Two more debt collectors bite the dust

Discussion in 'Credit Talk' started by cap1sucks, Dec 15, 2008.

  1. cap1sucks

    cap1sucks Well-Known Member

    Debt collector closes down By Jonathan D. Epstein

    NEWS BUSINESS REPORTER A Buffalo bill collector has abruptly shut down and laid off all 73 employees, after the company president said cash flow woes left it unable to continue operating.

    Elite Recovery Services, located on Great Arrow, closed on Thursday, sending its workers home suddenly without severance pay or any other benefits.

    Company president and CEO Richard C. Corica said Elite shut down because of â??economic reasons,â? although he did not elaborate. He said the company, which buys credit card debt and tries to collect on it, did not file for bankruptcy and is not struggling to pay debts, but its expenses are higher than its revenues.

    He said management is negotiating with an unidentified third-party to try to save the company, but would not go into more details about the discussions or the third party. He cited the confidentiality and sensitivity of the talks. â??Iâ??m hoping some other solution can take place. I hope something can be recovered,â? he said in an interview. â??Weâ??re negotiating, trying to save it, to make sure thereâ??s the capital to make sure this thing can work.â? He said he hopes to know by early next week whether the effort is successful. If not, he said, he might even be able to pay the severance the workers may be owed. â??Weâ??ve always been very fair to our employees and paid them for the hours that theyâ??ve worked,â? he said. â??Outside of that, thereâ??s nothing I can say until I know the final result.â?

    Elite is the second locally based debt collection firm to shut down abruptly in recent weeks, after First American Recovery Services in Amherst filed Chapter 11 bankruptcy last month. It cited a slowdown in payments from consumers and the decision by its lender to shut off a credit line.

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