Add me to mailing list    |           |      Search


Here is specific testimony, questions asked to Mr. Estok, CLP:

Q And you're pretty good with numbers; is that

10 right, sir?
11 A I can get around, yeah.
12 Q What percentage return on your $11,743 investment
13 are you trying to get out of this court?
14 A Oh, I don't know. I don't know how to answer
15 that.
16 Q Does it amount to about 170 percent return on
17 your original investment if the Court was to give you the
18 amount of money you're looking for? About 170 percent
19 return? Does that sound right, doing the math in your head?
20 A I can't -- I don't know the answer that question.
21 Q Well, you're certainly looking for more than a
22 hundred percent return, right?
23 A Of course, we're looking at the 28,000, not the
24 11,000. The 24,000. Of course, we talked about that
25 yesterday.


1 Q That's more than a hundred percent return, right?
2 A Of the 24,000?
3 Q The 24,000 would be more than a hundred percent
4 return on the 11,000?
5 A Yes.
6 Q Okay. It actually works out to more like 160
7 percent return on your investment, what you're looking for,
8 right? Is that correct, sir?
9 A I don't know.

Here is more regarding testimony on what IFC Credit declared they paid for leases, but later “hold backs” and other agreements came forward:

MR. TRUSEVICH: No, when I asked the Court as 23 far as the gentleman who swore that they paid $24,000 needs 24 to come down here, they said, if they want to file a 25 motion. We will be doing that, Judge. We believe the Court 51

1 needs to hear why he said that. If they've got 550 of these
2 around the country, you can't have affidavits sworn under
3 oath saying we paid $24,000 when we all know it's just a
4 game here, that they paid $11,500. $11,500 is the only
5 amount of money that ever left IFC property. The hold back
6 account is under IFC's control. We'd like that gentleman to
7 come down here, explain to the Court why he did that under
8 oath at the summary judgment stage when we didn't have any
9 documents to refute that. They have 550 of these around the
10 country. Judge, he ought to come down here, explain it.
11 And we believe -- this gentleman right here
12 said, well, it depends what the definition of paid is. Your
13 Honor, paid is paid. If I say I paid $10 for this, and I
14 really only paid five and put five in a secret holding
15 account, that's disingenuous. What we believe is he needs
16 to come down here, explain why he swore. And then we're
17 going to be asking -- we believe a penalty of one percent of
18 what their asset holding is is correct. But if Your Honor
19 hears it and says, all right, the definition of paid is this
20 floating definition -- but, Your Honor, you need to hear
21 that.
22 The only way this system works is by people
23 telling the truth. And I make no holds about it, what that
24 man did is he lied; he committed perjury; and his buddy here
25 is going to protect him, Mr. Estok, (CLP,) with all due respect to 52

THE WITNESS: We advanced $14 million in

5 leases to NorVergence customers. Of that, we may have had a
6 million to two million dollars of these various holdbacks
7 that had not been paid to them yet and would not be paid to
8 them because of their bankruptcy. We owed, however, $14
9 million to the banks. We borrowed $14 million from the
10 banks. So the banks are not putting us in default on those
11 obligations despite the fact that the underlying contracts
12 have defaulted, on the basis that we continue to pay them
13 their interest and principal every month. So for the last
14 18 months, every month out the door is $300,000 in payments
15 to the banks, and every month in the door is $100,000 or so
16 of cash from settlements and customers who are still making 17 their payments.

22 Q So if it's a true statement that IFC paid
23 $11,743.67, then you would agree with me, just as a basic
24 principle of logic, that it is a false statement to say that
25 IFC paid $24,723.51, right? That would be a false

8 Q (By Mr. Lownds) Sure. Is it a false statement
9 that IFC took the assignment of the agreement by paying the
10 purchase price of $24,723.51, because that amount was never
11 paid?
12 A I don't think it's a false statement, because I
13 think we intended to pay the entire $24,723.51.
14 Q I won't bicker with you, sir, but it doesn't say
15 intended to pay. It says by paying, doesn't it?
16 A That's what it says.
17 Q And that would be perjury, in other words,
18 correct?
19 A I wouldn't say that, no.
11 Q Now, your company, I think you said, was a $100
12 million company?
13 A What I said was that our assets, the amount of
14 assets on our own books is around $100 million. That would
15 be the aggregate value of the portfolio that we hold in our
16 books.
17 Q And with NorVergence, you had loaned as of June
18 of 2004, you had bought up to $13 to $14 million worth of
19 leases?
20 A Fourteen.
21 Q $14 million. And you stopped doing business with
22 NorVergence on June 15th, 2004, correct?
23 A Approximately, yes.
24 Q And that was prior to the bankruptcy?
He speaks of a meeting with NorVergence with 25 or more leasing companies involved, forming a steering committee, hiring "turn around" person, and then: You were saying they hired
18 Mr. Mane. Then what happened?
19 A Shortly thereafter, the steering committee and
20 Mr. Mane spoke to Quest, and they made it pretty clear that
21 they were not --
22 Q Who is Quest?
23 A Quest was the primary supplier of T-1 services to
24 NorVergence customers.
25 Q Okay. And what was their position vis-a-vis


1 NorVergence, if you know, how much money were they owed?
2 A Four or $5 million. And they made it pretty well
3 known that they were not willing to sit back and wait. If
4 the account wasn't brought up to date immediately, they were
5 going to shut off the service, which would have shut off
6 service for all the customers, all 11,000 customers.
7 Because of that, four of the lenders who had direct exposure
8 to them filed an involuntary Chapter 11 filing. I believe
9 that's around the end of June some time.
There were some expenses that just had
21 to be taken care of. I mean he had missed one payroll. He
22 was about to miss a second payroll. People were going to
23 start leaving immediately. Rent was past due. The landlord
24 was making noises. Obviously Quest was very unhappy. So to
25 buy some time, we collectively raised $2 million.


1 Q You say we collectively?
2 A The 22 leasing companies involved in this, of
3 which IFC contributed $200,000. To simply buy enough time
4 to see if there could be a strategy emerge that would allow
5 this company to reorganize under bankruptcy and get back out
6 there and handle their business. About -- within about a
7 week, Keith was back to us to say that the hole was pretty
8 deep, that they needed $10 million in immediate financing to
9 get out of the hole. And based on that, no one had any
10 interest in continuing to support the company. They could
11 not arrange any dip financing to help them through the
12 bankruptcy. So by middle of July, the bankruptcy was
13 converted to a Chapter 7 liquidation and a trustee was then

•  appointed.