June 20, 2001

 

Headlines—

 

    Greenspan Says Weakening Economy Tightening Credit

     Former Cit Ceo Files for $28 Million from Tyco Acquisition

'Financial Destinations' Web Seminar June 27-28 Web Cast

 

        EOriginal—Article 9—In Depth

 

 

       

 

 

CIT CEO Files to Sell Shares Worth $28 Million

 

                 By Laura Smitherman, Bloomberg

 

                 Albert Gamper, who got $16 million of restricted stock to stay at Tyco

                 International after the company bought CIT Group, filed to sell about 518,000

                 shares in his new employer. That stock is worth $28 million at the current price.

 

                 Gamper was CIT Group's chief executive when Tyco acquired the commercial

                 lender in an $8.7 billion transaction. The executive agreed to be CEO of the

                 financing unit of Tyco.

 

                 Under a previously disclosed contract, Gamper gets 300,000 restricted Tyco

                 shares and options for 1.2 million shares to remain with Tyco.

 

                 Gamper filed to sell Tyco stock he acquired through the exercise of options,

                 according to filings with the Securities and Exchange Commission. Tyco shares

                 fell 61 cents today (6/19/01) to $54.14.

 

                 The SEC form used by Gamper signals an intent to sell, and filers aren't

                 obligated to sell any or all of the shares listed. Gamper last sold nearly 45,000

                 Tyco shares June 4 for $2.5 million in gross proceeds, according to the filings.

 

                 Tyco, based in Bermuda and run from executive offices in Exeter, New

                 Hampshire, is the biggest maker of electronic connectors.

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

 

Greenspan not worried about effect of tax   cut, consumer confidence

 

Says Weakened Economy Has Tightened Credit

 

                                                                              

                 By Marcy Gordon

                 ASSOCIATED PRESS

 

                

                 WASHINGTON – Federal Reserve Chairman Alan Greenspan said                 Wednesday he's not worried that the newly enacted $1.35 trillion tax cut will

                 plunge the federal budget into a deficit as productivity growth slows.

 

                 "I'm not, senator," Greenspan replied when asked by Sen. Charles Schumer,

                 D-N.Y., at a Senate Banking Committee hearing whether he was concerned

                 about a potential slide back into government deficit spending.

 

                 On another economic issue, Greenspan acknowledged that the recent tide of

                 job layoffs – which has pushed new claims for state unemployment insurance

                 to more than 400,000 a week – "has got to be a factor in determining the

                 propensity of people to spend money" and affects consumers' confidence.

 

                 However, he added, there hasn't been "any real serious deterioration" in

                 spending by consumers, a more important benchmark than how confident

                 they feel.

 

                 During questioning, Schumer and several other Democratic senators needled

                 the central bank chief to express concern over the big 10-year tax cut, given

                 the state of the economy and the low savings rate of Americans. The tax cut,

                 recently enacted by Congress, is the centerpiece of President Bush's

                 economic program.

 

                 Greenspan, in his testimony, said the sagging economy has brought more

                 problem loans and made bankers fairly tightfisted. He cited problems in

                 retailing and manufacturing and among California utilities.

 

                 Bank regulators "need to be more sensitive to problems at individual banks,

                 both currently and in the months ahead," Greenspan said at the hearing on the

                 state of the nation's financial system. He also noted weaknesses in the health

                 care and telecommunications industries.

 

                 "We are fortunate that our banking system entered this period of weak

                 economic performance in a strong position," Greenspan said.

 

                 At the same time, the Fed chief reiterated his statement last month that

                 bankers and regulators are getting better at reducing risks and breaking a

                 cycle of tighter lending in a slumping economy and expanded credit in a

                 recovery.

 

                 "It is not an easy road, but it seems that we are well along it," Greenspan said.

 

                 In his testimony, Greenspan did not discuss the future course of interest-rate

                 policy.

 

                 To ward off recession, the Federal Reserve has slashed interest rates five

                 times this year. Many analysts predict policy-makers will make a sixth cut at

                 the end of their two-day meeting June 27. Economists, however, have mixed

                 opinions on the size of the reduction, with some predicting another

                 half-percentage-point cut and others leaning toward a more moderate

                 quarter-point move.

 

                 Greenspan's remarks come as personal debt is at an all-time high, and the

                 amount of income Americans are dedicating to making payments on it is at

                 levels not seen in 15 years. Mortgage delinquencies and write-offs by credit

                 card companies are rising, and personal bankruptcy filings could hit a record

                 this year.

 

                 During questioning by senators at Wednesday's hearing, Greenspan suggested

                 the problem of Americans' low savings rate – which stood at a negative 0.7

                 percent of after-tax income in April– is tempered by the "extraordinary degree

                 of productivity from our savings."

 

                 Greenspan declined to express his view on a proposal before Congress to

                 raise the $100,000 limit on deposit insurance coverage, which he has

                 previously opposed on grounds it would be a subsidy for wealthy people. He

                 said he preferred to wait until the Federal Reserve's board of governors takes

                 an official position on the issue.

 

 

Financial Fusion Announces 'Financial Destinations' Web Seminar; Industry Experts Offer Thought Leadership to Financial Institutions

 

  Webcast  www.financialfusion.com

 

 

    BOSTON--(-Financial Fusion Inc. announced today the "Financial Destinations on the Web" seminar to be held in a Web-cast format on June 27th and 28th, 2001. The "Financial

Destinations on the Web" seminar will feature Octavio Marenzi, president of Celent Communications, and Gady Costeff, vice president of electronic commerce at ABN AMRO North America. This Web-based seminar will analyze the choices facing retail banking executives and provide insight into winning strategies for these economically challenging times.

 

    "Financial Destinations on the Web" will address the following:

 

 -

   Current trends and adoption rates for banking online;

 -

   The Celent Report on "Ranking the US Vendors of Internet Banking Solutions;

 -

   ABN AMRO's perspective on what users really want, and how they selected their strategic e-Finance solutions provider, and;

 -

   Ways to increase customer retention and "share of wallet" through e-banking.

 

 

    The "Financial Destinations on the Web" seminar is jointly sponsored by Financial Fusion, IBM and Sideware.

 

    To register for these events, visit http://www.financialfusion.com/webcast or call 617-673-1234. Space is limited, so register today.

 

    About Financial Fusion, Inc.

 

    Financial Fusion, Inc. (www.financialfusion.com) provides enterprise-class e-finance solutions to the world's leading financial institutions, fusing applications and middleware on a single, integrated platform. The company builds complete financial destinations for banking and STP solutions for capital markets. All solutions run on the Financial Fusion Server(TM), a 100% Java based, multi-tier architecture, built to open standards. The company's worldwide support network includes offices in 60 countries. Global alliance partners include IBM, Sun Microsystems, Global Crossing, PricewaterhouseCoopers, e-Profile, Intuit and CheckFree. Financial Fusion is a wholly

owned subsidiary of Sybase, Inc. (NYSE: SY).

 

    Financial Fusion, Inc., the Financial Fusion logo and Financial Fusion Server are trademarks of Financial Fusion, Inc.

 

 

    CONTACT: Financial Fusion, Inc.       

             Nicole Rowe                 

             617.673.1209                

             nrowe@financialfusion.com   

                 or                      

             For Financial Fusion, Inc.  

             Kendra Lombardo              

             617.520.7085                

             kelombardo@webergroup.com   

 

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

 

Article 9  --In Depth

 

Susan L. Penn

Manager-Communications and Public Relations

eOriginal

The Warehouse at Camden Yards

351 West Camden Street, Suite 800

Baltimore, Maryland 21201

410-625-5151

410-659-9799 (fax)

www.eoriginal.com

 

 

Revised Article 9 – Now, you can control electronic assets, or chattel paper.

 

 

You know it’s coming, but what can you do to take advantage of fresh opportunities posed by the UCC’s revised Article 9? Twenty-seven states and the District of Columbia have already enacted the new law, and most remaining jurisdictions are expected to adopt it by July 1. That means equipment lessors should revamp their processes by the same deadline, or risk a host of problems ranging from government fines to customer litigation.

 

Once enacted, the new Article 9 will apply to all transactions within its scope, even those entered into prior to the statute’s effective date. Fortunately, a one-year grace period allows for the continued perfection of security interests that were perfected before the new law’s enactment.

 

Lessors wouldn’t need to worry if revised Article 9 contained only minor changes. But such is not the case. The Uniform Commercial Code establishes the legal infrastructure for billions of dollars of commerce, and Article 9 defines and regulates the legal rules for secured transactions -- which include commercial leases. Thanks to numerous provisions that affect the treatment of both new and existing lease transactions, the new law sets major changes in motion for lessors across the nation.

 

Fortunately, many of these changes will benefit savvy leasing companies. But those unprepared for July 1 will miss critical opportunities to maintain, not to mention grow, their market share.

 

In a nutshell, here’s what the new Article 9 does:

 

·        Radically changes the rules for UCC filing;

·        Includes security interests in certain types of previously omitted personal property, such as commercial deposit accounts, health-care receivables, and commercial tort claims;

·        Covers the sale of certain other intangible property, such as promissory notes and credit-card receivables, subjecting these transactions to the UCC’s perfection and priority rules;

·        Significantly expands the types of collateral which require a filed financing statement for perfection of a security interest;

·        Allows the documenting and authenticating of electronic transactions;

·        Provides that chattel paper may exist in electronic form, and that “control” of electronic chattel paper will fulfill perfection;

·        Lists criteria that constitute such control.

 

Clearly Revised Article 9 brings under its purview many transactions that formerly were not included. More important, perhaps, is that the new law also recognizes the concept of electronic chattel.

 

Going Paperless

This recognition marks a major milestone for lessors. Prompted by the rapid development of electronic commerce and the acceptance of electronic signatures, the federal government has created rules for the high-tech transactions of business. Not only will lessors be able to electronically sell or syndicate leases; the new law allows leasing companies to reap huge savings by going paperless.

 

Under Revised Article 9, "control" of electronic chattel paper is deemed to exist only if the records comprising the paper are created, stored and assigned in the following way:

1)     only one authoritative copy of the record exists that is unique, identifiable and, with certain limited exceptions, unalterable;

2)     the authoritative copy identifies the secured party as the assignee of the record(s); and

3)     the authoritative copy is communicated to and maintained by the secured party or its custodian.

 

But this definition of control is problematic in at least two ways. First, can truly unalterable records even be created? And secondly, without a secured party having control, can a lessor convince a secured lender that he or she should be comfortable with this type of collateral?

 

A Baltimore-based company may have solved these problems. eOriginal Inc. has created a software solution that enables leasing companies to conduct business paperless, while adhering to all aspects of Revised Article 9 at the same time. Listen to George Deehan, president of the leasing division at eOriginal:

 

“Most lessors are spending lots of money hiring people and putting costs into their business as they get ready to march down the road to cost reduction. In the meantime, we already have a product that lessors are easily integrating into their existing processes to make them far more efficient, and save them significant amounts of money.”