Académique Documents
Professionnel Documents
Culture Documents
PETTERS
1. My name is Thomas J. Petters. I am over the age of 1 8 and of sound mind. I make this
I. Background
3. In 1998, General Electric Capital Corp. (" GECC") provided Petters Capital, Inc.
("Petters CapitaF) with a $50 million line of credit ("Petters Capital Line").
4. The stated purpose of the Petters Capital Line was to finance transactions related to the
purchase of merchandise and then subsequent sale of that merchandise to retailers (such
as Costco / National Distributors (" Costco"). Once the retailers paid for the merchandise,
then GECC would be repaid its principal and also receive interest, fees and a profit-
sharing portion.
5. In early October 2000, Petters Capital and GECC agreed to close the Petters Capital Line.
Petters Capital was to pay off all outstanding amounts owed to GECC on or about
6. On or about October 24, 2000, 1 spoke by telephone with Paul Feehan of GECC (the
"First Phone CalF). During this call, Mr. Feehan screamed, yelled and used expletives.
I responded by doing the same. Mr. Feehan told me he had communicated with Costco to
verify certain receivables / purchase orders which served as GECC's collateral for the
Petters Capital Line. Mr. Feehan told me that Costco told him that Costco had not issued
these receivables / purchase orders. Mr. Feehan spoke to me in a very aggressive and
hostile manner. Mr. Feehan said that GECC did not have collateral to secure payment of
the Petters Capital Line and that Petters Capital was a fraud.
7. During the First Phone Call, Mr. Feehan accused me and Petters Capital of fraud, and
Page 1 of 4
V a SwkAJ f^jj^
M
- \w V (JV <AU?> J?|
"The Costco receivables and purchase orders are not valid and do not represent
real deals."
"You need to get this line of credit paid off right away."
"We are done with you. Both lines need to be shut down."
"We are going to kiltyour &if you do not get the line of credit paid off."
8. I understood Mr. Feehan s refefdn ioth lines" to mean the Petters Capital Line and
9. During the First Phone Call, I told Mr. Feehan the following in substance or words
"Why the hell are you calling Costco? Stay the hell away from Costco."
retailers."
10. Starting hours after the First Phone Call, and continuing for days afterwards, Mr. Feehan
and I had a series of more telephone calls (the "Later October Phone Calls").
1 1 . During the Later October Phone Calls, Mr. Feehan' s tone and tenor completely changed.
On the First Phone Call, Mr. Feehan spoke like an angry, aggressive lender. During the
Later October Phone Calls, Mr. Feehan became conciliatory and spoke like a 'diplomat.'
I understood Mr. Feehan to then be seeking an agreement to work out the issues and
12. During the Later October Phone Calls, Mr. Feehan said the following to me, in substance
"You have got to help me, I have the powers-that-be breathing down my neck. I
"We are going to be able to work this out, so we each get what we want."
Page 2 of 4
"Just get us paid off, and we will each go on our way, and we will not tell anyone
about the problems that we are having with you and this loan."
"Do not worry, if you get us paid off I am not going to do anything to hurt or shut
"Are you sure you are going to be able to get the loan paid off?"
"If you get us paid off, we will be out of the Petters business and no one will ever
"After we get paid back, we won't ever have to talk about this again."
13. During the Later October Phone Calls, I said to Mr. Feehan in substance or words
substantiallvtertheir effect:
purchase orders that secured this loan from the Petters Capital Line.M wirkthen- '
use that money to pay you / GECC off. You will stop bothering and messing with
my business and not contact any of my retailers and not speak with anyone about
any problems with me, my business or the Costco receivables / purchase orders
and my merchandis^
"The monies/f raise from the new lenders will be secured by the same collateral
that was your collateral for the monies outstanding and owed to you."
"My new lenders will be paid off when Costco pays on these receivables /
purchase orders."
"Because you are being paid off, you have no reason to contact Costco or anyone
else regarding me or my business ever again, and you have no reason to contact
14. During the Later October Phone Calls, GECC (through Mr. Feehan) and I agreed thatT"A(AL
would raise money from new lenders, that these new lenders' loans would be secured b} ,
the same collateral that GECC had for its loan (that Mr. Feehan had told me he believed
were fake and a fraud, and a basis for his belief that my business was a fraud), and that I
Page 3 of 4 I\/?
15. As a part of our agreement, GECC (through Mr. Feehan) and I also agreed that GECC
would not communicate with anyone about the issues and items he raised in the First
Phone Call, including about any problems, thoughts, concerns or issues that GECC had
16. GECC's 'silence' about the issues and items Mr. Feehan raised in the First Phone Call
was very important to me. I was adamant that GECC not talk about these issues and
17. 1 complied with my side of our agreement and GECC, to the best of my knowledge,
I declare under penalty of perjury that the foregoing is true and correct, in accordance with 28
U.S.C. 1746.
Thomas J. Petters
\ o- u -
iii
(Signature (Date)
Page 4 of 4