NEVER IN THE HISTORY OF THE WORLD HAS THE BUSINESS OF GIVING ADVICE BEEN SO PROFITABLE! A macro concern that I wish to share with you is my concern over the increasing amounts being siphoned off by the service industries involved in business transactions. Just look at the financial results being posted by Goldman Sachs, Merrill Lynch, HSBC - need I go on? Then, there is the next level consisting of lawyers, accountants, rating agencies and other gatekeepers. I have been deeply involved over the past few months with a complex real estate transaction in which the senior debt is part of a securitized pool of mortgages. Some restructuring needs to be done – resulting in essence, in a betterment of the secured pools position as significant amounts of equity are being invested. It is not something too unusual – all the professionals involved say they have done it before. Yet, as each knows that the process has started, and the train has left the station, they require additional paperwork, additional legal opinions, additional “assurances” and yes, you guessed it, additional fees. These fees are well in excess of anything justifiable from the hours spent nor the risk (if any) being taken. Take a look at the “Very LONG sentence attached hereto from one of many documents – and repeat verbatim! I welcome that an able minded person is able to make a good living – but for heavens sake, it must be tied to some risk/reward matrix. The USA has taken almost all it can from the factory floor (exclude the UAW and some others), but I’m concerned that the competitiveness of the US is being further eroded by these high strata inefficiencies which amount to big bucks. How many widgets do I need to manufacture and sell to cover the $850 charged per hour by a senior partner at a law firm? The Chinese, Koreans and others are laughing all the way ………………… A very LONG sentence. Forever discharge XYZ, ABC, Lender and master servicer, subservicer, and their respective successors, assigns, partners, directors, officers, agents, attorneys, administrators, trustees, subsidiaries, affiliates, beneficiaries, shareholders, representatives, agents, servants and employees (collectively, “Lender Parties”) from any and all rights, proceedings, agreements, contracts, judgments, debts, costs, expenses, promises, duties, claims, demands, cross-actions, controversies, causes of action, damages, rights, liabilities and obligations, at law or in equity whatsoever, known or unknown, suspected or unsuspected, choate or inchoate, whether past, present or future, now held, owned or possessed by original Obligors or Assuming Obligors, or which Original Obligors or Assuming Obligors may hereafter hold or claim to hold from the beginning of time to the date of this Agreement under common law or statutory right, known or unknown, arising, directly or indirectly, proximately or remotely, out of the Property, the Loan or any of the Loan Documents or any of the documents, instruments or any other transactions relating thereto or the transaction contemplated thereby including, without limitation, any and all rights, proceedings, agreements, contracts, judgments, debts, expenses, promises, duties, claims, demands, cross actions, controversies, causes of action, damages, rights, liability and obligations whether based upon tort, fraud, breach of any duty of fair dealing, breach of confidence, undue influence, duress, economic coercion, conflict of interest, negligence, bad faith, intentional or negligent infliction of mental distress, tortuous interference with contractual relations, tortuous interference with corporate governance or prospective business advantage, breach of contract, deceptive trade practices, libel, slander, conspiracy or any claim fro wrongfully accelerating the Note or wrongfully attempting to foreclose on any collateral relating to the Note, contract or usury, but only to the extent that the foregoing arise in connection with events which occurred prior to the date of this Agreement. Clive F. April 2006. back to Articles Index