The newly formed and highly specialized team was put into place to address the growing demand for special purpose entities
(SPEs) during an uncertain economy.
It is commonly believed that Enron--all right, Lay and Skilling--failed because of fraud, imaginative accounting, poor oversight and a criminal CFO who overreached himself with a few too many off-balance-sheet special purpose entities
Both Enron and Parmalat used such arrangements and special purpose entities
(SPEs) to conceal the true state of their finances.
The SEC's report on off-balance sheet arrangements, special purpose entities
and related issues recommends a rethinking of current guidance on reporting the financial results of leases and defined-benefit pension plans, while pressing for reporting all financial instruments at fair value.
Observation: The use of special purpose entities
is becoming more widespread.
FLFC will write insurance guaranty policies for transactions of the new company including the special purpose entities
which will fund the proprietary BCLOC Loans originated by the lending unit.
Generally accepted accounting principles require that companies consolidate all entities in which they have a controlling financial interest, including special purpose entities
These properties are owned by bankruptcy-remote special purpose entities
While there is nothing illegal per se about such subsidiaries, Enron ran into accounting trouble with several special purpose entities
it created to keep debt off its balance sheet.
NCAT also purchases issuer assets from bankruptcy-remote special purpose entities
that only sell receivables as to which GMAC has made the representations and warranties or certificates evidencing 100% ownership interest in such receivables.
Earlier today the Securities and Exchange Commission (SEC) issued a staff report Report and Recommendations Pursuant to Section 401(c) of the Sarbanes-Oxley Act of 2002 On Arrangements with Off-Balance Sheet Implications, Special Purpose Entities
, and Transparency of Filings by Issuers.
The certificates represent beneficial ownership interest in the trust, primary assets of which are notes backed by equity interests in seven special purpose entities
and their parents having an aggregate principal balance of approximately $1,900,000,000, as of the cutoff date.