TULSA, Okla. (AP) -- Bank of America has joined a list of companies suing former managers of Commercial Financial Services Inc.
In a lawsuit filed Wednesday in Tulsa County District Court, Bank of America and Enterprise Funding Corp. accuse CFS of violating the Oklahoma Securities Act, including fraud, conspiracy and negligent misrepensenation.
The complaint asks for unspecified actual and punitive damages.
The charges are made against former CFS chairman, Bill Bartmann. Also named are Gertrude Brady, former CFS investor relations manager; Jay Jones, former CFS executive vice president; and Chase Securities, which was CFS' primary investment banker.
The plaintiffs alleged that CFS engaged in a scheme to induce Enterprise, Bank of America and others into buying $189 million insecurities.
Tulsa-based CFS bought delinquent credit card accounts and sold bonds based on its ability to collect on that debt. The company filed for bankruptcy in December 1998 after CFS was questioned on its collection rates and the selling of accounts to another firm, DIMAT.
The company shutdown in June 1999. More than 3,900 people in Oklahoma City and Tulsa lost their jobs.
The Bank of America lawsuit features DIMAT -- a company Jones purchased in June 1999 -- and a computer model CFS developed to forecast the amounts it could collect on charged-off credit card receivables, which the plaintiffs contend was invalid.
The plaintiffs alleged that DIMAT bought bad credit card accounts from CFS totaling more than $63 million "all of which ultimately came from CFS itself."
The lawsuit states that "DIMAT was at all relevant times in fact under the control of Jones, who in concert with Bartmann and Brady used DIMAT to act as the buyer" of the bad credit card accounts.
Bartmann's attorney, Jim Reed, said the lawsuit offers "no facts or evidence to show that Bill was connected to DIMAT." "In our opinion, these lawsuits are an attempt to blame someone for something the plaintiffs already knew about," Reed said.
The Bank of America lawsuit joins 11 similar actions, all of those in federal court.