Investment Research Associates - Page 486




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          equipment leasing transactions.  The long-term notes used in HGA             
          Cinema Trust contained deferral provisions similar to those                  
          involved herein.  In fact, the only significant difference, in               
          most of the deals, is that instead of an indefinite offset                   
          provision, the notes contain the following variation.  The                   
          deferral provisions are to be read in light of a "limited"                   
          recourse obligation provision, the amount of which declines over             
          the years.  However, by the time the deferred amounts are due--a             
          time which is well after the original lease--the scheduled                   
          recourse obligation is zero.  In some instances the recourse                 
          obligation is zero from the outset.  In another instance the                 
          recourse is limited only to the value of the collateral.                     
          Further, the residual value, regardless of the scheduled                     
          obligation, and even under the most generous of estimates, is                
          also zero.                                                                   
               There is clearly a circularity of offsetting rent and debt              
          obligations in the provisions, and, generally, the only                      
          difference from the notes in HGA Cinema Trust is the substitution            
          of a valueless recourse obligation provision for the offset and              
          discharge provision.  There was little likelihood IRA would ever             
          be called on to pay the liability set forth in each of the long-             
          term notes.  Further, there was no testimony or other evidence               
          presented at trial that it ever did.  The intent of the limited              
          recourse provision and the deferral provision was the same as the            






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