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In this section are 2 examples of actual cases that are
currently in litigation. They clearly illustrate that fraud
or misrepresentation can be effected in large
organisations as well as small. Losses can run into
millions of pounds on assets that never realise their
true value, this is without any consideration for the
cost of spiralling legal expenses.
No fewer than 27 leasing companies faced losses
in excess of £70 million following the collapse of a
Leicester based manufacturing company after it
went into administration in 2007. Prior to the
collapse the company had sought multiple
financings from a number of lessors for each single
piece of equipment. Should there have been an
asset registry in place this would have been
prevented and at least acted as a strong
deterrent.
A growing enterprise based in Sussex sourced and
purchased a used packing machine to increase
production capacity, valued at £80,000. The
purchase was facilitated with a finance agreement.
Months following payment and installation it came
to light that the equipment was already under an
existing finance agreement with another lessor.
Title was passed back to the original finance
company and the lessee was forced to payback the
loan and return the machine to the original lessor.
This incurred loss of trade and substantial legal
costs for all parties.
In both cases had there been the Asset Registry
service available the losses would have been minimised
or even avoided.
Such scenarios have left the leasing industry pondering
due diligence and therefore it has strengthened calls for
lessors and asset financiers to participate in
arrangements for the registration of title in leased
assets.
Hence...Viztanet
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