Archive for December 4th, 2010

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He’s Baaaaack! Bill Bartmann Resuscitates CFS as CFS II

December 4, 2010

Tulsa has had its share of corporate executives and promoters whose enterprises turned from pillars of the Tulsa business community to collapsed houses of cards  Remember Tom Kivisto and SemGroup?  Remember Doug Pielsticker and Arrow Trucking?  Remember Wes McKinney and Republic Financial?  Remember Robert Trippett and Home-Stake Production?

Remember Bill Bartmann and Commercial Financial Services?

Bill Bartmann returns to CityPlex Towers with CFS II

For our readers who may have forgotten, or who lived in other parts of the country, CFS and Bill Bartmann were the hottest commodities in Tulsa during the 1990’s.  Bartmann himself was touted as “the richest man you’ve never heard of” in Inc. Magazine.

To make a long story short, Bartmann’s company (Commercial Financial Services, aka CFS) was in the business of buying bad credit card debt from banks for pennies on the dollar, then (so the story goes) making tons of money collecting it with their allegedly superior collection methods.  Bartmann then convinced investors (including some of the very banks that sold him their charged-off debt) to buy securities from CFS – collateralized by that very same credit card debt.  The debt now was supposedly worth much more in the hands of CFS because they had found the magic formula for collecting it.  The proceeds from securities sales allowed CFS to buy still more bad credit card debt, which they could securitize and resell….

The house of cards came tumbling down when investors found out that some resales of debt to a related company were being classified as collections – and that the related company was using money from Bartmann himself to buy the debt!  Overnight, CFS’s securities became toxic.  CFS’s cash flow dried up.  The word “Ponzi” was tossed around.  CFS declared bankruptcy.  One of the CFS executives went to jail, but Bartmann himself was acquitted on all charges.

Here is an excellent article on the CFS debacle from Fortune.

Well, Bartmann’s comeback is a story for the ages.  He has somehow risen zombie-like from the graveyard of past Tulsa financial disasters – in a new business with the same name and business model as the old business.

Pssst – Wanna buy some securitized bad debts on credit card?  Sure – it’s the same shit that WE bought from YOU, but it’s a lot more valuable now!

“There’s a sucker born every minute.” – P.T. Barnum

“And two to take him.” – C.E.W.