United
States
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): September 18, 2006 (September
14, 2006)
ePlus
inc.
(Exact
name of registrant as specified in its charter)
Delaware
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000-28926
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54-1817218
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(State
or other jurisdiction of incorporation or
organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification
No.)
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13595
Dulles Technology Drive, Herndon, VA 20171-3413
(Address,
including zip code, of principal executive offices)
Registrant's
telephone number, including area code: (703)
984-8400
Check
the appropriate box below if the Form
8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the
following
provisions (see General Instruction A.2
below):
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[
] Written communications pursuant to Rule 425
under the Securities Act (17 CFR
230.425)
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[
] Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
] Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
8.01 Other Events
On
September 18, 2006, ePlus
inc.
(the "Company") issued a press release announcing the results of a jury trial
conducted in the Fairfax County, Virginia Circuit Court from Sept. 11-14,
2006. On
September 14, 2006, the jury returned a verdict for Banc of America Leasing
& Capital, LLC (BoA) and against ePlus Group, inc. (“ePlus”) in the amount
of $3,025,000, plus interest at $395.97 per day beginning on December 22,
2004
through the judgment date.
As
previously disclosed, BoA filed suit against ePlus Group, inc. in May
2005. The suit alleged a breach of warranties made in a Finance Program
Agreement relating to a financing transaction between ePlus and BoA, in
which BoA financed an installment sale of equipment to Cyberco Holdings,
Inc. (“Cyberco”) from a third party vendor. After the equipment was
financed, the parties discovered that, unknown to ePlus or BoA, Cyberco
was
committing a sophisticated fraud. The jury appears to have
concluded that, by and between ePlus and BoA, ePlus bore the risk of
Cyberco’s fraud. As of the date of this release, the final judgment has
not been entered by the judge, and on October 13, 2006 the court is
scheduled to hold a hearing on BoA’s possible award of attorneys’ fees, at
which BoA is expected to seek approximately $1,000,000.
In
April,
2006, the United States Attorney for the Western District of
Michigan asserted that Cyberco defrauded approximately 40 financial
institutions of approximately $90 million. In June 2006, one of the principals
of Cyberco pled guilty to fraud, money laundering, and conspiracy. Cyberco,
related affiliates, and at least one principal are in Chapter 7 bankruptcy,
and
no future payments are expected from Cyberco.
As
previously disclosed, ePlus has settled a lawsuit with GMAC Commercial
Finance,
LLC (“GMAC”) in the amount of $6 million. The BoA and GMAC suits are the only
two suits regarding Cyberco in which ePlus is the defendant.
While
ePlus is disappointed in the verdict, it believes that it has strong grounds
for
appeal, and expects to appeal once there is a final order in the case. The
adverse verdict has been recorded in the year ended March 31, 2006.
The estimated after-tax loss, calculated using ePlus' 41% tax rate, is
approximately $2.5 million.
A
copy of
the Company’s press release issued on September 18, 2006 is filed as Exhibit
99.1 hereto and incorporated herein by reference.
Item
9.01 Financial Statements and
Exhibits
(c)
The following exhibits are filed as part of this
report:
Exhibit
Number |
Exhibit
Description |
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99.1
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Press
Release dated September 18, 2006 issued by ePlus
inc.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ePlus
inc.
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By:
/s/ Steven J. Mencarini
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Steven
J. Mencarini
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Date:
September 18, 2006
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Chief
Financial Officer
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3