FINOVA: The Complete Idiot’s Guide to Scary-Sounding Corporate Terminology

Hello again, fearless reader! As always, feel free to forward these silly ramblings to all of your
friends…and foes. As you could have expected, I’m here to assure you that Finova, the story, the
company, is alive and well. To be honest, we’re just getting started! Please hold the tomatoes, and the
venom…which reminds me…

Today’s half-baked analogy is that of a snake-bite and its immediate, poisonous effect, followed
by an antidote which balms and relieves. Notice that I didn’t say “cures”, because that would be asking
far too much!

As we’ve spent the last few weeks digesting Finova’s latest ‘news’, we have realized that the
more things change, the more they stay the same. To wit, these latest machinations by our Company serve
but one nefarious purpose: to reduce scrutiny. I’ve gotta hand it to Mr. Cumming; he really knows how to
shut off the lights!

But as you’ll see in today’s absurd Finova lesson, very scary-sounding words like “dissolution”
mean almost nothing. Sound bizarre? Maybe so, but as always, I’ve provided you with the tools and
information so that you can ponder and peruse for yourself. The only difference between Finova today,
and Finova pre-November 17, is that now we can call ourselves “Private Equity” investors, and if the
shoe fits…;

Dictionary Definition of "Private Equity"

Wikipedia Definition of "Private Equity"

I’m sure all the securities attorneys in the crowd are yawning their way through this mumbo-
jumbo, but for us humble laypeople, it sure is interesting to find out that “dissolution” might be a good
thing. Remember, folks, that only after you read the stuff can you call me crazy!

Okay now, before I’m defanged by savage Milton Critics, let’s get going! These samples of
Finova’s poisonous-sounding language, from the latest 10-Q, may initially sting like the bite of a Pit
Viper. But a quick application of semantic antidote, courtesy of the Delaware General Corporation Law,
EDGAR, and other resources, should have you feeling soothed in no time. And notice that I didn’t say
“cured”!

FINOVA SNAKEBITE:

“The Company does not intend to file any further periodic reports with the SEC under the Securities
Exchange Act of 1934.”

ANTIDOTE:

“Periodic” mostly means quarterly and annual reports, 10-Q’s and 10-K’s, and doesn’t refer to
random 8-k’s that could come out at anytime. Finova itself proved this by issuing an 8-k on the very same
afternoon that they released the above statement:
 Here's the 8-k that Finova released just hours after it said that it "does not intend to file any
further periodic reports..."

And here's yet another 'non-periodic' filing that Finova released 6 days later

LESSON LEARNED: Continue to watch EDGAR like a hawk, because Finova could still release 8-k’s
at any time, those sneaky b*stards.

------------------------------------------------------------------------------------------------------

FINOVA SNAKEBITE:

“On November 16, 2009, our Board authorized the filing of a Certificate of Dissolution of the Company
(the “Certificate of Dissolution”) with the Secretary of State of the State of Delaware. Accordingly, the
Certificate of Dissolution was filed and became effective on the Record Date, November 17, 2009”

ANTIDOTE:

So what!?!?!? The Delaware General Corporation Law automatically keeps the company open for an
additional three years:

Delaware Title 8, Chapter 1, Subchapter X, § 278

Furthermore, the Company can quite simply reverse itself, at any time, by filing a “certificate of
revocation of dissolution”:

Delaware Title 8, Chapter 1, Subchapter XII, § 311

LESSON LEARNED:

Don’t be hasty in reaching ‘conclusions’ about any aspect of the Finova story; we know nothing for sure.
“Dissolution” does not mean that the Company is immediately closed. Come to think of it, we
should all take a vacation from Finova right now. We should go for a walk instead, get some
fresh air, and then eat six or seven boxes of Christmas cookies.

----------------------------------------------------------------------------------------------------------------

FINOVA SNAKEBITE:
“At the close of business on the Record Date, we closed our stock transfer books and ceased recording
transfers of shares of our common stock. From and after that time, FINOVA’s common stock and stock
certificates evidencing the shares of common stock are no longer transferable on our books.
From and after the Record Date and subject to applicable law, our common stock is no longer treated as
outstanding and each holder of our common stock has ceased to have any rights in respect thereof and
will not be receiving any liquidating distribution, except as set forth below”

ANTIDOTE:
Go check our brokerage account. Are your Finova shares still there? Yes? Good!

LESSON LEARNED:

Our Finova shares haven’t been ‘wiped out’, or ‘cancelled’, or vaporized by Invisible Government
Helicopters, or any of those other silly exaggerations. In fact, neither form 25, form 15-12b, nor 15-12g
has been filed by Finova with the SEC (as of December 10, 2009):

Form 25 Description

Form 15-12 Description

Finova's EDGAR filings

An actual Form 15, filed by CIT, which shows what "cancellation" really looks like

All this means is that existing shareholders are ‘locked in’, and if you wanted to buy or sell,
you’d have to negotiate ‘privately’, hence the phrase “private equity”. Come to think of it, this might be
better for Mister Cumming, because now the scrutiny of the open market is a thing of the past! There are
now far fewer eyeballs following him, and he’s fine with that. I bet it gives him even more control over
the whole situation.
None-the-less, the company still exists, and the stock still exists. So maybe our “rights” as
“outstanding” shareholders have “ceased” to exist, but mustn’t that mean that Mr. Cumming’s “rights”,
and Mr. Buffett’s “rights” have also “ceased”?
But, wait, hold on a second: Do we really believe that they would do anything that would hurt
themselves!? Of course not. Now our Finova common stock could be called “instanding”, instead of
“outstanding”, to make a bit of a pun. But this entity is still alive, breathing, and functioning, while just
making far less information available to you and me. Oh well, we’ll just have to work much harder.
So, fearless reader, as much as I’d like to conclude this Christmas Letter with something
definitive about Finova, I’m sorry…I can’t help you. We are as uncertain as ever. Especially since Finova
included these bombshells in the very same 10-q that informed us of their “dissolution”:
“…uncertainty about the amount of future earnings…and uncertainty regarding the timing of the
reversal of deferred tax liabilities.”
Why even mention “future earnings” if there wasn’t such a possibility!!?!??!?!!?!?!?

I THOUGHT WE WERE DISSOLVING AND LIQUIDATING AND

WINDING DOWN OUR OPERATIONS!!?!??!?!?!?!?!?!??!
!?!??!??!?!?!?!?!?!?!?!!?!?!?!?!?!?????????!?!?!?!?!??!?
 MERRY CHRISTMAS AND HAPPY
NEW YEAR TO ALL OF YOU
BANANA-BRAINS

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!

grdmilton@gmail.com