Details, Details...How important are they?
Kevin F. Clune, CLP
An acquaintance of mine recently cornered me at a business event and handed me his card with instructions to contact him. He had just accepted a position as the CFO of a large medical laboratory firm and from his tone, I detected the matter was urgent.
The analytical equipment that is used by most medical laboratories typically is financed by banks, the manufacturer or the leasing company recommended by the vendor. Since Clune & Company had not provided their lease financing, I was even more curious as to the reason for his request.
“Blanket Liens have been filed by the leasing companies who had financed their medical laboratory equipment", he explained to me when we finally spoke. In his long career as a CPA, he was aware that a leasing company would routinely file UCCs on the collateral they were financing. However, he was horrified to learn that their lease providers had filed blanket liens, which covered ALL the assets of the company.
To make matters worse, he said, they added pre-payment penalties and would not return repeated phone calls and written requests to negotiate an early payoff and remove the UCC liens they had filed against the company. He was desperate for advice on how to proceed.
As part of the leasing industry, I was aware of some of these tactics and advised him to check his lease contract. A leasing company can’t legally file a blanket lien unless it is authorized in the lease contract.
“Unfortunately”, I told him, “these types of practices are more prevalent and are becoming the norm, rather than the exception.” I advised him to be persistent and to use any leverage at his disposal. Thanks to social media, he might be able to expose the abuses his company suffered at the hands of this lease provider, and issue a warning to his peers.
I have not heard if he prevailed but I can guarantee you his lease providers have lost this customer. He learned that it is always advisable to shop around among other leasing companies rather than simply accept the financing offered by the dealer or the manufacturer. In addition, the details of the lease contract should always be thoroughly reviewed.
Details can be important!
Kevin F. Clune, CLP
Clune & Company
