Tuesday, May 25, 2010

BloggeRhythms 5/25/2010

Heard from a good friend yesterday who doesn't like my political comments a bit, but thinks the rest of the stuff is okay. So, I know I have a chance at pleasing at least one reader today, because there's nothing worth commenting on in the political arena at all. Nonetheless, there are still some reminiscences that may be worth noting.

Many years ago, I was employed by the Bank of Virginia as a Regional Manager responsible for equipment financing in northern New Jersey. During that time I completed a transaction with a precious metals refiner who sought to raise funds by re-financing their non-real estate assets. Those types of deals are commonly called sale/leasebacks.

The reason the refinery wished to re-finance was that they earned their income from purchasing all kinds of items that contained various types of precious metals, then refining the items down and extracting what was of value. And, frankly, a considerable amount of what they bought to refine was discarded "junk" and trash.

Nonetheless, the discards had value to the refiners, and therefore they sought to purchase as much as they could, leading them to decide to turn whatever assets they could into cash. Now, I don't remember the precise terms and conditions of the transaction with them, but I clearly recall the paperwork.

When "documenting" a financing transaction the agreement is put in writing and, naturally, one of the most important components of the paperwork is a list of the specific machinery and equipment involved. In the case of the refinery, the re-financing covered every item in its operation that wasn't nailed down. There were slews of stuff.

So, to simplify the documentation process, I suggested that instead of typing in the details of each and every item on a list or "schedule", we take the original invoices and rubber stamp them with a blurb that contained the correct legal language, and then the invoices themselves could be signed or initialed making them a part of the contract. And, that's exactly what we did.

Several months later, I attended a week-long working meeting in Richmond, VA at the home office of my employer. During the course of the sessions various banking and financing personnel explained and demonstrated procedures regarding their particular functions. Though there was a value to the proceedings, it was the kind of stuff that could bore one into a coma.

One afternoon, midweek, I was nodding in my seat in an auditorium while an attorney droned on about proper procedure regarding completion of documents and forms, and what types of assets could, and could not, be leased or financed. He then went on to say something like "And, if Mr. Berke is in the audience, I'd like to mention specifically that we don't ever, ever, lease or finance livestock." Needless to say, that comment woke me right up.

The attorney then went on to use the documents from my refinery transaction in New Jersey to illustrate what was proper and what was not. And, it turned out that in this humongous pile of paperwork consisting of invoices for just about every item this refinery ever bought, was a bill for an attack trained watchdog. Because, since their inventories were so valuable, their theft insurer insisted that a dog patrol the premises along with armed guards all night long.

So, in that pile of invoices we received transferring ownership to us, The Bank of Virginia had "financed" and therefore taken title to this overgrown, vicious German Shepard.

For months and months to follow I'd receive calls from folks in the home office in Richmond wanting to know how "our" puppy was, and to ask if I ever stopped by the refinery to pet or groom him, or maybe, take him for a walk. Nonetheless, despite all the ribbing I took, of all that I've met in my career, and to this very day, that Shepard was by far the least expensive of all my business associates to buy a lunch for.

That's it for today folks.

Adios

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