Kit Menkin’s Leasing News

                   www.leasingnews.org Thursday 11, 2002

 

           Headlines----

HP Carly Fiorina Not Clean

  Municipal/Government Conference

    CIT Tyco Last Press Release

           Thursday---Odds and Ends

                SEC to File Fraud Case Against Xerox

 

### Denotes Press Release

HP Exec before merger vote: `We may have to do something extraordinary'

 

BRIAN BERGSTEIN, AP Business Writer

 

 

SAN JOSE, Calif. (AP) --

 

Two days before Hewlett-Packard Co. shareholders voted on the contested purchase of Compaq Computer Corp., HP chief Carly Fiorina told another executive they might have to take "extraordinary" steps to win over two big investors.

 

Fiorina's late-night message to chief financial officer Robert Wayman surfaced Wednesday, when the San Jose Mercury News reported that the voice mail was anonymously forwarded to one of its reporters.

 

The disclosure comes as HP's last-minute moves to win support for the $19 billion Compaq deal are at the center of a lawsuit against the company by dissident director Walter Hewlett.

 

Hewlett, the son of an HP co-founder and the leader of the proxy fight against the deal, claims HP improperly got the investment arm of Deutsche Bank to switch 17 million votes in favor of the deal by threatening to take future business away. Deutsche Bank had helped arrange a multibillion- dollar line of credit for HP just days earlier.

 

Hewlett wants a Delaware judge to throw out Deutsche Bank's votes, which he believes were enough to give HP what Fiorina called a "slim but sufficient" margin of victory in the March 19 vote.

 

HP confirmed that Fiorina's message to Wayman -- which apparently was retrieved by someone with access to an internal server connected to the company phone system -- was authentic. The company said nothing discussed in the message was improper or illegal.

 

However, Hewlett spokesman Todd Glass said Hewlett's lawyers believe the voice mail is relevant to the Delaware case and expect it will be turned over in the pretrial discovery phase. The trial is set to begin April 23.

 

In her voice mail to Wayman, Fiorina said she and HP's proxy solicitor were nervous that Deutsche Bank and Northern Trust, another large HP shareholder, would reject the deal.

 

"And so the suggestion is that you call the guy at Deutsche Bank again first thing Monday morning," Fiorina said in the voice mail, left March 17. "And if you don't get the right answer from him, then you and I need to demand a conference call, an audience, etc., to make sure that we get them in the right place. So Alan (Miller, HP's proxy solicitor) is feeling like you need a definite answer from the vice chairman, and if it's the wrong one, we have to swing into action. ...

 

"So if you would take Deutsche Bank, I'll take Northern Trust, get on the phone and see what we can get, but we may have to do something extraordinary for those two to bring 'em over the line here."

 

Wayman released a statement saying top HP executives were constantly assessing whether they had effectively pitched the deal to large investors and "did in fact make extraordinary efforts" in the final days, with dozens of last-minute presentations.

 

A source familiar with HP's strategy, speaking on condition of anonymity, told The Associated Press that Fiorina and Wayman had originally thought Deutsche Bank would vote for the deal on the advice of Institutional Shareholder Services, an independent proxy firm that endorsed the acquisition. At the time of Fiorina's voice mail to Wayman, the source said, HP had not yet made a formal presentation to the bank.

 

Deutsche Bank has refused to comment. The president of Northern Trust told the Mercury News its vote did not change in the waning days or split it.

 

HP shares were up 22 cents at $17.63 in morning trading on the New York Stock Exchange, where shares of Houston-based Compaq were up 25 cents to $9.53.

 

 

 

On the Net:

 

Voice mail available at: Real Cities

 

www.hp.com

 

www.compaq.com

 

Hewlett's opposition site:

Municipal/Governmental Leasing

If you are not going to the United Association of Equipment Leasing Conference in Las Vegas, Nevada, this is the other one to attended. Whether you are a member or not, this industry is growing and here you can learn more about it, get in with the latest, and the “price is right.”

The 2002 Association for Governmental Leasing & Finance Spring Conference (May 1-3 in Baltimore, MD) is fast approaching!!!

The deadline to register with the AGL&F  for the conference is THIS COMING MONDAY, April 15.  Make sure to register prior to that date to receive the discounted Early Bird attendee rate. A $150 savings for AGL&F Members.

Registration materials are available online at

http://www.aglf.org/events.html - please paste this link on your web browser and download the conference registration. Sponsorship opportunities are still available - please call AGL&F Headquarters or fill out the Sponsorship

Commitment form available as a download at the above link.

Please make sure to call the Baltimore Renaissance Harborplace Hotel at 410.547.1200 and make your reservation as soon as possible to avoid an inconvenience.  The room block cut off date has passed, but there are some rooms at the Renaissance still available at the standard rates.

Please feel free to contact AGL&F headquarters at 202.742.2453 if you have any questions or need conference registration materials faxed to you.

We look forward to seeing you in May in Baltimore!

--Graham Hauck

Executive Director

Association for Governmental Leasing and Finance

1255 23rd Street, NW

Washington, DC 20037

202.742.AGLF (2453)

fax: 202.833.3636

email: gsh@aglf.org

http://www.aglf.org

Not Gary Trebels IFC

-------------------------------------------------------------

The last press release on the CIT Tyco website:

 

 

Tyco's Financial Services Subsidiary, CIT, Files Registration Statement for Distribution Of CIT Shares

 

 

PEMBROKE, Bermuda, March 12 /PRNewswire-FirstCall/ -- Tyco International Ltd. (NYSE: TYC , LSE: TYI, BSX: TYC) today announced that its financial services subsidiary, CIT Group Inc., filed a registration statement on Form 10 with the Securities and Exchange Commission (SEC) relating to the pro rata distribution of the shares of CIT to Tyco shareholders. Tyco expects the distribution to be completed during the second calendar quarter of 2002. CIT intends to file an application to list its common stock on the New York Stock Exchange (NYSE) under the symbol "CIT."

 

CIT's registration statement on Form 10 relating to the registration of its

common stock under the Securities Exchange Act of 1934 has been filed with the SEC, but has not yet become effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

 

Thursday---Odds and Ends

From: Andrew Nere <ils@ilslease.com>

  Subject: Lease Pricing

Kit, I am looking for the developer of a product we purchased in 2000 called Lease Pricing.  Lease Pricing is a pricing calculator we use internally here at ILS. We use the product daily and need to add licenses for new sales reps.

It appears that the company is out of business (leasepricing.com is no longer active), but the broker/creator of the product may still be in the industry somewhere and hopefully reading your newsletter.

If anybody knows how I can get in contact with anyone associated with Lease Pricing, please give me a call.

Thanks Kit!

Andrew S. Nere

<ils@ilslease.com>

Innovative Lease Services, Inc.

( Leasing News made reference that Jim Lahti had left BancLease,and stand corrected, he left BancPartners to re-start Affiliated Corporate Services. editor)

== 

 

GE Capital Insider

The Funding Tree

 

HI KIT,

 

JUST A FOLLOW UP ON THE FUNDING TREE STORY.WE ARE GLAD TO REPORT OUR ONE CUSTOMER

AT THE FUNDING TREE,MR LEAZENBY GOT A REFUND OF HIS MONEY RECENTLY.

 

THANK YOU FOR YOUR UPDATES AND STORIES.

WILLIAM ROSS

 rosspru@msn.com

PRUDENTIAL LEASING INC.

 

DALLAS,TX.

---

 Kit,

      Thanks for running that piece on The Funding Tree today.  I especially enjoyed her pdf response.  Can't speak for others but from our viewpoint she is quite the spin doctor.

      I'll keep you posted as to the eventual outcome

Troy Lovick

Dolarian Business Group

2815 N. Blackstone

Fresno, CA. 93703

559-243-0117 voice

559-243-0126 fax

-- 

From Joseph Bonanno, Esq. ( Great “Pat’s “ fan )

Thank you for your kind words of suggestion that I should receive a "medal."

However, realize that the entire process involving CMC was an NAELB matter.

Neither myself nor the NAELB takes any delight in what occurred with CMC and apparently you are finding out about even more issues that can potentially make the overall situation even more unfortunate.

I also saw your writing about Funding Tree with respect to the CA Personal Property Broker's License. I know that myself and other lawyers in the leasing industry have continually given advice and guidance about this licensing requirement that is similar to license requirements in some other states, but CA has the most overreaching license as it pertains to Brokers.

It does not surprise me that what could potentially happen to anyone that needs to have a license that does not have a license happened to, in this case, Funding Tree. It is important to realize that licensing requirements, leasing documentation concerns and other disclosure requirements  are not something to be taken lightly.

I hope that all is well with you and keep up the good work that you do for the industry.

Joe Bonanno, Esq., CLP

NAELB Legal Counsel

151 Mystic Ave., Ste. One

Medford, MA 02155

Ph: (781) 391-7800

Fx: (781) 391-7889

EM: law@jgbesq.com

www.leasingissues.com

We Get Letters:

.I enjoyed the mail from you when I was employed there...but now I'm in a different occupation. Thank You for your letting me know you removed my name from your mailing list....You are a breath of fresh air.

 

Paul

 PAUL E HORGEN 

 

SEC to File Fraud Case Against Xerox

 

by Kathleen Day

Washington Post Staff Writer

 

The Securities and Exchange Commission will file civil fraud charges against Xerox Corp. today, and lawyers familiar with probe said the complaint is likely to provide the first detailed look at the accounting-abuse case the government also is weighing against Xerox's former chairman and its former auditor, KPMG LLP.

 

The SEC will simultaneously file in federal court the civil fraud charges and details of a settlement agreement the agency and Xerox reached and announced last week, sources said. The SEC has not authorized its staff to file charges against former Xerox officials or against KPMG but has notified them it is considering doing so.

 

The SEC action is viewed by many lawyers as a signal the agency plans to crack down on financial reporting abuses in the wake of the Enron scandal and resulting loss of investor confidence in the financial statements of publicly traded companies. Before Enron's collapse, some consumer groups and members of Congress questioned how tough the SEC would be under its new chairman, Harvey L. Pitt, who before being nominated by President Bush had represented major accounting firms.

 

Under the agreement, Xerox, without admitting or denying guilt, will pay a $10 million civil fine – the largest ever in a financial-reporting-violation case – and adjust its financial statements from 1997 through 2000.

 

KPMG spokesman George Ledwith confirmed that the firm is talking with the SEC about possible civil charges the agency might bring against the accounting firm in connection with its work for Xerox. The talks were first reported yesterday in the Wall Street Journal.

 

The spokesman said that the accounting firm stands by its work for Xerox.

 

A year ago, after learning about accounting problems uncovered by the SEC in Xerox's Mexico operation, KPMG demanded that Xerox do an independent investigation, according to Ledwith. He said that as a result, Xerox hired the law firm of Paul, Weiss, Rifkind, Wharton & Garrison and accounting firm PricewaterhouseCoopers to examine the company's accounting practices.

 

KPMG eventually refused to sign off on Xerox's 2000 financial statements and was fired, said Ledwith.

 

"We did exactly what we were supposed to do," said Ledwith. "It would be an outrage to see the SEC proceed with any action against us. The facts will show that we stood up to a big client, even though we ran the risk of getting fired, which we did."

 

Sources said the SEC has told former Xerox chairman Paul Allaire and former chief financial officer Barry Romeril, who retired at the end of last year under the cloud of the SEC investigation, that they are possible targets of a civil suit. Attorneys for the two men did not return repeated telephone calls.

 

Several other Xerox officials have also been informed they might be targets, though it was unclear yesterday if they are current employees of the company, sources involved in the case said. A Xerox spokesman would not comment beyond the details of the settlement that the company released last week.

 

Lawyers from Paul, Weiss did not return calls. A spokesman for PricewaterhouseCoopers declined to comment.

 

If a firm or individual is informed that they could be the target of an SEC proceeding, they have the right to respond in writing to defend themselves against possible charges. The staff of the SEC weighs that response before putting the matter to a final vote by the commission, which sources said occurred yesterday.

 

SEC staffers are talking with KPMG and former Xerox executives about their role in how Xerox accounted for long-term leases of machinery in Mexico and in the United States. In the complaint which is to be filed today, the SEC will say Xerox improperly boosted revenue from such sales. Sources familiar with the investigation turned up internal Xerox documents that suggest the motive of Xerox's top management was improper.

 

Xerox's stock fell 34 cents, to $9.94, on the New York Stock Exchange yesterday.

Bush administration postpones presentation on Amtrak's future

 

By Laurence Arnold, Associated Press,

 

WASHINGTON (AP) The Bush administration on Wednesday postponed a much- awaited presentation to Congress about the future of Amtrak and passenger train service, saying it needs more time to finish drafting a plan.

 

Allan Rutter, administrator of the Federal Railroad Administration, pulled out as a scheduled witness less than 24 hours before Thursday's hearing before the House panel overseeing railroads.

 

''Unfortunately, after many meetings with the highest levels within the administration, our work is not yet complete,'' Transportation Secretary Norman Y. Mineta wrote in a letter to the subcommittee's chairman, Rep. Jack Quinn, R-N.Y., and ranking Democrat, Rep. Bob Clement, D-Tenn.

 

Administration officials are said to be split over at least one key issue whether to let Amtrak continue to monopolize intercity passenger rail or allow franchising of at least some Amtrak services.

 

The two lawmakers said Mineta and Rutter promised to outline the administration's views next week.

 

''The administration needs to weigh in at this critical juncture as we in Congress seek to strengthen Amtrak and passenger rail throughout the country,'' Clement said.

 

Congress is due to vote this year on Amtrak's continued existence.

 

Amtrak, which failed to meet an order by Congress to begin operating without federal subsidies, has said it will need to cut routes unless it receives $1.2 billion for the fiscal year beginning Oct. 1. Bush has proposed $521 million.

 

Mark Yachmetz, associate administrator for railroad development in the Federal Railroad Administration, said in November that the White House would present a proposal as part of its 2003 budget.

 

But the document, released in February, addressed Amtrak only in general terms. It said the federal government, states and the private sector should work together to provide ''high-quality, cost-effective service on viable routes or where the states have declared a public need they are willing to fund.''

 

At congressional hearings since then, lawmakers from both parties have criticized administration officials for not contributing ideas to the debate.

 

Thursday's hearing will go on without Rutter. Witnesses representing government, academia, freight railroads, rail advocacy groups and the private sector will discuss whether there should be competition to run passenger trains and whether Amtrak's management and structure should be changed.

 

On the Net:

 

House Transportation Committee: http://www.house.gov/transportation/

 

Amtrak: http://www.amtrak.com