Kit Menkin’s Leasing News

           Monday, June 10, 2002

Accurate, fair and unbiased news for the equipment Leasing Industry




Centerpoint Financial Needs Help in Funding Approved Deals----

     Tyco International Lost Over 30% Stock Value on Friday

        Ex-Tyco Chief, a Big Risk Taker, Now Confronts the Legal System

           The Week's Economic Events

             T.Rowe Price Offers New College Investment Calculator

               Dun & Bradstreet Includes Goodwill

                Now is a Great Time to Buy a Business.”


### Denotes Press Release



Centerpoint Financial Needs Help in Funding Approved Deals----



CapitalWerks, LLC is interested in reviewing all approved backlog at

Centerpoint to provide a temporary funding solution.  All transactions will

require the following:


Minimum 13.55% Yield to CW based on "Risk Adjusted Pricing"

Maximum 10 points paid to origination source

Re-documented on CW-Preferred one page lease

Brokered Only-Discounting with Hold-back available

Hard copy Centerpoint approval.

Minimum SBSS score of 190

Site inspection

Minimum two advance payments

Interim rent billed from D & A date

Clean D & B report with an absence of suits, liens, & judgments


We are not currently accepting broker business but will provide this as a

one time solution to your subscription base. I hope this will relieve some

of the frustration of losing another industry resource. 


Jim Raeder


(According to a memo from Centerpoint Financial, they are unable to fund

deals approved.  Leasing News will print all those funders who may be able

to help. editor )




Tyco International Lost Over 30% Stock Value on Friday


That's because Tyco is "all hat and no cattle" as we used to say in Texas.


-Gary Millhollon





This illustrates the inherent problem when industrial conglomerates

acquire financial service companies at a substantial premium to book

value.  All they are really acquiring are a sum of cash flows at

specific spreads over a funding rate over a given period of time with

the need to continually raise more capital to keep the sum of payments



Finally, investors are realizing there's few ways to mask the premium

paid in these businesses.  It gets even more troubling when you realize

the acquirer and acquiree are in the same business with the same

customers.  What are you really buying and what is the price? 


David K. Young

DNJ Leasing


312-629-2874 (fax)



Ex-Tyco Chief, a Big Risk Taker, Now Confronts the Legal System



New York Times



Few chief executives are as closely identified with their companies
as L. Dennis Kozlowski was with Tyco International.


Mr. Kozlowski raced yachts, flew helicopters and rode a
Harley-Davidson motorcycle — and Tyco reflected his penchant for taking risks.
In the decade he ran it, Tyco used thousands of acquisitions to transform itself
from a New Hampshire manufacturer with 23,000 employees into a Bermuda-based
conglomerate with a quarter of a million workers worldwide. The company's stock
price rose even more steeply, jumping 15-fold from 1992 to 1999.


Along the way, Mr. Kozlowski developed a reputation for combativeness. He was unafraid
to spar with short-sellers, who said Tyco had used accounting gimmicks to overstate its
growth and profits. He proudly told interviewers that 100 percent of his own net worth
was held in Tyco's stock, and he spoke of his desire to make Tyco another  General Electric.
In a cover article last year, Business Week called Mr. Kozlowski "the most aggressive C.E.O."


Most big companies like to boast of the depth of their management and occasionally trot
out lower- level executives for analysts and investors to meet. But aside from Mark H. Swartz,
Tyco's chief financial officer, Mr. Kozlowski — who had worked at Tyco since 1975, nearly half
his life — rarely made other executives available to Wall Street on conference calls or presentations.


Investors "saw Dennis, they saw Mark, and they saw me," said Brad McGee, a Tyco executive
vice president who has served as the company's chief of investor relations and top spokesman.


As his wealth grew alongside Tyco's share price, Mr. Kozlowski climbed the social ladder. The son
of a Newark police detective, he became one of the world's highest-paid executives and made
occasional appearances in the Page Six gossip column of The New York Post. He was co-chairman
of a fund- raising dinner last Thursday for the New York Botanical Garden, whose benefit committee
includes philanthropists like Laurance whose benefit committee includes philanthropists like Laurance
S. Rockefeller and Daisy Soros.


But Mr. Kozlowski never made it to the benefit. He was indicted instead. On Tuesday, Manhattan
prosecutors charged him with evading more than $1 million in New York sales tax on the purchase
of $13 million in paintings, including a Monet and a Renoir. A day earlier, he had resigned as chairman
and chief executive of Tyco.


Mr. Kozlowski pleaded not guilty. The investigation is continuing, and people close to it say it is
focusing more and more on Mr. Kozlowski's tangled financial relationship with Tyco. So while Mr. Kozlowski
confronts the legal process, Tyco is struggling to untangle itself from him and to convince its investors and
bondholders that it can survive as an independent company.


Both have a difficult road ahead.


Already, it is clear that Mr. Kozlowski mingled his personal wealth with Tyco's operations in unusual ways.
Late in 2000, Mr. Kozlowski and Mr. Swartz made a $14.1 million personal loan to a director at TyCom, a
Tyco subsidiary. The loan, which has since been repaid, was still outstanding in December, when Tyco was
negotiating to buy from public shareholders the 11 percent of TyCom it did not already own.


Mr. Swartz also served as trustee of a trust that owns Mr. Kozlowski's Nantucket estate.


Tyco's charitable contributions and sponsorships were intermingled with Mr. Kozlowski's interests.
Tyco has sponsored a yacht in the round-the-world Volvo Ocean Race. The company gave the
Whitney Museum of American Art a $4.5 million grant to finance traveling shows shortly after
Mr. Kozlowski joined its board.


And, if the indictment is accurate, Mr. Kozlowski and Tyco shared a strong aversion to paying
taxes. In 1997, Mr. Kozlowski engineered Tyco's move of its headquarters to Bermuda, although
the company is still based in Exeter, N.H. The relocation cut $400 million from Tyco's tax bill in
the United States last year by allowing the company to avoid paying taxes on income it earned
outside the country. Some tax experts say the move enabled Tyco to shield some of its American
profits too.


In addition, people close to the company have acknowledged that Tyco paid for the 13-room
Fifth Avenue apartment that Mr. Kozlowski bought in 2000. Over the weekend, Bloomberg News
reported that a unit of Tyco bought a four-bedroom apartment at 610 Park Avenue for $6.38
million in 1998 and sold it to Angeles Kozlowski for $7 million in July 2000, one day before her
divorce from Mr. Kozlowski was entered in the New York county clerk's office.


Meanwhile, Mr. Kozlowski's homes in Florida, his yachts, and his art are being scrutinized, as
investigators try to determine whether the company paid for his personal expenses.


If so, Mr. Kozlowski could face more criminal charges for evading income tax. Tyco might face
regulatory action from the Securities and Exchange Commission for failing to fully disclose
Mr. Kozlowski's compensation.


But the cloud that hangs over Tyco runs deeper than whether or not the company paid for
Mr. Kozlowski's homes. Even before the collapse of  Enron, some short-sellers, traders who
profit when stock prices fall, questioned whether Tyco was growing as fast as it said it was.
They argued that Tyco had used aggressive accounting techniques — like encouraging the
companies it bought to take losses just before it folded them into its operations. Under some
circumstances, that maneuver could allow Tyco to report higher cash flow or profits to investors.


Mr. Kozlowski often expressed anger that anyone would question Tyco's financial results, or his
personal integrity. An article in Forbes magazine in October 2000 opened with an anecdote about
Mr. Kozlowski at a dinner party with Henry Silverman, chief executive of Cendant, whose stock
plunged in 1998 after the company discovered fraud on its books.


It must really annoy you "to hear Cendant and Tyco mentioned in the same sentence," Mr. Silverman
said to Mr. Kozlowski, according to the Forbes article.


"Henry, it drives me nuts," Mr. Kozlowski was said to have replied.


Investors appeared to accept that Mr. Kozlowski and Tyco were honest, especially after an S.E.C.
investigation in late 1999 and 2000 ended without any action being taken against the company.
Tyco's steady profit growth made it a favorite of institutional investors, who held almost 80 percent
of the stock earlier this year, compared with about 52 percent of General Electric, according
to data from Bloomberg.


Now Tyco's shares have collapsed, as investors grow fearful that Mr. Kozlowski manipulated the
company's results the same way he is accused of cheating on his personal finances. Since
Mr. Kozlowski resigned Monday, Tyco's shares have fallen 54 percent, to $10.10, their lowest
level in six years. This year, the shares have lost $98 billion in value, costing more than Enron's collapse.


Tyco continues to say that it is profitable. On Friday, John Fort, its interim chairman, told
investors that its earnings for the current quarter were on track.


But with its debt trading at junk-bond ratings and its stock in the doldrums, Tyco has
essentially lost access to the capital markets. Come February, the company faces $6 billion
in debt repayments that it cannot make without selling assets or convincing investors
that it is worthy of new credit.


So far, though, buyers for the assets that Tyco has tried to sell — including its plastics
division and its financing arm, the CIT Group — have been scarce. And Tyco, once as
fierce as its tough chief executive, is now struggling to maintain a brave face.



Full Tyco Stories available at:




The Week's Economic Events


May 10  MONDAY

Equipment Leasing Association 6/9-11

Credit & Collections Management Conference & Exhibit

Hyatt Regency Hill Country San Antonio, TX



Equipment Association of Equipment Lessors is holding its Fourth Annual 
(all you can eat) Crabfeast in Hanover,  MD. 

Over 200 expected, perhaps more for this networking food fest.




Beige Book



Producer Prices-May


Retail Sales-May


Weekly Jobless Claims




Inventory-Sales Ratio-April


Industrial Production-May


Capacity Utilization-May


Pay Day



T.Rowe Price Offers New College Investment Calculator



T. Rowe Price Associates has developed a new College Investment Calculator
that allows investors to estimate college education costs. Based

on this information, the investor can then calculate how much he would like
to invest each month, or on a one-time basis in a 529 plan.



calculator is free and is available on the Internet at



The calculator uses "Monte Carlo" simulation to evaluate and analyze

the performance of various portfolios in 500 different scenarios, and forecasts how the securities industry might perform in the future. This

allows for a family to calculate what their existing or planned college savings would amount to in a 529 Plan by the time a child begins college.



Dun & Bradstreet Includes Goodwill


Did you know that D&B began to include goodwill in their net worth

calculations for the first time in September of 2000? Even though they

called it a 'test,' they were doing it 'live' (i.e. - their reports reflected

the change in net worth) for all customers on which they had audited

financial statements. We did a story about last Spring.


I have been trying to find out how their 'test' has gone, but have not

gotten any response for 6 months now.


Rob Lawson

Credit Today

Tomorrow's Tools For Today's Credit Professionals

Phone  301-421-4402

Fax 301-421-4404








############### ##############################################



TORINO, ITALY--Buyers interested in good private companies in several niche businesses may have their best buying opportunities in the last two decades, Bruce Kropschot, President of Kropschot Financial Services, Vero Beach, Florida, learned during an international mergers and acquisitions professional’s conference in Torino, Italy.


Mr. Kropschot recently attended the International Association of Merger and Acquisition Professionals in Torino.


“A major focus of the session was on middle-market companies,” said Mr. Kropschot. “There is a lot of interest on strong niche businesses and industries, including business services, military/defense, pharmaceuticals, food and health care. Several of our European deal makers indicated they may have buyers for equipment leasing companies, an area in which Kropschot Financial Services specializes”


Kerry C. Dustin, a Florida businessman and TMAP chairman, said members of the association are putting their energy into seeking European public company buyers for a number of U.S. Companies.


“Stock prices have been more stable and European firms arc ready to invest in the United States,” Dustin said. “We’ve experienced a buyers’ market since the fall of 2001. Our members need to continue their work with private equity groups, buyers and sellers because this may be the best time since the early 1980s to buy top-notch, privately held firms.”


Mr. Kropschot concluded that “now is a great time to buy a business. Sellers are more realistic and willing to consider a more creative deal structure.”


According to an article appearing in the Charlotte Business Journal, April 26,

2002, IMAP member Rob Slee reported, the sale prices of private companies continue to slide. By the spring of 2000, the positive, macroeconomic environment had changed. The stock market, especially with regard to technology companies, fell dramatically. Lending tightened to the point where even solid companies could not attract capital.


Finally, earnings fell for many companies asthe recession gripped many segments of the U.S. economy beginning in the frill of 2000. Although the current deal making environment, is difficult, there are still opportunities to merge or sell to synergistic acquirers at fair prices. Pricing seemingly has stabilized in 2002. IMAP surveys its members each year from completed transactions. For the year 2001, there were a total of 199 transactions in the survey, with a total value of more than $2.2 billion.


According to IMAP members attending this year’s conference in Torino, members closed more than 36 transactions totaling more than $1.4 billion in the first four months of 2002. “That is a phenomenal accomplishment in a very difficult market. Cooperation and deal making between member firms and in cross border transactions are growing rapidly and proving to be highly effective,” said Mr. Kropschot.


The conference also included discussion of a variety of other issues including:

management buy-out opportunities and co-investment, under-performing loans and the acquisition of small public companies de-listed by the NASDAQ stock exchange.


Conference participants represented more than 50 international firms from Australia, Brazil, Mexico, Canada, nearly all western European nations, Poland and approximately 30 U.S. states. 1MM’ is a leading association of merger and acquisition professionals serving buyers and sellers of mid-market companies. Membership is limited to a select group of international M&A firms.


    Financial Services       

    I 16 Estuary Drive  Phone: 561-234-4544

    Vero Beach, FL 32963     Fax: 561-234-4406


E-mail: BKropschot@aoLcom

CONTACT:                   BRUCE KROPSCEIOT AT (772) 234-4544


#### ######################################################## 



To reach Leasing News, please e-mail or use the

contact form at   Fax messages are often difficult to read.

Telephone calls result in “telephone tag” and often take longer to respond due

to time differences and limited time.  E-mail is always best.


Leasing News is sent ONLY to people who have requested it.  We do not Spam.

You register using our website or contacting . Our subscriber list is NOT made available to

the third parties. Subscription and Removal Assistance can

be accessed through out contact site at or you may

directly contact with you name as you registered it

along with you-mail address ( our list is kept by the name registered, not

by company or e-mail address. We have great difficulty in finding your

e-mail address without your name. If you have signed up and are not

receiving Leasing News, your carrier may be blocking the "mass mail".  You

may notify your carrier or send an  e-mail to us for verification, if

needed.  Online version of this publication is at


Policy Statement


Policy Statement---Nothing is sent out that is not "fair." Always unbiased

reporting. Fairness always. If it is questionable, we will ask the writer's

permission to quote them. We will print information without attribution, but

feel as long as we do not name the person who sent it, we can use the

information. Any information we think is suspicious, we try to have if

substantiated first by at least two reliable people. We will not purposely

send out "negative" news. We prefer

"positive" news. We have no "axe" to grind or are not paid or seek or accept

any remuneration for product or promotion. We do not Spam anyone. To be

added to the mailing list, you must request it. We do not send anything

about our company or personal e-mail or jokes to the leasing news list. We

do not share our mailing list with anyone. We try not to send more than one

report a day, if at that, unless an "alert." We follow Internet

Netiquette at all times. Our sole purpose is to provide communication to

improve our profession. We reserve the right to deny sending the newsletter

when requested. We reserve the right to edit or delete an opinion that is

not in good taste or is outright derogatory.


Virus Info Center
Top Stories
Leasing News, Inc.
346 Mathew Street,
Santa Clara,
California 95050
Voice: 408-727-7477 Fax: 800-727-3851