That's what makes this so crazy, its incredible that their able to keep operating with this cloud over their head.
Pride Rental Units
- Thread starter LrgCar
- Start date
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Oh for sure ... India is not going to give Canada any leeway after all the dumb shit our Prime Minister pulled with them over the years.
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My mecahanic says the money is in Dubai ... private jet / villas and livin the life...
Tax free
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That's what my sources are telling me as well. Dubai seems to be the safe haven for all these scammers, gangsters, and corrupt politicians. Since there is no extradition treaty between UAE and Canada it works out well for all parties.
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Have seen one of those rental agreement ...looks like that's exactly how they were.
There is a usual lease agreement (High priced...this was a truck with some KMS on it)
In addition there is some extra pages from PRIDE DIESEL INC which detail what is covered in full maintenance. This pride diesel agreement is where lawyers/courts will definitely be fighting.
Also there is 1 page with Nationalease logo / with details of rental option
This will be a big big mess for sure
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That is where the issue comes in, they only assigned the lease portion of the contract with no mention of maintenance, the banks are playing dumb but are well aware of the nature of these plans. The companies are intertwined, the rental or lease agreements whatever you want to call them were signed relying on the fulfillment of the maintenance contract, without that they are worth nothing. We will see how it plays out in court but there is definitely some fraud going on and clearly, we have seen that the banks are or were in bed with the group. Hopefully, the courts see through this, side with the hard-working truckers, and see the misrepresentation in these contracts.
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I have spoken to multiple parties and that seems to be the case. If anyone is in the same boat please message me.
If there is a lease contract, a maintenance contract and a rental contract, each of these will stand on their own merits. The banks most likely took over the lease contract from PRIDE and have no expectation or care about the maintenance contract. It was the way to get the asset in their own hands instead of waiting for the bankruptcy to figure its way out. The banks are just looking for their monthly payment and if there are defaults, they can get their equipment back through their own processes. What can burn the lease operator(lessee) is the fine print of the lease contract. If the contract has a damage claw back, as most do, they will hold the lease operator responsible for any and all damage which can very subjective. Effectively they could ask for the total amount of money that it would take to repair the truck - which can get up there quite quickly. That includes every part, body, engine, after treatment etc., to bring it up to a sellable standard.
On the other hand, if PRIDE still holds the maintenance contract they win if they do no maintenance. The purpose of an entity such as PRIDE, PENSKE or RYDER to manage the vehicle lease and the maintenance contract is to perform the maintenance to the level that they can effectively keep the rolling stock in good condition to be able to make the most money for their used equipment. If PRIDE does not own the equipment, they don't care what the end result of that unit will be at the end of the lease agreement. They keep raking in the maintenance costs, usually cents per kilometer, and do as little maintenance as possible.
To sum it up, anybody operating a PGL lease unit better get ready for some nasty conversations. I would contact legal representation to review your contracts and get out of them as soon as possible. Remember, the banks and the PRIDE lawyers have all the experience of winning in these situations. The lease operator has no experience.
On the other hand, if PRIDE still holds the maintenance contract they win if they do no maintenance. The purpose of an entity such as PRIDE, PENSKE or RYDER to manage the vehicle lease and the maintenance contract is to perform the maintenance to the level that they can effectively keep the rolling stock in good condition to be able to make the most money for their used equipment. If PRIDE does not own the equipment, they don't care what the end result of that unit will be at the end of the lease agreement. They keep raking in the maintenance costs, usually cents per kilometer, and do as little maintenance as possible.
To sum it up, anybody operating a PGL lease unit better get ready for some nasty conversations. I would contact legal representation to review your contracts and get out of them as soon as possible. Remember, the banks and the PRIDE lawyers have all the experience of winning in these situations. The lease operator has no experience.
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Entering into full maintenance leases for for hire transportation companies has, in my opinion, never been a financially sound business decision. I believe that was the case 40 years ago when I was in that business and it remains the case today. The profit margins in transportation are too slim to support the per km charge involved in maintenance leases.
There is a business case that can be made for it. If you are a carrier, and do not have a maintenance shop of your own, this may work as you can control your maintenance costs and have a bit of insurance that any extra-large repairs are borne by the contract. If you use one of the big guys, Ryder or Penske, they have a lot of North America locations so repairs can get done fairly quickly almost anywhere - no road calls in obscure places. To make something like this work you have to utilize the asset to 100%. You have to maximize all the KM of the contract and not go over. Its not an easy feat because if you have a contract like this during down times like COVID you will not get its full value. For sure, if you have your own competent shop, you can do all the maintenance for much cheaper than the maintenance charge in the contract. It also depends on the total cost of the equipment lease. An argument could be made that even an equipment lease is not financially sound now a days. Maybe a single owner operator signed onto a company would be better fitted for something like this as long as they can maximize the utilization and not go over.
We entered into some full maintenance leases when the GHG2014 engines came into play. There was very little information in the field on how to maintain the new components and very few competent techs to even look at it. Our contract had a replacement rental vehicle clause in it so each time we had a problem that took more than 4 hours to repair we got a rental sub unit until it was repaired at no additional charge. We believed at the time that was the only way to go but over the years they have priced themselves out of the market plus each time we needed a sub truck there was none available adding to the frustration.
It all depends on the numbers, I guess.
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In the simplest of examples, any type of truck lease, especially in for- hire transportation, is like having two entities trying to squeeze profit out of the same asset, the lessee and the lessor. A private carrier on the other hand, uses the equipment to move their finished product or raw materials not as a profit centre, but as a convenience. In a full maintenance lease, the lessor is the clear winner in the early years of the lease. Expenditures are usually restricted to regular PM and smaller repairs, all the while collecting a hefty per km rate. In the latter years, yes, the lessor can spend more to keep the vehicle in a road worthy condition, especially when tires need to be replaced which is why these leases are generally 3-4 years in duration, or less. Perhaps in some unique situations the numbers can be massaged enough to make full maintenance leasing work in a for-hire transpiration scenario, but in most cases it appears to be financially unsound.
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Karma for who? O/O's that were told something and then rug pulled on?
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Right? screw the owner ops for not being able to default and buy back their assets for pennies on the dollar.
Sounds like they just want to get their money back in anyway they can. Drivers may be getting screwed unless they get a good lawyer. Sad.
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