An agreement between U.S. regulators and a money manager that could have brought student-debt relief to hundreds of thousands of borrowers has been rejected by a judge.
Banks, insurers, debt collectors and hedge funds involved in the trusts’ operations tried to block the accord. They argued that Florida-based VCG Securities, which holds equity slices of the National Collegiate trusts, had no right to hammer out the agreement with the federal consumer bureau. Donald Uderitz, who runs VCG, didn’t respond to an email, text message and voicemail seeking comment. Marisol Garibay, a spokesperson for the consumer bureau, declined to comment.
Uderitz has tried for years to change how the trusts collect from borrowers. One idea involved purchasing loans, taking a cut, and then striking deals with borrowers who’d pay less than what they owed. Uderitz has been unable to convince other investors in the trusts that he’s acting in their best interests.
Money managers Angelo Gordon & Co., Waterfall Asset Management, One William Street and Libremax Capital — which collectively hold more than $1.8 billion in notes issued by the National Collegiate trusts — have fought Uderitz in federal and state courts. Their lawyer, Michael Hanin, a partner at Kasowitz Benson Torres LLP, said the consumer bureau’s deal with the trusts would have trampled their rights.
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