June 2004
Ensemble Players…
Harmonizing ABL Products & Services

Features

Watching for Trends…
In-Depth Industry Knowledge Proves Invaluable

By Lester M. Friedman

Today, more than ever, appraisers need to be on top of market conditions and developments. They must be responsive to a market that has fewer buyers and constantly changing comparables. And they need to be flexible enough to adjust their appraisals to compensate for fluctuating conditions. (Ref # APP017)

Sale-Leasebacks: Unlocking the Hidden Liquidity in Assets
By Richard Carratu

Although sale-leasebacks accounted for hundreds of billions of dollars of activity in recent years, they have traditionally been used by capital-intensive manufacturing and other businesses to access the financial value locked up in their machinery and other equipment. Financial sponsors
and their portfolio companies have come to discover the advantages of using this solution as an alternative source of funds.

(Ref # LSP016)

Maximizing ROI Through Data Analysis Software Implementation
By Carolyn Newman

Data analysis software promises more efficient and effective ways for financial professionals to turn the data they work with into useful information, so why doesn’t everyone use data analysis software?

(Ref # TECH005)

Inventory Fraud… Are Examiners Doing All They Can?
By Lynn A. Trapanese

While not all companies are committing fraud, it is important for examiners to maintain a level of professional skepticism. In field exams, complacency breeds trouble and can result in consequences of devastating proportions. Just ask the auditors in the Phar-Mor bankruptcy case
who never detected a $300 million fraud scheme.

(Ref # FRD007)

Steel Industry’s “Perfect Storm”… Unique Challenges for Secured Lenders
By Birchel Brown

The steel industry has, in recent years, been thrust into what can aptly be described as the “perfect storm”. To successfully ride out this storm, secured lenders need to understand the metrics that drive the industry and keep a close eye on a multitude of factors.
(Ref # GEN005, IND051)

Using the Right Tools: Techniques for Proactive AR Monitoring
By Mark Iadarola

Utilization of current technology can allow both cash flow and asset-based lenders to become more proactive in understanding how their borrower’s working capital assets perform and can help to mitigate the ever changing risk associated with the underlying collateral.
(Ref # ACC003)

Not for the Uninitiated: UCC Security Interest Opinions
By James D. Prendergast

With UCC Insurance the lender is dealing with an insurance company over matters of insurance risk thereby eliminating the disconnect between the lender who wants the attorney to be an insurance company and the attorney who doesn’t want to be one. By contrast, opinions requested by a lender from counsel to the borrower are seldom worth the cost of obtaining them.
(Ref # INS005)

A Conversation With Jim Connolly – Bank of America’s New ABL Executive

Jim Connolly, former president and CEO of Fleet Capital, and now head of the combined ABL business, talks about how the industry will be affected by the merger, what kinds of organizational changes to expect and what his goals are for the new ABL entity.
(Ref # EXEC018)

Columns

A PROFILE OF SUCCESS
A Profile of Success: A Formidable Lender in the Center
A Profile of Ted Koenig, President, Hilco Capital LP

By NBA standards, even his six-foot, four-inch frame would barely qualify him as a point guard, but Hilco Capital’s President, Ted Koenig, has become a most formidable leader and resolute player at the center position of his company’s thrust into the mezzanine lending arena.

(Ref # EXEC017)

LEGAL EYES
Seventh Circuit Confirms Secured Creditors’ Rights in Qualitech II
By Lesley Anne Hawes

In its second reported decision arising out of the Qualitech Steel Corp. bankruptcy case, the U.S. Court of Appeals for the Seventh Circuit upheld the right of secured creditors to pursue preference actions against unsecured creditors when the preference claims have been assigned to the secured creditors post-petition pursuant to a court order approving debtor-in-possession financing and adequate protection for the secured creditors.
(Ref # LGL032)

TURNAROUND CORNER
Determining the Best Method For Liquidating Collateral
By James C. Ebbert

Every asset-based lender knows that there are many ways to approach liquidation. Most times, company closures fall along a continuum requiring the use of a combination of a going concern sale, an orderly cessation of the company’s activities or an abrupt closure. However, the most successful workouts will always be driven by an analysis of each situation on its individual
merits.

(Ref # APP018)

FACTORING FOCUS
Factoring in a Recovering Economy… Streamlining Strategies for Success
By Frank Hennessey

Recent statistics show that annual factoring volume has risen to more than $95 billion in total
purchases. Factors who combine creative solutions, streamlined funding processes and visionary
technology can successfully offer financial solutions that are aggressive and price competitive.

(Ref # FAC037)