East Coast AG's Whipping West Coast AG's 5-1

---including Texas: it is 6-1

by Kit Menkin

As Leasing News predicted that “Leasing Companies are caving in” regarding settlements with NorVergence lessees, the various attorney generals across the United States are also making announcements of their “wins.” There certainly are new developments, including more confusion.

These settlements seem to vary per state, and also per settlement, in some instances. There has been no remuneration included for attorney expenses or loss of income or time in the great majority of these settlements, plus any future claims must be also given up. Or course, those lessee do not need to agree to the settlement's reach by the various attorney general offices, but it does appear most seek an end to a terrible experience not only regarding their telephone system, but their faith in leasing companies protecting them or caring about repeat business. As important, not only are customers asking how stupid were the leasing companies to write $20,000 to $50,000 leases for a reportedly “matrix box” worth only $500 in the market place, but the government is puzzled, too.

There must be more to it, they think, as these financial giants couldn't be that dumb.

Florida Attorney General Charlie Crist announced settlements with two two leasing companies relating to business practices of the bankrupt NorVergence Corporation, allegedly involving over 525 customers of NorVergence: Wells Fargo Financial Leasing, Inc., and Lyon Financial Services, Inc., doing business as U.S. Bancorp Business Equipment Finance Group. GE has agreed to forgive $3.57 million owed by 270 New Jersey customers, and CIT has agreed to forgive $4.36 million owed by 255 customers. Both companies agreed
to end all litigation against customers for payments
due after July 15, 2004.

Here is the full press release:

http://leasingnews.org/PDF/Crist_announces_settlement.pdf

New Jersey Attorney General Peter C. Harvey announced settlements with – General Electric Capital Corp. (“GE”) and CIT Technology Financing Services, Inc. (“CIT”) – that will result in the forgiveness of nearly $8 million in payments owed by New Jersey customers under long-term service agreements with NorVergence, Inc., a bankrupt New Jersey telecommunications company.

Here is his press release:

http://www.leasingnews.org/items/NJ%20Office%20of%20the%
20Attorney%20General%20-%20Department%20of%20Law%20&
%20Public%20Safety%20-%20News%20Release.htm

The New York Attorney General's Office has also announced a settlement with Irwin Business Finance. AG Eliot Spitzer is

definitely adding votes to his announced intention to run

for governor in the next election.

Here is his press release:

http://leasingnews.org/PDF/irwin_business_finance_corp_aod.pdf

Joining Massachusetts, New York, New Jersey, Illinois, Florida, among others are now Arizona and Texas.

For instance, in Arizona, Attorney General Terry Goddard

announced:

"Under the agreement filed in Pima County Superior Court, TCF Leasing agreed to forgive the outstanding principal balance due on NorVergence leases held in Arizona. Two local businesses that will benefit from
this settlement are:

* Lindstrom OB/GYN in Gilbert will be forgiven $28,936

* Formosa International Systems in Tempe will be forgiven $31,920 "

Here is the full press release:

http://leasingnews.org/PDF/Goddard_Settles.pdf

In Texas, Attorney General Greg Abbott has even gotten more aggressive, as evidenced by the letters his office sent out to the leasing companies in his state:

Copy of Letter:

http://leasingnews.org/PDF/bancorp.pdf

List of Leasing Companies:

http://www.leasingnews.org/items/Texas%20Attorney%20General.htm

It is reported that the California Attorney General's office is negotiating with Wells Fargo to “settle” their leases with NorVergence lessees. Leasing News was not able to confirm or deny this or whatever other action AG Bill Lockyer office is doing on this matter, except the East Coast AG's are ahead of the West Coast AG's.

As we are getting closer and closer to the deadline of creditors filing claims with the NorVergence bankruptcy in New Jersey, other parts of the puzzle will come together, such as where the money went, who was responsible, who was in the “know” and he was “not,” and is there “fraud” involved? The New Jersey Attorney General has already declared there is, and filed against the corporation, the officers, and other “John Does” to be named. The Federal Trade Commission is not letting this go. As this become more a “reality,” you will see more NorVergence funders change their tune in pursuit of who was right or wrong, and see this is too costly to pursue in time spent and cash outlay.

As reported earlier, the trustee for the bankruptcy has several times extended the deadline for making claims, and is considering another extension due to all the leases involved. Once the deadline is passed, no claims will be accepted.

There has been controversy regarding NorVergence lessees making claims. As noted earlier, many of the settlements contain provisions about further actions or claims, but they may not apply to NorVergence, in bankruptcy, or telephone companies, who also may be culpable in the transactions.

We at Leasing News have printed an editorial as to our position, made after not only consulting our Advisory Board but taking a poll of our readers
http://www.leasingnews.org/Conscious-Top%20Stories/
Novergence_67.htm