Financing Capital Equipment: What you Need to Know When Deciding Whether to Lease or Borrow

Agenda

Ownership Matters; and We'll Explain Why

• Generally -
• The Various Risks and Benefits of Ownership; and Impact on Pricing and Structure
• What Is a Lease, and Why Does It Matter?
• Commercial Law Implications - Priority of Interests; Allocation of Risks and Responsibilities; Enforcement Rights and Remedies, and Bankruptcy
• Tax Implications - Federal Income Tax Considerations, Including Depreciation Benefits, Reporting and Disputes; and Local and Cross-Border Tax Considerations
• Accounting Implications - on or off Balance Sheet Considerations; Structural Issues; and How Strategies May Change With the New Accounting Rules

Lease Documents Aren't the Same as Loan Documents; and We'll Discuss the Similarities and (Essential) Differences

• Generally - Documenting and Closing a Lease or Secured Equipment Financing
• Lease vs. Loan Documents; What's Similar and What's Different (and Why)?
• Similarities "Hell or High Water"; Credit Considerations; Equipment Requirements; Restrictions and Protections; Insurance; and Syndication
• Differences Equipment Purchase; During Term and EndOfTerm Options; Return Requirements; Remedies; Income Tax BenefitRelated Provisions; and Indemnifications and Other Ownership RiskRelated Provisions

Equipment Financings Can Be Complicated; and We'll Discuss Some of Those Complicating Factors

• Bundled Financings - Can You Really Lease All of That High-Tech Stuff
• Transportation and Other Regulated Equipment - Ownership Can Be Tricky for Lessors
• Cross-Border Financings - If We Stipulate as to What Law Should Apply, Is That Enough?

Credits

Faculty

Denise L. Blau

Vedder Price

• Joined the New York office of VEDDER PRICE in 1994 as a shareholder and is a member of the firm’s tax practice and the global transportation finance team, whose performance led VEDDER PRICE to be named Aviation 100 Law Firm of the Year 2015
• Tax attorney who focuses on federal income tax planning and tax controversy representation of domestic and foreign corporate, partnership and individual clients
• Extensive experience in cross-border and domestic equipment lease financings, project and real estate financings, equity and debt financings, securitization transactions, international tax matters, joint ventures and acquisitions
• Lectures extensively on financing, securitization and leasing matters; author of many articles on those subjects, including several articles for Euromoney’s World Leasing Yearbook
• Selected for inclusion from 2007 to 2013 in New York Super Lawyers; received an AV Preeminent Peer Rating in Martindale-Hubbell
• Member of the Association of the Bar of the City of New York; Federal Bar Association (Tax Section); American Bar Association (Committee on Capital Recovery and Leasing of the Taxation Section and Business Law Section); International Society of Transport Aircraft Trading (ISTAT)
• J.D. and LL.M. degrees, New York University School of Law; B.A. degree, with honors, University of Pennsylvania

Edward K. Gross

Vedder Price

• Shareholder at VEDDER PRICE and a member of the Global Transportation Finance team
• Established the firm’s Washington, DC office and has over 30 years of experience representing bank-affiliated and large, independent equipment financing companies in all aspects of equipment finance transactions, including documenting, structuring, negotiating, syndicating and enforcing these transactions
• Handles all types of equipment finance matters and structures, including single investor, leveraged financings, true/tax motivated leases, synthetic leases, TRAC leases, bundled and other vendor-originated financings, and domestic and cross-border financings, primarily for transportation equipment, but also for other types of equipment, including: manufacturing and assembly line, construction and drilling, energy-related and other facilities, medical and health-related facilities, high-tech equipment (including bundled financings), trucks and trailers, modular units and vessel repair equipment
• Many clients rely on him in syndication transactions, including large portfolio purchases, “one-off” sales and assignments, discounting, back-leveraging and participation transactions
• Has prepared lease, loan and syndication forms for many of the most active financing providers in the industry
• Working with VEDDER PRICE’s well-regarded bankruptcy and creditors’ rights practice, he has assisted financing providers, including various creditor groups, with workout, restructuring, bankruptcy and enforcement matters
• Selected for inclusion in numerous editions of Who's Who Legal’s The International Who's Who of Aviation Lawyers, including the 2014 edition in which he participated in a roundtable discussion; in the 2013 edition of that publication, he is named one of the top 500 aviation lawyers in the world, and is cited as “a go-to lawyer for finance, insolvency and restructuring…well-respected by commercial clients”
• In 2013 he was ranked in Chambers USA in the Nationwide Banking & Finance: Equipment Finance & Leasing category; was also named in Washington DC Super Lawyers (2007–15) and has been listed in The Best Lawyers in America and The Legal 500
• Elected as Fellow to the American College of Commercial Finance Lawyers in 2011, and elected as Regent to the College in 2012
• Has been recognized by the Equipment Leasing and Finance Association (ELFA), receiving the Distinguished Service Award in 2008 and ELFA’s Legal Committee Edward A. Groobert Excellence in Leasing Award in 2011
• J.D. degree, University of Baltimore School of Law; B.A. degree, University of Maryland

Daniel McKew

Daniel McKew

• CPA/PFS (personal financial specialist)
• CGMA Certified Global Management accountant
• 21 years as President/CEO Bank owned Equipment Finance companies for 2 top ten banks
• Former member ELFA Board of Directors