The company has securitized many of its receivables, selling them for less than their face value, to raise money to pay down debt.
"The real issue is that a lot of the value of an agency is its assets and they want to find a way to cash out those receivables and sell their agency so they can get a long-term capital gain for tax purposes, which means selling an interest in their agency to another company".
The firm has consistently denied that it has plans to file for Chapter 11 bankruptcy protection, and partners at the firm say that it still has revenue from receivables, from selling business units and from operating its training center in St. Charles, Ill.
In these, it packages groups of customer receivables and sells them to a trust.
Card issuers still have access to money, thanks to a securitization machine that allows them to bundle receivables and sell them as securities.
For the next two years, I spent six days a week collecting the company's receivables and selling off the inventory so that I could pay down the bank debt.
The mutual fund industry has taken the position that some types of pension funds, as well as mortgage-backed securities and credit card receivables that are sold as securities, all fit in this category.
Thus in 2002 the engineering concern Halliburton sold receivables, boosting cash from operations by $180 million.
But it turns out that there is a long and respectable tradition of selling receivables; it's called "receivables factoring," and a quick Google search will reveal plenty of people in the business.
Jason and Panther would pay a fee for each card issued, or, if they sold the receivables to the bank, take a cut of the profits for collecting from the debtors.
