SquareTwo Financial (d/b/a Collect America and Fresh View Solutions) and 18 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, lead case number 17-10676 (SquareTwo Financial Services).
The Company, which acquires, manages and collects charged-off consumer and commercial accounts receivable, is represented by Matthew A. Feldman of Willkie Farr & Gallagher. SquareTwo Financial will also be filing for recognition of the U.S. Chapter 11 proceedings under Part IV of the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice. The Company also announced an agreement with Resurgent Holdings, under which Resurgent Holdings or one or more of its subsidiaries or affiliates will acquire substantially all of SquareTwo Financial’s portfolio of assets.
The acquisition will occur through the purchase of the equity interests of certain of SquareTwo Financial’s subsidiaries, including its Canadian subsidiaries and business. Upon completion of the transaction and following the transfer of the servicing of accounts in the U.S. to Resurgent Holdings and its affiliates, SquareTwo Financial will wind down its U.S. operations, including those of its subsidiary Fresh View Solutions. SquareTwo Financial’s Canadian operations will continue under Resurgent Holdings’ ownership.
Concurrent with its Chapter 11 petition, the Company also filed a Joint Prepackaged Chapter 11 Plan and related Disclosure Statement. According to the Disclosure Statement, “Holders of Second Lien Lender Claims, U.S. General Unsecured Claims and Existing U.S. Interests shall not receive or retain any distribution under the Plan on account of such Claims and Interests.”
J.B. Richardson, Jr., SquareTwo Financial’s C.O.O., comments, “Unfortunately, changes in the regulatory and business environment over the last several years have had a significant economic impact on the company. We reviewed many strategic alternatives over the past nine months to find a path that would allow us to operate competitively and continue operations with our workforce in place. We ultimately determined that the sale to Resurgent and the attendant wind-down was the most value-maximizing approach.”
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