CHICAGO, Feb. 20 /PRNewswire/ -- GATX Corporation and GATX Capital
Corporation today reported on the conclusion of the first phase of a trial
that is currently underway in Federal District Court for the Northern District
of California to which GATX Capital is a party.
As noted in detailed descriptions in the GATX Corporation and GATX Capital
filings on forms 10-Q and 10-K, GATX Capital is party to litigation arising
from the issuance by the Federal Aviation Administration of Airworthiness
Directive 96-01-03, the effect of which significantly reduced the amount of
freight that ten 747 aircraft were authorized to carry. These aircraft were
modified from passenger to freighter configuration between 1988 and 1994 by
subcontractors of GATX/Airlog, a California partnership in which a subsidiary
of GATX Capital is a partner. GATX Capital previously reached settlements
covering five of the aircraft, and the remaining five are the subject of this
trial.
The first phase of the trial concluded on Friday, February 16. The jury
found that GATX/Airlog breached its warranties under the applicable aircraft
modification agreements, and fraudulently failed to disclose information to
the operators of the aircraft. The second phase of the trial to determine
damages to be awarded to the plaintiffs is expected to conclude within three
weeks.
While the amounts claimed in this matter are substantial, the extent of
liability with respect to such claims cannot be reasonably estimated at this
time. However, once finally determined, the amount required to be paid will
be material to the results of operations in a given period for GATX Capital
and GATX Corporation, and may have a material adverse effect on the financial
condition of these parties. The company is currently evaluating the amount of
estimated reserves that may be required for payment of damages. The accrual
for estimated reserves will be considered a subsequent event in accordance
with Generally Accepted Accounting Principles, and as such will be reflected
in 2000 results.
Jesse V. Crews, president of GATX Capital Corporation, stated, "We
strongly believe that throughout the course of the trial GATX/Airlog offered
evidence showing that it did not breach its obligations under the terms of the
modification agreements and made all required disclosures to its customers.
In that regard, the jury's decision is disappointing. This is an extremely
complex case involving a number of difficult and novel factual and legal
issues. We believe a number of those issues present important matters for
further judicial review, and we plan to vigorously pursue appropriate review
of those issues."
Further information with regard to this trial will be communicated as
appropriate.
COMPANY DESCRIPTION
GATX Corporation (NYSE: GMT) is a unique finance and leasing company
combining asset knowledge and services, structuring expertise, creative
partnering and risk capital to serve customers and partners worldwide. GATX
Corporation provides leasing and financial services responsive to the
specialized needs of a range of businesses. GATX Corporation specializes in
railcar and locomotive operating leasing, aircraft operating leasing,
information technology leasing, and venture finance for customers in diverse
industrial sectors worldwide.
FORWARD LOOKING STATEMENTS
This press release includes statements which may constitute forward-
looking statements made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995. This information may involve risks
and uncertainties that could cause actual results to differ materially from
the forward-looking statements. Although the company believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, such statements are subject to risks and uncertainties
including but not limited to general conditions, including demand and pricing
in its primary rail, air, technology, and diversified equipment leasing
markets, opportunities for asset resale within these markets, and stable labor
conditions within the company's rail service network. These factors and
others could cause actual results to differ materially from those projected.
Investor, corporate information and press releases may be found at
http://www.gatx.com . A variety of current financial information, historical
financial information, press releases and photographs are available at this
site. GATX press releases may be obtained by accessing PR Newswire's Company
News On-Call's automated fax service at 800-758-5804. The company
identification number for GATX is 105121.
SOURCE GATX Corporation
 back to top
Related links:
http://www.gatx.com
Company News On-Call:
http://www.prnewswire.com/comp/105121.html or fax,
800-758-5804, ext. 105121
CONTACT:
Analysts and Investors, Robert C. Lyons,
Director of Investor Relations, 312-621-6633, or Media, George S.
Lowman, Managing Director- Communications, 312-621-6599, both of
GATX Corporation
|
