The original lease in a mobile MRI unit was for 36 months which was paid on a timely manner.  After lease expiration, the lessee paid 41 month to month payments at $18,000 a month.  Once the lessee finally noticed that the lease had expired, the lessee provided notice and had an additional 90 days of payments, which were required prior to returning the equipment due to the terms of the lease.  Total payments of $792,000 were made after the original lease term had expired.  If managed properly the equipment could have been purchased for fraction of the payments.

This Company had centralized purchasing and accounting functions with multiple manufacturing and distribution facilities.  Procedures were in place for proper notice at lease termination.  The Company believed it was managing the end of lease process, however there were no checks and balances to ensure that procedures were followed.  As a result, this Company was one of the most profitable accounts for our leasing company.  Accounting did notify the plants that equipment schedules were maturing, but there was little follow up and millions of dollars of equipment remained in service at above market rates.  Although this company had all of the procedures in place it still was not managing the process and spent millions of dollars unnecessarily.

This association leased equipment for its luxury condominium project.  The leasing company put egregious lease terms into the contract which forced the association to retain the equipment at the end of the lease term (for example, the lease stated that the lessee had to return the equipment to any location within the continental US via a shipping company selected by the lessor).  Clearly this made the return provisions more costly than the equipment and a negotiated purchase was completed.  Highline’s understanding of the lessor’s options saved the association approximately 50% from the leasing companies original purchase price.

If you would like more information about Highline, please call 720-334-3865 / 303-929-2414 or email: Info@HighlineFin.com