System, method, and lease structure for cross-border financing
AssigneeAllco (Canada) Finance Inc.
InventorVern V. Kakoschke
Life of this patent
Estimating the term…
Abstract
System, method, and lease structure for cross-border financing are disclosed. The method uses qualified technological equipment, software, and rights in the software owned by a first party resident in a first jurisdiction, comprising assessing the fair market value of the assets, the first party transferring the rights in the assets to a special purpose entity in a second jurisdiction set up by a second party; and the special purpose entity leasing the assets to the first party under a reverse lease. In a variation, the qualified technological equipment is dealt with in a separate transaction from the software involving a sale or lease of the rights of the first party followed by a reverse lease.
Claims33
A system for facilitating a cross-border finance transaction, comprising:
- qualified technological equipment owned by a first party residing in a first jurisdiction;
- and
- software for use in conjunction with the qualified technological equipment owned by the first party;
- wherein:
- the fair market value of the qualified technological equipment and the software is assessed;
- the first party transfers rights in the qualified technological equipment to a special purpose entity,
- the special purpose entity leases rights of use and operation of the qualified technological equipment under a hardware lease to the first party for a first term;
- the first party transfers rights to the software to a second party residing in a second jurisdiction external to the first jurisdiction;
- and
- the second party leases rights of use and operation of the software to the first party under a software lease for a second term.
A bifurcated leasing structure for financing qualified technological equipment and software for use in conjunction with the qualified technological equipment, being Leased Assets, comprising:
- (i) a sale or head hardware Lease of the qualified technological equipment from a first party resident in Canada to a special purpose entity established under the laws of the province of Nova Scotia, the special purpose entity having a registered office in Nova Scotia but does not carry on business in Canada except in the province of Alberta, the lease being prepaid at the outset by the special purpose entity such that the first party would receive a prepayment of rent approximately equal to the fair market value of the Leased Assets;
- (ii) a hardware lease of the qualified technological equipment from the special purpose entity to the first party at an implicit lease rate that is less than the interest rate at which the Leased Assets could otherwise be financed in Canada;
- (iii) a sale or head software Lease of the software from the first party to a second party resident in the United States of America or a trust under which the second party is the beneficiary;
- and
- (iv) a software lease of the qualified technological equipment from the second party back to the first party at an implicit lease rate that is less than the interest rate at which the Leased Assets could otherwise be financed in Canada.
A method of financing using qualified technological equipment, software for use in conjunction with the qualified technological equipment, and rights in the software, being Leased Assets owned by a first party resident in a first jurisdiction, comprising the steps of:
- (i) Assessing the fair market value of the Leased Assets;
- (ii) The first party transferring the rights in the Leased Assets to a special purpose entity in a second jurisdiction set up by a second party;
- and
- (iii) The special purpose entity leasing the Leased Assets to the first party under a reverse lease at an implicit lease rate that is less than the interest rate at which the Leased Assets could otherwise be financed in the jurisdiction of the first party;
- wherein the transfer of the rights in the Leased Assets from the first party to the special purpose entity is accomplished either by an outright sale of the Leased Assets at fair market value or by a head lease for a term greater than the expected remaining useful life of the Leased Assets.
A system facilitating a cross-border finance transaction, comprising:
- qualified technological equipment, and
- software for use in conjunction with the qualified technological equipment, and
- rights in the software,
- being Leased Assets owned by a first party resident in a first jurisdiction, wherein:
- (i) the fair market value of the Leased Assets is assessed;
- (ii) the first party transfers the rights in the Leased Assets to a special purpose entity by an outright sale of the Leased Assets at the fair market value or by a head lease for a term greater than the expected remaining useful life of the Leased Assets;
- and
- (iii) The special purpose entity leases the Leased Assets to the first party under a reverse lease.
Dependencies are inferred from the claim text.