Bringing CLiF back from the brink

By Aleksander Nowacki

Dariusz Baran, the president of the Leasing and Finance Center (Centrum Leasingu i Finansów, or CLiF), is an unlikely hero. This soft-spoken 40-year-old mathematician looks more like an accountant than the scourge of dishonest judiciaries, but his successful fight to overturn the bankruptcy of his company has turned him into something of a cult figure with this country's economic media.

"I can say that by the end of the summer CLiF will have started looking for an investor who will be able to provide the sources of finance for us to resume leasing activities," Baran said. Should that search prove successful, it would be a remarkable comeback for a company that has spent the last year and a half in the mire.

Last month, the Supreme Court ruled that the December 2001 bankruptcy of CLiF came about "in flagrant breach of the law." With the decision came the hope that Baran's fight to resurrect the company he had co-founded back in 1992 may, in the end, prove successful. For nearly a decade CLiF was one of the largest leasing companies in the country, catering to small and mid-sized businesses in particular. Even shortly before the bankruptcy it was a Warsaw Stock Exchange powerhouse, recording a greater price increase in 2000 than any other company. Then, all at once, banks withdrew credit facilities and filed for CLIF's bankruptcy.

"I don't blame president Baran if he thinks there was a conspiracy of banks against his company," said Andrzej Stawicki, owner of Gaz-Bud warehouses and the initiator of an association that groups CLiF's former clients, who have suffered most as a result of the acrimony. The conspiracy theory goes that the banks were trying to protect their own leasing companies by removing an intermediary from the market. However, all those concerned insist that they are prepared to look for ways to end the acrimony and settle their remaining differences out of court.

"Kredyt Bank maintains its commitment to settling its differences (with CLiF) out of court," said the bank's spokeswoman, Izabela Mościcka. Speculation is rife, however, that the bank is not happy with the terms of settlement proposed by the company.

Should the efforts fail, the prospects for CLiF are bleak. Although Baran says that even the burden of on-going court suits, bound to take years, would not make the company's return to business impossible, few observers share his optimism.

Nevertheless, if the settlement is reached, CLiF may yet recapture some of its lost glory.

"What we have to offer to the potential investor is a developed and operational IT infrastructure, a distribution network we have managed to salvage under difficult circumstances and, most important of all, a portfolio of clients," Baran explained. Paradoxically, in the face of all the damage that CLiF's 6,000 clients suffered in the wake of bankruptcy, it is that last strength that may prove crucial.

"I can definitely imagine working with CLiF again," Stawicki stated categorically. "If only they manage to find sources of financing, which will be very hard, I'm happy to re-establish the relationship." He went on to say that there was a significant number of people who shared his sentiments.

Paweł Jakubowski, another of CLiF's clients, said that he would also be happy to work with the company. "But I don't see how they could go back to leasing," he continued. "They simply won't find the financing for it." Jabubowski, however, sees an alternative. Should CLiF beat all the obstacles in its way and meet its obligations to clients, it would come to be perceived as an exceptional success story. It could then offer its expertise to other businesses that fall victim to this country's imperfect legal system.

Baran's thinking seems to go along more conservative lines. He is interested in finding a strategic investor and doesn't rule out the possibility it'll be one of the banks that have their own flailing leasing businesses.

Failing that, Baran would consider re-listing and seeking capital on the stock exchange. That, however, may be too ambitious even for the man who has (almost) brought CLiF back to life.