Kit Menkin’s Leasing News

           Tuesday, June 4, 2002

Accurate, fair and unbiased news for the equipment Leasing Industry




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

        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?”







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? 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.




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.




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.






A Prime Example of Anything-Goes Executive Pay






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



          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



          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



          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.”


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




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 Email








Mike Graneri’s Top Gun Seminar Series


Leasing Market Strategies



Seminar Dates and Cites


( Mon, June 10, 2002 – Chicago, IL


( Mon, June 17, 2002 – Los Angles, CA


ą Topic: Lease Marketing Strategies.


ą Time: 9:00 - 4:30 PM


ą Cost: $200.00 for one person or $175.00 per person for two or more



For more information:

Z Ph 732-828-8891

Z Fax 732-



Z Mail:

Z Web site:




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




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



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, 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 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.''




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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



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



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



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 <>, call

800-827-5711 or email to <>.


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.



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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













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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






Susan Carol, APR

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