Debt financing for companies

• US 20020156709A1
• Filed: 10/29/2001
• Published: 10/24/2002
• Est. Priority Date: 10/27/2000
• Status: Abandoned Application

• Current Assignee: Pearl Street Group Limited
• Original Assignee: Pearl Street Financial Group Limited
• Inventors: Andrus, David, Jones, Stephen David
• Application Number:
  US10/046,418
• Publication Number:
  US 20020156709A1
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

An investment company receives funds from a plurality of unaffiliated capital markets investors. The investors receiving in return a debt claim against the investment company. The investment company invests a substantial majority of the invested funds from the investment company directly into operating companies as debt obligations of the operating companies for essentially unrestricted use by the operating companies, the terms providing at least one year of relief from repayment of the debt. The investment company receives a security interest in substantially all assets of the operating companies. Out of the invested funds, the investment company purchases an insurance policy for the benefit of the investors. The insurance policy covers the investment company against default by the operating companies and insures repayment to the investor of the funds invested. The insurer of the insurance policy receives benefit of debt and equity interests in the operating companies.

Claims

1. A method, comprising the steps of:

receiving funds from a plurality of capital markets investors into an investment company unaffiliated with the investors, the investors receiving in return a debt claim against the investment company;

investing a substantial majority of the invested funds from the investment company directly into operating companies as debt obligations of the operating companies for essentially unrestricted use by the operating companies, the terms providing at least one year of relief from repayment of the debt, the investment company receiving a security interest in substantially all assets of the operating companies.

out of the invested funds, purchasing an insurance policy for the benefit of the investor, the insurance policy covering the investment company against default by the operating companies and insuring repayment to the investor of the funds invested, the insurer of the insurance policy receiving benefit of debt and equity interests in the operating companies.

2. A method, comprising the steps of:

receiving funds from a capital markets investor into an investment company;

investing a substantial majority of the invested funds from the investment company into one or more operating companies;

arranging an insurance policy for the benefit of the investor, the insurance policy insuring repayment to the investor of the funds invested, the insurer of the insurance policy receiving benefit of debt and equity interests in the operating company or companies.

3. The method of claim 2, wherein:

the investment company receives investments from a plurality of investors.

4. The method of claim 3, wherein:

the investment company'"'"'s investment in the operating company is on terms not requiring principal repayment by the operating company to the investment company for at least one year, a repayment obligation of the operating company to the investment company being supported by an equity interest in the operating company.

5. The method of claim 3, wherein:

the insurance policy covers the investment company against default by the operating company and insures payment of principal and interest to the investors.

6. The method of claim 3, further comprising the step of:

investing a substantial majority of the invested funds from the investment company out to one or more operating companies for business expansion of the operating companies, the investment company receiving a security interest in substantially all assets of the operating companies.

7. The method of claim 2, wherein the debt claim received by the investor is an indirect claim, co-mingled with debt claims against other operating companies

8. The method of claim 2, wherein the insurance policy insures payment of interest arising under the debt claim.

9. The method of claim 2, wherein the investment company raises its capital in the capital markets.

10. The method of claim 2, wherein the investor receives no equity in the investment company.

11. The method of claim 2, wherein an agreement between the investor and the investment company contemplates repayment of the funds within seven years.

12. The method of claim 2, wherein the investment company receives an equity interest in the operating company in return for its investment.

13. The method of claim 12, wherein the equity interest received by the investment company includes a warrant exercisable for stock of the operating company.

14. The method of claim 2, wherein the investment company receives a debt interest in the operating company in return for its investment.

15. The method of claim 14, wherein the debt issued by the operating company provides for repayment forbearance for at least one year.

16. The method of claim 14, wherein the operating company receives unrestricted use of funds invested by the investment company.

18. The method of claim 17, further comprising the step of:

investing a substantial majority of the invested funds from the investment company out to a plurality of operating companies on terms not requiring principal repayment by the operating companies to the investment company for at least one year, repayment obligation of the operating companies to the investment company being supported by an equity interest in the operating companies.

19. The method of claim 18, further comprising the step of:

out of the bond proceeds, purchasing an insurance policy covering the investment company against default by the operating companies and insuring payment of principal and interest to the investors.

20. The method of claim 19, wherein the insurance policy insures payment of interest arising under the debt claim.

21. The method of claim 18, further comprising the step of:

the investment company receiving a security interest in substantially all assets of the operating companies.

22. The method of claim 18, wherein the bonds are sold to unaffiliated investors in the capital markets.

23. The method of claim 17, wherein the investor receives an indirect debt claim against the operating company, co-mingled with debt claims against other operating companies

24. The method of claim 17, wherein the investment company raises its capital in the capital markets.

25. The method of claim 17, wherein the investor receives no equity in the investment company.

26. The method of claim 17, wherein the investment company receives an equity interest in the operating company in return for its investment.

27. The method of claim 26, wherein the equity interest received by the investment company includes a warrant exercisable for common stock of the operating company.

28. The method of claim 17, wherein the investment company receives a debt interest in the operating company in return for its investment.

29. The method of claim 28, wherein the debt issued by the operating company provides for repayment forbearance for at least one year.

30. The method of claim 28, wherein the operating company receives unrestricted use of funds invested by the investment company.

31. The method of claim 17, wherein the investment company includes a number of separate entities chartered in several distinct jurisdictions.

32. The method of claim 31, wherein the investment company includes a special purpose vehicle chartered to hold the assets and liabilities of a single series of finds received from capital markets investors.

17. A method, comprising the steps of:

receiving funds from a capital markets investor into an investment company;

investing a substantial majority of the invested funds from the investment company into an operating company as a debt obligation of the operating company, the terms providing at least one year of relief from repayment of the debt.

33. A method, comprising the steps of:

receiving funds from a plurality of capital markets investors into an investment company;

investing a substantial majority of the invested funds from the investment company directly to an operating company for business expansion of the operating company, the investment company receiving a security interest in substantially all assets of the operating company;

out of the invested funds, purchasing an insurance policy covering the investment company against default by the operating company and insuring repayment of principal to the investors.

34. The method of claim 33:

wherein the plurality of investors receive debt claims against the investment company in return for their invested funds.

35. The method of claim 33, wherein:

the insurance policy insures payment of principal and interest to the investors.

36. The method of claim 33, wherein the debt claim received by the investor is an indirect claim, co-mingled with debt claims against other operating companies

37. The method of claim 33, wherein the investor receives no equity in the investment company.

38. The method of claim 33, wherein an agreement between the investor and the investment company contemplates repayment of the funds within seven years.

39. The method of claim 33, wherein the investment company receives an equity interest in the operating company in return for its investment.

40. The method of claim 39, wherein the equity interest received by the investment company includes a warrant exercisable for stock of the operating company.

41. The method of claim 33, wherein the investment company receives a debt interest in the operating company in return for its investment.

42. The method of claim 41, wherein the debt issued by the operating company provides for repayment forbearance for at least one year.

43. The method of claim 33, wherein the operating company receives unrestricted use of funds invested by the investment company.

44. The method of claim 33, further comprising the step of:

investing the funds to a plurality of operating companies, the investment company receiving a security interest in assets of each operating company of the plurality.

45. The method of claim 33, wherein the investment company further receives a security interest in all available assets of the operating company.

46. The method of claim 33, wherein the investment company further receives a fixed yield return on the money lent to the operating company.

47. The method of claim 33, wherein the investment company further receives an equity interest in the operating company.

50. The method of claim 50, further comprising the step of:

arranging an insurance policy for the benefit of the investors, the insurance policy insuring repayment to the investor of the funds invested, the insurer of the insurance policy receiving benefit of debt and equity interests in an operating company.

51. The method of claim 50, wherein:

the insurance policy insures payment of principal and interest to the investors.

52. The method of claim 48, wherein the debt claim received by the investor is an indirect claim, co-mingled with debt claims against other operating companies

53. The method of claim 48, wherein the investor receives no equity in the investment company.

54. The method of claim 48, wherein the investment company receives an equity interest in the operating company in return for its investment.

55. The method of claim 54, wherein the equity interest received by the investment company includes a warrant exercisable for stock of the operating company.

56. The method of claim 48, wherein the investment company receives a debt interest in the operating company in return for its investment.

57. The method of claim 56, wherein the debt issued by the operating company provides for repayment forbearance for at least one year.

59. The method of claim 58, wherein:

an insurer of the insurance policy receives benefit of debt and equity interests in the operating company.

60. The method of claim 58, wherein:

the terms of the investing to the operating companies providing at least one year of relief from repayment of the debt.

61. The method of claim 58, wherein the insurance policy insures payment of interest arising under the debt claim.

62. The method of claim 58, wherein the investor receives no equity in the investment company.

63. The method of claim 58, wherein the investment company receives an equity interest in the operating company in return for its investment.

64. The method of claim 63, wherein the equity interest received by the investment company includes a warrant exercisable for stock of the operating company.

65. The method of claim 58, wherein the investment company receives a debt interest in the operating company in return for its investment.

66. The method of claim 65, wherein the debt issued by the operating company provides for repayment forbearance for at least one year.

67. The method of claim 65, wherein the operating company receives unrestricted use of funds invested by the investment company.

48. A method, comprising the steps of:

receiving funds from a plurality of capital markets investors into an investment company unaffiliated with the investors;

investing a substantial majority of the invested funds from the investment company out to one or more operating companies for essentially unrestricted use by the operating companies, the investment company receiving a security interest in substantially all assets of the operating companies.

49. The method of claim 48:

wherein the plurality of investors receive debt claims against the investment company in return for their invested funds.

58. A method, comprising the steps of:

receiving funds from capital markets investors into an unaffiliated investment company, the investors receiving in return a debt claim against the investment company, the debt claim covered by an insurance policy insuring payment of principal and interest;

investing a substantial majority of the invested funds from the investment company out to one or more operating companies.