In The Marketplace

Pursuant to the negotiated settlement, GE Capital has agreed to forgive 85% of the remaining rental agreement balances; forgive any late fees, penalties and property insurance charges; credit any payments made; and withdraw any adverse credit reports. In addition, Spitzer also formally notified 19 financial institutions of his impending legal action in connection with the fraudulent NorVergence telecommunications agreements. Institutions to whom notices were sent are: Alfa Financial Corporation; BB&T Leasing Corporation; Celtic Bank Corporation; CIT Technology Financing Services, Inc.; Commerce Commercial Leasing, LLC; Court Square Leasing Corporation; DeLage Landen Financial Services, Inc.; Dolphin Capital; IFC Credit Corp.; Irwin Business Finance; Liberty Bank; National City Commercial Capital Corp. (formerly known as Information Leasing Corporation); Popular Leasing USA, Inc.; Preferred Capital, Inc.; Sterling Bank Leasing, Inc.; Studebaker-Worthington Leasing Corp.; TCF Leasing, Inc.; U.S. Bancorp Leasing and Financial, Inc.; and Wells Fargo Equipment Finance, Inc.

GATX Rail, of Chicago, a unit of GATX Corporation, has announced it has acquired the remaining interest in Locomotive Leasing Partners from the Electro-Motive Division of General Motors. GATX Rail has held a 50% interest in LLP since its inception in 1995, and this transaction will result in 100% ownership of the fleet of 486 locomotives by GATX Rail. Locomotive Leasing Partners was formed by GATX and General Motors in 1995 through a combination of their respective locomotive lease fleets. Including the locomotives in this transaction, GATX owns or has an interest in approximately 750 locomotives. With a customer base that includes Class I railways, regional and short line railroads and industrial users throughout North America, GATX Rail has a long-established position in locomotive leasing and is one of the world's leading rail car lessors, with an interest in more than 152,000 cars.

Key Equipment Finance of Superior, CO has announced it has completed the previously announced acquisition of American Express Business Finance Corporation, the equipment-leasing unit of American Express' small business division. Presently the nation's third-largest bank-based equipment financing company, the combination will increase KEF's managed assets by approximately $1.5 billion, and elevate it to a leadership position in serving small and midsize businesses while giving the company the widest geographic reach of any provider in that segment.

ORIX USA of Dallas, TX has announced that Caren Cook has been appointed general counsel of the company's Structured Finance division based in Kennesaw, GA. Structured Finance specializes in providing equipment financing and leasing to middle market and larger business enterprises. Additionally, Structured Finance provides “turnkey” financing (land, building and equipment) of facilities (refineries, manufacturing plants, grocery stores, processing plants and other facility-related business locations) with core competencies in manufacturing, grocery, energy, mining, business aircraft, rail, marine and other capital-intensive industries.

In a separate announcement, the company announced that Stephen J. Turpin has joined the Structured Finance division and will be responsible for the development of the division's specialty finance origination for the gaming, broadcast/media, entertainment and sports franchise industries.

The company also named Patrick Barrett as vice president, for its Structured Finance division. He will be based in New Jersey and will be responsible for direct lease and loan origination in the Northeast.

New York Attorney General, Eliot Spitzer, has announced a settlement with General Electric Capital Corporation in connection with a widespread telecommunications fraud involving NorVergence, Inc., a bankrupt New Jersey-based telephone equipment and service company. Under the terms of the agreement, GE Capital will forgive approximately $2 million in payments due from New York customers who had signed long-term contracts with NorVergence.

NorVergence began aggressively marketing its telecommunications products in 2002, falsely promising potential customers savings of up to 60%. It attributed these savings to its use of a proprietary device referred to as a “Matrix box.” The company claimed this technological innovation provided customers with wireless, toll-free inbound, local and long-distance telephone service; and high-speed Internet connection, all for a fixed monthly fee. In truth, the equipment accomplished none of these functions; rather, it is commonly used in the industry to permit both voice and data transmission through a high-speed service line. NorVergence's sales force was trained to apply deceptive and high-pressure sales tactics to prospective customers, which included small businesses, not-for-profits, and religious institutions. Nationally, the company secured approximately 11,000 customers, nearly 1000 in New York.

The company's customers typically signed 5-year contracts, which the company then sold at a discount, to third-party financial institutions including GE Capital. The financial institutions, in turn, then billed customers under the original contract terms. These multiyear commitments purported to obligate customers to pay as much as $340,000 for the matrix box, even though the market value of the devices was no more than $1500. After NorVergence filed for bankruptcy, its customers were left without telecommunications services and they had to purchase alternative service on a per call basis. The financial institutions, however, continued to bill customers for the discontinued services.

Pursuant to the negotiated settlement, GE Capital has agreed to forgive 85% of the remaining rental agreement balances; forgive any late fees, penalties and property insurance charges; credit any payments made; and withdraw any adverse credit reports. In addition, Spitzer also formally notified 19 financial institutions of his impending legal action in connection with the fraudulent NorVergence telecommunications agreements. Institutions to whom notices were sent are: Alfa Financial Corporation; BB&T Leasing Corporation; Celtic Bank Corporation; CIT Technology Financing Services, Inc.; Commerce Commercial Leasing, LLC; Court Square Leasing Corporation; DeLage Landen Financial Services, Inc.; Dolphin Capital; IFC Credit Corp.; Irwin Business Finance; Liberty Bank; National City Commercial Capital Corp. (formerly known as Information Leasing Corporation); Popular Leasing USA, Inc.; Preferred Capital, Inc.; Sterling Bank Leasing, Inc.; Studebaker-Worthington Leasing Corp.; TCF Leasing, Inc.; U.S. Bancorp Leasing and Financial, Inc.; and Wells Fargo Equipment Finance, Inc.

GATX Rail, of Chicago, a unit of GATX Corporation, has announced it has acquired the remaining interest in Locomotive Leasing Partners from the Electro-Motive Division of General Motors. GATX Rail has held a 50% interest in LLP since its inception in 1995, and this transaction will result in 100% ownership of the fleet of 486 locomotives by GATX Rail. Locomotive Leasing Partners was formed by GATX and General Motors in 1995 through a combination of their respective locomotive lease fleets. Including the locomotives in this transaction, GATX owns or has an interest in approximately 750 locomotives. With a customer base that includes Class I railways, regional and short line railroads and industrial users throughout North America, GATX Rail has a long-established position in locomotive leasing and is one of the world's leading rail car lessors, with an interest in more than 152,000 cars.

Key Equipment Finance of Superior, CO has announced it has completed the previously announced acquisition of American Express Business Finance Corporation, the equipment-leasing unit of American Express' small business division. Presently the nation's third-largest bank-based equipment financing company, the combination will increase KEF's managed assets by approximately $1.5 billion, and elevate it to a leadership position in serving small and midsize businesses while giving the company the widest geographic reach of any provider in that segment.

ORIX USA of Dallas, TX has announced that Caren Cook has been appointed general counsel of the company's Structured Finance division based in Kennesaw, GA. Structured Finance specializes in providing equipment financing and leasing to middle market and larger business enterprises. Additionally, Structured Finance provides “turnkey” financing (land, building and equipment) of facilities (refineries, manufacturing plants, grocery stores, processing plants and other facility-related business locations) with core competencies in manufacturing, grocery, energy, mining, business aircraft, rail, marine and other capital-intensive industries.

In a separate announcement, the company announced that Stephen J. Turpin has joined the Structured Finance division and will be responsible for the development of the division's specialty finance origination for the gaming, broadcast/media, entertainment and sports franchise industries.

The company also named Patrick Barrett as vice president, for its Structured Finance division. He will be based in New Jersey and will be responsible for direct lease and loan origination in the Northeast.