Axiant: A Look From the Inside

January 25, 2010: It’s late Thursday morning, and all’s quiet on the fifth floor of Two Irvington Centre, an imposing sand-colored Rockville office building and a major hub of what used to be one of the nation’s biggest litigation-based debt collection operations.

Until very recently, Mann Bracken LLP and its support services partner Axiant LLC occupied not only this publicly accessible level, but also the two card-access floors beneath it, meaning the companies’ hundreds of employees took up half the six-story building.

Back when the firm had tens of thousands of pending court cases, the place must have been bustling: Axiant clerks doing all the backup work for the far fewer lawyers of Mann Bracken; debtors visiting the reception desk to pay their bills; and, across the lobby, executives passing through a frosted glass door secured by a hand-recognition station.

But now, pizzeria fliers, not debt documents, sit on the reception desk, and only the occasional mail sorter walks through the black marble-coated lobby and past the deserted front offices and “out of service” pay phones to do the firms’ mop-up work behind locked doors.

One such woman, a former Axiant manager and, before that, an employee at Wolpoff & Abramson, took a break from sending debtors’ checks to creditors like Discover Card to chat about what happened.

She remembered the day after the judge converted Axiant’s Chapter 11 bankruptcy into a Chapter 7 liquidation last month.

“We had to let the staff go,” said the woman, who would not give her name. “That was very sad. Some people were here 32 years. … This is the only job they’ve ever been at.”

Speaking in the lobby with “AXIANT” on the wall between the elevators and “Mann Bracken LLP” on the frosted glass door just steps away, the woman described the law firm and its support company, from her perspective, as essentially one and the same. She said Axiant was “like a temp agency” that “did all the behind-the-scenes stuff.” But when it came to signing court documents, she said, “you were Mann Bracken.”

She said the corporate structure of the various debt-buying or -collecting entities was “very confusing for me — and I worked here.”

As downsizing efforts were unsuccessful and the operation went bust, she recalled, some attorneys at Mann Bracken left and took jobs at other law firms. Others, she said, are now working from home.

She had been asked to come in and simply sort the mail that still arrives by the basketful.

“I’m trying to do what’s right,” she said.

Mann Bracken and Axiant employees, creditors and debtors are not the only ones left in the lurch.

Ahra Cho, the manager of Carving’s Cafe on the building’s ground floor, said the collapse of the Mann Bracken-Axiant enterprise has been catastrophic for the breakfast and lunch business.

Whereas Carving’s used to serve up to 100 people breakfast, now the number is closer to 30, Cho said. And more than 200 people would come in for lunch; now “80 is, like, a lot.”

It’s almost noon on a Thursday, and “as you can see, there’s no people here,” Cho said.

“Gone,” she said of more than half her customer base. “Just like that.”

Our Bad: Barrist Backs Out!

HORSHAM, Pa., Dec. 8: NCO Group, Inc. (”NCO”), a leading provider of business process outsourcing services, announced today that it has notified Axiant LLC (”Axiant”) that it is terminating its proposal to purchase Axiant.

On November 20, 2009, NCO entered into an agreement to acquire Axiant, a provider of legal collection services, subject to satisfactory completion of due diligence, the execution of a definitive agreement and other conditions.

Is it possible Michael Barrist is beginning to see the light?

Mann Bracken's "Axiant" Crashes, Acquired by Michael Barrist of NCO

NEW YORK, Nov 20 - Axiant LLC, a provider of legal collections services, said on Friday it filed for Chapter 11 bankruptcy protection and will be sold NCO Group Inc, a provider of accounts receivable outsourcing services.

Axiant had between $10 million and $50 million of both assets and debts, according to its Chapter 11 filing on Friday with the U.S. bankruptcy court in Wilmington, Delaware.

The Huntersville, North Carolina-based company said it filed after its cash flow slid in 2008 and 2009 because of a decline in volume from key customers and a reduction in collection rates stemming from the recession.

While Axiant said it could once handle $55 million in collections per month, it has closed two call centers and reduced its workforce by more than 95 percent, to 50 employees from 1,069.

Axiant expects the NCO transaction to close in the first quarter of 2010, subject to better offers that might be received at auction, and approval of the bankruptcy court.

The bankruptcy case is In re Axiant LLC, U.S. Bankruptcy Court, District of Delaware, No. 09-14118.

Michael Barrist of NCO faces significant challenges in integrating Axiant with NCO. No details on the retention of key Mann-Bracken players such as Chris Diwan, Connell Loftus, Matthew Linkie, Scott Kramer, James Branton, Jerome Yalon and Chris Bracken were available.

Axiant Website

Take a look at http://www.axiant.com.

It doesn't say much, does it?

Is this the Mann Bracken mothership, or is Mann Bracken still the mother of all collection agencies?

Only time will tell.