The Illinois CU with a $1.1 million unsecured claim as listed by Centrix in its original Sept. 19 petition expects to be represented, said Simons, at creditor and attorney meetings slated last Friday and again this week before Judge Elizabeth Brown who was assigned the case.

Simons said he is satisfied so far with Centrix' performance on the CU's $25 million portfolio and that the $1.1 million claim "is much higher than we have calculated", but does represent unpaid first payment defaults.

In its reorganization petition filed in the Nevada court, Centrix listed 30 of its largest unclaimed creditors, which included 21 CUs along with bank-connected leasing units, insurance firms, commercial finance entities plus dealer vendors.

Like Simons at Credit Union 1, several executives with CUs contacted by Credit Union Times said they found discrepancies with the Centrix filing though attorneys said that might be expected since a complete list has yet to be adjudicated before the Denver court.

"I'm not sure where that number came from and what it represents," declared Dennis Lombard, president/CEO of the $150 million Unitedone Credit Union of Manitowoc, Wis. Centrix said it owes $992,000 to Unitedone on what the CU contends is a $9 million portfolio, some of which is in participations.

Peter Paulson, executive vice president of the $608 million Corporate America Family Credit Union of Elgin, Ill., on the hook for $3.1 million and with one of the largest claims, said his CU has monitored its Centrix portfolio and its cash flow on a due diligence basis for months. Paulson agreed with fellow Illinoisan, Simons of Credit Union 1, that the NCUA subprime risk alert "was an abrupt response" to Centrix' financial condition taking away as it did "its revenue strength" leading up to the bankruptcy filing.

Corporate America has hired Chicago attorneys to represent the CU in the Denver proceeding, as "we watch what will transpire there", but so far Centrix is honoring its commitments. Helping Centrix CUs in Illinois has been the Illinois Credit Union League, whose service subsidiary has exposure in participations, said a spokesman.

The exact amount of its claim was not immediately available at press time, but the league has held two meetings so far with 16 Illinois CUs, all with Centrix exposure, to discuss the status of the case, said Simons.

Meanwhile in Texas, also a state with a larger number of large CU claimants, the state's CU commissioner Harold E. Feeney predicted the number of CUs in his state with claims could reach "in the 15-20 range."

Centrix' problems "have been a major focus for us for a long time," said Feeney, commenting on six Texas CUs that appeared on the list of 30 of the largest creditors. "Some Texas credit unions may end up taking a significant hit" when the case is finally resolved, Feeney forecast. Centrix officials said last week they intend to keep its "partners" advised of its financial status on a regular basis as it services existing portfolios.

In a Sept. 27 letter to its CU clients, Kevin Barry, executive vice president for Centrix, wrote that it has hired outside turnaround and investment help as part of its reorganization and $30 million sales package.

Barry said the firm has hired, with court approval, RAS Management Advisors Inc., Newport, R.I., and investment advisor Raymond James & Co., St. Petersburg, Fla., to assist in the restructuring and sale.

As stated earlier, Centrix said its Chapter 11 plan seeks a sale "as quickly as possible" of its servicing platform and operations "to a credible and well funded third-party in a manner that provides the existing insurance policies" remain in place to ensure coverage with Everest Reinsurance Holdings of Liberty Center, N.J. While three large creditors filed their own involuntary petition against Centrix Sept. 15, the firm, as part of its deal to restore financial health, said it has obtained a "debtor in possession" financing facility with Falcon Investment Advisors of Boston.

Barry wrote that the sale and the restructuring moves "will provide the essential stability to avoid any disruption in servicing of your loan portfolio assets" or insurance policies.

Under the proposed sales agreement involving a capital infusion, Centrix officials have said Robert Sutton, the founder and chairman of Centrix, will become a minority shareholder in the investment group.

If the sale is approved by the court, "Mr. Sutton will not have an ongoing day-to-day role in the operations of the loan servicing platform and will not be entitled to receive any compensation." –[email protected]