CCRT » Topics » Restricted Cash

This excerpt taken from the CCRT 10-Q filed Aug 5, 2008.

Restricted Cash

Restricted cash includes $8.7 million of escrowed gross proceeds (including interest earned thereon) associated with the forward flow contract between one of our subsidiaries and a subsidiary of Encore Capital Group, Inc (collectively with all other subsidiaries or affiliates of Encore Capital Group, Inc. to which this Report refers, “Encore”), as well as certain collections on receivables within our Auto Finance segment, the cash balances of which are required to be distributed to note holders under our debt facilities, and cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with our retail micro-loan activities. On July 10, 2008, Encore did not purchase certain accounts as contemplated by the forward flow contract, alleging that the accounts it was required to purchase failed to meet the standards set forth in the contract (based upon the allegations made by the Federal Trade Commission (“FTC”)). Subsequently both our subsidiary and Encore (and another subsidiary of Encore) advised one another that they were in default of various obligations under the contract and various related agreements among them and the parties are in the process of submitting these disputes to arbitration. Because of the ongoing disputes and concerns as to their ultimate resolution, we did not recognize $1.5 million of income in the three months ended June 30, 2008 representing escrowed funds and interest thereon that we believed we earned in that three-month period but that Encore has not released from the escrowed proceeds.

This excerpt taken from the CCRT 10-Q filed May 7, 2008.

Restricted Cash

Restricted cash includes $10.0 million of escrowed gross proceeds (and interest earned thereon) associated with our forward flow contract with Encore Capital Group, Inc (“Encore”), as well as certain collections on receivables within our Auto Finance segment, the cash balances of which are required to be distributed to note holders under our debt facilities, and cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with our retail micro-loan activities. Of the $10.0 million in restricted cash associated with our forward flow contract, as of March 31, 2008, $1.3 million represented cash that had been earned but not yet received from the escrow account.

This excerpt taken from the CCRT 10-K filed Feb 29, 2008.

Restricted Cash

Restricted cash includes $10.0 million of escrowed gross proceeds associated with our forward flow contract with Encore Capital Group, Inc (“Encore”), as well as certain collections on receivables within our Auto Finance

 

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segment, the cash balances of which are required to be distributed to note holders under our debt facilities, and cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with our retail micro-loan activities.

This excerpt taken from the CCRT 10-Q filed Nov 5, 2007.

Restricted Cash

Restricted cash includes $132.1 million of cash that we drew on and that serves as collateral underlying one of the debt facilities associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range; as additional eligible principal receivables are originated associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, we are free to substitute such receivables as collateral, thereby freeing comparable amounts of underlying cash collateral for our unrestricted use. We also include $10.0 million of the gross proceeds associated with our sale of previously charged-off receivables and forward flow contract with Encore Capital Group, Inc (“Encore”) within restricted cash, as well as (1) certain collections on receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range and our Auto Finance segment, the cash balances of which are required to be distributed to note holders under our debt facilities and (2) cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with our retail micro-loan activities.

This excerpt taken from the CCRT 10-Q filed Aug 1, 2007.

Restricted Cash

Restricted cash includes $10.0 million of the gross proceeds associated with our sale of previously charged-off receivables and forward flow contract with Encore Capital Group, Inc (“Encore”), certain collections on our Auto Finance receivables, the cash balances of which are required to be distributed to note holders, and cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with our micro-loan activities.

This excerpt taken from the CCRT 10-K filed Feb 28, 2007.

Restricted Cash

Pursuant to our sale of previously charged-off receivables and forward flow contract with Encore Capital Group, Inc. (“Encore”) (see Note 5, “Sale of Previously Charged-Off Receivables and Forward Flow Contract”),

 

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we were required to place into escrow $10.0 million of the gross proceeds associated with the transaction. We have disclosed the cash associated with this escrow account as restricted cash on the face of the consolidated balance sheets as of December 31, 2006 and 2005, and the release of these funds will occur upon performance of certain conditions under the forward flow contract with Encore.

Restricted cash balances at December 31, 2006 and 2005 also include cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with our micro-loan activities.

This excerpt taken from the CCRT 10-K filed Mar 2, 2006.

Restricted Cash

Pursuant to the Company’s sale of previously charged-off receivables and forward flow contract with Encore Capital Group, Inc. (“Encore”) (see Note 5, “Sale of Previously Charged-Off Receivables and Forward

 

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Index to Financial Statements

Flow Contract”), $10.0 million of the gross proceeds received in this transaction were placed into escrow. The cash associated with this escrow account has been disclosed as restricted cash on the face of the consolidated balance sheet as of December 31, 2005, and the release of these funds will occur upon performance of certain conditions under the forward flow contract with Encore. Additionally, the Company provides an irrevocable standby letter of credit agreement for $10.0 million to Columbus Bank & Trust, the principal financial institution that issues the credit cards marketed by the Company. The purpose of the letter of credit is to protect the financial institution from non-payment by the Company of its obligation to purchase receivables arising in the credit card accounts on a daily basis. Prior to the second quarter of 2005, the Company was required to maintain a minimum cash balance of $10.0 million with the bank that issued the letter of credit, and that minimum cash balance was disclosed as restricted cash on the face of the consolidated balance sheet as of December 31, 2004.

Restricted cash balances at December 31, 2005 also include cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with the Company’s micro-lending activities.

This excerpt taken from the CCRT 10-K filed Mar 8, 2005.

Restricted Cash

        The Company provides an irrevocable standby letter of credit agreement for $10.0 million to Columbus Bank & Trust, the principal financial institution that issues the credit cards marketed by the Company. The purpose of the letter of credit is to protect the financial institution from non-payment by the Company of its obligation to purchase receivables arising in the credit card accounts on a daily basis. The Company is required to maintain a minimum cash balance of $10.0 million with the bank that issued the letter of credit. Such cash has been disclosed as restricted cash on the face of the consolidated balance sheet. Restricted cash balances at December 31, 2004 also include cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with the Company's new micro-lending activities.

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