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Ibm's Leasing Arm Comes Out Swinging In Court


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IBM'S LEASING ARM COMES OUT SWINGING IN COURT

Pension between IBM and computer leasing companies is approaching the breaking point. Through aggressive pricing, IBM Credit Corp. has captured more than 50% of the market. Recently, IBM sued Comdisco Inc., its largest leasing rival, and two makers of expansion memory for IBM mainframes, Cambex Corp. and EMC Corp. All were accused of regularly misappropriating IBM Credit property by replacing original parts when they upgrade mainframes owned by IBM Credit. When returned to IBM they don't contain exactly the same parts that IBM shipped.

The defendants say the suits are just harassment over a practice that IBM had long permitted. Meanwhile, Comdisco and four other leasing companies have created a war chest of about $1 million to pay for law firm Weil, Gotshal & Manges to investigate IBM's actions and prepare for possible countersuits. Administering the fund is the Computer Dealers & Lessors Assn., a trade group, which says IBM management has declined to discuss the issue with them. Both sides have been lobbying the Justice Dept. to reinterpret a 1956 consent decree that's supposed to keep Big Blue's market power in check. The decree, which settled an antitrust suit, calls for IBM not to favor--through pricing, for instance--customers who lease from it over those who purchase its gear. EDITED BY PAUL M. ENG


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