EPlus settles with GMAC Commercial Finance, pays $6M

washington.bizjournals.com

by Neil Adle,

Staff Reporter

EPlus has settled a lawsuit with GMAC Commercial Finance in a deal that includes a cash payment of $6 million, which ePlus says it has paid.

The Herndon-based company, a seller of cost-management products and services for businesses, was sued by Southfield, Mich.-based GMAC in January of 2005, seeking repayment of three promissory notes totaling about $10.65 million.

GMAC's claim against ePlus was for $13.4 million, including interest and legal fees, with the trial set to begin July 24. The suit was in connection with an alleged breach of warranties regarding an assignment of debt from ePlus, as lessor, for leases with Cyberco Holdings, a now defunct tech company that was based in Grand Rapids, Mich.

In June of this year, a Cyberco principal pled guilty to fraud, money laundering and conspiracy. Cyberco, related affiliates and at least one principal are in Chapter 7 bankruptcy, and no future payments are expected from Cyberco, ePlus said in a statement Thursday.

The U.S. Attorney has asserted that Cyberco defrauded approximately 40 financial institutions of approximately $90 million, says ePlus (NASDAQ: PLUS).

Company executives say they believe they had a strong case but on advice of counsel decided a settlement was the right move.