The David Murray of San Diego is the same one who was with Preferred Capital

"I expect to get all of the principal, interest and attorneys' fees back in this case(Commercial Money Center)," says Douglas Freeman, who became chief executive in April when his South Carolina-based mortgage banking firm, Resource Bancshares Mortgage Group, merged with NetBank. He predicts a resolution early next year."

By ROBERT LUKE

The Atlanta Journal-Constitution

USING TECHNOLOGY AS A TOOL and high interest rates as bait -- Alpharetta- based NetBank has been adept at capturing deposits nationwide from yield-starved savers and investors.

Now it must demonstrate that it can be just as nimble in cross-selling other financial products -- and in using its deposits to originate a wider array of loans, such as those to small businesses. The aim is to package the loans and sell them to investors for fatter, "banklike" profits.

"They are not making anything like that now, by a long shot," says banking analyst Christopher Marinac of SunTrust Robinson Humphrey in Atlanta.

NetBank aims to remedy that, armed with new management and a coterie of experienced bankers plucked from rivals.

It's turned Marinac, a skeptic, into a believer in the company's shares, which have languished since the Internet bubble burst. At their peak, the shares were trading at more than six times what they are fetching now.

NetBank, with total assets of $3.76 billion, operates the nation's largest independent retail Internet bank. It also is a wholesale and retail mortgage lender.

No one doubts that Internet banking is here to stay. Most banks -- large and small -- offer online banking in some form.

"Household adoption in the U.S. passed 25 percent a few months ago, up a hundredfold since 1994," says Jim Bruene, editor and publisher of the Seattle-based Online Banking Report. "We project another doubling of usage to 50-plus million households by the end of the decade."

The problem with pure online banks and thrifts, such as NetBank, is that while they are good at attracting deposits, they have been less successful in originating a diverse portfolio of loans.

Part of that was by design. Online bankers figured that it would be more cost- effective to buy loans from others, to participate in loans made by others, or to invest in income-producing securities. Two years ago, nearly 99 percent of NetBank's loans were purchased.

The strategy, implemented by previous management, backfired when about $85 million worth of "subprime" leases turned sour. The leases were written by Commercial Money Center, which later filed for bankruptcy protection and is now being liquidated.

Lease deal went bad

CMC, founded in Las Vegas in 1997, the same year that NetBank went public, originated commercial-equipment and other types of leases to those with poor credit who were willing to pay high interest rates.

CMC pooled the leases and sold the income stream to investors, including NetBank and other institutions. To lure those investors, CMC purchased insurance policies or surety bonds so that in the event the lessees didn't make payments, investors still would be paid.

Today, less than 10 percent of the lessees still are making payments, according to Atlanta attorney Russell Bogue III. His clients include some of the insurers, which have refused to pay NetBank and the other financial institutions involved. They, in turn, have sued the insurers, seeking to recover their money, plus interest.

"I expect to get all of the principal, interest and attorneys' fees back in this case," says Douglas Freeman, who became chief executive in April when his South Carolina-based mortgage banking firm, Resource Bancshares Mortgage Group, merged with NetBank. He predicts a resolution early next year.

Even so, NetBank has set aside nearly $21 million for potential losses on the leases, or about a quarter of its total exposure. Doing so cut into second-quarter profits.

But should NetBank succeed in being made whole, Marinac figures the thrift can add the $21 million back to its bottom line.

Of course, there's the chance that NetBank will fail to get all of its money back.

Analyst Peyton Green of First Tennessee Securities, who is "neutral" on the stock, calculates that if NetBank were to boost its loss reserve to 50 percent, as another banking firm involved with CMC has done, NetBank's earnings would be cut by 28 cents a share.

Freeman, former president of Bank of America's consumer finance group, insists NetBank won't need to boost its loss reserve. Most analysts, including Marinac, agree.

Shares languish

Still, investors aren't snapping up NetBank's shares, which are trading at about 1.2 times book value. To compare, a group of 62 thrifts with assets of $1 billion to $10 billion now trade at about 1.5 times book value, according to Marinac. He says there are several reasons for this disparity.

Chief among them is that most of NetBank's revenue and profits now come from RBMG, which originates and buys home loans from mortgage brokers and other lenders and then resells the loans to investors. To finance the unit, NetBank has been whittling down its third-party loan portfolio.

There's concern that when mortgage refinancings slow, NetBank's revenues and profits could be hurt.

Marinac says those fears are overblown.

"NetBank has plans and personnel in place to evolve into more than just a residential mortgage originator," he says. "Several bank executives with real tenure in commercial banking are in queue to begin generating small-business, owner- occupied commercial real estate and perhaps automobile loans during 2003 and 2004."

Freeman says NetBank will disclose its small-business strategy by the end of the first quarter. If it lends to small businesses and others, the thrift has indicated it will promptly sell the loans to investors, recycling the funds to make more loans. By not holding the loans in its own portfolio, NetBank figures it can effectively reduce credit risk and interest rate risk.

Because the new lending potentially carries fatter profit margins than conventional home loans, Marinac reckons NetBank's profits won't suffer if mortgage refinancings decline. He estimates next year's earnings will rise to $1 a share from an estimated 62 cents a share this year. The consensus estimate among analysts is 61 cents a share this year and 93 cents next year, according to Thomson First Call.

A 'metamorphosis'

Besides its mortgage and retailing banking units, Freeman says NetBank will rely on new businesses, such as processing loans for others and selling insurance, for growth.

"NetBank is undergoing a metamorphosis," Marinac says. "Once a one-sided company, it now is a multifaceted one that has a much better handle on risk and a much better game plan to achieve banklike returns."

Marinac adds that per-share profits could get an additional boost if NetBank continues to repurchase shares. The company has said it plans to repurchase a fifth or more of its shares over the next two to three years, using excess capital and future earnings to do so.

If NetBank succeeds in achieving its goals, Marinac says the company eventually could be acquired.

"There are other institutions that would like to have an online arm for funding purposes," he says.

"There are certain foreign banks that might want a U.S. presence and the funding capability that NetBank would provide."

---------------------------------------------------------------------------------------------------

Venserve/SalesStream—David Murray

The David Murray of San Diego is the same one who was with Preferred Capital. A friend of mine was in management with Venserve/SalesStream until the change in the program. He left when found out who the new managers were.

He didn't want anything to do with them. He also felt that with their involvement the program did not have much of a future.

Mike Rogers

mike@e-abel.com

Full Story at: http://www.leasingnews.org/#vebserv

Year-End Sales Cartoon

http://two.leasingnews.org/cartoons/amex.gif

---------------------------------------------------------------------------------------------------

Fed switches focus to deflation

Greenspan says tools are available

Sam Zuckerman, Chronicle Economics Writer

With little fanfare, the Federal Reserve has carried out

its most far- reaching policy shift in a generation, ushering in what may be a multiyear period of exceptionally low interest rates.

Since the late 1970s, when an oil shortage sent prices spiraling out of control, until recently, the nation's central bank had one overriding obsession -- to wring inflation out of the U.S. economy.

Now though, with prices rising at their slowest pace in four decades, Fed policymakers have turned their attention to the opposite threat -- the possibility that prices could rise too slowly or actually fall for an extended period, a condition known as deflation.

Prices are climbing at a snail's pace, 1.5 percent annually, according to the Personal Consumption Expenditures Price Index, an obscure Commerce Department measure that is Fed Chairman Alan Greenspan's favorite inflation yardstick.

With the economy recovering sluggishly from recession, unemployment edging up and the cost of such goods as computers and clothing dropping, the nation is nearer than it has been at any time since the Great Depression of the 1930s to a deflationary situation.

"There are some well-founded reasons to presume that deflation is more of a threat to economic growth than is inflation," Greenspan said during a speech earlier this month.

In a recent note to clients, Paul McCulley, managing director at the bond mutual fund company Pimco and one of the nation's most savvy Fed watchers, wrote that the central bank's new focus on deflation amounts to nothing less than a regime change.

"The Fed has finally, and decisively, declared victory in its two-decade war against inflation and has started a new secular war against deflation risks," McCulley wrote.

What this new stance means is that borrowers can expect today's low interest rates to last for a while and perhaps drop further.

As the nation's central bank, the Fed controls the supply of money in the economy and sets the level of short-term interest rates.

LONG-TERM RATES IN FOCUS

Now, in order to expand its arsenal of weapons for fighting deflation, Fed policymakers are speculating openly about the extraordinary possibility of lowering long-term rates usually set by market forces.

That would put the Fed in the business of controlling the costs of mortgages, corporate bonds and similar forms of debt. It also would offer a windfall to home buyers.

In 2001, as the nation slipped into recession, the Fed cut its benchmark federal funds rate -- what banks charge each other for overnight loans -- 11 times. At the beginning of November, the Fed resumed its rate- cutting campaign,

slashing the federal funds rate from 1.75 percent to 1.25 percent, a four- decade low.

In the face of possible deflation, "you want to be extremely aggressive," said former Fed Governor Janet Yellen, who teaches at UC Berkeley's Haas School of Business. "The risks from over stimulating the economy are smaller than risks from being too tough."

What scares the Fed is the danger that business and consumer spending will turn so slack that sellers will be forced to cut prices repeatedly to find buyers.

At first blush, lower prices might seem like a good thing. But deflation is actually one of the most dangerous of all economic diseases, fostering chronic recession, rising unemployment and epidemics of bankruptcies. Its harshest effect is on business and household borrowers, who must pay back their debts with ever-more-valuable dollars.

A relatively moderate bout of deflation, in which prices have fallen about 1 percent per year, is one of the things that has transformed Japan from a powerhouse into an enfeebled and demoralized player on the world economic stage.

REMOTE DANGER

Fed officials are quick to say they think the danger of deflation hitting the United States is still remote. They also stress their determination to prevent it at all costs.

"The Fed would take whatever means necessary to prevent significant deflation in the United States," recently appointed Fed Governor Ben Bernanke vowed in a speech last month.

The main reason the Fed fears deflation is that its traditional policy tools won't work if prices are falling.

The federal funds rate is very close to zero, and the central bank can't push it below that level. "They are running out of ammunition," UC Berkeley's Yellen said.

To understand why the Fed's main policy tool would be useless, it's necessary to think about how low rates work in the presence of inflation:

If prices are rising at a 3 percent annual rate, and I take out a loan at a 1 percent rate, my borrowing rate is below the rate of inflation. In effect, I'm paying back the loan with dollars that are worth less than the ones I borrowed.

If prices are falling 1 percent annually, and I take out a no-interest loan,

I must pay it back with dollars that are worth more than the ones I borrowed. If I am a business owner whose revenue is falling because I am forced to lower prices, that loan could become increasingly burdensome.

WEAPONS AVAILABLE

Although they are committed to stopping deflation before it starts, Fed officials say they wouldn't be crippled if prevention failed.

"If deflation were to develop, options for an aggressive monetary policy response are available," Greenspan said in his recent speech.

For his part, the Fed's Bernanke mentioned an array of options, including buying long-term government bonds and subsidizing bank purchases of corporate bonds. Such moves would inject cash into the economy and lower interest rates on long-term debt.

Theoretically, the extra cash in the hands of consumers and businesspeople could boost demand to the point that prices start rising again, curing the deflation problem.

Bernanke even invoked the ultimate power of the Fed to flood the economy with currency by, in effect, printing money. That's an image associated with episodes of runaway inflation in developing countries, not pronouncements by sober-minded policymakers of the world's leading economic power.

"What a striking thing for a central banker to say," said Tom Schlesinger, executive director of Financial Markets Center, a Vermont research group that monitors the Fed. "It's so much at odds with the whole gestalt of central banks as the bulwark of the value of the nation's currency."

The fact is, though, that real deflation is so rare that central bankers have little experience fighting it. No one really knows whether a central bank's anti- deflation policies would work.

"Everything is untried and unproven," Yellen said.

Chart: http://www.sfgate.com/cgi-bin/article.cgi?f=/chronicle/archive/2002/12/29/BU243126.DTL&type=chart

E-mail Sam Zuckerman at

szuckerman@sfchronicle.com.

------------------------------------------------------------------------------------------------

Requiem for the Lease-to-Own Pay Phone

By Yuki Noguchi

Washington Post Staff Writer

At one time, voices glanced against its metal walls. Dates were made here, secrets exchanged. Once people lined up, shifting from foot to impatient foot, pointedly lifting their watches, Hey, lady, how long you gonna talk?

But today, the pay phone by the Rodman's grocery store at Randolph and Selfridge roads in Wheaton stands empty, a smelly, rusting piece of metal and plastic. As if to highlight its obsolescence, Andres Castro stands right next to it and dials the office from his Nextel cell phone.

He has come to demolish it.

In Washington, as in other parts of the country, pay phones are disappearing from the landscape. The number of them across the country has dwindled from a high of 2.7 million in the mid-1990s to about 1.9 million now, supplanted by the more personal wireless phones that fit in a pocket. The small companies that maintain them are pulling out of the business. Even at the higher price of 50 cents a call, many phones run at a deficit -- it costs more to clean, maintain and service them -- so people like Castro are yanking them from their sockets, cutting the lines, and pulling them from shopping centers, gasoline stations, restaurants and street corners where they used to turn a booming profit.

"We're just gonna take this one out with brute force," Castro declares before sawing the rusted bolts off the pay phone's aluminum bottom.

The Rodman's phone was installed May 11, 1995, and generated $27,000 over its lifetime.

Castro dons suede work gloves and pushes the booth sideways, and it cracks. Time of death: 11 a.m., Dec. 13 -- Friday the 13th.

"At first it was fun, because you'd put in a new phone and you'd generate revenue right away of $600 a month," said Castro, a manager and 11-year veteran at Robin Technologies Inc. in Rockville. Castro empties the coin bin of the dead pay phone, which now averages only $2.50 a day.

There is an indignity to the way pay phones go. They are covered with detritus -- an empty 750-milliliter bottle of cheap red wine, a wet pack of Marlboro Lights and discarded phone cards. The shiny base of the pay phone shells degrade to a mottled magenta. "Unfortunately, what happens is people urinate on them and they corrode," Castro said.

Robin Technologies once owned or leased 1,100 pay phones, but a year ago started pulling 10 a month. It now installs satellite dishes, sets up e-mail kiosks and sells e-mail marketing to restaurants to make up for lost revenue. Meanwhile, the company's basement storage, the morgue, holds more than 150 old pay phones and their outer casings.

About 75 percent of pay phones are owned and operated by local phone companies such as Verizon Communications Inc. and SBC Communications Inc. Those companies have vast empires with many lines of business, including cell phones, so what is lost in pay phone revenue is made up through other means. But even Verizon has cut back by 25,000 pay phones in the past two years, bringing its total to 425,000 phones around the country. And BellSouth Corp., which managed 143,000 pay phones two years ago, announced then that it would phase out of the business in 2003 because it is not lucrative.

The remaining 25 percent of pay phones are owned or leased by independent operators such as Robin Technologies or U.S. Teleservices Inc., which feel the dramatic erosion of revenue.

U.S. Teleservices is decommissioning pay phones at a rate of 20 a month, or "as fast as we can get to them," said Robert Hayden, president of the Fairfax firm.

"The bulk of our business at one time was indoor [pay] phones, but most of those have really suffered over the last three years," Hayden said. Those used to generate $150 to $200 in revenue a month but now are so little-used that they often lose $20 a month after Hayden pays the $25 to $35 monthly line charge to Verizon. That doesn't include other costs incurred for maintenance or cleanup after vandalism.

U.S. Teleservices' monthly revenue has declined to $20,000 to $25,000, from nearly $70,000. Hayden's workforce has diminished to four from 12, and everyone has taken a 30 percent pay cut, while he has stopped taking a salary.

"I'm so mentally out of the pay phone business now," said Hayden, who is replacing pay phones with automated teller machines and selling wireless Internet access. "It's been a long transition, though, because I had to borrow again -- more than $200,000 -- to reinvest to just get back to the income I had."

It is much easier -- and cheaper -- to dial from a cell phone for customers who can afford one. However, pay phones are still profitable in the lowest-income areas of a city, said Terry Rainey, president of the American Public Communications Council Inc., an industry group representing independent pay phone operators around the country.

"There are a great number of people in this country without a phone," Rainey said -- 4 and 5 percent, which is more than the 1 or 2 percent of the U.S. population that lacks television sets.

"Some lower-income areas rely on [pay phones] for regular communications, as well as, in some cases, emergency calls," said Mason Harris, president of Robin Technologies and of the Atlantic Payphone Association.

That is true for the two pay phones at the gazebo-style bus stop at Potomac Place Shopping Center. Those still ring in $120 to $130 every several weeks, mostly because that is the route the hired help take on the way to their clients' palatial houses nearby.

That compares with average revenue of less than $100 a month for each of the pay phones Harris owns or operates in the Washington area. In the past four years, that figure has declined from $175 a month, he said. With a similar phenomenon affecting a diminishing roster of independent pay phone operators, it's no wonder that all around the city, pay phones are flying off the wall, he said.

"I wish I'd sold two years ago" while the getting was still good, he said. Shopping centers that had four pay phones now have two, Harris said. Pretty soon, pay phones will be a rare breed, he said.

This process of elimination can create its own vicious cycle.

Arlington resident Erik Newton said he finally broke down and purchased a cell phone two and a half years ago after not being able to find a pay phone near the White Flint mall. He couldn't find one at the gasoline station where he'd stopped; the one across the street didn't have one, either.

For some, the pay phone has become untouchably déclassé.

A woman at the Old Ebbitt Grill was asking strangers if she could borrow their cell phones one recent evening. She systematically worked her way through half the people seated at the bar, none of whom had cell phones to lend. Finally, she reached Hayden, who was sipping a beer. He suggested she use the pay phone he maintained in the restaurant. She haughtily replied: "I wouldn't be caught dead using a pay phone."

Top-selling calendar titles of 2003

By Associated Press

Top-selling 2003 calendars through Dec. 25:

1. George W. Bush, daily boxed

2. Sports Illustrated Swimsuit, wall

3. German Shorthaired Pointers, wall

4. Harry Potter Movie, wall

5. The Far Side, wall

6. 365 Cats, daily boxed

7. Thomas Kinkade Painter of Light, wall

8. Lord of The Rings The Two Towers, wall

9. Dilbert, daily boxed

10. FDNY Firefighters, wall

Source: Calendars.com

Golden Arches get tarnished by changing tastes, price wars

By Lorraine Mirabella

The Baltimore Sun

It grew into America's biggest restaurant chain - not to mention one of the world's best-known brands - by serving up quick, consistent food at low prices.

But once-indomitable McDonald's Corp., home of the Happy Meal, the Hamburglar and the Special Sauce, is limping nowadays amid an onslaught of rivals, changing consumer trends and missteps.

The company said Dec. 17 that it expects to post its first quarterly loss. Now, it's hoping that an end-of-year management shake-up will reverse a two-year slump.

But some analysts wonder whether it can restore luster at the Golden Arches.

They say the fast food is too slow at McDonald's, the menu too complicated and the low prices not a strong enough lure to keep customers from choosing a growing array of culinary rivals. The results show up in the bottom line: Profit has fallen in seven of the past eight quarters, and the stock price tumbled to a seven-year low in the fall.

To analysts, the problem is that McDonald's has strayed too far from what it does best: burgers, fries and sodas.

"They've been too busy tweaking the menu and changing the cooking system and rolling out products. It's no longer fast, and that's a concern," said Ann Gurkin, a restaurant analyst with Davenport & Co. in Richmond, Va. "They need to focus on the core business, on the essence of the business - the quality of the product, speediness, cleanliness - focus on the basics."

Analysts question whether the company's president, Jim Cantalupo, 59, will be up to the challenge when he takes over as chairman and chief executive Jan 1. Cantalupo, who will replace 21-year McDonald's veteran Jack M. Greenberg, joined the company in 1974 as a controller and earned a reputation as the force behind its international growth.

"We have reservations about Mr. Cantalupo," Gurkin said. "He's been in the system. He has operated during an era when McDonald's strategy was growth worldwide. We need a new approach, and I'm not sure he can break out of the old mold and bring a fresh opinion. We have a wait-and-see attitude."

To be sure, other fast-food chains are struggling, too, facing a tight economy that has restaurant-goers watching their wallets. Now, a price war has inflicted more damage.

"It's become very competitive, and competitive at a time when the economy is not great," said Jerry McVety of McVety & Associates, a restaurant consultancy in Farmington Hills, Mich.

Burger King, the nation's No. 2 burger chain, has been losing customers. In early December, the second-largest U.S. owner of Burger King restaurants, AmeriKing Inc., filed for Chapter 11 bankruptcy protection after reporting a $22.9 million loss in the first half of the year on $177 million in sales. Burger King's owner, Diageo PLC, said recently that it would sell the chain to a buyout group for $1.5 billion, knocked down from an initial deal of $2.26 billion.

No. 3 burger chain Wendy's International Inc., considered the gold standard of fast food, lowered its 2002 earnings forecast slightly this month, blaming the weak economy and the price war.

"There seems to be a growing trend away from" fast food, said John Glass, an equity analyst at CIBC World Markets in Boston. "It's not accurate to say no one likes fast food; it has a permanent place in the American restaurant landscape. But the industry has grown rapidly for decades and is now showing its age and overcapacity.

"People are eating better and have more choices, and they're more experimental with foods, certainly more so than the generation before this generation."

New categories of fast food - the quick-casual chains such as St. Louis-based Panera Bread and Baha Fresh Mexican Grill - are giving budget- and time-conscious diners choices well beyond cheeseburgers and chicken sandwiches.

The higher-priced casual segment, with players such as Applebee's and Outback Steakhouse, is growing more quickly than the fast-food category.

As the economy has faltered, the restaurant industry has been less able to absorb the new players, as it had more or less done over the past two decades, said Harry Balzer, vice president of NPD Group's Foodworld, a consumer market-research firm in Chicago. That's because Americans are maintaining, if not cutting back, their restaurant outings.

"It becomes a market-share battle," Balzer said. "If you're going to somebody new, you're not going to somebody old. It's difficult to say whether the burger places are in trouble (over the long term) or not. They're the largest and the ones taking the hit in the market-share battle."

For all its difficulties, McDonald's remains the industry giant, dwarfing other fast-food chains in sales and number of restaurants as well as boasting the healthiest per-restaurant sales in the industry.

It reported $20 billion last year in U.S. sales, which include both -owned and franchised stores, compared with $8.5 billion for Burger King and $6.8 billion for Wendy's. And it posted a $1.6 billion profit.

Wendy's is opening more restaurants, however, and it's gaining market share. Wendy's also is moving to get in on emerging trends with Mexican Baja Fresh and Tim Hortons, a Canadian chain of coffee and baked-goods restaurants.

McDonald's, based in Oak Brook, Ill., has 30,000 restaurants worldwide, with 13,000 in the United States.

A Top Story in 2002:

The Shame of MSM Capital

$1.3 Million in “Advance Rentals” Not Returned?

by Christopher Menkin

http://two.leasingnews.org/images/shame%20on%20you%20%231.jpg

---- When asked if Mr. Cingari, former president of Colonial Pacific Leasing,

formerly with Pitney-Bowes, had anything he wanted to say, he told

us “no.” Asked if he wanted us to say he had “no comment,” he specifically told Leasing News not to state that. He requested we print he was “not available.”----

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

Around the end of last year, Leasing News started getting complaints for

the Bulletin Board that MSM Capital, Irvine, California was not returning “Advance Rentals.” Callers told us MSM would approve a lease in less than an hour, send out the documents, and take the check, but not fund leases. Officer Rob Pardini was mentioned often.

At first the officers Mike Cingari, formerly president of Colonial Pacific

Leasing in Oregon, and his “partner officer” Rob Pardini, denied it. It

was a mistake. (I still have all the e-mail responses from them.)

As the complaints piled up over the news few months, they started to “discover” alleged accounting errors, they told us, and in the beginning, Leasing News was successful in having “Advance Rentals” returned to applicants who contacted us.. We don’t

list on the Bulletin Board companies who return the money claimed. Both officers

of the corporation were becoming more difficult to reach. As we got more complaints, the MSM Capital telephone calls were not being returned and Leasing News was getting “stonewalled.” Readers will remember President Cingari’s comment: “Tell them I am not available.”

In May, the complaints became so numerous, they made it to the Leasing

News Bulletin Board. We found out we were no longer successful

in getting money returned, and evidently there were serious problems that

neither officer Cingari or Pardini wanted to admit. Up to this time, they

had been somewhat cooperative.

MSM Capital Corporation also known as NASBA Capital and MSM filed Chapter

7 Bankruptcy on July 31, 2002. The filing was accepted on August 1,2002

by the Clerk of the Central District, U.S. Bankruptcy Court.

During this time, ex-employees were winning past due salary and commission

claims from the previous year to almost $200,000. Leasing News printed their

stories, but it was not until we were able to obtain the over 100 page filing signed

by Michael Cingari, President, that we understood the “advance rental” game.

It appears over $1.3 million in “advance rentals” were not returned as documented

by 93 pages and 549 creditors. Not all are “deposits.” Perhaps 90 percent are. We called several of the creditors listed. They were located all over the country, mostly smaller

cities. The ones we contacted went back over a year, telling stories of signed leases, but no fundings. Creditor dollar numbers were $250, $494.58, $1,675.24, $4,536.08, $10,000, one $40,000 ( these were labeled deposits, but may have been vendor payments?) We did not verify all of them. We only sampled them, hearing stories of leases not funded. They are listed in the Chapter 7 filing as “deposits” owed to creditors. We actually don’t know the exact number of creditors with “deposit” as there is a mixture, nor did we verify they were all not “advance rentals” not returned. If

we were able to do this, we believe the dollar figure may be higher.

Labor claims were here, such as for salesman Ziya Arik, $75,000; Mark Bloom, $26,786.29; Jim Bowles, $28,855.46; Shawn Donahue, $25,381.53: $16,632.43;

Vishal Masani, $14,848.70; Mathew Swan, $27,041.00 ( there are others who

are pending, listed elsewhere in the filing. ).

Several “suppliers” are also listed, such as GE Capital/Colonial Pacific $135,000;

Centerpoint Financial Services, $23,081.76; Manifest, $8502.61;Business Insurance, $2,455; workman’s compensation insurance, $4,000. There is no estimate for personal property taxes (they stated “unknown,” evidently not paid,) sales tax, pensions or 401K plans. These are claims “to be made by the governmental agencies.”

There is no mention of “reps and warrants” on leases “discounted” or disputes

with funding sources, as perhaps they are “contingent liabilities.”

The reason the salesmen were not paid their commissions: it appears the corporation had spent the money to meet overhead.

The evidence: page 1, Statement of Affairs:

Income from operation of business:

Year to Date: $538,856 Lease fee income

Last Year: $3,912,459 Lease fee income

year before: $4,229,952 Lease fee income

The company evidently had no income to pay the salesmen for their commissions,

so they left. Claims and counter-claims were made, but the California

Labor Court to date has ruled in favor of the ex-employees, even in appeals.

MSM has lost every labor complaint. It appears the salesmen will never see

the money as assets listed are: accounts receivable, $405,000; office equipment

and furnishings, $400; and in debtor’s possession, office furniture, $250.00: total of $422,864. After attorney expenses, court costs, payments to the government for

taxes, and secured claims, you can see from the math there will be nothing left.

Who’s fault is it that the company filed Bankruptcy 7. After hearing

what appear as outright lies for over a year, it is obvious from the actual income statement filed, MSM Capital desperately needed “advance rentals” and the

salesmen’s commissions----The chapter 7 bankruptcy filing signed by President Michael Cingari gives every indication they had no means or intention of paying them.

It appears on July 25th the former president of MSM Capital, and Colonial Pacific

Leasing, Michael Cingari , with agent Grant Holstrom, formed “Crosswater Capital” in Southern California. 15615 Alton Parkway, Ste 175

Irvine, CA 92618 DNS shows: 4 Marquette Way Coto De Caza, CA 92679

(949)459-2129

Mr.Cingari was not available.

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

---------------------------------------------------------------------------------------------------

Monday Night Football

By Cam Inman

CONTRA COSTA TIMES

Throughout the past week, several 49ers maintained they weren't looking past tonight's game against the Rams, their longtime NFC West rivals.

"I'm concentrating on the Rams," 49ers wide receiver Tai Streets said. "They've had our number the last couple years."

Added 49ers center Jeremy Newberry: "From a standpoint that they're a rival, people will be up for this game."

The 49ers ended a six-game losing streak to the Rams with a 37-13 victory at Candlestick Park on Oct. 6. A win today would give the 49ers an undefeated record against NFC West teams, something they have done four times since 1970 (1984, '92, '94 and '97).

The 49ers perhaps will try pulling off that feat tonight by utilizing more reserves than regular starters, many of whom will be rested as a precaution for the playoffs.

Quarterback Jeff Garcia is expected to start for the 49ers before giving way to Tim Rattay, who's thrown only 25 passes in three seasons. Will tonight's appearance be enough to get Rattay playoff- ready?

"It's hard to tell. In the past three years, my only (extensive) action has been in the preseason, so I just don't know," Rattay said. "My job (tonight) is to be effective, not to light up the scoreboard."

As a result of this past weekend's games, the 49ers (10-5) finally settled into their playoff position as the NFC's No. 4 seed. They'll wrap up the regular season tonight in a virtually meaningless game against the host St. Louis Rams (6-9) before venturing into the postseason for the second straight year.

The Giants (10-6) will come into Candlestick Park on Sunday at 1:30 p.m. as the NFC's top wild-card team, not to mention the NFC's hottest club, having won its past four games.

The 49ers have won their past five meetings with the Giants, including a 16-13 triumph in the Sept. 5 league opener. The clubs have split their six postseason meetings, the most recent being a 44-3 rout by the 49ers in a 1993 divisional playoff game.

"They're playing very well," 49ers coach Steve Mariucci said Sunday night in a brief session with Bay Area media at the team's downtown hotel. "We thought they were good back then (in the season opener), and we think they're playing very well."

The Giants secured a wild-card berth Saturday with a 10-7 overtime win over the Philadelphia Eagles, who still earned home-field advantage throughout the playoffs with their 12-4 record.

Mariucci said he watched the Giants game on television Saturday, but that he missed most of Sunday's action while on the team flight to St. Louis for tonight's game, which remains his focus.

"I'm getting ready for this game," Mariucci said. "Our (assistant) coaches, they're preparing for the Giants. We'll get their last film and break it down (today). We've already got breakdowns of them on both sides of the ball. We'll look at their last game, put it in the computer and away we go."

Had the Tampa Bay Buccaneers (12-4) not defeated the Chicago Bears (4-12) on Sunday night, the 49ers could have earned the NFC's No. 3 seed with a victory tonight.

If the 49ers win their first-round game, they will have to travel to Philadelphia or Tampa Bay the following weekend. The only way the 49ers can host another playoff game after their first-round match is if they and the wild-card Atlanta Falcons (9-6-1) reach the NFC title game.

The 49ers clinched the NFC West title -- and an accompanying playoff berth -- three weeks ago with a Dec. 8 win at Dallas.

"I think we're an afterthought in the league, in the playoffs," 49ers consultant Bill Walsh said Friday. "People aren't talking about us. ... Obviously we're optimistic. There's going to be a real tough game in there somewhere. All of them could be tough, but there's going to be really one where we have to overcome the odds, and we'll be playing somewhere (on the road), if we win that first game."

Traditionally the toughest place to play in the postseason is Lambeau Field, home of the Green Bay Packers. Because the Packers lost 42-17 to the New York Jets on Sunday, the Packers went from a possible No. 1 seed to the No. 3 seed, meaning the 49ers can't visit them unless it's in the NFC title game. The 49ers lost 25-15 last season at Lambeau Field in a first-round game, and the Packers beat the host 49ers 20-14 two weeks ago.

(December 31, 1967- Playing in a wind chill of 40 degrees below zero, the Green Bay Packers won the National Football League championship game by defeating Tom Landry’s Dallas Cowboys, 21-17. The game, played at Lambeau Field in Green Bay, Wisconsin was called the Ice Bowl. During the game, the whistles of the referees actually froze to their lips. It turned out to be the coldest championship game ever.

Packers quarterback Bart Starr scored the winning touchdown on a quarterback sneak with 13 seconds left to play.

----------------------------------------------------------------------------------

NFL Playoff Glance

The Associated Press

Wild-card Playoffs

Saturday, Jan. 4

Indianapolis at N.Y. Jets, 4:30 p.m. (ABC)

Atlanta at Green Bay, 8 p.m. (ABC)

Sunday, Jan. 5

Cleveland at Pittsburgh, 1 p.m. (CBS)

N.Y. Giants at San Francisco, 4:30 p.m. (FOX)

Divisional Playoffs

Saturday, Jan. 11 and Sunday, Jan. 12

TBD at Tennessee

TBD at Oakland

TBD at Tampa Bay

TBD at Philadelphia

Conference Championships

Sunday, Jan. 19

AFC Championship and NFC

Championship

3 p.m. and 6:30 p.m.