After a spectacular rise to the top during the foreclosure crisis, special servicer Wingspan Portfolio Advisors LLC has landed in bankruptcy.
Wingspan was founded in 2008 by Steven Horne, an attorney
who served as president and chief executive officer. Horne previously worked for Fannie Mae and Ocwen Financial Corp.
The Dallas-based distressed loan servicer quickly grew, with its total staff size reaching 300 employees by 2011.
Wingspan was the second-fastest-growing mortgage-related company
in the 2013 Inc. Hire Power Award.
It was named two consecutive years to the Inc. 500.
But Wingspan’s business relied on a distressed-loan model that thrived during the foreclosure crisis but had no apparent sustainability in a healthier real estate market.
Cracks began emerging in 2012, when — after the conclusion of
one client contract — Wingspan notified the Texas Workforce Commission in a Worker Adjustment Retraining Notification that 459 employees would be laid off.
But demand for staffing recovered, and headcount at Wingspan flew past 2,000 people
by 2013.
In October 2014, however, Wingspan
filed a WARN with the Florida Department of Economic Opportunity indicating 50 employees were being laid off.
Later that month, the special servicer confirmed that Horne was out as CEO as Wingspan’s stockholder investor group made a multi-million dollar capital infusion.
Since then, Wingspan has disclosed
100 layoffs in Monroe, Louisiana, and 150 more job cuts in Florida.
On Monday, Wingspan
filed a voluntary petition for Chapter 7 bankruptcy in a Texas federal bankruptcy court.
Assets were listed at $1.2 million.
But liabilities far exceeded assets at $12.1 million.
Between a thousand and 5,000 creditors are impacted by Wingspan’s bankruptcy.
Cisco Systems Capital Corp. was the biggest single creditor listed with more than
$0.4 million in unsecured debt. Dell Financial Services LLC held another nearly $0.4 million in debt.
“Hold-back from Factored Accounts Receivable” showed as a $1.3 million liability.
