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Christopher Menkin
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Christopher "Kit" Menkin is of editor LeasingNews.org (http://www.leasingnews.org/), an internet trade publication for the finance/leasing industry. He has 46 years experience in the finance/leasing industry as well as being a founder of a commercial regional bank and serving on several company... More
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  • The facts behind the $96 Million LEAF Securization 8 comments
    Feb 4, 2011 12:07 PM

    by Christopher Menkin


    “LEAF Financial Corporation Announces Securitization of $96 Million of Leasing Assets”

    It never ceases to amaze me how many publish a press release as if it is accurate, true, the truth, because the company said so. Many of them are misleading, and worse, after being printed, they are like the stories that have been making the internet rounds for years that receivers start to believe are true history or a true fact.

    Case in point comes from a press release from LEAF Financial Corporation, where Crit DeMent is Chairman, CEO, LEAF Financial Corporation, LEAF Commercial Capital, plus Chairman-elect of the Equipment Leasing and Finance Association.
     

    "With the completion of LEAF 2011-1, LEAF has securitized approximately $96 Million of leases, term funded by the issuance of Contract Backed Notes on behalf of LEAF Commercial Finance Fund, LLC, a consolidated subsidiary of LEAF Equipment Finance Fund 4, L.P. ("LEAF 4"), one of the investment partnerships it administers. Guggenheim Securities, LLC, was the arranger of the notes and LEAF will continue to be the servicer for the assets."

    This new securitization deal was to pay off Morgan Stanley for a line that was due August 4, 2010, according to the SEC filings. It appears Leaf was in breach on the line. Please note in the footnotes that LEAF 4 fund has high charge-offs and was under performing, like the others.

    From the SEC filing:
    "On January 26, 2011, the Registrant's consolidated subsidiary, LEAF Commercial Finance Fund, LLC (" LCFF “), completed a $95,991,000 term securitization. Pursuant to the securitization, LEAF Receivables Funding 6, LLC, a newly formed subsidiary of LCFF, issued six classes of notes. The notes are asset-backed debt, secured and payable only by certain assets of LEAF Receivables Funding 6, LLC. Proceeds from the offering were used to repay all amounts due under the Registrant's credit facility with Morgan Stanley Bank, N.A. and terminate this facility. The notes are governed by an Indenture dated as of January 6, 2011 between LEAF Receivables Funding 6, LLC and U.S. Bank National Association in its capacity as trustee and custodian."(1)

    A LEAF Financial Corporation press release stated, "As the securitization marketplace continues to show increased strength, a number of equipment leasing and finance companies are accessing this channel as a means to diversify their capital strategy. This transaction brings LEAF's total securitizations to $700 Million since May 2010. With this securitization, all of the short term debt of LEAF 4, which at one point totaled approximately $450 million, has now been match funded with long term debt. LEAF 4 now joins LEAF Equipment Leasing Income Fund III, L.P. in having greater stability by no longer relying strictly on short term credit warehouse facilities."

    Page 12, confirms the Morgan Stanley dates, and actually tells part of the other half of the press release, which can been seen as the opposite of the securitization story as quoted in the press release(2):
     

    (1) Form 8-K filed by LEAF:
    http://leasingnews.org/PDF/Leaf126.pdf

    (2) Morgan Stanley Loan Matured on August 4, 2010:
    http://leasingnews.org/PDF/MorganStanley8410.pdf
     

    Previous stories:
    http://www.leasingnews.org/Conscious-Top%20Stories/leaf_resource.html

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Comments (8)
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  • Stevielee
    , contributor
    Comments (6) | Send Message
     
    So whats the point to your blog? To keep throwing shit in investors faces? Where do you get your info? Conjecture and if so where did you get your knowledge. Companies have enough witch hunters chasing them, as well as FINRA and the hounds from hell, the bottom of the barrell-securities litigators. What's your angle?

     

    ssyoshik@gmail.com
    4 Nov 2011, 06:27 AM Reply Like
  • Christopher Menkin
    , contributor
    Comments (99) | Send Message
     
    Author’s reply » The lack of internet netiquette shows me your intelligence and inability to read. First, I am the editor/publisher of leasingnews.org, which you could have easily seen in my profile.

     

    In the articles, I included copies of the four funds, none of them profitable, the notices of not paying investors, requests to take
    principal as they are out of management fees, and the investors have complained to leasing news they were misrepresented by the salesmen at LEAF who were hawking the investment package.

     

    My role is to bring this to the attention of Leasing News readers, and was invited to bring stories to Seeking Alpha that involved stock and other such investments, such as these funds. The parent of
    LEAF Financial is on NASDAQ, by the way.

     

    I suggest you take some night classes or junior college classes
    on economics and investing, as they have such classes. I don't
    know if they teach manners.
    4 Nov 2011, 11:53 AM Reply Like
  • ElaineM
    , contributor
    Comment (1) | Send Message
     
    I am one of those that were duped into Leaf Financial investment by my financial advisor in Matthews, NC. We invested 100,000 with them and according to our advisor would get paid back 7% over 7 years and then get repaid the balance of our investment. Looks like we will loose approx. 70,000. I filed a complaint with FINRA against our advisor (who is no longer our advisor). This was such a rip off and we really can't afford to loose that kind of money. Wish there would be a class action lawsuit against Leaf for this type of ripoff.
    17 Oct 2013, 12:35 PM Reply Like
  • ConcernedK&V
    , contributor
    Comments (3) | Send Message
     
    We're also looking for an attorney with the fortitude to take on a lawsuit against LEAF. My sister and I lost hundreds of thousands with this disreputable organization. Our letters also appear on this site under Concerned K&V. Please let us know if you have had any other responses to your letter.

     

    Concerned K&V
    25 Mar 2015, 10:10 AM Reply Like
  • SuMaCH
    , contributor
    Comment (1) | Send Message
     
    My mother and I also were duped by Leaf Financial and the financial planner who recommended she invest in LEAF at age 84 y.o. She insisted that he only recommend "low risk" investments and he assured her that LEAF was her best option. Clearly this was a misrepresentation at best and more likely fraud.

     

    Our issue is that we did not become aware that she lost her entire original investment of $25,000 until LEAF informed us by letter AFTER the Eligibility time of 6 years had passed.
    We may be barred from going after the financial planner because of this. Now clearly the Financial Planner would have known that the 7 year investment, even if lost, would be time -barred. My mother and I were unaware of this additional risk...the barring of claims that are 6 years after the INITIAL investment. Apparently the Eligibility Rule does not take into consideration that we were completely unaware that we had incurred any damages, much less having lost our entire investment, and that neither LEAF nor the Financial Planner made us aware until after the time for filing a claim had passed. Convenient rule for Financial Planners!

     

    I would be interested in knowing if a Class Action suit is ever filed.
    5 Jul, 03:35 PM Reply Like
  • Christopher Menkin
    , contributor
    Comments (99) | Send Message
     
    Author’s reply » I am not aware of any class action suit. The parent company was sold, LEAF is now a new company, I understand. I would go to FINRA
    http://bit.ly/29oe0AT
    http://bit.ly/29yW44Q

     

    If I hear of anything new, will keep you in mind to communicate with.
    6 Jul, 02:51 PM Reply Like
  • Christopher Menkin
    , contributor
    Comments (99) | Send Message
     
    Author’s reply » Most of these salesmen worked for LEAF and were not independent advisors. I have heard it called a "Ponzi Scheme." I have received many complaints...I think there would be many interested in a class action suit.
    18 Oct 2013, 12:33 PM Reply Like
  • Christopher Menkin
    , contributor
    Comments (99) | Send Message
     
    Author’s reply » Yes, very well read. I would think you need a Pennsylvania attorney as that is where LEAF is located. The person would have to be an expert in this, and really don't know anyone who has this expertise. I will ask around.
    26 Mar 2015, 12:01 PM Reply Like
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