Getting a Competitive Edge in the Debt Purchasing Market

April 12th, 2010

Getting into debt purchasing? New asset classes?
Here’s how to ramp up fast.

Challenge:
An owner built a successful niche contingency collection agency with a highly efficient process for collecting on behalf of telecom companies nationwide. When long-standing clients began to sell off their debt portfolios, the owner quickly realized he could either get into debt purchasing, or risk losing his clients to the debt buyers moving in. The choice was obvious.

Very soon, the owner was actively involved in his first auction of a telecom portfolio that was being sold directly by the issuer. He qualified to make it into the best-and-final round for the sale but came up short of the winning bid.

The next portfolio he came across was also being sold direct from a telecom provider and was being sold in a similar style auction. To be on the winning side this time, he was prepared to pay a significantly higher price — not only in purchase price but in contract provisions. He knew once he owned the portfolio, he’d be able to collect it far better than anyone else. But was he about to overpay?

Solution:
This time, the owner hired Kaulkin Ginsberg for advice on how to assess and bid on the portfolio. Our team of experts quickly went into action because the owner had only a few days to submit his bid. Fortunately, because of our years of experience, we were able to ramp up very quickly. We worked with the owner to create a purchasing plan based upon his experience with this paper and his overall collection strategies and projections. The owner also sent us the telecom portfolio for assessment. After our detailed analysis, we advised him on a fair and reasonable opening bid, and a final bid that we felt he should not exceed during the process.

The owner ended up with the winning bid, which was within percentage points of our recommended range. Best of all, the price was well below the offer he was originally planning to make on the paper, saving him over a million dollars.

What can we do for you?

Contact Mike Ginsberg,  at 240-499-3800 or by email to discuss your interests in confidence.

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