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Come 'Hell or High Water' NorVergence Causing a Stir over Documentation

By Barbara M. Goodstein
April 01, 2005

So-called “hell or high water,” “waiver of defense” and lessor favorable “submission to jurisdiction” clauses have long been cornerstones of equipment finance documentation. But, the unfolding debacle over the last year involving a company called NorVergence has cast an unfavorable light on these important provisions and, in doing so, entangled most of the top players in the leasing industry.

NorVergence, Inc. was founded in 2001 by brothers Peter and Thomas Salzano. Within 2 years it had become a multi-million dollar telecommunications success story, generating revenues of more than $140 million in the year prior to its bankruptcy.

Headquartered in Newark, NJ, the company's main source of business was reselling telephone and Internet service that it purchased wholesale from such companies as Qwest Communications, Sprint Communications Co. LP and T-Mobile USA Inc. The NorVergence sales staff focused on offering deeply discounted telecommunications packages to small businesses throughout the country.

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