DENVER — Flatiron Financial Services Inc. (Flatiron) announced that it has acquired substantially all the assets of Centrix Financial LLC pursuant to a sale/auction approved in the U.S. Bankruptcy Court for the District of Colorado.

In a statement issued by Flatiron, the remaining Centrix assets are expected to be liquidated. 

Flatiron, identified in a statement by company officials as a leading provider of auto loan servicing, using state-of-the-art technology at its Centennial, Colo., based call-center, said that it employs more than 400 associates. 

Under the terms of the acquisition announced in a statement released as a result of inquiries by SubPrime Auto Finance News, the company is led by Kevin Barry, who officials said was formerly the executive vice president of the Centrix Loan Management Group. Barry was responsible for the servicing of a $1.4 billion portfolio of auto loans held by credit unions and other financial investors throughout the country, according to executives.

Along with Barry, Flatiron listed its management team as including Mark Oleksik as chief financial officer; Steve Thompson as chief information officer; Scott Roswell as general counsel; and former senior managers with Centrix Financial. Jody Hall, previously vice president in charge of remarketing and loss control with Centrix Financial has assumed that same role with Flatiron, officials added.

While many of the new Flatiron management team comes from Centrix, the officers of Centrix were not retained by the company. "The former officer team of Centrix Financial is no longer associated with Flatiron," company executives explained in the statement issued to SubPrime.

The report went on to state, "Barry and his new executive team have extensive experience in the servicing and credit collection operations, managing portfolio servicing operations in both first party and third party environments with various organizations, including Centrix Financial, Arcadia Financial, Citicorp Retail Services, Pitney Bowes Credit Corp. and International Creditors Service."

In answer to questions as to how Flatiron came to acquire Centrix, officials wrote, "Prior to Centrix filing for Chapter 11 protection under the United States Bankruptcy Code, it's Portfolio Management Program came under scrutiny by the National Credit Union Association, culminating in the issuance of a first ever Risk Alert in June 2005.

"The Risk alert sought to increase the level of operational due diligence and reporting by credit unions subject to the NCUA regulations," executives explained in the report. "In addition to the Risk Alert, the agency issued a Documents of Resolution, which operated to prohibit credit unions from participating in the PMP and other competitors' subprime indirect lending programs until certain described measures were untaken by the credit unions and approved by the agency.

"The affect of the Risk Alert and the DORs shut off the pipeline of available lenders for the PMP. Centrix Financial's Loan Production Group productivity fell from more than 12,000 loans per month at its height to 300 loans shortly before seeking bankruptcy protection," officials continued in the statement.

"With the sale of its former assets, Centrix Financial will now be filing a plan of liquidation with the bankruptcy court. Its servicing platform, which continued to operate throughout the pendancy of the bankruptcy, is intact and operating successfully for Flatiron and its existing credit union and other financial investor clients," company executives said.

Officials told SubPrime that Flatiron is backed by Falcon Mezzanine Investors – a private equity investment group out of New York and Boston – the former secured lender of Centrix.

In their official statement, executives said, "Falcon and Flatiron are committed to growing their servicing operations and concentrating specifically on the auto lending niche, but with plans to accommodate other clientele, such as credit card, mortgage and other consumer and commercial lending partners.

"Flatiron will provide assistance in all loan servicing operations, including customer service, collections, risk management, remarketing, back-up servicing, data aggregation and training," executives concluded in the statement.