Marks & Evans, P.C. 
April  2020
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Well, I'm staying at home. Mostly. So are many of you.

Things (work-things) are slowed down, at least temporarily. So what, other than binge-watching Game of Thrones, learning to cook, and fretting over cash flow, can we be doing?

One answer I might suggest is that we are offering  online tutorials/training/Q&A sessions for clients. We will send you the "just-for-fun" test we did a while back and an outline of possible topics, but the 2-4-6 hour (whatever you feel you will need) sessions will cover any leasing/finance topic and any question your operations, sales or even credit staff might have.

It's an excellent way to:
  • fill in knowledge gaps
  • identify weak spots in your process or documentation
  • show staff the bigger picture - why we are doing all this paperwork
  • let staff share knowledge with each other
  • educate sales staff in alternatives they might propose to difficult clients, arguments why you are offering the best deal, and what lease language they cannot promise to remove
  • give the old guys in your office a chance to show off
  • save money on lawyers fixing mistakes or fielding specific questions
  • keep the people you are paying from binge-watching Game of Thrones
Shoot me an email if you are interested. We are exploring the security of a couple of services for face-to-face meetings and will be set up as early as next week.

Another possibility is to read your lease. Just sit down with coffee or whatever, and READ. You may find (gasp) typos, language that is at-odds with what you actually do, something you don't understand...if you are thinking that you'd rather not know what bad things are in your lease because you don't expect to be surprised by anything serious, watch the "Red Wedding" Episode of Game of Thrones (#29, 3d season).

Catch up on your reading. You can purchase the CLFP Manual whether or not you are a Certified Lease & Finance Professional (go to www.clfpfoundation.or g ), and if not, why not prep for the test and take it when we can emerge from our sheltering? Professor Johnson and I have a few of our short/inexpensive POWER TOOLS FOR SUCCESSFUL LEASING  books available (email me) and there are a bunch of more in-depth volumes out there, including books by Sean Halladay and Sudhir Amembal, well worth checking out.

As to other reading, I (like many of you) have a long list of fiction and history. You might want to check out Personality, Character, and Leadership In The White House: Psychologists Assess the Presidents by Steven J. Rubenzer and Thomas R. Faschingbauer  | Aug 31, 2004. Note the date and that there is a chapter entitled "Donald Trump for President?"! This chapter, written when it was a funny idea, examines whether a CEO would make a good president, based on the extensive psychological modelling the egghe...uh... psychologists did. The book is dry as sand, but amazingly comprehensive and totally surprising.
Monopoly (and Other Old Fashioned Family Board Games). It's just not the same when you are a grown-up in the financial world. Add options, auction unpurchased properties...or gather the kids for a game of  Family Treevia . If you're interested, send me an email and I will send instructions (free, of course) - it's a game I created 20 years ago to keep my pre-teens from being swallowed by television, and it might work as an alternative to  Super Mario Mind-Numbing Zombie Shooting on whatever-the-heck video system is in vogue. Honestly, my kids & stepkids enjoyed it, especially the "prizes."

BTW: We still have a few "A House Divided..." t-shirts left. Send mailing instructions. No charge, not even postage.

Tammy, Matt and I wish you a safe and productive spring.

Based, in part, on recent ELFA LegalTalk discussions (thanks, guys):

Deferral Agreements:  
Don't forget that they should be null and void if the lessee defaults on the non-deferred lease provisions, like insurance, taxes, maintenance, or bankruptcy.

Trade Names:  
You know (and your operations staff had better know) that you ignore trade names (dba's, fictitious names) when filing a UCC financing statement. Always file in the debtor's legal name and be sure you have it exactly right. There is another side to the question.

Is YOUR trade name registered in any state involved in the transaction, or where a lawsuit may be brought? In most states, you cannot sue in your trade name unless it is registered. This may not be necessary if the name is disclosed to be a trade name for your corporation or limited liability company and, like qualification to do business, is curable without voiding the contract.

Here's a brain-teaser. If you buy a discounted lease that is signed by the lessor in its unregistered trade name (a private-label lease, perhaps), and the lessor goes out of business, can you register the trade name yourself if you need to? I would guess that you could register the name, but remember there is likely to be a lessee lawyer trying to trip you up.

Broker's License: It's been years since we updated our research, but

Income Tax Indemnity:
Back in the day, this was the topic of heated debates between lessor and lessee counsel. For those who do not generally dabble in federal income tax law (and don't forget that there can be state law implications), many forms adopt the "acts or omissions" standard, leaving the lessor unprotected if the structure of the transaction causes the IRS to treat it as a financing instead of a lease. You might want to discuss this with any client doing tax leasing.

Force Majeur Clauses:  
These sections, common in manufacturing and supply contracts, provide that a party is excused from performance if prevented by labor unrest, war, "act of God" and/or a host of other possibilities. They do NOT belong in leases or EFAs. The lessee's primary obligation is to pay rent. The lessor's only obligation should be to allow the lessee to continue use and "quietly enjoy" the equipment as long as there is no default. The lease or EFA is a hell or high water, unconditional and absolute.

Just say no, but if you are required to include such nonsense in a lease or financing document, at the very least exclude the obligation to pay rent. Unfortunately, that is what some of us are facing due to COVID-19, and possible overbroad state legislation.
"Loan Broker" Licenses: YOU MIGHT WANT TO READ THIS:
  • If you are a broker/originator/lessor who signs leases and EFAs in its own name and the assigns (discounts) them to a bank, funder or other lessor, or 
  • If you purchase leases or EFAs from anyone listed above.
Is a lease a "loan" for these statutes? Is a $1-out lease a "loan"? An EFA? What are the penalties and do they apply to a funder? The definitions, penalties and other language, varies wildly from state to state. It might be worth a look. Bear in mind that these lists are the result of review of state statutes and, in some cases, calls to the appropriate state officials. some may be inapplicable to your business for one reason or another. We are not given anyone an opinion here, just raising possible issues. Most, if not all, of these states are likely to exclude specifically vendors, and we do not believe a vendor leasing company (even a separate corporation) would be covered. Also, banks may be excluded in some states (Cal).


1.  The following states require licenses, or at least some form of registration to act as a "loan broker" in a business transaction. Some of these may be inapplicable to you for one reason or another.   California (a Finance Lender License), Illinois, Indiana, North Carolina, Nebraska, Ohio, Oklahoma, Rhode Island, Utah, Vermont, Tennessee (loans to individuals, which may include sole proprietors).

2. Note that these states restrict or require a license to collect an "advance fee" - compensation payable by the borrower before the loan is placed with a lender.   Arizona, Arkansas, Georgia, Iowa, New York, New Jersey, North Dakota, Pennsylvania

3.  Finally, these states, have specific do's and don'ts for loan brokers. These requirements may include restrictions on the collection of advance fees.  
Arkansas, Connecticut, Georgia, Iowa, New Jersey, New York
400 Century Park South
Suite 100
Birmingham, AL 35226
(205) 251-8301

Direct Mail To: 
P.O. Box 11386
Birmingham, AL 35202
Barry S. Marks   
Direct:  205.251.8303 │
Matthew D. Evans   
Direct:  205.251.8302  │

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