CFS Chairman, Directors Resign Amid Inquiry

Commercial Financial Services Inc., the biggest collection agency for defaulted credit card debt, said Chairman and President William Bartmann and others resigned amid an inquiry by credit analysts into the company’s business practices. The ratings on $1.8 billion in outstanding CFS bonds were lowered or withdrawn by all four major credit-rating companies last week. The rating actions were spurred by an anonymous letter that said CFS sold some of its loans at inflated prices to a company it had close ties with--sales that might have exaggerated the performance of CFS’ loan-recovery business. CFS officials met with bond investors and rating company analysts in New York on Tuesday. Wayne Learned, director of operations at the Tulsa, Okla.-based private company, said Bartmann’s resignation was “temporary.” Bartmann’s wife, Kathryn, also resigned as a director. The two own 80% of the company and retain the right to reinstate themselves after the credit-rating companies finish their inquiry, Learned said. Former Central Intelligence Agency Director James Woolsey, who was appointed to CFS’ board of directors earlier this month to oversee an investigation into the allegations, also resigned Tuesday, Learned said. Jay Jones, a stakeholder and director, also resigned.