Lease termination method

• US 6,735,573 B1
• Filed: 06/08/2000
• Issued: 05/11/2004
• Est. Priority Date: 12/14/1999
• Status: Expired due to Fees

• Current Assignee: Dynamic RISK Assumption Incorporated
• Original Assignee: Dynamic RISK Assumption Incorporated
• Inventors: Gelman, Bernard, Broussard, James Joseph
• Primary Examiner(s): Olszewski, Robert P.
• Assistant Examiner(s): GORT, ELAINE L
• Application Number:
  US09/589,701
• Time in Patent Office: 1,433 Days
• Field of Search: 705/30, 705/35, 705/37, 705/4, 705/31, 705/40, 340/825.27, 340/825.26
• US Class Current: 705/30
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 40/12 Accounting
• CPC Class Codes: G06Q 40/123 Tax preparation or submission

Abstract

A method for derecognizing the commitment of a lessor in an operating lease having a lease liability including the steps of holding by a lessee an operating lease wherein the operating lease has a future value S₁ and determining the present value P₁ of the operating lease in accordance with the future value S₁. The method also calls for buying the operating lease by a buyer entity for a value P₂ greater than the present value P₁, thereby providing a first net gain and holding the lease liability by the buyer entity for a period of time and discharging a lease liability of the operating lease at the end of the period of time for a value S₁ that is less than a future value S₂ thereby determining a second net gain. The present value P₂ is determined according to the present value P₁ and according to a time t years prior to the time at which the value of the lease liability reaches S₁. The present value P₂ is determined according to the value S₂ and the future value S₁ is known at the time of the determining of the present value P₁. The first net gain is a net gain for the seller and the second net gain is a net gain for the buyer entity. The lease liability is recorded as a long term debt by the seller and may be at present value by the buyer entity. The buyer entity can be an insurance company.

Claims

1. A method for derecognizing the commitment of a lessee in an operating lease, comprising the steps of:

(a) holding by a lessee a recognized operating lease wherein the recognized operating lease has an obligation to a lessor and the recognized operating lease has a fixed future value S₁;

(b) determining the present value P₁ of the recognized operating lease in accordance with the fixed future value S₁;

(c) buying the recognized operating lease from the lessee by a buyer entity for a present value P₂ greater than the present value P₁ wherein the lessee retains the obligation to the lessor thereby providing a first net gain to the lessee whereby the recognized operating lease is derecognized to provide a derecognized operating lease;

(d) holding the derecognized operating lease and storing information regarding the derecognized operating lease in a computer by the buyer entity for a period of time; and

(e) discharging a liability of the derecognized operating lease at the end of the period of time by the buyer entity for the future value S₁ that is less than a future value S₂ determined in accordance with the present value P₂ thereby providing a second net gain to the buyer entity.

2. The method for derecognizing the commitment of a lessee of claim 1, wherein the present value P₂ is determined according to the present value P_1.

3. The method for derecognizing the commitment of a lessee of claim 1, wherein the present value P₁ is determined according to a time t years prior to the time at which the value of the lessee retained obligation reaches S_1.

4. The method for derecognizing the commitment of a lessee of claim 3, wherein the buyer entity holds the lessee retained obligation for a period of time before selling the lessee retained obligation.

5. The method for derecognizing the commitment of a of claim 4, wherein the buyer entity sells the lessee retained obligation to a further buyer entity before t years from the purchase have elapsed.

6. The method for derecognizing the commitment of a lessee of claim 4, where the further buyer entity is an insurance company.

7. The method for derecognizing the commitment of a lessee of claim 4, wherein the buyer entity acquiring the lessee retained obligation at the present value P₁ sells the lessee retained obligation to a further buyer before t years from the purchase have elapsed.

8. The method for derecognizing the commitment of a lessee of claim 3, wherein the present value P₂ is determined according to the value S₂.

9. The method for derecognizing the commitment of a lessee of claim 1, wherein the future value S₁ is known at the time of the determining of the present value P₁.

10. The method for derecognizing the commitment of a lessee of claim 1, wherein the first net gain is a net gain for the lessee and the second net gain is a net gain for the buyer entity.

11. The method for derecognizing the commitment of a lessee of claim 1, wherein the lessee retained obligation is recorded as a long term commitment by the lessee and as a present value by the buyer entity.

12. The method for derecognizing the commitment of a lessee of claim 1, wherein the buyer entity comprises an insurance company.

13. The method for derecognizing the commitment of a lessee of claim 12, wherein the buyer entity comprises a consortium including an insurance company.

14. The method for derecognizing the commitment of a lessee of claim 1, wherein the first net gain comprises M_s.

15. The method for derecognizing the commitment of a lessee of claim 1, wherein the first net gain comprises a value greater than M_s.