NorVergence BK Trustee Pleads for More Time

U.S. Bankruptcy Court Chief Judge Rosemary Gambardella has agreed to grant a deadline extension request from NorVergence's liquidating trustee, who says he needs more time to act on about 1,500 unexpired leases before they are automatically cancelled.

The ruling marks the second deadline extension for trustee Charles Forman, the fourth since the proceedings started. The new deadline is Feb. 28, 2005.

"The liquidating trustee needs more time to act on the leases because lawsuits over the leases that name the debtor are all over the place," says Forman's counsel, Michael Holt of Forman Holt & Eliades.

The Federal Trade Commission, various federal and state agencies, including eight state attorneys general have launched lawsuits against NorVergence, claiming that the failed company defrauded its customers. It is reported that the California Attorney General staff has been negotiating with Wells Fargo and others, and is about to launch a suit.

Several states are also suing or settling with the leasing companies that bought leases from NorVergence.

Thirty-six of those companies are being sued by 1,100 of NorVergence's former customers, according to the bankruptcy court. Telecomagents.com places their Weir law suit number at over 2,500, while the Michael Green Class Action Suit is encompassing all those who do not “settle” and qualify to partake in any potential award. There are five other state similar group actions, clients represented are not known.

Many leases companies have written off over $50 million in leases, as is required by their accountants or regulating agencies, although they continue to seek remedy in court.

An equal amount are in litigation, but it is not known if they have been written off the books at this time, most likely carried in another financial category.

In the bankruptcy filings, it was reported that NorVergence had placed over 11,000 leases into effect.