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Author: prichards Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 476  
Subject: $75m factoring is 'off balance' sheet acct'g Date: 9/20/1998 7:35 PM
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I have read the non recourse factoring agreement,

http://www1.FreeEDGAR.com/search/ViewFilingsContent.asp?CIK=719612&Directory=950135&Year=97&SECIndex=3573&Extension=.tst&PathFlag=0&SFType=&SDFiled=&DateFiled=8/19/97&FormType=10-Q&CompanyName=LEARNING_CO_INC&OEMSource=&SourcePage=FilingsResults

and these issues become obvious:

1)this is not the form of factoring which I mistakenly took for granted. It is at best a derivative form, but essentially
a loan agreement with receivables as collateral.

2)there's also a clause in the agreemnt stating this risk.

3)There's also a clause which extends the liability of TLC is the 'obligour' fails to pay. this essentially voids the
claim of non recourse.

It therefore becomes just anther form of off balance sheet accounting of loans and a method to lower DSO's.

Do you think so and/or is this why Jeff Goverman warned investors ?
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