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: Commission File Number
January 23, 1997 1-8319
GATX CAPITAL CORPORATION
Incorporated in the IRS Employer Identification Number
State of Delaware 94-1661392
Four Embarcadero Center
San Francisco, CA 94111
(415) 955-3200
Item 5. Other Events
The Company recently learned that on December 18, 1996 General Electric
Capital Corporation and a subsidiary (collectively, "GECC") filed a Complaint in
the Superior Court for the County of San Francisco (Case No. 983351) against
GATX/Airlog Company, a California general partnership ("Airlog") of which a
Company subsidiary is a partner, and the Company, among others. The Complaint
asserts causes of action for breach of contract, fraud, negligent
misrepresentation and trespass to personal property arising out of the
modification of three B747 aircraft from passenger to freighter configuration.
These aircraft are among a group of ten aircraft affected by the issuance of
Airworthiness Directive 96-01-03 (the "AD") by the Federal Aviation
Administration (the "FAA") in January 1996. The effect of the AD is to reduce
significantly the amount of freight the affected aircraft may carry. The
Complaint seeks direct and consequential damages which it alleges may be in
excess of $50 to $75 million, a declaration requiring defendants to promptly
repair the aircraft and punitive damages. To the best of the Company's
knowledge, no Summons has been served on any of the Defendants in this action.
The three aircraft were modified by subcontractors of Airlog in
1991 with GECC's knowledge and consent pursuant to contracts between Airlog
and GECC. These aircraft are part of a group of ten aircraft that are subject
to the AD and were modified by subcontractors of Airlog pursuant to a design
approved by the FAA. The three aircraft were flown for more than four years
prior to the issuance of the AD.
The Company previously disclosed that Evergreen International Airlines,
Inc. made a claim on the Company with respect to three other aircraft of the ten
affected by the AD. The Company responded to that claim by bringing an action
for a Declaratory Judgment that neither Airlog nor the Company has any
liability to Evergreen as a result of the issuance of the AD. The remaining four
affected aircraft are owned by three other entities.
Consistent with its ongoing product support, Airlog continues to
pursue, with the apparent cooperation of the operators of the aircraft,
including GECC and Evergreen, solutions to the FAA's concerns raised in the AD.
While the results of any litigation are impossible to predict with
certainty, the Company believes that GECC's claims are without merit and that
the Company and Airlog have adequate defenses thereto.
Signatures
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.
GATX CAPITAL CORPORATION
/s/ Michael E. Cromar
----------------------
Michael E. Cromar
Vice President and
Chief Financial Officer
January 23, 1997
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