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In the Marketplace

By ALM Staff | Law Journal Newsletters |
September 29, 2008

RSC Equipment Rental, Inc. of Scottsdale, AZ, has consolidated its field operations in North America into two geographical areas, an East Division and a West Division, instead of the three areas it has had previously. Joe Foster and David Ledlow, senior vice presidents of operations, will assume the responsibility of the East and West Divisions, respectively. In connection with this structural change, Ned Graham, senior vice president of operations, has decided to leave the company.

CIT Group Inc. of New York has decided to retain CIT Rail after indicating about four months ago that selling this business was a possibility. The company stated that the decision to retain the $4.5 billion rail franchise and the third largest railcar lessor in North America is the result of progress the company has made in managing its balance sheet and strengthening its liquidity position. Instrumental in the decision was CIT's recent success in divesting of the Home Lending business, managing commercial portfolio cash flows and sourcing new liquidity facilities. CIT agreed to sell its home-lending business to hedge fund Lone Star Funds for $1.5 billion and its $470 million manufactured-housing portfolio to Vanderbilt Mortgage & Finance Inc. for $300 million.

In a separate announcement, CIT has also established a vendor financing relationship with Pettibone LLC, an owner of several independent operating companies that produce a wide array of equipment and products. Under the terms of the agreement, CIT Vendor Finance established a lease financing program in South America and China with Barko Hydraulics and Pettibone Traverse, two affiliates of Pettibone LLC that supply rough terrain material handling equipment to the forestry, scrap, pipeline and railroad industries.

The Alta Group of Lake Tahoe, NV, has announced a new business alliance created to fill the growing demand for equipment leasing and financing consulting services in China. The group has entered into a working agreement with LeaseOne (Beijing) Management Consultants Co., Ltd., which is based in Beijing and employs more than 30 partners, consultants, and analysts. Together, the companies will offer consulting, professional development, and financial advisory services, including strategies for funding and mergers and acquisitions, to businesses inside and outside China that are seeking to expand their leasing presence there. LeaseOne professionals are located in Beijing, Shanghai and Shenzhen.

United Rentals, Inc. of Greenwich, CT, has announced that it had reached a final settlement with the Securities and Exchange Commission of the SEC's previously announced inquiry into the company's accounting practices. The inquiry related to a series of sale/leaseback deals, principally during 2002 and prior years, which were also the subject of an investigation by a special committee of the company's independent directors. Under the terms of the settlement, which has been submitted for court approval, United consented, without admitting or denying the allegations in the SEC's complaint, to the entry of a judgment requiring it to pay a civil penalty of $14 million and disgorgement of one dollar and enjoining United from violations of certain provisions of the federal securities laws in the future. The company previously recognized a charge of $14 million relating to the settlement of this matter in the second quarter of 2008. Accordingly, the settlement will have no effect on the company's third-quarter operating results.

United also announced that it has entered into a memorandum of understanding with lead plaintiff's counsel to settle the purported class action litigation that was filed following the initial announcement of the SEC inquiry in August 2004. The contemplated settlement, which is subject to the prior satisfaction of a number of contingencies, provides that the claims of the plaintiff class will be settled for a cash payment of $27.5 million. United continues to cooperate fully with a related U.S. Attorney's office inquiry that has led to charges against the company's two former chief financial officers.

RSC Equipment Rental, Inc. of Scottsdale, AZ, has consolidated its field operations in North America into two geographical areas, an East Division and a West Division, instead of the three areas it has had previously. Joe Foster and David Ledlow, senior vice presidents of operations, will assume the responsibility of the East and West Divisions, respectively. In connection with this structural change, Ned Graham, senior vice president of operations, has decided to leave the company.

CIT Group Inc. of New York has decided to retain CIT Rail after indicating about four months ago that selling this business was a possibility. The company stated that the decision to retain the $4.5 billion rail franchise and the third largest railcar lessor in North America is the result of progress the company has made in managing its balance sheet and strengthening its liquidity position. Instrumental in the decision was CIT's recent success in divesting of the Home Lending business, managing commercial portfolio cash flows and sourcing new liquidity facilities. CIT agreed to sell its home-lending business to hedge fund Lone Star Funds for $1.5 billion and its $470 million manufactured-housing portfolio to Vanderbilt Mortgage & Finance Inc. for $300 million.

In a separate announcement, CIT has also established a vendor financing relationship with Pettibone LLC, an owner of several independent operating companies that produce a wide array of equipment and products. Under the terms of the agreement, CIT Vendor Finance established a lease financing program in South America and China with Barko Hydraulics and Pettibone Traverse, two affiliates of Pettibone LLC that supply rough terrain material handling equipment to the forestry, scrap, pipeline and railroad industries.

The Alta Group of Lake Tahoe, NV, has announced a new business alliance created to fill the growing demand for equipment leasing and financing consulting services in China. The group has entered into a working agreement with LeaseOne (Beijing) Management Consultants Co., Ltd., which is based in Beijing and employs more than 30 partners, consultants, and analysts. Together, the companies will offer consulting, professional development, and financial advisory services, including strategies for funding and mergers and acquisitions, to businesses inside and outside China that are seeking to expand their leasing presence there. LeaseOne professionals are located in Beijing, Shanghai and Shenzhen.

United Rentals, Inc. of Greenwich, CT, has announced that it had reached a final settlement with the Securities and Exchange Commission of the SEC's previously announced inquiry into the company's accounting practices. The inquiry related to a series of sale/leaseback deals, principally during 2002 and prior years, which were also the subject of an investigation by a special committee of the company's independent directors. Under the terms of the settlement, which has been submitted for court approval, United consented, without admitting or denying the allegations in the SEC's complaint, to the entry of a judgment requiring it to pay a civil penalty of $14 million and disgorgement of one dollar and enjoining United from violations of certain provisions of the federal securities laws in the future. The company previously recognized a charge of $14 million relating to the settlement of this matter in the second quarter of 2008. Accordingly, the settlement will have no effect on the company's third-quarter operating results.

United also announced that it has entered into a memorandum of understanding with lead plaintiff's counsel to settle the purported class action litigation that was filed following the initial announcement of the SEC inquiry in August 2004. The contemplated settlement, which is subject to the prior satisfaction of a number of contingencies, provides that the claims of the plaintiff class will be settled for a cash payment of $27.5 million. United continues to cooperate fully with a related U.S. Attorney's office inquiry that has led to charges against the company's two former chief financial officers.

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