Colorado-based debt collector SquareTwo Financial Corp filed for Chapter 11 bankruptcy on Sunday in the U.S. Bankruptcy Court for the Southern District of New York, the company said in a statement.
SquareTwo reached an agreement with Resurgent Holdings LLC to take ownership of the debt collector's portfolio of assets, with Resurgent agreeing to invest $405 million, according to the filing.
SquareTwo Chief Operating Officer J.B. Richardson said the proceeds from the agreement would result in a final purchase price of $264 million in exchange for 100 percent of the equity of the reorganized company.
On completion of the transaction, SquareTwo will close its operations in the United States, with the closing expected to be completed by the end of 2017.
SquareTwo said its Canadian operations would continue under Resurgent's ownership.
AlixPartners is serving as restructuring adviser and Keefe, Bruyette & Woods, Inc is serving as financial adviser to SquareTwo.
SquareTwo is being provided legal counsel by Willkie Farr & Gallagher LLP in the United States and by Thornton Grout Finnigan in Canada. Resurgent Holdings is being provided legal counsel by Foley & Lardner LLP in the United States and by McCarthy Tétrault LLP in Canada.
(Reporting by Kanishka Singh in Bengaluru; Editing by Peter Cooney)