February 15, 2001
LEASING NEWS 02/15/2001
to regularly receive Leasing News kitmenkin@leasing news.org
---also ON LINE ( to be posted soon ).
Sierra Cities/Amex---More Like Christmas!!!
Rodi Doesn't Take it Standing Down-----Hits Back
United Capital---Leasing News Would like to hear from Steve Dallas
( We have e-mail, phone messages to his cell phone, plus have
spoken to United Capital attorney to obtain a comment, verify
or deny the many broker complaints we are receiving.editor )
"Smartmoney" Expects Finova to Fold along with other large leasing companies )
" the truth is no one really knows how bad the credit-quality issues are
at the nation's banks ( leasing companies)."
"DowJones" Sees It the same way as "Smartmoeny" re: Finova
( "When Will the Bad News End???" )
Lyons Capital--Remembered ( List to be Corrected )
U.S.Capital, Santa Barbara--makes "Customer Complaint" List
Bay View Capital Reports fourth quarter 2000 net loss of $92.5 million
CIT Freezes Broker Business--But They Want the Fashion Industry:
7thOnline Provide Financial Services to the Fashion Industry via CIT
Sterling Bancorp Declares 221st Consecutive Quarterly Cash Dividend
Penske/Rollins Truck Merger Deal Gets Clearance
Not a Valentine Day Massacre! More Like Christmas!!!
First Sierra---Amex Merger
You have to be kidding. This is the best possible news I can think of.
What, exactly, is American Express buying? Are they buying
SierraCities' proprietary software? American Express already offers
leases to customers holding their corporate card., so I assume they have
their own software. Is American Express buying Sierra Cities' customer
list? How many of SierraCities' customers already have American Express'
corporate card? Is American Express buying SierraCities' lease
portfolio? As far as I am aware the portfolio has already been
As far as I am concerned SierraCities, far from becoming more formidable as
part of Amex, is in fact being taken "off the table." SierraCities has a
good group of inside sales people. Is Amex going to let them sell?
If not what do they have to sell?
I see this climate as being similar to the climate in 1997. In 1997, and
into 1998, all the small leasing companies were getting bought up by First
Sierra, UniCapital, and the other "roll ups," taking these lessors off the
table. It made it that much easier for new companies to get up with
funding sources that either might not have looked at a new company, or
would not have wanted to upset one of their existing brokers.
Far from being the St. Valentine's Day Massacre for leasing companies I
think it is more like Christmas.
+ + +
Regarding the First Sierra Purchase by American Express:
I don't think anyone needs to worry about AMEX. All you have to do is take a
look at what they did when they purchased Rockford Industries several years
ago. At the time, there were over 50 top leasing reps with solid vendor
relationships who were all producing big numbers. AMEX came in and tried to
turn leasing into a credit card process and all the reps left taking their
vendors with them. We have been very successful when competing against an
AMEX approval and I think anyone reading your newsletter will find what we
have found. They know credit cards, they don't know leasing.
+ + +
American Express' current attempts at small ticket leasing have been
very clumsy. It is very hard to get a quote from them and if you can the
rates haven't been anything special. Wasnt there a major overnight carrier
getting into leasing? I haven't run into them either. First Sierra aka
Sierracities' back room was never very impressive. The only deals I lost
were ones I tried to fund through FirstSierra. Bigger is not better and
there will be plenty of room below their radar for quality service at
competitive products. Bring it on!
Bank of Walnut Creek
+ + +
Knowing First Sierra has lost all of its legs over the past 12 months, I
find the "Massacre" theme comical. Which Baccarro wrote the piece? This is
still a viable market for all of us. Bring it on baby!!!Knowing First Sierra has lost all of
its legs over the past 12 months, I find the "Massacre" theme comical. Which Baccarro wrote the piece? This is still a viable market for all of us. Bring it on baby!!!
name with held
+ + +
I agree that money is tighter along with credit criteria in general. I also
agree that the strong brand name, ample cash, and customer base that
American Express enjoys is a competitive advantage. However, we compete
with AMEX now in several markets and have competed with BTOB in the past.
We have won and lost both deals and vendors from each.
You are correct that BTOB/AMEX will be a competitive force to be reckoned
with. They will be a player, but will not (in my opinion) provide the
proverbial straw breaking the brokers back. If brokers can still thrive in
the face of competitive giants like GE/Colonial and flash in the pans like
Bankvest, we'll still be around after BTOB/AMEX.
My point(s)... 1. Competition is a part of the industry, it keeps us
sharp. 2. Seasoned brokers have the tools to thrive in the face of even the
largest competitors. 3. I don't agree that this merger spells a massacre
for the broker, use it to enforce your existing relationships. 4. There is
a long journey between hype and facilitation (e.g. LeaseExchange,
Kit, my comments are global in scope and are/were not directed to how you
conduct business at American Leasing. Nor was my intention to "bury my head
in the sand". My intention was to provide a reinforcing viewpoint to the
many brokers receiving your newsletter.
Finally, Kudos to Mr. Depping for a strong comeback. Even if he is a
competitor, you've got to admire his business acumen.
Andrew S. Nere
Innovative Lease Services, Inc.
(800)438-1470 Ext. 216
+ + +
Is this not a similar press release that they came out with
when VerticalNet was going to buy them? At this point the deal is not inked
yet. Many things could happen before the close date. Although I must admit it
appears to be pretty firm at this point. The next question is if there will
be consolidation and where, which could result in the loss of key employees
and the ability to provide quality service.
name with held
( We print all comments. The press release was issued by American Express.
That is one major different than the VerticalNet. Another is the marketplace
squashed that deal. It was really never a good one, in my opinion. The
American Express makes a lot of sense, solid logic, and yes, I have lost
deals as a broker to UPS Leasing, American Express Leasing, Sierra Cities,
among others. The pie is smaller and any loss is a loss, even if one deal.
I am telling you to be prepared for stiffer competition from the surviving
leasing companies, brokers, and customers who are more rate conscious than
ever. Now is the time for relationship salesmanship. editor.
Hello, Steve Dallas. Leasing News Calling!
( We have e-mails, phone messages to his cell phone, plus have
spoken to United Capital attorney to obtain a comment, verify
or deny the many broker complaints we are receiving.editor )
Another Ex-United Capital Broker Complaint
When United Capital shut down it's broker operations, it cost us $4K to $5K
in unpaid commissions (by way of canceled checks). Not a lot of money by
any means - so we consider ourselves lucky.
We did not pursue this by legal means for 2 reasons:
1. we honestly wanted to see United come back from the dead and felt we
could absorb this opportunity cost with the idea they might make it up to us
if they survived.
2. if they did not make it, we would be wasting our time filing.
Now, it appears that they might make it - but at our expense.
If you are able to confirm that they are soliciting our lessee/vendor
database, please make it publicly known. At that time we will pursue United
Capital for these unpaid commissions by every legal means available.
Further, I invite other brokers to contact me so we can combine our efforts
Hopefully there are people at United who keep up with your newsletter and
might think twice if they see a grassfire starting. Then again, they might
While you, and almost everyone else, wants desperately to see a silver lining in at least one
leasing cloud, it is dangerous to interject you personal hopes when reporting a
conversation, in this case, the conversations with Steve Dallas. I remember
your comments asking readers to give Mr. Dallas the benefit of the doubt when
he claimed he was working hard to dig United out of the hole they were in.
As it turns out, apparently, he and his team were maneuvering to fund deals
behind the backs of his brokers. As things continue to deteriorate for
lenders and brokers, and they will I think, you might want to be extra
careful not to buy into the spin doctoring that you'll hear almost daily.
Finally, here's the bottom line on United: They have no lender, with Old
Kent Leasing Services exiting the market. Their last, best hope, at least at
this point in time, is to broker business through their retail company.
Name With Held
( Steve Dallas had a leasing company with his brother in Santa Clara, where we
are located. I tried to get them in the Chamber of Commerce, but they moved
to San Jose. I think his brother still runs a leasing company there. And yes,
I think Steve Dallas is remise in not actively doing "damage control." I am
sure he is not having a happy time, and I can tell when I call that his voice
box is full on his cellular telephone, meaning he probably doesn't have time
even return his wife's telephone calls. It appears things are getting "out
of his control" at United Capital. editor ).
In your list of demised leasing companies you show that Lyon Credit
Corporation was acquired by Hudson United Bancorp in September, 1999. I was
with Lyon Credit at the time of the sale. Hudson renamed Lyon Credit
Corporation as "United Capital, A Division of Hudson United Bank". (Not to
be confused with the Steve Dallas United Capital operation located in
Operations continued normally as "United Capital" until June 2000 when the
bank demanded that United cut its overhead. United did that by laying off
all of the personnel in its Irvine, California and Atlanta, Georgia regional
offices on August 4, 2000. The Dallas office, where I was located, was to
remain open until October 27, 2000. However, the company offered a severance
package to any Dallas personnel who wanted to leave early. Come August 7 and
it was only myself and my region manager (who was responsible for marketing)
left in Dallas and one person who also stayed on in Atlanta to handle the
I left the company October 27. My region manager left in January, 2001 and
the fellow in Atlanta left the company February 9, 2001. The company
president (and founder of Lyon Credit Corporation), John Bowes, left the
company February 2, 2001.
The remaining corporate staff from the Stamford United Capital headquarters
moved into one of Hudson United Bank's office buildings in Westport,
Connecticut at the end of January of this year.
>From what I hear, the bank is now trying to force the remainder of the
executive staff to resign and is trying to renege on the balance of their
employment contracts, which have about two years to run. One EVP, as I
understand it, was offered six months severance (vs. the 24 that would be
due under the contract) and the rest of the corporate clerical staff, not
covered by an employment contract, if and when they are let go, will not get
the more lucrative severance package myself and others received (three
months) but rather the bank's severance package of one week for each year of
Although the company technically is still in business, they have not
accepted any new business since last August, they honored existing
commitments through December 31, 2000 and the remaining few personnel are
running off the portfolio at the present time.
I'd say, "Stick a fork in 'em; they're done."
And, as Paul Harvey says, "That's the rest of the story."
Ronald J. Brodt
National Equipment Capital
One item in your Today In history section that was left out.
( Did not mean to overlook Arizona, especially since you now will
have a new stadium for Cardinals. editor ).
Rodi Doesn't Take it Standing Down-----
Dear Mr. Goodman,
I sincerely doubt that I would ever have to worry about "outselling" you.
I'm fairly certain that my customers don't travel anywhere near the same
circles that yours do. You are right about one thing, however. My
customers don't care about customer service because when they deal with our
company it's a given. You are also the one who's lost touch with reality.
If "price" were the only issue those dot.com companies would have had a much
more prosperous run. Their entire business plan revolved around getting the
lowest price. We all now know how effective that strategy was.
With respect to my tenure as the UAEL president it is now obvious to me that
you harbor some bad feelings toward me since I emphatically declined to let
you teach your fee income "tactics" to the UAEL membership. Sorry Mr.
Goodman, but I'm one of those "holier than thou" types that actually
believes in the UAEL standards, and I'm damn proud of it. We do our best to
operate within the context of those standards. You don't think that would
have anything to do with the fact that we've prospered somewhat in this
industry, do you?
By the way, when my bank recently began collecting a "fee" for a service
they performed, we were notified as to the nature of the fee, why it was
being added, and the amount of the fee. The explanation and reason made
sense therefore I had no quarrel with it. It was all above board and yes,
it was done in an ethical, up front manner. It's fairly obvious from your
comments that you would prefer to generate fee income in whatever
clandestine manner you can fabricate. If the customer complains or refuses
to pay it, then you can employ "scare" tactics and threaten them with
I dare say Mr. Goodman, that you are a dinosaur in this industry. As such it
won't be long until your species is totally extinct. Incidentally, I think
you spelled "guerilla" wrong. You meant "Gorilla", didn't you?
no dates on these changes:
We keep reducing this list, thanks to readers. Anyone who has approximate
dates on these changes, please let us know.
American Business Leasing ( gone )
The Bancorp Group, Inc. (Southfield, MI) (Not accepting news business. The BOD of the parent bank is assessing what to do with the leasing subsidiary.....currently servicing portfolio
but not originating. no longer in business )
Imperial Credit Industries (ICII) ( sold portfolio )
Merit Leasing ( gone )
Prime Leasing, Minnesota ( no longer doing business )
Up-Date to our Bulletin Board: Customer Complaints
( We have received many complaints from many brokers and super brokers about
this company. This is only one of the many we have received. editor ).
U.S. Capital, Santa Barbara, California 2/14/2001
A short while ago JDR Capital Corporation received a faxed communication from U.S. Capital
Corporation of Santa Barbara, California in which the latter was informing the leasing community of a new program it was offering. In its correspondence it described a leasing line of 30
million dollars which it was offering to brokers to fund their leases. It included full details
as to credit criteria and rates.
For a period of years prior to the receipt of the aforesaid fax JDR had received a great deal
of business from U.S. Capital. Its representative, Ken Nelson, never demonstrated any cause for
concern. When the fax arrived, updated due diligence was performed which also did not indicate
any cause for concern. Consequently, JDR offered the program to its customers.
Not long after JDR received numerous approvals and, in some cases, had documents prepared and
forwarded to U. S. Capital for funding, U. S. Capital and Ken Nelson appeared to drop off the
face of the Earth. Although we were able to leave voice-mail messages we had no success in
speaking to a live person. We received no return phone calls or any other communication. As
quickly as possible we notified our broker customers that a problem appeared to exist and we
suggested that they try to get their deal funded elsewhere. As we have many other funders we are in the process of attempting to find alternative financing for those transactions
In the last week or so we have received numerous calls from other super brokers and brokers that are experiencing an identical problem with U.S. Capital. It seems that they have created a very
widespread problem in a very short period of time. We are sure that there are a great many
brokers and/or vendors that have been affected by this. The leasing community should be aware of the problem. As to JDR we are doing our best to assist those that we dealt with.
If you desire further information please feel free to contact me.
Very truly yours,
note: Please do not confuse Lease Capital, Inc of Alabama, Bo Bohannon, with Lease Capital,
California, Martin Baraeske. They are not affiliated
----Lease Capital---Martin Bareske Complaint
This came to us originally as a complaint on November 28 for the Leasing News Bulletin Board.
You responded by e-mail on several occasions, the last being December 2, that the funds would be returned. Here it is 13 days later, and according to lessee, the money has not been returned.
Here is what Keith Ahearn as to say.
They are again asking me to post this, from very beginning, and I would like to know if there is anything new you would like to add before posting this on LeasingNews, which we will do after
January 2 as 30 days from your promise date is a reasonable period of time.
I would like to inform you of the status of my failed sales / leaseback commitment with Mr.
Barteske. I realize that Sheila has been corresponding and has informed you of all of the lies
and misdirection that Lease Capital has done. Realizing that not doing the proper research
caused the majority of my problems. When I was contacted by Mr. Barteske, on the footer of his
fax was , Member of the NAELB and even the last fax received still has it . Below this is the
Better Business Bureau of So. Cal.
Atleast when you pull them up on their web site they inform you that doing business with Lease
Capital is pretty risky. As of this date I have not received the $3,825.00 and it looks like I
never will. Meanwhile I watch my business slowly slipping away, not just from the loss of
revenue but from losing 6 weeks of valuable time. Most of my vendors have had enough of waiting
for me to find the funding necessary to continue on. I'm getting close to losing every thing
i've worked for and pretty much lost hope. I don't intend on this letter to sound like I'm
crying the blues, quite the contrary. It's a shame that a piece of "work" like Barteske can
topple small business owners with cash flow problems so easily while riding on the coattails of
brokers who work hard at their profession.
Precision Diagnostics Plus Inc.
Kit, As of today, Jan 6, 2001, We have not heard or received any of the money that we were
supposed to have returned to us from Mr. Barteske. He last told us that he was looking into the
situation and would let us know something, but we have not heard a thing. He can write a good
letter when he needs to cover his butt, but when it comes down to it he just a bunch of lies and excuses.
NAELB Expels Lease Capital Corporation/Principal Martin J. Barteske
( PLEASE PLACE A NOTE IN YOUR LETTER THAT LEASE CAPITAL, INC OF ALABAMA , BO BOHANNON PAST BOARD MEMBER AND VICE-PRESIDENT OF NAELB, IS IN GOOD STANDING WITH NAELB AND IS NOT AFFILIATED WITH
LEASE CAPITAL OF CALFORNIA .
BO BOHANNON, PRESIDENT )
Martin Barteske, CEO
20902 Brookhurst Street, Suite 204,
Huntington Beach, CA 92646-6637
Toll Free Phone: (866) 836-5600 (866) 964-8350
Toll Free Fax: (866) 834-5600 (800) 964-2140
www.LeaseCapital.net / firstname.lastname@example.org
TO: ALL MEMBERS OF THE NAELB
FR: JOE BONANNO, ESQ., NAELB LEGAL COUNSEL
DT: NOVEMBER 15, 2000
To All Members of the NAELB:
This correspondence is to advise all members of the NAELB that the Board of Directors, in
conjunction with the NAELB Ethics Program, has taken action against a member of the NAELB. The
Board of Directors takes this action after there is a process of a complaint being filed against a member, a response process taking place, a review by the NAELB Ethics Committee and a referral by the NAELB Ethics Committee to the Board of Directors. Therefore, this is a process whereby
there is ample time for the resolution of the matter, review by multiple individuals and finally a review by the Board of Directors. Every benefit of the doubt is extended to the parties
involved and there is a specific procedure that is followed along the way.
A matter that did reach the Board of Directors involving a company called Lease Capital
Corporation located at 20902 Brookhurst Street, Huntington Beach, CA of which an individual
known as Martin J. Barteske is the principal. The Board of Directors, in accordance with the
Ethics Procedure voted in place by the voting membership of the NAELB, has voted to expel Lease
Capital Corporation from membership in the NAELB effective immediately.
As always, the NAELB encourages our members to conduct business with members and in the event
there is difficulty between members, the NAELB can attempt to resolve the matter or in the
extreme case, expel a member from membership.
We at the NAELB are hopeful that our members find the ethics program to be a great member
( We had a posting regarding an incident with Lease Capital Corporation and Martin Barteske with much documentation, but believe we were successful and the sender asked us to withhold the
information. Much of the "complaints" we get are settled by others, such as the National
Association of Equipment Lease Brokers. The $295 membership fee is the lowest in the industry
and you not only get help such as above, but the naelb post, ability to instantly contact fellow members on line for help in finding a source, or answering a question, is worth much more than
the membership fee, believe me. Having access to both Barry Marks and Joseph Bonnano---that's
priceless. www.naelb.org.----editor )
FMC Leasing Confirms Gibraltor Financial Complaint 10/05/2000
I don't doubt Paul Von Bruck's story regarding Gibraltar Financial. We have had a similar
experience. They accepted up front lease payments and then declined the deal. They then refused
to return the payments with the justification that they had to work on the deal; therefore, they had earned the money. There is no up front disclosure. We only became aware of their questionable
practices after they had accepted funds.
I'm sure this won't be the last email you'll receive regarding Gibraltar.
FMC Leasing Corp
Gibraltor Financial Complaint 10/04
We brokered a transaction to Gibraltar Financial recently and suffered serious problems. It
started when they requested we obtain a signed commitment letter. We did. Cliff Wagner, Beth,
Donna and Todd told me they were funding the deal. This was a lie. No big deal however as long
as the deal get's done. Our customer then received a letter from Ford saying they were declined. Given Gibraltar's good standing among the various leasing organizations(UAEL etc..), I gave
them the benefit of the doubt. They stated, we have someone who will do this deal. We delayed
the vendor and lessee for 75 days as we received the same statement over and over from Cliff,
Beth, Donna and Todd. Then they stopped returning calls from us the vendor and lessee. After
dozens of calls Cliff finally informed me that they "could not get the deal done". We
immediately requested a return of the customers commitment fee. We overnighted our portion(2k).
We felt so sorry for this guy we could do no less. It has now been 135 days apx. 60 apx days
since the decline. When I contacted Cliff and asked why he had not returned the deposit, he
stated "Oh, I forgot about that. I'll get it taken care of." 20 days later I got a call from the vendor's Attorney. They are threatening us since we put the deal together and since Gibraltar
will not return their calls. (The vendor and lessee have known of Gibraltor through the whole
deal) So I called Cliff again. He stated, " Oh wow, they are still pursuing this, I'll get there money out ASAP." 30+ days later nothing has been sent. Cliff Wagner refuses to return any calls.
Every time we call, he is on the line. They must have a call identifier. This assumption is
backed by some evidence. He refuses to return messages. Based upon his comment "they (the
lessee) are still pursuing this?" as if he is confused why a customer would want their $5,000
back, I believe Gibraltar wants to keep this person's money. If any of you can help this lessee
with a lease feel! free.
I thought they were reasonably solid. They are called Cap of MB out of South Carolina. My number is 888-468-5822 x 208 Paul von Bruck Capital Funding Group.
P.S: I have Gibraltor's messages saved on our message machine if any of you doubt this message
BSB Leasing Complaint
Hello Kit - After reading your note from BSB LEASING, I found myself unable to sit still and not submit this to you. At this moment I do not desire to get this too complicated ~ however, I do
wish to put on record in your newsletter, that some folks in the leasing industry speak from
several sides of their mouth. I have worked hard to quietly maintain dignity, integrity and
decorum in this industry since I started in it in 1979. Over the last two years, I have had
clients contacted directly by BSB LEASING in Denver, and other 'competitors' salespersons or
account persons or whatever politically correct title they wish to have assigned to them - In
any event, MY clients have been told, upon being telephoned by before mentioned competitors that LJR LEASING was "OUT OF BUSINESS" when my dear clientele inquired of my where-abouts. And, by
the way, these competitors somehow managed to access private client data from some of the
largest DIRECT LENDERS there are. Just wanted to make myself heard.
Lori Reicheg -
We have never had Lori or LJR Leasing as a broker with BSB Leasing. I challenge her to show how
we could have contacted her customers when we have never dealt with her. We do have in house
sales people that compete for business with the leasing world but our broker side acts as a
separate unit and no information is shared. If she did do business with us she would know how
honorable a company BSB Leasing is. Please feel free to give her my phone number. I would be
more than happy to talk with her about it. We have been in business for close to 20 years,
funded almost 400 million dollars in
leases, dealt with almost 400 brokers, if we were stealing brokers customers I think it would
have surfaced by now at NAELB or UAEL. If you check the record we have never had a single
complaint in our history.
I have never been a broker that used BSB or any other source to fund a transaction. I have been
a DIRECT BROKER since 1979. In 1998 I was forwarded a letter from a client who had been
contacted weekly by telephone after receiving a letter from BSB Leasing. That letter was
forwarded to Stephanie Desparois at GE Capital/Colonial Pacific Leasing. The letter said
something to the effect of "BSB is now the designated leasing source for COLONIAL PACIFIC
LEASING CORP". My client was told by whomever from BSB then began a weekly telephone
solicitation, that LJR was either out of business or likely out of business. That particular
letter was the beginning of a rather nasty and unpleasant series of events at GE/CPLC for me,
where I had been a DIRECT BROKER since 1983 with an OUTSTANDING portfolio w/under 1%
delinquency. In addition to BSB, another 'source' in Southern California named Alliance Funding
managed to access my Client Portfolio information maintained at CPLC - and began an extensive
and exhausting solicitation of my clientele - so much so that I was again told by Ms Desparois
that they were also sent a "Cease & Desist" letter - this information was told to me by Ms
Desparois as instructed by Curt Lysne.
The 'challenge' from Mr Zwillinger will not be responded to. It is a nasty 'game' that is played in an industry that is unregulated and unchallenged, and I have never, nor will I ever
participate in the play. Since around the time of the buy-out of CPLC from Pitney Bowes by GE
there has been a great deal of unprofessional activity and behavior. Perhaps it started by
unscrupulous activity 'on the inside' for financial gain. I have as I stated, maintained a quiet dignity about the manner in which I have provided my service. My vendors and clients, tho fewer
in number than BSB I'm sure, have remained loyal to my service thru these nearly 17 years,
knowing that I did not engage in the oft-engaged practice of deception or other abominable
behavior to earn my living.
Leasing Network Purchase Option Problems
Notice: Received reports from three brokers now about leases they put together through network
group to funding source has fmv not 10% purchase options. Disputes trying to be resolved. Any
broker experiencing the same, please notify Leasingnews.org. All information will be kept
confidential and will not be published without your specific permission.
Universal Capital Services
Kit, my company, Citation Financial Group located in Fair Oaks, CA (Sacramento) is one of the
companies having a problem with Universal Capital Services. They have not returned a Lessee's
advance payment nor have they paid us our commisssion on a brokered transaction. I have sent
documents to the
NALEB attorney, who is following up on our complaint with UCS. We have also contacted a
collection attorney in Florida. If you know of others who have been wronged by these people,
please have them contact me. If you want all of the details I will be happy to e-mail them to
you. We need to stop co
mpanies who make a bad name for the industry.
Citation Financial Group
Bruce Zwillinger, BSB, cuts off Universal Capital Service
Bruce Zwillinger, BSB, cuts off Universal Capital Service, Springhill, Florida informs NAELB of
their action. This company not returning money to lessee from deal funding by BSB. Many attempts to get money returned to lessee, but many broker promises by Universal Capital Service.
Universal Capital Services
Source states Universal Capital Services, Springhill, Florida, took up-front fees on deal and
has not returned to lessee. Lessee is complaining to funding source. This is the third complaint received on this. Source is trying to find out more and request this be posted on bulletin
board. Source will allow us to state name, if this is not resolved.
$25,000 SD $29,000 first and last three months did not return money Parker Leasing and
Financing, Ft. Lauderdale, Florida no web site, no district attorney complaints, advised to pull a D&B, find out who the secured parties are and if I can identify them, will give them the
person to call at the funding source to hear the full story about what is happening. Parker
Leasing and Financing refuses to return commitment fee and first and last.
Dodson Group - Delivery Charge
We had been using the Dodson Group for overnight (Airborne) until recently. They were charging
us $8.75 per overnight (their cost to Airborne is $7.61, who cares, they deserve a profit). But, in auditing our bills for the last 2 years we kept noticing that we were being repeatedly
charged $12.00 to $18.75 for overnight on about 1/3 to 1/2 of the over nights. Initially, Dodson claimed "overweight", so we researched further and discovered that most of the overcharges were
on checks going out overnight to vendors and brokers - no way this could be "overweight". For
the past year we have faxed and called Dodson repeatedly to get corrected invoices - no one
would even respond! So, we put them on notice that we would not pay any more invoices until they corrected their over billing problem - they never did. Their response was to turn us over to a
collection agency! We are convinced they purposely overcharged us, and probably every other
client! Dodson does a lot of biz with NAELB brokers, don't these brokers need to know about
Dodson's policy of quoting one price and charging another?
Universal Finance / Universal Manufacturing
Avoid this company like the plague. I believe that if it is the same one they also run companies under the name(s) Universal Manufacturing -(Vendor) & Universal Finance (Credit repair company). I'll look up the e-mail I received on this a while back. I think what the story was is that
Universal Capital would submit a deal to funding source, then if declined due to personal
credit, Universal Finance would repair credit then resubmit elsewhere. The vendor would be
Universal Manufacturing who would sell $2,000 computers for $40,000 invoice (just under F/S
disclosure). Then they split excess with lessee. Though I'm not sure about the Florida part.
I'll get back with the additional info ASAP.
Do you know anything about Univerasl Capital Services, Inc., in Spring Hill, Florida 34606. One
of the lease brokers I work with is having trouble getting paid on a deal. He thinks the company is owned by Jim and Anita Koper. Please let me know if you hear anything. Thanks.
Metropolitan Mortgage and Sec in Washington had a division that funded the lesser credits. Well
they have stopped and are not honoring their approvals if they don't already have signed docs.
This was told to me by a broker in Arizona who has 10 deals sitting with them and she is now
scrambling to replace them.
Bay View Capital Corporation Announces Fourth Quarter Results
SAN MATEO, Calif., Feb. 14 /PRNewswire/ -- Bay View Capital Corporation (NYSE: BVC) (the
"Company") today reported a fourth quarter 2000 net loss of $92.5 million, or $2.83 per share,
as compared to a net loss of $234.5 million, or $7.18 per share, for the third quarter of 2000
and net income of $5.3 million, or $0.19 per share, for the fourth quarter of 1999.
Bay View took further steps during the fourth quarter to restructure its balance sheet and
position itself for 2001. Fourth quarter pre-tax results included $59.4 million in charges
associated with the revaluation of franchise-related assets, $52.1 million in net losses
associated with asset sales, and $32.1 million of additional loan loss provision related
primarily to franchise loans. The revaluation included a $50.7 million mark-to-market valuation
adjustment on the Company's $379.4 million portfolio of franchise loans classified as
held-for-sale, reflecting conservative bulk-sale pricing. The revaluation also included $8.7
million in adjustments to other franchise-related assets. Net losses on asset sales included a
previously announced $26.4 million loss on the sale of $256.4 million of low-yielding
franchise-related asset-backed securities and an $18.2 million loss related to the sale of
$244.0 million of high loan-to-value home equity loans. In December, the Company also sold
$232.3 million of lower-yielding fixed-rate mortgage-backed securities. During 2001, the Company recognized $10 million in gains relating to the December sales of asset-backed securities and
high loan-to-value home equity loans.
"Although 2000 was a very difficult year, we are optimistic about the future of our core
businesses, led by the continued strength of our deposit franchise," said Edward H. Sondker, Bay View's President and Chief Executive Officer. "After shutting down our franchise lending
division last quarter, our focus this quarter was on restructuring our balance sheet. Our
actions during the fourth quarter have substantially reduced our exposure to franchise and high
loan-to-value home equity asset concentrations. These actions should also enhance our
marketability as we continue to pursue our strategic options."
Bay View's retail deposits grew $68 million during the quarter, reflecting the continued
strength of Bay View Bank's deposit franchise. Wholesale borrowings, including brokered
certificates of deposit, were reduced by $656 million from the prior quarter-end. The increase
in retail deposits was primarily related to the Company's marketing and promotional efforts.
These deposits are a significantly lower-cost funding source relative to wholesale borrowings.
Bay View remains committed to expanding its deposit base by growing both consumer and business
accounts and building on the success of its internet banking program.
Loan originations totaled $168.6 million for the quarter. Originations of retail loans were
$90.5 million while originations of commercial loans were $78.1 million. These originations were more than offset by loan sales totaling $433.9 million during the fourth quarter, including the
sale of $95.9 million of franchise loans, the aforementioned sale of $244.0 million of high
loan-to-value home equity loans, $49.1 million of auto loans, and $44.9 million of
lower-yielding single-family mortgage loans. Although these loan sales reduced the Company's
credit risk profile and generated regulatory capital, they also reduced net interest income.
The Company's net interest income and net interest margin for the fourth quarter of 2000 were
$37.4 million and 2.95%, as compared to $41.7 million and 3.09% for the prior quarter.
Normalized net interest margin, which the Company defines as net interest margin adjusted to
include the net rental income from its auto leasing activities and the expenses related to its
Capital Securities, was 3.21% as compared to 3.32% for the previous quarter. The decrease in net interest income was primarily due to lower average interest-earning asset balances. The Company
expects its net interest margin to improve during 2001 reflecting the benefits associated with
the recent sales of lower-yielding assets, anticipated declines in market interest rates, and
further reductions in wholesale borrowings.
"Our efforts during 2001 will continue to focus on selling our remaining held-for-sale franchise loan portfolio," commented Mark E. Lefanowicz, Executive Vice President and Chief Financial
Officer. "We are encouraged by the sale of over $95 million in franchise loans during the fourth quarter at no significant gain or loss. We currently have multiple parties looking at a
substantial portion of the remaining held-for-sale portfolio."
Credit quality continued to be impacted by the performance of franchise loans, which is evident
when comparing the Company's credit quality statistics with and without its franchise lending
activities. Various sectors of the franchise market have been impacted by market pressures,
specifically certain fast food restaurant brands. Nonperforming assets were $101.7 million at
December 31, 2000 as compared with $48.8 million at September 30, 2000. Loans and leases
delinquent 60 days or more at December 31, 2000 were $84.8 million as compared with $34.8
million at September 30, 2000. Net charge-offs as a percentage of average loans and leases
improved to 0.31% for the fourth quarter as compared with 1.29% for the third quarter.
Nonperforming assets excluding franchise-related assets were $17.5 million as compared with
$15.9 million for the prior quarter, while non-franchise delinquencies were $23.3 million as
compared with $23.5 million for the prior quarter. In addition, nonperforming assets included
approximately $23 million of franchise loans that are technically performing as agreed but
require classification as nonperforming assets according to regulatory guidelines. During the
course of this past year, the Company was able to cure over $48 million of classified franchise
assets and nearly $32 million of nonperforming franchise assets at no loss to the Company. The
only charge-off the Company has incurred since its 1999 acquisition of Franchise Mortgage
Acceptance Company was a $7.9 million write-down of non-franchise funeral home loans. Otherwise, the Company has had net recoveries on franchise loans. Despite this, the Company has reserves
totaling approximately 10% of its franchise loan portfolio classified as held-for-investment.
Excluding net losses on sales of assets, noninterest income was $32.8 million for both the third and fourth quarters of 2000. During the fourth quarter, increases in loan fees and charges and
loan servicing income were offset by lower income related to auto leases, which the Company
ceased purchasing in June 2000.
General and administrative expenses were $35.7 million for the fourth quarter of 2000 as
compared with $38.8 million for the third quarter of 2000. The decrease in general and
administrative expenses from the prior quarter was primarily due to the impact of the shutdown
of the franchise production unit as of September 30, 2000. This was partially offset by higher
professional and legal fees as the Company continues to explore its strategic options, as well
as higher marketing expenses related primarily to its deposit franchise.
During the fourth quarter, the Company established a $26 million valuation allowance against
approximately $68 million in net deferred tax assets generated in the fourth quarter, a
significant portion of which represents net operating loss carryforwards.
Liquidity & Regulatory Capital -- At December 31, 2000, Bay View Bank had liquidity levels with
cash and overnight deposits in excess of $700 million, representing over 20% of total retail
deposits. Further, the Bank's regulatory capital continued to meet the minimum regulatory
requirements to be deemed adequately capitalized at December 31, 2000. As previously announced,
the Company and Bay View Bank have filed capital plans pursuant to the terms of regulatory
agreements. The Company is currently in the process of updating these plans to reflect fourth
As of December 31, 2000, the Parent Company had approximately $11 million in cash and cash
equivalents. This cash, combined with earnings generated from the Parent Company's
interest-earning assets, continues to be sufficient to service the Parent Company's debt.
Although Bay View again deferred the dividend on its Capital Securities (NYSE: BVS) and cannot
predict when regulatory approval will be obtained for payment.
Bay View Capital Corporation is a diversified financial services company. The Company's
principal subsidiary is Bay View Bank, a nationally chartered commercial bank which is the
largest deposit franchise exclusively serving the San Francisco Bay Area with 57 full service
branches. Bay View offers a full array of retail and commercial banking products and services to customers throughout the nation.
This press release contains forward-looking statements which describe the Company's future
plans, strategies and expectations. All forward-looking statements are based on assumptions and
involve risks and uncertainties, many of which are beyond the Company's control and which may
cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Factors that might affect forward-looking statements include, among
-- the demand for the Company's products;
-- actions taken by the Company's competitors;
-- tax rate changes, new tax laws and revised tax law interpretations;
-- adverse changes occurring in the securities markets;
-- inflation and changes in prevailing interest rates that reduce margins
or the fair value of the financial instruments held;
-- economic or business conditions, either nationally or in the Company's
market areas, that are worse than expected;
-- legislative or regulatory changes that adversely affect the Company's
-- the inability to sell or securitize assets;
-- the timing, impact and other uncertainties of asset sales or
acquisitions and the Company's success or failure in the integration of
-- the ability to enter new geographic and product markets successfully
and capitalize on growth opportunities;
-- technological changes that are more difficult or expensive than
-- increases in delinquencies and defaults by borrowers and other loan
-- increases in the provision for losses on loans and leases;
-- the inability to sustain or improve the performance of subsidiaries;
-- the inability to achieve the financial goals in the Company's strategic
plans, including any financial goals related to both contemplated and
consummated asset sales or acquisitions;
-- the outcome of lawsuits or regulatory disputes;
-- credit and other risks of lending, leasing and investment activities;
-- the inability to use net operating loss carryforwards currently held by
As a result of the above, the Company cannot assure that future results of operations or
financial condition or any other matters will be consistent with those presented in any
forward-looking statements. Accordingly, the Company cautions you not to rely on these
forward-looking statements. The Company does not undertake, and specifically disclaims any
obligation, to update these forward-looking statements, which speak only as of the date made.
Sterling Bancorp Declares 221st Consecutive Quarterly Cash Dividend
NEW YORK, Feb. 15 /PRNewswire/ -- Sterling Bancorp (NYSE: STL), parent company of Sterling
National Bank, today declared a quarterly dividend of $0.16 per common share, payable March 31,
2001, to shareholders of record on March 15, 2001. The dividend is the 221st consecutive
quarterly cash dividend paid by the Company and its predecessors since it became a public
Sterling Bancorp (NYSE: STL) is a financial holding company with assets of $1.3 billion,
offering a full range of banking and financial services products. Its principal banking
subsidiary is Sterling National Bank, founded in 1929. Sterling provides a wide range of
products and services, including commercial lending, asset-based financing, factoring/accounts
receivable management, international trade financing, commercial and residential mortgage
lending, equipment leasing, trust and estate administration and investment management services.
Sterling has operations in the metropolitan New York area, as well as Virginia and other
mid-Atlantic states and conducts business throughout the U.S. More information is available on
the company's Website, http://www.sterlingbancorp.com.
Moody's Expects Finova to File for Bankruptcy
By Matthew Goldstein, Smartmoney.Com
As if a slumping economy wasn't bad enough, bankers are getting awfully jittery these days about little-known Finova Group, an Arizona-based financial-services company that specializes in
lending to midsize companies.
Why the anxiety? Moody's Investors Service, the credit-rating agency, expects Finova to file for bankruptcy any day now in order to restructure or eliminate the estimated $11 billion in debt it owes to banks, bondholders and other creditors. If that were to occur, it would be one of the
biggest debt restructurings ever. And the fallout could spell trouble for the banking industry,
since nearly $4.7 billion of the debt is in the form of bank loans. That isn't nearly enough to
cause problems for the banking system all by itself, but it underscores the nasty problems
lenders are faced with these days.
It's difficult to determine which banks are on the hook. Multimillion-dollar commercial loans
like the ones made to Finova are often "syndicated," meaning several banks buy a portion of the
loan in order to spread the risk of a default. But experts say the banks that originated these
massive loans are the ones most likely to carry the highest percentage of Finova's bank debt in
their portfolios. Assuming that's true, the list of suspects is a Who's Who of the nation's
biggest banks: Wells Fargo, Bank of America, Bank One, First Union, Citigroup's Citibank, J.P.
Morgan Chase and FleetBoston Financial's Fleet Bank, according to industry analysts and Loan
Pricing, a research firm.
Creditors usually get paid something when their customers go bankrupt, but sometimes it's just
pennies on the dollar. And when banks are the ones left holding the bag, they usually write off
the uncollected portion of the loan - an event that results in a charge against earnings. For
instance, Wells Fargo recently classified a $122 million commercial loan - believed by some to
belong to Finova - as a bad, or nonperforming, loan. (Wells Fargo, which declined to comment on
the situation, hasn't yet taken a charge on the loan.) Needless to say, the more bad debts a
bank has in its portfolio, the more hits it'll have to take against earnings.
Perhaps the most alarming aspect of the Finova situation is how fast things careened out of
control. In the first nine months of last year, the dollar value of its bad loans rose nearly
140%, to $421 million. (Finova has yet to report financial results for its last fiscal quarter.)
The list of losers includes a $117 million loan to Sunterra, a bankrupt time-share resort
company; a $31.7 million loan to an unnamed wireless-messaging company; and loans to the
now-defunct airline Tower Air.
Finova went to sleep in Wall Street's penthouse and woke up in its doghouse. In the early years
after it went public in 1992, the company wowed analysts with its fast growth and dependable
earnings results. The firm's assets - loans under management - grew from just over $2 billion in 1992 to $14 billion in 2000, as it became an important lender to midsize businesses.
But all the goodwill Finova had built up on the Street began unraveling after the company made a series of stunning announcements last March. With little warning, it announced it was writing
off a $70 million loan to an unnamed computer distributor and was taking a big charge against
earnings. It also announced the hasty and unexpected retirement of longtime Chief Executive
The analysts were surprised, to put it mildly. A formerly fawning Robertson Stephens analyst
responded by saying, "a loss of this magnitude must force investors to question the company's
overall credit quality." A year ago, more than a dozen analysts followed the company; now
there's just one.
The company's stock, meanwhile, has taken a year-long pounding, falling from around $32 on March 24, 2000 to just $1.14 on Feb. 14. Shareholders are hopping mad. A class-action suit filed in
federal court in Arizona alleges that Finova's management concealed the $70 million bad loan as
long as possible, and identifies the defaulting borrower as Supercom, a privately owned
California computer company. (Finova has never publicly named the borrower.) Meanwhile, value
investors and workout artists are squabbling over the remains. There's now a complex battle
underway for control of Finova that involves GE Capital, Goldman Sachs and Warren Buffett, among others.
While there's no reason to believe there's a minefield of Finovas out there, the truth is no one really knows how bad the credit-quality issues are at the nation's banks. Ruchi Madan, a banking analyst at Salomon Smith Barney, estimates that some $51 billion in problematic loans sits in
the portfolios of the nation's big banks. Of course, not all those loans will fall into the
nonperforming category. And some banks - like Bank of America - have more problems than others.
Like most banking analysts, Madan predicts the bad-loan problem is a manageable one now that the Federal Reserve is cutting interest rates.
But that prediction relies on a couple of assumptions - that the economy won't slip into
recession despite the Fed's actions, and that there aren't a lot of other Finovas out there
getting ready to blow up in their lenders' faces. It's probably a safe bet - but the suddenness
with which Finova crumbled shows it's far from a sure one.
Are you a bargain hunter with a taste for the unusual? If so, you may want to check out "The
Finova Store." On Finova's Web site, shoppers can buy assets that Finova has taken from some of
its borrowers who've defaulted on their loans. There's some unusual stuff there you can make a
bid on. Are you in the market for a jumbo jet? Well, Finova has a bunch of them.
How about some lodging? Finova has a 179-room hotel in Texas for sale.
Best of all, Finova says prices are negotiable.
Finova Parties Get Organized as Bankruptcy Looms
By Joe Niedzielski, Dow Jones Newswires
Finova Group's bondholders, lenders and equity investors are getting organized as the
Scottsdale, AZ-based financial services firm attempts to restructure its huge debt load.
The parties' discussions thus far are said to be informal. And according to a lawyer
representing bondholders and shareholder documents filed with the Securities and Exchange
Commission, neither the bondholders nor an ad hoc committee of equity holders are currently in
possession of nonpublic information about the company.
But the organization of the various interests in recent weeks underscores the dire nature of
Finova's financial condition. Several analysts who follow the company and specialists that
invest in distressed debt agree that Finova may have already violated the terms of its bank
agreements as of the end of the fourth quarter.
Finova hasn't yet released its year-end financial results and an official declined comment on
whether it was in violation of its bank agreements.
Finova has about $4.7 billion of bank debt and $6.3 billion of bonds outstanding. The company
faces $2.1 billion in bank debt that comes due this May. Absent a debt restructuring agreement
with its creditors, rating agency officials say Finova may face a Chapter 11 bankruptcy filing.
Already, Goldman Sachs Group and GE Capital, a unit of General Electric, have offered to take
effective control of Finova through the purchase of about $2 billion face amount of its debt and a management contract to run the firm.
A bankruptcy filing would represent one of the largest in recent memory. Signs that groups
representing bondholders, lenders and equity investors have organized indicate that the
framework for a prepackaged Chapter 11 filing could be in the works, said one distressed debt
analyst, who declined to be identified.
An unofficial committee of bondholders has retained the New York-based firm of Wachtel Lipton
Rosen & Katz, an attorney there confirmed. Sources say banks have hired Shearman & Sterling,
which also has offices in New York. That firm declined comment.
Last year, Finova hired Credit Suisse First Boston to explore strategic alternatives. The
company has also retained the law firm of Gibson Dunn & Crutcher, the Finova official confirmed.
The bank loans and bond debt are on equal standing, potentially giving holders equal treatment
in getting repaid in bankruptcy court proceedings. One caveat, though, is that provisions within some of the bank loan agreements may allow banks to seize a certain amount of collateral in
event of default, one debt analyst said.
If that were to happen, the banks would have some seniority over bondholders in the sense that
they might have additional collateral, the analyst said.
Equity investors have also been asked by Finova to form an "ad hoc" committee of institutional
holders of its common stock, according to a form 13D filed with the Securities and Exchange
Commission by James D. Bennett.
Bennett, an investor in distressed companies, runs two restructuring funds set up as limited
liability companies in Delaware and an offshore restructuring fund that is a Cayman Islands
exempted company, according to the SEC filing.
He reported a 5.66% stake in Finova's shares in the filing. The filing said the committee's
purpose is to obtain information about Finova's options for a financial restructuring and to
"facilitate communication" among its members, the company and other shareholders.
The Finova official referred calls about the filing to Bennett, who didn't return calls.
It's fairly common for bondholders and lenders to organize ahead of a possible restructuring or
Chapter 11 filing, since these creditors would have priority over a company's assets if it were
to liquidate. Shareholders, on the other hand, are often left with nothing in the event of a
In Finova's case, however, some maintain there may be residual equity value left in the firm
after creditors are paid out in a potential liquidation and restructuring.
The distressed securities analyst said initiating discussions with equity investors has a
"certain rationale" since a potential prepackaged filing from Finova could need the consent of
some of the equity holders to gain approval from a bankruptcy court judge.
CIT Freezes Broker Business--But They Want the Fashion Industry:
CIT And 7thOnline in Alliance to Provide Financial Services to the Fashion Industry
NEW YORK--(BUSINESS WIRE)--Feb. 15, 2001--CIT (NYSE: CIT; TSE: CIT.U), a leading global source
for financing and leasing capital, and 7thOnline, a major B2B provider of web-based
merchandising technology and services for the fashion industry, today announced an alliance to
provide online credit protection and receivables financing to fashion industry vendors and
Under the agreement, CIT's Commercial Services unit will issue credit to buyers to purchase
goods on the 7thOnline Web site and at the same time provide credit protection and receivables
financing to the sellers. According to the credit protection program, CIT will assume the
buyer's financial ability to pay its debts on all approved orders through 7thOnline's Web site.
Under the receivables financing program, CIT will offer advanced payment to the seller on a
buyer's payment expected in the near future.
As the premiere B2B site in the fashion apparel sector, 7thOnline provides Web-based
merchandising services to the global fashion industry. Explaining why the company chose to
partner with CIT, CEO Max Ma said: "We turned to CIT because they are the leader in providing
financing to the fashion industry. This alliance will offer our customers real-time access to
CIT's services, which will help simplify the financing component of the buying process," added
"CIT is committed to supporting B2B e-commerce," said John F. Daly, president of CIT Commercial
Services. "Partnering with 7thOnline will provide fashion industry vendors and retailers with
financing for their on-line transactions. As the retail industry shifts towards on-line
procurement, we are putting our financial resources and broad range of services to work for the
new economy," added Daly.
7thOnline's Web site is tailored for the fashion industry. Fashion vendors create secure online
product showrooms that can be accessed by retailers to facilitate the entire merchandising
process--including shopping, assortment planning, order placement, and store presentation. By
streamlining buying, selling and merchandising activity, the online service helps retailers and
vendors increase communication efficiency and reduce operational expenses.
7thOnline is the premiere web-based merchandising technology and service provider for the global
fashion industry. 7thOnline has developed proprietary technology that enhances communication and
operational efficiency for both retailers and vendors. 7thOnline streamlines the business of
CIT Commercial Services is the nation's largest provider of factoring, accounts receivable
management and lending services. It is a business unit of CIT Commercial Finance, one of six
operating groups of The CIT Group, Inc. (NYSE: CIT; TSE: CIT.U).
CIT is a leading, global source of financing and leasing capital for companies in more than 30
industries. Managing more than $50 billion in assets across a diversified portfolio, CIT is the
trusted financial engine empowering many of today's industry leaders and emerging businesses,
offering vendor, equipment, commercial, factoring, consumer and structured financing
capabilities. Founded in 1908, CIT operates extensively in the United States and Canada with
strategic locations in Europe, Latin and South America, and the Pacific Rim. For more
information on CIT, visit the Web site at www.cit.com.
Ann-Margret Crater, 212/536-9310
Clifford Public Relations (For 7thOnline)
Christian Nelson, 212/358-0800 x 26
Penske/Rollins Truck Deal Gets Clearance
Penske Truck Leasing received Federal Trade Commission antitrust clearance for its $13-a-share
proposal to acquire Rollins Truck Leasing.
Penske said its Sun Acquisition unit's cash tender offer for Rollins is scheduled to expire on
Feb. 21, unless extended. The offer commenced on Jan. 24.
Penske agreed to acquire the truck leasing and rental company for about $754 million on Jan. 15.