2005 Nov/Dec Issue

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NOVEMBER/DECEMBER 2005
Leasing Products & Services -
Exploring the tools of the trade

FEATURES

A Pool for Additional Residual-Taking:
Winning More FMV Deals in Your Leasing Business Unit
By James Hershberger, Principal, Hook Mountain Consulting
It is a no-brainer that assuming higher residuals will win business. But, can that be done without taking on too much risk and wreaking havoc down the road? Can it be done safely without fundamentally changing residual policy? Well yes, but not without guidelines and parameters.

Equipment Repossessions on the Rise in 2005: First Major Increase Since 2002
By Edward Castagna, President, Nassau Asset Management
Nassau Asset Management's NasTrac Quarterly Index (NQI) detected a sizeable increase in equipment repossessions and liquidations during the first two quarters of 2005 compared with the same period last year. In fact, First Quarter and Second Quarter 2005 marked the first time since 2002 that Nassau has noted an overall rise in the volume of repossessions and liquidations. The change is significant given the downward trend in repossessions for the prior two years.

Training Leasing's Next Generation... Imperative Today's Leaders Say
By Susan Carol, President, Susan Carol Associates
Recently, the ELA's Industry Future Council (IFC) marked the subject of training as critical and according to Training magazine, training budgets are increasing on a nationwide basis. Lynda Jackson of The Alta Group is advising the equipment financing industry to take heed of what the IFC and others are advising.

Automating Ingenuity in Leasing...
What Should Be Standardized Among Non-Standard Thinkers?
By Steve Lundergan, Founder & President, Vision Commerce
When prioritizing automation for assembling an end-to-end solution, your front end must be flexible to meet your unique origination needs and your back end must offer standardized capabilities to ensure compliance. Innovative lessors are different, so their solutions should be accommodating.

The Ties That Bind: Rating Linkages in Parent & Finance Subsidiary Relationships
Fitch Ratings Report
The issue of rating linkages between a corporate parent company and a financial subsidiary is as important as it is evolving. This report highlights Fitch's approach to rating these types of entities and under what circumstances the ratings of a finance subsidiary may differ from its parent company.

HR Matters: What's All This About Corporate Culture Anyway?
By Gni Grossman, Vice President, Molloy Associates
So, you're a manager and you keep hearing blather about "corporate culture." Not knowing what it is, or whether it is something crucial to your success, you decide that for now, it's best to ignore it. Eventually though, the niggling questions in the back of your brain take over. For new managers and those with experience alike, what follows is a primer on "corporate culture."

COLUMNS

PROFILE OF SUCCESS
Siemens Financial Services - The Mouse That Roared An Interview with Siemens Financial Services NA's New President and CEO, Roland Chalons-Browne
By Christopher Moraff, Associate Editor
In October 2005, when William Zadrozny announced he was stepping down as CEO of Siemens Financial Services, the company sought out Roland Chalons-Browne, who was by then in his 15th year with the American unit of German bank WestLB. When the company came knocking, Chalons-Browne accepted the offer with alacrity, realizing an opportunity existed for personal - as well as professional - growth.

SURVIVING SCRUTINY
What's the Trouble With Automatic Renewals in Fleet Leases?
The "Free Pass" From the Accounting Rules is Not Valid
By Bill Bosco, Principal, Leasing 101
There has been a sea change in the financial reporting environment and structured operating leases get special mention as a problem area. Structures that worked in the past because rules were ignored or issues deemed immaterial are not acceptable today. Lessors should take care to offer structures that they know will qualify for operating lease treatment over their term to have satisfied customers and avoid reputation risk.

LEGAL WATCH
Plan Confirmation & Cram Down... Life After Armstrong World Bankruptcy
By Lesley Anne Hawes, Partner, Frandzel Robins Bloom & Csato, L.C.
The Armstrong World Industries case is an illustration of the complicated power struggles in large Chapter 11 cases that can also be played out in smaller and less complex Chapter 11 reorganizations. The case illustrates that predicting how a court will apply the Bankruptcy Code's complex confirmation standards can also be difficult and uncertain, creating another factor that must be weighed in negotiating Chapter 11 plans.

DISPATCHES FROM THE TRENCHES
From Scary Damages Cases to Lurking De-facto Lessees - Oh, My!
By Kenneth P. Weinberg, Esq., Associate, Baker, Donelson, Bearman, Caldwell & Berkowitz
This edition of Dispatches From the Trenches discusses: (1) an improperly decided liquidated damages case; (2) broad descriptions of collateral on financing statements; (3) types of term sheets; (4) all risk insurance and wear and tear exclusions; and (5) de-facto lessees and perfection risks.

If you are interested in ordering an article from this, or any other issue of the Monitor, please visit our article directory page. To purchase a PDF of the Monitor 100 Report, click here. Visit our Past Issues page.

Questions or comments regarding Monitor content, or to inquire about submitting an article, contact Stuart Papavassiliou, Senior Editor, at 610.293.1300 ext. 124 or e-mail sppapa@monitordaily.com