- 98 -
RD Leasing was not liable to a third party for the debt.
Unlike the transaction in Frank Lyon Co. v. United States, 435 U.S.
561 (1978), if Comdisco had failed to make its lease payments, RD
Leasing would not have had to provide its own capital to make
mortgage payments to a third party. If RD Leasing did not make its
final balloon payments on the equipment, Comdisco’s only remedy was
to retake the equipment. Thus, RD Leasing had the option to
abandon the equipment, leaving Comdisco no recourse against RD
Leasing.23
The transaction did not occur on a public market but rather in
an environment controlled by Comdisco and NEFI. When the sale-
leaseback transaction involved herein was proposed, Mr. Hastings
used the M&S report to interpolate the values stated therein to
arrive at values relevant to the specific dates in the proposed
transaction. He then presented these interpolated numbers to Greg
Barwick, one of M&S’s appraisers. The cost of the computers, the
financing of the purchase price (including the interest rates), and
the rents, as well as the estimated residual values, were easily
manipulated to project a pretax profit.
NationsBank’s records show that the bank treated the
“purchase” of the rents receivable as a loan to Comdisco and
anticipated prepayment by March 28, 1994. The bank’s records
23 The equipment was Andantech’s only asset, and the
Andantech interest was RD Leasing’s principal asset (RD Leasing,
however, was required to maintain sufficient investments to
redeem Mr. Parmentier’s preferred stock).
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