After three consecutive quarters of failing to show any portfolio growth, the equipment leasing industry came through at year's end to close 2003 with only a slight net loss in portfolio size. According to the Equipment Leasing Association's Quarterly Performance Indicators Report (PIR), total net portfolio growth decreased by a total of only 0.4% in 2003. While 2003 marked the second consecutive year in which the leasing industry failed to recognize any net portfolio growth for a calendar year, based on how 2003 was shaping up after the third quarter, the modest overall drop-off was not such bad news. In fact, 2003 was not as bad a year for the leasing industry as one might have expected given the many challenges that have been presented over the past few years. New business volume and credit approvals were up, and charge-offs and actual delinquencies were down. Employment remains a concern, but overall, it appears that the leasing industry is weathering the storm.

Is the equipment really worth the cost of litigation? Before advising clients to pursue problem accounts legally, it pays to determine the true market value of the equipment in question.

Equipment lessors bargain for a very different set of legal rights than secured creditors. These bargained-for rights are often subject to attack, particularly in the Chapter 11 context where it is common for interested parties to challenge the characterization of a Chapter 11 debtor's obligations under an agreement styled as a lease. <i>See In re APB Online, Inc.</i>, 259 B.R. 812, 815 (Bankr. S.D.N.Y. 2001). As the recent decision by the Third Circuit in <i>Duke Energy Royal, LLC v. Pillowtex Corp. (In re Pillowtex, Inc.)</i>, 349 F.3d 711 (3d Cir. 2003) illustrates, when faced with the question of whether a transaction constitutes a "true" lease or a secured financing, Bankruptcy Courts will look through the cosmetics of the deal to its substance. To avoid the re-characterization of an equipment lease by a Bankruptcy Court, an equipment lessor must structure its transactions to retain an economically meaningful "residual value" in the leased property.

National news of importance to you and your practice.

Features

The United States Pharmacopeia (USP), an organization that, among other things, operates MEDMARX, the national, Internet-accessible anonymous reporting database that hospitals and health care systems may voluntarily use to track and trend medication errors, last month published 10 recommendations for cutting down medication errors in hospitals and health care facilities.

Features

Earlier this year, the federal government lost an attempt to deny insurance coverage to doctors who -- in their capacity as sole owners of their own corporations -- signed contracts with the United States to provide health care to patients at a non-profit clinic. When the government attempted to tell the doctors -- after the doctors had been sued for malpractice -- that they were not eligible for coverage, the doctors fought back in the U.S. District Court for the District of Columbia.

In Parts One and Two of this article, we discussed the strategies involved in deciding when to question the opposing party's expert; during preliminary <i>voir dire</i> or during cross examination. We noted that, in a jury trial, it is usually prudent to wait until cross-examination to attack the expert, so that the jury can see where the holes in the witness's qualifications and conclusions are. But sometimes, questioning during <i>voir dire</i> is preferable, especially when the result is likely to be the witness disqualification to testify as an expert.

Recently, the California Court of Appeal (Fourth Appellate District, Division One) issued a decision that confirms and clarifies the broad scope of trial court authority under California Evidence Code section 801 to exclude expert testimony that lacks adequate foundation. (<i>Jennings v. Palomar Pomerado Health Systems, Inc.</i> (2004) 114 Cal.App.4th 1108 [8 Cal. Rptr.3d 363].)