The Thugs of Asset Acceptance

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Re: The Thugs of Asset Acceptance

« Reply #15 on: May 04, 2008, 02:41:04 AM »

http://finapps.forbes.com/finapps/jsp/finance/compinfo/secfilings/SECFilings.jsp?tkr=AACC

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ASSET ACCEPTANCE CPTL CORP (NASDAQ: AACC) | SEC Filings

$ 12.34 $ -0.01 -0.1%
All prices in USD
Price delayed at least 15 minutes Fri May 02 2008 16:00 EDT
Date Form Title
05/01/08 10-Q Quarterly Report
Summary | Full Filing (478kB)
04/30/08 8-K Disclosing Results of Operations and Financial Condition
Summary | Full Filing (128kB)
03/21/08 8-K Disclosing Changes in Registrant's Certifying Accountant
Summary | Full Filing (10kB)
03/17/08 8-K/A Disclosing Changes in Registrant's Certifying Accountant
Summary | Full Filing (21kB)
03/14/08 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (13kB)
03/13/08 10-K Annual Report
Summary | Full Filing (1mB)
03/13/08 8-K Disclosing Changes in Registrant's Certifying Accountant
Summary | Full Filing (13kB)
03/11/08 8-K Disclosing Entry into a Material Definitive Agreement
Summary | Full Filing (216kB)
02/26/08 8-K Disclosing Results of Operations and Financial Condition
Summary | Full Filing (175kB)
02/22/08 8-K Disclosing Results of Operations and Financial Condition
Summary | Full Filing (35kB)
11/09/07 10-Q Quarterly Report
Summary | Full Filing (1003kB)
11/06/07 8-K Disclosing Results of Operations and Financial Condition
Summary | Full Filing (177kB)
10/25/07 8-K Disclosing Results of Operations and Financial Condition
Summary | Full Filing (49kB)
10/24/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (15kB)
10/09/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (18kB)
10/09/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (15kB)
08/20/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (131kB)
08/07/07 10-Q Quarterly Report
Summary | Full Filing (575kB)
08/06/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (21kB)
08/02/07 8-K Disclosing Results of Operations and Financial Condition
Summary | Full Filing (169kB)
07/31/07 8-K Disclosing Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year
Summary | Full Filing (64kB)
07/23/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (18kB)
06/18/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (32kB)
06/13/07 8-K Disclosing Termination of a Material Definitive Agreement
Summary | Full Filing (12kB)
06/05/07 8-K Disclosing Entry into a Material Definitive Agreement
Summary | Full Filing (457kB)
05/29/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (145kB)
05/04/07 8-K Disclosing Other Events
Summary | Full Filing (9kB)
05/04/07 10-Q Quarterly Report
Summary | Full Filing (450kB)
04/26/07 8-K Disclosing Results of Operations and Financial Condition
Summary | Full Filing (128kB)
04/09/07 8-K Disclosing Change in Directors or Principal Officers
Summary | Full Filing (9kB)

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« Last Edit: May 04, 2008, 02:41:44 AM by Sharing Lights »	Logged

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Re: The Thugs of Asset Acceptance

« Reply #16 on: May 04, 2008, 02:43:30 AM »

http://finapps.forbes.com/finapps/jsp/finance/compinfo/secfilings/SECFilingsAllFilings.jsp?cik=0001264707

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ASSET ACCEPTANCE CAPITAL CORP Rpt Per : NIERENBERG DAVID
4 5/1/2008 4/29/2008 People
ASSET ACCEPTANCE CAPITAL CORP Filer : NIERENBERG INVESTMENT MANAGEMENT CO
SC 13D/A 5/1/2008 People
ASSET ACCEPTANCE CAPITAL CORP 10-Q 5/1/2008 3/31/2008 People, Glimpse
ASSET ACCEPTANCE CAPITAL CORP 8-K 4/30/2008 4/30/2008 People
ASSET ACCEPTANCE CAPITAL CORP Rpt Per : NIERENBERG DAVID
4 4/24/2008 4/22/2008 People
ASSET ACCEPTANCE CAPITAL CORP DEF 14A 4/17/2008 5/21/2008 People
ASSET ACCEPTANCE CAPITAL CORP Rpt Per : NIERENBERG DAVID
4 4/16/2008 4/14/2008 People
ASSET ACCEPTANCE CAPITAL CORP Rpt Per : NIERENBERG DAVID
4 4/11/2008 4/9/2008 People
ASSET ACCEPTANCE CAPITAL CORP Rpt Per : HERRING DARIN
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ASSET ACCEPTANCE CAPITAL CORP Rpt Per : NIERENBERG DAVID
3 4/8/2008 4/3/2008 People
ASSET ACCEPTANCE CAPITAL CORP Filer : NIERENBERG INVESTMENT MANAGEMENT CO
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ASSET ACCEPTANCE CAPITAL CORP Filer : NIERENBERG INVESTMENT MANAGEMENT CO
SC 13D/A 3/24/2008 People
ASSET ACCEPTANCE CAPITAL CORP 8-K 3/21/2008 3/21/2008 People
ASSET ACCEPTANCE CAPITAL CORP Rpt Per : HAIDER DONALD
4 3/18/2008 3/17/2008 People
ASSET ACCEPTANCE CAPITAL CORP 8-K/A 3/17/2008 3/10/2008 People
ASSET ACCEPTANCE CAPITAL CORP 8-K 3/14/2008 3/10/2008 People
ASSET ACCEPTANCE CAPITAL CORP Rpt Per : LOCKHART H EUGENE
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ASSET ACCEPTANCE CAPITAL CORP 10-K 3/13/2008 12/31/2007 People, Glimpse
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Re: The Thugs of Asset Acceptance

« Reply #17 on: May 04, 2008, 03:08:17 AM »

Asset enters into agreements to borrow considerable sums of monies from lenders so that it can purchase,
as it admits charge-offs from banks and lending institutions.

It conducts its operations by taking calculated risk that, even though purchasers of charge-offs
are not Holders In Due Course and have no legal authority to enforce charge offs as
obligations of Consumers to pay the amounts demanded by Asset Acceptance, it can get around laws
by fraud and deception.

Asset, then, capsulizes on Consumers' ignorance of law and aid of many judges
in the Civil and Small Claims courts, who are, actively, supported and lobbied by debt collection industry
and local law firms specializing in extortion of sums from Consumers in courts.

Majority of Consumers default when are sued in courts or yield harassment and intimidation tactics by
debt collectors and attorneys partnered with Asset in off-court extortions via US Mail and telecommunications:
home phone and mobile phone access.

Asset purchases charge-offs for pennies on a dollar, inflates the sums, adds nonexistent penalties and its, own interests, while not being a bank or lending to Consumers institutions; thus, possessing no authority to charge interests on moneys not lent to Consumers, and passes on the evidence of unauthorized Breach of Consumers' Private Files to local attorneys-debt collectors who split the collected sums with Asset under a veil of contingency fees.

Such violating laws attorneys, proceeding in conflict of interests acting as party of interest and attorneys for a client, usually waive their attorneys' fees so that can bypass laws from such angle.

The above constitutes sheer racketeering pursuant to organized crime-enterprises operations warranting
indictment of the actors involved and refund of monies extorted from the US Citizens of various States.


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Re: The Thugs of Asset Acceptance

« Reply #18 on: May 04, 2008, 03:20:16 AM »

http://finapps.forbes.com/finapps/jsp/finance/compinfo/secfilings/SECFilingsAllFilings.jsp?cik=0001264707

........................

........................

........................

IN WITNESS WHEREOF, the parties signing this Amendment have caused this Amendment to be executed and delivered as of the day and year first above written.

ASSET ACCEPTANCE CAPITAL CORP.

By /s/ Mark A. Redman
Name: Mark A. Redman
Title: Senior Vice President-Chief Financial Officer

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
individually and as Administrative Agent,

By /s/ Carlton Faison
Name: Carlton Faison
Title: Senior Vice President

--------------------------------------------------------------------------------

RBS CITIZENS, N.A. (f/k/a Charter One Bank, N.A.)

By /s/ Andre A. Nazareth

Name: Andre A. Nazareth
Title: Senior Vice president

CITIZENS BANK

By /s/ Troy Stevenson

Name: Troy Stevenson
Title: Vice President

WELLS FARGO FOOTHILL, LLC,
A Delaware limited liability company, as Lender

By /s/ Tami Barrows

Name: Tami Barrows
Title: Vice President

COMERICA BANK

By /s/ Chris Uhl

Name: Chris Uhl
Title: Assistant Vice President

FIFTH THIRD BANK,
a Michigan Banking Corporation

By /s/ John Antonczak

Name: John Antonczak
Title: Vice President

LASALLE BANK MIDWEST N.A.

By /s/ Scott A.Wickens

Name: Scott A. Wickens
Title: First Vice President

BANK OF SCOTLAND

By /s/ Karen Weich

Name: Karen Weich
Title: Vice President

--------------------------------------------------------------------------------

BMO CAPITAL MARKETS FINANCING, INC.

By /s/ Michael S. Cameli
Name: Michael S. Cameli
Title: Director

NATIONAL CITY BANK

By /s/ Michael Kell
Name: Michael Kell
Title: Vice President

FIRST BANK

By /s/ Keith M. Schmelder
Name: Keith M. Schmelder
Title: Senior Vice President

ISRAEL DISCOUNT BANK OF NEW YORK

By /s/ Robert J. Fainelli
Name: Robert J. Fainelli
Title: First Vice President

By /s/ Barry Soloman
Name: Barry Soloman
Title: First Vice President

Term Loan B Lenders:

Name: LightPoint CLO VIII, Ltd.

Airlie CLO 2006-1, Ltd.

By /s/ Colin Donlan
Name: Colin Donlan
Title: Senior Vice President

--------------------------------------------------------------------------------

Term Loan B Lenders :

Israel Discount Bank of New York

By /s/ Robert J. Fainelli

Name: Robert J. Fainelli
Title: First Vice President

NACM CLO II

By /s/ Joanna Willars

Name: Joanna Willars
Title: Authorized Signatory

Loomis Sayles Cayman Leveraged Senior Loan Fund Ltd.

By: Loomis, Sayles & Company, L.P., Its Investment Manager

By: Loomis, Sayles & Company, Incorporated
Its General Partner

By /s/ John R. Bell

Name: John R. Bell
Title: Vice President

Prospero CLO II B.V.

By /s/ Eric Hurshman

Name: Eric Hurshman
Title: Attorney-in-Fact

WhiteHorse I LTD.

By: WhiteHorse Capital Partners, LP
As collateral manager

By /s/ Ethan M. Underwood, CFA

Name: Ethan M. Underwood, CFA
Title: Portfolio Manager

Kingsland I, Ltd.

By: Kingsland Capital Management, LLC, as Manager

By /s/ Vincent Siino

Name: Vincent Siino
Title: Authorized Officer,
Kingsland Capital Management, LLC as
Manager

Kingsland III, Ltd.

By: Kingsland Capital Management, LLC, as Manager

By /s/ Vincent Siino

Name: Vincent Siino
Title: Authorized Officer,
Kingsland Capital Management, LLC as
Manager

--------------------------------------------------------------------------------

Kingsland IV, Ltd.

By: Kingsland Capital Management, LLC, as Manager

By /s/ Vincent Siino

Name: Vincent Siino
Title: Authorized Officer,
Kingsland Capital Management, LLC as
Manager

Silverado CLO 2006-I, Limited

By: Wells Capital Management
As Portfolio Manager

By /s/ Zachary Tyler

Name: Zachary Tyler
Title: Authorized Signatory

BlackRock Senior Income Series V (f/k/a Granite Finance Limited)

By /s/ Anthony Heyman

Name: Anthony Heyman
Title: Authorized Signatory

Longhorn CDO III LTD

By /s/ Anthony Heyman

Name: Anthony Heyman
Title: Authorized Signatory

Atrium VI

By /s/ David H. Lerner

Name: David H. Lerner
Title: Authorized Signatory

Atrium IV

By /s/ David H. Lerner

Name: David H. Lerner
Title: Authorized Signatory

Castle Garden

By /s/ David H. Lerner

Name: David H. Lerner
Title: Authorized Signatory

Pioneer Floating Rate Fund

By: Pioneer Investment Management, Inc. Its Advisor

By /s/ Margaret C. Bagley

Name: Margaret C. Bagley
Title: Associate General Counsel and Vice President

--------------------------------------------------------------------------------

Pioneer Diversified High Income Trust

By: Pioneer Investment Management, Inc.
Its Advisor

By /s/ Margaret C. Bagley

Name: Margaret C. Bagley
Title: Associate General Counsel and Vice President

Eagle Loan Trust

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Stanfield Arnage CLO Ltd.

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Stanfield AZURE CLO, Ltd.

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Stanfield Bristol CLO, Ltd.

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Stanfield Carrera CLO, Ltd.

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Stanfield Daytona CLO, Ltd

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

--------------------------------------------------------------------------------

Stanfield McLaren CLO, Ltd.

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Stanfield Modena CLO, Ltd

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Stanfield Vantage CLO, Ltd

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Stanfield Veyron CLO, Ltd

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

XL Re Europe Limited

By: Stanfield Capital Partners, LLC
as its Collateral Manager

By /s/ David Frey

Name: David Frey
Title: Managing Director

Symphony CLO IV

By: Symphony Asset Management, LLC

By /s/ Lenny Mason

Name: Lenny Mason
Title: Portfolio Manager

Symphony CLO V

By: Symphony Asset Management, LLC

By /s/ Lenny Mason

Name: Lenny Mason
Title: Portfolio Manager

--------------------------------------------------------------------------------

Navigator CDO 2007-1, Ltd

By: Bank of America, N.A.,
Its Attorney-in-fact

By: /s/ Michael Roof

Name: Michael Roof
Title: Vice President

ColumbusNova CLO IV Ltd. 2007 II

By /s/ Tom Buhrer

Name: Tom Buhrer
Title: Senior Director

ColumbusNova CLO Ltd. 2006-I

By /s/ Tom Buhrer

Name: Tom Buhrer
Title: Senior Director

ColumbusNova CLO Ltd. 2006-II

By /s/ Tom Buhrer

Name: Tom Buhrer
Title: Senior Director

ColumbusNova CLO Ltd. 2007-I

By /s/ Tom Buhrer

Name: Tom Buhrer
Title: Senior Director

Gale Force 4 CLO, Ltd.

By: GSO Debt Funds Management LLC
As Collateral Manager

By /s/ Sanjai Bhonsle

Name: Sanjai Bhonsle
Title: Authorized Signatory

CIFC FUNDING 2007-IV, LTD.

By /s/ Elizabeth Chow

Name: Elizabeth Chow
Title: Head of Underwriting

Silverado CLO 2006-II LIMITED

By: New York Life Investment Management LLC,
As Portfolio Manager and Attorney-in-Fact

By /s/ Arthur Torrey

Name: Arthur Torrey
Title: Director

Apidos Cinco CDO

By /s/ John Stelwagon

Name: John Stelwagon
Title: Authorized Signatory for its investment advisor
Apidos Capital Management, LLC

--------------------------------------------------------------------------------

Apidos CDO IV

By /s/ John Stelwagon

Name: John Stelwagon
Title: Authorized Signatory for its investment advisor
Apidos Capital Management, LLC

Apidos CDO III

By /s/ John Stelwagon

Name: John Stelwagon
Title: Authorized Signatory for its investment advisor
Apidos Capital Management, LLC

Apidos CDO II

By /s/ John Stelwagon

Name: John Stelwagon
Title: Authorized Signatory for its investment advisor
Apidos Capital Management, LLC

Apidos CDO I

By /s/ John Stelwagon

Name: John Stelwagon
Title: Authorized Signatory for its investment advisor
Apidos Capital Management, LLC

GULFSTREAM-SEXTANT CLO 2007-I LTD

By: Gulf Stream Asset Management LLC
As Collateral Manager

By /s/ Barry K. Love

Name: Barry K. Love
Title: Chief Credit Officer

Eaton Vance Institutional Senior Loan Fund

By: Eaton Vance Management as Investment Advisor

By /s/ Scott Page

Name: Scott Page
Title: Vice President

Eaton Vance Loan Opportunities Fund, LTD.

By: Eaton Vance Management as Investment Advisor

By /s/ Scott Page

Name: Scott Page
Title: Vice President

Grayson & Co.

By: Boston Management and Research as Investment Advisor

By /s/ Scott Page

Name: Scott Page
Title: Vice President

--------------------------------------------------------------------------------

Eaton Vance

By /s/ Scott Page

Name: Scott Page
Title: Vice President

Eaton Vance CDO IX Ltd.

By /s/ Scott Page

Name: Scott Page
Title: Vice President

Eaton Vance CDO VIII, Ltd.

By /s/ Scott Page

Name: Scott Page
Title: Vice President

Big Sky III Senior Loan Trust

By: Eaton Vance Management As Investment Advisor

By /s/ Scott Page

Name: Scott Page
Title: Vice President

The Norinchukin Bank, New York Branch

By: Eaton Vance Management, Attorney-in-fact

By /s/ Scott Page

Name: Scott Page
Title: Vice President

Octagon Investment Partners VIII, Ltd.

By /s/ Michael B. Nechamkin

Name: Michael B. Nechamkin
Title: Senior Portfolio Manager

Octagon Investment Partners IX, Ltd.

By /s/ Michael B. Nechamkin

Name: Michael B. Nechamkin
Title: Senior Portfolio Manager

Octagon Investment Partners XI, Ltd.

By /s/ Michael B. Nechamkin

Name: Michael B. Nechamkin
Title: Senior Portfolio Manager

Green Lane CLO LTD.

By /s/ Kaitlin Trinh

Name: Kaitlin Trinh
Title: Director

1888 FUND, LTD.

By /s/ Kaitlin Trinh

Name: Kaitlin Trinh
Title: Director

--------------------------------------------------------------------------------

Mountain View CLO III Ltd.

By: Seix Advisors, a fixed income division Of Trusco Capital Management, Inc.,
As Collateral Manager

By /s/ George Goudelias

Name: George Goudelias
Title: Managing Director

SF-1 Segregated Portfolio

By /s/ Paul Leland

Name: Paul Leland
Title: Attorney-in-Fact

SF-3 Segregated Portfolio

By /s/ Paul Leland

Name: Paul Leland
Title: Attorney-in-Fact

Rivendell CBNA Loan Funding LLC, for itself or as agent for
Rivendell CFPI Loan Funding LLC

By /s/ Elizabeth Heisler

Name: Elizabeth Heisler
Title: Attorney-in-Fact

--------------------------------------------------------------------------------

CONSENT AND AGREEMENT
As of the date and year first above written, each of the undersigned hereby:
(a) fully consents to the terms and provisions of the above Amendment and the consummation of the transactions contemplated hereby and acknowledges and agrees to all of the representations, covenants, terms and provisions of the above Amendment applicable to it;
(b) represents and warrants to the Administrative Agent and the Lenders that (i) the execution, delivery and performance of this Consent and Agreement are within its corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action, (ii) this Consent and Agreement has been duly executed and delivered by it and constitutes a legal, valid and binding obligation of it, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law and (iii) the execution, delivery and performance of this Consent and Agreement by it (w) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (x) will not violate any applicable law or regulation or its charter, by-laws or other organizational documents or any of its Subsidiaries or any order of any Governmental Authority, (y) will not violate or result in a default under any indenture, agreement or other instrument binding upon it or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by it or any of its Subsidiaries, and (z) will not result in the creation or imposition of any Lien on any of its assets; and
(c) acknowledges that its consent and agreement hereto is a condition to the Lenders’ obligation under the above Amendment and it is in its interest and to its financial benefit to execute this consent and agreement.

ASSET ACCEPTANCE, LLC

By /s/ Mark A. Redman
Name: Mark A. Redman
Title: Senior Vice President-Chief Financial Officer

CONSUMER CREDIT, LLC

By /s/ Mark A. Redman
Name: Mark A. Redman
Title: Senior Vice President-Chief Financial Officer

RX ACQUISITIONS, LLC

By /s/ Mark A. Redman
Name: Mark A. Redman
Title: Senior Vice President-Chief Financial Officer

--------------------------------------------------------------------------------

PREMIUM ASSET RECOVERY CORPORATION

By /s/ Mark A. Redman
Name: Mark A. Redman
Title: Senior Vice President-Chief Financial Officer

ASSET ACCEPTANCE HOLDINGS LLC

By /s/ Mark A. Redman
Name: Mark A. Redman
Title: Senior Vice President-Chief Financial Officer

AAC INVESTORS, INC.

By /s/ Mark A. Redman
Name: Mark A. Redman
Title: Senior Vice President-Chief Financial Officer

RBR HOLDING CORP.

By /s/ Mark A. Redman
Name: Mark A. Redman
Title: Senior Vice President-Chief Financial Officer

EXHIBIT 99.1

28405 Van Dyke Avenue
Warren, Michigan 48093
www.AssetAcceptance.com

Contacts:
Noel Ryan III
Lambert, Edwards & Associates
616-233-0500 / aacc@lambert-edwards.com


« Last Edit: May 04, 2008, 03:21:51 AM by Sharing Lights »	Logged

Sacred Triangle: Believe/Learn/Accomplish.

Foundation: is the Virtues.
Result: re-discover your,
Higher Self connecting
- Above & Below -
Past & Future
Fulfilling Your Destiny!

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Administrator
Faith & Achievements

Offline

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Re: The Thugs of Asset Acceptance

« Reply #19 on: May 04, 2008, 03:25:46 AM »

Asset Acceptance Capital Corp. Announces Amendment to Credit Agreement
WARREN, Mich., March 10, 2008 – Asset Acceptance Capital Corp. (NASDAQ: AACC), a leading purchaser and collector of charged-off consumer debt, announced that it entered into an amendment today to its credit agreement.

As previously reported on February 22, 2008, Asset Acceptance obtained a temporary waiver of noncompliance with its total liabilities to tangible net worth covenant until March 17, 2008 to permit it time to obtain the amendment.

The amendment to its credit agreement, pursuant to which Asset Acceptance maintains a $100 million revolving credit facility and a $150 million term loan facility, resets two financial covenants and increases the rate of interest the Company pays on borrowings under the credit facility by 25 basis points (0.25 percent). The two financial covenants reset by the amendment are (1) the ratio of consolidated total liabilities to tangible net worth, and (2) the leverage ratio. The amendment also permanently waives the earlier default on the consolidated total liabilities to tangible net worth covenant.

During the fourth quarter 2007, Asset Acceptance opportunistically took advantage of what it believed to be a favorable debt purchasing environment.

The increased level of purchasing funded by borrowings on the revolving credit facility, coupled with the step down in the ratio of consolidated total liabilities to tangible net worth at December 31, 2007 from 3.0:1.0 to 2.5:1.0, resulted in the Company not passing the total liabilities to tangible net worth covenant.

Mark A. Redman, Chief Financial Officer, commented “We are pleased to have worked with our lenders to quickly resolve the non-compliance with our loan covenant and to give us the additional flexibility to pursue our planned level of debt purchasing for 2008.”

As of March 10, 2008, outstanding borrowings on the Company’s revolving credit facility and term loan facility were $25.0 million and $149.3 million, respectively.

--------------------------------------------------------------------------------

About Asset Acceptance Capital Corp.

For more than 40 years, Asset Acceptance has provided credit originators, such as credit card issuers, consumer finance companies, retail merchants, utilities and others an efficient alternative in recovering defaulted consumer debt. For more information, please visit www.AssetAcceptance.com.
Asset Acceptance Capital Corp. Safe Harbor Statement

This press release contains certain statements, including the Company’s plans and expectations regarding its operating strategies, purchases of charged-off receivables and costs, which are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s views, expectations and beliefs at the time such statements were made with respect to such matters, as well as the Company’s future plans, objectives, events, portfolio purchases and pricing, collections and financial results such as revenues, expenses, income, earnings per share, capital expenditures, operating margins, financial position, expected results of operations and other financial items. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Risk Factors”) that make the timing, extent, likelihood and degree of occurrence of these matters difficult to predict. Words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “should,” “could,” “will,” variations of such words and similar expressions are intended to identify forward-looking statements. There are a number of factors, many of which are beyond the Company’s control, which could cause actual results and outcomes to differ materially from those described in the forward-looking statements. Risk Factors include, among others: ability to purchase charged-off consumer receivables at appropriate prices, ability to continue to acquire charged-off receivables in sufficient amounts to operate efficiently and profitably, employee turnover, ability to compete in the marketplace, acquiring charged-off receivables in industries that the Company has little or no experience, integration and operations of newly acquired businesses, and the ability to achieve anticipated cost savings from office closings without the disruption of collections associated with the closing of these offices. These Risk Factors also include, among others, the Risk Factors discussed under “Item 1A Risk Factors” in the Company’s most recently filed Annual Report on Form 10-K and other SEC filings, in each case under a section titled “Risk Factors” or similar headings and those discussions regarding risk factors as well as the discussion of forward-looking statements in such sections are incorporated herein by reference. Other Risk Factors exist, and new Risk Factors emerge from time to time that may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Furthermore, the Company expressly disclaims any obligation to update, amend or clarify forward-looking statements.
# # #


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Re: The Thugs of Asset Acceptance

« Reply #20 on: May 04, 2008, 03:33:04 AM »

http://finapps.forbes.com/finapps/jsp/finance/compinfo/secfilings/SECFilingsAllFilings.jsp?cik=0001264707

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 30, 2008
Asset Acceptance Capital Corp.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 000-50552
(Commission
File Number) 80-0076779
(IRS Employer
Identification No.)

28405 Van Dyke Avenue
Warren, MI 48093
(Address of principal executive offices)
Registrant’s telephone number, including area code: (586) 939-9600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 140.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

--------------------------------------------------------------------------------

Item 2.02. Results of Operations and Financial Condition.
On April 30, 2008, Asset Acceptance Capital Corp. issued a press release announcing its results of operations and financial condition for and as of the three month period ended March 31, 2008, unaudited. The press release is being furnished pursuant to Item 2.02 of Form 8-K. The full text of the press release is furnished as Exhibit 99 to this Form 8-K and is incorporated in this report by reference.
The press release attached to this Form 8-K contains a financial measure for adjusted EBITDA that is not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”).

Quote

SL: i.e. FRAUD!

We have provided a reconciliation in the press release of the non-GAAP financial measure for adjusted EBITDA to GAAP net income.
We have included information concerning adjusted EBITDA because we believe that this measure is a useful indicator of our ability to generate cash collections in excess of operating expenses (other than non-cash operating expenses, such as depreciation and amortization) through the liquidation of our receivable portfolios. We use adjusted EBITDA as the basis for our management bonus program and a similar computation is used in our loan agreement covenants. This non-GAAP financial measure should not be considered as an alternative to, or more meaningful than, net income as an indicator of our operating performance.
Item 9.01. Financial Statements and Exhibits .
The following exhibits are furnished herewith:

Exhibit Number Exhibit Description

99 Press Release dated April 30, 2008, announcing Registrant’s results of operations and financial condition for and as of the three month period ended March 31, 2008, unaudited.

--------------------------------------------------------------------------------

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

April 30, 2008 ASSET ACCEPTANCE CAPITAL CORP.

By: /s/ Nathaniel F. Bradley IV
Name: Nathaniel F. Bradley IV
Title: Chairman of the Board, President and
Chief Executive Officer

--------------------------------------------------------------------------------

EXHIBIT INDEX

Exhibit No. Description

99 Press Release dated April 30, 2008.

Exhibit 99

28405 Van Dyke Avenue
Warren, Michigan 48093
www.AssetAcceptance.com

Contact:
Noel Ryan III
Lambert, Edwards & Associates, Inc.
616-233-0500 / aacc@lambert-edwards.com
Asset Acceptance Capital Corp. Announces First Quarter 2008 Results
Reports Record Cash Collections and Operating Expenses Reduced to 50% of Cash Collections;
Revenue Declines on Higher Purchased Receivable Amortization
Warren, Mich., April 30, 2008 — Asset Acceptance Capital Corp. (NASDAQ: AACC), a leading purchaser and collector of charged-off consumer debt, today announced first quarter 2008 results, highlighted by a 4.6 percent improvement in cash collections and reduced operating expenses. Total revenues declined by 4.4 percent versus the same period last year.
Asset Acceptance reported cash collections of $100.3 million in the first quarter ended March 31, 2008 — the first time quarterly cash collections have exceeded the one hundred million dollar mark, versus cash collections of $95.9 million in the same period of 2007.
Total revenues declined to $64.4 million for the first quarter 2008, compared to total revenues of $67.3 million in the first quarter of 2007. Amortization of purchased receivables in the first quarter of 2008 was 36.4 percent of total cash collections versus 30.3 percent in the year ago period. The Company reported a first quarter 2008 net impairment charge of $0.4 million, versus a net impairment charge of $4.5 million in the prior year quarter.
Net income for the quarter was $6.8 million, or $0.22 per fully diluted share, compared to net income of $9.9 million, or $0.28 per fully diluted share, for the first quarter of 2007. Earnings Before Interest, Taxes, Depreciation and Amortization, including purchased receivable amortization (“Adjusted EBITDA”), increased 12.9 percent in the first quarter 2008 to $52.1 million when compared to the year-ago period. Please refer to the table on page 4, which reconciles net income according to Generally Accepted Accounting Principles (“GAAP”) to Adjusted EBITDA.
Rion Needs, Senior Vice President and COO, commented: “Operating expenses were 50 percent of total cash collections in the quarter, comparing favorably to more than 53 percent in the same quarter a year ago and nearly 56 percent for all of 2007. Our efforts to focus on improving expense management and implementing higher levels of operational discipline throughout our organization were factors that contributed to the lower collection cost. However, also contributing to this decline was our conscious decision to temporarily defer some legal collection expenses as we enhanced our predictive modeling capabilities and refined our ability to forecast costs and resulting collections in the legal collection channel.”
During the first quarter of 2008, the Company invested $22.3 million to purchase charged-off consumer debt portfolios with a face value of $548.5 million, representing a blended rate of 4.07 percent of face value. This compares to the prior-year first quarter, when the Company invested $36.3 million to purchase consumer debt portfolios with a face value of $765.1 million,

--------------------------------------------------------------------------------

Asset Acceptance First Quarter 2008 Results
Page 2 of 9 ~
representing a blended rate of 4.74 percent of face value. All purchase data is adjusted for buybacks.
“We were opportunistic, but selective in our approach to purchasing delinquent receivable portfolios during the first quarter,” said Brad Bradley, Chairman, President and CEO of Asset Acceptance Capital Corp. “Several factors contributed to our modest investment in purchased receivables during the first quarter when compared to the year-ago period, including our belief that the pricing environment may continue to improve from current levels, our bias toward the most attractive deals available in the market, as well as reduced purchasing activity for two weeks while we sought a temporary waiver for our credit agreement covenant violation. Furthermore, given the potential impact of the current uncertain macroeconomic climate on the financial well-being of the U.S. consumer, we believe portfolio supply will continue to expand in the foreseeable future.”
Bradley continued: “Given our more moderate purchasing activities during the quarter, we used excess cash flow to reduce our outstanding debt on the revolving line of credit by $27.0 million during the first quarter. This reduction in our debt outstanding, combined with the updated financial covenants under our credit agreement, provide us with the financial flexibility to further capitalize on an improving debt purchasing environment.”
The Company provided the following details regarding purchased receivable revenues:

3 months ended March 31, 2008
Year of Amortization Monthly Net Zero Basis
Purchase Collections Revenue Rate Yield(1) Impairments Collections
2002 and prior $ 14,575,197 $ 14,187,683 2.7 % N/M % $ (550,000 ) $ 13,078,350
2003 11,897,021 10,145,297 14.7 31.89 (481,050 ) 6,196,948
2004 9,594,231 6,579,328 31.4 7.11 1,050,347 931,339
2005 10,611,978 5,759,834 45.7 3.91 92,986 36,398
2006 24,887,906 15,533,913 37.6 5.56 92,000 1,964,255
2007 27,347,947 11,201,973 59.0 2.50 180,000 44,810
2008 1,350,001 314,660 76.7 1.38 — —

Totals $ 100,264,281 $ 63,722,688 36.4 6.20 $ 384,283 $ 22,252,100

2

--------------------------------------------------------------------------------

Asset Acceptance First Quarter 2008 Results
Page 3 of 9 ~

3 months ended March 31, 2007
Year of Amortization Monthly Net Zero Basis
Purchase Collections Revenue Rate Yield(1) Impairments Collections
2001 and prior $ 10,330,950 $ 10,244,254 0.8 % N/M % $ — $ 10,166,762
2002 12,016,760 7,943,214 33.9 25.36 216,800 4,554,522
2003 16,780,060 11,649,217 30.6 14.11 763,300 2,676,504
2004 14,034,358 9,179,365 34.6 6.31 1,931,000 768,617
2005 14,740,661 10,436,030 29.2 4.57 934,000 10,536
2006 26,513,053 16,380,649 38.2 4.24 628,000 285,541
2007 1,437,508 949,305 34.0 1.55 — —

Totals $ 95,853,350 $ 66,782,034 30.3 7.14 $ 4,473,100 $ 18,462,482

(1) The monthly yield is a weighted-average yield determined by dividing purchased receivable revenues recognized in the period by the average of the beginning monthly carrying values of the purchased receivables for the period presented.

First Quarter 2008: Key Financial Highlights
§ Cash collections increased 4.6 percent to $100.3 million in the current quarter, versus $95.9 million in the prior year first quarter.

§ Total revenues declined 4.4 percent to $64.4 million in the current quarter, versus $67.3 million in the prior year first quarter.

§ Net income decreased 31.2 percent to $6.8 million in the current quarter, versus net income of $9.9 million in the prior year first quarter. Net income per fully diluted share decreased to 0.22, compared with net income per fully diluted share of 0.28 in the prior year quarter.

§ Total operating expenses were $50.1 million, or 50.0 percent of cash collections. This compares with operating expenses of 53.4 percent of cash collections during the same period last year.

§ Traditional call center collections were $47.5 million, a decrease of 1.6 percent from the same period last year and 47.4 percent of total cash collections.

§ Legal collections for the quarter were $38.2 million, an increase of 6.4 percent from the same period last year and 38.1 percent of total cash collections.

§ Other collections, consisting primarily of agency forwarding, bankruptcy and probate collections, accounted for $14.6 million or the remaining 14.5 percent of cash collections.

§ Quarterly account representative productivity on a full-time equivalent basis was $53,908, an increase of 0.5 percent from the first quarter 2007.

3

--------------------------------------------------------------------------------

Asset Acceptance First Quarter 2008 Results
Page 4 of 9 ~
Mark Redman, Senior Vice President-Finance and CFO of Asset Acceptance Capital Corp., concluded: “Overall, we generated strong cash flow as demonstrated by the 12.9 percent growth in Adjusted EBITDA resulting from increased cash collections and the reduction in operating expenses to 50.0 percent of total cash collections. Amortization rates on purchased receivables continue to rise as the portfolios acquired in recent years in an elevated pricing environment comprise a larger proportion of total cash collections.” Redman summarized: “Higher prices result in lower expected multiples of purchase price to be collected and therefore lower yields for revenue recognition. The reduced yields result in a lower proportion of cash collected being recognized as purchased receivable revenues.”
Reconciliation of GAAP Net Income to Adjusted EBITDA (Unaudited)
The Company provided the following table which reconciles GAAP net income, as reported, to Adjusted EBITDA. The Company indicated that the measure “Adjusted EBITDA” is the basis for its management bonus program and a similar computation is used in its credit agreement’s financial covenants. The Company believes that Adjusted EBITDA, which is generally cash collections less operating expenses (other than non-cash operating expenses, such as depreciation and amortization) represents the Company’s cash generation which can be used to purchase receivables, pay down debt, pay income taxes, return to shareholders and for other uses. Adjusted EBITDA, which is a non-GAAP financial measure, should not be considered an alternative to, or more meaningful than, net income prepared on a GAAP basis. Additionally, Adjusted EBITDA as computed by the Company may not be comparable to similar metrics used by others in the industry.

3 months ended March 31,
2008 2007
Net income $ 6,777,824 $ 9,851,253

Add: interest income and expense (net), income taxes, depreciation 8,520,369 7,253,151
Add (subtract): (gain) loss on disposal of equipment and other assets (153,522 ) (5,415 )
Add: impairment of intangible assets 445,651 —
Add (subtract): other (income) expense (17,983 ) (12,209 )

Subtotal 15,572,339 17,086,780

Change to balance of purchased receivables 36,689,362 29,509,791
Non-cash revenue (147,769 ) (438,475 )

Adjusted EBITDA $ 52,113,932 $ 46,158,096

Cash collections $ 100,264,281 $ 95,853,350
Other revenues, net 472,937 523,993
Operating expenses (50,102,324 ) (51,302,724 )
Depreciation and amortization 1,027,804 1,088,892
Impairment of intangible assets 445,651 —
Loss (gain) on disposal of equipment 5,583 (5,415 )

Adjusted EBITDA $ 52,113,932 $ 46,158,096

4

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Asset Acceptance First Quarter 2008 Results
Page 5 of 9 ~
First Quarter 2008 Earnings Conference Call
Asset Acceptance Capital Corp. will host a conference call at 10 a.m. Eastern today to discuss these results and current business trends. To listen to a live Web cast of the call, please go to the investor section of the Company’s web site at www.AssetAcceptance.com . A replay of the Web cast will be available until April 29, 2009.


« Last Edit: May 04, 2008, 03:42:36 AM by Sharing Lights »	Logged

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Re: The Thugs of Asset Acceptance

« Reply #21 on: May 04, 2008, 03:40:55 AM »

About Asset Acceptance Capital Corp.

For more than 45 years, Asset Acceptance has provided credit originators, such as credit card issuers, consumer finance companies, retail merchants, utilities and others an efficient alternative in recovering defaulted consumer debt. For more information, please visit www.AssetAcceptance.com.
Asset Acceptance Capital Corp. Safe Harbor Statement

Quote

SL: Not recovering but providing an alternative way, meaning, they buy evidence of debt for worthless charge-offs which have no legal, financial value.

This press release contains certain statements, including the Company’s plans and expectations regarding its operating strategies, charged-off receivables and costs, which are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s views, expectations and beliefs at the time such statements were made with respect to such matters, as well as the Company’s future plans, objectives, events, portfolio purchases and pricing, collections and financial results such as revenues, expenses, income, earnings per share, capital expenditures, operating margins, financial position, expected results of operations and other financial items. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Risk Factors”) that make the timing, extent, likelihood and degree of occurrence of these matters difficult to predict.

Quote

SL: Because legally Asset can't enforce its gamble, speculative portfolios purchases.

Had Consumers known real laws, Asset would have gotten BIG ZERO fro its speculative investments into
charge-offs and unauthorized by Consumers Breach of theri private files.

Words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “should,” “could,” “will,” variations of such words and similar expressions are intended to identify forward-looking statements.

There are a number of factors, many of which are beyond the Company’s control, which could cause actual results and outcomes to differ materially from those described in the forward-looking statements. Risk Factors include, among others: ability to purchase charged-off consumer receivables at appropriate prices, ability to continue to acquire charged-off receivables in sufficient amounts to operate efficiently and profitably, employee turnover, ability to compete in the marketplace and acquiring charged-off receivables in industries with which the Company has little or no experience.

These Risk Factors also include, among others, the Risk Factors discussed under “Item 1A Risk Factors” in the Company’s most recently filed Annual Report on Form 10-K and in other SEC filings, in each case under a section titled “Risk Factors” or similar headings and those discussions regarding Risk Factors as well as the discussion of forward-looking statements in such sections are incorporated herein by reference.

Other Risk Factors exist, and new Risk Factors emerge from time to time that may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Furthermore, the Company expressly disclaims any obligation to update, amend or clarify forward-looking statements.
5

--------------------------------------------------------------------------------

Asset Acceptance First Quarter 2008 Results
Page 6 of 9 ~
Supplemental Financial Data

(Unaudited, Dollars in Millions, except collections per account representative) Q1 ‘08 Q4 ‘07 Q3 ‘07 Q2 ‘07 Q1 ‘07
Total revenues $ 64.4 $ 62.2 $ 52.6 $ 65.9 $ 67.3
Cash collections $ 100.3 $ 89.1 $ 90.7 $ 95.4 $ 95.9
Operating expenses to cash collections 50.0 % 58.8 % 57.4 % 54.1 % 53.4 %
Traditional call center collections (Note 1) $ 47.5 $ 38.6 $ 41.0 $ 45.0 $ 48.3
Legal collections $ 38.2 $ 37.6 $ 36.6 $ 37.8 $ 35.9
Other collections (Note 1) $ 14.6 $ 12.9 $ 13.1 $ 12.6 $ 11.7
Amortization rate 36.4 % 31.2 % 42.7 % 31.3 % 30.3 %
Collections on fully amortized portfolios $ 22.3 $ 20.4 $ 21.3 $ 22.1 $ 18.5
Core amortization rate (Note 2) 46.8 % 40.4 % 55.7 % 40.8 % 37.6 %
Investment in purchased receivables (Note 3) $ 22.3 $ 61.5 $ 35.2 $ 37.6 $ 36.3
Face value of purchased receivables (Note 3) $ 548.5 $ 1,496.2 $ 1,858.8 $ 1,108.5 $ 765.1
Average cost of purchased receivables (Note 3) 4.07 % 4.11 % 1.89 % 3.39 % 4.74 %
Number of purchased receivable portfolios 47 46 42 37 33
Collections per account representative FTE (Note 1) $ 53,908 $ 44,235 $ 45,549 $ 49,421 $ 53,629
Average account representative FTE’s (Note 1) 901 889 916 930 921

Note 1: Amounts reclassified for purposes of comparability to current periods.
Note 2: Core amortization rate is amortization divided by collections on non-fully amortized portfolios.
Note 3: All purchase data is adjusted for buybacks.
6

--------------------------------------------------------------------------------

Asset Acceptance First Quarter 2008 Results
Page 7 of 9 ~
Asset Acceptance Capital Corp.
Consolidated Statements of Income
(Unaudited)

Three months ended March 31,
2008 2007
Revenues
Purchased receivable revenues, net $ 63,722,688 $ 66,782,034
Gain on sale of purchased receivables 159,105 —
Other revenues, net 472,937 523,993

Total revenues 64,354,730 67,306,027

Expenses

Salaries and benefits 21,930,965 22,448,455
Collections expense 22,096,681 23,069,940
Occupancy 1,927,488 2,339,385
Administrative 2,668,152 2,213,356
Restructuring charges — 148,111
Depreciation and amortization 1,027,804 1,088,892
Impairment of intangible assets 445,651 —
Loss (gain) on disposal of equipment 5,583 (5,415 )

Total operating expenses 50,102,324 51,302,724

Income from operations 14,252,406 16,003,303
Other income (expense)
Interest income 23,251 15,727
Interest expense (3,344,597 ) (263,818 )
Other 17,983 12,209

Income before income taxes 10,949,043 15,767,421
Income taxes 4,171,219 5,916,168

Net income $ 6,777,824 $ 9,851,253

Weighted average number of shares:
Basic 30,553,019 34,718,820
Diluted 30,565,690 34,725,992
Earnings per common share outstanding:
Basic $ 0.22 $ 0.28
Diluted $ 0.22 $ 0.28

7

--------------------------------------------------------------------------------

Asset Acceptance First Quarter 2008 Results
Page 8 of 9 ~
Asset Acceptance Capital Corp.
Consolidated Statements of Financial Position

March 31, 2008 December 31, 2007
(Unaudited)
ASSETS

Cash $ 12,753,915 $ 10,474,479
Purchased receivables, net 330,127,109 346,198,900
Income taxes receivable 823,300 3,424,788
Property and equipment, net 12,478,908 11,006,658
Goodwill and other intangible assets 16,932,614 17,464,688
Other assets 6,116,672 6,083,211

Total assets $ 379,232,518 $ 394,652,724

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:
Accounts payable $ 3,678,460 $ 3,377,068
Accrued liabilities 23,925,493 17,423,378
Notes payable 163,875,000 191,250,000
Deferred tax liability, net 60,474,878 60,164,784
Capital lease obligations 9,186 18,242

Total liabilities 251,963,017 272,233,472

Stockholders’ equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized; no shares issued and outstanding — —
Common stock, $0.01 par value, 100,000,000 shares authorized; issued shares — 33,119,597 at March 31, 2008 and December 31, 2007, respectively 331,196 331,196
Additional paid in capital 145,857,175 145,610,742
Retained earnings 26,242,942 19,465,118
Accumulated other comprehensive loss, net of tax (4,186,135 ) (2,012,127 )
Common stock in treasury; at cost, 2,551,556 shares at March 31, 2008 and December 31, 2007, respectively (40,975,677 ) (40,975,677 )

Total stockholders’ equity 127,269,501 122,419,252

Total liabilities and stockholders’ equity $ 379,232,518 $ 394,652,724

8

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Asset Acceptance First Quarter 2008 Results
Page 9 of 9 ~
Asset Acceptance Capital Corp.
Consolidated Statements of Cash Flows
(Unaudited)

Three months ended March 31,
2008 2007
Cash flows from operating activities
Net income $ 6,777,824 $ 9,851,253
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,027,804 1,088,892
Deferred income taxes 1,510,293 197,786
Share-based compensation expense 246,433 94,144
Net impairment of purchased receivables 384,283 4,473,100
Non-cash revenue (147,769 ) (438,475 )
Loss (gain) on disposal of equipment 5,583 (5,415 )
Gain on sale of purchased receivables (159,105 ) —
Impairment of intangible assets 445,651 —
Changes in assets and liabilities:
Increase in accounts payable and accrued liabilities 3,429,300 744,837
Decrease in other assets 536,083 73,747
Increase in income taxes 2,601,488 4,681,382

Net cash provided by operating activities 16,657,868 20,761,251

Cash flows from investing activities
Investment in purchased receivables, net of buy backs (20,472,028 ) (36,214,485 )
Principal collected on purchased receivables 36,305,079 25,036,691
Proceeds from the sale of purchased receivables 161,331 —
Purchase of property and equipment (2,415,950 ) (454,785 )
Proceeds (payments) from sale or disposal of property and equipment (3,264 ) 11,493

Net cash provided by (used in) investing activities 13,575,168 (11,621,086 )

Cash flows from financing activities
Borrowings under notes payable — 17,000,000
Repayment of notes payable (27,375,000 ) (27,000,000 )
Payment of credit facility charges (569,544 ) —
Repayment of capital lease obligations (9,056 ) (23,895 )
Purchase of treasury shares — (699,060 )

Net cash used in financing activities (27,953,600 ) (10,722,955 )

Net increase (decrease) in cash 2,279,436 (1,582,790 )
Cash at beginning of period 10,474,479 11,307,451

Cash at end of period $ 12,753,915 $ 9,724,661

Supplemental disclosure of cash flow information
Cash paid for interest $ 3,434,253 $ 208,083
Cash paid for income taxes 73,390 1,037,000
Non-cash investing and financing activities:
Change in fair value of swap liability 3,374,207 —
Change in unrealized loss on cash flow hedge (2,174,008 ) —

9


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Re: The Thugs of Asset Acceptance

« Reply #22 on: May 04, 2008, 03:52:25 AM »

I would prove that I never accuse an innocent party but provide solid and accurate report when deal with debt collectors.

I called them - mutants for a reason because of the incredible depth of lies, fraud, and sub-human conduct these mutants exhibit.

They extort and lie, trying to convince the People and courts that suffer damages as pleaded or stated in theri garbage extortion letters and are entitled to recovery.

Just read the outlined in red; save it to your PC and wake uo to TRUTH and PLAIN FACTS!

Shall we proceed now?

Let's do it!


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Re: The Thugs of Asset Acceptance

« Reply #23 on: May 04, 2008, 03:55:21 AM »

http://finapps.forbes.com/finapps/jsp/finance/compinfo/secfilings/SECFilingsAllFilings.jsp?cik=0001264707

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission file number: 000-50552
Asset Acceptance Capital Corp .
( Exact name of registrant as specified in its charter )

Delaware 80-0076779
( State or other jurisdiction of
incorporation or organization ) ( I.R.S.Employer Identification No. )

28405 Van Dyke Avenue
Warren, Michigan 48093
( Address of principal executive offices )
Registrant’s telephone number, including area code:
(586) 939-9600

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer þ Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of April 21, 2008, 30,568,041 shares of the Registrant’s common stock were outstanding.

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ASSET ACCEPTANCE CAPITAL CORP.
Quarterly Report on Form 10-Q
TABLE OF CONTENTS

Page
PART I — Financial Information

Item 1. Consolidated Financial Statements (unaudited) 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
Item 3. Quantitative and Qualitative Disclosures about Market Risk 34
Item 4. Controls and Procedures 35
PART II — Other Information

Item 1. Legal Proceedings 35
Item 6. Exhibits 35
Signatures 36
Exhibits: 10.1 First Amendment to Credit Agreement dated as of June 5, 2007, between Asset Acceptance Capital Corp. and JPMorgan Chase Bank, N.A. and other lenders
10.2 2008 Annual Incentive Compensation Plan for Management (Portions of this document have been omitted pursuant to a request for confidential treatment)
31.1 Rule 13a-14(a) Certification of Chief Executive Officer
31.2 Rule 13a-14(a) Certification of Chief Financial Officer
32.1 Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
2008 Annual Incentive Compensation Plan
Certification of Chief Executive Officer
Certification of Chief Financial Officer
Section 1350 Certification

Quarterly Report on Form 10-Q
This Form 10-Q and all other Company filings with the Securities and Exchange Commission are also accessible at no charge on the Company’s website at www.assetacceptance.com as soon as reasonably practicable after filing with the Commission.
2

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Table of Contents

PART I — FINANCIAL INFORMATION
Item 1 . Consolidated Financial Statements
ASSET ACCEPTANCE CAPITAL CORP.
Consolidated Statements of Financial Position

March 31, 2008 December 31, 2007
(Unaudited)
ASSETS

Cash $ 12,753,915 $ 10,474,479
Purchased receivables, net 330,127,109 346,198,900
Income taxes receivable 823,300 3,424,788
Property and equipment, net 12,478,908 11,006,658
Goodwill and other intangible assets 16,932,614 17,464,688
Other assets 6,116,672 6,083,211

Total assets $ 379,232,518 $ 394,652,724

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:
Accounts payable $ 3,678,460 $ 3,377,068
Accrued liabilities 23,925,493 17,423,378
Notes payable 163,875,000 191,250,000
Deferred tax liability, net 60,474,878 60,164,784
Capital lease obligations 9,186 18,242

Total liabilities 251,963,017 272,233,472

Stockholders’ equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized; no shares issued and outstanding — —
Common stock, $0.01 par value, 100,000,000 shares authorized; issued shares — 33,119,597 at March 31, 2008 and December 31, 2007, respectively 331,196 331,196
Additional paid in capital 145,857,175 145,610,742
Retained earnings 26,242,942 19,465,118
Accumulated other comprehensive loss, net of tax (4,186,135 ) (2,012,127 )
Common stock in treasury; at cost, 2,551,556 shares at March 31, 2008 and December 31, 2007, respectively (40,975,677 ) (40,975,677 )

Total stockholders’ equity 127,269,501 122,419,252

Total liabilities and stockholders’ equity $ 379,232,518 $ 394,652,724

See accompanying notes.
3

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ASSET ACCEPTANCE CAPITAL CORP.
Consolidated Statements of Income
(Unaudited)

Three months ended March 31,
2008 2007
Revenues
Purchased receivable revenues, net $ 63,722,688 $ 66,782,034
Gain on sale of purchased receivables 159,105 —
Other revenues, net 472,937 523,993

Total revenues 64,354,730 67,306,027

Expenses
Salaries and benefits 21,930,965 22,448,455
Collections expense 22,096,681 23,069,940
Occupancy 1,927,488 2,339,385
Administrative 2,668,152 2,213,356
Restructuring charges — 148,111
Depreciation and amortization 1,027,804 1,088,892
Impairment of intangible assets 445,651 —
Loss (gain) on disposal of equipment 5,583 (5,415 )

Total operating expenses 50,102,324 51,302,724

Income from operations 14,252,406 16,003,303
Other income (expense)
Interest income 23,251 15,727
Interest expense (3,344,597 ) (263,818 )
Other 17,983 12,209

Income before income taxes 10,949,043 15,767,421
Income taxes 4,171,219 5,916,168

Net income $ 6,777,824 $ 9,851,253

Weighted average number of shares:
Basic 30,553,019 34,718,820
Diluted 30,565,690 34,725,992
Earnings per common share outstanding:
Basic $ 0.22 $ 0.28
Diluted $ 0.22 $ 0.28

See accompanying notes.
4

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Table of Contents

ASSET ACCEPTANCE CAPITAL CORP.
Consolidated Statements of Cash Flows
(Unaudited)

Three months ended March 31,
2008 2007
Cash flows from operating activities
Net income $ 6,777,824 $ 9,851,253
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,027,804 1,088,892
Deferred income taxes 1,510,293 197,786
Share-based compensation expense 246,433 94,144
Net impairment of purchased receivables 384,283 4,473,100
Non-cash revenue (147,769 ) (438,475 )
Loss (gain) on disposal of equipment 5,583 (5,415 )
Gain on sale of purchased receivables (159,105 ) —
Impairment of intangible assets 445,651 —
Changes in assets and liabilities:
Increase in accounts payable and accrued liabilities 3,429,300 744,837
Decrease in other assets 536,083 73,747
Increase in income taxes 2,601,488 4,681,382

Net cash provided by operating activities 16,657,868 20,761,251

Cash flows from investing activities
Investment in purchased receivables, net of buy backs (20,472,028 ) (36,214,485 )
Principal collected on purchased receivables 36,305,079 25,036,691
Proceeds from the sale of purchased receivables 161,331 —
Purchase of property and equipment (2,415,950 ) (454,785 )
(Payments) proceeds from sale or disposal of property and equipment (3,264 ) 11,493

Net cash provided by (used in) investing activities 13,575,168 (11,621,086 )

Cash flows from financing activities
Borrowings under notes payable — 17,000,000
Repayment of notes payable (27,375,000 ) (27,000,000 )
Payment of credit facility charges (569,544 ) —
Repayment of capital lease obligations (9,056 ) (23,895 )
Purchase of treasury shares — (699,060 )

Net cash used in financing activities (27,953,600 ) (10,722,955 )

Net increase (decrease) in cash 2,279,436 (1,582,790 )
Cash at beginning of period 10,474,479 11,307,451

Cash at end of period $ 12,753,915 $ 9,724,661

Supplemental disclosure of cash flow information
Cash paid for interest $ 3,434,253 $ 208,083
Cash paid for income taxes 73,390 1,037,000
Non-cash investing and financing activities:
Change in fair value of swap liability 3,374,207 —
Change in unrealized loss on cash flow hedge (2,174,008 ) —

See accompanying notes.
5


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Re: The Thugs of Asset Acceptance

« Reply #24 on: May 04, 2008, 04:36:11 AM »

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Table of Contents

ASSET ACCEPTANCE CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Nature of Operations

Asset Acceptance Capital Corp. and its subsidiaries (collectively referred to as the “Company”) are engaged in the purchase and collection of defaulted and charged-off accounts receivable portfolios.

These receivables are acquired from consumer credit originators, primarily credit card issuers, consumer finance companies, healthcare providers, retail merchants, telecommunications and other utility providers as well as from resellers and other holders of consumer debt.

The Company periodically sells receivables from these portfolios to unaffiliated companies.

Quote

SL: I enlarge:

The Company periodically sells receivables from these portfolios to unaffiliated companies.

In addition, the Company finances the sales of consumer product retailers.

The accompanying unaudited financial statements of the Company have been prepared in accordance with Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, income and cash flows in conformity with U.S. generally accepted accounting principles.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair presentation of the Company’s financial position as of March 31, 2008 and its income for the three months ended March 31, 2008 and 2007 and cash flows for the three months ended March 31, 2008 and 2007, and all adjustments were of a normal recurring nature.

SL: I enlarge: a normal recurring nature.

The income of the Company for the three months ended March 31, 2008 and 2007 may not be indicative of future results.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Reporting Entity

The consolidated financial statements include the accounts of Asset Acceptance Capital Corp. consisting of direct and indirect subsidiaries AAC Investors, Inc., RBR Holding Corp., Asset Acceptance Holdings, LLC, Asset Acceptance, LLC, Rx Acquisitions, LLC, Consumer Credit, LLC and Premium Asset Recovery Corporation.

All significant intercompany balances and transactions have been eliminated in consolidation.

The Company currently has two operating segments, one for purchased receivables and one for finance contract receivables.

The finance contract receivables operating segment is not material and therefore is not disclosed separately from the purchased receivables segment.

Purchased Receivables Portfolios and Revenue Recognition

Purchased receivables are receivables that have been charged-off as uncollectible by the originating organization and typically have been subject to previous collection efforts.

The Company acquires the rights to the unrecovered balances owed by individual debtors through such purchases.

SL: I enlarge: The Company acquires the rights to the unrecovered balances owed by individual debtors through such purchases.

Quote

SL: Here comes THE PROOF OF GRAND FRUD AND EXTORTION - RICO ONITS FACE!!!

The receivable portfolios are purchased at a substantial discount (generally more than 90%) from their face values and are initially recorded at the Company’s acquisition cost, which equals fair value at the acquisition date.

SL: I enlarge: The receivable portfolios are purchased at a substantial
discount (generally more than 90%)
from their face values

Quote

SL: In chess, the move is called MATE!

Law of damages-injury of tort action demands recovery of actual damages sustained.

Anything else is a fraud and extortion subjected to RICO an State's laws of unconscionable and deceptive practices.

Debt collectors like Asset and its mutated, deviant, sub-human lying crew of thieves-attorneys
purchase evidence of debt and inflate it by about 90% in the first round of extortion and, then, keep adding bogus penalties and interests on the 100% it fraudulent claims as damages sustained.

What terrorists? These mutants are terrorists pillaging the US Consumers and laughing at them in the process with theri debt collection dumb and lazy layers who can't get a real job so resort to collections.

Financing for the purchases is primarily provided by the Company’s cash generated from operations and the Company’s revolving credit facility.

Quote

SL: Operations are EXTORTIONS AND DECEPTION!


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Re: The Thugs of Asset Acceptance

« Reply #25 on: May 04, 2008, 04:45:07 AM »

The Company accounts for its investment in purchased receivables using the guidance provided by the Accounting Standards Executive Committee Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired in a Transfer” (“SOP 03-3”).

The provisions of SOP 03-3 were adopted by the Company effective January 2005 and apply to purchased receivables acquired after December 31, 2004. The provisions of SOP 03-3 that relate to decreases in expected cash flows amend previously followed guidance, the Accounting Standards Executive Committee Practice Bulletin 6, “Amortization of Discounts on Certain Acquired Loans”, for consistent treatment and apply prospectively to purchased receivables acquired before January 1, 2005. The
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Company purchases pools of homogenous accounts receivable. Pools purchased after 2004 may be aggregated into one or more static pools within each quarter, based on common risk characteristics. Risk characteristics of purchased receivables are generally considered to be similar since purchased receivables are usually in the late stages of the post charged-off collection cycle. The Company therefore aggregates most pools purchased within each quarter. Pools purchased before 2005 may not be aggregated with other pool purchases. Each static pool, either aggregated or non-aggregated, retains its own identity and does not change over the remainder of its life. Each static pool is accounted for as a single unit for recognition of revenue, principal payments and impairments.

Collections on each static pool are allocated to revenue and principal reduction based on the estimated internal rate of return (“IRR”). The IRR is the rate of return that each static pool requires to amortize the cost or carrying value of the pool to zero over its estimated life. Each pool’s IRR is determined by estimating future cash flows, which are based on historical collection data for pools with similar characteristics. The actual life of each pool may vary, but will generally amortize between 36 and 84 months depending on the expected collection period for each static pool. Monthly cash flows greater than revenue recognized will reduce the carrying value of each static pool and monthly cash flows lower than revenue recognized will increase the carrying value of the static pool. Each pool is reviewed at least quarterly and compared to historical trends to determine whether each static pool is performing as expected. This comparison is used to determine future estimated cash flows. If the revised cash flow estimates are greater than the original estimates, the IRR is adjusted prospectively to reflect the revised estimate of cash flows over the remaining life of the static pool. If the revised cash flow estimates are less than the original estimates, the IRR remains unchanged and an impairment is recognized. If the cash flow estimates increase subsequent to recording an impairment, reversal of the previously recognized impairment is made prior to any increases to the IRR.
The cost recovery method prescribed by SOP 03-3 is used when collections on a particular portfolio cannot be reasonably predicted. When appropriate, the cost recovery method may be used for pools that previously had a yield assigned to them. Under the cost recovery method, no revenue is recognized until the Company has fully collected the cost of the portfolio. As of March 31, 2008, the Company had 67 unamortized pools on the cost recovery method, including all healthcare pools, with an aggregate carrying value of $21.1 million or about 6.4% of the total carrying value of all purchased receivables. The Company had 51 unamortized pools on the cost recovery method with an aggregate carrying value of $26.9 million, or about 7.8% of the total carrying value of all purchased receivables as of December 31, 2007.

The agreements to purchase receivables typically include general representations and warranties from the sellers covering account holder death, bankruptcy, fraud and settled or paid accounts prior to sale.

Quote

SL: These mutants buy accounts even when banks and they know that there were:

death, bankruptcy, fraud and settled or paid accounts prior to sale.

And they still EXTORT.

HOW DO YOU CALL THESE, PARD MY FRENCH, - MUTATED MOTHERFUCKERS?


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Re: The Thugs of Asset Acceptance

« Reply #26 on: May 04, 2008, 04:55:30 AM »

These representations and warranties permit the return of certain ineligible accounts from the Company back to the seller.

The general time frame to return accounts is within 90 to 240 days from the date of the purchase agreement.

Proceeds from returns, also referred to as buybacks, are applied against the carrying value of the static pool.

Periodically the Company will sell, on a non-recourse basis, all or a portion of a pool to third parties.

The Company does not have any significant continuing involvement with the sold pools subsequent to sale. Proceeds of these sales are compared to the carrying value of the accounts and a gain or loss is recognized on the difference between proceeds received and carrying value, in accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities — a replacement of SFAS 125”, as amended.

The agreements to sell receivables typically include general representations and warranties. Any accounts returned to the Company under these representations and warranties, and during the negotiated time frame, are netted against any “gains on sale of purchased receivables” or if they exceed the total reported gains for the period as a “loss on sale of purchased receivables”, which would be accrued for if material to the consolidated financial statements.
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Changes in purchased receivable portfolios for the three months ended March 31, 2008 and 2007 were as follows:

Three months ended March 31,
2008 2007
Beginning balance $ 346,198,900 $ 300,840,508
Investment in purchased receivables, net of buybacks 20,472,028 36,214,485
Cost of sale of purchased receivables, net of returns (2,226 ) —
Cash collections (100,264,281 ) (95,853,350 )
Purchased receivable revenues 63,722,688 66,782,034

Ending balance $ 330,127,109 $ 307,983,677

Accretable yield represents the amount of revenue the Company can expect over the remaining life of the existing portfolios. Nonaccretable yield represents the difference between the remaining expected cash flows and the total contractual obligation outstanding (face value) of the purchased receivables. Changes in accretable yield for the three months ended March 31, 2008 and 2007 were as follows:

Three months ended March 31,
2008 2007
Beginning balance (1) $ 559,605,071 $ 417,690,314
Revenue recognized on purchased receivables (63,722,688 ) (66,782,034 )
Additions due to purchases during the period 19,883,169 38,371,419
Reclassifications (to) from nonaccretable yield (15,474,731 ) 19,818,438

Ending balance (2) $ 500,290,821 $ 409,098,137

(1) The balances are based on the estimated remaining collections, which refers to the sum of all future projected cash collections on our owned portfolios. The January 1, 2008 beginning balance reflects the extension of certain portfolios’ lives from 60 to 84 months during 2007.

(2) Accretable yields are a function of estimated remaining cash flows and are based on historical cash collections. Please refer to Forward-Looking Statements on page 20 and Critical Accounting Policies on page 33 for further information regarding these estimates.

Cash collections for the three months ended March 31, 2008 and 2007 include collections from fully amortized pools of which 100% of the collections were reported as revenue. Components of revenue from fully amortized pools were as follows:

Three months ended March 31,
2008 2007
Revenues from fully amortized pools:
Amortizing before the end of their expected life $ 8,470,055 $ 5,273,827
Amortizing after their expected life 12,605,435 11,698,801
Accounted under the cost recovery method 1,176,610 1,489,854

Total revenue from fully amortized pools $ 22,252,100 $ 18,462,482

Changes in purchased receivables portfolios under the cost recovery method for the period ended March 31, 2008 and 2007 were as follows:

Three months ended March 31,
2008 (1) 2007
Portfolios under the cost recovery method:
Beginning balance $ 26,991,102 $ 7,246,315
Addition of portfolios 2,069,185 1,973,328
Buybacks, impairments and resales adjustments (718,072 ) (792,099 )
Cash collections on all portfolios under the cost recovery method until fully amortized (7,262,064 ) (668,186 )

Ending balance $ 21,080,151 $ 7,759,358

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(1) The ending balance includes the first quarter of 2005 aggregate and healthcare portfolios on the cost recovery method. The carrying values of the first quarter of 2005 aggregate and all healthcare portfolios were $9.2 million and $7.2 million, respectively, of the total carrying value of purchased receivables as of March 31, 2008. The carrying values of the first quarter of 2005 aggregate and all healthcare portfolios were $12.0 million and $8.4 million, respectively, of the total carrying value of purchased receivables as of December 31, 2007.

During the three months ended March 31, 2008 and 2007, the Company recorded net impairments of $0.4 million and $4.5 million, respectively, related to its purchased receivables and valuation allowance for purchased receivables. The net impairment charge reduced revenue and the allowance reduced the carrying value of the purchased receivable portfolios. Changes in the allowance for receivable losses for the three months ended March 31, 2008 and 2007 were as follows:

Three months ended March 31,
2008 2007
Beginning balance $ 62,091,755 $ 39,714,055
Impairments 1,795,533 4,714,000
Reversal of impairments (1,411,250 ) (240,900 )
Deductions (1) (1,236,133 ) (362,000 )

Ending balance $ 61,239,905 $ 43,825,155

(1) Deductions represent impairments on fully amortized purchased receivable portfolios that were written-off and cannot be reversed.

Seasonality
Collections within portfolios tend to be seasonally higher in the first and second quarters of the year due to consumers’ receipt of tax refunds and other factors. Conversely, collections within portfolios tend to be lower in the third and fourth quarters of the year due to consumers’ spending in connection with summer vacations, the holiday season and other factors. However, revenue recognized is relatively level due to the application of the provisions prescribed by SOP 03-3. In addition, the Company’s operating results may be affected to a lesser extent by the timing of purchases of charged-off consumer receivables due to the initial costs associated with purchasing and loading these receivables into the Company’s systems. Consequently, income and margins may fluctuate from quarter to quarter.
Collections from Third Parties

Quote

SL: Now, these mutants admit giving attorneys percentage of extorted spoils.

Racketeers at their, wicked teamwork raping US Consumers via courts.

The Company regularly utilizes unaffiliated third parties, primarily attorneys and other contingent collection agencies, to collect certain account balances on behalf of the Company in exchange for a percentage of balances collected by the third party.

SL: I enlarge:

The Company regularly utilizes unaffiliated third parties, primarily attorneys and other contingent collection agencies, to collect certain account balances on behalf of the Company in exchange for a percentage of balances collected by the third party.

The Company records the gross proceeds received by the unaffiliated third parties as cash collections.

Quote

SL: But they lie to Consumers by writing, "we may disclose .... to our affiliates.."


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Re: The Thugs of Asset Acceptance

« Reply #27 on: May 04, 2008, 05:01:50 AM »

The Company includes the reimbursement of certain legal and other costs as cash collections. The Company records the percentage of the gross cash collections paid to the third parties as a component of collections expense. The percent of gross cash collections from such third party relationships were 28.9% and 23.9% for the three months ended March 31, 2008 and 2007, respectively.
9

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Accrued Liabilities
As of March 31, 2008 and December 31, 2007, the total of accrued liabilities was $23,925,493 and $17,423,378, respectively. The details of the balances are identified in the following table.

March 31, 2008 December 31, 2007
Accrued payroll, benefits and bonuses $ 8,833,969 $ 7,271,593
Fair value of derivative instruments 6,500,210 3,126,003
Deferred rent 3,665,191 3,754,365
Accrued general and administrative expenses 2,496,414 2,003,463
Deferred credits (cash advance) 1,435,279 —
Accrued interest expense 747,438 974,900
Other accrued expenses 246,992 293,054

Total accrued liabilities $ 23,925,493 $ 17,423,378

Concentration of Risk
For the three months ended March 31, 2008 and 2007, the Company invested 52.0% and 71.6%, respectively, in purchased receivables from three sellers. The top three sellers were different in each period.

Interest Expense

Interest expense included interest on the Company’s credit facilities, unused facility fees and amortization of capitalized bank fees. Interest expense of $19,769, related to software developed for internal use, was capitalized in the first quarter of 2008.

Earnings Per Share

Earnings per share reflect net income divided by the weighted-average number of shares outstanding. Diluted weighted average shares outstanding at March 31, 2008 and 2007 included 12,671 and 7,172 dilutive shares, respectively, related to outstanding stock options, deferred stock units, restricted shares and restricted share units (referred to as "share-based awards"). There were 740,085 and 288,936 outstanding share-based awards that were not included within the diluted weighted-average shares as their exercise price exceeded the market price of the Company’s stock at March 31, 2008 and 2007, respectively.

Goodwill and Other Intangible Assets

Intangible assets with finite lives arising from business combinations are amortized over their estimated useful lives, ranging from five to seven years, using the straight-line and double-declining methods. As prescribed by SFAS 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), goodwill and trademark and trade names with indefinite lives are not amortized. Goodwill and other intangible assets are reviewed annually to assess recoverability or more frequently if impairment indicators are present, in accordance with SFAS 142. Impairment charges are recorded for intangible assets when the estimated fair value is less than the carrying value of that asset. During the first quarter of 2008, the Company decided to discontinue its medical contingent collection business, which led to an impairment of $0.4 million for the net carrying value of customer contracts and relationships intangible assets. This impairment is recorded in “Impairment of intangible assets” in the consolidated statements of income.

Comprehensive Income

Components of comprehensive income are changes in equity other than those resulting from investments by owners and distributions to owners. Net income is the primary component of comprehensive income. The Company’s only component of comprehensive income other than net income is the change in unrealized gain or loss on derivatives qualifying as cash flow hedges, net of income taxes. The aggregate amount of such changes to equity that have not yet been recognized in net income are reported in the equity portion of the accompanying consolidated statements of financial position as accumulated other comprehensive loss, net of income taxes. The accumulated
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other comprehensive income (loss), net of tax for the three months ended March 31, 2008 and 2007 is presented in the following table:

March 31, 2008 March 31, 2007
Opening balance $ (2,012,127 ) $ —
Change (2,174,008 ) —

Ending balance $ (4,186,135 ) $ —

Reclassifications

Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income.

Recently Issued Accounting Pronouncements

SFAS No. 141 (R), “Business Combinations” and SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51”

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations,” (“SFAS 141(R)”), and SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51,” (“SFAS 160”). These pronouncements are required to be adopted concurrently and are effective for business combination transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Early adoption is prohibited, thus the provisions of these pronouncements will be effective for the Company in fiscal year 2009. The Company has not completed its analysis of the potential impact of SFAS 141(R) and SFAS 160 on its consolidated statements of financial position, income or cash flows.
2. Recapitalization

On April 24, 2007, the Company announced a recapitalization plan (the “Recapitalization Plan”) to return approximately $150.0 million to the Company’s shareholders. Pursuant to the Recapitalization Plan, on June 12, 2007, the Company completed a modified “Dutch auction” tender offer, resulting in the repurchase of approximately 2.0 million of the Company’s common shares for an aggregate purchase price of $37.2 million, or $18.75 per share.

On June 28, 2007, under a repurchase agreement announced on April 24, 2007, the Company purchased shares from (i) its largest shareholder, (ii) its Chairman, President and Chief Executive Officer, and (iii) its Senior Vice President and Chief Financial Officer. These shareholders elected not to tender any shares in the tender offer and the repurchase agreement allowed them to maintain their pro rata beneficial ownership interest in the Company after giving effect to the tender offer and purchases under the repurchase agreement. The Company repurchased 2.0 million common shares from these shareholders for an aggregate price of $37.8 million, or $18.75 per share.

On June 18, 2007, the Company’s Board of Directors declared a special one-time cash dividend of $2.45 per share, or $74.9 million in aggregate, which was paid on July 31, 2007 to holders of record on July 19, 2007.

In order to fund these transactions, the Company obtained a $150.0 million term loan through a new credit agreement, (the “New Credit Agreement”) aggregating $250.0 million, which was funded on June 12, 2007, and terminated its former credit agreement. Refer to Note 3, “Notes Payable” for further information.

As a result of the payment of the special one-time cash dividend, the Company adjusted the number of deferred stock units outstanding under the Company’s 2004 stock incentive plan, as amended, and also changed the exercise price and number of outstanding stock options issued under the 2004 stock incentive plan, as amended, in order to avoid dilution to holders of the deferred stock units and outstanding stock options. Refer to Note 6, “Share-Based Compensation” for further information.

During the quarter ended June 30, 2007, the Company incurred approximately $1.1 million in transaction costs associated with the Dutch auction tender offer and recorded these costs as a reduction in stockholders’ equity.
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In addition, the Company incurred approximately $2.3 million in fees, which were recorded as a deferred financing cost and included in other assets in the consolidated statements of financial position.

During the quarter ended March 31, 2008, the Company recorded interest expense of approximately $3.2 million in connection with borrowings under the New Credit Agreement and amortized approximately $0.1 million in deferred financing costs. During the quarter ended March 31, 2007, the Company recorded interest expense of approximately $0.2 in connection with borrowings under the former credit agreement and amortized approximately $0.1 in deferred financing costs.
3. Notes Payable

The New Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders named therein, that originated on June 5, 2007 was amended on March 10, 2008 (the “Amended New Credit Agreement”). Under the terms of the Amended New Credit Agreement, the Company has a five-year $100 million revolving credit facility (the “Revolving Credit Facility”) and a six-year $150 million term loan facility (the “Term Loan Facility” and, together with the Revolving Credit Facility, the “Amended New Credit Facilities”). The Amended New Credit Facilities bear interest at prime or up to 125 basis points over prime depending upon the Company’s liquidity, as defined in the Amended New Credit Agreement. Alternately, at the Company’s discretion, the Company may borrow by entering into one, two, three, six or twelve-month contracts based on the London Inter Bank Offer Rate (“LIBOR”) at rates between 150 to 250 basis points over the respective LIBOR rates, depending on the Company’s liquidity. The Company’s Revolving Credit Facility includes an accordion loan feature that allows it to request a $25.0 million increase as well as sublimits for $10.0 million of letters of credit and for $10.0 million of swingline loans. The Amended New Credit Agreement is secured by a first priority lien on all of the Company’s assets. The Amended New Credit Agreement also contains certain covenants and restrictions that the Company must comply with, which, as of March 31, 2008 were:
• Leverage Ratio (as defined) cannot exceed (i) 1.25 to 1.0 at any time on or before June 29, 2009, (ii) 1.125 to 1.0 at any time on or after June 30, 2009 and on or before December 30, 2010 or (iii) 1.0 to 1.0 at any time thereafter;

• Ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth cannot exceed (i) 3.0 to 1.0 at any time on or before September 29, 2008, (ii) 2.75 to 1.0 at any time on or after September 30, 2008 and on or before December 30, 2008, (iii) 2.5 to 1.0 at any time on or after December 31, 2008 and on or before December 30, 2009, (iv) 2.25 to 1.0 at any time on or after December 31, 2009 and on or before December 30, 2010, (v) 2.0 to 1.0 at any time on or after December 31, 2010 and on or before December 30, 2011 or (vi) 1.5 to 1.0 to any time thereafter; and

• Consolidated Tangible Net Worth must equal or exceed $80.0 million plus 50% of positive consolidated net income for three consecutive fiscal quarters ending December 31, 2007 and for each fiscal year ending thereafter, such amount to be added as of December 31, 2007 and as of the end of each such fiscal year thereafter.

The Amended New Credit Agreement contains a provision that requires the Company to repay Excess Cash Flow, as defined, to reduce the indebtedness outstanding under its Amended New Credit Agreement. The repayment of the Company’s Excess Cash Flow is effective with the issuance of our annual audited consolidated financial statements for fiscal year 2008. The repayment provisions are:
• 50% of the Excess Cash Flow for such fiscal year if the Leverage Ratio was greater than 1.0 to 1.0 as of the end of such fiscal year;

• 25% of the Excess Cash Flow for such fiscal year if the Leverage Ratio was less than or equal to 1.0 to 1.0 but greater than 0.875 to 1.0 as of the end of such fiscal year; or

• 0% if the Leverage Ratio is less than or equal to 0.875 to 1.0 as of the end of such fiscal year.

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Commitment fees on the unused portion of the Revolving Credit Facility are paid quarterly, in arrears, and are calculated as an amount equal to a margin of 0.25% to 0.50%, depending on the Company’s liquidity, on the average amount available on the Revolving Credit Facility.
The Amended New Credit Agreement requires the Company to effectively cap, collar or exchange interest rates on a notional amount of at least 25% of the outstanding principal amount of the Term Loan Facility. Refer to Note 4, “Derivative Financial Instruments”.
The Company had $163.9 million and $191.3 million principal balance outstanding on its Amended New Credit Facilities at March 31, 2008 and December 31, 2007, respectively, of which $148.9 million and $149.3 million was part of the Term Loan Facility at March 31, 2008 and December 31, 2007, respectively, and $15.0 million and $42.0 million was part of the Revolving Credit Facility, respectively. The Term Loan Facility requires quarterly repayments totaling $1.5 million annually until March 2013 with the remaining balance due in June 2013.
The Company believes it is in compliance with all terms of the Amended New Credit Agreement as of March 31, 2008.
4. Derivative Financial Instruments
The Company may periodically enter into derivative financial instruments, typically interest rate swap agreements, to reduce its exposure to fluctuations in interest rates on variable-rate debt and their impact on earnings and cash flows. The Company does not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed nor does it enter into or hold derivatives for trading or speculative purposes. The Company periodically reviews the creditworthiness of the swap counterparty to assess the counterparty’s ability to honor its obligation.
Based on the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended and interpreted, the Company records derivative financial instruments at fair value. Refer to Note 9, “Fair Value” for additional information.
In September 2007, as required by the Company’s Amended New Credit Agreement, the Company entered into an amortizing interest rate swap agreement whereby, on a quarterly basis, it swaps variable rates under its Term Loan Facility for fixed rates. At inception and for the first year, the notional amount of the swap is $125 million. Every year thereafter, on the anniversary of the swap agreement the notional amount will decrease by $25 million. This swap agreement expires on September 13, 2012.
The Company’s financial derivative instrument is designated and qualifies as a cash flow hedge and the effective portion of the gain or loss on such hedge is reported as a component of other comprehensive income in the consolidated financial statements. To the extent that the hedging relationship is not effective, the ineffective portion of the change in fair value of the derivative is recorded in other income (expense). For the three months ended March 31, 2008, the ineffective portion of the change in fair value of the derivative recorded in earnings was $799. Hedges that receive designated hedge accounting treatment are evaluated for effectiveness at the time that they are designated as well as through the hedging period. As of March 31, 2008, the Company does not have any fair value hedges.
The fair value of the Company’s cash flow hedge has been recorded as a liability and is included with accrued liabilities in the consolidated statements of financial position. The fair value was $6,500,210 and $3,126,003 at March 31, 2008 and December 31, 2007, respectively. Changes in fair value were recorded as an adjustment to other comprehensive income, net of tax, of $4,186,135 and $2,012,127 at March 31, 2008 and December 31, 2007, respectively. Amounts in other comprehensive income will be reclassified into earnings under certain situations; for example, if the occurrence of the transaction is no longer probable or no longer qualifies for hedge accounting. The Company does not expect to reclassify any amount currently included in other comprehensive income into earnings within the next 12 months.
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5. Property and Equipment
Property and equipment, having estimated useful lives ranging from three to ten years consisted of the following:

March 31, 2008 December 31, 2007
Computers and software $ 15,184,362 $ 12,838,395
Furniture and fixtures 10,121,378 10,074,927
Leasehold improvements 2,170,672 2,156,864
Equipment under capital lease 133,063 133,063
Automobiles 51,709 51,709

Total property and equipment, cost 27,661,184 25,254,958
Less accumulated depreciation (15,182,276 ) (14,248,300 )

Net property and equipment $ 12,478,908 $ 11,006,658

6. Share-Based Compensation
The Company adopted a stock incentive plan (the “Stock Incentive Plan”) during February 2004 that authorizes the use of stock options, stock appreciation rights, restricted stock grants and units, performance share awards and annual incentive awards to eligible key associates, non-associate directors and consultants. The Company has reserved 3,700,000 shares of common stock, in addition to treasury shares, for issuance in conjunction with all options and other stock-based awards to be granted under the plan. The purpose of the plan is (1) to promote the best interests of the Company and its stockholders by encouraging associates and other participants to acquire an ownership interest in the Company, thus aligning their interests with those of stockholders and (2) to enhance the ability of the Company to attract and retain qualified associates, non-associate directors and consultants. No participant may be granted options during any one fiscal year to purchase more than 500,000 shares of common stock. The Company Records share-based compensation in accordance with SFAS No. 123(R), “Share-Based Payment,” a revision of SFAS 123, “Accounting for Stock-Based Compensation”.
The Company amended its Stock Incentive Plan in May 2007 to expand an anti-dilution provision of the plan. The additional compensation expense resulting from the amendment to the Stock Incentive Plan for the three months ended March 31, 2008 was $1,013, relating to nonvested associate stock options.
As discussed in Note 2, “Recapitalization” the Company commenced a recapitalization transaction, including declaration of a special one-time cash dividend, in the quarter ended June 30, 2007. The payment of the special one-time cash dividend resulted in an increase in the number of deferred stock units outstanding and a change to the exercise price and number of outstanding stock options under the anti-dilution provisions of the stock incentive plan. The methodology used to adjust the awards was consistent with Internal Revenue Code Section 409A and 424 and the proposed regulations promulgated thereunder, compliance with which was necessary to avoid adverse tax issues for the holders of awards. Such methodology also results in the fair value of the adjusted awards post-dividend to be equal to that of the unadjusted awards pre-dividend, with the result that there is no additional compensation expense in accordance with accounting for modifications to awards under SFAS 123(R).
Based on historical experience, the Company used an annual forfeiture rate of 15% for associate grants. Grants made to non-associate directors were assumed to have no forfeiture rates associated with them due to immediate vesting of grants to this group.
The Company’s share-based compensation arrangements are described below.
Stock Options
The Company utilizes the Whaley Quadratic approximation model, an intrinsic value method, to calculate the fair value of the stock awards on the date of grant using the assumptions noted in the following table. In addition, changes to the subjective input assumptions can result in different fair market value estimates. With regard to the Company’s assumptions stated below, the expected volatility is based on the historical volatility of the Company’s stock and management’s estimate of the volatility over the contractual term of the options. The expected term of the
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Re: The Thugs of Asset Acceptance

« Reply #28 on: May 04, 2008, 05:03:20 AM »

Table of Contents

option is based on management’s estimate of the period of time for which the options are expected to be outstanding. The risk-free rate is derived from the five-year U.S. Treasury yield curve on the date of grant.

Options issue year: 2008 2007
Expected volatility — 45.30% - 46.92%
Expected dividends — 0.00%
Expected term — 5 Years
Risk-free rate — 3.42% - 4.98%

As of March 31, 2008, the Company had options outstanding for 684,295 shares of its common stock under the 2004 stock incentive plan. These options have been granted to key associates and non-associate directors of the Company. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant and have 10-year contractual terms. The options granted to key associates generally vest between one and five years from the grant date whereas the options granted to non-associate directors generally vest immediately. The fair values of the stock options are expensed on a straight-line basis over the vesting period. The related expense for the three months ended March 31, 2008 includes $51,170 in salaries and benefits for associates. The related expense for the three months ended March 31, 2007 includes $2,204 in administrative expenses for non-associate directors and $18,824 in salaries and benefits for associates. The total tax benefit recognized in the consolidated statements of income was $19,496 and $7,864 for the three months ended March 31, 2008 and 2007, respectively. The following summarizes all stock option related transactions from January 1, 2008 through March 31, 2008.

Weighted-Average Aggregate
Options Weighted-Average Remaining Intrinsic
Outstanding Exercise Price Contractual Term Value
January 1, 2008 691,599 $ 14.03
Granted — —
Exercised — —
Forfeited or expired (7,304 ) 20.62

Outstanding at March 31, 2008 684,295 13.96 8.14 $ 71,488

Exercisable at March 31, 2008 428,434 $ 16.34 7.46 $ —

The weighted-average fair value of the options granted during the three months ended March 31, 2007 was $7.32. No options were exercised during the three months ended March 31, 2008 and 2007.
As of March 31, 2008, there was $1,073,883 of total unrecognized compensation expense related to nonvested stock options granted under the stock incentive plan. The unrecognized compensation expense is comprised of $927,374 for options expected to vest and $146,509 for options not expected to vest. The unrecognized compensation expense options expected to vest is expected to be recognized over a weighted-average period of 3.40 years.
Deferred Stock Units
As of March 31, 2008, the Company had granted 12,171 deferred stock units (“DSUs”) to non-associate directors under the Company’s 2004 Stock Incentive Plan. DSUs represent our obligation to deliver one share of common stock for each unit at a later date elected by the Director, such as when the Director’s service on the Board ends. DSUs have no vesting provisions and are not subject to forfeiture. DSUs do not have voting rights but would receive common stock dividend equivalents in the form of additional DSUs. The value of each DSU is equal to the market price of the Company’s stock at the date of grant.
The fair value of the DSUs granted during the three months ended March 31, 2008 were expensed immediately to correspond with the vesting schedule. The related expense for the three months ended March 31, 2008 and 2007 includes $31,259 and $28,148 in administrative expenses.
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The following summarizes all DSU related transactions from January 1, 2008 through March 31, 2008.

Weighted-Average
Grant-Date
DSUs Fair Value
January 1, 2008 8,965 $ 13.44
Granted 3,206 9.75

Balance at March 31, 2008 12,171 $ 12.47

As of March 31, 2008, there was no unrecognized expense related to nonvested DSUs.
Restricted Shares
The Company grants restricted shares and restricted share units (restricted shares and restricted share units are referred to as “RSUs”) to key associates under the Stock Incentive Plan. Each RSU is equal to one share of the Company’s common stock. As of March 31, 2008, the Company had RSUs outstanding for 289,010 shares of its common stock. The value of the RSUs is equal to the market price of the Company’s stock at the date of grant. The RSUs generally vest over two to four years based upon service or performance conditions.
The fair value of the RSUs is expensed on a straight-line basis over the vesting period based on the number of RSUs that are expected to vest. For RSUs with performance conditions, if goals are not expected to be met, the compensation expense previously recognized is reversed. The related expense for the three months ended March 31, 2008 and 2007 was $164,004 and $44,968, respectively, included in salaries and benefits.
The following summarizes all nonvested RSU related transactions from January 1, 2008 through March 31, 2008.

Weighted-Average
Grant-Date
Nonvested RSUs RSUs Fair Value
Nonvested at January 1, 2008 290,760 $ 11.12
Forfeited (1,750 ) $ 9.28

Nonvested at March 31, 2008 289,010 $ 11.13

As of March 31, 2008, there was $2,893,536 of total unrecognized expense related to nonvested RSU’s. The total unrecognized expense is comprised of $1,886,363 for RSUs expected to vest and $1,007,173 for shares not expected to vest. The unrecognized compensation expense for RSU’s expected to vest is expected to be recognized over a period of 3.05 years. There were no RSUs vested as of March 31, 2008.


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Re: The Thugs of Asset Acceptance

« Reply #29 on: May 04, 2008, 05:05:47 AM »

7. Contingencies and Commitments
Litigation Contingencies

The Company is involved in certain legal matters that management considers incidental to its business. The Company recognizes liabilities for contingencies and commitments when a loss is probable and estimable. The company recognizes expense for defense costs when incurred.
Management has evaluated pending and threatened litigation against the Company as of March 31, 2008 and does not believe exposure to be material.
Other Contingencies

During the first quarter, the Company entered into an agreement with a third party collecting on its behalf. Under this agreement, the Company will receive a total cash advance of $7.0 million, in varying installments, through November 2009.

The Company received the first installment of $1.5 million in the quarter ended March 31, 2008, and incurred approximately $0.1 million in court cost expenses, which were offset against a portion of the cash advance.

A liability equal to the unused cash advance is included in accrued liabilities in the consolidated statements of financial position.
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The agreement contains performance conditions for both parties and the Company may be required to refund a portion of the cash advance in certain situations.
8. Income Taxes
The Company recorded an income tax provision of $4.2 million and $5.9 million for the three months ended March 31, 2008 and 2007, respectively. The provision for income tax expense reflects an effective income tax rate of 38.1% and 37.5% for the three months ended March 31, 2008 and 2007, respectively.
The Company records interest and penalties related to unrecognized tax benefits as income tax expense. Interest and penalties related to the Company’s uncertain tax positions at January 1, 2008 were not significant.
The federal income tax returns of the Company for 2004, 2005, 2006, and 2007 are subject to examination by the IRS, generally for three years after the latter of their extended due date or when they are filed. The significant state income tax returns of the Company are subject to examination by the state taxing authorities, for various periods generally up to four years.
9. Fair Value
The Company partially adopted SFAS No. 157, “Fair Value Measurements” (“SFAS 157”) as of January 1, 2008. SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 applies where other accounting pronouncements require or permit fair value measurements; it does not require any new fair value measurements. According to FASB Staff Position No. FAS 157-2, the application of SFAS 157 to certain non-financial assets and liabilities is deferred to fiscal years beginning after November 15, 2008. The Company’s goodwill and other intangible assets are measured at fair value on a recurring basis for impairment assessment. The deferral of SFAS 157 applies to these items.
The partial adoption of SFAS 157 did not have a material impact on the Company’s consolidated statements of financial position, income or cash flows. The Company has chosen not to adopt SFAS No. 159, “Fair Value Option”.
The Company uses the following methods and assumptions to estimate the fair value of financial instruments.
Interest Rate Swap Agreement
The fair value of the interest rate swap agreement represents the amount the Company would receive or pay to terminate or otherwise settle the contract at the consolidated statements of financial position date, taking into consideration current unearned gains and losses. The interest rate swap agreement was valued using Level 2 inputs, which are inputs other than quoted prices that are observable, either directly or indirectly. The fair value was determined using a market approach, and is based on the three-month LIBOR curve for the remaining term of the swap agreement. Refer to Note 4, “Derivative Financial Instruments”, for additional information about the fair value of the interest rate swap.
The partial adoption of SFAS 157 does not apply to the Company’s purchased receivables or credit facilities since these financial instruments are not recorded at fair value. SFAS No. 107, “Disclosures about Fair Value of Financial Instruments” establishes the disclosures about fair value for these financial instruments.
The Company uses the following methods and assumptions to estimate the fair value of financial instruments.
Purchased Receivables
The Company initially records purchased receivables at cost, which is discounted from the contractual receivable balance. The ending balance of the purchased receivables is reduced as cash is received based upon the guidance of PB6 and SOP 03-3. The carrying value of receivables was $330,127,109 and $346,198,900 at March 31, 2008 and December 31, 2007, respectively. The Company computes fair value of these receivables by discounting the future
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cash flows generated by its forecasting model using an adjusted weighted average cost of capital, reflective of other market participants cost of capital. The fair value of the purchased receivables approximated carrying value at both March 31, 2008 and December 31, 2007.
Credit Facilities
The Company’s Amended New Credit Facilities had carrying amounts of $163,875,000 and $191,250,000 as of March 31, 2008 and December 31, 2007, respectively. The Company computed the approximate fair value of the Amended New Credit Facilities to be $137,286,077 and $158,652,946 as of March 31, 2008 and December 31, 2007, respectively. The fair value of the Company’s Amended New Credit Facilities is based on borrowing rates currently available to the Company and similar market participants.
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