(MENAFN – Arab News) There has been a tremendous increase in the total value of personal loans extended by Saudi local banks in recent years. It shot up nearly 20 times within the last 13 years reaching SR219 billion in 2011 from SR11 billion in 1998, according to a report in Al-Eqtisadiah business daily.
This was mainly attributed to a huge increase in the number of banking customers and their reliance on local lenders to meet most of their personal requirements. Subsequently, almost all local banks have expanded their base of personal lending substantially even without taking into account the solvency of customers. Several financial and legal experts warned customers against relying heavily on banks to meet their financial requirements but most of them ignore such warnings.
Earlier, the number of customers who took out personal bank loans was very limited. In 1998, the volume of personal loans extended by local banks was merely SR11.2 billion. However it jumped three times to SR38.4 billion in 2001. The total value of personal loans was SR178.4 billion and SR198.8 billion in 2007 and 2010 respectively.
During Q3, 2011, the volume of personal loans extended by banks rose to SR218.9 billion. These included SR27.7 billion for real estate financing, SR46.2 billion for financing purchase of vehicles and equipment, and SR144.8 billion for other purposes, while credit card loans account for SR8.65 billion.
The huge increase in personal loans attributed mainly to the remarkable growth in the number of bank customers in recent years and their increased dependence on banks to meet most of their financial requirements. A number of Saudi financial and legal experts recently noted that Saudi banks had adopted a more cautious approach while extending personal loans in the past. Before 2000, the local banks concentrated mainly in extending loans only to companies and firms rather than individuals.
However, now the situation has been changed tremendously and almost all banks are competing each other to exploit this situation and resorting to the practice of receiving personal loan repayments directly from the salaries of borrowers. This practice served as a motivation for local banks to extend more personal loans to employees without taking into account their solvency.
The Saudi Arabian Monetary Agency (SAMA) introduced regulations for consumer financing and made them binding for the local banks effective Jan. 1, 2006. Banks are able to solve all the problems related to personal loans following the regulations issued by the central bank. There was also a SAMA directive that allows banks to treat the salaries of borrowers as security if they take out personal loans. This has helped banks to expand their base of personal lending substantially.
Some financial experts stressed that consumers must take utmost care and caution while taking personal loans so as not to affect their solvency as well as to prevent them from falling into a debt trap. They noted that consumers should take loans only if they are sure that they can make their prompt repayment. Loans be taken to fulfill only basic needs and not for any unnecessary requirements. There should be precise calculations and well thought out planning before taking loans, and there should not be any hasty decisions to take a loan. Precaution is to be taken against taking loans from illegal and unauthorized financial firms so as to avert becoming victims of fraudulent means and cheating.
Also, the monthly amount of repayment must be affordable to the consumer. There should also be proper balance between spending, borrowing and savings of the consumer. The consumer must have obtained all the relevant information with regard to the terms and conditions of borrowing and be fully aware of his ability to make repayments without affecting his solvency. The experts also cautioned against the habit of taking personal loans at regular intervals.
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2012年2月1日星期三
5 bad financial fumbles by NFL players
Hall of Fame quarterback John Elway often escaped trouble on the field. But in 2010, Elway and a business partner invested $15 million with a hedge-fund manager who was arrested on charges that he ran a Ponzi scheme, The Denver Post reported. Elway lost $3 million.
Athletes can fall victim to Ponzi schemes if they do a poor job vetting the people who are handling their investments, says Michael Chasnoff, chief executive of Truepoint Inc., a wealth management company in Cincinnati.
Athletes often think they can trust the person investing their money if he or she was recommended by someone the athlete respects.
Investors have to perform their own due diligence no matter how much they trust the person who recommends an investment adviser, Chasnoff says.
The National Association of Personal Financial Advisors offers a questionnaire to help investors interview potential advisers. Before signing on, an investor should also contact the adviser’s other clients as a reference.
Look for advisers who are known in the community and give back to the community through charities or nonprofit groups. “They are usually very professional, high-integrity people,” Chasnoff says.
http://tourism9.com/ http://vkins.com/
Athletes can fall victim to Ponzi schemes if they do a poor job vetting the people who are handling their investments, says Michael Chasnoff, chief executive of Truepoint Inc., a wealth management company in Cincinnati.
Athletes often think they can trust the person investing their money if he or she was recommended by someone the athlete respects.
Investors have to perform their own due diligence no matter how much they trust the person who recommends an investment adviser, Chasnoff says.
The National Association of Personal Financial Advisors offers a questionnaire to help investors interview potential advisers. Before signing on, an investor should also contact the adviser’s other clients as a reference.
Look for advisers who are known in the community and give back to the community through charities or nonprofit groups. “They are usually very professional, high-integrity people,” Chasnoff says.
http://tourism9.com/ http://vkins.com/
AHEB Investment Group Reflects on a Successful Year for 2011
MANCHESTER, England, February 1, 2012 /PRNewswire/ –
AHEB Investment Group, the Belize-registered financial services consulting firm, has achieved another great year in 2011, despite the economic turmoil. The company announces 50% increase in its profits for 2011, whilst having laid the foundations for what promises to be an equally successful 2012 with the agreement of 20 client projects. The commitment, professionalism and high levels of expertise displayed by AHEB in the complex area of financing for large ventures and complex banking structures, is evident by the praise received from their clients.
The momentum gathered by AHEB Investment Group and their successful year continued right up to last weeks of December and is no doubt set to keep going into the start of 2012. During the last weeks of the year, meetings carried out with several major European banks and new investors set the pace for stage two of these exciting new developments, expected to take place in early 2012, with the next round of key negotiations. The success and achievements of these negotiations are by no small part down to AHEB’s expertise and professionalism in the field of large venture financing and complex banking structures, but also the clients themselves and the relationships and trust earned.
As AHEB Investment Group confirms its successful negotiation for 20 key projects at the end of 2011, it also announces that company profits have also increased by 50%. Andreas Charalambous, Managing Director of AHEB Investment Group, comments: “It has been an excellent year for AHEB Investment Group and we are pleased to be involved in some very major projects, which have allowed us to demonstrate our level of expertise and professionalism. We are very pleased to have a selection of extremely professional clients to work with and this allows us to bring great results also.”
AHEB Investment Group’s clients and associates are also very pleased with their cooperation and have expressed their gratitude in the testimonials received by the company. William Sickert, Principal and Director of International Zip Line Corporation comments: “Our experience with AHEB Investment group has been of the utmost in integrity and communication with respect to opportunities and programs. Our confidence and partnership led to progressive meetings and program introductions in Europe in the month of November. AHEB investment Group has the tenacity and relationships necessary to provide excellent and realistic programs to assist in the growth of your company. They are now our exclusive partners in our business and I endorse their staff as professional and integral in our future business worldwide.”
Randall Hickman of NCARE comments not only on the work ethic but also the personal touch offered by AHEB: “AHEB Investment Group has led our Funding Group to success by showing strong competence, integrity, and a shared common goal in success. Their dedication to our project (National Center for Autism Research and Education) has been nothing short of stellar. In working with them in Europe to finalize our project they have been nothing short of amazing. Further, AHEB displayed a warmth and personal touch unmatched compared with most financial groups. AHEB Investment Group has been nothing short of the height of professionalism, courtesy, and competence in all of their actions. We would highly recommend them to any project group seeking to arrange financing. They have made our project a reality.”
With these collaborations growing from strength to strength, the results in gaining finance for clients, and the project management and consulting agreements made over the past year, AHEB Investment Group is primed for a consecutively promising 2012. Andreas Charalambous, Managing Director of AHEB Investment Group, reciprocates: “We would once again like to thank our partners, investors, clients and friends for their kind words and reaffirm our commitment towards them. It is due to these partnerships, where all parties work together for mutual benefit, that we have been able to enjoy such a successful year with record profits. We look forward to continuing existing ventures whilst exploring new ones with our partners and clients in the near future.”
About AHEB Investment Group
AHEB Investment Group was founded in 2008 aiming to provide professional support and consulting regarding financing to businesses of large and medium size but also start up enterprises. AHEB specializes in assisting the development of large commercial and industrial projects by offering financing solutions and advisory support. Successful projects include real estate developments, construction including large hotels, energy based projects covering power plants and oil rigs with other major purchases of ships and aircraft. AHEB’s relationships with principal global and regional banking institutions assist businesses in arrangement of collateral via its network of investment partners. For further information about AHEB Investment Group, visit http://www.ahebgroup.com , email info@ahebgroup.com or call +1-347-4166069.
To read further customer testimonials from AHEB Investment Group clients visit: http://www.ahebgroup.com/dotnetnuke/CustomerTestimonials/tabid/201/Default.aspx
http://tourism9.com/ http://vkins.com/
AHEB Investment Group, the Belize-registered financial services consulting firm, has achieved another great year in 2011, despite the economic turmoil. The company announces 50% increase in its profits for 2011, whilst having laid the foundations for what promises to be an equally successful 2012 with the agreement of 20 client projects. The commitment, professionalism and high levels of expertise displayed by AHEB in the complex area of financing for large ventures and complex banking structures, is evident by the praise received from their clients.
The momentum gathered by AHEB Investment Group and their successful year continued right up to last weeks of December and is no doubt set to keep going into the start of 2012. During the last weeks of the year, meetings carried out with several major European banks and new investors set the pace for stage two of these exciting new developments, expected to take place in early 2012, with the next round of key negotiations. The success and achievements of these negotiations are by no small part down to AHEB’s expertise and professionalism in the field of large venture financing and complex banking structures, but also the clients themselves and the relationships and trust earned.
As AHEB Investment Group confirms its successful negotiation for 20 key projects at the end of 2011, it also announces that company profits have also increased by 50%. Andreas Charalambous, Managing Director of AHEB Investment Group, comments: “It has been an excellent year for AHEB Investment Group and we are pleased to be involved in some very major projects, which have allowed us to demonstrate our level of expertise and professionalism. We are very pleased to have a selection of extremely professional clients to work with and this allows us to bring great results also.”
AHEB Investment Group’s clients and associates are also very pleased with their cooperation and have expressed their gratitude in the testimonials received by the company. William Sickert, Principal and Director of International Zip Line Corporation comments: “Our experience with AHEB Investment group has been of the utmost in integrity and communication with respect to opportunities and programs. Our confidence and partnership led to progressive meetings and program introductions in Europe in the month of November. AHEB investment Group has the tenacity and relationships necessary to provide excellent and realistic programs to assist in the growth of your company. They are now our exclusive partners in our business and I endorse their staff as professional and integral in our future business worldwide.”
Randall Hickman of NCARE comments not only on the work ethic but also the personal touch offered by AHEB: “AHEB Investment Group has led our Funding Group to success by showing strong competence, integrity, and a shared common goal in success. Their dedication to our project (National Center for Autism Research and Education) has been nothing short of stellar. In working with them in Europe to finalize our project they have been nothing short of amazing. Further, AHEB displayed a warmth and personal touch unmatched compared with most financial groups. AHEB Investment Group has been nothing short of the height of professionalism, courtesy, and competence in all of their actions. We would highly recommend them to any project group seeking to arrange financing. They have made our project a reality.”
With these collaborations growing from strength to strength, the results in gaining finance for clients, and the project management and consulting agreements made over the past year, AHEB Investment Group is primed for a consecutively promising 2012. Andreas Charalambous, Managing Director of AHEB Investment Group, reciprocates: “We would once again like to thank our partners, investors, clients and friends for their kind words and reaffirm our commitment towards them. It is due to these partnerships, where all parties work together for mutual benefit, that we have been able to enjoy such a successful year with record profits. We look forward to continuing existing ventures whilst exploring new ones with our partners and clients in the near future.”
About AHEB Investment Group
AHEB Investment Group was founded in 2008 aiming to provide professional support and consulting regarding financing to businesses of large and medium size but also start up enterprises. AHEB specializes in assisting the development of large commercial and industrial projects by offering financing solutions and advisory support. Successful projects include real estate developments, construction including large hotels, energy based projects covering power plants and oil rigs with other major purchases of ships and aircraft. AHEB’s relationships with principal global and regional banking institutions assist businesses in arrangement of collateral via its network of investment partners. For further information about AHEB Investment Group, visit http://www.ahebgroup.com , email info@ahebgroup.com or call +1-347-4166069.
To read further customer testimonials from AHEB Investment Group clients visit: http://www.ahebgroup.com/dotnetnuke/CustomerTestimonials/tabid/201/Default.aspx
http://tourism9.com/ http://vkins.com/
2012年1月23日星期一
NYT: Romney fan and private equity poster boy
updated 1 minute ago 2012-01-22T23:36:00
It was, the gossip pages would later report, the talk of the Hamptons — a midsummer night’s bacchanal in the playground of the 1 percent.
Beyond the windswept dunes in Bridgehampton, at a $400,000-a-month oceanfront mansion, bright young things bubbled up and the Champagne flowed fast. Into the small hours, professional dancers in exotic clothing gyrated atop platforms. One couple twirled flaming torches. The sounds of techno boomed over the beach.
The New York Post summed up the evening’s Dionysian mysteries with the following headline: “Nude Frolic in Tycoon’s Pool.”
The Post’s tycoon, and the party’s host, was a financier named Marc J. Leder, and those weekend revels last July had the East End of Long Island buzzing. Like many deal makers, though, Mr. Leder, 50, is virtually unknown outside financial circles. But from his headquarters in Boca Raton, Fla., he presides over a multibillion-dollar private empire. He is a practitioner of a Wall Street art that helped define an age of hyperwealth, and which has now been dragged into the white-hot spotlight of presidential politics: private equity.
It was through private equity that one Republican candidate, Mitt Romney, amassed his wealth — and, it turns out, it was through private equity that Mr. Romney first met Mr. Leder. A couple of months after the blowout in Bridgehampton, Mr. Leder was host for a fund-raiser at his Boca Raton home for Mr. Romney’s campaign. But the connection goes back even further. Years ago, a visit to Mr. Romney’s investment firm inspired Mr. Leder to get into private equity in the first place. Mr. Romney was an early investor in some of the deals done by Mr. Leder’s investment company, Sun Capital, which today oversees about $8 billion in equity.
Mr. Romney’s own time in the private equity business, at Bain Capital, has provoked fierce attacks from Republican rivals and others. It has also prompted a lot of questions, including the big one: What good is this business, anyway? Detractors say private equity has enriched a handful of financiers at the expense of ordinary Americans. The deal makers, this line goes, buy companies and then bleed the life out of them. Jobs are often among the casualties.
Whether there’s truth to such claims depends on whom you ask. Private equity executives, as well as Mr. Romney, who left Bain in 1999, say the industry fixes troubled companies and ultimately creates jobs. Whatever the case, three decades after this sort of deal-making burst onto the scene in the merger mania of the 1980s, there are surprisingly few solid answers from either side.
What is certain is that buyout specialists upended the old order and made vast fortunes for themselves. Fueled by easy money from banks, and from endowments and pension funds, these private investors were able to buy companies with borrowed money and put down relatively little of their own cash.
Today, many of these private kingdoms rival the nation’s mightiest public companies. In all, the private equity industry oversees $3 trillion in global assets, according to Preqin, the research firm. Buyout kings control more than 14,000 American companies, including brands like Hilton Hotels and Burger King.
But financiers weren’t the only ones to embrace private equity. On the campaign trail, Rick Perry called private equity artists “vulture capitalists.” But as governor of Texas, he blessed the largest corporate buyout in history — the $44.4 billion takeover of the utility TXU by several investment firms in 2007. Indeed, as in many other places nationwide, public pension funds in Texas used public money to bet on private equity, in hopes of generating the investment returns they needed to pay retirees.
Against this backdrop, the story of Marc Leder might seem a footnote in the nation’s economic ledger. But it is a story worth knowing. That’s because, in many ways, Mr. Leder personifies the debates now swirling around this lucrative corner of finance.
To his critics, he represents everything that’s wrong with this setup. In recent years, a large number of the companies that Sun Capital has acquired have run into serious trouble, eliminated jobs or both. Since 2008, some 25 of its companies — roughly one of every five it owns — have filed for bankruptcy.
Among the losers was Friendly’s, the restaurant chain known for its Jim Dandy sundaes and Fribble shakes. (Sun Capital was accused by a federal agency of pushing Friendly’s into bankruptcy last year to avoid paying pensions to the chain’s employees; Sun disputes that contention.) Another company that sank into bankruptcy was Real Mex, owner of the Chevy’s restaurant chain. In that case, Mr. Leder lost money for his investors not once, but twice.
Yet Mr. Leder doesn’t seem to be suffering too much himself. In fact, he is living so large that he can’t avoid the limelight. Last July, he used part of his personal fortune to join a group of investors in buying the Philadelphia 76ers. In December, he was spotted on St. Bart’s with Russell Simmons, of Def Jam and Phat Farm fame, and Rachel Zoe, the celebrity stylist. That again landed him in The New York Post, which dubbed him a “private equity party boy.”
Mr. Leder says that characterization couldn’t be further from the truth. He focuses on what are known as “scratch and dent” deals, which typically involve companies that are struggling to begin with. One-third of the companies Sun Capital has bought are losing money. It’s a tricky game in good times, and downright dangerous in bad ones. Mr. Leder and his defenders say Sun Capital has saved many companies and, with them, many, many jobs.
“I think the portrayal of me as having wild and crazy parties is absolutely incorrect,” Mr. Leder said during a wide-ranging interview in Sun Capital’s offices in Midtown Manhattan. “I spend a small percentage throwing some parties, attending some parties. I like music. I like to dance. But rather than reporting on how I spend 340 days and nights of my year, the media likes to report on the other 25.”
Paul Jones, chief executive of the Midwest retailer ShopKo, which Sun Capital acquired in 2005, said Mr. Leder has kept a close eye on his company. “I get e-mails from him, usually on Sunday mornings, in which he’s says we had an impressive week or sometimes it’s just to give our team an ‘attaboy,’ ” Mr. Jones said.
For more than 28 years, Helen Smolak worked at the Friendly’s in Denham, Mass. Day in and day out, she served Big Beef Burgers and Fribbles, collected tips and made a decent living.
All that changed one evening last October. That was when Ms. Smolak’s supervisor called to tell her the restaurant was shutting down — immediately.
“It was my family. That was my home,” said Ms. Smolak, 56. “Friendly’s always came first. I was supposed to retire with these people and with this company.”
What went wrong? Sun Capital acquired Friendly’s in 2007 for $395 million — an 8 percent premium based on Friendly’s stock price at the time. But now Sun was saying the weak economy and the rising prices of milk and other ingredients had pushed Friendly’s, a 76-year-old chain, to the brink.
The Pension Benefit Guaranty Corporation, the federal agency that helps safeguard corporate pensions, wasn’t so sure. It accused Sun Capital in bankruptcy court filings of using the bankruptcy to shift Friendly’s pension burden onto the agency.
“That’s absolutely not true,” Mr. Leder said. Friendly’s pension fund, he said, was underfunded well before Sun Capital bought the company. The outcome, he added, is simply the way the bankruptcy process works.
“We don’t make the rules,” he said with a shrug. He said the matter was settled with the agency for a “nominal” sum.
Bankruptcy is never pretty. But, in this case, Sun Capital was particularly adept at getting what it wanted. Only months after Friendly’s went bankrupt, Mr. Leder has already regained control of the company. It was a calculated move, and one that is potentially lucrative for Sun Capital and its investors. In filing for bankruptcy, Friendly’s also cut hundreds of jobs, closed dozens of restaurants and bought some time to regroup. Now, if Sun Capital can turn around Friendly’s, it might eventually be able to sell the chain at a profit.
Beyond the windswept dunes in Bridgehampton, at a $400,000-a-month oceanfront mansion, bright young things bubbled up and the Champagne flowed fast. Into the small hours, professional dancers in exotic clothing gyrated atop platforms. One couple twirled flaming torches. The sounds of techno boomed over the beach.
The New York Post summed up the evening’s Dionysian mysteries with the following headline: “Nude Frolic in Tycoon’s Pool.”
The Post’s tycoon, and the party’s host, was a financier named Marc J. Leder, and those weekend revels last July had the East End of Long Island buzzing. Like many deal makers, though, Mr. Leder, 50, is virtually unknown outside financial circles. But from his headquarters in Boca Raton, Fla., he presides over a multibillion-dollar private empire. He is a practitioner of a Wall Street art that helped define an age of hyperwealth, and which has now been dragged into the white-hot spotlight of presidential politics: private equity.
It was through private equity that one Republican candidate, Mitt Romney, amassed his wealth — and, it turns out, it was through private equity that Mr. Romney first met Mr. Leder. A couple of months after the blowout in Bridgehampton, Mr. Leder was host for a fund-raiser at his Boca Raton home for Mr. Romney’s campaign. But the connection goes back even further. Years ago, a visit to Mr. Romney’s investment firm inspired Mr. Leder to get into private equity in the first place. Mr. Romney was an early investor in some of the deals done by Mr. Leder’s investment company, Sun Capital, which today oversees about $8 billion in equity.
Mr. Romney’s own time in the private equity business, at Bain Capital, has provoked fierce attacks from Republican rivals and others. It has also prompted a lot of questions, including the big one: What good is this business, anyway? Detractors say private equity has enriched a handful of financiers at the expense of ordinary Americans. The deal makers, this line goes, buy companies and then bleed the life out of them. Jobs are often among the casualties.
Whether there’s truth to such claims depends on whom you ask. Private equity executives, as well as Mr. Romney, who left Bain in 1999, say the industry fixes troubled companies and ultimately creates jobs. Whatever the case, three decades after this sort of deal-making burst onto the scene in the merger mania of the 1980s, there are surprisingly few solid answers from either side.
What is certain is that buyout specialists upended the old order and made vast fortunes for themselves. Fueled by easy money from banks, and from endowments and pension funds, these private investors were able to buy companies with borrowed money and put down relatively little of their own cash.
Today, many of these private kingdoms rival the nation’s mightiest public companies. In all, the private equity industry oversees $3 trillion in global assets, according to Preqin, the research firm. Buyout kings control more than 14,000 American companies, including brands like Hilton Hotels and Burger King.
But financiers weren’t the only ones to embrace private equity. On the campaign trail, Rick Perry called private equity artists “vulture capitalists.” But as governor of Texas, he blessed the largest corporate buyout in history — the $44.4 billion takeover of the utility TXU by several investment firms in 2007. Indeed, as in many other places nationwide, public pension funds in Texas used public money to bet on private equity, in hopes of generating the investment returns they needed to pay retirees.
Against this backdrop, the story of Marc Leder might seem a footnote in the nation’s economic ledger. But it is a story worth knowing. That’s because, in many ways, Mr. Leder personifies the debates now swirling around this lucrative corner of finance.
To his critics, he represents everything that’s wrong with this setup. In recent years, a large number of the companies that Sun Capital has acquired have run into serious trouble, eliminated jobs or both. Since 2008, some 25 of its companies — roughly one of every five it owns — have filed for bankruptcy.
Among the losers was Friendly’s, the restaurant chain known for its Jim Dandy sundaes and Fribble shakes. (Sun Capital was accused by a federal agency of pushing Friendly’s into bankruptcy last year to avoid paying pensions to the chain’s employees; Sun disputes that contention.) Another company that sank into bankruptcy was Real Mex, owner of the Chevy’s restaurant chain. In that case, Mr. Leder lost money for his investors not once, but twice.
Yet Mr. Leder doesn’t seem to be suffering too much himself. In fact, he is living so large that he can’t avoid the limelight. Last July, he used part of his personal fortune to join a group of investors in buying the Philadelphia 76ers. In December, he was spotted on St. Bart’s with Russell Simmons, of Def Jam and Phat Farm fame, and Rachel Zoe, the celebrity stylist. That again landed him in The New York Post, which dubbed him a “private equity party boy.”
Mr. Leder says that characterization couldn’t be further from the truth. He focuses on what are known as “scratch and dent” deals, which typically involve companies that are struggling to begin with. One-third of the companies Sun Capital has bought are losing money. It’s a tricky game in good times, and downright dangerous in bad ones. Mr. Leder and his defenders say Sun Capital has saved many companies and, with them, many, many jobs.
“I think the portrayal of me as having wild and crazy parties is absolutely incorrect,” Mr. Leder said during a wide-ranging interview in Sun Capital’s offices in Midtown Manhattan. “I spend a small percentage throwing some parties, attending some parties. I like music. I like to dance. But rather than reporting on how I spend 340 days and nights of my year, the media likes to report on the other 25.”
Paul Jones, chief executive of the Midwest retailer ShopKo, which Sun Capital acquired in 2005, said Mr. Leder has kept a close eye on his company. “I get e-mails from him, usually on Sunday mornings, in which he’s says we had an impressive week or sometimes it’s just to give our team an ‘attaboy,’ ” Mr. Jones said.
For more than 28 years, Helen Smolak worked at the Friendly’s in Denham, Mass. Day in and day out, she served Big Beef Burgers and Fribbles, collected tips and made a decent living.
All that changed one evening last October. That was when Ms. Smolak’s supervisor called to tell her the restaurant was shutting down — immediately.
“It was my family. That was my home,” said Ms. Smolak, 56. “Friendly’s always came first. I was supposed to retire with these people and with this company.”
What went wrong? Sun Capital acquired Friendly’s in 2007 for $395 million — an 8 percent premium based on Friendly’s stock price at the time. But now Sun was saying the weak economy and the rising prices of milk and other ingredients had pushed Friendly’s, a 76-year-old chain, to the brink.
The Pension Benefit Guaranty Corporation, the federal agency that helps safeguard corporate pensions, wasn’t so sure. It accused Sun Capital in bankruptcy court filings of using the bankruptcy to shift Friendly’s pension burden onto the agency.
“That’s absolutely not true,” Mr. Leder said. Friendly’s pension fund, he said, was underfunded well before Sun Capital bought the company. The outcome, he added, is simply the way the bankruptcy process works.
“We don’t make the rules,” he said with a shrug. He said the matter was settled with the agency for a “nominal” sum.
Bankruptcy is never pretty. But, in this case, Sun Capital was particularly adept at getting what it wanted. Only months after Friendly’s went bankrupt, Mr. Leder has already regained control of the company. It was a calculated move, and one that is potentially lucrative for Sun Capital and its investors. In filing for bankruptcy, Friendly’s also cut hundreds of jobs, closed dozens of restaurants and bought some time to regroup. Now, if Sun Capital can turn around Friendly’s, it might eventually be able to sell the chain at a profit.
And profit, after all, is what private equity is really about. Among the Sun Capital investors that stand to benefit from all of this are the New York State Teachers’ Retirement System, the Indiana State Teachers’ Retirement Fund and the Ford Foundation.
Jeffrey States is the investment officer for the Nebraska Investment Council, another Sun Capital investor. He said some private equity firms do provide information about how their dealings might affect things like jobs. But not all investors ask for such details.
“The primary objective is returns,” Mr. States said.
Mr. Leder, for his part, has never been shy about turning a profit. He and another banker, Rodger R. Krouse, were working at Lehman Brothers when they saw the huge money-making potential of private equity. They hatched their plan to get into the business one April afternoon in 1995, after a meeting at Mr. Romney’s Bain Capital in Boston.
The executives at Bain had been grousing about a deal in which Bain had doubled its money. But the Bain executives were lamenting that if they had sold sooner, they could have made much more.
On the plane back to New York, Mr. Leder and Mr. Krouse sat stunned.
“We’re looking at each other saying, ‘This is an industry where double your money is not that good of a deal?’ ” Mr. Leder recalls.
At 10 the next morning, Mr. Leder and Mr. Krouse marched into their bosses’ offices and quit. They then decided to base their new private equity firm in Boca Raton, and became its co-chief executives, believing the location would give them an edge in spotting potential acquisitions in the Southeast before their rivals in New York and Boston. But competitors kept outbidding them for companies.
It took 20 months, but they finally got their foot in the door. Friends and family members invested in their first dozen deals. Mr. Romney also invested personally in some early transactions, including an acquisition of a company that made speakers for computers and another that made carbon paper.
(Mr. Romney’s 2011 financial disclosures included stakes worth less than $15,000 apiece in two Sun-controlled companies — a pittance, given his estimated wealth of as much as $250 million. A spokeswoman for Mr. Romney’s campaign did not respond to an e-mail or a call seeking comment.)
Sun Capital soon carved a niche in doing turnarounds. In 1997, it acquired a majority stake in a maker of injection-molded polypropylene panels. By 2002, that company had more than doubled its sales.
One success led to another. Mr. Leder and Mr. Krouse invested $1.5 million in a company that supplied parts for Corvettes and walked away with $20 million. Two Sun investors were so tickled that they bought each man a red Corvette.
Such successes aside, Mr. Leder and Mr. Krouse make something of an odd couple. Mr. Krouse has the quiet demeanor of an accountant and tends to shift in his seat when conversations turn to his private life. (Former associates say he is a family man who likes to spend his spare time reading.)
Mr. Leder, by contrast, is bigger than life. He storms into a room and seems to suck out all of the air. Several former colleagues say he appears to have a photographic memory. He speaks rapidly and rarely holds back.
In a conversation about his business dealings, he segued into how his father wanted him to be a doctor but that he opted for other pursuits because he hated dissecting frogs in biology class. And he mentioned how he used crushed graham crackers as the secret ingredient in the pancakes he used to make for his youngest daughter.
He also said he started reading The Wall Street Journal when he was 12, and that in high school he delivered chickens and started a D. J. business. And he said that he typically sleeps for two to three hours at a time at night before waking up to answer e-mails.
AS word got out about Sun Capital’s early investment successes, pension funds and endowments were soon clamoring to get into its funds. Sun Capital raised fund after fund, each bigger than the last. In 2007, it raised $6 billion for a single fund. Sun Capital had hit the big time.
Then the Great Recession struck. The private equity boom turned bust fast.
By early 2009, numerous companies that Sun Capital had acquired were struggling to survive. Sun was racked by internal dissent. And Mr. Leder’s personal life had hit a rough patch.
By that spring, several Sun companies, including Drug Fair, Big 10 Tires and Mark IV Industries, had spiraled into bankruptcy. The firm had already taken losses on a large deal, a hostile takeover of the fashion company Kellwood, which Sun Capital had acquired without the usual due diligence.
Then came other, more personal blows. Mr. Leder and Mr. Krouse both lost money that they had personally invested with Bernard L. Madoff. Mr. Leder and his wife of 22 years, Lisa, began to go through a messy divorce. She demanded half of his total wealth, which she contended was more than $400 million at the time. The two eventually settled for an undisclosed amount.
Its business in retreat, Sun Capital laid off a number of its own employees. Those who stayed were told they would receive no cash bonuses. Instead, everyone was given a bigger slice of the portfolio of companies that, at that time, was losing value every day.
Angry employees fired off a list of dozens of pointed questions to Mr. Leder and Mr. Krouse, asking how much money the two co-founders had been paid and how much they had taken out of Sun Capital. The employees wanted to know how a firm that had just raised a $6 billion fund, and which was collecting about $120 million a year in management fees alone, could possibly be running low on cash.
Mr. Leder and Mr. Krouse had, in fact, already paid themselves handsomely for their giant fund. As 50-50 partners, they kept the first year’s fees, in cash, for themselves, according to former employees. A spokesman for Sun Capital declined to comment.
Mr. Leder said that even during its worst year, Sun Capital booked a small profit. He denied that his decisions were driven by his own financial interests. And Sun Capital paid its employees cash bonuses early for 2009 , he said, because “we realized we had pulled in the reins a little too hard.”
To critics who say that Sun Capital grew too big, too fast, Mr. Leder pointed to ShopKo, which it bought for $1.2 billion. Sun brought in new management, freshened up stores and plans to merge it with another Midwest retailer, Pamida. Sun Capital has already paid itself a dividend on that deal, and Mr. Leder says he expects it will generate big returns.
In a smaller deal, Sun Capital bought the Midwest retailer Gordmans for $56 million in 2008. It doubled its returns through two dividend payments and proceeds from the Gordmans initial public offering in 2010.
When asked if private equity could withstand the heat of election-year politics, Mr. Leder seems unfazed. He is among the top contributors to the political action committee Restore Our Future, a so-called super-PAC created to help Mr. Romney. He insists his business isn’t politics — it’s private equity.
“I don’t worry about what I can’t affect,” he said.
This story, “In a Romney Believer, Private Equity’s Risks and Rewards,” oringinally appeared in The New York Times.
Copyright © 2012 The New York Times
http://tourism9.cm/ http://vkins.com/
Jeffrey States is the investment officer for the Nebraska Investment Council, another Sun Capital investor. He said some private equity firms do provide information about how their dealings might affect things like jobs. But not all investors ask for such details.
“The primary objective is returns,” Mr. States said.
Mr. Leder, for his part, has never been shy about turning a profit. He and another banker, Rodger R. Krouse, were working at Lehman Brothers when they saw the huge money-making potential of private equity. They hatched their plan to get into the business one April afternoon in 1995, after a meeting at Mr. Romney’s Bain Capital in Boston.
The executives at Bain had been grousing about a deal in which Bain had doubled its money. But the Bain executives were lamenting that if they had sold sooner, they could have made much more.
On the plane back to New York, Mr. Leder and Mr. Krouse sat stunned.
“We’re looking at each other saying, ‘This is an industry where double your money is not that good of a deal?’ ” Mr. Leder recalls.
At 10 the next morning, Mr. Leder and Mr. Krouse marched into their bosses’ offices and quit. They then decided to base their new private equity firm in Boca Raton, and became its co-chief executives, believing the location would give them an edge in spotting potential acquisitions in the Southeast before their rivals in New York and Boston. But competitors kept outbidding them for companies.
It took 20 months, but they finally got their foot in the door. Friends and family members invested in their first dozen deals. Mr. Romney also invested personally in some early transactions, including an acquisition of a company that made speakers for computers and another that made carbon paper.
(Mr. Romney’s 2011 financial disclosures included stakes worth less than $15,000 apiece in two Sun-controlled companies — a pittance, given his estimated wealth of as much as $250 million. A spokeswoman for Mr. Romney’s campaign did not respond to an e-mail or a call seeking comment.)
Sun Capital soon carved a niche in doing turnarounds. In 1997, it acquired a majority stake in a maker of injection-molded polypropylene panels. By 2002, that company had more than doubled its sales.
One success led to another. Mr. Leder and Mr. Krouse invested $1.5 million in a company that supplied parts for Corvettes and walked away with $20 million. Two Sun investors were so tickled that they bought each man a red Corvette.
Such successes aside, Mr. Leder and Mr. Krouse make something of an odd couple. Mr. Krouse has the quiet demeanor of an accountant and tends to shift in his seat when conversations turn to his private life. (Former associates say he is a family man who likes to spend his spare time reading.)
Mr. Leder, by contrast, is bigger than life. He storms into a room and seems to suck out all of the air. Several former colleagues say he appears to have a photographic memory. He speaks rapidly and rarely holds back.
In a conversation about his business dealings, he segued into how his father wanted him to be a doctor but that he opted for other pursuits because he hated dissecting frogs in biology class. And he mentioned how he used crushed graham crackers as the secret ingredient in the pancakes he used to make for his youngest daughter.
He also said he started reading The Wall Street Journal when he was 12, and that in high school he delivered chickens and started a D. J. business. And he said that he typically sleeps for two to three hours at a time at night before waking up to answer e-mails.
AS word got out about Sun Capital’s early investment successes, pension funds and endowments were soon clamoring to get into its funds. Sun Capital raised fund after fund, each bigger than the last. In 2007, it raised $6 billion for a single fund. Sun Capital had hit the big time.
Then the Great Recession struck. The private equity boom turned bust fast.
By early 2009, numerous companies that Sun Capital had acquired were struggling to survive. Sun was racked by internal dissent. And Mr. Leder’s personal life had hit a rough patch.
By that spring, several Sun companies, including Drug Fair, Big 10 Tires and Mark IV Industries, had spiraled into bankruptcy. The firm had already taken losses on a large deal, a hostile takeover of the fashion company Kellwood, which Sun Capital had acquired without the usual due diligence.
Then came other, more personal blows. Mr. Leder and Mr. Krouse both lost money that they had personally invested with Bernard L. Madoff. Mr. Leder and his wife of 22 years, Lisa, began to go through a messy divorce. She demanded half of his total wealth, which she contended was more than $400 million at the time. The two eventually settled for an undisclosed amount.
Its business in retreat, Sun Capital laid off a number of its own employees. Those who stayed were told they would receive no cash bonuses. Instead, everyone was given a bigger slice of the portfolio of companies that, at that time, was losing value every day.
Angry employees fired off a list of dozens of pointed questions to Mr. Leder and Mr. Krouse, asking how much money the two co-founders had been paid and how much they had taken out of Sun Capital. The employees wanted to know how a firm that had just raised a $6 billion fund, and which was collecting about $120 million a year in management fees alone, could possibly be running low on cash.
Mr. Leder and Mr. Krouse had, in fact, already paid themselves handsomely for their giant fund. As 50-50 partners, they kept the first year’s fees, in cash, for themselves, according to former employees. A spokesman for Sun Capital declined to comment.
Mr. Leder said that even during its worst year, Sun Capital booked a small profit. He denied that his decisions were driven by his own financial interests. And Sun Capital paid its employees cash bonuses early for 2009 , he said, because “we realized we had pulled in the reins a little too hard.”
To critics who say that Sun Capital grew too big, too fast, Mr. Leder pointed to ShopKo, which it bought for $1.2 billion. Sun brought in new management, freshened up stores and plans to merge it with another Midwest retailer, Pamida. Sun Capital has already paid itself a dividend on that deal, and Mr. Leder says he expects it will generate big returns.
In a smaller deal, Sun Capital bought the Midwest retailer Gordmans for $56 million in 2008. It doubled its returns through two dividend payments and proceeds from the Gordmans initial public offering in 2010.
When asked if private equity could withstand the heat of election-year politics, Mr. Leder seems unfazed. He is among the top contributors to the political action committee Restore Our Future, a so-called super-PAC created to help Mr. Romney. He insists his business isn’t politics — it’s private equity.
“I don’t worry about what I can’t affect,” he said.
This story, “In a Romney Believer, Private Equity’s Risks and Rewards,” oringinally appeared in The New York Times.
Copyright © 2012 The New York Times
http://tourism9.cm/ http://vkins.com/
In a Romney Believer, Private Equity’s Risks and Rewards
IT was, the gossip pages would later report, the talk of the Hamptons — a midsummer night’s bacchanal in the playground of the 1 percent.
Beyond the windswept dunes in Bridgehampton, at a $400,000-a-month oceanfront mansion, bright young things bubbled up and the Champagne flowed fast. Into the small hours, professional dancers in exotic clothing gyrated atop platforms. One couple twirled flaming torches. The sounds of techno boomed over the beach.
The New York Post summed up the evening’s Dionysian mysteries with the following headline: “Nude Frolic in Tycoon’s Pool.”
The Post’s tycoon, and the party’s host, was a financier named Marc J. Leder, and those weekend revels last July had the East End of Long Island buzzing. Like many deal makers, though, Mr. Leder, 50, is virtually unknown outside financial circles. But from his headquarters in Boca Raton, Fla., he presides over a multibillion-dollar private empire. He is a practitioner of a Wall Street art that helped define an age of hyperwealth, and which has now been dragged into the white-hot spotlight of presidential politics: private equity.
It was through private equity that one Republican candidate, Mitt Romney, amassed his wealth — and, it turns out, it was through private equity that Mr. Romney first met Mr. Leder. A couple of months after the blowout in Bridgehampton, Mr. Leder was host for a fund-raiser at his Boca Raton home for Mr. Romney’s campaign. But the connection goes back even further. Years ago, a visit to Mr. Romney’s investment firm inspired Mr. Leder to get into private equity in the first place. Mr. Romney was an early investor in some of the deals done by Mr. Leder’s investment company, Sun Capital, which today oversees about $8 billion in equity.
Mr. Romney’s own time in the private equity business, at Bain Capital, has provoked fierce attacks from Republican rivals and others. It has also prompted a lot of questions, including the big one: What good is this business, anyway? Detractors say private equity has enriched a handful of financiers at the expense of ordinary Americans. The deal makers, this line goes, buy companies and then bleed the life out of them. Jobs are often among the casualties.
Whether there’s truth to such claims depends on whom you ask. Private equity executives, as well as Mr. Romney, who left Bain in 1999, say the industry fixes troubled companies and ultimately creates jobs. Whatever the case, three decades after this sort of deal-making burst onto the scene in the merger mania of the 1980s, there are surprisingly few solid answers from either side.
What is certain is that buyout specialists upended the old order and made vast fortunes for themselves. Fueled by easy money from banks, and from endowments and pension funds, these private investors were able to buy companies with borrowed money and put down relatively little of their own cash.
Today, many of these private kingdoms rival the nation’s mightiest public companies. In all, the private equity industry oversees $3 trillion in global assets, according to Preqin, the research firm. Buyout kings control more than 14,000 American companies, including brands like Hilton Hotels and Burger King.
BUT financiers weren’t the only ones to embrace private equity. On the campaign trail, Rick Perry called private equity artists “vulture capitalists.” But as governor of Texas, he blessed the largest corporate buyout in history — the $44.4 billion takeover of the utility TXU by several investment firms in 2007. Indeed, as in many other places nationwide, public pension funds in Texas used public money to bet on private equity, in hopes of generating the investment returns they needed to pay retirees.
Against this backdrop, the story of Marc Leder might seem a footnote in the nation’s economic ledger. But it is a story worth knowing. That’s because, in many ways, Mr. Leder personifies the debates now swirling around this lucrative corner of finance.
To his critics, he represents everything that’s wrong with this setup. In recent years, a large number of the companies that Sun Capital has acquired have run into serious trouble, eliminated jobs or both. Since 2008, some 25 of its companies — roughly one of every five it owns — have filed for bankruptcy.
Among the losers was Friendly’s, the restaurant chain known for its Jim Dandy sundaes and Fribble shakes. (Sun Capital was accused by a federal agency of pushing Friendly’s into bankruptcy last year to avoid paying pensions to the chain’s employees; Sun disputes that contention.) Another company that sank into bankruptcy was Real Mex, owner of the Chevy’s restaurant chain. In that case, Mr. Leder lost money for his investors not once, but twice.
Yet Mr. Leder doesn’t seem to be suffering too much himself. In fact, he is living so large that he can’t avoid the limelight. Last July, he used part of his personal fortune to join a group of investors in buying the Philadelphia 76ers. In December, he was spotted on St. Bart’s with Russell Simmons, of Def Jam and Phat Farm fame, and Rachel Zoe, the celebrity stylist. That again landed him in The New York Post, which dubbed him a “private equity party boy.”
Mr. Leder says that characterization couldn’t be further from the truth. He focuses on what are known as “scratch and dent” deals, which typically involve companies that are struggling to begin with. One-third of the companies Sun Capital has bought are losing money. It’s a tricky game in good times, and downright dangerous in bad ones. Mr. Leder and his defenders say Sun Capital has saved many companies and, with them, many, many jobs.
“I think the portrayal of me as having wild and crazy parties is absolutely incorrect,” Mr. Leder said during a wide-ranging interview in Sun Capital’s offices in Midtown Manhattan. “I spend a small percentage throwing some parties, attending some parties. I like music. I like to dance. But rather than reporting on how I spend 340 days and nights of my year, the media likes to report on the other 25.”
Paul Jones, chief executive of the Midwest retailer ShopKo, which Sun Capital acquired in 2005, said Mr. Leder has kept a close eye on his company. “I get e-mails from him, usually on Sunday mornings, in which he’s says we had an impressive week or sometimes it’s just to give our team an ‘attaboy,’ ” Mr. Jones said.
FOR more than 28 years, Helen Smolak worked at the Friendly’s in Denham, Mass. Day in and day out, she served Big Beef Burgers and Fribbles, collected tips and made a decent living.
All that changed one evening last October. That was when Ms. Smolak’s supervisor called to tell her the restaurant was shutting down — immediately.
“It was my family. That was my home,” said Ms. Smolak, 56. “Friendly’s always came first. I was supposed to retire with these people and with this company.”
What went wrong? Sun Capital acquired Friendly’s in 2007 for $395 million — an 8 percent premium based on Friendly’s stock price at the time. But now Sun was saying the weak economy and the rising prices of milk and other ingredients had pushed Friendly’s, a 76-year-old chain, to the brink.
The Pension Benefit Guaranty Corporation, the federal agency that helps safeguard corporate pensions, wasn’t so sure. It accused Sun Capital in bankruptcy court filings of using the bankruptcy to shift Friendly’s pension burden onto the agency.
“That’s absolutely not true,” Mr. Leder said. Friendly’s pension fund, he said, was underfunded well before Sun Capital bought the company. The outcome, he added, is simply the way the bankruptcy process works.
“We don’t make the rules,” he said with a shrug. He said the matter was settled with the agency for a “nominal” sum.
Bankruptcy is never pretty. But, in this case, Sun Capital was particularly adept at getting what it wanted. Only months after Friendly’s went bankrupt, Mr. Leder has already regained control of the company. It was a calculated move, and one that is potentially lucrative for Sun Capital and its investors. In filing for bankruptcy, Friendly’s also cut hundreds of jobs, closed dozens of restaurants and bought some time to regroup. Now, if Sun Capital can turn around Friendly’s, it might eventually be able to sell the chain at a profit.
And profit, after all, is what private equity is really about. Among the Sun Capital investors that stand to benefit from all of this are the New York State Teachers’ Retirement System, the Indiana State Teachers’ Retirement Fund and the Ford Foundation.
Jeffrey States is the investment officer for the Nebraska Investment Council, another Sun Capital investor. He said some private equity firms do provide information about how their dealings might affect things like jobs. But not all investors ask for such details.
“The primary objective is returns,” Mr. States said.
Mr. Leder, for his part, has never been shy about turning a profit. He and another banker, Rodger R. Krouse, were working at Lehman Brothers when they saw the huge money-making potential of private equity. They hatched their plan to get into the business one April afternoon in 1995, after a meeting at Mr. Romney’s Bain Capital in Boston.
The executives at Bain had been grousing about a deal in which Bain had doubled its money. But the Bain executives were lamenting that if they had sold sooner, they could have made much more.
On the plane back to New York, Mr. Leder and Mr. Krouse sat stunned.
“We’re looking at each other saying, ‘This is an industry where double your money is not that good of a deal?’ ” Mr. Leder recalls.
At 10 the next morning, Mr. Leder and Mr. Krouse marched into their bosses’ offices and quit. They then decided to base their new private equity firm in Boca Raton, and became its co-chief executives, believing the location would give them an edge in spotting potential acquisitions in the Southeast before their rivals in New York and Boston. But competitors kept outbidding them for companies.
It took 20 months, but they finally got their foot in the door. Friends and family members invested in their first dozen deals. Mr. Romney also invested personally in some early transactions, including an acquisition of a company that made speakers for computers and another that made carbon paper.
(Mr. Romney’s 2011 financial disclosures included stakes worth less than $15,000 apiece in two Sun-controlled companies — a pittance, given his estimated wealth of as much as $250 million. A spokeswoman for Mr. Romney’s campaign did not respond to an e-mail or a call seeking comment.)
Sun Capital soon carved a niche in doing turnarounds. In 1997, it acquired a majority stake in a maker of injection-molded polypropylene panels. By 2002, that company had more than doubled its sales.
One success led to another. Mr. Leder and Mr. Krouse invested $1.5 million in a company that supplied parts for Corvettes and walked away with $20 million. Two Sun investors were so tickled that they bought each man a red Corvette.
Such successes aside, Mr. Leder and Mr. Krouse make something of an odd couple. Mr. Krouse has the quiet demeanor of an accountant and tends to shift in his seat when conversations turn to his private life. (Former associates say he is a family man who likes to spend his spare time reading.)
Mr. Leder, by contrast, is bigger than life. He storms into a room and seems to suck out all of the air. Several former colleagues say he appears to have a photographic memory. He speaks rapidly and rarely holds back.
In a conversation about his business dealings, he segued into how his father wanted him to be a doctor but that he opted for other pursuits because he hated dissecting frogs in biology class. And he mentioned how he used crushed graham crackers as the secret ingredient in the pancakes he used to make for his youngest daughter.
He also said he started reading The Wall Street Journal when he was 12, and that in high school he delivered chickens and started a D. J. business. And he said that he typically sleeps for two to three hours at a time at night before waking up to answer e-mails.
AS word got out about Sun Capital’s early investment successes, pension funds and endowments were soon clamoring to get into its funds. Sun Capital raised fund after fund, each bigger than the last. In 2007, it raised $6 billion for a single fund. Sun Capital had hit the big time.
Then the Great Recession struck. The private equity boom turned bust fast.
By early 2009, numerous companies that Sun Capital had acquired were struggling to survive. Sun was racked by internal dissent. And Mr. Leder’s personal life had hit a rough patch.
By that spring, several Sun companies, including Drug Fair, Big 10 Tires and Mark IV Industries, had spiraled into bankruptcy. The firm had already taken losses on a large deal, a hostile takeover of the fashion company Kellwood, which Sun Capital had acquired without the usual due diligence.
Then came other, more personal blows. Mr. Leder and Mr. Krouse both lost money that they had personally invested with Bernard L. Madoff. Mr. Leder and his wife of 22 years, Lisa, began to go through a messy divorce. She demanded half of his total wealth, which she contended was more than $400 million at the time. The two eventually settled for an undisclosed amount.
Its business in retreat, Sun Capital laid off a number of its own employees. Those who stayed were told they would receive no cash bonuses. Instead, everyone was given a bigger slice of the portfolio of companies that, at that time, was losing value every day.
Angry employees fired off a list of dozens of pointed questions to Mr. Leder and Mr. Krouse, asking how much money the two co-founders had been paid and how much they had taken out of Sun Capital. The employees wanted to know how a firm that had just raised a $6 billion fund, and which was collecting about $120 million a year in management fees alone, could possibly be running low on cash.
Mr. Leder and Mr. Krouse had, in fact, already paid themselves handsomely for their giant fund. As 50-50 partners, they kept the first year’s fees, in cash, for themselves, according to former employees. A spokesman for Sun Capital declined to comment.
Mr. Leder said that even during its worst year, Sun Capital booked a small profit. He denied that his decisions were driven by his own financial interests. And Sun Capital paid its employees cash bonuses early for 2009 , he said, because “we realized we had pulled in the reins a little too hard.”
To critics who say that Sun Capital grew too big, too fast, Mr. Leder pointed to ShopKo, which it bought for $1.2 billion. Sun brought in new management, freshened up stores and plans to merge it with another Midwest retailer, Pamida. Sun Capital has already paid itself a dividend on that deal, and Mr. Leder says he expects it will generate big returns.
In a smaller deal, Sun Capital bought the Midwest retailer Gordmans for $56 million in 2008. It doubled its returns through two dividend payments and proceeds from the Gordmans initial public offering in 2010.
When asked if private equity could withstand the heat of election-year politics, Mr. Leder seems unfazed. He is among the top contributors to the political action committee Restore Our Future, a so-called super-PAC created to help Mr. Romney. He insists his business isn’t politics — it’s private equity.
“I don’t worry about what I can’t affect,” he said.
http://tourism9.cm/ http://vkins.com/
The New York Post summed up the evening’s Dionysian mysteries with the following headline: “Nude Frolic in Tycoon’s Pool.”
The Post’s tycoon, and the party’s host, was a financier named Marc J. Leder, and those weekend revels last July had the East End of Long Island buzzing. Like many deal makers, though, Mr. Leder, 50, is virtually unknown outside financial circles. But from his headquarters in Boca Raton, Fla., he presides over a multibillion-dollar private empire. He is a practitioner of a Wall Street art that helped define an age of hyperwealth, and which has now been dragged into the white-hot spotlight of presidential politics: private equity.
It was through private equity that one Republican candidate, Mitt Romney, amassed his wealth — and, it turns out, it was through private equity that Mr. Romney first met Mr. Leder. A couple of months after the blowout in Bridgehampton, Mr. Leder was host for a fund-raiser at his Boca Raton home for Mr. Romney’s campaign. But the connection goes back even further. Years ago, a visit to Mr. Romney’s investment firm inspired Mr. Leder to get into private equity in the first place. Mr. Romney was an early investor in some of the deals done by Mr. Leder’s investment company, Sun Capital, which today oversees about $8 billion in equity.
Mr. Romney’s own time in the private equity business, at Bain Capital, has provoked fierce attacks from Republican rivals and others. It has also prompted a lot of questions, including the big one: What good is this business, anyway? Detractors say private equity has enriched a handful of financiers at the expense of ordinary Americans. The deal makers, this line goes, buy companies and then bleed the life out of them. Jobs are often among the casualties.
Whether there’s truth to such claims depends on whom you ask. Private equity executives, as well as Mr. Romney, who left Bain in 1999, say the industry fixes troubled companies and ultimately creates jobs. Whatever the case, three decades after this sort of deal-making burst onto the scene in the merger mania of the 1980s, there are surprisingly few solid answers from either side.
What is certain is that buyout specialists upended the old order and made vast fortunes for themselves. Fueled by easy money from banks, and from endowments and pension funds, these private investors were able to buy companies with borrowed money and put down relatively little of their own cash.
Today, many of these private kingdoms rival the nation’s mightiest public companies. In all, the private equity industry oversees $3 trillion in global assets, according to Preqin, the research firm. Buyout kings control more than 14,000 American companies, including brands like Hilton Hotels and Burger King.
BUT financiers weren’t the only ones to embrace private equity. On the campaign trail, Rick Perry called private equity artists “vulture capitalists.” But as governor of Texas, he blessed the largest corporate buyout in history — the $44.4 billion takeover of the utility TXU by several investment firms in 2007. Indeed, as in many other places nationwide, public pension funds in Texas used public money to bet on private equity, in hopes of generating the investment returns they needed to pay retirees.
Against this backdrop, the story of Marc Leder might seem a footnote in the nation’s economic ledger. But it is a story worth knowing. That’s because, in many ways, Mr. Leder personifies the debates now swirling around this lucrative corner of finance.
To his critics, he represents everything that’s wrong with this setup. In recent years, a large number of the companies that Sun Capital has acquired have run into serious trouble, eliminated jobs or both. Since 2008, some 25 of its companies — roughly one of every five it owns — have filed for bankruptcy.
Among the losers was Friendly’s, the restaurant chain known for its Jim Dandy sundaes and Fribble shakes. (Sun Capital was accused by a federal agency of pushing Friendly’s into bankruptcy last year to avoid paying pensions to the chain’s employees; Sun disputes that contention.) Another company that sank into bankruptcy was Real Mex, owner of the Chevy’s restaurant chain. In that case, Mr. Leder lost money for his investors not once, but twice.
Yet Mr. Leder doesn’t seem to be suffering too much himself. In fact, he is living so large that he can’t avoid the limelight. Last July, he used part of his personal fortune to join a group of investors in buying the Philadelphia 76ers. In December, he was spotted on St. Bart’s with Russell Simmons, of Def Jam and Phat Farm fame, and Rachel Zoe, the celebrity stylist. That again landed him in The New York Post, which dubbed him a “private equity party boy.”
Mr. Leder says that characterization couldn’t be further from the truth. He focuses on what are known as “scratch and dent” deals, which typically involve companies that are struggling to begin with. One-third of the companies Sun Capital has bought are losing money. It’s a tricky game in good times, and downright dangerous in bad ones. Mr. Leder and his defenders say Sun Capital has saved many companies and, with them, many, many jobs.
“I think the portrayal of me as having wild and crazy parties is absolutely incorrect,” Mr. Leder said during a wide-ranging interview in Sun Capital’s offices in Midtown Manhattan. “I spend a small percentage throwing some parties, attending some parties. I like music. I like to dance. But rather than reporting on how I spend 340 days and nights of my year, the media likes to report on the other 25.”
Paul Jones, chief executive of the Midwest retailer ShopKo, which Sun Capital acquired in 2005, said Mr. Leder has kept a close eye on his company. “I get e-mails from him, usually on Sunday mornings, in which he’s says we had an impressive week or sometimes it’s just to give our team an ‘attaboy,’ ” Mr. Jones said.
FOR more than 28 years, Helen Smolak worked at the Friendly’s in Denham, Mass. Day in and day out, she served Big Beef Burgers and Fribbles, collected tips and made a decent living.
All that changed one evening last October. That was when Ms. Smolak’s supervisor called to tell her the restaurant was shutting down — immediately.
“It was my family. That was my home,” said Ms. Smolak, 56. “Friendly’s always came first. I was supposed to retire with these people and with this company.”
What went wrong? Sun Capital acquired Friendly’s in 2007 for $395 million — an 8 percent premium based on Friendly’s stock price at the time. But now Sun was saying the weak economy and the rising prices of milk and other ingredients had pushed Friendly’s, a 76-year-old chain, to the brink.
The Pension Benefit Guaranty Corporation, the federal agency that helps safeguard corporate pensions, wasn’t so sure. It accused Sun Capital in bankruptcy court filings of using the bankruptcy to shift Friendly’s pension burden onto the agency.
“That’s absolutely not true,” Mr. Leder said. Friendly’s pension fund, he said, was underfunded well before Sun Capital bought the company. The outcome, he added, is simply the way the bankruptcy process works.
“We don’t make the rules,” he said with a shrug. He said the matter was settled with the agency for a “nominal” sum.
Bankruptcy is never pretty. But, in this case, Sun Capital was particularly adept at getting what it wanted. Only months after Friendly’s went bankrupt, Mr. Leder has already regained control of the company. It was a calculated move, and one that is potentially lucrative for Sun Capital and its investors. In filing for bankruptcy, Friendly’s also cut hundreds of jobs, closed dozens of restaurants and bought some time to regroup. Now, if Sun Capital can turn around Friendly’s, it might eventually be able to sell the chain at a profit.
And profit, after all, is what private equity is really about. Among the Sun Capital investors that stand to benefit from all of this are the New York State Teachers’ Retirement System, the Indiana State Teachers’ Retirement Fund and the Ford Foundation.
Jeffrey States is the investment officer for the Nebraska Investment Council, another Sun Capital investor. He said some private equity firms do provide information about how their dealings might affect things like jobs. But not all investors ask for such details.
“The primary objective is returns,” Mr. States said.
Mr. Leder, for his part, has never been shy about turning a profit. He and another banker, Rodger R. Krouse, were working at Lehman Brothers when they saw the huge money-making potential of private equity. They hatched their plan to get into the business one April afternoon in 1995, after a meeting at Mr. Romney’s Bain Capital in Boston.
The executives at Bain had been grousing about a deal in which Bain had doubled its money. But the Bain executives were lamenting that if they had sold sooner, they could have made much more.
On the plane back to New York, Mr. Leder and Mr. Krouse sat stunned.
“We’re looking at each other saying, ‘This is an industry where double your money is not that good of a deal?’ ” Mr. Leder recalls.
At 10 the next morning, Mr. Leder and Mr. Krouse marched into their bosses’ offices and quit. They then decided to base their new private equity firm in Boca Raton, and became its co-chief executives, believing the location would give them an edge in spotting potential acquisitions in the Southeast before their rivals in New York and Boston. But competitors kept outbidding them for companies.
It took 20 months, but they finally got their foot in the door. Friends and family members invested in their first dozen deals. Mr. Romney also invested personally in some early transactions, including an acquisition of a company that made speakers for computers and another that made carbon paper.
(Mr. Romney’s 2011 financial disclosures included stakes worth less than $15,000 apiece in two Sun-controlled companies — a pittance, given his estimated wealth of as much as $250 million. A spokeswoman for Mr. Romney’s campaign did not respond to an e-mail or a call seeking comment.)
Sun Capital soon carved a niche in doing turnarounds. In 1997, it acquired a majority stake in a maker of injection-molded polypropylene panels. By 2002, that company had more than doubled its sales.
One success led to another. Mr. Leder and Mr. Krouse invested $1.5 million in a company that supplied parts for Corvettes and walked away with $20 million. Two Sun investors were so tickled that they bought each man a red Corvette.
Such successes aside, Mr. Leder and Mr. Krouse make something of an odd couple. Mr. Krouse has the quiet demeanor of an accountant and tends to shift in his seat when conversations turn to his private life. (Former associates say he is a family man who likes to spend his spare time reading.)
Mr. Leder, by contrast, is bigger than life. He storms into a room and seems to suck out all of the air. Several former colleagues say he appears to have a photographic memory. He speaks rapidly and rarely holds back.
In a conversation about his business dealings, he segued into how his father wanted him to be a doctor but that he opted for other pursuits because he hated dissecting frogs in biology class. And he mentioned how he used crushed graham crackers as the secret ingredient in the pancakes he used to make for his youngest daughter.
He also said he started reading The Wall Street Journal when he was 12, and that in high school he delivered chickens and started a D. J. business. And he said that he typically sleeps for two to three hours at a time at night before waking up to answer e-mails.
AS word got out about Sun Capital’s early investment successes, pension funds and endowments were soon clamoring to get into its funds. Sun Capital raised fund after fund, each bigger than the last. In 2007, it raised $6 billion for a single fund. Sun Capital had hit the big time.
Then the Great Recession struck. The private equity boom turned bust fast.
By early 2009, numerous companies that Sun Capital had acquired were struggling to survive. Sun was racked by internal dissent. And Mr. Leder’s personal life had hit a rough patch.
By that spring, several Sun companies, including Drug Fair, Big 10 Tires and Mark IV Industries, had spiraled into bankruptcy. The firm had already taken losses on a large deal, a hostile takeover of the fashion company Kellwood, which Sun Capital had acquired without the usual due diligence.
Then came other, more personal blows. Mr. Leder and Mr. Krouse both lost money that they had personally invested with Bernard L. Madoff. Mr. Leder and his wife of 22 years, Lisa, began to go through a messy divorce. She demanded half of his total wealth, which she contended was more than $400 million at the time. The two eventually settled for an undisclosed amount.
Its business in retreat, Sun Capital laid off a number of its own employees. Those who stayed were told they would receive no cash bonuses. Instead, everyone was given a bigger slice of the portfolio of companies that, at that time, was losing value every day.
Angry employees fired off a list of dozens of pointed questions to Mr. Leder and Mr. Krouse, asking how much money the two co-founders had been paid and how much they had taken out of Sun Capital. The employees wanted to know how a firm that had just raised a $6 billion fund, and which was collecting about $120 million a year in management fees alone, could possibly be running low on cash.
Mr. Leder and Mr. Krouse had, in fact, already paid themselves handsomely for their giant fund. As 50-50 partners, they kept the first year’s fees, in cash, for themselves, according to former employees. A spokesman for Sun Capital declined to comment.
Mr. Leder said that even during its worst year, Sun Capital booked a small profit. He denied that his decisions were driven by his own financial interests. And Sun Capital paid its employees cash bonuses early for 2009 , he said, because “we realized we had pulled in the reins a little too hard.”
To critics who say that Sun Capital grew too big, too fast, Mr. Leder pointed to ShopKo, which it bought for $1.2 billion. Sun brought in new management, freshened up stores and plans to merge it with another Midwest retailer, Pamida. Sun Capital has already paid itself a dividend on that deal, and Mr. Leder says he expects it will generate big returns.
In a smaller deal, Sun Capital bought the Midwest retailer Gordmans for $56 million in 2008. It doubled its returns through two dividend payments and proceeds from the Gordmans initial public offering in 2010.
When asked if private equity could withstand the heat of election-year politics, Mr. Leder seems unfazed. He is among the top contributors to the political action committee Restore Our Future, a so-called super-PAC created to help Mr. Romney. He insists his business isn’t politics — it’s private equity.
“I don’t worry about what I can’t affect,” he said.
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2012年1月19日星期四
Ask the Elder Law Attorney: Disclosures and Loans
Craig Reaves, past president of the National Academy of Elder Law Attorneys, practices elder law in Kansas City, Mo., and fields occasional questions from New Old Age readers. Submit yours to newoldage@nytimes.com. Please limit your queries to general legal issues, as Mr. Reaves cannot respond with individualized legal advice. Questions have been edited and condensed.
After my mother died in 2006, my father’s doctor said he shouldn’t be left alone. Apparently Mom was covering for him. I’d visited seven weeks earlier and had not recognized how advanced his dementia had become.
Their will, stored in a safe, indicated that two of my sisters should manage things if both parents died. So the family — eight siblings in all — agreed that these two should have legal authority. They were added to financial accounts and given power of attorney. No one was in a position to care for my father, so he moved into a care facility, first in Florida, now in Michigan. He’s in relatively good health at age 80, cheerful on most days. He still knows me.
We siblings have had some squabbles regarding the sale of my parents’ house and other issues. Their estate was not large, probably under $350,000; given my father’s condition, it was always a concern whether he could pay for the care he needed.
I’ve requested, from both sisters who are managing things, some kind of statement as to exactly what Dad’s financial status is. These requests have fallen on deaf ears at times and been met with fury at other times. One sister, who’s slightly more forthcoming, recently told me that Dad has about 18 months of long-term care insurance coverage remaining. After that, he probably has enough money for another 18 months’ care.
Do I have any way to compel my sisters to share what I believe they already should have? Friends have warned that their secrecy in itself could mean unethical goings-on. I’m worried that in three years, they’ll ask me for a significant contribution — even greater than a one-eighth share, because some siblings can’t afford to help at all. That will present a wrenching quandary; I’ve accumulated much less myself than the $350,000 Dad started with. He may yet live a good long while, and I’d like to find a way to help my family avoid becoming more anxious about money as time goes on.
Gina
Phoenix, Ariz.
Unfortunately, this is not an unusual story. I strongly suggest that you contact an elder law attorney in the state where your father resides. Every state has its own statutes governing durable powers of attorney, and they can be very different. Whether an attorney-in-fact — meaning the person appointed by the power-of-attorney document to act on another’s behalf — has a duty to keep other heirs and siblings informed will depend on how the document is worded, the applicable state law and the facts of the situation.
Generally, though, the attorney-in-fact owes a fiduciary obligation to the principal (your father, in this case), not his heirs (the rest of the family). Unless the law or the document requires disclosure, an attorney-in-fact is usually not required to share any details with the heirs. She may even be prohibited from doing so.
There may be extenuating circumstances in this case, though, since all the children at one point apparently agreed to contribute time and effort to help their father. Moreover, I’m unsure what you mean when you say that your sisters were added to your father’s financial accounts. It may make a difference whether their names were only added as agents for your father or as joint owners of the accounts.
If directly approaching the attorneys-in-fact brings no satisfaction, and especially if you’re concerned that your sisters may be taking advantage of your father, you can petition the probate court in his county to appoint a guardian or conservator for him.
That will not only provide court oversight but will give you and your siblings access to your father’s financial information. And it will provide a forum in which you can air grievances about your father’s situation. The court will make sure that your father won’t be taken advantage of.
This can be an expensive solution, though, and it is probably a last resort. Perhaps the mere threat of going to court will convince your sisters to be more forthcoming about what they’re doing.
By the way, if your father runs out of money for his long-term care, he should qualify for Medicaid assistance. It generally won’t become his children’s responsibility to pay for his care themselves.
My ex-husband died five months after we divorced. My minor children are his sole heirs. All the accounts and assets were probated, and I was made legal representative. Now my ex-father-in-law is suing the estate for $2,800 in “loans” he made to his son when my ex’s business was slow in 2010.
What proof does he need to provide that this was not just a gift? He may just be trying to hurt me. I’m not sure he realizes, at age 85, that this money would be coming from his grandchildren, not from me.
Dawn
Davie, Fla.
The answer to this question will vary by state, so I suggest that you contact the lawyer who represented you in the probate or an elder law attorney in your community. But generally speaking, if the probate has closed and the decedent’s father knew of the probate, he should be barred from suing to collect on an alleged loan.
If the probate is still underway, the father can file a claim with the court. If the personal representative — that’s you — disputes this supposed loan, the court will schedule a hearing and your former father-in-law will have the burden of proving that this sum was a loan. Normally, that would require a promissory note signed by his son. If he can’t prove that this was a loan, then he can’t collect.
After my mother died in 2006, my father’s doctor said he shouldn’t be left alone. Apparently Mom was covering for him. I’d visited seven weeks earlier and had not recognized how advanced his dementia had become.
Their will, stored in a safe, indicated that two of my sisters should manage things if both parents died. So the family — eight siblings in all — agreed that these two should have legal authority. They were added to financial accounts and given power of attorney. No one was in a position to care for my father, so he moved into a care facility, first in Florida, now in Michigan. He’s in relatively good health at age 80, cheerful on most days. He still knows me.
We siblings have had some squabbles regarding the sale of my parents’ house and other issues. Their estate was not large, probably under $350,000; given my father’s condition, it was always a concern whether he could pay for the care he needed.
I’ve requested, from both sisters who are managing things, some kind of statement as to exactly what Dad’s financial status is. These requests have fallen on deaf ears at times and been met with fury at other times. One sister, who’s slightly more forthcoming, recently told me that Dad has about 18 months of long-term care insurance coverage remaining. After that, he probably has enough money for another 18 months’ care.
Do I have any way to compel my sisters to share what I believe they already should have? Friends have warned that their secrecy in itself could mean unethical goings-on. I’m worried that in three years, they’ll ask me for a significant contribution — even greater than a one-eighth share, because some siblings can’t afford to help at all. That will present a wrenching quandary; I’ve accumulated much less myself than the $350,000 Dad started with. He may yet live a good long while, and I’d like to find a way to help my family avoid becoming more anxious about money as time goes on.
Gina
Phoenix, Ariz.
Unfortunately, this is not an unusual story. I strongly suggest that you contact an elder law attorney in the state where your father resides. Every state has its own statutes governing durable powers of attorney, and they can be very different. Whether an attorney-in-fact — meaning the person appointed by the power-of-attorney document to act on another’s behalf — has a duty to keep other heirs and siblings informed will depend on how the document is worded, the applicable state law and the facts of the situation.
Generally, though, the attorney-in-fact owes a fiduciary obligation to the principal (your father, in this case), not his heirs (the rest of the family). Unless the law or the document requires disclosure, an attorney-in-fact is usually not required to share any details with the heirs. She may even be prohibited from doing so.
There may be extenuating circumstances in this case, though, since all the children at one point apparently agreed to contribute time and effort to help their father. Moreover, I’m unsure what you mean when you say that your sisters were added to your father’s financial accounts. It may make a difference whether their names were only added as agents for your father or as joint owners of the accounts.
If directly approaching the attorneys-in-fact brings no satisfaction, and especially if you’re concerned that your sisters may be taking advantage of your father, you can petition the probate court in his county to appoint a guardian or conservator for him.
That will not only provide court oversight but will give you and your siblings access to your father’s financial information. And it will provide a forum in which you can air grievances about your father’s situation. The court will make sure that your father won’t be taken advantage of.
This can be an expensive solution, though, and it is probably a last resort. Perhaps the mere threat of going to court will convince your sisters to be more forthcoming about what they’re doing.
By the way, if your father runs out of money for his long-term care, he should qualify for Medicaid assistance. It generally won’t become his children’s responsibility to pay for his care themselves.
My ex-husband died five months after we divorced. My minor children are his sole heirs. All the accounts and assets were probated, and I was made legal representative. Now my ex-father-in-law is suing the estate for $2,800 in “loans” he made to his son when my ex’s business was slow in 2010.
What proof does he need to provide that this was not just a gift? He may just be trying to hurt me. I’m not sure he realizes, at age 85, that this money would be coming from his grandchildren, not from me.
Dawn
Davie, Fla.
The answer to this question will vary by state, so I suggest that you contact the lawyer who represented you in the probate or an elder law attorney in your community. But generally speaking, if the probate has closed and the decedent’s father knew of the probate, he should be barred from suing to collect on an alleged loan.
If the probate is still underway, the father can file a claim with the court. If the personal representative — that’s you — disputes this supposed loan, the court will schedule a hearing and your former father-in-law will have the burden of proving that this sum was a loan. Normally, that would require a promissory note signed by his son. If he can’t prove that this was a loan, then he can’t collect.
Craig Reaves, past president of the National Academy of Elder Law Attorneys, practices law in Kansas City, Mo., and fields occasional questions from New Old Age readers. Submit yours to newoldage@nytimes.com. Please limit your queries to general legal issues, as Mr. Reaves cannot respond with personalized legal advice.
http://tourism9.com/ http://vkins.com/
http://tourism9.com/ http://vkins.com/
The New Old Age Blog: Ask the Elder Law Attorney: Disclosures and Loans
Craig Reaves, past president of the National Academy of Elder Law Attorneys, practices elder law in Kansas City, Mo., and fields occasional questions from New Old Age readers. Submit yours to newoldage@nytimes.com. Please limit your queries to general legal issues, as Mr. Reaves cannot respond with individualized legal advice. Questions have been edited and condensed.
After my mother died in 2006, my father’s doctor said he shouldn’t be left alone. Apparently Mom had been covering for him. I’d visited seven weeks earlier and had not recognized how advanced his dementia had become.
Their will, stored in a safe, indicated that two of my sisters should manage things if both parents died. So the family — eight siblings in all — agreed that these two should have legal authority. They were added to financial accounts and given power of attorney. No one was in a position to care for my father, so he moved into a care facility, first in Florida, now in Michigan. He’s in relatively good health at age 80, cheerful on most days. He still knows me.
We siblings have had some squabbles regarding the sale of my parents’ house and other issues. Their estate was not large, probably under $350,000; given my father’s condition, it was always a concern whether he could pay for the care he needed.
I’ve requested, from both sisters who are managing things, some kind of statement as to exactly what Dad’s financial status is. These requests have fallen on deaf ears at times and been met with fury at other times. One sister, who’s slightly more forthcoming, recently told me that Dad has about 18 months of long-term care insurance coverage remaining. After that, he has enough money for probably another 18 months’ care.
Do I have any way to compel my sisters to share what I believe they already should have? Friends have warned that their secrecy in itself could mean unethical goings-on. I’m worried that in three years, they’ll ask me for a significant contribution — even greater than a one-eighth share, because some siblings can’t afford to help at all. That would present a wrenching quandary; I’ve accumulated much less myself than the $350,000 Dad started with. He may yet live a good long while, and I’d like to find a way to help my family avoid becoming more anxious about money as time goes on.
Gina
Phoenix
Unfortunately, this is not an unusual story. I strongly suggest that you contact an elder law attorney in the state where your father resides. Every state has its own statutes governing durable powers of attorney, and they can be very different. Whether an attorney-in-fact — meaning the person appointed by the power-of-attorney document to act on another’s behalf — has a duty to keep other heirs and siblings informed will depend on how the document is worded, the applicable state law and the facts of the situation.
Generally, though, the attorney-in-fact owes a fiduciary obligation to the principal (your father, in this case), not his heirs (the rest of the family). Unless the law or the document requires disclosure, an attorney-in-fact is usually not required to share any details with the heirs. She may even be prohibited from doing so.
There may be extenuating circumstances in this case, though, since all the children at one point apparently agreed to contribute time and effort to help their father. Moreover, I’m unsure what you mean when you say that your sisters were added to your father’s financial accounts. It may make a difference whether their names were only added as agents for your father or as joint owners of the accounts.
If directly approaching the attorneys-in-fact brings no satisfaction, and especially if you’re concerned that your sisters may be taking advantage of your father, you can petition the probate court in his county to appoint a guardian or conservator for him.
That not only will provide court oversight but will give you and your siblings access to your father’s financial information. And it will provide a forum in which you can air grievances about your father’s situation. The court will make sure that your father won’t be taken advantage of.
This can be an expensive solution, though, and it is probably a last resort. Perhaps the mere threat of going to court will convince your sisters to be more forthcoming about what they’re doing.
By the way, if your father runs out of money for his long-term care, he should qualify for Medicaid assistance. It generally won’t become his children’s responsibility to pay for his care themselves.
My ex-husband died five months after we divorced. My minor children are his sole heirs. All the accounts and assets were probated, and I was made legal representative. Now my ex-father-in-law is suing the estate for $2,800 in “loans” he made to his son when my ex’s business was slow in 2010.
What proof does he need to provide to demonstrate that this was not just a gift? He may just be trying to hurt me. I’m not sure he realizes, at age 85, that this money would be coming from his grandchildren, not from me.
Dawn
Davie, Fla.
The answer to this question will vary by state, so I suggest that you contact the lawyer who represented you in the probate or an elder law attorney in your community. But generally speaking, if the probate has closed and the decedent’s father knew of the probate, he should be barred from suing to collect on an alleged loan.
If the probate is still under way, the father can file a claim with the court. If the personal representative — that’s you — disputes this supposed loan, the court will schedule a hearing and your former father-in-law will have the burden of proving that this sum was a loan. Normally, that would require a promissory note signed by his son. If he can’t prove that this was a loan, then he can’t collect.
http://tourism9.com/ http://vkins.com/
After my mother died in 2006, my father’s doctor said he shouldn’t be left alone. Apparently Mom had been covering for him. I’d visited seven weeks earlier and had not recognized how advanced his dementia had become.
Their will, stored in a safe, indicated that two of my sisters should manage things if both parents died. So the family — eight siblings in all — agreed that these two should have legal authority. They were added to financial accounts and given power of attorney. No one was in a position to care for my father, so he moved into a care facility, first in Florida, now in Michigan. He’s in relatively good health at age 80, cheerful on most days. He still knows me.
We siblings have had some squabbles regarding the sale of my parents’ house and other issues. Their estate was not large, probably under $350,000; given my father’s condition, it was always a concern whether he could pay for the care he needed.
I’ve requested, from both sisters who are managing things, some kind of statement as to exactly what Dad’s financial status is. These requests have fallen on deaf ears at times and been met with fury at other times. One sister, who’s slightly more forthcoming, recently told me that Dad has about 18 months of long-term care insurance coverage remaining. After that, he has enough money for probably another 18 months’ care.
Do I have any way to compel my sisters to share what I believe they already should have? Friends have warned that their secrecy in itself could mean unethical goings-on. I’m worried that in three years, they’ll ask me for a significant contribution — even greater than a one-eighth share, because some siblings can’t afford to help at all. That would present a wrenching quandary; I’ve accumulated much less myself than the $350,000 Dad started with. He may yet live a good long while, and I’d like to find a way to help my family avoid becoming more anxious about money as time goes on.
Gina
Phoenix
Unfortunately, this is not an unusual story. I strongly suggest that you contact an elder law attorney in the state where your father resides. Every state has its own statutes governing durable powers of attorney, and they can be very different. Whether an attorney-in-fact — meaning the person appointed by the power-of-attorney document to act on another’s behalf — has a duty to keep other heirs and siblings informed will depend on how the document is worded, the applicable state law and the facts of the situation.
Generally, though, the attorney-in-fact owes a fiduciary obligation to the principal (your father, in this case), not his heirs (the rest of the family). Unless the law or the document requires disclosure, an attorney-in-fact is usually not required to share any details with the heirs. She may even be prohibited from doing so.
There may be extenuating circumstances in this case, though, since all the children at one point apparently agreed to contribute time and effort to help their father. Moreover, I’m unsure what you mean when you say that your sisters were added to your father’s financial accounts. It may make a difference whether their names were only added as agents for your father or as joint owners of the accounts.
If directly approaching the attorneys-in-fact brings no satisfaction, and especially if you’re concerned that your sisters may be taking advantage of your father, you can petition the probate court in his county to appoint a guardian or conservator for him.
That not only will provide court oversight but will give you and your siblings access to your father’s financial information. And it will provide a forum in which you can air grievances about your father’s situation. The court will make sure that your father won’t be taken advantage of.
This can be an expensive solution, though, and it is probably a last resort. Perhaps the mere threat of going to court will convince your sisters to be more forthcoming about what they’re doing.
By the way, if your father runs out of money for his long-term care, he should qualify for Medicaid assistance. It generally won’t become his children’s responsibility to pay for his care themselves.
My ex-husband died five months after we divorced. My minor children are his sole heirs. All the accounts and assets were probated, and I was made legal representative. Now my ex-father-in-law is suing the estate for $2,800 in “loans” he made to his son when my ex’s business was slow in 2010.
What proof does he need to provide to demonstrate that this was not just a gift? He may just be trying to hurt me. I’m not sure he realizes, at age 85, that this money would be coming from his grandchildren, not from me.
Dawn
Davie, Fla.
The answer to this question will vary by state, so I suggest that you contact the lawyer who represented you in the probate or an elder law attorney in your community. But generally speaking, if the probate has closed and the decedent’s father knew of the probate, he should be barred from suing to collect on an alleged loan.
If the probate is still under way, the father can file a claim with the court. If the personal representative — that’s you — disputes this supposed loan, the court will schedule a hearing and your former father-in-law will have the burden of proving that this sum was a loan. Normally, that would require a promissory note signed by his son. If he can’t prove that this was a loan, then he can’t collect.
http://tourism9.com/ http://vkins.com/
2012年1月2日星期一
Ziegler Closes $59 Million Covenant Retirement Communities Financing
CHICAGO, IL–(Marketwire -12/29/11)- Ziegler, a specialty investment bank, is pleased to announce the successful closing of a tax-exempt bank direct purchase for Covenant Retirement Communities (CRC). The direct purchase was completed by JP Morgan Chase and was structured as two series of bonds, $15,830,000 of Series A Bonds and $43,335,000 Series B Bonds, for a total aggregate par amount of $59,165,000 (Series 2011 Bonds).
The Series 2011 Bonds were the first multi-state issuance for the Illinois Finance Authority. The Illinois Finance Authority passed legislation allowing it to serve as a multi-state conduit issuer in July, 2010. The CRC financing is the first financing that has been approved and closed under the multi-state legislation. Ziegler, the IFA, and CRC are very excited to be the first transaction of what hopes to become a great resource to other multi-state providers. “The Illinois Finance Authority is proud to play a role in our State’s first multi-state conduit transaction. Governor Pat Quinn and the Illinois General Assembly recognized that multi-state conduit issuance authority is an important tool to both retain and create jobs in Illinois. The IFA is pleased to work with Ziegler’s professional team and, importantly, Covenant Retirement Communities, on this groundbreaking project,” said Chris Meister, IFA Executive Director.
Proceeds from the Series 2011 Bonds were used to refund the outstanding Series 1999 (MI) Bonds, Series 1999 (CO) Bonds, Series 2004 Bonds, and Series 2006 Bonds, as well as provide CRC with more than $6 million of new money to pay for capital improvements for several CRC campuses in Colorado, Illinois, and Michigan. In addition to the issuance of the Series 2011 Bonds, Ziegler also worked closely with Covenant Retirement Communities on the replacement of two letters of credit for the Series 1992 and 1995 Bonds. Both the Series 1992 and 1995 Bonds will be secured by letters of credit from JP Morgan Chase.
Covenant Retirement Communities, Inc. (CRC) is an Illinois 501(c)(3) eligible corporation that owns and operates a system of continuing care communities offering the full continuum of care, in association with the Evangelical Covenant Church. The corporate office of CRC is located in Skokie, IL with facilities located in California, Washington, Connecticut, Florida, Illinois, Minnesota, Colorado, and Michigan. CRC currently has 14 communities with more than 4700 independent living, assisted living, and skilled nursing units and is #5 on the LeadingAge Ziegler 100, a list of the largest not-for-profit senior living providers in the nation.
As one of the nation’s leading underwriters of financing for non-profit senior living providers Ziegler offers investment banking, financial risk management, merger and acquisition services, investment management, seed capital, FHA/HUD, capital and strategic planning as well as senior living research, education, and communication. Don Carlson, Managing Director and Vice Chairman at Ziegler, commented, “The IFA multistate legislation provided a very cost effective and efficient process which allowed CRC to issue bonds to refund prior issues in Colorado, Michigan and Illinois and to fund new projects in each of these states as well. This transaction will further strengthen CRC’s conservative capital structure, which will allow them to continue to provide the highest level of service to their residents. This transaction was truly a success on many fronts.”
For further information on the structure and use of these issues, please see the Official Statements for the Series 1992 and Series 1995 Bonds located on the Electronic Municipal Market Access system’s Document Archive.
For more information about Ziegler, please visit us at www.Ziegler.com.
About Ziegler:
The Ziegler Companies, Inc. (Pinksheets: ZGCO.PK – News) together with its affiliates (Ziegler) is a specialty investment bank with unique expertise in complex credit structures and advisory services. Nationally, Ziegler is ranked as one of the leading investment banking firms in its specialty sectors of healthcare, senior living, religion and education finance, as well as corporate finance and FHA/HUD. Headquartered in Chicago, IL with regional and branch offices throughout the U.S., Ziegler creates tailored financial solutions including bond financing, advisory, private placement, seed capital, M&A, risk and asset management. Ziegler serves institutional and individual investors through its wealth management and capital markets distribution channels.
Certain comments in this news release represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. This client’s experience may not be representative of the experience of other clients, nor is it indicative of future performance or success. The forward-looking statements are subject to a number of risks and uncertainties, in particular, the overall financial health of the securities industry, the strength of the healthcare sector of the U.S. economy and the municipal securities marketplace, the ability of the Company to underwrite and distribute securities, the market value of mutual fund portfolios and separate account portfolios advised by the Company, the volume of sales by its retail brokers, the outcome of pending litigation, and the ability to attract and retain qualified employees.
This communication does not constitute an offer to buy these securities. The offering is made only by the Official Statement and through an appropriately registered representative. The Series 2011 Bonds may not be appropriate for all investors. Market value and/or accrued interest will fluctuate during the period held, and, if sold prior to maturity, the yield received may be more or less than the yield calculated at the time of purchase. Discounted yields herein are gross yields to maturity. Discounted bonds may be subject to capital gains tax, rates of which will vary, so investors should consult their own tax advisor with regard to their personal tax situation. Interest on municipal bonds may be exempt from federal income tax but may be subject to tax for residents of certain states. For bonds designated AMT, taxes may exist for certain investors. Ziegler will sell these bonds on a principal basis.
The corporation or its officers, directors, stockholders, or members of their families may at times have a position in the securities mentioned herein and may make purchases or sales of these securities. Not all call or put information is identified in the description above. Please be sure to discuss any special features with your Financial Advisor before deciding whether to invest in these securities.
http://tourism9.com/
The Series 2011 Bonds were the first multi-state issuance for the Illinois Finance Authority. The Illinois Finance Authority passed legislation allowing it to serve as a multi-state conduit issuer in July, 2010. The CRC financing is the first financing that has been approved and closed under the multi-state legislation. Ziegler, the IFA, and CRC are very excited to be the first transaction of what hopes to become a great resource to other multi-state providers. “The Illinois Finance Authority is proud to play a role in our State’s first multi-state conduit transaction. Governor Pat Quinn and the Illinois General Assembly recognized that multi-state conduit issuance authority is an important tool to both retain and create jobs in Illinois. The IFA is pleased to work with Ziegler’s professional team and, importantly, Covenant Retirement Communities, on this groundbreaking project,” said Chris Meister, IFA Executive Director.
Proceeds from the Series 2011 Bonds were used to refund the outstanding Series 1999 (MI) Bonds, Series 1999 (CO) Bonds, Series 2004 Bonds, and Series 2006 Bonds, as well as provide CRC with more than $6 million of new money to pay for capital improvements for several CRC campuses in Colorado, Illinois, and Michigan. In addition to the issuance of the Series 2011 Bonds, Ziegler also worked closely with Covenant Retirement Communities on the replacement of two letters of credit for the Series 1992 and 1995 Bonds. Both the Series 1992 and 1995 Bonds will be secured by letters of credit from JP Morgan Chase.
Covenant Retirement Communities, Inc. (CRC) is an Illinois 501(c)(3) eligible corporation that owns and operates a system of continuing care communities offering the full continuum of care, in association with the Evangelical Covenant Church. The corporate office of CRC is located in Skokie, IL with facilities located in California, Washington, Connecticut, Florida, Illinois, Minnesota, Colorado, and Michigan. CRC currently has 14 communities with more than 4700 independent living, assisted living, and skilled nursing units and is #5 on the LeadingAge Ziegler 100, a list of the largest not-for-profit senior living providers in the nation.
As one of the nation’s leading underwriters of financing for non-profit senior living providers Ziegler offers investment banking, financial risk management, merger and acquisition services, investment management, seed capital, FHA/HUD, capital and strategic planning as well as senior living research, education, and communication. Don Carlson, Managing Director and Vice Chairman at Ziegler, commented, “The IFA multistate legislation provided a very cost effective and efficient process which allowed CRC to issue bonds to refund prior issues in Colorado, Michigan and Illinois and to fund new projects in each of these states as well. This transaction will further strengthen CRC’s conservative capital structure, which will allow them to continue to provide the highest level of service to their residents. This transaction was truly a success on many fronts.”
For further information on the structure and use of these issues, please see the Official Statements for the Series 1992 and Series 1995 Bonds located on the Electronic Municipal Market Access system’s Document Archive.
For more information about Ziegler, please visit us at www.Ziegler.com.
About Ziegler:
The Ziegler Companies, Inc. (Pinksheets: ZGCO.PK – News) together with its affiliates (Ziegler) is a specialty investment bank with unique expertise in complex credit structures and advisory services. Nationally, Ziegler is ranked as one of the leading investment banking firms in its specialty sectors of healthcare, senior living, religion and education finance, as well as corporate finance and FHA/HUD. Headquartered in Chicago, IL with regional and branch offices throughout the U.S., Ziegler creates tailored financial solutions including bond financing, advisory, private placement, seed capital, M&A, risk and asset management. Ziegler serves institutional and individual investors through its wealth management and capital markets distribution channels.
Certain comments in this news release represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. This client’s experience may not be representative of the experience of other clients, nor is it indicative of future performance or success. The forward-looking statements are subject to a number of risks and uncertainties, in particular, the overall financial health of the securities industry, the strength of the healthcare sector of the U.S. economy and the municipal securities marketplace, the ability of the Company to underwrite and distribute securities, the market value of mutual fund portfolios and separate account portfolios advised by the Company, the volume of sales by its retail brokers, the outcome of pending litigation, and the ability to attract and retain qualified employees.
This communication does not constitute an offer to buy these securities. The offering is made only by the Official Statement and through an appropriately registered representative. The Series 2011 Bonds may not be appropriate for all investors. Market value and/or accrued interest will fluctuate during the period held, and, if sold prior to maturity, the yield received may be more or less than the yield calculated at the time of purchase. Discounted yields herein are gross yields to maturity. Discounted bonds may be subject to capital gains tax, rates of which will vary, so investors should consult their own tax advisor with regard to their personal tax situation. Interest on municipal bonds may be exempt from federal income tax but may be subject to tax for residents of certain states. For bonds designated AMT, taxes may exist for certain investors. Ziegler will sell these bonds on a principal basis.
The corporation or its officers, directors, stockholders, or members of their families may at times have a position in the securities mentioned herein and may make purchases or sales of these securities. Not all call or put information is identified in the description above. Please be sure to discuss any special features with your Financial Advisor before deciding whether to invest in these securities.
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Ziegler Closes $7 Million Financing for Total Longterm Care, Inc.
CHICAGO, IL–(Marketwire -12/12/11)- Ziegler, a specialty investment bank, is pleased to announce the successful closing of a $7,000,000 fixed-rate tax-exempt bond issue for Total Longterm Care, Inc. (TLC). TLC was formed in December 1989 to establish Colorado’s first Program of All-inclusive Care for the Elderly (PACE). TLC began its PACE operations with one location in Denver and has grown to five centers serving the entire Denver metro area in the following locations: Capitol Center (in Denver), which TLC management expects to replace with the Broadway Center (in Denver), Cody Center (in Lakewood), Chambers Center (in Aurora), Pinnacle Center (in Thornton), and Pueblo Center (in Pueblo) (collectively, the TLC Centers). The newest PACE location will be in San Bernardino, California, where land and existing buildings were just purchased.
Today, TLC has more than 1,800 participants across its five Centers. TLC is part of a family of companies, including a parent organization known as Total Community Options; affiliates provide PACE care and support services including fundraising, a PACE center in New Mexico, and an affordable housing community in Colorado. TLC is rated “BBB-” by Fitch Ratings.
PACE is an innovative system of care designed to meet the needs of nursing home-eligible individuals. PACE providers help these individuals stay in their homes and communities, rather than enter nursing homes, by combining medical care, community-based home and healthcare services, and day care programs.
The Series 2011 Bonds are being issued to: 1) finance the acquisition, construction, equipping and improvement of the Broadway Center, which will replace the leased Capitol Center; 2) fund a debt service reserve fund; and 3) pay certain expenses incurred in connection with the issuance of the Series 2011 Bonds.
As one of the nation’s leading underwriters of financing for non-profit senior living providers Ziegler offers investment banking, financial risk management, merger and acquisition services, investment management, seed capital, FHA/HUD, capital and strategic planning as well as senior living research, education, and communication. Mary Muñoz, Managing Director in Ziegler’s Senior Living practice, commented, “Total Longterm Care’s leadership has proven highly adept at managing the service-intensive, capitated PACE business. We view PACE as a prototype for true person-centric care, a foundation for effective healthcare delivery. We could not be more pleased to be working with Total Longterm Care to further its PACE mission and to support the growth of PACE nationally.”
For further information on the structure and use of this issue, please see the Official Statement located on the Electronic Municipal Market Access system’s Document Archive.
For more information about Ziegler, please visit us at www.Ziegler.com.
About Ziegler:
The Ziegler Companies, Inc. (Pinksheets: ZGCO.PK – News) together with its affiliates (Ziegler) is a specialty investment bank with unique expertise in complex credit structures and advisory services. Nationally, Ziegler is ranked as one of the leading investment banking firms in its specialty sectors of healthcare, senior living, religion and education finance, as well as corporate finance and FHA/HUD. Headquartered in Chicago, IL with regional and branch offices throughout the U.S., Ziegler creates tailored financial solutions including bond financing, advisory, private placement, seed capital, M&A, risk and asset management. Ziegler serves institutional and individual investors through its wealth management and capital markets distribution channels.
Certain comments in this news release represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. This client’s experience may not be representative of the experience of other clients, nor is it indicative of future performance or success. The forward-looking statements are subject to a number of risks and uncertainties, in particular, the overall financial health of the securities industry, the strength of the healthcare sector of the U.S. economy and the municipal securities marketplace, the ability of the Company to underwrite and distribute securities, the market value of mutual fund portfolios and separate account portfolios advised by the Company, the volume of sales by its retail brokers, the outcome of pending litigation, and the ability to attract and retain qualified employees.
This communication does not constitute an offer to buy these securities. The offering is made only by the Official Statement and through an appropriately registered representative. The Series 2011 Bonds may not be appropriate for all investors. Market value and/or accrued interest will fluctuate during the period held, and, if sold prior to maturity, the yield received may be more or less than the yield calculated at the time of purchase. Discounted yields herein are gross yields to maturity. Discounted bonds may be subject to capital gains tax, rates of which will vary, so investors should consult their own tax advisor with regard to their personal tax situation. Interest on municipal bonds may be exempt from federal income tax but may be subject to tax for residents of certain states. For bonds designated AMT, taxes may exist for certain investors. Ziegler will sell these bonds on a principal basis.
The corporation or its officers, directors, stockholders, or members of their families may at times have a position in the securities mentioned herein and may make purchases or sales of these securities. Not all call or put information is identified in the description above. Please be sure to discuss any special features with your Financial Advisor before deciding whether to invest in these securities.
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Today, TLC has more than 1,800 participants across its five Centers. TLC is part of a family of companies, including a parent organization known as Total Community Options; affiliates provide PACE care and support services including fundraising, a PACE center in New Mexico, and an affordable housing community in Colorado. TLC is rated “BBB-” by Fitch Ratings.
PACE is an innovative system of care designed to meet the needs of nursing home-eligible individuals. PACE providers help these individuals stay in their homes and communities, rather than enter nursing homes, by combining medical care, community-based home and healthcare services, and day care programs.
The Series 2011 Bonds are being issued to: 1) finance the acquisition, construction, equipping and improvement of the Broadway Center, which will replace the leased Capitol Center; 2) fund a debt service reserve fund; and 3) pay certain expenses incurred in connection with the issuance of the Series 2011 Bonds.
As one of the nation’s leading underwriters of financing for non-profit senior living providers Ziegler offers investment banking, financial risk management, merger and acquisition services, investment management, seed capital, FHA/HUD, capital and strategic planning as well as senior living research, education, and communication. Mary Muñoz, Managing Director in Ziegler’s Senior Living practice, commented, “Total Longterm Care’s leadership has proven highly adept at managing the service-intensive, capitated PACE business. We view PACE as a prototype for true person-centric care, a foundation for effective healthcare delivery. We could not be more pleased to be working with Total Longterm Care to further its PACE mission and to support the growth of PACE nationally.”
For further information on the structure and use of this issue, please see the Official Statement located on the Electronic Municipal Market Access system’s Document Archive.
For more information about Ziegler, please visit us at www.Ziegler.com.
About Ziegler:
The Ziegler Companies, Inc. (Pinksheets: ZGCO.PK – News) together with its affiliates (Ziegler) is a specialty investment bank with unique expertise in complex credit structures and advisory services. Nationally, Ziegler is ranked as one of the leading investment banking firms in its specialty sectors of healthcare, senior living, religion and education finance, as well as corporate finance and FHA/HUD. Headquartered in Chicago, IL with regional and branch offices throughout the U.S., Ziegler creates tailored financial solutions including bond financing, advisory, private placement, seed capital, M&A, risk and asset management. Ziegler serves institutional and individual investors through its wealth management and capital markets distribution channels.
Certain comments in this news release represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. This client’s experience may not be representative of the experience of other clients, nor is it indicative of future performance or success. The forward-looking statements are subject to a number of risks and uncertainties, in particular, the overall financial health of the securities industry, the strength of the healthcare sector of the U.S. economy and the municipal securities marketplace, the ability of the Company to underwrite and distribute securities, the market value of mutual fund portfolios and separate account portfolios advised by the Company, the volume of sales by its retail brokers, the outcome of pending litigation, and the ability to attract and retain qualified employees.
This communication does not constitute an offer to buy these securities. The offering is made only by the Official Statement and through an appropriately registered representative. The Series 2011 Bonds may not be appropriate for all investors. Market value and/or accrued interest will fluctuate during the period held, and, if sold prior to maturity, the yield received may be more or less than the yield calculated at the time of purchase. Discounted yields herein are gross yields to maturity. Discounted bonds may be subject to capital gains tax, rates of which will vary, so investors should consult their own tax advisor with regard to their personal tax situation. Interest on municipal bonds may be exempt from federal income tax but may be subject to tax for residents of certain states. For bonds designated AMT, taxes may exist for certain investors. Ziegler will sell these bonds on a principal basis.
The corporation or its officers, directors, stockholders, or members of their families may at times have a position in the securities mentioned herein and may make purchases or sales of these securities. Not all call or put information is identified in the description above. Please be sure to discuss any special features with your Financial Advisor before deciding whether to invest in these securities.
http://tourism9.com/
Ziegler Closes $38 Million Bay Area Charter Financing
CHICAGO, IL–(Marketwire -12/07/11)- Ziegler, a specialty investment banking firm with over a 100 years of experience, is pleased to announce the successful closing of the $38 million Bay Area Charter Foundation, LLC financing. This is the first bond issue for this borrower and the third bond issue Ziegler has underwritten for schools managed by Charter Schools USA.
Bay Area Charter Foundation, LLC is a Florida 501(c)(3) that holds charters for two charter schools in the greater Tampa, Florida area. Both schools (Woodmont Charter School and Winthrop Charter School) opened in August 2011 and are managed by Charter Schools USA, a for-profit EMO based in Fort Lauderdale, Florida.
The current financing will refinance bridge loans that funded acquisition and construction costs for the two school facilities, as well as provide funding for an expansion at the Winthrop facility. Upon completion of the Winthrop expansion in fall 2012, the two schools will have a combined capacity of approximately 2,380 students in grades K-8.
With Ziegler’s expertise in charter school financing and our extensive capital markets capabilities, these combined efforts resulted in the successful placement of all bonds that met the borrower’s structural and timing constraints. Michael Braun, Senior Vice President in Ziegler’s Religion & Education practice, stated, “This financing fulfilled a long-term goal of Charter Schools USA (CSUSA) to open a charter school in the Hillsborough County area. These schools will benefit the community by expanding school choice options with CSUSA’s viable and proven curriculum while also creating a positive learning environment for the students.”
For further information on the structure and use of this issue, please see the Electronic Municipal Market Access system’s Document Archive: http://emma.msrb.org/SecurityView/SecurityDetails.aspx?cusip=A0C4C11167337732398CA7ED53DE7BF0A.
For more information about Ziegler and please visit us at www.Ziegler.com.
About Ziegler:The Ziegler Companies, Inc. (Pinksheets: ZGCO.PK – News) together with its affiliates (Ziegler) is a specialty investment bank with unique expertise in complex credit structures and advisory services. Nationally, Ziegler is ranked as one of the leading investment banking firms in its specialty sectors of healthcare, senior living, religion and education finance, as well as corporate finance and FHA/HUD. Headquartered in Chicago, IL with regional and branch offices throughout the U.S., Ziegler creates tailored financial solutions including bond financing, advisory, private placement, seed capital, M&A, risk and asset management. Ziegler serves institutional and individual investors through its wealth management and capital markets distribution channels.
Certain comments in this news release represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. This client’s experience may not be representative of the experience of other clients, nor is it indicative of future performance or success. The forward-looking statements are subject to a number of risks and uncertainties, in particular, the overall financial health of the securities industry, the strength of the healthcare sector of the U.S. economy and the municipal securities marketplace, the ability of the Company to underwrite and distribute securities, the market value of mutual fund portfolios and separate account portfolios advised by the Company, the volume of sales by its retail brokers, the outcome of pending litigation, and the ability to attract and retain qualified employees.
This communication does not constitute an offer to buy these securities. The offering is made only by the Official Statement and through an appropriately registered representative. The Series 2011 Bonds may not be appropriate for all investors. Market value and/or accrued interest will fluctuate during the period held, and, if sold prior to maturity, the yield received may be more or less than the yield calculated at the time of purchase. Discounted yields herein are gross yields to maturity. Discounted bonds may be subject to capital gains tax, rates of which will vary, so investors should consult their own tax advisor with regard to their personal tax situation. Interest on municipal bonds may be exempt from federal income tax but may be subject to tax for residents of certain states. For bonds designated AMT, taxes may exist for certain investors. Ziegler will sell these bonds on a principal basis.
The corporation or its officers, directors, stockholders, or members of their families may at times have a position in the securities mentioned herein and may make purchases or sales of these securities. Not all call or put information is identified in the description above. Please be sure to discuss any special features with your Financial Advisor before deciding whether to invest in these securities.
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Bay Area Charter Foundation, LLC is a Florida 501(c)(3) that holds charters for two charter schools in the greater Tampa, Florida area. Both schools (Woodmont Charter School and Winthrop Charter School) opened in August 2011 and are managed by Charter Schools USA, a for-profit EMO based in Fort Lauderdale, Florida.
The current financing will refinance bridge loans that funded acquisition and construction costs for the two school facilities, as well as provide funding for an expansion at the Winthrop facility. Upon completion of the Winthrop expansion in fall 2012, the two schools will have a combined capacity of approximately 2,380 students in grades K-8.
With Ziegler’s expertise in charter school financing and our extensive capital markets capabilities, these combined efforts resulted in the successful placement of all bonds that met the borrower’s structural and timing constraints. Michael Braun, Senior Vice President in Ziegler’s Religion & Education practice, stated, “This financing fulfilled a long-term goal of Charter Schools USA (CSUSA) to open a charter school in the Hillsborough County area. These schools will benefit the community by expanding school choice options with CSUSA’s viable and proven curriculum while also creating a positive learning environment for the students.”
For further information on the structure and use of this issue, please see the Electronic Municipal Market Access system’s Document Archive: http://emma.msrb.org/SecurityView/SecurityDetails.aspx?cusip=A0C4C11167337732398CA7ED53DE7BF0A.
For more information about Ziegler and please visit us at www.Ziegler.com.
About Ziegler:The Ziegler Companies, Inc. (Pinksheets: ZGCO.PK – News) together with its affiliates (Ziegler) is a specialty investment bank with unique expertise in complex credit structures and advisory services. Nationally, Ziegler is ranked as one of the leading investment banking firms in its specialty sectors of healthcare, senior living, religion and education finance, as well as corporate finance and FHA/HUD. Headquartered in Chicago, IL with regional and branch offices throughout the U.S., Ziegler creates tailored financial solutions including bond financing, advisory, private placement, seed capital, M&A, risk and asset management. Ziegler serves institutional and individual investors through its wealth management and capital markets distribution channels.
Certain comments in this news release represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. This client’s experience may not be representative of the experience of other clients, nor is it indicative of future performance or success. The forward-looking statements are subject to a number of risks and uncertainties, in particular, the overall financial health of the securities industry, the strength of the healthcare sector of the U.S. economy and the municipal securities marketplace, the ability of the Company to underwrite and distribute securities, the market value of mutual fund portfolios and separate account portfolios advised by the Company, the volume of sales by its retail brokers, the outcome of pending litigation, and the ability to attract and retain qualified employees.
This communication does not constitute an offer to buy these securities. The offering is made only by the Official Statement and through an appropriately registered representative. The Series 2011 Bonds may not be appropriate for all investors. Market value and/or accrued interest will fluctuate during the period held, and, if sold prior to maturity, the yield received may be more or less than the yield calculated at the time of purchase. Discounted yields herein are gross yields to maturity. Discounted bonds may be subject to capital gains tax, rates of which will vary, so investors should consult their own tax advisor with regard to their personal tax situation. Interest on municipal bonds may be exempt from federal income tax but may be subject to tax for residents of certain states. For bonds designated AMT, taxes may exist for certain investors. Ziegler will sell these bonds on a principal basis.
The corporation or its officers, directors, stockholders, or members of their families may at times have a position in the securities mentioned herein and may make purchases or sales of these securities. Not all call or put information is identified in the description above. Please be sure to discuss any special features with your Financial Advisor before deciding whether to invest in these securities.
http://tourism9.com/
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