Archie's Corner

[Capt_Nemo]

kiddo.........

Westar Financial Sues Bank One; Seeks More Than $1 Billion In Damages



FRIDAY , JANUARY 04, 2002 02:42 PM

TUMWATER, WA, Jan 04, 2002 (INTERNET WIRE via COMTEX) -- Westar Financial Services Incorporated (OTC: WEST) today reported that on January 2, 2002, it filed suit against Bank One, Columbus, N. A., a wholly owned subsidiary of Bank One Corporation (NYSE: ONE), for more than $1 billion plus attorneys' fees and expenses. The action was filed in the United States District Court, Western District of Washington, at Seattle. The suit was filed for Westar by the law firm of Bucknell, Stehlick, Sato & Stubner, LLP, of Seattle.

Until November 7th of this year, Westar was a leading originator of prime credit auto leases reporting revenues of more than $147 million and earnings of $2.3 million in its second fiscal quarter ended September 30. Westar also provides lease services for more than 25,000 accounts valued at more than $625 million for its own account and for others.

Over the past six years, Westar has cultivated relationships with 2600 auto dealers in 30 states, which account for approximately 13% of the country's auto dealers.

The lawsuit alleges a number of causes of action, among them breach of contract, tortuous interference, breaches of good faith, as well as fraud and misrepresentation, all revolving around Bank One's aggressive actions "to terminate its relationship with Westar and destroy Westar's business," according to the filing documents.

According to the complaint:

1) Bank One destroyed Westar's business even though the two parties had entered into a series of more than 50 transactions, each negotiated separately, with a total value of more than $635 million. Through these transactions, Westar transferred securities in the form of Pooled Interest Certificates (PICS) or Asset Specific Trust Instruments (ASTIS) to Bank One. These transactions transferred limited beneficial interests in automobile leases to Bank One.

2) Since 1995, Bank One and Westar have entered into a variety of business relationships. During the past six years, the portfolio of auto leases originated directly by Bank One and independent of Westar has performed poorly and generated losses. Bank One also does not utilize Westar to service its Bank Originated Portfolio, which reportedly lost hundreds of millions of dollars this year.

3) Westar's portfolio of auto leases has generated substantial profits for Bank One. The combination of Bank One's origination standards and Westar's servicing of its own portfolio, (using Westar's proprietary LASIRpro software system) have resulted in the Westar Originated portfolio performing better than industry standards and better than the Bank Originated Portfolio.

4) In the summer of 2001, Bank One notified Westar it no longer wished to purchase PICS based upon leases generated by Westar. Representatives of Bank One cited as the reasons for this that: a) it had suffered great losses in its own auto leasing portfolio, b) it wished to reduce the internal political conflicts posed by continuous purchases of the limited beneficial interests in superior performing leases originated by Westar, and c) it wished to reduce the Bank's exposure to losses in its own auto leasing portfolio.

5) Also this past summer, Bank One and Westar agreed that Westar would use its good relationship with the investment banking firm of Credit Suisse First Boston (CSFirst Boston) to encourage CSFirst Boston to purchase the $600 million Westar Originated Portfolio for a term securitization in order to reduce Bank One's exposure to the leasing business, and to create $300 million of additional purchasing capacity for the purchase of $300 million PICs from the Westar.

The suit further alleges that on October 9, 2001, Westar was "unexpectedly informed that Bank One's CEO had learned of the new agreement and due to the personal animosity he held towards CSFirst Boston he refused to allow the bank to proceed with the agreement." As a result, Bank One breached its agreement with Westar by refusing to honor the agreement to sell the Westar Originated Portfolio to CSFirst Boston and refusing to purchase any more PICs from Westar.

In addition, the lawsuit alleges Westar had developed a proprietary software system, known as LASIRpro (Lease Accounting Securitization Income Reporting), which is unique in the leasing industry. Following its purported termination of Westar as servicer of the Westar Originated Portfolio, Bank One demanded that Westar transfer proprietary information and property belong to Westar, including, without limitation, some or all of the LASIRpro system.

"Bank One's abrupt termination of our long-standing, and for them very profitable, relationship created enormous damage for Westar, its creditors and shareholders, and car dealers, partners and customers," said R. W. Christensen, Jr., Westar's President. "And the way it has been handled by Bank One has, if anything, magnified that damage. We believe our track record of success in the past five quarters coupled with the substantial investments we've made over the years to develop and commercialize our technology speaks for itself. We are very serious about these claims and believe our choice of counsel, one of the most experienced firms in the area of lender liability law, further speaks to our determination."

Until September 11, 2001, WEST was the leading publicly traded automobile-oriented e-commerce financial portal and ASP (application service provider). Westar originated and fulfilled consumer financings for itself or others. Westar completed the first entirely electronic Internet automobile purchase and lease transaction in October 1999. For more information on WEST visit www.westarfinancial.com.



CONTACT: R.W. Christensen, Jr.
President & CEO
360-754-6227



May this new year be kind, and fair to all..........
Rick... ô¿ô
Disclaimer
http://www.investorshub.com/boards/read_msg.asp?message_id=135097