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Never Say Never!

April 06, 2015, 07:00 AM
Related: Asset Recovery

As a recovery specialist, I’m often amazed by the lengths taken by lessees and borrowers to “block” lessors and lenders from recovering equipment when a financing transaction goes sour.

Of course, there are circumstances when equipment cannot be located and repossessed. However, many times seemingly impossible equipment repossession assignments can indeed be resolved utilizing creative approaches. The point being that lessors and lenders should “never say never” and rush to write-off assets, because equipment can often be located and successfully recovered if the repossession company engages creative methodologies and persistence.

To follow are two interesting asset repossession situations I’d like to share. Both assignments seemed totally unresolvable at one time – but as you will see, creativity can often pay off for all parties involved.

Recently, Collateral Consultants, LLC, received a repossession assignment from a lessor to recover several pieces of missing equipment on an equipment lease with a total asset value of over $2 million. Upon accepting the assignment, we conducted an in-depth background check on the lessee. Armed with this information we proceeded with a standard demand for the equipment. The lessee informed us that all equipment financed on the lease had been shipped overseas to be used to complete a very large job in a foreign country.

We verified with U.S. Customs that in fact all the equipment had been shipped out of the country by the lessee. At this point repossession looked hopeless for our client based on the totality of the circumstances – after all, the equipment was no longer in the U.S and equipment shipped overseas is often unrecoverable.

Not ready to admit defeat, our team continued to investigate, and we were able to make contact with the foreign country’s Consulate. During this investigation we learned that while a case such as this would be considered a civil matter in the United States, it was in fact a criminal act in the country where the equipment was now located. Furthermore, it was illegal to hinder repossession of equipment in the country.

With this new information in hand, we informed the lessee of the implications of his criminal actions. Subsequently the lessee agreed to ship all equipment back to the United States and surrender it to our client.

Although it took approximately six months to complete this seemingly “dead assignment,” we successfully repossessed the equipment by taking a few extra steps we had never undertaken in the past.

In a different assignment, our office received an assignment from an equipment rental company that had rented heavy equipment to a now delinquent client. The rental agreement included the option for the renter to purchase the equipment on the rental schedule. Several weeks past and our client never successfully secured payment for the equipment as outlined in the rental agreement. We also learned that the rental company had spoken with the renter directly who subsequently advised that the equipment had been shipped to Poland.

Upon acceptance of this assignment, we began our research and quickly learned the renter had family ties to Poland. Upon making contact with the renter, he confirmed the equipment was shipped to Poland and he presented a very cavalier attitude about the matter, thinking his actions had somehow given him the leg up in the matter.
Our team of investigators continued to interview several people associated with the renter. During this lengthy process we received a confidential informant phone call advising us the equipment was actually still in the United States. More research allowed us to determine the geographic location of the equipment.

Armed with this information, we advised the renter that we knew the location of the equipment and that it was never shipped to Poland. We also advised him we had dispatched a crew to secure the equipment as soon as possible. Within an hour of our phone call, our client called to inform us that the renter had walked into their office and paid for the equipment, balance in full.
In the end, partnering with the best repossession company is critical because it can mean the difference between writing off a transaction and recovering collateral to minimize losses. It is incumbent upon the repossession company to fully understand each assignment and work creatively toward successful resolution of any and all assignments. In these cases, we learned clearly to never say never … no matter how difficult or seemingly impossible the assignment.

Kevin Carter
President | Collateral Consultants, LLC
Born and raised in Texas, Carter is a graduate of Cooper High School, class of 1984. He served in the United States Army from 1987 to 1995. He then began working in the collections/skiptracing industry. Excelling in this field, he was recruited to oversee one of the largest repossession companies at that time in Texas. In 2003, he pursued a childhood dream of becoming a police officer, and worked full time in law enforcement until 2010. In the fall of 2010, Carter launched Collateral Consultants, which rapidly made a name for itself throughout the auto finance industry, as well as the rental car & equipment industry. Not only recovering defaulted loan vehicles, but also recovering numerous stolen rental cars and rental equipment. His years of experience as a police officer allow him to work in conjunction with many local, and state agencies in recovering stolen rental cars and equipment. Carter continues to maintain his police officer credentials, and has several employees at Collateral Consultants who are retired police officers with many years of experience conducting interrogations, and interviews.
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