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Debt collection firm files for Chapter 7 bankruptcy

A company that used to specialize in collecting delinquent debt has sought protection from creditors for itself.

The ironic bankruptcy case struck Hudson and Keyse LLC of Painesville, Ohio, which has been open for more than two decades.

The company, which filed for Chapter 7 protection at the U.S. Bankruptcy Court’s Northern District of Ohio, owes more than $63 million to more than 200 creditors, and reported assets of about $288,000, according to Crain’s Cleveland Business. The company effectively closed and fired its 40 employees on September 1. It has downsized from about 150 since 2008.

Hudson and Keyse has been in financial trouble since 2008, thanks to “inappropriate management,” according to CEO Mark Finston. The company owes the most – about $60 million – to Vion Holdings of Atlanta, and the majority of its creditors are vendors. Also counted among those it owes money are several employees due thousands in back wages.

The industry news source Inside Accounts Receivable Management said the company was paying creditors as much as twice the market price for the debt it purchased and attempted to recoup.