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www.leasingnews.org Tuesday,
June 4, 2002 Accurate,
fair and unbiased news for the equipment Leasing Industry
Headlines---- CIT
Group President Al Gamper says, “ Oh, Sh*t !!!”
( full round-up of all news re: Tyco-Cit )
Bank Earnings Rise to New Record of $21.7 Billion
Telemark Back Up for Sale?
The Funding Tree---All Monies Still Not Returned
Bill Graneri’s Top Gun Seminar Series http://www.eael.org/event_calendar.htm#Crab%20Feast
Credit card companies' late fees hit record high
San Jose Symphony Declares bankruptcy
ePlus New Manage V3.0
Norstan President Granger Named to IDS Board
Steve LeBarron to Northern Consulting ###
Denotes Press Release “I
am looking for someone who can get Federal Deals done as an East Coast
Manager for a captive. “Know
anyone who lives in DC or would want to live there and manage a captive
leasing program?”
Fred
fstlaurent@cfl.rr.com CIT
Group President Al Gamper says, “ Oh, S**t !!!” Here
is a current round up of events ALEX
BERENSON New York Times .Dennis
Kozlowski resigned as chairman and chief executive of Tyco International
Ltd. yesterday as prosecutors in Manhattan sped ahead with a criminal
investigation into whether he had evaded sales taxes on the purchase
of millions of dollars' worth of art. An
indictment may come as early as today, according to two lawyers
knowledgeable about the inquiry. Tyco's board demanded Mr. Kozlowski's
resignation, a person close to the board said, after emergency conference
calls that began on Sunday and ended yesterday morning. Even
among legions of highly paid chief executives, Mr. Kozlowski stood
out. Prosecutors
in the office of the Manhattan district attorney, Robert M. Morgenthau,
say they believe that Mr. Kozlowski bought $8 million to $12 million
in paintings from dealers in New York for his Fifth Avenue apartment,
according to several people who have been briefed on the inquiry.
The investigation, which began with a tip in January, has widened
to include other dealers and collectors. Mr.
Kozlowski shipped the paintings to Tyco's headquarters in New Hampshire
to avoid paying New York sales tax before returning the paintings
to his 13-room apartment on Fifth Avenue, these people said. In
some cases, they said, dealers simply shipped empty cartons to New
Hampshire and delivered the art directly to Mr. Kozlowski's apartment.
They said the practice enabled Mr. Kozlowski to avoid $650,000 to
$1 million in taxes. The combined city and state sales tax in Manhattan
is 8.25 percent. Mr.
Kozlowski has hired Stephen E. Kaufman, a leading criminal defense
lawyer whose clients have included Leona M. Helmsley and Michael
R. Milken, to represent him. Mr. Kaufman declined to comment yesterday
and said Mr. Kozlowski also would not comment. Mr.
Kozlowski's sudden resignation deepened the crisis at Tyco, a conglomerate
that makes everything from security systems to medical equipment
and has a quarter-million employees. Tyco's stock has lost three-
quarters of its value this year, leaving investors $85 billion poorer.
The investigation of Mr. Kozlowski's purchases throws into high
relief questions of corporate and executive responsibility that
have disturbed investors since the collapse of Enron last year. As
it grew in the late 1990's, some analysts and investors criticized
Tyco for what they saw as opaque accounting practices and for its
1997 move to Bermuda to avoid paying some United States taxes. But
big investors cheered Tyco's seemingly steady earnings growth, and
the company's stock soared. Now
the questions that Wall Street, and Main Street, ignored during
the boom have come center stage, said Jeffrey Sonnenfeld, associate
dean of the Yale School of Management. "For
several years now, people were afraid to challenge what they didn't
understand," he said. "It's only since October, or really
since January, that we've seen the unraveling." If
Tyco cannot raise cash and regain investors' confidence by selling
assets, it may face a cash squeeze, some analysts say, with $12
billion in debt coming due by the end of next year. "They
are definitely in snow, and I don't know how good their snowshoes
are," said Nicholas Heymann, an analyst at Prudential Securities
who rates Tyco as a hold. "This has been a shock to investors." The
Standard & Poor's stock index of major companies fell 2.5 percent
yesterday. Stock analysts said Mr. Kozlowski's departure had unnerved
the markets. The
resignation of Mr. Kozlowski represents the end of the stock market
boom of the 1990's, Mr. Sonnenfeld said. "He is the epitome
of a group of swashbuckling C.E.O.'s who came along in the last
decade who called themselves, audaciously, the serial acquirers." Mr.
Kozlowski was the most aggressive of all, Mr. Sonnenfeld said. Other
executives, like Bernard J. Ebbers, who lost his job in April as
chief executive of WorldCom, confined themselves to one industry.
Mr. Kozlowski sought to build a giant multi-industry corporation,
following in the footsteps of the conglomerate builders of the 1960's,
like Harold Geneen of ITT. Conglomerates
usually fail, because running a diverse group of companies is much
harder than buying them, Mr. Sonnenfeld said. "The incredible
ego that these folks have, people who believe they're born with
some transcendent business sense," Mr. Sonnefeld said. "They
tend to build these empires in their own image." In
a statement yesterday morning, Tyco said Mr. Kozlowski had resigned
"for personal reasons." But a person close to the board
said that the directors had demanded Mr. Kozlowski's resignation.
If it had fired him, Tyco would have probably had to pay Mr. Kozlowski
a severance package of at least $120 million, this person said.
Because he resigned, Tyco says it has avoided that obligation and
plans to negotiate a new exit deal. But Mr. Kaufman, Mr. Kozlowski's
lawyer, declined to comment on whether his client would seek payment. Mr.
Kozlowski also resigned yesterday as a director of the Raytheon
Company. Tyco
said John F. Fort would succeed Mr. Kozlowski as interim chairman
and chief executive. Mr. Fort was Tyco's chairman from 1982 to 1992,
when Mr. Kozlowski became head of the company. The
investigation and resignation are a stunning end to Mr. Kozlowski's
career as Tyco's top executive. Over the last decade, Mr. Kozlowski
steered the company to acquire hundreds of other companies. Tyco's
earnings soared in the 1990's, and the company became a favorite
of big investors. From 1992 to 1999, its stock rose fifteenfold. Mr.
Kozlowski, the son of a Newark police detective who became an accountant
after attending Seton Hall University, has made hundreds of millions
of dollars selling Tyco shares, and his profile has steadily climbed.
He became a yacht racer and a backer of the New York restaurateur
Nello Balan. In 2000, he bought an $18.5 million apartment on Fifth
Avenue. But
Tyco's shares and Mr. Kozlowski's career have collapsed this year,
under harsh questions about the company's accounting and business
practices. Tyco,
which is based in Exeter, N.H., moved its nominal headquarters to
Bermuda in 1997 to avoid United States taxes on foreign sales. The
company's accounting practices are highly complex, and although
it reports billions of dollars in profit every year, its debt has
swelled to $24 billion. After
Enron's collapse, Tyco came under fresh scrutiny and was then damaged
by troubling disclosures and abrupt changes in its business strategy
In
January, Mr. Kozlowski said Tyco would reverse its decade-long strategy
of acquiring other companies and would split into four independent
companies and spin off its plastics division in a private sale.
Investors were alarmed in February by the disclosure that Mr. Kozlowski
and Mark H. Swartz, Tyco's chief financial officer, had quietly
sold $500 million in company stock since 1999 while saying publicly
that they rarely if ever sold shares. ---
Who
is Dennis Kozlowski? Worth.com named him number 10 out of 50 top
business executives last year. Here
is his profile: Business
Philosophy The
best way to reduce resistance to workforce and budget cuts in a
newly acquired operation, Kozlowski believes, is to promote a new
boss from among its current staff. "Then they feel they're
part of our team and contributing to a new start." Management
Style He
shuns memos, staff meetings, and bureaucracy (corporate headquarters
has 70 staffers for a corporation of 180,000). Personal
Strength Still
thinks of himself as an entrepreneur. He spends 60 percent of his
time on the road so he can meet and visit with employees, investors,
and customers. Weakness Whim
shopping and impulsiveness, Kozlowski confesses, but senior vice-president
Bradley McGee disagrees: "Impulsiveness means regret, and Dennis
never looks back with regret." Family
Ties Very
close to his two daughters, one of whom is in LBOs and the other,
in Columbia Law School. Passions Flies
small planes and the company helicopter, but given time off, Kozlowski
would head for his reconditioned 1934 racing boat, Endeavour, and
sail around the world. Corporate
Goal Discover
more technological components Tyco can spin off into limited IPOs,
as it did this year with its fiber-optics unit. Personal
Goal Have
as much impact on early education as he has on manufacturing. Donates
extensively to schools for underprivileged children and has adopted
a middle-school class with his daughter. Financial
Reward Salary
of $1.3 million, bonus of $3.2 million. Mr.
Kozlowski said on air he would not have bought CIT last year, especially in
light of Tyco's plans to split into four companies. He unveiled
the restructuring plan last month as Tyco's stock price plummeted
on investor concerns about its accounting methods. The concerns
were sparked by Enron Corp.'s collapse. When
asked about the cash payments of $10 million to Tyco director Frank
Walsh and $10 million to a New Jersey charity in which Walsh is
a trustee, he said it would never happen again. He did not want
to make it appear Tyco was similar to
Enron. Frank
Walsh, who is reportedly leaving the Tyco board of directors, also
was allegedly “instrumental” in brokering the deal. The
SEC and investors are
concerned as it certainly questions Walsh's independence as a director. ----- Sweet
Contract May Well Be All for Naught By
FLOYD NORRIS New York Times On
Jan. 22, 2001, just one week before shares of Tyco peaked, the company's
board awarded L. Dennis Kozlowski a new contract that called for
him to remain chairman and chief executive until Nov. 16, 2008,
his 62nd birthday. He was given eight million shares of restricted
stock, then worth $485 million at the market price for unrestricted
stock. That
contract was unusual in many ways. For starters, it said that the
only reason Mr. Kozlowski could be fired for cause was if he was
convicted "of a felony that is materially and demonstrably
injurious to the company or any of its subsidiaries or affiliates,
monetarily or otherwise." And even with such a conviction,
it would require a vote of three-quarters of the board to fire him. That
contract provided for generous severance benefits if he was fired
without cause, or if he resigned for "good reason," a
term that included a reaction to a board reduction of his duties. Brad
McGee, a Tyco spokesman, said yesterday that the "contract
became void upon his resignation" but that the board planned
to negotiate with Mr. Kozlowski about severance benefits. He estimated
the value of the severance under the contract at about $120 million
and said he did not know whether Mr. Kozlowski agreed that it was
now void. Under
the existing deal, Mr. Kozlowski would be entitled to an immediate
payment of almost $17 million, plus a bonus for the part of the
current fiscal year that he worked. He would also receive a lifetime
consulting arrangement that would pay him $137,500 a year. In addition,
he would receive all the benefits he has been accustomed to receiving,
including "access to company aircraft," as well as to
cars, offices and apartments. And
the scale of his benefits now can be appreciated by noting that
last year's company-paid premium on his life insurance policy, including
the amount it paid to cover his taxes on the premium, came to $3.8
million. The company did not disclose the face amount of the policy,
but the contract provided he would keep the policy for life, with
the company continuing to pay the premiums. -----
NEWS
ANALYSIS A
Prime Example of Anything-Goes Executive Pay By
DAVID LEONHARDT New York Times Even
as a boom in executive pay brought vast wealth to nearly every person
running a large American company, L. Dennis Kozlowski still stood
out. During
his rise to become one of the nation's more prominent chief executives,
Mr. Kozlowski persuaded his board to give him hundreds of millions
of dollars' worth of cash, stock and perquisites. Now, with the
rapid decline of his reputation, culminating in his departure yesterday
as the chief executive of Tyco International, Mr. Kozlowski has
come to highlight nearly every controversy surrounding executive
pay. Mr.
Kozlowski received a guaranteed salary so large that it cost Tyco
a tax deduction. He took home tens of millions of dollars of pay
that supposedly reflected his improvement of the company's performance.
Yet Tyco still lent him millions of dollars and he has quietly sold
more than $300 million of Tyco stock back to the company since 1999
— even as he was claiming to have sold little or no stock. Incongruously,
Mr. Kozlowski also
looked for ways to save amounts of money that represented a pittance
of his wealth. Rather than waiving the fee to sit on his own board,
as most executives do, he received $75,000 last year, according
to a Tyco filing. To avoid paying state sales taxes on art he bought,
he shipped the works — or empty boxes, in some cases —
to other states, prosecutors say. That
last move cost him his job, insiders said yesterday, in the latest
sign that executives who seem to have abused their position are
now more likely to suffer consequences — rather than merely
criticism or slaps on the wrist — than in the recent past.
Executives still have enough control over their own compensation
to prevent widespread pay cuts, corporate governance experts said,
but the anything- goes ethos of the late 90's seems to be receding. For
example, Bernard J. Ebbers, the former chief executive of WorldCom,
lost his job in April partly because of the contrast between his
pay and his company's woes. Christos M. Cotsakos, the chief executive
of E*Trade, said last month that he would forfeit almost half of
his $80 million in 2001 pay in response to criticism, including
an investor lawsuit. Members of the Rigas family, who founded Adelphia
Communications, gave up most of their board seats last week after
investors had learned of loans from the cable company to the family. This
kind of turmoil, combined with the accounting problems highlighted
by the demise of Enron, has left many people wondering whether the
soaring corporate profits of the late 1990's were at least partly
a mirage created by executives who stood to benefit from the advance
of their company's stock. Shares
of Tyco — a conglomerate that Mr. Kozlowski built by buying
one company after another and that now makes an array of products
from burglar alarms to syringes — closed at $16.05 yesterday,
down $5.90. The stock has fallen from almost $60 late last year
as investors have become worried that Tyco used complicated accounting
techniques to inflate its profits. Tyco
executives have defended their practices as legitimate. But in a
sign of the shifting corporate terrain, Tyco's board no longer seems
willing to pay Mr. Kozlowski so generously. During
negotiations last weekend, Mr. Kozlowski agreed to resign. As a
result, he is not eligible for a severance package that could have
exceeded $100 million, the company said. Tyco's directors will negotiate
a new severance deal with him. Over
the last three years, the board paid Mr. Kozlowski $19 million in
cash and perks and almost $80 million in stock, according to company
filings. It also gave him 13.4 million stock options — many
more than most chief executives received — but many of the
options will become valuable only if Tyco's stock recovers from
its slump and eventually returns to its earlier highs. Mr.
Kozlowski's pay last year included a base salary of $1.65 million.
In the early 1990's, Congress adopted a law preventing companies
from claiming a tax deduction on any pay above $1 million that is
not based on a company's performance. In
all, Mr. Kozlowski made "an egregious amount of money,"
said Judith Fischer, managing director of Executive Compensation
Advisory Services, a research company in Alexandria, Va. "In
any peer group, he would be considered very well paid." Mr.
Kozlowski was the chairman of Tyco's board until yesterday. The
head of the compensation committee is Stephen W. Foss, a manufacturing
executive who has been on Tyco's board since 1983. Individual
cases aside, most boards still seem willing to allow chief executives
to dictate much of their own pay. Last year, median total pay for
executives at large companies increased 9 percent even as profits
fell 35 percent, according to a study of 200 companies by Pearl
Meyer & Partners, a consulting firm in New York. But
investors, who have long had little power over executive pay, have
begun to agitate for more of a voice as stock prices and pay have
moved in opposite directions. At
a few companies, large investors have fought company requests to
set aside millions of shares of stock to use for employee stock-option
grants. In a rare victory for opponents of such packages, Jones
Apparel, a maker of clothing and shoes, withdrew a stock-option
proposal last month. Other
companies, however, have fought the opposition; they received a
lift this year when the Securities and Exchange Commission ruled
that companies can ignore some shareholder requests for a vote. But
that will not end the fights. Later this week, the New York Stock
Exchange is expected to announce a proposed set of rules that would
require companies listing their shares on the Big Board to receive
stockholder approval for all new option proposals. Currently, shareholders
do not vote on broad-based plans that award options to executives
and lower-level employees. At
other companies, investors have introduced resolutions asking companies
to change their severance packages for executives or otherwise rein
in pay. The resolutions have been receiving a greater share of votes
than they did in previous years, according to the Investor Responsibility
Research Center in Washington. But
few of the resolutions are binding. "The action on the shareholder
front this year is extraordinary," Ann Yerger, director of
research at the Council of Institutional Investors, which represents
large investors. "But that doesn't mean it's going to influence
company behavior." For
now, only the very largest piles of money, like Mr. Kozlowski's,
seem at risk of collapsing under their own weight. ----
Remember
When--- CIT
(3/2001) Tyco International Ltd. makes offer for about $9.2 billion
in cash and stock in a deal that would allow the manufacturer
to finance purchases of its wide array of products. Bermuda Hq,
N.H. operation office. ( 2/2001) Closing Atlanta office and others,
"freeze" on new broker business. June
20,2001 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. CHRONOLOGY
- Tyco's history under Kozlowski
NEW YORK- Following are key dates in
Dennis Kozlowski's term as chief executive of
conglomerate Tyco International Ltd. (NYSE:TYC - News)
July 1992 - Dennis Kozlowski is named chief executive
of Tyco after serving as the company's chief operating
officer since 1989. The company, then mostly known for
its fire protection and large valve business, is worth
about $3 billion.
July 1994 - Tyco tackles first big-ticket acquisition
under Kozlowski, purchasing Kendal International, maker
of Curad bandages and other medical products, for $1.4
billion.
July 1997 - Tyco acquires burglar alarm and security
firm ADT Ltd. Structured as a reverse merger, ADT
technically bought Tyco and changed its name to Tyco
International. The company moves its headquarters to
Bermuda, where ADT is based.
April 1999 - Tyco purchases electronics maker AMP Inc.
for $11.3 billion in stock.
October 1999 - Short-seller David W. Tice questions the
use of large reserves related to acquisitions, saying
they obscure results.
December 1999 - Tyco says the Securities and Exchange
Commission is conducting a nonpublic, informal inquiry
into charges and reserves linked to the company's
acquisitions.
June 2000 - Tyco says it has amended earnings per share
for fiscal 1999 and the first quarter of fiscal 2000
after the SEC review. The company also agrees to
acquire health care firm Mallinckrodt for about $3.1
billion in stock in a deal making the company the
world's No. 2 medical device maker.
March 2001 - Tyco enters the financial services
business when it agrees to acquire commercial finance
company CIT Group Inc. for about $10 billion.
January 2, 2002 - Tyco denies the SEC is launching a
new investigation of the company after research company
SEC Insight Inc. issues an alert on Tyco.
January 22, 2002 - Tyco says it plans to separate into
four independent publicly traded companies: security
and electronics; health care; fire protection; and flow
control and financial services. The company says the
move should unlock tens of billions of dollars in
shareholder value. Tyco also says it plans to sell its
plastics unit.
January 30, 2002 - Kozlowski and Chief Financial
Officer Mark Swarts say they will each buy 500,000
shares of Tyco's stock, which had fallen to its lowest
share price since the company's SEC investigation in
1999.
February 4, 2002 - Tyco says it spent more than $8
billion on more than 700 acquisitions in the past 3
years that it did not separately announce to the
public. Standard & Poor's and Fitch ratings cut the
company's credit ratings.
March 11, 2002 - Two groups of private equity firms
offer to buy Tyco's plastics business.
March 12, 2002 - Tyco says it is on track to spin off
CIT into an independent company by May, but also says
it might sell off a piece of CIT before the move.
March 20, 2002 - A team of private equity firms
approach Tyco with a proposal to buy a minority stake
in CIT group for up to $1.5 billion. General Electric
Co. (NYSE:GE - News) says it has no interest in
acquiring CIT.
April 24, 2002 - Sale of the company's plastic unit
stalls because Tyco fails to come up with key financial
data and may need to lower the unit's earnings forecast
for the year.
April 25, 2002 - Tyco says it abandoned its plan to
split into four companies, calling the strategy a
mistake, and reported a $1.9 billion net loss in the
March quarter, in a stunning about-face. CIT files for
initial public offering for as much as $7.15 billion.
May 24, 2002 - Investment bank Lehman Brothers
allegedly withdraws a $5.0 billion offer for CIT after news of
the offer was leaked to the media.
June 3, 2002 - Kozlowski resigns abruptly amid mounting
criticism of his flip-flopping corporate strategy and
news he is under investigation for avoiding personal
taxes. Former CEO John Fort, a current board member who
headed the company from 1982 to 1992, will assume
"primary executive responsibilities" for an interim
period while Tyco looks for permanent successor CEO
Departure, Failed Lehman Bid Hurt CIT IPO By
Jake Keaveny, Reuters Wall
Street's biggest stock offering this year, Tyco International's
sale of its finance arm, is getting smaller by the minute. The
resignation of Tyco Chief Executive L. Dennis Kozlowski was the
latest snag in the sale planned for this month. Backed against a
wall by a $27 billion debt load, Tyco will probably have to slash
the price to complete the sale on schedule, investors and bankers
said. Ten
days ago, Lehman Brothers, one of Tyco's advisers, retracted its
$5 billion offer, making an initial public offering more likely
than an outright sale. That was like putting up a "clearance
sale" tag from the $7.15 billion it had hoped to raise, and
potential investors are likely to ratchet down the price, investors
and bankers said. "The
IPO is tainted," said Oak Ridge Investments President David
Klaskin, an owner of Tyco stock and potential buyer of the CIT IPO.
"I wouldn't expect them to do much better than ($5 billion)." The
timing of Kozlowski's departure has left investors scratching their
heads. Many had assumed Tyco would wait until after the CIT sale
before shaking up its management. "People
were expecting some management changes," said Prudential Securities
analyst Nicholas Heymann. "But they weren't expected until
after the monetization of CIT." Kozlowski
told his replacement, John Fort, that he left his high-profile position
because of a probe into whether he evaded New York sales taxes,
according to a source familiar with the situation. Tyco said the
CIT offering, which would be this year's biggest, is still on track. Lehman's
lengthy history with CIT and intricate knowledge of its business
casts an ominous shadow on the sale. It's as if someone went over
the company with "fine tooth comb, and found something wrong,"
said Oak Ridge Investments' Klaskin. Lehman
helped advise Tyco when it bought CIT for $9.5 billion about a year
ago. It worked with Goldman Sachs, to try to sell the unit to potential
bidders like GE Capital and Wells Fargo earlier this year, but investor
allegations that Tyco used improper accounting for acquisitions
-- something it has vehemently denied -- hampered a deal. "Clearly
(Lehman's bid) didn't help the value," said Brian Bruce, a
director at Boston-based PanAgora Asset Management, who owns Tyco
stock. "Trying to spin this off and not getting good value
is frustrating." A
person close to the situation said Lehman's decision to retract
its bid 10 days ago had nothing to do with the strength of CIT's
balance sheet or business. The investment bank was not in a position
to close the deal at the time the news was leaked to the press,
he said. Tyco
wants to avoid further credit rating downgrades caused by its heavy
debt load, which have already pushed up its borrowing costs. The
company could get by on as little as $4 billion to $5 billion from
a CIT deal to cover its near-term financing needs, Credit Sights
analysts Glenn Reynolds and Patricia Lee wrote in a recent report.
Tyco has said it has enough cash to meet its debt payments through
next February, although it has $3.25 billion of financing needs
in second quarter 2003. At
a lower price, CIT becomes more attractive, investors said. The
94-year-old company has a strong brand name and $48 billion of assets
in areas ranging from machinery financing for small businesses to
loans to all of the U.S. and Canadian railroad operators. "It's
akin to a distressed sale situation because the company needs to
raise capital rather than it getting out at a peak multiple,"
said an investor, who declined to be named. The investor, who often
buys companies that are targets for acquisition, said he's interested
in buying CIT shares. Lehman's
bid of $5 billion -- about 10 times CIT's expected forward 12-month
earnings -- is actually close to fair value, Credit Sights analysts
Reynolds and Lee said. That
would be a slight discount to the 11 to 12 multiple for Household
International, a company similar to CIT but in some higher- margin
financing businesses. Even
so, investment bankers familiar with the sale caution against comparing
an IPO with an outright acquisition. In
a depressed stock market, companies can often fetch a higher value
from an IPO than a private sale. Acquirers focus on the health of
a company's balance sheet, so assuming debt or issuing stock for
big purchases is riskier than during a boom market, when growth
and profits are the goal. Citigroup
Inc. opted this year to spin off Travelers Property Casualty Corp
rather than sell it outright, and Loews Corp. took a similar approach
with its Carolina Group Inc. ----------------------------------------------------------------------------------------------- Bank
Earnings Rise to New Record of $21.7 Billion Net
Interest margin improvement at large banks give lift to profits,
while asset-quality weaknesses continue to grow. FDIC labels
this “contraction in industry’s loan portfolio is first in
five years.” http://www.fdic.gov/news/news/press/2002/pr6002a.html Commercial
banks earned a record $21.7 billion in the first quarter of 2002,
besting the previous quarterly earnings record set in the first
quarter of 2001 by 9.6 percent (see Chart 1). The average return
on assets was 1.33 percent, the third-highest ever for the industry http://www.fdic.gov/news/news/press/2002/pr6002a.html --------------------------------------------------------------------------------------------------- Telemark
Back Up for Sale? A
friend of mine that worked for Telmark until recently has informed
me that a sale of the company to GE Capital that has been supposed
to take place "any time now" for the last three weeks
has apparently been officially killed by GE on Friday. He
did not know the reason only that GE was supposedly the one that
backed out and that Telmark is now starting over in the sale process
Name
Withheld (any
confirmation or denial, please let us know. editor) ----------------------------------------------------------------------------------------------- The
Funding Tree---All Monies Still Not Returned I
have a customer that is out about 7000 . Do you know how we can
contact the Funding Tree. Kendra promised a refund over two
months ago and we are still waiting.
Philip Dushey
Global Financial Services
17 State Street
New York NY 10004
212-480-4900 Phone
212-482-6026 Fax
global@globaleasing.com Email ------------------------------------------------------------ Mike
Graneri’s Top Gun Seminar Series Leasing
Market Strategies www.granieriassociates.com Seminar
Dates and Cites Midwest (
Mon, June 10, 2002 – Chicago, IL West (
Mon, June 17, 2002 – Los Angles, CA à
Topic: Lease Marketing Strategies. à
Time: 9:00 - 4:30 PM à
Cost: $200.00 for one person or $175.00 per person
for two or more
------------------------------------------------------------------------------------------------------------ June
11 Crabfeast Equipment
Association of Equipment Lessors is holding its Fourth Annual (all
you can eat) Crabfeast in Hanover, MD. As of June 1 there are
70 registrants, with 100 attendees still expected. If
you are a member of any of the leasing trade associations, you may
attend this event for $65. ($90 nonmembers). For
additional information, call
the eael office at 914 381 5830. Thanks,
Alison http://www.eael.org/event_calendar.htm#Crab%20Feast -----------------------------------------------------------
Credit
card companies' late fees hit record high But
the firms deny they use tactics to elicit more funds from card holders By
Ron Lieber WALL
STREET JOURNAL More
people are getting socked with late fees on their credit cards,
and the card issuers couldn't be happier about it. More
than 58 percent of consumers had to pay a late fee during the past
year, according to a study from CardWeb.com, an Internet site that
tracks the credit-card industry. Late fees represent the third-
largest revenue source for card companies after interest charges
and payments from the merchants who accept their cards. Since 1996,
annual late-fee revenue for the industry has jumped to a record
$7.3 billion from $1.7 billion. In
recent months, most of the companies have also quietly boosted late
fees for big chargers. The card companies accomplished this by moving
to a three-tiered fee structure that increases late fees for larger
balances. Last month, for instance, Chase started charging a $35
late fee for balances greater than $1,200, and $29 for balances
between $150.01 and $1,200.00. Chase charges $12 for balances less
than $150.00. Previously, Chase charged a $29 fee no matter what
the balance. Compounding
the pressure on cardholders, card issuers have been shortening grace
periods. The average grace period is now 21.2 days, down from 29.7
days in 1990, according to CardWeb.com. The grace period is the
amount of time between the end of the billing cycle and the payment
due date. The card companies claim to send the bills out as soon
as the billing cycle closes, though depending on the mail, it could
take several days to arrive in the mailbox. How
do the companies define late? At Chase, payments are due at noon
on the due date listed on the bill, but the company generally will
let it slide for people who are just a day late. MBNA has a similar
leniency period. American Express charges a flat $29 late fee on
its credit cards and may cut cardholders some slack if they are
a bit late. Even with the 24-hour leniency periods, the card issuers
still rake in a lot of late fees. In its most recent quarterly earnings
announcement, Morgan Stanley crowed about fee income from its credit
card services unit, which includes the Discover Card. The company
noted that merchant and card-member fees rose 9 percent, reflecting
higher late fees specifically as well as an increase in the fees
they collect from merchants. The
card companies deny they are making it harder to pay on time in
order to generate late fees. An Amex spokeswoman says, "There
is no question we want people to pay us on time." The company
says it gives the best rates to the people who have the best payment
history. The company says, "The reality is that we need to
encourage people to pay us back on time, and the existence of a
late fee is to give that kind of encouragement." The
credit-card companies are anxious to increase their fee income for
a number of reasons. During the past several years, increased competition
has left them less able to charge annual fees, and as interest rates
have declined they haven't been able to collect as much money from
customers who use their credit cards to borrow. While
charge volume and the number of cards in circulation have risen
over the years, the shaky economy has led to more people paying
their bills late. For the March billing period, card companies gave
up and wrote off 6.62 percent of the money cardholders owed to them,
according to ratings agency, Fitch Inc. The card companies use the
fees to give customers an extra incentive to pay on time. For
procrastinators, the card companies have come up with a number of
last-minute solutions. American Express lets consumers call up the
800 number on the back of their cards and dictate the check number
and bank routing number off the bottom of their check in order to
transfer the money electronically. The service is free at American
Express, though it will usually cost between $10 and $15 to pay
other issuers this way.
San Jose Symphony Declares bankruptcy By
Lisa M. Krieger and Rodney Foo San Jose Mercury News SAN
JOSE, Calif. - The San Jose Symphony will play its farewell concert
Saturday night and then will head to U.S. Bankruptcy Court, where
it hopes to dissolve years of growing debts and distrust before
it plans for the future. The
news ends the hope that Silicon Valley could sustain a traditional
symphony in the model of the great San Francisco, Philadelphia,
New York and Boston symphonies. It
also leaves San Jose as the largest U.S. city without a symphony
orchestra. (Other
arts groups such as the American Musical Theater closes all by one local
show, to sign with touring company for other performances. Other
art groups
lose large corporate sponsors as tax dollars also dry up. editor
) With
enough support, the symphony could be replaced within two years
by a smaller, community-based and more fiscally responsible orchestra,
according to the transition committee. But a new symphony won't
start up operations until it has accumulated enough money -- at
least one year's worth of operational funding, three to six months
of reserve and a substantial endowment, committee chairman Jay Harris
said. The
announcement concludes months of uncertainty about the future of
the 123-year-old institution. With an estimated $3.4 million in
debt and just $300,000 in assets, the survival of the symphony seemed
increasingly bleak. Concert attendance had fallen off. To make ends
meet, the organizers borrowed money on credit. Shut
down last October due to mismanagement and spiraling debt, its status
has been in limbo. Without closure, it was impossible to raise the
revenues for a new start, said Harris, the former San Jose Mercury
News publisher who took over the symphony committee in December. ``There
is an odd sense of relief that the truth is being told, as painful,
as regretful as it is,'' Harris said. ``One by one, a lot of people
lost faith due to false promises, mismanagement and creating expectations
that were not realistic. ``We
need a fresh start. Substantial change is needed. There is support
for some form of symphonic music in Silicon Valley . . . but it
can't be the old model.'' San
Jose Symphony was not alone in its troubles. With high overhead,
low cash flow and huge dependence on corporate and individual good
will, recent years have been difficult for orchestras all around
the country. Ten U.S. symphonies that have declared bankruptcy in
the last 15 years. Eight have come back -- some smaller, such as
Sacramento and Oakland, and others stronger, including San Diego,
which found an angel in Qualcomm founder Irwin Jacobs, who pledged
a $120 million endowment. But
the local symphony confronted more than the usual problems. It lived
in the shadow of the world- class San Francisco Symphony. It failed
to win the support of the region's young and very transitory population.
The region's economic downturn made matters worse. Saturday's
benefit concert will be the last of four. By June 15, staff will
be cut and the symphony will release an audit of expenses and revenues.
The future of its musicians is uncertain. Some
plan to stay in the area and see what the future holds, but others
are open to moving. ``If the opportunity comes up, I will not hesitate
to pick up and leave the area,'' says associate principal second
violin Elizabeth Corner, who is raising two children with her husband
Michael Corner, principal clarinet in the symphony. ``If we can
see light at the end of the tunnel, I can imagine waiting. . . .
But for now, we have to scramble.'' The
symphony's transitional committee had put off bankruptcy in an effort
to reach an out-of-court settlement with creditors. But
a report by a specially appointed advisory panel, led by Nancy Glaze
of the David and Lucile Packard Foundation and adopted May 15 by
the committee, concluded that to move forward, the symphony first
had to be free of debt and inefficient organization. Harris
said the only decision remaining is what sort of bankruptcy relief
to seek. Under Chapter 7 of the Federal Bankruptcy Act, all its
assets -- including its music library and bandshell -- could be
put up for auction. Chapter 11 would permit it to reorganize under
court protection, perhaps allowing it to pay only part of its debt
to creditors. As
word of the bankruptcy reached the musical community, there were
feelings of both regret and optimism about the future. ``It
is a dark page in the history of San Jose,'' said Maestro Leonid
Grin, who has a contract with the symphony through 2004. ``This
is one of the oldest orchestras in the country and one of the oldest
west of the Mississippi. We can't afford to lose such a symphony.'' Grin
said it's too late for him to book guest appearances with other
orchestras next season, and he declined to comment on how his contract
will be affected by Monday's announcement. He
said the new symphony must bring music to the masses by playing
at parks, colleges, and as smaller ensembles, to build a larger
audience. That's
something the advisory panel echoed. It also said San Jose should
forget plans for a new $150 million symphony hall until the new
symphony is thriving. ``We
mourn the loss of a fellow artistic colleague,'' said Andrew Bales,
executive director of the Ballet San Jose Silicon Valley. ``They
were somebody else here working in the trenches to keep artists
employed and to provide services to the community.'' Many
of symphony musicians are also employed by the ballet's own orchestra,
Bales said, but the symphony's demise will not affect the ballet's
season. Bob
Kieve, San Jose radio station owner who served on the symphony board
from 1968 until 1998, called the move to file for bankruptcy a ``long
overdue'' step toward ``resurrecting the symphony.'' Irene
Dalis, head of the San Jose Opera and doyenne of the Silicon Valley
arts community, said the suspension of the symphony was inevitable
but sad. As a center for cultural, San Jose is ``still very young,''
Dalis said. ``Unfortunately, we have so much wealth here but the
ones are wealthy don't seem to be leaning to helping the arts.'' She
expressed hope a newly reconstituted symphony will flourish. ``Many
symphonies have had this kind of situation and stopped and retooled
and rethought everything and come back stronger,'' she said. Said
Maestro Grin: ``I'm kind of an optimist, you know . . . like everything
in life after a dark period there is always some bright times coming.'' ``I
hope this dark period will bring us a brighter future.'' ####
############################### #################### ENTERPRISE
ASSET MANAGEMENT IMPROVED WITH ePlus' NEW MANAGE+* V3.0 Enhanced
Application Provides In-depth Reporting and Enhanced Security HERNDON,
VA, - ePlus, Inc., (Nasdaq NM: PLUS), a leading provider
of ePlus Enterprise Cost Management (eECM), today announced the availability
of Manage+ 3.0, the latest generation of its industry-leading web-based
asset management application. As an integral component of eECM, Manage+
3.0 helps automate the entire indirect supply chain and lower the total
cost of ownership for its customers, including eProcurement, asset life
cycle management, financing, and fulfillment. Manage+ 3.0 gives customers
the flexibility to manage fixed assets proactively, enabling enterprise-level
access and control with the security of a hosted solution. "At
ePlus, we appreciate that a company's visibility, control and ability
to manage
its asset base is key to cost reduction and continued growth," commented
Phillip G. Norton, chairman and CEO of ePlus. "With ePlus' web-enabled
Manage+, we provide the information our customers' need to effectively
manage fixed assets and automate business processes. Version 3.0
provides significantly enhanced value and functionality to meet
the evolving
needs of our customers, in a secure, flexible, and web-hosted application."
ePlus
is rolling out the new version of Manage+ as a corporate sponsor
at the
Gartner Group's Annual IT Asset Management and TCO Summit 2002 in Orlando,
FL, from June 3rd to June 5th. Exciting,
effective new features of Manage+ 3.0 include:
* Updated Application Security Layer-protects the integrity and
diversity of information by tailoring each individual user's access
to menu
applications according to privilege and profile
* Enhanced Reporting module-offers expanded option, redeployment
and contact reports with extensive query capabilities
* New Change Password Option-enhances each user's system security
by making it easier to change passwords frequently to adhere to individual
corporate business practices
* New Global Update feature-refines population authorized
to make
a group change to locations, contacts, or allocations of assets
* Comprehensive Search feature-facilitates multi-field searches
based on a variety of allocation types and equipment options. Manage+
offers customers a wide range of asset management tools to comprehensively
manage assets throughout the lifecycle, including capturing data
from the procurement cycle and providing information, reporting, tracking
audit trails, and providing management tools during the useful life of
the asset. Financial, tax, software license, maintenance, location, user,
accounting allocation and budgeting, warranty, and detailed asset
data are
organized into useful groups, including: *
Asset Detail *
Asset Options *
Locations *
Contacts *
Allocations *
Maintenance *
Invoices *
Financials *
Charge Backs The
latest version of Manage+ includes features and functions derived
from ePlus'
unique experience of providing real world solutions to customers
of many
sizes, organizational structures, and industries. Manage+ tracks virtually
any type of asset, including IT, software, capital equipment, vehicles,
and medical equipment. Manage+ customers are commercial, public, and
institutional enterprises including Michael Baker Corporation, Martin Marietta
Materials, ProBusiness, City of Raleigh, Commonwealth of Virginia DOT,
Westvaco, Hooper Holmes, and Georgetown University. Manage+
provides a central database that stores, displays, and updates deployment
details, such as: serial number, description, model number, installation
date, vendor, and equipment status. Manage+ makes tracking changes
and creates an asset audit trail seamless with any web browser; allowing
movement details, upgrade records, and usage trends to be easily identified. An
asset's multiple and detailed costs are completely tracked and categorized
by Manage+ which enables the customer to dissect financial data, prepare
budgets, track charge backs, and analyze cost history. As organizational
changes occur, Manage+ can globally update all asset information
and financial details to reflect a new corporate structure. With
its powerful reporting tools, Manage+ can summarize, format, and customize
valuable asset information into over 20 standard and any number
of customized
reports. These reports can be easily retrieved and distributed through
a secure web interface. As
a part of the ePlus Enterprise Cost Management solution, Manage+
is an integrated
component of ePlus' technology platform, including Procure+, a leading
eProcurement software application, Pay+, ePlus' electronic bill presentment,
payment and document imaging solution, and Content+, a leading catalog
content application and service. eECM cover all aspects of business process
management - from procuring goods and services, to tracking financial
data and managing corporate assets, to outsourcing, fulfillment, content
technology, and related services. More
information about Manage+ can be found at www.eplus.com/manage_plus/index.shtml. <http://www.eplus.com/manage_plus/index.shtml.> About
ePlus inc. A
leading provider of Enterprise Cost Management, ePlus provides a comprehensive
solution to reduce the costs of purchasing, owning, and financing
goods and services. ePlus Enterprise Cost Management (eECM) packages
business process outsourcing, eProcurement, asset management, supplier
enablement, strategic sourcing, and financial services into a single
integrated solution, all based on ePlus' leading business application software.
Profitable since inception in 1990, the company is headquartered in
Herndon, VA and has more than 30 locations in the U.S. For more information,
visit our website at www.eplus.com <http://www.eplus.com>,
call 800-827-5711
or email to info@eplus.com <mailto:info@eplus.com>. ePlus(tm),
ePlusSuite(tm), Procure+(tm) , Manage+(tm) , Service+(tm), and MarketBuilder(tm)
are trademarks of ePlus Inc. ePlus Enterprise Cost Management,
eECM, Pay+ and ePlus Leasing are trademarks applied for of ePlus Inc.
Finance+SM is a registered service mark of ePlus inc. ePlus Content FrameworkSM
is a service mark applied for of ePlus. #############
######################################## Technology
Software, Services and Solutions Executive Named to International
Decision Systems' Board of Directors Norstan
President Granger to Broaden IDS Board's Experience MINNEAPOLIS,
Minn-International Decision Systems, Inc. (IDS) - the global leader
in leasing and sales management software systems - announced today
that named James C. Granger has joined its parent company's board
of directors as a non-executive director. In making the announcement
at Group plc's annual g meeting, Board Chairman John Hubert noted,
"Jim's extensive experience of the technology software, services
and business solutions in the USA will add valuable experience to
the board. He has been president and CEO of Norstan Inc. (NASDAQ:NRRD)
and a member of its board of directorssince November 2000. He was
previously president and CEO of Digital Biometrics Inc. (now Visionics
Inc. - NASDAQ: VSNX) for four years. Prior to that he was involved
in the telecommunications business areas with Sprint, ADC Telecommunications
and ATT." About
International Decision Systems With
nearly three decades of industry-specific expertise and track record
in leasing accounting, International Decision Systems (IDS) is the
global market leader in developing lease accounting, portfolio management,
and wholesale/floorplan financing software and services. Over 500
independent, bank-related, captive leasing and financial services
companies worldwide use IDS' stable, scalable and robust end-to-end
lease accounting software to streamline and automate the entire
leasing life cycle. Lessors also use IDS' software to leverage
the Internet's speed and flexibility for improving service to customers,
achieving greater internal efficiencies and closing deals faster. IDS
also has the industry's largest global consulting, implementation,
technical support organizations that provide incomparable service
from offices located in from offices in the United Kingdom, North
America (Boston and Minneapolis), Australia (Sydney), and Southeast
Asia (Singapore). IDS'
parent company, Group plc companies, is publicly traded on the London
Stock Exchange (IDGL). For additional information about International
Decision Systems and IDS Group plc, visit www.idsgrp.com. ----------------------------------------------------------------
------------------------------------------------------------------------
. --------------------------------------------------------------------------------------
###################
################################## \ Sorthern
Consulting Hires Finance Industry Veteran To
Head Global Business Development, Expand
Auto Leasing Channels CHICAGO,
--Northern Consulting announced today the hiring of 23-year
industry veteran Steve LeBarron. LeBarron will head global marketing
and business development for this fast-growing consulting firm meeting
the technology integration needs of equipment and vehicle leasing
companies
and finance organizations worldwide. LeBarron
will serve as a senior manager responsible for new business development
as well as ongoing client consultation. "He will be seeking
a deeper
understanding of customers' needs today and five years from now,"
says
Cameron Krueger, managing director of Northern Consulting. During
his five-plus years at International Decision Systems (IDS), based
in
Minneapolis, Minn., LeBarron held positions in product, market and
marketing
management. As director of marketing, LeBarron was responsible for
all aspects of global marketing. While
at IDS, LeBarron gained experience and exposure to all aspects of
the lease
management product line from pricing and lease accounting to web-based
products. LeBarron also was a point person for IDS' trade association
relationships. LeBarron
has been steadily involved in the equipment and vehicle leasing
and
finance industry since 1983. His employment history includes seven
years
with GE Capital Fleet Services, where he designed and marketed programs
that generated new revenue and new marketing channels for their
leasing
products. LeBarron's
global perspective, stemming from his experience with GE Capital
Fleet
Services and IDS, made him an attractive candidate for Northern
Consulting,
Krueger says. "Through our partnership with Richmond Consulting
in
Europe, we have been expanding our role in vehicle leasing and hope
to bring
our experience abroad to the United States." "I
am looking forward to having an active role in Northern's business
development
initiatives" says LeBarron. He
adds that he appreciates Northern's commitment to remaining impartial
and
independent in its relationships with software and technology providers.
"Being impartial is key to ensuring Northern's customers maximize
their technology investments," adds LeBarron. He says he plans
to help
Northern leverage its distinct competence in technology consulting
in new
markets and continue its successful track record across the breadth
of the
leasing industry. The
Edina, Minn., resident who also has been employed in the past by
Mutual Service
Insurance and Dart & Kraft Financial, both in Minnesota, will
work from
an Edina office. LeBarron
is a native of Menomonee Falls, Wis., and received his B.S. in
business
administration at the University of Wisconsin LaCrosse. He later
went
on to receive his master of business administration at the Carlson
School
of Business at the University of Minnesota. About
Northern Consulting Northern
Consulting is a fast-growing global consultancy with its' corporate
headquarters in Chicago and a partner (Richmond Consulting) in the
United Kingdom. They provide systems, operations, and financial
consulting
exclusively to the auto and equipment leasing industry and finance
industries. Formed in 1999, Northern Consulting has grown steadily
with
revenues tripling in the past three years while possessing five
of the top
20 equipment lessors among their client base. Northern's customers
include
GE Capital, Boeing Capital, Cisco Systems Capital, and dozens of
small
to mid-size lessors. Managing Director Cameron Krueger is a frequent
speaker,
author, and participant in equipment leasing and finance industry
events
and is an active member of the Equipment Leasing Association. He
can be
reached at ckrueger@NorthernConsulting.com. Susan
Carol, APR Susan
Carol Associates Public Relations, Inc. 1127
Columbus Drive Stafford,
VA 22554-2030 Phone:
540-659-4038 Fax:
509-752-8145 E-mail:scapr@technologywriters.com ----------------------------------------------------------------------------------------- To
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