Unicapital--et al.

The Portland, Oregon group will be kept going by Bank of America, I am told. There is a serious problem now of brokers not getting paid, and vendors not being paid, and Bank of America is supposedly going to rectify that. BSB is also frozen and it things don't happen soon, there will be nothing to bargain for---this is from brokers on line to me, who are waiting for deals to be approved, funded, re-approved, commissions to be paid. According to people in the know, This is a critical time and if the deadline is extended one more time, meaning past Monday, November 6, there will not only not be much left, but a stockholders suit that can bring in Nations Bank/Bank of America.
Sierra Cities---It is beginning to appear none of the suitors are willing to pay the price for this company. Here is a posting from the YAHOO BTOB Chat Box ( public knowledge ):
" the answer to your question is top management has severance packages for years to come regardless of what the stock does----if the company remains in business. However, the real loss to the top folks is the loss in their stock value. Just using 8 as a cost price, Mr. Depping is down about $6,500,000 at the close today. If you consider the high of 32 per share, he is down somewhere in the $43,000,000 range. That's a lot of Cuban cigars. For those of us that are not too bright, we will have tax write offs also."

http://messages.yahoo.com/bbs?.mm=FN&action=m&board=7082005&tid=fsfh&sid=7082005&mid=2563

El Camino Leasing---If anyone can pass on any information about what is happening, "on" or "off" the record, please let me know.

Steve Chriest, Signature Leasing

I'm glad to read Bob Rodi's comments on the current state of technology in our industry. There is no doubt that we're facing the continued march of high tech, in our industry and in virtually every aspect of our daily lives. Does anyone really think we'll replace high tech with low tech? In everyone's headlong rush to construct the ultimate, high-tech equipment leasing auction site, where buyers submit requests and where funding sources bid for the privileged of supplying money to the applicants, there appears to be a disconnect between the business plans and the customers. No one, it seems, understands their "Guy" (customer). Is their Guy the lessee? The vendor? The broker? What if their model calls for dealing with several Guys? Has anyone bothered to ask what their Guy wants? For example, who, in today's world, where change is the norm, and confusion the reality, wants so many choices that the decision making process is not only complicated, but time consuming? Did anyone ask the funding sources how comfortable they are with delegating credit responsibility to a dot com? "Did anyone ask equipment vendors how comfortable they are relinquishing control of their sale (customer) to the same dot com, who would shuffle the transaction off to unknown funding sources? Sorry to report that these questions weren't asked. The proof is in the numbers. As Bob Rodi pointed out, no one, I repeat, no one, has published funding numbers. There is no doubt, as I talk to the dot com people, that sub-prime credits apply to these sites for credit. These credits are simply not being funded. No one can survive long when their main activity is declining credit requests. The internet has shown us, if nothing else, that it works best today as a medium for information, and as an environment in which commodities can be bought and sold in an efficient, cost-effective manner. Until equipment leasing becomes a commodity, on-line credit transaction processing only addresses the least significant part of the entire leasing process. As usual, no one is listening to those in the industry who can shed the most light on the leasing Guy - the independent equipment leasing brokers.

Steve Chriest
SCHRIEST@aol.com

David Rabinovitz

Don't count on the "build it and they will come" strategy working.

Do count on the "build it and drive them there" to work.

Instead of calling us at an 800 line, call us at a www site.

Interesting reading.

We have believed for some time the real success will be for the advanced marketer who uses the web to streamline the process, increase throughput (on a constant staff basis - ie. more volume with the same body count) and reduce processing costs. "Build it and they will come" just doesn't work in the leasing business. At least not yet. The proof is, in part, the recent Inc 500 issue. Live Capital had been a big advertiser in Inc. Full page inside cover ads. That was about 1 year ago. I don't see them in Inc as much.

The ELA is buying space to promote leasing and had a special leasing section. LiveCapital took a 1/4 page ad - note... ONLY a 1/4 page.
AccessLease took a 2 page spread. If Inc were such a great draw, LiveCapital would continue to advertise heavily. They are not in the current issue (November 2000). Many of these dumb com's will realize to be successful they should probably have a leasing broker on staff to better understand the market and once they do understand themarket, that you have to pull people to your site. Advertising alone won't do it.

We have been sitting on the sidelines waiting for one of these high flying dc's to go bust so we could try to buy their web site (not domain name) and processing technology cheap. All that technology investment seems to be valued at zero when the idea tanks - even though as processing software, some of these d'cs (dot coms) actually have built their own pretty neat proprietary packages.

Anyway... nice article, great commentary on the market.

david rabinovitz
david-rab@mediaone.net

Covad Communications CEO Quits
Internet: Growing losses at the ISP, trading more than 90% below its 52-week high, are behind Robert Knowling Jr.'s departure.
From Times Staff and Wire Reports Financial reality caught up with Robert E. Knowling Jr. on Wednesday, forcing him to resign as chief executive of high-speed Internet service provider Covad Communications Group two weeks after the company reported widening losses.
With Covad's stock trading more than 90% below its 52-week high, the company's board of directors decided that new leadership was in Covad's "best interest," according to a company statement. Knowling, 45, also served as president and chairman of the board. Knowling became Covad's CEO in 1998 after serving as executive vice president of operations and technologies for Baby Bell US West.
Investors reacted positively to the executive change. In Nasdaq trading Wednesday, Covad shares closed at $5.97, up 69 cents, but off their 52-week high of $66.67 on March 1. Covad said Frank Marshall will step in as interim chief executive and that former Covad CEO and co-founder Charles McMinn will become chairman of the Santa Clara company. The changes were made during a regularly scheduled board meeting. The board has commenced a search for a permanent chief executive, the company said.
Although Covad is considered one of the leading companies in the nascent business of providing high-speed Internet access over copper phone lines using digital subscriber line technology, the cost of building out a DSL network has turned out to be greater than investors expected. DSL service is typically 10 times faster than traditional dial-up Internet connections.

In mid-October, Covad said it lost $190 million in its fiscal third quarter, or $1.22 per share, compared with a net loss of $54 million or 47 cents per share a year earlier. At the time, Covad blamed the widening loss on nine of its Internet service provider customers who left the company with unpaid bills totaling $11.4 million.

Covad is racing against competitors NorthPoint Communications Group and Rhythms NetConnections to build the DSL system with the biggest footprint in major markets. Covad has concentrated on supplying services to major U.S. cities and expects to be in markets with 45% of homes and 50% of businesses by the end of the year. All three companies typically bundle their technology with Internet service providers, such as Concentric Network, Juno Online Services and EarthLink.

Covad also faces competition from companies using other technologies to provide the so-called last mile of high-speed Internet access to customers' desktops. Excite@Home and Roadrunner provide broadband Net access over cable television lines, while start-ups like NextLink Communications, Teligent and Winstar Communications are offering alternatives using fixed-wireless technology.
Analysts estimate that 4 million Americans will be using some sort of high-speed Internet access service by year's end.
Despite the company's growing losses and sagging stock price, Knowling's departure comes on the heels of some financial victories. Knowling recently netted $500 million in a four-day marathon financing round. And in September, he sold 6% of Covad to local phone giant SBC Communications for $150 million. That deal also is expected to bring in another $600 million over six years by allowing SBC to resell Covad's services nationwide.

"Bob has made significant contributions to Covad as he has focused the company on growing both its DSL footprint and its subscriber base," Marshall, the new CEO, said in a statement.

But now the company must focus on "achieving cash flow positive status as quickly as possible while maintaining our leadership position as a national broadband service provider," he said. Marshall, 53, has served on Covad's board of directors since 1997. He has held leadership positions at communications equipment maker Cisco Systems, including stints as general manager of the company's Core Business Unit and vice president of engineering. Knowling didn't return a phone call seeking comment.

Bank One loses appeal on loan
Ex-business owner gets $2.35 million for loss of financing
By TOM KERTSCHER
of the Journal Sentinel staff

An appeals court on Tuesday upheld a Milwaukee court ruling that orders Bank One Corp. to pay $2.35 million for cutting off financing to a small business that experienced routine financial problems.
The order probably will result in $1.9 million after expenses for former business owner David Schutte of Oconomowoc, who battled the nation's fourth-largest bank holding company and its $273 billion in assets.
The order also warns Goliath-size banks not to run over David-size clients, said Schutte's lawyer, Cindy Mack of Milwaukee.
"They try to woo you into doing business with them if they think you're an attractive business, but if the business starts having problems, they want to cut all ties with you," Mack said. "You just see a total different face on the bank when a business is having difficulties. All of a sudden they're not your partner in business. They want to get their money and be done with you."
A Bank One spokeswoman, Mary Kay Bean in Detroit, said the bank "handled the loan properly" and would decide whether to take further legal action in the case. She declined to comment further. Schutte, a real estate developer, was running Williams Bay Trading when it set up a $5.5 million line of credit with Bank One in 1994. The money financed the Watertown clothing distributor's importing of clothing, which was sold to retailers.
Williams Bay alleged in a Milwaukee County Circuit Court lawsuit that Bank One breached a contract by cutting off the financing after the company reported a loss of $400,000 in 1995. The move forced the company to file for bankruptcy in 1996, the suit said.
Circuit Judge Michael Malmstadt ruled that Bank One had breached its contract with Williams Bay Trading and in December 1998 ordered the bank to pay the company $1.7 million.
On Tuesday, a Court of Appeals panel in Milwaukee upheld Malmstadt's decision. Judges Ted Wedemeyer Jr., Charles Schudson and Patricia Curley agreed that the bank had breached the contract and did so in "bad faith".
The amount that Bank One must pay rose from $1.7 million to $2.35 million because interest had accumulated since the trial court ruling, Mack said. The money will be paid to Schutte, who should be left with $1.9 million after legal fees, she said.
Schutte, 48, who said he has been in business for himself since he was 17, insisted that he had never had problems with a bank before Bank One cut off financing for Williams Bay Trading. "When this was happening, it was like I had landed in Oz or something; it was sort of surreal," Schutte said. "I feel sorry for people who this happens to who aren't in a position to fight back. Bank One's attitude in all this was, 'We're going to crush this guy, and then he won't be able to fight back.' "
Cheryl McCollum, spokeswoman for the Wisconsin Bankers Association in Madison, said banks must consider the financial condition of businesses to which they lend money because federal regulations require loans to be "safe and secure." If they're not careful, banks can be restricted in making new lo ans, she said. McCollum also said it isn't in banks' interest to freeze lines of credit. "Banks are interested in seeing businesses succeed and grow," she said.
After Williams Bay Trading filed for bankruptcy, Schutte sold the company's assets. The new owners, operating out of Racine under the same name, import and distribute clothing.

Memorial Services for Chris Ridgeway

From Jeff Morris via David Itzikman ditzikman@c2capital.com

One of my favorite people in the whole world, Chris Ridgeway, passed away on October 21, 2000.

Chris was and is a man of incredible honor, loyalty and responsibility. You could always count on Chris. As a seller of lease paper, you might not always like what he said, but you knew that when he said it, it would be written in stone. I had the privilege of knowing and working with Chris for over 15 years. It was always enjoyable, entertaining and productive. I will greatly miss those almost daily conversations.

If you did not know Chris well, he possessed a very dry, understated humor. Very few conversations with him did not involve a great deal of laughter. It was part of who he was. Even in these last few weeks, those who loved him and were with him were comforted by his levity and personality.

In this day and age, a man of honor is rare. Chris Ridgeway was that man. On numerous occasions, he stood up and did the right thing both personally and professionally regardless of the consequences. Thank you Chris for that gift of strength.

Chris was and is surrounded by love. His beloved wife Sheila, his son Damon and his daughter Christy were with him throughout this ordeal as well as countless friends. If the measure of a man is the Love of his family and friends, Chris was a giant.

Chris, you are loved and you are missed.