Legal Issue: $425K Contract Dispute Resolved in 67 Days—Without Stepping Into Court
- Industry: Multiple (acquired debt portfolio)
- Total Debt: $890,000 across 23 accounts
- Age: 180-450 days past due
- Service: Debt Collection & Litigation
01 | Problem
A corporate collection department inherited 23 Mexican accounts totaling $890,000 when their company acquired a competitor. All accounts were 180+ days past due, already written off for tax purposes. The CFO asked: “Can we recover anything, or should we sell this portfolio to a debt buyer for $0.10 on the dollar?” Multiple U.S. collection agencies had attempted phone-based collection with zero success. The accounts were considered “dead files.”
02 | Solution
HMH Legal conducted a two-phase approach:
Phase 1 – Triage (Week 1-2):
- On-site assessment of all 23 debtor companies
- Determined 8 companies had permanently closed (no recovery possible)
- Identified 15 active businesses with collectible potential
Phase 2 – Targeted Recovery (Week 3-12):
- Prioritized accounts by recovery likelihood and amount
- Amicable resolution for 11 accounts through payment plans
- Litigation for 4 accounts with documented assets but refusal to negotiate
- Secured partial settlements based on realistic recovery potential
03 | Result
- Recovered: $478,000 (54% of total portfolio, 70% of collectible accounts)
- Timeline: 90 days for amicable recoveries, 6-9 months for litigated accounts
- ROI: 435% compared to debt buyer offer ($890K × 10% = $89K offer)
The collection department now sends all Mexican accounts to HMH Legal at 90 days past due rather than waiting until they’re completely aged. This proactive approach has increased their overall Mexican recovery rate from 12% to 67%.
"Before working with them, I had some anxiety about doing business in Mexico, as I felt I didn’t fully understand the potential risks involved. They did a great job revamping our documentation, but what really impressed me was the time and effort they spent helping our local credit department “sell” these new documents internally to the sales team, many of whom were initially apprehensive the stricter docs might hinder sales. HMH allayed those fears, and now, knowing that we now have a strong set of documents for credit sales, it has taken away a lot of the concern about credit risk. We now have confidence in granting or increasing credit knowing that we have the necessary tools to fully protect the company’s interests."
Services
Our services in Secured Transactions and Litigation early on of the sales process or upon negotiations or restructure of a loan or debt, are key to prevent or properly address a problem situation, as the one pointed out.
