§ 103551 Equipment Trust Financing

This law lets a buyer tell the seller to give the equipment to a bank or trust that holds it for investors, and lets that bank deliver the equipment straight to the buyer while the buyer signs a purchase or lease at the same time.

Key Takeaways

•A purchase or lease can require the seller to transfer equipment to a bank or trust.
•The bank/trust holds the equipment for the benefit of equipment trust certificates (like bond investors).
•The trust can deliver the equipment directly to the buyer’s designated people.
•The buyer (district) can sign its own purchase or lease agreement at the same time.

Example

A school district wants new buses. The contract says the bus maker will sell the buses to a bank trust that backs special bonds, and the trust will then hand the buses to the district’s officers while the district signs a lease for the buses.

The district’s agreement can require the bus maker to transfer the buses to the bank trust, the trust holds them for the bond investors, and then the trust gives the buses to the district and the district signs its lease all at once.

The agreement to purchase or lease may direct the vendor or lessor to sell and assign or lease the rolling equipment to a bank or trust company duly authorized to transact business in the State of California as trustee, for the benefit and security of the equipment trust certificates and may direct such trustee to deliver the rolling equipment to one or more designated officers of the district and may authorize the district to simultaneously therewith execute and deliver an installment purchase agreement or a lease of the equipment to the district. (Added by Stats. 1974, Ch. 502.)

Key Takeaways

•A purchase or lease can require the seller to transfer equipment to a bank or trust.
•The bank/trust holds the equipment for the benefit of equipment trust certificates (like bond investors).
•The trust can deliver the equipment directly to the buyer’s designated people.
•The buyer (district) can sign its own purchase or lease agreement at the same time.

Key Takeaways

Example

Key Terms

References

§ 103551 Equipment Trust Financing

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References