Thursday’s edition is now in our archives:

 

                                     http://www.leasingnews.org/archives.htm

 

Kit Menkin’s Leasing News  www.leasingnews.org  

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   S P E C I A L   E D I T I O N---BalboaCapitalBitesMe.com

 

                     http://www.leasingnews.org/images/Jerry/Welcome.htm

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               Two founders of Balboa Capital Speak Out

 

 

Shawn Giffin drives a 1997 Lincoln Navigator with standard California plates.

 

 Patrick Byrne drives a 1993  Porsche, no personalized license plates.

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First I promised present president Shawn Giffin on the telephone that I would acknowledge an e-mail he sent to me early this morning, after returning from London, England.  The time on the e-mail is 5:18am.  I responded

to it while Leasing News was in the “que, “ around ten am, as I had written it early today, and told our IS to send it out.

 

from Shawn Giffin:

 

  Kit:

 

  Good morning, sir!  I just returned to the country late last night.  I was

on a trip with my wife, Laura, and did not have access to any e-mail.  I

walked in this morning to a firestorm.

 

  I have never heard anything about the Lone Wolf account before, and it's

too early here for anyone else to be in.  I will review it all today and

will respond to you about that account and our business practices with

respect to residuals and end of term options.  In the meantime, I would sure

appreciate you withholding additional messages on the subject until I have

had a chance to comment.  Your newsletter on 9/19 was pretty brutal.  Our

business partners, employees, and even some of my friends and relatives

subscribe to your newsletter.  This "piling on" from unnamed sources hurts

the morale of the committed and talented employees with whom I am so

fortunate to work.  The impression anyone reading those comments will form

is simply wrong.  This company subscribes to the highest standards of

integrity, full disclosure and "world class" business practices.  Mistakes

we have made along the way - and I have made plenty - are my mistakes, not

theirs.  The derisive comments unfairly suggests our team here lacks

integrity.  That could not be farther from the truth.

 

  By the way, no one here has ever driven a car with the license plate

"FMV".  It's barely worth addressing, but that comment certainly suggests an

unrealistic and damning picture of the philosophy of this company.

 

  Stay tuned, Kit.  I will respond.  Thanks.

 

  Shawn Giffin

 shawnrg@balboacapital.com

 

 

Normally I write Leasing News at lunch, but today was Sue’s parents sixtieth

wedding anniversary and we were having a late lunch with them before they

drove up from Carmel Valley to San Francisco to celebrate it together., so Leasing News went out early today. The first e-mail and leasing news had crossed on the internet.

 

Actually, the first e-mail, according to the date received, was Patrick Byrne

at 11:46am, received here, and Shawn’s was 11:48 am.  I opened them

up right after noon, trying to leave the office and Leasing News had already

gone out.

 

While Shawn sent his “response” e- mail first to me, according to his header, at 9:59:43, it was not received by me until after noon.  And actually not read by me until now, around 3:45pm. According to my system, Patrick Bryne e-mail was

here first.   It is important to Shawn for me to put this introduction to the e-mail as he believes he communicated to me that Balboa Capital did have a comment.  However, the story was already on its way before I was aware of this.

 

The delay in receiving his e-mail may have been caused by Red Code  virus slowing down the internet cycle.

 

Shawn told me he was not aware of Lone Wolf, and that he was aware Patrick Byrne would be sending me an e-mail, although he no longer worked at Balboa Capitol ( as we reported, although he is on the board of directors. )

 

So as is Leasing News policy, I am going in chronological order as received:

 

from Patrick Byrne

 

Hi Kit:

 

 

 

First, let me applaud your newsletter.  It is a great example of a real

positive innovation that has occurred in our industry over the past couple

of years and, God knows, these have been few and far between.  I am amazed

at the sense of community that you and your newsletter have been able to

create within the leasing industry, so hats off to you!

 

I am, however, disturbed by the practice of letting people post comments

without their names attached.   Although, we vehemently disagree with Jerry

Gonzalez’s characterization of the events, we applaud his decision to attach

his name to his views.   The practice of allowing individuals to post

comments to your site anonymously leads to a National Enquirer type of

journalism that encourages the piling on of negative, and often erroneous,

information.  If someone wishes to post a comment on your site then let that

person have the decency to sign his or her name to it.

 

I do feel compelled to refute a few of the allegations put forth by the

ghostwriters:

 

The ghostwriters allege unprofessional and unethical tactics, but what could

be more unethical or unprofessional than posting defamatory and untrue

comments about a company without the decency of attaching your name?

 

Balboa’s practice is not and has never been to hide $1 buyouts.  In fact, we

do not even have a separate addendum for a $1 buyout.  The end of term

option is right on the lease; therefore, making it impossible to “hide” the

addendum.  Further, our lease does not have a 180-day notice period nor does

it have a 12-month extension provision.   In sum, Balboa Capital has one of

the fairest, most descriptive, and most user-friendly documents in the

leasing industry.

 

Shawn does drive an eight-year-old, 1993, Porsche but it has never had

personalized plates.  For the record, I drive a 1997 Lincoln Navigator with

standard California plates.

 

I find it interesting that people still talk about Shawn and I as being

“disciples” of Amplicon.  Yes, Shawn and I did work for Amplicon.  But, we

have not been at Amplicon for 13 years!  Further, when we worked at Amplicon

we worked there for less than one year.  I can assure you that we were not

“converted” during this time, whatever that means.  I am neither defending

nor approving of Amplicon’s business practices but rather simply stating

that we have no idea what goes on there.

 

The majority of salesmen that leave Balboa do not receive a “stock” letter

from an attorney.   Most people leave on good terms.  In a few instances, we

have had individuals who, upon leaving, physically took files, deliberately

erased hard drives, destroyed property, etc.   We consider these acts

unacceptable and we have pursued legal actions in some of these instances.

Balboa does make every effort to protect its property and proprietary

information and we offer no apologies for this.  We do not discourage

competition but we do insist that we have fair, ethical, and professional

competition.

 

Balboa Capital takes customer service seriously.  We are one of the only

leasing company’s that has a customer service department and one of the only

leasing companies that performs customer surveys on it’s customers.  We are

not successful at dazzling all of our customers and this pains me; but I can

assure you that it is not from a lack of trying.  I will put our customer

service record up against any leasing company that has been in business for

thirteen years and has the number of customers that we have.

 

Although we do not approve of his tactics, Mr. Gonzalez has every right to

air his views and experience with Balboa Capital.  We are disappointed that

we have not been able to live up to our reputation of high customer service.

But, I can assure you that Mr. Gonzalez’s experience is not representative

of the typical Balboa customer.

 

Kit, in summary, I am proud of the company that both past and current

employees have help build.  Balboa Capital remains a strong company with

strong customer service values.  Given our track record, I am confident that

we will work through the issues with Mr. Gonzalez.

 

Thank you for the opportunity to tell our side of the story and I welcome

all debate that comes from people that have the courage to put their name

behind their words.

 

Sincerely,

 

 

Patrick Byrne

Chairman

BALBOA CAPITAL

pateb@balboacapital.com

 

Good morning.  I only just saw the web-site you linked to your newsletter

this morning because I have been out of the country on a boat.  All the

things considered, I probably should have stayed there.

 

With respect to the complaint from Mr. Gonzales, I am calling him this

morning and intend to discuss his poor experience with us.  I have more to

say on that matter, but really believe he and I should review it first.  The

series of events he portrays in his e-mail to you is markedly different from

the information I have reviewed here.  Once he and I speak, I will have a

clearer picture and will address the specifics of his lease.

 

In regard to the comments made from anonymous former employees, they

certainly delivered the desired sting.  It's a sad irony because the

company's relationship with its employees is unquestionably one of our

biggest strengths.  Visitors to our office consistently comment on their

high energy, positive attitude and professionalism.  I would do anything for

this team, and I think they know that.  They have tremendous integrity and

hold high the values of the organization.  These are remarkable people.  If

this company was acting unethically toward its employees or customers, each

would leave and have no problem finding immediate employment.  Our turnover

in non-sales positions is less than 3% per year, and in sales positions it

is lower than the industry norm.

 

Many years ago, we ran into some challenges on accounts with customers who

claimed their lease was structured with a fixed buyout.  It was not a common

occurrence, but it happened enough that we were concerned.  There was no

documentation supporting their claim, so we essentially ended up in the

frustrating dilemma of having a transaction on our books structured as a

true lease, yet having the customer claim no residual was owed.  The vast

majority of these were resolved amicably - there were no strong arm tactics

or bullying.

 

In 1997, we changed our lease to a "plain English" version.  The buyout is

on the front of the document in unmistakably bold letters - this includes

our lease with Mr. Gonzales.  Confusion or controversy regarding buyouts on

our leases since this change was made nearly 5 years ago has been virtually

non-existent.

 

In regard to the renewal section, it's not intended as a "got you" or an

under-disclosed sinister provision.  About 1/3 of our leases are FMV

transactions.  Those customers are asked to notify us within 120 days of the

end of the lease whether they will be returning the equipment of buying it.

Every customer receives a letter from us well before the 120 day notice

period reminding them to provide us notice of their intention.  If we do not

receive notice, the lease calls for a 6 month renewal.  Long ago, we did not

send that reminder, and we had our share of customers who were frustrated

with this provision because they had not read the lease agreement.  We

responded by changing our process to include the reminder letter, shortened

the notice period, and reduced the length of the renewal period.   The vast

majority of our customers make the requested notice.  If a customer does not

make notice, but still wants to buy the equipment, we often reduce or waive

the renewal period.  It is there so that we have time to remarket equipment

if it is to be returned.

 

The comments in your 9/19 newsletter paint an inaccurate picture of this

company, its beliefs, and the honor of its employees.  As the events of the

last few days testify, bad news and negativity certainly travel faster and

receive more widespread attention than good news.  Most of our customers are

satisfied and appreciative of the service they receive, but it's unlikely

any of them will put up a web-site singing our praises.  Our employees are

fulfilled and committed to their customers and the company, but they are not

likely to send you an e-mail discussing how terrific it is to work here.  I

am not an effective enough communicator or businessperson to portray to you

or your readers all the good that is done here everyday.  This e-mail is

already too long, and I have to believe there are more compelling and

mission critical activities for your readers than my comments regarding the

negative messages you published.

 

I take it very personally when any customer is dissatisfied.  Our objective

is to always exceed our customers' expectations, and I consider it my

failure when we do not.  The success we have been fortunate enough to

experience is the result of our work force and its extraordinary talent.

Those employees who left on unfavorable terms are so few compared to the

hundreds who have worked here, or still work here, and are proud of their

accomplishments and the company.

 

Shawn Giffin

President

Balboa Capital Corporation

shawnrg@balboacapital.com

 

 

The first issue is BalboaCapitalBitesMe.com, which Patrick Bryne says,

“Mr. Gonzalez has every right to air his views and experience with Balboa Capital.”

 

That is not the official stand that was told to Leasing News.  Also if Mr.

Byrne “no longer works for Balboa,” I guess he doesn’t get involved in

“day-to-day” things.  If he did, we can assume this would have been

“settled” even before a website was developed by Jerry Gonzalez.

 

The issue of the notification and buy-out is a dispute, and Leasing News has held

the story for over a week, trying every day to get “the other side.”  We investigate

all disputes that want to be posted on our Bulletin Board.  Many do not make

it as they are not  about ethics or “wrong doing,” if you will, but a dispute between two parties. 

 

Until the e-mail above, no one has mentioned Balboa’s side.  Even Shawn Giffin

is not aware, but then again and his wife Laura have been in London.  We await

his decision as president.