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November 7, 1988


By CBR Staff Writer

L L Bean, that marvellous Maine mail order mogul with the wonderful money-back guarantees, has discovered the hard way that leasing companies don’t necessarily share its homey philosophy. This is particularly the case when the leasing company has gone broke. Bean had sublet a 3090-200 to ICS, a Syracuse, New York, lessor, to make room for a 3090-400E it leased from another independent. In March, ICS went belly up amid a sea of angry creditors. Bean had believed that ICS was obligated to pay off its original lease, funded by Chase Lincoln Leaseway. But this was not the way the deal had been written. When ICS sublet the Bean machine, it never assumed the original debt, but instead said it would make Bean’s payments. Therefore, Bean’s original pledge remained in force. Chase Lincoln, like any lender, didn’t want an explanation, it wanted the money it was due. When the cheques stopped coming it, it looked to its original debtor, thereby putting the boot to L L Bean. Bean has belatedly gotten an expensive education. And so will any other user/sublessor in the same situation that doesn’t insist that its lawyers make sure it is adequately protected. It’s not as easy to play banker as it is to don woodsy togs and pretend to be Dan’l Boone. L L Bean is not the only user led into the woods by ICS, nor the one with the largest problem. EDS subleased a passel of equipment to the now-defunct lessor. Even if EDS were still under its former generalissimo Ross Perot, we doubt there are legal commandos capable of freeing all the funds held hostage by the ICS bankruptcy. (C) Hesh Wiener, Computer & Communications Buyer

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