Headlines----

 

Fugitive PinnFund founder gives self up in San Diego

   GE may appeal decision on Honeywell deal

      GATX Realigns Its Legal Structure

             Internet Based Commercial Financing Firm Seeks Investors

                          --- "On the Way to the Top"

Hubba-Hubba: Ford exec explores wide world of credit

    Some Good News: Buying Spree in June Gives Nation a Boost

       Heller-GE job Cuts To Follow as Tyco-CIT Cuts

         Consolidated Container Co. Names New President

         Finance Event Sept. 10-11 in Chicago   $1,195/ $1,295 after Aug. 10

            Finova Financial Results: Net Loss of $426.5 M for 2^nd Quarter

                 NUR Macroprinters & CitiCapital Launch 'NUR Capital' In the U.S

                        U.S. Real Estate Market Will Face Sharp Contraction Thru 2003

 

Remember, "When the Going Gets Tough"...the Tough Don't Stay Home!               

               Business is waiting for you in Boca   ( see announcement )

 

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Fugitive PinnFund founder gives self up in San Diego

 

 

     Fanghella held after hearing in massive securities fraud case

                  By Mike Freeman and Bruce V. Bigelow

SAN DIEGO UNION-TRIBUNE STAFF WRITERS

 

Michael J. Fanghella, the PinnFund USA founder wanted in connection with a $330 million securities fraud, surrendered to U.S. marshals yesterday after four months as a fugitive.

 

Wearing a gray suit and accompanied by his attorney, Fanghella, 50, turned himself in unexpectedly at 9:45 a.m. in San Diego, said Mark Owen of the U.S. Marshals Service. Fanghella was sought by authorities for contempt of court for failing to answer civil fraud charges brought in March by the U.S. Securities and Exchange Commission.

 

Federal regulators allege that through the Carlsbad-based PinnFund, Fanghella and James Hillman of Oakland defrauded investors out of $330 million in one of the largest securities fraud cases in San Diego County history.

 

Fanghella appeared yesterday before U.S. Magistrate Judge Anthony Battaglia. Authorities speculated that Fanghella had been hiding in Barbados, where he had a home and bank accounts. Fanghella's attorney, Ezekiel Cortez, denied that his client had been in the Caribbean.

 

Surrounded by reporters after yesterday's brief court hearing, Cortez said Fanghella had not been in the United States, but declined to say where he was.

"The media had said he was basking in the sun somewhere," Cortez said. "You could see for yourselves. He was not tan. He was not enjoying himself. He does not look like he's been on vacation."

 

Why did Fanghella flee? Where has he been for the past four months?

"That will all come out in court later," Cortez said.

 

Fanghella was held after yesterday's court appearance. Another hearing is scheduled today before U.S. District Judge Marilyn Huff on the contempt charge.

A criminal investigation also is under way, said Assistant U.S. Attorney Kevin Kelly. He declined to comment further.

 

Former U.S. Attorney Charles La Bella, now in private practice and hired by the court to search for PinnFund assets, speculated that criminal charges may be filed soon to keep Fanghella in jail.

 

"I am assuming, as a former prosecutor, the U.S. attorney is contemplating filing criminal charges now that he's back in custody," La Bella said.

 

Less than a month ago, the High Court in Barbados froze Fanghella's assets at the request of U.S. authorities. Fanghella and his one-time girlfriend, Kelly Cook, had about $808,000 in a Barbados bank account and owned property there worth $1 million, according to a statement issued by the Barbados government.

Earlier, Huff froze Fanghella's assets in the United States and issued a judgment against him for $109 million.

 

"With the asset freeze in place both here and overseas, in most cases (fugitives) choose to do what he did," said Tom Zaccaro, an SEC attorney handling the case.

According to the SEC, at least 166 investors "ponied" up $330 million over seven years, thinking they were financing mortgage loans made by PinnFund. The company specialized in home loans for customers with poor credit. ( plus

owned and operated along with their mortgage offices, PinnLease. editor )

 

Authorities contend that instead of funding mortgages, Fanghella used about one-third of the investors' funds to finance his lavish lifestyle.

 

Authorities say an additional $95 million went to cover operating losses at PinnFund, which swelled to 42 offices and had more than 400 employees nationwide before closing March 23.

 

The rest of the money, regulators say, went to pay the promised 17 percent interest to investors. They say the arrangement was a classic Ponzi scheme, where new investor money is used to pay interest to earlier investors.

 

Authorities say Fanghella used investor funds to buy a yacht and expensive dinners, including a $31,000 tab at a restaurant in San Diego. He also used investors' money to pay for jewelry, a $5 million home, artwork and other gifts for Cook. In all, Cook received $14 million in investor funds, the SEC says.

Cook, who appeared in adult films under the name Kelly Jaye, is not accused of violating any laws, but she is fighting the SEC's attempts to get her to return what she received from Fanghella. A trial on the case is scheduled this fall.

Oakland resident Hillman, who raised the money from investors for PinnFund, maintains that he was duped by Fanghella just as investors were. He is fighting the SEC's charges.

 

Hillman's attorney, Tom Brown of the Shepard Mullin law firm in Los Angeles, said he hopes Fanghella will answer questions about who was aware of the scam.

Asked if he was worried that Fanghella would seek a deal with authorities that implicates Hillman, Brown said, "If he makes a deal and tells the truth, I think it's a very positive thing for us."

 

Until yesterday, Fanghella was last seen March 22, the day the SEC filed its civil fraud case. Authorities found purchases on his credit card for a hotel near Los Angeles International Airport and for an airline ticket to Barbados.

In court yesterday, Fanghella's attorney emphasized that his client had returned voluntarily to face the SEC's charges.

 

 

 

Finova Announces Financials: Net Loss of $426.5 M for 2^nd Quarter

 

The FINOVA Group, Inc. announced financial results for the second quarter

2001, reporting a net loss of $436.5 million or $7.15 per diluted share for

the quarter ended June 30, 2001, compared to net income of $42.9 million or

$0.69 per diluted share in the second quarter of 2000. For the six months

ended June 30, 2001, the Company announced a net loss of $512.2 million or

$8.39 per diluted share compared to net income of $53.3 million or $0.86 per

diluted share in the first six months of 2000.

 

Equipment Leasing Association Thursday Question

 

Does Your Company Communicate Policies for Sharing/Selling

Customer's Personal Information to Other Companies?

******************************

The Gramm-Leach-Bliley (GLB) financial services modernization bill passed in

1999 requires financial companies to annually send customers a copy of their

policies for sharing and selling their personal information to other

companies and to set up a mechanism by which customers can opt-out of such

sharing or selling of their personal information. Is your company sending

out its privacy policy to customers? That is this month's ELA Online Quick

Poll Question. Visit

 

http://www.elaonline.com/ and log in your answer today!

 

  ( You  need to be a member to participate in the poll and see the result.

      You can cast a vote and see the results, but your vote will not be counted.

       When I checked there were 24 no and 11 yes. Those that read Barry Marks,

       Esq. comments Monday, Aug. 1on recent FTC rulings know the correct

       answer.   http://www.leasingnews.org/archives/August01/8-01-01.htm   

         editor)

 

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GE may appeal decision on Honeywell deal

 

 

By Paul Geitner

ASSOCIATED PRESS

 

BRUSSELS, Belgium -- General Electric plans to appeal the European Union's decision to block its $41 billion merger with Honeywell International, a source said yesterday.

 

An appeal would not be aimed at reversing the European Commission's rejection of the merger. Instead, GE wants to refute the commission's finding that GE has a dominant position in the jet engine market, the source said on condition of anonymity.

 

That ruling, if allowed to stand, could make it difficult for GE to make future acquisitions.

 

The New York Times  carried a similar report, citing unidentified executives close to the company, in its editions yesterday.

 

"We are still considering our options," said GE spokesman Gary Sheffer.

The EU announced July 3 that it was blocking the GE-Honeywell merger, the first time it ever took sole responsibility for stopping an all-American deal.

GE has until the end of September to file an appeal at the Court of First Instance in Luxembourg, court spokeswoman Fionnuala Connolly said.

 

If GE loses there, it can then go to the European Court of Justice, also in Luxembourg. The court has never annulled a merger prohibition since the EU began reviewing them under its current laws a decade ago.

Of six merger prohibitions appealed, three have been upheld and the others are pending, including last year's WorldCom-Sprint deal, which was blocked on both sides of the Atlantic.

 

Antitrust lawyers contend the European courts act too slowly to save deals, but they say appeals can be valuable in clarifying legal issues.

 

Top on the list in the GE-Honeywell case is the EU's reasoning that GE might have been able to drive competitors out of the aerospace market by offering customers a complete package of GE engines, Honeywell avionics and financing from GE Capital Aviation Services.

 

That so-called bundling theory was criticized in the United States, where regulators are more inclined to allow businesses to pursue such synergies, in part because they have more power to break up any monopolies that might result.

"I think the commission's decision will set a bad precedent for conglomerates like GE" if it is allowed to stand, said Fiona Carlin, an antitrust lawyer at Baker & McKenzie's European Law Center in Brussels. An appeal is important "so we get some clarity," she said.

 

When WorldCom announced its appeal last year, it said it did not want the EU's decision to "become the basis for future commission actions or initiatives."

That case, filed Sept. 27, is in early stages because not all the written submissions have been received, Connolly said. No date for a hearing has been set.

GE shares closed down 70 cents at $42.80 in trading yesterday the New York Stock Exchange.

 

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Extent of Heller-GE job cuts unknown

 

 

By Melissa Allison

Chicago Tribune staff reporter

 

Although General Electric Capital Corp. officials say it is too soon to know how many jobs and other resources they will eliminate to make a success of their planned acquisition of Chicago-based Heller Financial Inc., it is clear that some back-office and headquarters positions will be cut.

 

"There are various headquarters functions they won't need," Heller Chief Executive Richard Almeida said yesterday.

 

And there is overlap in back-office operations, although it is not clear to what extent, he said. But for the most part, even when pitching the same services, the companies have sought different clients.

 

How the operations will be integrated is an open question. GE Capital officials have said they value the culture and management of Heller, but are reluctant to say how much of it will survive. In fact, the company declines to even say how large it is in Heller's primary business: middle-market commercial financing.

 

The $5.3 billion deal announced Monday represents the second-largest acquisition ever for GE Capital parent General Electric Co.--after its more than $6 billion acquisition of NBC parent RCA Corp. in the mid-1980s--but Chicago-based Heller will be only a small cog in GE.

 

Heller has assets of nearly $20 billion and employs 2,500 people worldwide, about 800 of them in Chicago. GE Capital's assets total $370 billion, and the parent company employs 313,000 people worldwide.

 

Even 59-year-old Almeida does not know whether there will be a job for him after the deal closes, although he said he is not ready to retire.

 

Some analysts said Tuesday that Heller's majority owner, Fuji Bank of Japan, gave Almeida veto power over the deal, which he did not exert because he believed it was in the best interest of all shareholders to accept the cash offer from GE Capital, which offered a 50 percent premium. Almeida said only that he was involved in negotiations early on.

 

"They did what was right for shareholders at what might be their own expense, and there aren't a lot of management teams that would make that call," said Reilly Tierney, an analyst at Fox-Pitt, Kelton in New York.

 

Jeff Germanotta, who covers GE for William Blair & Co. in Chicago, said the company typically moves "methodically but swiftly to properly organize the new business."

 

The Heller acquisition "isn't a fire drill," he said. "Heller is a well-run company, so I think they'll move quickly and prudently to integrate it so as to minimize disruption to customers in the marketplace."

 

Almeida said he expects sales representatives and others who deal directly with customers to keep their jobs because there is little overlap with GE Capital in that area.

 

Even in businesses where GE Capital and Heller overlap, Heller tends to go for smaller clientele, Almeida said.

 

And in some areas--a factoring operation in Europe and a strong health-care finance operation--Heller is well ahead of GE Capital, experts said.

Still, Almeida said the details of how to mix Heller into GE Capital are not worked out.

 

"At this point, they honestly do not have a road map in terms of how all this is going to get integrated," he said.

 

There is no clear formula at GE or GE Capital for integrating acquisitions. They do so many--GE averages roughly 120 a year, while GE Capital has completed more than 400 acquisitions in the past 10 years--that it is difficult to generalize.

What is clear is that GE is anxious to make acquisitions now that European regulators have rejected its bid for Honeywell International Inc.

"They're on the warpath for anything they can buy," Tierney said. "They're going to buy Comdisco too."

 

Rosemont-based Comdisco Inc., which entered bankruptcy protection this month, has been in negotiations to sell its leasing business to GE.

 

( There is one thing for sure, readers, when a bank or finance companies buys another: staff will be let go.  They may say there will be none or some in the

beginning, but often the person who makes the announcement, he or she

will be gone, too. This happened at Bank of America, at Mellon, at every

acquisition.  It is now happening at CIT, and it will happen at Heller.  My

advice, take your professional lease recruiter out to lunch.  Make them your

best friend.  You may not need them today, but at least for the next year,

start recruiting your recruiter. editor. )

 

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Remember, "When the Going Gets Tough"...the Tough Don't Stay Home! Business is waiting for you in Boca

 

 

"When the Going Gets Tough..."

ELA 40th Annual Convention

October 28-30

Boca Raton Resort & Club

 

Now more than ever, you need information, ideas and contacts. Get Going and

register TODAY for the Equipment Leasing Association 40th Annual Convention. Remember, "When the Going Gets Tough"...the Tough Don't Stay Home! Business is waiting for you in

Boca!

 

Complete convention information now available online at

http://www.elaonline.com/events/2001/AnnConv/

 

 

Note:

 ELA Announces Silent Auction to Take Place at Convention

 

ONE NIGHT ONLY!!!

Sunday OCTOBER 28, 2001

ELA'S 6TH ANNUAL SILENT AUCTION

BY THE BEACH AT BOCA

 

6-8:30 PM - during the opening reception at

ELA's 40th Annual Convention

 

 

 

__________________________________________________________________

 

 

Good News ! !Buying Spree in June Gives Nation a Boost

 

 Economy: Spending rose a surprising 0.4% despite rising jobless rate. But consumer confidence fell in July, which may signal slow growth ahead.

  

 

By PETER G. GOSSELIN, LOS ANGELES TIMES STAFF WRITER

 

WASHINGTON -- Consumers propped up the stumbling U.S. economy with their spending in June despite growing worries about losing their jobs and a miserly increase in incomes.

 

Personal-consumption expenditures rose an unexpectedly strong $25.7 billion, or 0.4%, in June, the result largely of a bump in the purchase of big-ticket items such as cars, the Commerce Department said Tuesday. The consensus of private economic forecasters had been a 0.3% increase.

 

The up tick in consumption came despite new evidence that the economy was not snapping back as quickly as some had hoped. An index of manufacturing activity in the Chicago area showed that more jobs and production were cut in July as new orders fell further. And it occurred as signs that consumers were growing more concerned about the economy and their chances of being laid off. The Conference Board, a New York business research group, announced that its index of consumer confidence fell to 116.5 in July from a revised 118.9 in June. Most analysts had predicted that it would rise.

 

"The moderate decline in confidence signals slow economic growth ahead," said Lynn Franco, director of the group's consumer research center.

 

Federal Reserve Chairman Alan Greenspan has repeatedly said consumer spending is key to maintaining the nation's economic health. He has warned that any substantial drop in spending could send the economy into recession.

Consumers' importance was underscored Friday when the government announced that the economy grew at an anemic 0.7% annual rate in the April-through-June period. Without consumers, who boosted their spending at a rate of 2%, the economy would hardly have grown at all. The nation's business sector, for example, slashed equipment and software investment at a 14.5% annual pace.

Some analysts warned of signs that the consumer spending spree could not go on forever.

 

Friday's growth figures showed that although consumption grew during the second quarter, it did so at a slower pace than during the first three months. The Commerce Department said that although personal income increased in June by $27.6 billion, or 0.3%, the increase was outpaced by spending, pushing the already low savings rate down from 1.2% in May to 1.1% in June.

 

In addition, Conference Board officials said the "almost nonstop layoff announcements" of recent months had taken their toll on consumers' optimism, which could dampen their willingness to keep spending.

 

The share of people describing current business conditions as "bad" grew from 12.6% in June to 14.4% in July, according to the group. Those who expect fewer jobs to be available in the next six months increased from 16.3% to 18.1%.

The nation's unemployment rate rose to 4.5% in June, when employers slashed 114,000 jobs. The economic consensus is that July's rate will climb to 4.7% and businesses will shed 38,000 more jobs. The Labor Department will release July figures Friday.

 

"Right now, consumer confidence has stabilized and is moving sideways, but I'm not optimistic it's going to stay that way," said Michael J. Moran, chief economist with Daiwa Securities America Inc. in New York.

 

One reason to think the jobless rate could jump is what's going on in manufacturing. The National Assn. of Purchasing Management-Chicago index gave what may turn out to be a sneak preview of the national picture by falling from 45.6 in June to 38 last month. Any reading below 50 signals that business declined. Economists thought the figure would slip to just 43.5.

Analysts said the Chicago number suggested that a national report, due out today, would show a similar pattern, signaling that predictions of a turnaround in the manufacturing sector this year were premature.

 

"It looked like manufacturing hit bottom in March and was recovering," said Kathleen Camilli, chief economist with Tucker Anthony in New York. "But if these [Chicago] numbers hold up nationally, that implies there has been a reversal and we're headed down again."

 

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Event For Manufacturers, Financial Firms Will Explore Partnership Issues & Opportunities,   Sept. 10-11 in Chicago

 

   $1,195 if prior to Aug. 10; afterwards it is $1,295

&nb