“Holdback” news fuel New law enforcement Investigations Judge Sally Montgomery has reportedly rendered her verdict regarding testimony from IFC Credit Corporation officers in a case regarding a NorVergence lease with Specialty Optical dba S.O.S. in Dallas Texas, County Court 3. A “findings of fact and conclusion of law” has been drafted for Judge Montgomery's signature. It is expected to be released tomorrow.
Judge Sally Montgomery County Court-at-Law 3 Leasing News requested a comment from IFC Credit Corporation on several new Texas lawsuits filed evidently after the results of the Specialty Optical dba S.O.S. case and the news of “holdbacks” and its affect on “usury laws” in the state. IFC Credit stated they had no comment to make. In this specific law suit, the “Equipment Rental Agreement” is for 60 months at $543.67 or $32,620.20. After testimony, it is learned that IFC paid NorVergence $11,743 for a $28,000 original invoice figure that yielded lease payments of $32,620.20. The original lease factor was .0194, but in “reality” was .0463 on a sixty month term. The first time IFC Credit Vice President John Estok, Certified Leasing Professional (CLP) admitted to “holdbacks,” that Leasing News can find, was in the Morey Lumber NorVergence case, yet to be heard in court in Texas. In the Specialty Optical court testimony CLP Estok said he guesses that IFC Credit has over $2 million in holdbacks. The opposing counsel then questioned whether perjury is involved, specifically on the testimony from Patrick A. Witowski, Executive Vice President of Operations Judge Montgomery ruled earlier for the NorVergence lessee “.... properly cancelled the Lease with NorVergence. IFC takes nothing on its counterclaim. SOS shall recover court costs and reasonable attorney fees in the amount of $45,000.00 for trial, $30K for appeal, and $15 K for a petition for review to the Supreme Court of Texas, and $15K for responding to any unsuccessful appeal by IFC to the Supreme Court of Texas in the event the petition for discretionary review is granted per the parties stipulation.” Leasing News was threatened with a lawsuit from IFC Credit for reporting what was stated in the court transcript, public information, plus quoting an attorney on the results of her decision: From Chicago attorney Vincent T. Borst , Askounis & Borst, P.C.: “Our firm represented IFC in that trial. I have reviewed counsel's comments and have discussed them with the other attorneys involved with us in the litigation. “Counsel's comments are false, and unsupported by the evidence he presented at trial or the judge's decision in the matter. They represent unsubstantiated assertions he made during trial and which he was unable to support by evidence or otherwise. Moreover, as IFC intends to appeal the trial judge's decision, it is not final or binding upon IFC. “More to the point, IFC considers those assertions to be sanctionable against counsel, and slanderous against IFC. If you assist in slandering IFC's reputation by publishing these wholly unsubstantiated assertions, IFC will take all available legal steps against you to recoup the undoubted damage to its reputation your article will cause, including suit against you in a Court of appropriate jurisdiction. “IFC is contacting counsel to demand that he retract his statements. IFC demands that you refrain from publishing them. If you do, you will be held accountable for slandering IFC's reputation in the equipment leasing and lending communities.” In researching Pacer Service Center and other court records, Leasing News discovered more than 100 cases appearing to involve Askounis & Borst representing IFC Credit in actions regarding NorVergence lessees, many transferred out of the state, many settled; Aksounis & Borst writing the affidavits. Certainly the law firm of Askounis & Borst has earned its fair share of what is involved, but what knowledge did they have about these “holdbacks?” Will the “settled cases” be re-opened by the Federal Trade Commission or local attorneys general offices?
Texas Attorney General Gregg Abbott It is reported that Texas Attorney Gregg Abbott and his staff is looking into this in their state regarding usury and providing full disclosure of information. Leasing News is seeking a statement regarding the latest developments. In the Specialty Optical dba SOS trial before the Honorable Sally L. Montgomery, Dallas, Texas, IFC Credit Corporation Officer John Estok, CLP, divulged that his company has a $100 million asset portfolio with over $14 million in “up to 800” NorVergence leases with 550 in question: “…for the last 18 months, every month out the door is $300,000 in payments to the banks, and every month in the door is $100,000 or so of cash from settlements and customers who are still making their payments. “ Ron Lear, PFF Bank & Trust, Huntington Beach, California told Leasing News of the $9 million line to IFC Credit that “all payments were being made on time.” He would not give any other comment. Most banks when a lease defaults after a certain period of time, the line of credit would require the lease be purchased back. In the Specialty Optical dba SOS Trial, CLP John Estok estimated they had “up to 800 leases” with NorVergence and only 250 of them “ not considered in default. It has also become apparent to the Federal Trade Commission that other leasing companies also engaged in “holdbacks,” which may be considered not your typical industry 2% practice, but may be considered more an “incentive” or even a “kick back” to purchase the leases, a spokesman told Leasing News. In several depositions, particularly now with Preferred Capital, Brecksville, Ohio in bankruptcy, “holdbacks” were common. How common with other leasing companies holding out with NorVergence lessees? And perhaps as important, what about the Code of Ethics of any law firm. The job is to represent your client to the best of your ability, but as the officer of a court, isn't full disclosure a kingpin to holding the process together? As soon as Judge Sally Montgomery signs the “findings of fact and conclusion of law,” Leasing News will report it. |
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