10,629 NorVergence Leases in Contention

US Express Settles for 85% NorVergence Leases Forty customers, totaling $1.7 million, of US Express were offered 85% settlement of “equipment rental agreement” last week.

Allegedly 1,371 NorVergence lessees to date have been offered settlements, out of an original estimated 12,000. This does not include the FTC win of $47 million dollars of “uncommitted” signed leases, with claims against the receivables, assets, held by the NorVergence Corporation in bankruptcy and claimed by several leasing companies as “additional collateral” for their defaulted leases. No count of leases were given, according to Leasing News Research, and it should be noted the 12,000 leases was given to the Bankruptcy judge from the officers of the NorVergence Corporation at the time of filing. It also should be noted there is a 1450 member class action suit. The remainders of the alleged 12,000 leases appear to be in individual litigation with the first issue “venue,” which is being overturned in most court districts.

Leasing News is attempting to find out from the 28 attorneys general Offices and District of Columbia actually what the “real number” is who have taken the settlement offered.

Illinois Attorney General Lisa Madigan said the latest settlement agreement could provide more than $160,000 in debt forgiveness to four Illinois small businesses located in Cook and Kane Counties.

Illinois was joined by the Attorneys General from California, Colorado, Connecticut, Georgia, Kansas, Maryland, Massachusetts, Michigan, North Carolina, Pennsylvania and South Dakota in reaching an agreement with New Jersey-based US Express Leasing, Inc. The settlement was reached in connection with collection agreements the leasing company holds regarding NorVergence, Inc.

Impacted consumers and businesses may choose or decline to participate in the settlement agreement. If all affected consumers in the participating states accept the deal, US Express will write off approximately $1.59 million in debt for 40 small businesses.

Earlier this year, Madigan and Attorneys General from across the country announced similar agreements with GE Capital, US Bancorp, Wells Fargo, CIT Technology and De Lage Landen Financial Services. Those leasing companies agreed to write off more than $27.7 million they claimed to be owed by 1,371 NorVergence customers, including more than $6.89 million owed by 341 Illinois customers.

“With each additional settlement reached with a leasing agency – whether big or small – additional small business owners are provided relief from the collection hassles they have experienced since NorVergence declared bankruptcy last year,” Madigan said.

From the Illinois AG Madigan's press release:

“Under the settlement agreements, US Express – which either through direct contracts with NorVergence customers or through other third-party companies bought out rental agreements between NorVergence and its customers – has agreed to write off or forgive a combined $1.59 million the company claimed to be owed by 40 NorVergence customers from the states represented in the agreements, including $160,000 owed by four Illinois consumers.

“While US Express denies any wrongdoing, it has agreed to forgive approximately 85 percent of the debt the company claims consumers owe on rental agreements as of July 15, 2004, and provide up to two years for customers to pay any remaining balances.

“The settlement agreements provide that small businesses that have not previously reached independent settlement agreements with the leasing companies will have the opportunity to receive an 85 percent write-off of the money owed from the period beginning on July 15, 2004, the approximate date that NorVergence ceased providing services. Consumers who have made payments to US Express since July 15, 2004, will receive credit for those payments toward their remaining balance. In addition, any customer that previously settled with US Express for terms that are less favorable than this settlement can choose to receive the more favorable settlement terms.

“All Illinois consumers who signed agreements with NorVergence that were bought by US Express will receive a notice in the mail shortly regarding the opportunity to participate in this settlement. To accept the settlement offer, consumers must follow instructions contained in the notice and execute a Settlement and Mutual Release by the date indicated in the notice.”