
6 percent from the same period a year earlier. Hilton
projects second-quarter earnings per share in the low 20-cent range.
For the full year, revenue is expected to be down about 1 percent
from the $3.05 billion reported in 2001, with earnings in the low
to mid-60-cent range. Wall
Street is looking for earnings, excluding items, of 20 cents a share
for the second quarter and 58 cents a share for 2002. New
York Stock Exchange listed Hilton Hotels shares traded Tuesday afternoon
at $15.90, up 49 cents, or 3.2 percent. --------------------------------------------------------------------------------------------------
##############
################################ #################### GATX
Reports Q1 Results $25.1 this year $170.7 last year GATX
announced its 2002 first quarter results, reporting net income of
$25.1 million or $.51 per diluted share compared to net income
of $170.7 million or $3.45 per diluted share in the prior year period. Excluding
non-comparable items, GATX reported 2002 first quarter income of $18.9
million or $.39 per diluted share compared to income of $31.6 million
or $.63 per diluted share in the prior year period. Non-comparable
items include gains on the sale of GATX Terminals-related assets in
both periods and certain non-recurring expenses primarily associated
with the closing of a railcar repair facility reported in the 2001
first quarter. All comments from here forward in this press release
reflect operations excluding the aforementioned items. Key
elements of the 2002 first quarter include: *
Revenues in the 2002 first quarter decreased 15% from the prior year
period due to lower lease and warrant-related revenues at Financial
Services. *
Ownership costs decreased 9% due to lower average investment levels. *
Consistent with plans to improve operating efficiency, the company
substantially reduced 2002 first quarter SG&A compared to the
prior year period. *
Utilization of the company's total North American rail fleet was 91%
at quarter end compared to 92% at year end and 93% in the prior year
period. Utilization of the company's owned aircraft portfolio was
97% at quarter end, with an additional 2% under letter of intent for
lease. *
Investment volume and capital expenditures for the quarter totaled
$322 million compared to $640 million in the prior year period. The
2001 first quarter volume included $220 million of investments related
to the acquisition of the El Camino Resources' technology portfolio
and the acquisition of a rail fleet in Poland. Much of the 2002 first
quarter volume was related to scheduled aircraft deliveries. Ronald
H. Zech, chairman and CEO of GATX, stated, "The 2002 first quarter
was very challenging for GATX. While we made excellent progress in
managing our air portfolio and reducing costs across the company,
our end markets have yet to show signs of a recovery. "Despite
various reports indicating that the U.S. economy has stabilized and
entered a recovery phase, the rail market remains weak. Industrial
manufacturing capacity utilization has not rebounded and rail industry
carloadings declined year over year. As a result, railcar utilization
and pricing remain under pressure. We continue to expect that 2002
income in our rail business will remain flat with 2001 levels. "Air
travel is slowly recovering from the sharp drop following September
11. Our air group has done an excellent job placing and financing
new deliveries and renewing existing leases. Currently, 15 of 16 scheduled
deliveries in 2002 are leased or under letter of intent. Our focus
on narrow-body aircraft is serving us well in this market. However,
competition in the industry is intense as other major lessors have
been aggressively attempting to maintain high aircraft utilization,
which in turn has negatively affected lease rates. Therefore, while
the uncertainty regarding the placement and financing of our new aircraft
deliveries is abating, the income contribution from our air business
will be lower during this recovery period. "While
we are working to maximize income and returns in the face of unfavorable
market conditions, we are also faced with unprecedented volatility
in the capital markets. Credit spreads for most BBB-rated companies
have increased, and it has been especially difficult for companies
in the finance sector. The rating agency downgrades that GATX experienced
in the first quarter are having a negative impact on our near-term
financial results: we are carrying a higher than optimal cash balance
in order to maintain high liquidity, and re-accessing the public unsecured
debt markets has proved to be expensive. However, we are confident
that the steps we are taking, including the successful completion
of nearly $600 million in financing in the first quarter, will enable
us to improve our financial flexibility and will lead to lower long-term
borrowing costs." Mr.
Zech concluded, "At the beginning of the year we outlined income
expectations of $2.00-$2.25 per diluted share for 2002. Based on today's
operating and capital market environment, achieving this objective
will be a significant challenge, but one that we will pursue aggressively.
Additionally, we will remain focused on our core strengths: leading
positions in our core franchise businesses; a high-quality asset base;
and a commitment to generating attractive long-term returns for our
shareholders." SEGMENTS Consistent
with the 2001 Annual Report and Form 10-K reporting format, the financial
data for Financial Services and GATX Rail reflect the consolidation
of all rail assets and related activities under a single GATX Rail
segment. Prior period results have been prepared on a comparable basis.
Similarly, key performance data for GATX Rail, including car counts
and utilization figures, incorporate all railcar assets within GATX. FINANCIAL
SERVICES Financial
Services, comprised principally of GATX Capital, reported first quarter
net income of $7.0 million compared to $10.7 million in the prior
year period. The decrease was driven by lower pre-tax spread, warrant
income and remarketing gains, partially offset by lower SG&A expenses. Investment
volume totaled $307 million compared to $483 million in the prior
year period. The prior year period included $130 million related to
the acquisition of the El Camino Resources portfolio. The 2002 first
quarter investment volume includes $173 million related to the air
business, reflecting the company's scheduled deliveries of new A320
and B737 aircraft. Pre-tax
spread totaled $32.3 million in the first quarter compared to $41.8
million in the prior year period. Annualized pre-tax spread in the
first quarter was 4.6% of average net investments, compared to 5.9%
for the prior year period. Lower net lease income and interest income,
reflecting both pricing competition and lower investment volumes,
led to the decline in pre-tax spread. Remarketing
income, comprised of both gains on asset sales and residual sharing
fees, was $7.6 million in the first quarter compared to $14.4 million
in the prior year period. A decrease in residual sharing fees, which
occur when GATX sells an asset for a third party, contributed to the
lower remarketing income. Warrant income was $.5 million in the first
quarter compared to $15.3 million in the prior year period, reflecting
reduced valuations across many early stage companies and limited IPO
activity. GATX
RAIL GATX
Rail reported income of $18.0 million in the first quarter compared
to $12.9 million in the prior year period. The primary drivers behind
the year-over-year improvement include higher remarketing gains, increased
joint venture income, and lower SG&A. These factors more than
offset lower utilization and continued pressure on lease rates. Utilization
of GATX Rail's North American fleet was 91% at the end of the first
quarter, compared to 92% at 2001 year end and 93% at the prior year
period. GATX Rail's North American fleet totaled 128,000 cars at the
end of the first quarter, down from 132,000 at the prior year period.
GATX Rail added 260 railcars in the first quarter compared to 1,300
in the prior year period. The fleet reduction and lower new car order
levels are consistent with GATX's strategy to limit new car additions
to specific customer orders, while removing excess cars from the system. North
American manufacturing capacity utilization, one of several benchmarks
for economic activity and ultimately demand for railcars, was 74%
at the end of the first quarter, essentially flat with year-end levels.
In addition, first quarter industry railcar loadings were down 4.1%
compared to the prior year. These factors highlight that the manufacturing
sector has yet to show meaningful improvement. Until this occurs,
demand for railcars and underlying lease rate pricing will remain
under pressure. CONSOLIDATED
CREDIT STATISTICS Loss
provisions totaled $17.7 million in the first quarter compared to
$21.3 million in the prior year period. Offsetting a portion of the
2002 first quarter provision was a gain of $13.9 million attributable
to the extinguishment of non-recourse debt associated with one particular
credit. The company continues to maintain an appropriate allowance
position in light of economic conditions, and the allowance for losses
was 6.4% of reservable assets at the end of the first quarter compared
to 6.0% at the end of 2001 and 6.1% in the prior year period. Net
charge-offs and impairments totaled $22.1 million during the first
quarter, including $14.1 million related to the assets financed with
the aforementioned non-recourse debt. Net charge-offs and impairments
were 1.2% of average total assets on an annualized basis. In the prior
year period, net charge-offs and impairments totaled $30.0 million,
or 1.6% of average total assets on an annualized basis. Non-performing
leases and loans totaled $101.7 million or 3.6% of Financial Services'
investments compared to $96.4 million (3.4%) at the end of 2001 and
$113.0 million (4.0%) in the prior year period. ###############
##################################### ################ Congress Panel Agrees to Limit Home Shield in Bankruptcy By PHILIP SHENON New York Times ASHINGTON,— Senate and House negotiators approved a compromise Tuesday that revived a bill sought by banks and credit card companies, which are trying to make it harder for many people to escape their debts by going to bankruptcy court. The negotiators reached a compromise on the issue that many lawmakers have linked to the collapse of Enron: whether debtors who declare bankruptcy should be permitted to keep expensive homes out of the hands of their creditors. State laws in Florida and in Texas, where Enron is based, allow homeowners to shield the full value of their primary residence in bankruptcy. That currently protects several former Enron executives with multimillion- dollar mansions who might eventually be forced into bankruptcy court by shareholder lawsuits or criminal charges. Under the deal reached today, Congressional negotiators agreed on a voice vote to limit the so-called homestead exemption to $125,000 for convicted felons or for anyone who owes a debt under federal or state securities laws. They also barred use of the unlimited exemption to anyone who had not lived in a state for at least 40 months. Senator Herb Kohl, Democrat of Wisconsin and the leading Senate opponent of the unlimited homestead exemption, said the compromise would prevent Enron executives and others "from cheating the system — the worst abusers are the carpetbaggers and bad actors who use the homestead exemption to game the system and shield millions from their creditors." A bi-partisan group of lawmakers from Texas and Florida had resisted any type of curb on the exemption. The conference committee has been working for months to try to overcome differences between bills passed last year by the Senate and the House to rewrite the bankruptcy laws. The bills were similar in many ways and would end the ability of millions of Americans to use the bankruptcy system to wipe out credit card bills and other loans that are not secured by homes or other assets. Many of those debts would instead have to be paid back over time. There were a record number of bankruptcy filings last year, up 19 percent from 2000. The number of filings totaled 1,452,000, some 4 percent more than the previous annual record in 1998. Banks and credit card companies have insisted that debtors were abusing the bankruptcy laws to escape debts they could otherwise repay. Opponents of the overhaul described the House and Senate bills as giveaways to the banks and credit card companies for their generous campaign contributions. The resolution of the homestead dispute today appeared to leave only one big stumbling block to final passage of bankruptcy overhaul legislation. That matter — whether people involved in violent acts against abortion clinics should be permitted to erase their debts in bankruptcy court — has proved greatly contentious. Senator Charles E. Schumer of New York and his Democratic allies on the conference committee are threatening to block the wider bankruptcy bill if it does not contain language that would bar such anti-abortion activists from using the bankruptcy process to shield themselves from paying court-ordered fines for the violence. Members of the conference committee decided to leave the abortion issue until their next meeting. Earlier, the negotiators reached agreement on other disputed provisions, including one also linked to Enron that would have allowed troubled companies to shield assets by moving them off their balance sheets to a separate entity before declaring bankruptcy. Opponents note that Enron made frequent use of that sort of financing, and supporters of the provision, apparently fearing more criticism tied to the Enron case, agreed to drop it. The compromise today on the homestead provision angered consumer rights advocates, who said it would still allow many people in financial trouble, but with access to millions of dollars, to move their assets into homes, where the wealth would be shielded from creditors. Howard Metzenbaum, a former Democratic Senator from Ohio who is now the chairman of the Consumer Federation of America, said after today's hearing that the move by several senators to reach a quick compromise on the homestead provision and the overall bill was explained by one thing. "Campaign contributions from banks and credit card companies," he said. The chairman of the House Judiciary Committee, Representative F. James Sensenbrenner Jr., Republican of Wisconsin and a leading supporter of the bankruptcy overhaul, has rebuffed the criticism, arguing that the compromise bill "benefits nearly every sector of our society" by reducing fraud and promoting responsible spending. The bill, he said, would ultimately help many consumers "avoid bankruptcy by ensuring that they are made aware of alternatives to bankruptcy and the consequences of credit www.leasingnews.org
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