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NorVergence Bankruptcy Hearing by Christopher Menkin The first meeting of creditors regarding the filing of Chapter 7 bankruptcy was held at 2:00pm, Friday, August 27, at the office of US Trustee, Raymond Blvd, One Newark Center, Suite 1401, Newark, New Jersey. The Honorable Rosemary Gambardella is the United States Bankruptcy Judge. As noted the deadline for filing a proof of claim must be received by the bankruptcy clerk's office from all creditors (except a governmental unit), November 29,2004. For a governmental unit, 180 days from the date of relief. Leasing News was not at the meeting, nor have we been able to obtain Several of the leasing companies named in the first class action suit by The great majority of attorneys who have registered are from New Jersey, then New York and Pennsylvania. Virginia attorney James Reynolds represents Data Connection and Metaswitch, Minnesota attorney Joseph H. Anderson represent Lyon Financial, Colorado attorney James C. Underhill represents New Horizons Eclectic, California attorney Linda Berberian represents PFF Bank & Trust, and listed also are single attorney representatives from Florida and Texas, for instance, but the main groups are from this region. The actual dollar amount will not be known until the trustee files a report after all the creditor and governmental units file their claim. Whether they are justified claims or what the deposition will be is one of the purpose of the hearings to follow. The guess is a minimum of $30 million. Anything about it is surely conjecture, but at one time, NorVergence's health insurance practices are being investigated by the U.S. Labor Department, another probe by the New Jersey Department of Labor centers on allegations of bounced paychecks made by former NorVergence employees, and the Federal Trade Commission has reportedly launched an inquiry into NorVergence's leasing contract language. According to ELT News, Equipment Leasing Association President Michael Fleming says the leasing contract language at issue in the FTC probe is valid, as it has been tested and held up by courts for many years He also told staff writer Martha McKay of the New Jersey Star Legend , " ‘I think it's no secret to anybody [that the leasing companies] probably didn't know as much as they should have known...A couple of [leasing] companies may even be out of business over this,' Fleming said, but he declined to name them. But he defended the contract language, and said it has been tested and has stood up in court cases for years. "' If I were a small-business person, I would say this was an expensive lesson and I would pay it'." According to the various list serve and hosted sites Leasing News has observed, readers have contacted various state attorney general offices, district attorney offices, and state public utilities commissions. It appears most are put off by the fact of the bankruptcy hearings, awaiting results from it. It also appears from this listserve and hosted sites many lessees are making settlements, working out the most beneficial payoff. There were reportedly over 11,000 users who were cut off in July at various times of the month and have moved on to other telephone carriers. The listserve that appears to be the largest is for ex-NorVergence employees. While the class action suits will continue to be filed, it appears the numbers they represent are in the low hundreds, combined. Most are quite bitter, smaller companies, while the middle size and larger companies have moved on. It also appears there may be as many as fifty leasing entities who were involved in the financing and an act of collusion gets further and further more difficult to substantiate. It also appears that leasing companies are just starting to call leases in It has not been 60 days since NorVergence closed their doors; however, the change of telephone carrier and use of the Matrix box has occurred. Whether there are more defaults or “settlements” to follow in the next few months, is not known. Certainly there have been no mass numbers of businesses joining the various class action suits under progress. Perhaps a major factor to what has not been happening is the lack of major news media attention to the troubles caused by the filing of bankruptcy by NorVergence. These are not consumers, but businesses who almost had their telephone cut off from their use, and now pay a penalty for what was once thought “long distance” cost savings. It is not making front page headlines, let alone even being reported by many local metropolitan newspapers. The first to file a class action suit is: Mr. Green is co-counsel and has informed Leasing News informed that an amended class action complaint will name 26 leasing companies and Doe Corps. 1-40. Mr. Green states, "Former Norvergence customers may obtain more information about the class action by going to www.njnorvergenceclassaction.com and submitting a form. Letters are then sent by counsel to putative class members updating them on material developments in the class action." MICHAEL SCOTT GREEN, ESQ. At the last communication from the Telecom Agents Association, fifty had joined their legal co-op. Their focus appears to be this. http://www.telecomagent.org There are still businesses joining these actions, but at this time, |
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