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Old February 25th 07, 05:34 PM posted to,,,alt.accounting,alt.chess
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Default Bill Goichberg and Joel Channing Advocate Using Life Membership Assets as Collateral

Originally Posted by chessoffice
The following is typical of the type of behavior
Board members have to endure with Sam on the Board. Joel Channing
emailed the Board on Feb 23 regarding our line of credit and the
investment of LMA funds (this will soon be a public binfo). The
Cumberland County Bank is offering us a 1.5% lower interest rate than
our current bank (First Tennessee), with no compensating balance
requirement (at First Tennessee the requirement is $40,000). Sounds
like a great idea, but look at Sam's response below.

At 08:48 AM 2/23/2007 -0500, Joel Channing wrote:

Dear Mike,

Yesterday Joseph Nanna emailed Bill Hall and me the following:

"I had a meeting with Bill Startup, the President of Cumberland County
Bank this morning. One of the topics we discussed was a line of
credit. They would love for us to establish a line of credit with
then with a rate of 1.5% over our current CD rate of 4.75% or 6.25%
for borrowing against a a line of credit. They would use the two CD's
we have with them for collateral with no provision for compensating
balances. The line of credit we currently have with First Tenn. is at
a rate of .50% under prime which at the moment is 8.25% or 7.75% for
any operating capital borrow from them. We are required to carry
$40,000 as a compensating balance with First Tenn. which would go away
if we move to Cumberland County Bank. It would require a Board
Resolution to make the switch from First Tenn. to CCB and with a
savings of 1.50% in interest and no compensating balances, it's a no
brainer. I will pursue this avenue if we can get the board to approve
the switch."

This sounds like a good idea to me. Please let me know if the LMA
Committee is agreeable to switching banks as Joseph proposes. If you
are, I'll ask the Board to act on it.

Also, per our discussion of last night, I'd appreciate your direction
as to how you'd like us to invest the LMA funds. Bill Goichberg
recommends consideration of the Vanguard Money Market prime fund which
he says is currently paying 5.10% simple (5.22% compound) interest.


It is my understanding that the LMA Committee is completely opposed to
any further use of LMA Funds as a compensating balance for any further
borrowings by the office.

The LMA Committee prefers to move its funds out of Tennessee

The office needs to learn to live within its budget, something it
seems unable to do.

Kindly recall that the LMA used to have $2 million cash and equivalent
in it. That money is now all gone because of deals like this in the
past. The money the LMA has now is new money from the sale of the
building. When that money is gone, which seems likely to happen soon,
there will really be nothing left.

I wonder why Joel Channing writes above, "This sounds like a good idea
me". Have you no brains? What qualifications do you have anyway to be
on this board?

Sam Sloan
I am very glad that Bill Goichberg has posted this otherwise
confidential BINFO.

In it, Joel Channing quotes a statement that moving the funds to
Cumberland County Bank "'is a no brainer".

I respond, "Have you no brains?"

The reason that moving the funds is a terrible idea is that then the
CDs holding the LMA Funds will be used as collateral for the USCF Line
of Credit.

The LMA Funds are Life Membership Asset Funds, which represent money
paid by Life Members when they joined the USCF. Those funds are to be
kept as a reserve so that the Life Members will continue to get Chess

If we default on our line of credit, as we will soon as we are
$241,000 in the red so far this year, the Cumberland County Bank will
take our LMA Funds that are being used as collateral !!!!

I really think that this time they have gone to far. Bill Goichberg
and Joel Channing should be recalled, impeached and removed from the
board for advocating this.

Sam Sloan

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