GE Capital "A Settlement Prototype"

ELTnews

New Jersey Law Journal (06/20/05) ; Brennan, Lisa

The recent settlement of a nationwide class action lawsuit between former customers of the now defunct phone-service reseller Norvergence and General Electric Capital Corp. serves as a template for similar lawsuits.

As part of the deal, GE Capital agreed to pardon approximately $9 million in payments from 660 small businesses and nonprofits in a dozen states.

Those payments were owed under five-year leases they entered into with Norvergence before the phone-service reseller went out of business. Later approved by a Bergen County, N.J., judge, the settlement offers a pattern for other cases and hope for pending lawsuits against 34 other companies that purchased Norvergence leases.

Attorneys on both sides credit GE for setting the pace for other leasing firms that have not reached settlements.

"The fact of the matter is GE really deserves kudos for settling," says attorney Jeffrey Herrmann. "Rather than dig in its heels and fight, GE recognized that class members were victims, too."