Agency

Clients place pools of loans with CRA to be worked by CRA on behalf of the client. All borrower contact and negotiation is conducted in the name of the client, all settlement agreements are arranged and serviced by CRA, but are specifically between the client and the borrower. CRA fronts all 3rd party costs. If we secure a recovery, the 3rd party expenses are netted from the gross recovery proceeds, and then split with our clients based on a predetermined formula. If we DO NOT secure a recovery, we absorb any costs we have incurred. At least monthly CRA provides full reports to the client (typically in a format designated by the client) and forwards the clients share of all settlement proceeds.

Benefits:

• Client does not need to support a department for this recovery activity
• Client human and financial resources are freed up for use in core activities
• Client receives full accounting and accountability from CRA on all files
• Recovery activities are in the hands of experienced professionals who maximize the recovery on each workable file

Limited Partnership

CRA and the client enter into a partnership relationship with CRA as the general partner and the client as the limited partner. Client conveys pools of assets to the partnership to be worked by the general partner. Client’s contribution to the partnership is limited to the value of the files placed. All borrower contact and negotiation is conducted in the name of the limited partnership, all settlement agreements are arranged and serviced by CRA and are between the partnership and the client. Monthly reporting and funds distribution are as set forth above.

Benefits:

a. All as set forth in No. 1 above
b. Clients name, legal risk and financial exposure are all removed from recovery process
c. Files are immediately removed from client’s books and supervision
d. Client exposure to negative public relations is eliminated

Assignment of Assets to CRA

This approach is similar to No. 2 with the significant exception that the files are assigned directly to CRA and no partnership is formed. CRA takes ownership of the files under a reporting, fee splitting and performance agreement

Benefits:

a. All as set forth in No’s. 1 & 2 above
b. The expense and legal involvement of partnership formation is eliminated
c. Files can be returned to client without complex partnership dissolution

Asset Purchase – Installment Payments

Differs from No. 3 CRA purchases the assets from the client with a formal Purchase Agreement, with the purchase price being the agreed to split in monthly recovery fees, paid out over an agreed time frame in monthly “installments.”.

Asset Purchase – Cash

This is an obvious alternative that provides immediate capital and frees the lender of further involvement in the loans. However, pricing for JDC asset sales is historically conservative because there are regularly material unknowns that only surface post sale during in depth due diligence or settlement negotiations, and which can have a significant financial impact on the note holder, including litigation risk and depressed recovery amounts. For these reasons, lenders who are willing to wait for the results in the above discussed partnership or installment sale scenarios are usually rewarded with a much higher overall return.