Debt Resolve Gets Loan, Signs UK Client

Debt Resolve (AMEX: DRV) the provider of an online collections auction system, reported it received a loan to operate its call center collections business and signed an unnamed top-10 debt collection and management firm based in the United Kingdom.

White Plains, N.Y.-based Debt Resolve entered into a $275,000 line of credit with William B. Mooney, a member of its board, according to a filing yesterday with the U.S. Securities and Exchange Commission. In return, Mooney receives a five-year warrant to buy up to 137,500 shares of Debt Resolve at $2 a share. Debt Resolve was trading midday today at $2.02, up 1.5 percent.

The loan will be used to fund working capital needs, including the operations of Debt Resolve subsidiary First Performance Corp., a collection agency with about 100 collectors in two offices in Las Vegas and Fort Lauderdale, Fla. It claimed 2006 gross revenues of $6 million.

Debt Resolve bought First Performance in January for $850,000, consisting of $500,000 in cash, 88,563 shares of Debt Resolve stock, and the assumption of certain liabilities ("Debt Resolve Acquires Collection Agency First Performance Corp," 1/23).

The loan from Mooney carries an interest rate of 12 percent with interest payable monthly in cash, terms that the board determined are equivalent to what Debt Resolve could have received elsewhere, according to the SEC filing. Debt Resolve’s Co-Chairmen, James D. Burchetta and Charles S. Brofman, agreed to each personally guarantee repayment of 33% of the loan.

Debt Resolve also announced today that it signed its first international client, a major UK-based debt collector that will use its online system in its collection efforts. Debt Resolve recently announced its entry into additional European markets, including France and Belgium, The Netherlands and Luxembourg. 

Earlier this year, Debt Resolve announced that it entered into a strategic partnership with fasEo Ltd., a UK-based consulting firm who successfully closed the contract, and continues to actively meet with prospects in the UK and Europe, according to Debt Resolve’s press release.