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Notice

Liquidation and Debt Collection Activities; Fees for Liquidation Activities Performed by Authorized CDC Liquidators

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Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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AGENCY:

U.S. Small Business Administration (SBA).

ACTION:

Notice of Compensation Fees Percentages.

SUMMARY:

SBA is setting the compensation fees for Authorized CDC Liquidators (“ACLs”) for their liquidation activities on 504 loans that have been completed as of the date of this notice, and for ongoing liquidation activities being pursued according to an approved liquidation plan, at 10% of the net recovery proceeds realized from the sale of collateral or other liquidation actions on an individual loan up to $25,000 for each such loan and 5% of the realized net recovery proceeds above such amounts. SBA is also setting compensation fees for liquidations by ACLs of 504 loans where the debenture was purchased during the period after May 14, 2007, through the date of this notice, and for which a liquidation plan has not yet been approved by SBA, at 4% of the net recovery proceeds realized from the sale of collateral or other liquidation action on an individual loan up to $25,000 for each such loan and 2% of the realized net recovery proceeds above such amounts.

DATES:

These compensation fee percentages are effective as of April 4, 2008.

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FOR FURTHER INFORMATION CONTACT:

Walter Intlekofer, Chief, Portfolio Management Division, (202) 205-7543, walter.intlekofer@sba.gov.

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SUPPLEMENTARY INFORMATION:

On April 12, 2007, SBA published in the Federal Register at 72 FR 18349, a final rule amending the regulations pertaining to guaranteed loan and debenture liquidation and litigation cases for the Certified Development Company Program and the 7(a) Guaranteed Loan Program. This final rule had an effective date of May 14, 2007. In Section 120.542(c) of the amended regulations, SBA published the formula for determining the compensation fee that SBA would pay to Authorized CDC Liquidators for their liquidation actions on 504 loans. SBA stated that the compensation fee was to be a percentage (to be published in the Federal Register from time to time, but not to exceed 10%) of the net recovery proceeds realized from the sale of collateral or other liquidation activities, on an individual loan, up to a fee of $25,000 for such loan, and a lower percentage (also to be published in the Federal Register from time to time, but not to exceed 5%) of the realized net recovery proceeds above such amounts.

SBA recognizes that some ACLs have been performing liquidation activities on certain 504 loans since the publication of the final rule. Therefore, SBA will provide compensation from its administrative budget and on an interim basis, is setting the liquidation compensation percentages as follows:

For all liquidations of 504 loans that have been completed by an ACL as of the date of this notice, where the liquidation plan was approved by SBA after the date the CDC became an ACL, SBA will pay a compensation fee of 10% of the net recovery proceeds realized from the sale of collateral or other liquidation actions on an individual loan up to $25,000 for each such loan and 5% of the realized net recovery proceeds above such amounts.

For all liquidations currently in progress that are being pursued by an ACL in accordance with an SBA approved liquidation plan that was approved after the date the CDC became an ACL, SBA will pay a compensation fee of 10% of the net recovery proceeds realized from the sale of collateral or other liquidation actions on an individual loan up to $25,000 for each such loan and 5% of the realized net recovery proceeds above such amounts.

For all liquidations by an ACL on 504 loans for which the debentures were purchased after May 14, 2007 (the effective date of the final rule), through the date of this notice, and for which a liquidation plan has not yet been approved, SBA will pay a compensation fee of 4% of the net recovery proceeds realized from the sale of collateral or other liquidation actions on an individual loan up to $25,000 for each such loan and 2% of the realized net recovery proceeds above such amounts. Liquidation plans for these loans must be submitted to SBA Commercial Loan Centers in Fresno, CA or Little Rock, AK within 90 calendar days from the date of this notice.

For any 504 loan for which the debenture has not yet been purchased, SBA is unable to pay any compensation fees at this time. Any future change will be communicated in the Federal Register.

Pursuant to 13 CFR 120.542(c), all requests for compensation fees must be received by SBA within nine months from the date of SBA's purchase of the defaulted debenture. Fee requests not received within such timeframe will be automatically rejected.

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Authority: 13 CFR 120.542.

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Grady Hedgespeth,

Director of Financial Assistance.

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[FR Doc. E8-7067 Filed 4-3-08; 8:45 am]

BILLING CODE 8025-01-P