Is Finova Really Dead?

August 2012 Locking Horns With Leucadias Joe Steinberg I swear to you, loyal followers, that this will be the most efficient Leucadia/Finova/Berkadia screed that Ive ever written. No lengthy excerpts from ancient 10ks, no ponderous editorials, no delusional fantasies. (OK, maybe just one.) I will try to transcribe the brief conversation that I had with Joe Steinberg after the Leucadia annual meeting, which was held on Tuesday, May 15, 2012. First, I will offer my take on a possible Finova future, which is based almost entirely on a look back through Leucadias past. Quite simply, I find it impossible to believe that these guys would let Finovas $1.7 Billion NOL wither and die on the vine unused. Especially considering that they are still milking Baldwin Enterprises Inc, some 25 years after Baldwins bankruptcy and restructuring. I strongly encourage you to bone up on the stories of Brae, GATX, PHLCorp/Baldwin Enterprises Inc, and Allcity Insurance. Leucadia lowballed minority shareholders in every single one of those situations, and has been sued multiple times for grossly downplaying the inherent value in these companies. Please take a quick look at this article, The Short End: http://www.forbes.com/forbes/1998/0727/6202091s2.html My opinions are just opinions, but they are also fortified by some of the knowledge (and enlightenment) from these mentors: Bob W, Rick F, Chris S, and Jay Welts... among many others. Special thanks to you guys for all your time and patience. As of this writing, I am in the seventh month of recovery from a triple bypass/mitral valve repair, so I am more enthusiastic about life than ever before. I stay sane by laughing and making silly puns and dopey skits. (I think I might just have one last Berkadia video left in me, so stay tuned.) Im at the point where I dont give a rats asp what anyone thinks of my silly words; life is too short, so Im gonna blog. Please though, always remember that I also present deadly accurate facts and information, so we can be informed about the Leucadia/Berkadia story. Im just a messenger, hoping to lead you to the same info Ive found. Here goes, and thanks for staying awake. ------------------------------------------------------------------------------------------------------------------------------------Call it self-inflicted, self-immolation, or sado-masochistic if you will, but I do still derive a certain pleasure from being yelled at by Joe Steinberg. This years encounter was my 7th (Im pretty sure I began attending in 2006) and I wasnt disappointed. Joe was as hostile to me as hes ever been, maybe more so. It seems proportionate to the accuracy of my Finova-related questions; the better the information Ive gathered, the testier Joe gets. I didnt expect any surprises, but silly me; at least one of his responses was very, very interesting. Keep in mind that I was polite, with a smile on my face, as always. It didnt work though; Joe Lemon-Puss wasnt happy to see me, and it showed. His brilliant taxman/assistant Joe Orlando was following closely behind him, and just seemed to laugh, or smirk, as we went down the escalator. I had asked three generic questions during the meeting; about Bernanke printing money, about the value of a Harvard MBA, and about how students like me could best emulate the Leucadia track record. Those questions drew some hilarious, if monosyllabic, answers from Ian and Joe. But I saved the Finova interrogation until after the meeting, as Joe had berated me to do in years past. I had a brief conversation with Bruce Baird, brother of Brent Baird, from First Carolina Investors. I asked Bruce if he could recall who they sold their 3.3 million Finova shares to

in November of 2009, but he basically said that they just sent it to the broker, and it was gone. There wasnt a specific buyer, as best as he could recall. But then I turned and saw Joe en route to the turnstiles and the exit, so I bade farewell to Mr. Baird, spun round, and engaged my subject. Heres the rough transcript: Me: Hello Mister Steinberg! Im Gregory. Do you have a minute? JS: No, not really Me: Ill be brief, sir. JS: Listen, Greg. Your questions are way too complicated, and Me: Not these ones, sir. I admit that I was somewhat unprepared last year, but this time Ive got this handy piece of yellow paper right here, nice-and-tight, yes-or-no, to make it easier for you. This shouldnt take us a minute or so. Me: So as of today, todays date, does Finovas NOL still exist? JS: Listen! Finova is dead! Me: Does the NOL exist today? JS: No! [My transcript here doesnt nearly convey the tone and volume of his response, so use your imagination] Me: But sir, Finovas dissolution is not yet complete, and wont be until November 2012, due to the automatic three-year extension of the companys existence. JS: [no words, just a smirk] By this time were moving through the turnstilesand I feel like I should just keep pounding away Me: Sir, would Finova be subject to Cancellation-Of-Debt-Income, and result in a reduction of the NOL, based on $1.7B in NOL minus $1.4B in the defaulted Senior Notes? Even if so, that would still leave $300M in NOL, which could be used by The Berkadias, right? After all, when the dissolution ends in November, section 332 of the IRC allows an owner of 80% of the common stock to inherit or absorb the NOLs. JS: Listen, it cant be done! Same thing he said last year. But now Im ready for the fun part, where hes clearly agitated and will likely answer I dont know or I dont remember to every next question Me: Why not, sir? Why cant it be done? Now hold onto your seat folks, because this is where the story takes a very, very interesting twist JS: Because it was a different parent! Jesus F. Christ!!! What the f*** did he say !!?!??! Imagine my total disbelief at this moment Me: What !?!?! Who is the different parent!!??!?!

JS: I dont remember! Me: Is it BH Finance LLC? JS: [no words, just the smirk] Me: Sir, who is the different parent, if not one of the 12 Berkadias? Is it BH Finance LLC!? OK, Mister Steinberg, which of the 12 Berkadia entities owns the Finova common stock? JS: I dont remember! By this time, were stepping toward the doors that let out onto Madison Avegotta go for it. Me: Mister Steinberg, why was Finova common stock never cancelled? JS: I dont know! Hes clearly flabbergasted, and has had enough of me, but I gotta keep going Me: Sir, in late November of 2009, Brent Baird and his fund, First Carolina Investors, sold 3.3 million Finova common shares all at once. I never saw that transaction go over on any of my screens, so I suspect that it was a private sale. Did you buy that stock? Do you know who bought that stock? JS: [With a rather pregnant pause and another smirk] Thats it. Were done. Im not answering any more questions. Me: OK, sir. I guess well see you again in November. And with that, he turned to Orlando, who had an even bigger smirk on his face, and they shook their heads and walked out the door. I should have continued badgering Joe Lemon-Puss for more info, but I think the time will pass quickly enough between now and November (when the Delaware three-year post-dissolution period ends). It sure will be interesting to see what happens then. Plus, it was raining, so I just bolted for the train station.

HOPELESSLY COMPLEX; WHO EXACTLY OWNS THE FINOVA COMMON STOCK? Ok folks, the time has come. Im basically giving up on my quest to figure out just which Berkadia entity actually owns the Finova common stock. Since Joe Steinberg doesnt remember, I guess I have to call it quits, right? Ive done all I can. But wait! Theres hope! Maybe you can parse this ridiculously indecipherable bit from the original Finova SC13A, dated August 28, 2002, and enlighten me!??!?!?! This amendment reports only a change in the entities through which Berkshire Hathaway Inc. and Leucadia National Corporation own their shares of common stock of The FINOVA Group Inc. The transaction described in this amendment did not change the ultimate control of those shares by, or change the number of those shares beneficially owned by, Berkshire Hathaway Inc. and Leucadia National Corporation, through their respective subsidiaries. Item 1. Security and Issuer.

This Statement constitutes Amendment No. 1 ("Amendment No. 1") to the statement on Schedule 13D (the "Original 13D") filed with the Securities and Exchange Commission by Leucadia National Corporation

("Leucadia"), and its subsidiaries, Phlcorp, Inc. ("Phlcorp"), WMAC Investment Corporation ("WMAC"), a direct subsidiary of Phlcorp and WMAC Investors, Inc. ("WMAC II"), a direct subsidiary of WMAC (collectively, the "Leucadia Parties"), together with Berkadia Management LLC ("Berkadia Management"), a Delaware limited liability company, the members of which are BH Finance LLC ("BF"), an indirect subsidiary of Berkshire Hathaway Inc. ("Berkshire"), and WMAC, and Berkadia LLC ("Berkadia"), a Delaware limited liability company the members of which are WMAC II, Berkadia Management and BHF Berkadia Member Inc. ("BHF"), an indirect subsidiary of Berkshire, with respect to the common stock, $0.01 par value per share (the "Company Common Stock"), of The FINOVA Group Inc., a Delaware corporation (the "Company"). Unless otherwise indicated, all capitalized terms used herein have the meanings ascribed to them in the Original 13D. Item 2. Identity and Background.

As discussed in the Original 13D, the Leucadia Parties, Berkadia, Berkadia Management, Berkshire and certain subsidiaries of Berkshire were members of a group with respect to 61,020,581 shares of Company Common Stock (the "Shares") that were owned of record by Berkadia. On August 23, 2002 (and effective as of July 31, 2002), Berkadia transferred all of the Shares to Berkadia Equity Holdings LLC, a Delaware limited liability company ("BEH"), the members of which are WMAC II and BHF, and immediately thereafter transferred all of the membership interests in BEH to BHF and WMAC II in partial liquidation of the interests of WMAC II and BHF in Berkadia. As a result, BEH has become a reporting person with respect to the Shares. Also, as a result of this transaction, Berkadia and Berkadia Management no longer have a direct or indirect interest in the Shares. The purpose of the transaction was to separate the ownership and management of the Shares from Berkadia's other activities. Berkshire and Leucadia each indirectly owned 50% of the membership interests in Berkadia insofar as such interests pertained to the Shares, and indirectly own 50% of the membership interests of BEH. The effect of the transaction was to move the Shares from one Berkshire-Leucadia jointly controlled entity (i.e., Berkadia) to another (i.e., BEH). The transaction did not change the ultimate control of the Shares or increase or decrease the number of the shares of Company Common Stock beneficially owned by Berkshire or Leucadia. The Leucadia Parties, BEH, Berkadia and Berkadia Management are making this separate filing on Schedule 13D in accordance with Rule 13d-1(k)(2) under the Securities Exchange Act of 1934, as amended, and the Leucadia Parties are solely responsible for the information contained in this separate filing, except for information with respect to BEH, Berkadia and Berkadia Management. BEH, Berkadia and Berkadia Management are Reporting Persons in this Schedule 13D but do not assume any responsibility for information contained herein with respect to the Leucadia Parties. Berkshire and its subsidiaries are filing a separate amendment to the Schedule 13D originally filed by Berkshire with respect to the Shares (the "Berkshire Amendment") that will include BEH, Berkadia and Berkadia Management as reporting persons. The information in this Amendment No. 1 and in the Berkshire Amendment with respect to BEH, Berkadia and Berkadia Management is duplicative out of necessity and does not reflect the acquisition of additional shares of Company Common Stock.

For purposes of this Amendment No. 1, BEH and the Leucadia Parties are sometimes collectively referred to as the "Beneficial Owners." Surely this poses no challenge to any of you smart people, right? I mean, any minute now, one of you will call me with an exact answer, right? No? OK, I forgive you, but from this point forward, lets just call it The Berkadia F.O.E., or The Berkadia Family of Entities. I dont intend to imply that Joe is my foe, because he is my buddy, right? Were all in this together, right? It takes a village, right, Joe? Anyone? Hello !??!?! Can you hear me? [tap tap] Is this thing on!?!?!?!?! ---------------------------------------------------------------------------------------------------------------------------HELP ME CHOOSE A TITLE FOR MY NEXT VIDEO: THE POTENTIAL FOR INJUSTICE OR THE BLOB THAT ATE FINOVAS NOLS Im sure you can guess which one I like, but why dont we put it to a popular vote? Send your entry to: gdhawaya@gmail.com I believe that the injustice will work something like this: Leucadia/Berkadia/Whoever is going to sneak around in the dark, picking up Finova common shares wherever they find them. Like an open order, until they get to the 80% that is necessary for the parent to inherit the NOLs under IRC section 332. At that point, the parent or blob, whoever that may be, will simply absorb the tax attributes, and the world will have no idea what happened. Thereafter, Berkadia and all its subsidiaries will enjoy the benefits of tax-freedom, as so competently demonstrated by Leucadia since 1979. As you know, Berkadia Commercial Mortgage already has a $190BBBillion portfolio, and is making $$$ hand-over-fist. Its a perfect place for The Berkadia F.O.E. to use its NOLs. And it will look very similar to your favorite 1950s creature/blob movie, where the monster consumes the hapless subjects as they scream pointlessly into the closing jaws of Berkadia! Unless, of course, the rebellious Minority launches some kind of beam, or ray, or poison-poison-pill, like they do in the movies. All-of-a-sudden, Minority Shareholder Man, in his red cape and tight underwear, flies down and vanquishes the F.O.E.! Then, the hideous mound of goop releases the damsel (Finova) in distress, and frees the oppressed value from within the BHF Berkadia Member Blob! The good people of Minorityshareholderville rush to the center of town to celebrateor to burn Joe Steinberg in effigyand live happily ever after Finova. Sounds awesome, huh??!??!?!?!?!i

TWELVE BERKADIAS? ILL SEE YOUR TWELVE, AND RAISE YOU FIFTEEN For those of you bored enough to have sat through my asinine video Clarified Berkadia, it turns out that our estimate of the number of Berkadias was far, far too low, as we might have suspected. In addition to those twelve, theres BHF Berkadia Member Inc., from way back, and Welsh Road Funding, home of the Berkadia $2.5 BBBillion surety bond from last autumn. Theres also BH Finance LLC, on the Berkshire side, run by the Wizard of Oz, Marc Hamburg. I mean, really, there are at least fifteen entities at work here. Maybe Ill run a contest, starting right now; I want all of you to draw your best diagram, on your wall or white board, of all the Berkadias. I will set up a collage of everyones Berkadia Interpretations; well mount them on the walls and display them like an art show. Youll all be invited, and owl serve wine and cheese. Then we can stand around and gaze at each others subsidiaries. I think that would be a really diverse event, so I have only one question; Stilton or Smoked Gouda?

URGENT FILINGS, MARTIN BIENENSTOCK, AND HIS FANCY SIDEKICK; BIG GUNS IN A BIG RUSH Im still curious about the urgency with which Finova filed its Certificate of Dissolution. Remember that the Finova senior notes matured on November 15, 2009, and the very next day, November 16th, Finova filed its Certificate of Dissolution in Delaware. Like, if this is all so dead-in-the-water, why the rush? This reminds me of the hearing in Delaware Bankruptcy Court on December 4, 2006, to which Finova sent not only Martin Bienenstock, but also his equally highly regarded sidekick, Judy G.Z. Liu. So I ask you; if Finova was worthless wallpaper by that time, why send [not one, but] two of the highest paid, most influential bankruptcy attorneys to represent you? I strongly encourage you to type Bienenstock Finova Delaware into google, and read the entry called Finova bankruptcy case; reopened for convenience?. Its a transcript of that hearing, and when you get to the part where Martin Bienenstock and the judge banter about how they dont understand the market, lets see if you laugh as hard as I did. ----------------------------------------------------------------------------------------------------------MY FINAL EXHORTATION TO JOE: WASTE NOT WANT NOT, ESCPECIALLY WITH NOLS Dear Mister Steinberg, please dont waste Finovas NOL. Considering the effort that you have made since at least 2000 to try to take over Finova, it would be a total loss for you to give up now. Id forgive you for terminating Finova annual meetings without having given the proper notice. Ill even make a promise; that if you make Finova work, I will never harangue you again. I will take down all my papers and videos. You could recapitalize Berkadia/Finova, and wed all win. You could even dedicate a wing of your new complex on Highway-Behind-The-Pond, and call it The Spa That Finova Built. Id even promise not to canoe across and tie up at your new dock! Whaddya think? Wouldnt you like to retire in peace?

TURNING OVER A NEW L.E.A.F.; THE L.EUCADIA E.XTRAPOLATED A.SSET F.ANTASY Ok, lemme close by indulging in a pure, exaggerated, hyperbolic dream. Ready? Finovas NOL will benefit the Leucadia/Berkadia entities for the next 25 years, just like Baldwin Enterprises Inc has been doing for the last 25. There. Thats it. Im done now, so please just promise me that if they call in the middle of the night, trying to scoop up your Finova Common Stock, that youll settle for nothing less than Two U.S. Dollars. Thanks, and well be seeing youze layta. -Gee Dee Hawaya August 2012 Milton, Massachusetts