Project Background

Warbird is engaged by a US Govt Agency (Agency) to perform annual compliance reviews of a top-20 US Bank’s activities to orderly liquidate a $10 Billion/15,000 asset portfolio of distressed commercial loans.  Under the Bank’s agreement with the Agency, a major portion of losses incurred by the Bank in performing its duties were reimbursable by the Agency.

Services & Solutions

Among the findings, totaling tens of millions over the five-year course of the engagement, Warbird recognized that $2.4 Billion/4,000 assets had been referred to its collection department with the Bank’s representation to the Agency that collection efforts were being pursued.   Upon examination, Warbird discovered that the Bank’s collection department was inadequately structured and staffed to pursue the collection of complex commercial loans, having prior responsibility only to collect consumer loan delinquencies, such as credit cards.  The primary beneficiary of any collections on this $2.4 Billion/4,000 assets was the Agency, due to its agreement with the Bank to reimburse a major portion of losses.

Outcome & Results

In response to Warbird’s finding, the Bank agreed that its representation to the Agency that collection activities on the $2.4 Billion/4,000 assets were being adequately pursued was false.  Warbird’s finding included specific recommendations (including supporting summary schedules, sample forms/documentation) for the Bank to use when preparing a restructuring plan to correct the acknowledged inadequacy.

The Bank prepared and implemented a major restructuring plan for its collection department that included not only the $2.4 Billion/4,000 asset portfolio under Warbird’s review but Billions in additional Bank-owned assets outside of this portfolio being managed by the department.  The result was improved collection opportunity for the Agency and for the Bank on the assets both within and outside of the 2.4 Billion/4,000 asset portfolio included in Warbird’s engagement agreement with the Agency.


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