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August 30, 2001 Kit
Menkin’s Leasing
News
www.leasingnews.org Thursday, August 30, 2001 ------------------------------------------------------------------------------------------------------ Leasing
News is also delivered
to your e-mail door
step daily. The signature has “This
Day in American
History”—written
expressly for Leasing
News---- ------------------------------------------------------------------------------------------------------ Headlines--- Leasing Industry’s Celebrated Jim Raeder Speaks Out Richard Shapiro Apologies to Jim Raeder Irwin Financial announced its third quarter dividend. GE Capital Extends Tender Offer for Heller Financial Information Leasing Names Mary
Long to Develop
Leasing Biz U. S. Dollar Smothered by Falling U.S. Stocks Dot.com Crash Squeezes Lloyds of London Training: Key to Success During Tough Times
EFJ Ron Caruso
Drives a Lincoln/Wants
to Know about the
AmX “Bomb” ( If
a tree falls on
a deserted island,
does it makes a
sound? Yes ) More pictures from Fred St. Laurent on the eLessors Technology Conference at located at the end. Atlanta, George Alan Zeppenfeld Report tomorrow ###
denotes press release ________________________________________________________________________________ Jim
Raeder, Capital
Werks Speaks Out I
have remained silent long enough.
It had become
a tiresome bore,
but now the nuisance
factor has moved
into libelous and
defamatory territory,
as I listen to the
"B" players
and malcontents
of our industry,
seek out the scapegoats
for all the mistakes
by the "Tinpot
Field-Marshalls
of our Industry",
made in an effort
to outpace the competition,
or in the pursuit
of mastering the
game of cashing
in on exorbitant
executive bonuses,
at the expense of
sustainable long
term goals. All
of us enjoyed the
days of "550
FICO" scores
and story credits
being chased by
10% buy rates, merger
and acquisition
mania, and the idea
of achieving a 30
multiple of sales
vs. earnings, driving
the decisions of
our organizations.
All good
things must come
to an end, and ohhh
boy…have they.
I
have never seen
an industry, as
openly cannibalistic,
and one in such
disarray, manage
to point the finger
at everyone but
itself, for all
its woeful inadequacies.
When a salesperson
loses a deal, it's
of course because
their victorious
competitor lied
to the client; when
a portfolio doesn't
perform, it's of
course because the
chief credit officer
didn't do his job,
"so fire him,"
or let's just blame
the broker so everyone
can keep their jobs.
When
a transaction is
repurchased the
only one who really
loses is the broker,
rarely the salesperson.
A former
employer of mine
was hit for over
a million dollars
by a rogue salesperson
and a fraudulent
vendor.
It took them
over two years to
pay off the lenders
at the sole sacrifice
of the owners of
the company.
The idea
of fabricating fake
invoices, disguising
sale lease backs,
hiding week credited
partners, and other
misleading information
processed by creative
salespeople can
only end up costing
the shareholders
of the organization.
Representations
and Warranties written
by the lenders are
strong and one sided
for obvious reasons.
The Republic
Group at the time
of acquisition by
First Sierra Financial
carried a loss reserve
of over $700,000
directly accrued
for re-purchases.
We had four credit
officers specifically
employed to protect
our lenders from
false information
provided by the
clients or the occasional
misguided salesperson.
In seven years of
business and over
$250,000,000 in
originations, the
company paid out
less than $220,000
of this reserve.
At
the time the merger
occurred, First
Sierra escrowed
over $2.5 million
in stock and an
additional $330,000
for the possibility
of any undisclosed
or unknown liabilities,
of which after one
full year was released
back to the shareholders
without incident.
In addition,
due to the pooling
of interest merger
agreement, First
Sierra Financial
and now American
Express Business
Finance assumed
all the Representative
and Warranties of
The Republic Group
along with all the
other 28 acquisitions. If there are any valid outstanding claims,
I will personally
support all efforts
to collect what's
rightfully due. As
a former Founder
and the President
of The Republic
Group, LLC and General
Manager - Sr. Vice
President of all
First Sierra Retail,
with over 390 reports
and 26 direct reports,
these so called
under handed sales
tactics and aggressive
misleading behavior,
written about in
your newsletter,
was neither preached,
nor was it accepted
practice.
I have authored
numerous correspondence
to the sales force
on proper methods
of winning the business
of Lessee's and
Vendors alike. On a rare occasion, a salesperson would cross the line and unfortunately,
termination would
result, again at
the cost of the
employer. The
blatantly defamatory
comments you allow
to be spewed on
your newsletter
and rumored in the
industry will no
longer be tolerated. It's a shame that our industry, one that currently struggles to
stay competitive,
has succumbed to
a fratricidal frenzy,
initiated by the
hapless and mediocre
of our brethren,
has now forced those
of us who are serious
professionals, to
resort to legal
means to protect
the interests and
jobs of our employees
and our organizations. For
the strong to survive,
the weak must perish…it’s
nature’s law. Let’s focus not on the successful, but
direct our efforts
at excising the
mediocre from our
midst...those who
claw at the lonely
fraudulent deal
to pay for their
overpriced homes
or lavish offices.
Perhaps now
we can all get back
to work and stick
to fact not fiction. Sincerely, J. Raeder __________________________________________________________________________ Shapiro
Apologies to Jim
Raeder Kit, We
have worked on and
Jim Raeder has accepted
a retraction from
my article dated
8-28-01 Please
publish to following
a.s.a.p Thanks, Richard
Shapiro rshapiro@saddlebackfinancial.com On
Tuesday August 28,
2001 I wrote an
e-mail published
by Leasing News.Org concerning
Preferred Lease
and CapitalWerks.
This letter is sent
as a retraction
and official apology
to these companies,
their management
and their
employees. The original
e-mail was written
in the heat of the
moment after
losing a transaction
that I had invested
many hours of my
time and effort.
I
do not have any
personal knowledge
of these companies
funding sources
or lines
of credit and their
relationships to
each other. I also
do not have any
direct information
on their internal
methods of quoting
lease transactions.
Sometimes we lose
a transaction and
our customer indicates they
were quoted very
low rates but these
statements cannot
be verified. I,
again retract my
statements and apologize
for my comments. Richard
Shapiro ------------------------------------------------------------------------------------------------------ Louis
Schneider Tomorrow---- Preferred
Lease Chief Financial
Officer Louis Schneider---Exclusive
Interview Tomorrow. He
has many compliments
for the ex-president,
David Murray, who
we are told is no
longer at
Venserve. _____________________________________________________________________________ #########
##########################
######################## Irwin Financial Announces Action On Stock Dividend Irwin Financial announced its third quarter dividend. The dividend of $0.065 per share will be paid on September 21, 2001, to all shareholders of record on September 7, 2001. The dividend rate is a $0.005 per share or 8.3% increase as compared with the dividend paid in the third quarter of 2000. Irwin Financial (www.irwinfinancial.com) is an interrelated group of specialized financial services companies. The Corporation, through its five subsidiaries - Irwin Home Equity Corporation, Irwin Mortgage Corporation, Irwin Union Bank, Irwin Business Finance, and Irwin Ventures - provides a broad range of consumer and commercial financial services in selected markets across the US and Canada. ___________________________________________________________________________ Equipment Finance Journal Ron Caruso Drives a Lincoln Continental I drive a '97 Lincoln Continental for my one-mile commute to my office-no problem with traffic jams! By the way, what's the news you referred to earlier concerning American Express? Regards, Ron ( Well, now that Greg McIntosh has left, will he talk, or will the alleged large severance he got seal his mouth shut? He reportedly knows all about it. So does Van Etten, Leasing News is told. We have asked him for inside information, along with others we have spoken. Leasing News will also attempt to contact Thomas Depping, who is in the middle of this. In his farewell letter to Sierra Cities, he wanted to be known as the "Gazelle". Perhaps it is more accurate than he originally thought, as a "Gazelle" has great bursts of speed, a very fast runner, known for leaving the scene quickly, before getting caught. Leasing News will have a full story as soon as we have all the comments together. We also will ask Mr. Depping for his side to the story. editor ) ------------------------------------------------------------------------------------------------------ From Equipment Leasing Association: Training: Key to Success During Tough Times ****************************** Well-trained employees are more productive, cause fewer job-related mistakes, are happier at work and are better able to respond to customer needs. Two ELA workshops of particular value to the newest members of your organization are planned for September: Principles of Leasing Workshop - #1 ELA workshop for over a decade! September 10-12 ñ Denver Marriott Southeast, Denver, CO -An intense and valuable introduction to the fundamentals of the equipment leasing & finance industry http://elaonline.com/events/2001/principles/ Fundamentals of Credit in the Equipment Leasing & Finance Industry September 20 ñ Westin San Francisco Airport Hotel, San Francisco, CA -A one-day workshop for the newest members of your credit review team! http://www.elaonline.com/events/2/ Valuable Take-Home Materials Each attendee receives a specially prepared workbook, that is a valuable reference guide long after the workshop is completed. Attendees to Principles of Leasing workshop receive a free copy of the highly acclaimed CD-Rom, Professor Lessor's Principles of Leasing. Seasoned Instructors Our instructors have decades of practical as well as instructional experience among them. Your employees will learn from the best! Watch for brochures in the mail. But for more information right now, please visit http://elaonline.com/events/2001/principles/ or http://www.elaonline.com/events/2/ or email dtullis@elamail.com --------------------------------------------------------------------------------------------------- ### ############## ################################### ILC Names New Vice President of Brokerage Unit Mary Long will be responsible for developing leasing business CINCINNATI, \/ -- Provident Bank and its subsidiary Information Leasing Corporation (ILC) announced that Mary Long has been named Vice President and Business Unit Director of ILC's Brokerage Business Unit. With $1.3 billion in assets under management, ILC provides small to medium sized businesses with a variety of flexible financing solutions for acquiring major purchases including capital equipment and other high tech resources. Ms. Long will be responsible for the continued growth and success of ILC's lease brokerage business. ILC emphasizes highly selective relationships with lessors and brokers across the country with emphasis on quality credits and assets. Additionally, the broker team plays an important role in ILC's bulk purchase, warehouse lending and acquisition of transactions from third party originators. "Mary has proven to be a valuable part of the ILC team," said Vince Rinaldi, ILC President and CEO. "She has played a leadership role implementing many of the credit policies, systems and personnel acquisitions that have provided a backbone for our success." Ms. Long joined ILC in early 1997, originally as Credit Manager for Small Ticket Underwriting. Immediately preceding this promotion, she was Assistant Vice President-Credit Team leader for the Brokerage Unit. Prior to joining ILC, Mary serviced as Assistant Controller for Donnellon McCarthy, Inc. She received her B.S. from Xavier University in accounting. About Information Leasing Corporation & The Provident Bank Information Leasing Corporation, a small to mid-ticket equipment leasing company, is a wholly-owned subsidiary of The Provident Bank. The Provident Bank is the main subsidiary of Provident Financial Group, Inc. (Nasdaq: PFGI), a Cincinnati-based company with $15.1 billion in on-balance sheet assets and $20.1 billion in managed assets. The Provident Bank provides full-service retail and commercial banking operations regionally and nationally. Additional company information is available at www.ilcinc.com and www.provident-bank.com . For further information, please contact: Kristina S. Klopp, Public Relations Manager, 513-579-2248, or kklopp@provident-bank.com ### ######################## ############################ __________________________________________________________________________ U. S. Dollar Smothered by Falling U.S. Stocks NEW YORK (Reuters) - The dollar sank more than half a percent against both the euro and yen on Thursday due primarily to a steep drop in U.S. stock prices and after the European Central Bank cut short-term interest rates one-quarter percentage point. The ECB cut its benchmark minimum bid rate to 4.25 percent, as expected, citing slowing growth in Europe and the United States and easing inflation pressures. The ECB's decision initially elicited little reaction in the currency markets until ECB President Wim Duisenberg said in part the euro had more room to rise and that inflation within the euro zone is likely to fall below the 2 percent ceiling in the first half of next year. Dollar losses accelerated in late morning as the Dow Jones Industrial average (^DJI - news) stumbled below the psychologically significant 10,000 level to its lowest level in nearly five months as a gloomy outlook from network computer maker Sun Microsystems Inc. (Nasdaq:SUNW - news) renewed worries over corporate profits. The Nasdaq Composite index (^IXIC - news) was down nearly 3percent in light trading volume. ``The ECB rate cut is helping but the stock market has to be playing a part in this dollar weakness. The pervasive pessimism in the U.S. remains the dominant feature,'' said Tim Fox, currency analyst at Standard Chartered Bank in New York.Duisenberg said softening European inflation ``permits us now and not earlier to lower interest rates without endangering price stability now and in the near future.'' He said the United States downturn had been longer and deeper than anticipated, and that euro zone growth ``will most likely be slower than expected a few months ago.’ Rate cuts are seen as potential inflationary triggers, because they encourage borrowing and investing, which generally spur economic growth. Duisenberg emphasized there was no bias toward future rate cuts in the ECB's decision. A snap poll by Reuters indicates 23 out of 25 economists predict another quarter point rate cut by year-end. ``The market I think is anticipating another 25 basis point move and we anticipate it will come in October,'' said Bob Lynch, currency strategist at BNP Paribas in New York. ``The new level of interest rates is compatible with the maintenance of price stability in the medium term,'' Duisenberg told a press conference following the rate decision ____________________________________________________________ Dot.com crash squeezes top insurer Lloyd's: the world's oldest insurer The dot.com collapse and a Brazilian oil rig disaster have combined to squeeze the world's oldest insurer, Lloyd's of London. The insurance market has been forced to increase its projected loss for the last two years to £2bn ($2.9bn). Lloyd's racked up some of the biggest losses in the UK's corporate history in the 1980s and early 1990s because of hefty payouts on claims that including natural disasters and asbestos-related health issues. Now the bankruptcy of a host of dot.com firms, and a very expensive oil rig disaster in Brazil, will once again push the firm deep into the red in 1999 and 2000. Fewer catastrophes The market has revised up its loss for 1999 to £1.4bn ($2bn), its biggest loss since 1990. "1999 is widely acknowledged to represent the low point of the global insurance market and Lloyd's results reflect those conditions," the insurer said in a statement. But Lloyds also noted that trading conditions are now improving. With fewer catastrophes in 2000, the market projects losses of £694m for that year. And last week, the Association of Lloyd's Members forecast the market would return to profitability in 2002. Lloyd's reports its results with a three-year time lag and final figures for 1999 are expected next year. _______________________________________________________________________ ######## ################## ################################### GE Capital Extends Tender Offer for Heller Financial General Electric Capital (GE Capital) announced that Hawk Acquisition, its wholly owned subsidiary, has extended the expiration date for the cash tender offer by GE Capital and Hawk Acquisition for all outstanding shares of common stock of Heller Financial. The new expiration date is 5:00 P.M., EST, on Monday, October 1, 2001. As of 5:00 P.M., New York City time, |