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Investors in the once-beleaguered Thaxton Group define fiscal cliff in another way.
Hopefully in three weeks, those investors who saw their life savings disappear will finally be able to step back from the brink of that cliff.
They will finally get all their money back, plus a little more.
The car-title lender and insurance company specializing in high-risk loans, which filed for bankruptcy nine years ago, is on target to pay off 100 percent of its debt, plus a dividend by the end of the year, said company President and CEO Robert Dunn.
“Right now, we are still unsure of the exact amount above 100 percent,” Dunn said.
“It will be enough to put smiles on their faces. They’re going to get all of their money, plus a dividend.”
Dunn, the Finley Group restructuring executive who ran Thaxton during its bankruptcy, said the company is finalizing the paperwork right now and hopes to distribute the final checks to the 3,500-plus stockholders by mid-December.
“It’s been tough on a lot of them,” Dunn said. “I’m very aware of that. For those who stuck it out, there is going to be a good outcome. It’s just taken awhile.”
Thaxton, based in Lancaster, collapsed in 2003. It blamed its financial woes on a combination of a weak economy, unemployment and bankrupt borrowers.
At the time of its bankruptcy, Thaxton’s 6,800 noteholders – 1,500 of whom were from South Carolina – had their $121 million in assets frozen. In 2003, Thaxton cited assets of $206 million and debts totaling $242 million.
In April 2007, Thaxton Group Inc., which is now doing business as Southern Management Co., won confirmation of its Chapter 11 plan. At the time of the bankruptcy, shareholders were expected to get back about 85 percent of their money.
Since then, the company has been getting back on firm financial footing.
Early on, some shareholders sold their claims for as little as 30 cents on the dollar, but even in bankruptcy, the company made money, including $40 million between 2003 and 2007, when its Chapter 11 plan was approved by a judge.
Since then, the company has continued to pay off its debt. To date, about $119 million has been distributed to shareholders, including about $19.5 million earlier this year.
“We have been making distributions since 2007,” Dunn said. “We gave shareholders a pretty good slug in June. I don’t know of many companies who can make it back and be able to do what we’ve been able to do,” Dunn said.
Contact Greg Summers at (803) 283-1156