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News Now

CU System
Centrix Chapter 11 re-org approved by court
DENVER (4/25/08)--The U.S. Bankruptcy Court for the District of Colorado Monday approved the Chapter 11 reorganization of Centrix Financial, a subprime auto lender whose clients included credit unions. Michael Richman, an attorney with the New York-based law firm of Foley & Lardner, confirmed to News Now that Judge Elizabeth E. Brown approved the reorganization and liquidation plans, and overruled objections to the reorganization during an oral ruling Monday. Richman represents the Official Committee of Unsecured Creditors, which includes credit unions, in the case. "It's a tremendous success for the creditors in the case," Richman said. "They're pleased the judge has confirmed the Chapter 11 plans. The reorganization plan is the best opportunity for creditors to secure any money that might be handed out" through the liquidation process. The next step, he said, is to have the judge's confirmation order signed and entered into the court docket, and the plan consummated. He noted a liquidating trust has been formed to handle any potential claims being pursued. The trust will retain attorneys to carry on the litigation for recovering funds. Credit unions and other entities have claimed millions against the company's assets. Last year, Centrix's assets were sold to Falcon Investment Advisers, who traded more than $30 million in secured debt for control of Centrix's portfolio, which had $1.9 billion in subprime auto loans--most of them from credit unions--at the time (News Now Jan. 12, 2007).


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