Hudson & Keyse, an Ohio-based debt buyer, filed Chapter 7 Bankruptcy in the U.S. Bankruptcy Court for the Northern District of Ohio on September 7, 2010.
Hudson & Keyse’ bankruptcy schedules indicate that it owes more than $ 63,000,000 and reports assets totaling approximately $ 288,000. Yes, creditors will receive less than one half cent on the dollar. This debt buyer dug a deep crater.
Hudson & Keyse was founded in 1984 and grew rapidly during the early to mid 00’s. Between 2003 and 2006, Hudson & Keyse’ revenue leaped from $ 1.4 million to $ 21.9 million — a 1,414 percent increase. Employee payroll jumped from 15 to 131 employees during this period.
Between 2006 and 2008, Hudson & Keyse locked itself into long term contracts to purchase charged off accounts for a fixed price of $ .08 on the dollar. (During the 2006 – 2008 time period, this price indicates that these accounts were probably secondary debts.) By 2010, the market price for these accounts had collapsed to 2 to 3 cents on the dollar.
Hudson & Keyse acting CEO and president cited a skewed business model that significantly overstated the amounts that the company could collect on its assets every month.
In March, 2010, Atlanta-based Vion Holdings, L.L.C. purchased Hudson & Keyse’ account portfolios from the bank syndicate that held the loans secured by Hudson & Keyse’ account portfolios.
Although Hudson & Keyse filed only one lawsuit in Orange County, Florida, the dramatic implosion and resulting crater is noteworthy.
(C) 2010 Donald E. Petersen
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