Delaying the Inevitable
Equipment Financing Company (EFC) was a large corporation with more than $2 billion in assets. Within its doors were three men who controlled the financial reporting for the company. At the top of the organizational chart was the CEO, Clifford Elmer, a dominating individual who enjoyed a high-spending lifestyle. By his account, he was a scrapper who had become a self-made millionaire by working hard and not accepting “no” from anybody. Separated from his wife, he had a new girlfriend and teenage children to support. With an expensive lifestyle and several households to fund, Clifford was focused on the success of EFC and also on expanding the business to increase his fortune.
Next in the hierarchy was the CFO, Curtis Franklin, a former banker and friend to all. Curtis was close to retirement and knew that his eight-year tenure at EFC would be his last stop before living the carefree life he had worked so hard for.
Last in the chain was the chief accounting officer (CAO), Calvin Atkin, a middle-aged certified public accountant who had worked his way up at EFC into a management position. Calvin had used his success at EFC to provide for a comfortable lifestyle that included a home in an exclusive neighborhood and private schools for his children.
Securitization of Loans
EFC's core business was financing high-cost medical equipment. The company would receive “warehouse” loans from larger lending institutions and turn around and ...