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July 17, 2001 Headlines—
Barbados Court Freezes PinnFund Exec's Assets Chicago Tribune-Comdisco + Execs face bankruptcy, too Who Are Comdisco's Largest Credtors--- Capital Stream Selects TIBCO AmSouth Reports 2nd Q. Earnings of $133.5 Million
Leasing Ethics Dialog---New Viewpoints & Runnalls Final Word? plus
-EXCLUSIVE— Bob Rodi, CLP --Personal Credit Ruling Without Explained _________________________________________________________________ Barbados court freezes PinnFund exec's assets ASSOCIATED PRESS BRIDGETOWN, Barbados -- A court has frozen the Barbados assets of Michael J. Fanghella, former chief executive of PinnFund USA of Carlsbad, at the request of U.S. officials who accuse him of bilking investors out of millions to fund his lavish lifestyle. The High Court in Barbados froze the assets of Fanghella and his one-time girlfriend Kelly Cook, including $808,000 in a local bank account and a property worth $1 million, the government said in a written statement.. Fanghella and Oakland lawyer James Hillman were accused of securities fraud in a civil lawsuit filed by the Securities and Exchange Commission in March. A U.S. District judge in California froze Fanghella's assets there. At least 166 individuals and small groups invested in PinnFund, which sold mortgages to people with poor credit histories. Investors were kept in the dark with bogus financial statements showing a profit, according to the SEC. Investigators called it a classic Ponzi scheme in which early investors were paid off with money from later investors for eight years until the program collapsed. Barbados' attorney general sought the order from the High Court in May based on requests from the U.S. Department of Justice and the Securities and Exchange Commission, the government said in its statement. --------------------------------------------------------------------------------------------------- COMDISCO RECOVERY PLAN Execs face bankruptcy, too BY HOWARD WOLINSKY BUSINESS REPORTER Chicago Tribune When Middle Eastern terrorists exploded a bomb at the World Trade Center in New York in 1993, Rosemont-based Comdisco Inc.'s disaster recovery unit had its bank clients in the Manhattan skyscraper up and running the next day in Comdisco's facility across the Hudson River in New Jersey. Monday, the tech company, which took a body blow from the high-tech downturn, set into motion its own disaster recovery plan as it filed for protection from creditors while it reorganizes under Chapter 11 of the federal Bankruptcy Act and said it planned to sell its technology services business for $610 million to Hewlett-Packard Co. Comdisco also is planning a quick recovery. It aims to exit from Chapter 11 in early 2002. Any units not sold off will form a new Comdisco, with computer leasing once again forming the core competency of the company. Norm Blake, chairman and chief executive of Comdisco for three of the past four months and former CEO of the U.S. Olympic Committee, said in a statement, ''As a result of our comprehensive strategic review, we decided that the sale of our technology services business was in the best interest of Comdisco and our stakeholders.'' Fifty-one Comdisco units, 35 tied in with the company's defunct Prism Communication Services high-speed data network, are seeking Chapter 11 protection. In its quarterly filing in May with the Securities and Exchange Commission, Comdisco said it owned $7.52 billion in assets and owed $6.74 billion in debts. Comdisco is considering selling its core technology equipment-leasing business and asked the court for permission to auction off one or more of its businesses that lease high-tech equipment. The company plans to fire 170 employees, about 100 of them in the Chicago area. Thirty vacant positions will be eliminated. All told, Comdisco employs 2,900 employees worldwide in its technology services, equipment-leasing and ventures businesses. The company had 4,000 positions when it started cutting last fall. Comdisco's stock fell from a 52-week high of $33.50 touched on July 25 last year to 53 cents last month. The stock closed Monday at $1.06, down 49 cents. Hewlett-Packard plans to complete the purchase of Comdisco's technology services businesses, including the disaster recovery and Web hosting businesses, by Oct. 31. Comdisco has received a $600 million credit line from a group led by Citibank NA, subject to court approval. The technology services unit being picked up by Hewlett-Packard employed about 1,300 and was responsible for 25 percent of Comdisco revenues, or $637 million, in fiscal 2000. In fiscal 2000, Comdisco rang up $3.8 billion in revenue, with $2.5 billion coming from the company's core unit that leased computers and medical equipment, and $673 million from the unit that leased equipment to venture-backed start-ups. Execs face bankruptcy, too Repercussions from Comdisco Inc.'s corporate bankruptcy might resonate in the personal bankruptcies of dozens of top Comdisco executives. More than 100 Comdisco executives could be facing personal bankruptcy as a result of a ''shared investment plan'' in which they tied their personal fortunes to the company's success. The execs borrowed about $1 million each three years ago to purchase shares at $17 to $20 each. Comdisco has been one of the pillars of Chicago's tech scene. With a $5,000 loan from his father, Kenneth Pontikes, a former IBM salesman, started Comdisco (short for Computer Discount Co.) in 1969 to lease used IBM mainframes. Pontikes died from cancer in 1994. The company had its ups and downs over the years. About 10 years ago, it took a stab at gas and oil exploration. In the early to mid-1990s, Comdisco returned to its original business and began a turnaround as it trimmed its workforce and became the largest independent computer services company in the world. It also moved into leasing personal computers and medical equipment, such as reconditioned CT scanners. Under Nicholas Pontikes, 36, son of the founder, Comdisco increasingly became involved in Internet-related ventures, including a high-speed data network and leasing equipment to start-ups. The company was clobbered when the high-tech economy bubble burst last year. Nicholas Pontikes resigned in December, saying the company required an experienced executive at the helm. Comdisco Inc. eliminated its quarterly dividend in May as it announced $54 million in losses in the second quarter, compared with a $43 million profit during the same period the previous year. Bank of America Top Unsecured Lender to Comdisco By Christine Richard, Dow Jones Newswires Bank of America will be listed as holding the top unsecured claim against Comdisco when the company's bankruptcy court petition is made public, according to a Comdisco spokeswoman. Bank of America has an unsecured claim against the company of $88,950,000, putting it on top of the list of unsecured creditors. Analysts say, however, that institutional bondholders may have larger claims. Royal Bank of Scotland has the second largest unsecured claim of $72,550,000. Citicorp has the third largest claim of $71,140,000. Banc One Capital Markets has the fourth largest claim of $62,680,000. Credit Lyonnais S.A. has the fifth largest claim at $61,820,000. Topping Comdisco's list of trade creditors when the company's Chapter-11 bankruptcy filing is released will be Cisco Systems, the spokeswoman said. Cisco is owed $4,115,749. Solectron Corp. is second on the list of trade creditors with a claim of $3,504,457. Nortel Networks is third on the list with a claim of $2,535,503. International Business Machines is fourth with $1,437,107, and EMC Corp. is fifth with $1,216,992. Chase Manhattan Bank is the top holder of Comdisco bonds - $387,409,000 worth - the Comdisco spokeswoman said. She described Chase Manhattan as the "largest registered noteholder." Analysts said the bank was likely to be a trustee rather than the ultimate holder of the debt. The second largest holder of Comdisco notes is Bank of New York at $273,044,000. The third largest is State Street Bank & Trust at $223,692,000. Fourth on the list is Bankers Trust at $143,420,000, and fifth is Citibank at $140,808,000. Analysts said mutual funds and insurance companies were likely to be the largest holders of the debt. +++ ### ########### #### Comdisco Receives Approval of "First Day Orders"
ROSEMONT, Ill.--(BUSINESS WIRE)--July 17, 2001-- Interim Approval Granted For $600 DIP Financing Facility; Employee Wages And Benefits To Continue As Normal; Court Schedules Hearing To Approve Bidding Procedures For Sale of Availability Solutions Business to Hewlett-Packard and For Potential Auction of Leasing Assets Comdisco, Inc. (NYSE: CDO) announced today that the U.S. Bankruptcy Court for the Northern District of Illinois yesterday approved "first day motions" that are intended to support the company's employees, customers and vendors and provide other forms of operational and financial stability as Comdisco proceeds with its reorganization process. At Comdisco's request, the court approved the following first day orders: Payment of pre-petition and post-petition employee wages, salaries and benefits during the company's voluntary restructuring under Chapter 11; interim approval for $600 million of debtor-in-possession (DIP) financing for use by the company to continue operations, pay employees and purchase goods and services; authority to maintain existing cash management programs; authority to pay certain prepetition commitments that are necessary for operation of the company's core businesses in the normal course; and authority to retain certain legal, financial, real estate and other professionals to support the company's reorganization cases. A final hearing to approve the DIP credit facility, which is being provided by a group of banks led by Citibank, N.A. as Administrative Agent, The Chase Manhattan Bank as Syndication Agent, and Heller Financial, Inc. as Documentation Agent, has been scheduled for August 9, 2001. Of the $600 million facility, $200 million is available during the interim period, $100 of which has been reserved specifically to support international operations. As announced Monday, Comdisco has, subject to Court approval, agreed to sell its Availability Solutions business to Hewlett-Packard Company for $610 million. The Court has scheduled a hearing on July 23, 2001 to approve bidding procedures related to the sale and has set August 23, 2001 as the date for the sale hearing. The Court has also scheduled a hearing on July 23 to approve bidding procedures for a sale of all or part of Comdisco's leasing business. Norm Blake, Comdisco Chairman and Chief Executive Officer, said, "We are pleased with the prompt approval by the court of our `first day orders,' which, taken together, will enable the company to operate without interruption and meet normal business obligations as it proceeds with the reorganization process. Comdisco and all of our subsidiaries will conduct business operations as usual while continuing to make customer service a top priority during the restructuring and transition process. The prompt approval of these `first day orders' is good news for our company as a whole, as well as its customers, employees and business partners." The case has been assigned to the Honorable Judge Ronald Barliant under case number 01-24795. Additional information on the case can be obtained via the Internet at www.ilnb.uscourts.gov and entering the case number 01-24795. About Comdisco Comdisco (www.comdisco.com) provides technology services worldwide to help its customers maximize technology functionality, predictability and availability, while freeing them from the complexity of managing their technology. The Rosemont, (IL) company offers a complete suite of information technology services including business continuity, managed web hosting, storage and IT Control and Predictability Solutions(SM). Comdisco offers leasing to key vertical industries, including semiconductor manufacturing and electronic assembly, healthcare, telecommunications, pharmaceutical, biotechnology and manufacturing. Through its Ventures division, Comdisco provides equipment leasing and other financing and services to venture capital backed companies. Safe Harbor: The foregoing contains forward-looking statements regarding Comdisco. They reflect the company's current views with respect to current events and financial performance, are subject to many risks, uncertainties and factors relating to the company's operations and business environment which may cause the actual results of the company to be materially different from any future results, express or implied by such forward-looking statements. The company intends that such forward-looking statements be subject to the Safe Harbor created by Section 27(a) of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. The words and phrases "expect," "estimate," and "anticipate" and similar expressions identify forward-looking statements. Certain factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the DIP Facility; Court approval of the Company's motions as prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 Cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the Company's cases to Chapter 7 cases; the ability of the Company to reduce its workforce and related expenses and to achieve anticipated cost savings; year end audit and other procedures which may affect the Company's 2001 financial results; the ability of the Company to obtain trade credit, and shipments and terms with vendors and service providers for current orders; potential adverse developments with respect to the Company's liquidity or results of operations; the ability to fund and execute its business plan; the ability of the Company to attract, retain and compensate key executives and associates; the ability of the Company to attract and retain customers; potential adverse publicity; and adjustments arising in the course of completing the analysis of information with respect to the review of the company's businesses and evaluation of impairment charges; continuing volatility in the equity markets, which can affect the availability of credit and other funding sources to the high technology sector companies in the Ventures portfolio, resulting in the inability of those companies to satisfy their obligations in a timely manner and an increase in bad debt experience beyond current reserves; continued consolidation in the telecommunications industry and curtailment of the growth plans of the remaining companies in that sector, which could result in fewer buyers and reduced prices for available Prism assets, and a further reduction in the proceeds actually received from the sale of those assets compared to prior estimates and an increase in the losses associated with the discontinued operation. Other risk factors are listed from time to time in the company's SEC reports, including, but not limited to, the report on Form 10-Q for the quarter ended December 31, 2000. Comdisco disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. CONTACT: Comdisco Inc. For Investors, 866/757-7750 or Mary Moster(MR), 847/518-5147 or Kekst and Company Fred Spar or Jeremy Fielding, 212/521-4800 KEYWORD: ILLINOIS #### #### ---------------------------------------------------------------------------------------------- Capital Stream--- News potentially of interest for you regarding the future of the Commercial Finance Industry as a whole in terms of flexibility, efficiency and profitability. This partnership, announced today, means banks (including Bank of America), finance companies, and manufacturers will be accelerating the speed at which they do business. Please let me know if you're interested in receiving the complete scoop/release. CapitalStream Selects TIBCO Software To Provide Enterprise Application Integration Across Its Networked Commercial Finance Platform CapitalStream improves its robust commercial finance platform; additional technology will enable rapid, scalable integration for third-party and customers' legacy systems SEATTLE, WA. - July 17, 2001 - CapitalStream (www.CapitalStream.com), a Seattle-based provider of commercial finance automation technology, today announced it will utilize the TIBCO Software Inc. (Nasdaq: TIBX) Enterprise Application Integration (EAI) suite to integrate, connect and extend its network and offerings for banks, financial institutions and manufacturers. The choice for CapitalStream is significant in that it will make it possible for its offering to integrate more quickly and easily with customer legacy systems and increase customer usage flexibility - all while accelerating the commercial finance transaction workflow process... Sincerely, Nancy Gardner DDB Seattle for CapitalStream 206/223-6339 --------------------------------------------------------------------------------------------------- Ethics Dialog—Continues CLP License Not the Answer--- I do not believe that "licensing" people by the CLP program is in any way going to keep unethical people from being unethical. I do not have my CLP, nor does anyone in my office, and have no plans to be "licensed". I worked in a field that required licenses had a series 7 and series 63 required by the SEC to trade stocks and futures when I worked for EF Hutton and Dean Witter. In my office alone in Boston, we had 4 brokers that were caught for scamming and churning. One is in jail. Do you honestly think having a license stops those people that want to make money the easy way? It only puts more power in their hands to learn the ropes. And with a license like I had..comes very, very strict regulation. The SEC and the NASD. Even they can't stop frauds. I have heard through the grapevine which brokers etc are unethical and I will not to do business with them. By going to association meetings, ELA, EAEL, UAEL and NAELB you will learn who to do business with. Know who's been in this business a long time, and get to know people that you may never do business with but are well respected. Those are the people you can call when you want "info" on a source etc. If they don't know you they won't tell you. By attending and being active in associations there are principals of banks and some of the largest leasing companies that I go to. This to me is just as valuable as deal flow. Licensing is not the answer. Knowing who you do business with is the answer. Sincerely, Deborah J. Monosson President BOSTON FINANCIAL & EQUITY CORPORATION 20 Overland Street Boston Massachusetts 02215 617-267-2900 617-437-7601 Fax +++ Last year the UAEL advertised a 3 day seminar that was a prep for the CLP exam. I signed up, took the 3 days along with a number of other people. On Sunday 4 of us took the exam and were completely unprepared for that exam. All of us failed the exam. I wrote to the UAEL for a refund for the seminar, and have been ignored. Letters were send with a return receipt. Ms. Dalton signed for two of them. But there has been no response to letters, e-mails, and telephone messages. Cindy ( Spurdle of the CLP Foundation ) states that UAEL is responsible for the cost of the seminar. She is willing to let me take the exam again at no additional cost. Want to print this, be my guest.
Cary Sue Lavan ( Leasing News has received several complaints about CLP Examinations involving UAEL seminars, and we have referred them to the Executive Director Joanie Dalton. editor ) ~~
Everyone is counting penny's and losing dollars on this issue. The problem lies with industry stalwarts who somehow convince banks (Lehman) to lend them money on false statistics that have no way of truly succeeding. Examples are T&W Leasing, Bankvest, UniCapital, Granite, Copelco and even Finova when they got in. Most of these industry leaders knew that they could ramp up volume through false credit models, attach that volume to past performance, create value based upon current production and past performance and then subsequently go public and/or sell the company thus yielding millions in profits for the founders. I have posted several write ups on the issue of FUNDER FRAUD!!! Until Wall Street and Others get smart, very few "leaders of our industry" will resist the temptation of millions. Let's face it, nothing has happened to these con men. And that is what they are....CON MEN!!! If the con men get prosecuted, maybe others will be less tempted. I do believe that Buyers of Leasing companies are smarter these days and will look for other variables when valuing a prospective leasing company. Would it have made a difference if the Price's were CLP's or not? NO WAY!! They had 20 years of successful experience and a great reputation. But look at them now. One is being prosecuted under Tax Fraud and both have become difficult to contact. I do not know what happened to the UniCapital guy but looks pretty fishy to me. |