Centrix Financial, the former title sponsor of the Grand Prix of Denver, has agreed to be sold to a group of investors that includes chief executive and current principal equity holder Robert Sutton.
The group also includes the private- equity firm Falcon Investment Advisors, based in Boston, and Everest Reinsurance Holdings, a publicly traded insurance company based in New Jersey.
Financial terms of the sale weren’t disclosed Tuesday. The deal is expected to be finalized in November.
“I am gratified that together we will be able to ensure the stability and future growth” of the company, Sutton said in a statement.
Many observers, including people close to Centrix and early investors, had said the privately held company was on the verge of bankruptcy.
The Centennial-based subprime auto lender says it has underwritten 250,000 loans totaling nearly $4 billion since 1998.
But after growing rapidly through the early part of this decade, the company hit a downward spiral last year.
Over the past year, Centrix cut its workforce from 1,500 to 500. The bulk of its employees are in Centennial.
Marv Rockford, a spokesman for Sutton, declined to comment further. He wouldn’t say whether the company would be moved or whether there would be additional downsizing.
The company is being sued by a group of investors alleging fraud and claiming Centrix “may be undercapitalized or insolvent.”
Centrix has said it will vigorously fight the lawsuit.
Scott Browning, an attorney for the investors suing Centrix, said his clients “continue to be concerned about the transactions that (they) identified in their complaint, and they intend to use the court process to fully understand and bring to light Centrix’s financial dealings with its affiliates and Bob Sutton.”
Sutton, a racing enthusiast who bought the Grand Prix in 2004, had to sell part of the race so it could be held this year. Centrix was dropped as the title sponsor.
The company has attributed its struggles to tighter regulations. Last summer, the National Credit Union Administration cautioned credit unions – whose accounts it guarantees – about using third-party loan companies such as Centrix to to help subprime borrowers.
Falcon and Everest didn’t return calls Tuesday seeking comment.
The companies already were linked to Centrix. Falcon has been its senior lender since January, and Everest provides insurance for loans serviced by Centrix, according to a statement released Tuesday.
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
