Popular Leasing USA Loses Its Argument in Home Town Court

“----dangerous precedent set?”

A three-judge panel in St. Louis County Circuit Court, Missouri, has ordered the addition of a bankrupt telecommunications company in New Jersey to more than $30 million “cost to lessor “ contract disputes.

Over 100 pending breach-of contract suits involving Norvergence leases were purchased by Popular Leasing USA of Baldwin, Missouri, a subsidiary of Banco Popular North America (BPNA.) They claim the lease payments should continue to be made.

The defendants have many issues, stating NorVergence should also be named in the legal dispute, as the contracts are fraudulent.

"The court finds in the absence of NorVergence Inc. (that) complete relief cannot be accorded among those already parties," judges Melvyn W. Wiesman, Barbara Wallace and Ellen Levy Siwak ruled. "Based upon the oral argument of counsel, the court finds it feasible to join NorVergence as a party."

“The effect of a court order adding NorVergence on the industry of "buying and selling of contracts would be devastating," Popular Leasing USA Attorney Randal Scherck said in his original arguments, according to the St. Louis Post-Dispatch. " It sets a dangerous precedent,"

Daniel V. Conlisk, the attorney for approximately 75 of the lessees, argued that his clients need to add NorVergence Inc. of Newark, N.J., even though the company is in bankruptcy proceedings as he claims they were the victims of fraud by NorVergence and perhaps the cause why his clients no longer are making leasing payments regarding contracts the companies signed with NorVergence for Internet, telephone and cell-phone service.

Randall F. Scherck, lawyer for Popular Leasing USA, argued that such an order from them was not necessary as their cause centered around enforcing the "stream of payment" of the leasing contracts.

Scherck acknowledged that Popular Leasing purchased the leasing contracts from NorVergence and denies that Popular Leasing USA was involved in any alleged “fraud.”

One of the arguments centers around the alleged high-tech, next-generation network accelerator called "The Matrix", allegedly costing $1500 new and $500 used. NorVergence salesmen claimed the product was a "spectacular innovation" which would channel telephones, Internet and cell phone service onto single line.

Most of the leases had listed only one Matrix device, although some had two, but all the “cost to lessor” were quite different. It appears no one at Popular Leasing USA caught the description being the same in funding of the over 100 leases, obtaining insurance certificates or filing personal property tax reports or UCC forms, despite the many different prices of the lease contracts they purchased.

Customers were reportedly told they'd get unlimited service if they would sign leases and pay fixed-price bills monthly. When "The Matrix" turned out to be a decidedly low-tech machine - basically a router - charges of fraud were filed and by June of last year, NorVergence was in bankruptcy.

Conlisk position is they were fraudulent contracts, adding that the defendants also had the right to examine the relationship between NorVergence and Popular Leasing in the preparation of the lease contracts, evidently as the cause to cease making the “stream of contract” payments.

In a related story, according to a press release : “ Popular Leasing U.S.A., announced that it has expanded its Capital Markets Group to include a Commercial Finance Division, complementing the group's existing Healthcare and Technology Division.

“Headed by Kevin Ward, the division will deliver financing solutions for mid- and large-ticket ($100,000 to $10 million) equipment transactions. Additionally, the unit will expand its current portfolio acquisition and vendor program finance initiatives for construction, manufacturing, printing and other industries.

“'Our expansion into the commercial equipment arena is the next logical step to meet our aggressive growth goals by making available attractive financial products and services geared to industry-specific needs and requirements,'” said Ward, formerly of Sierra Cities. ‘Addressing our customer's needs has lead to our continued development of value-added products and services, and we remain committed to helping them expand their businesses and achieve their goals.'

“ With direct, vendor and manufacturer programs available, Popular Leasing's Commercial Finance Division will offer master lease lines of credit, sale and leaseback transactions, and equipment portfolio purchases. Its equipment specialties include machine tools, packaging and food processing, material handling, plastics, mobile and tower cranes, telecommunications, rail maintenance, and information technology.

“The new division will be headquartered in Ewing, N.J., with offices in Littleton, Colorado, and Rio Verde, Arizona. About Popular Leasing U.S.A. Popular Leasing is a subsidiary of Banco Popular North America. Established in 1996, Popular Leasing is now the 32nd largest bank-affiliated leasing company in the U.S., with a focus on medical and commercial markets in all 50 states, Canada, Puerto Rico and the U.S. Virgin Islands. Headquartered in Ballwin, Missouri, Popular Leasing has a network of 15 sales offices in nine states. For further information, contact Popular Leasing at 800-829-9411 or visit www.popularleasingusa.com .

“ About Banco Popular Banco Popular North America is a subsidiary of Popular, Inc., which, with more than $40 billion in assets, is ranked among the country's 30 largest bank holding companies. BPNA operates over 135 branches in California, Texas, Illinois, New York, New Jersey and Florida, as well as 130 financial services stores under the name of Popular Cash Express. Banco Popular was named one of the “100 Best Companies to Work For” in 2005 by FORTUNE Magazine and ranks among the top 10 Small Business Administration lenders in the country. Banco Popular was founded 112 years ago in the U.S. Commonwealth of Puerto Rico.”

(Best contact on this new division is Doug Mehl, Commercial Finance Division 800-770-3052, formerly with Safeco and GE, possessing tremendous management skills and marketing abilities. editor)