Methods for Securing Against Tenant Defaults
October 01, 2003
Security deposits are an age-old form of security for the performance of the tenant's obligations under a lease. In the simplest of transactions, the tenant deposits a fund with the landlord to be used to protect the landlord against the economic consequences of a tenant's default. The amount of the fund is the product of negotiations and usually involves a multiple of the monthly rent payable under the lease. In more sophisticated commercial transactions with other than the most creditworthy of tenants, the landlord wants the tenant to deposit a substantial sum, perhaps a multiple of the yearly rent payable under the lease, especially if the landlord pays for substantial tenant improvements. <p><i>Part Two of a Two-Part Series</i>
The Leasing Hotline
October 01, 2003
Highlights of the latest commercial leasing cases from around the country.
The Unfriendly California Skies: Avoiding Sales/Use Tax on Aircraft Purchases
October 01, 2003
Imagine getting slapped with a $100,000 past-due tax bill from the state of California several years after you purchased an aircraft, and you don't even live in that state. Think it can't happen? Better think again, as this type of scenario plays out with increasing frequency as California grapples with perennial budget shortages.
Private Leasing Companies Can't Ignore Sarbanes-Oxley
October 01, 2003
According to AMR Research, which recently surveyed 60 Fortune 1,000 companies, it is estimated that the Fortune 1,000 will spend $2.5 billion in 2003 alone in costs associated with Sarbanes-Oxley Act compliance. How much more will be spent by smaller public companies and by those in the private-company sector is a mystery, but the total costs - in cash, time, consulting fees, lost opportunities, and human resources - will surely be staggering.
A Primer on Portfolio Management Options for Parents and Captives
October 01, 2003
Imagine receiving a call from corporate indicating that your captive team has done a wonderful job of providing financing for your manufacturer parent organization. In fact, as a result of this excellent performance the parent company's leverage ratio is reaching the point that its financial rating may be reduced by the rating agencies. This is the type of good news/bad news call most captive managers would rather not receive.
In the Marketplace
October 01, 2003
Highlights of the latest equipment leasing news from around the country.
Homeland Security Technology: An Investor's Perspective
October 01, 2003
When you look at the financial sections of newspapers and magazines over the past few months, you get the sense that capital, entrepreneurs and technology innovators are flowing toward a new homeland security space ' a market in which the buyer is essentially one customer: the federal government.
Venture Capitalists: They're No Angels
October 01, 2003
Although angels invest at a lower price, VCs usually ask for and get better terms for their money. Why don't angels do the same? Angel investor. Venture capitalist. Many investors would like to be one or both. Yet few know the distinction between the two - or which is more advantageous.
Shadow Directors and Controlling Shareholders: Duties and Liability
October 01, 2003
The meltdown and the consequent disappointments have produced a wave (actual and threatened) of litigation, alleging the VCs, through the board seats of their appointees, were in "control" of failed companies (dot-coms and others), and therefore obligated to exercise "fiduciary" care over the fortunes of minority shareholders. And, the deep-pocketed VCs have, of course, been taking evasive action. Their time-honored gambits are, first, to eschew a board seat and substitute instead "observer" or "visitation" rights ' the right to sit in attendance at all board meetings and speak one's piece - but not vote. Given the muscle the VCs enjoy, by keeping their hand on the money spigot, this usually amounts to the same thing as a board seat. This is a practice known in the UK as "shadow directors." I am informed by my UK compadres that liability can attach as if the individual VC was, <i>de jure as well as <i>de facto, sitting on the board.
Arbitration Altercation
October 01, 2003
It's not unusual for parties to wrangle over the appointment of neutrals in an arbitration, but a long-running battle in broker-dealer arbitrations revolves around who has the right to represent investors at the proceedings.
