Meanwhile, Bartmann wrestled with an abiding sense of shame. Worst of all were the run-ins with former employees in the streets of Muskogee, a conservative and insular town of 35,000. "You're walking down the street," says Bartmann, "and one of them's coming out of the hardware store or the post office. You weren't planning on meeting, and all of a sudden, there you are, in the middle of the sidewalk, staring at each other. You can tell by the look on their face that they haven't found work yet, they can tell by the look on my face that I sure can't employee 'em. Real awkward," he says softly. "Real awkward."
Attitudes toward his new line of work didn't help, either. "People laughed when Bill said he was going to make money buying bad loans," says one former employee. At times Bartmann succumbed to profound self-doubt. "You fool, you can't do this, you're $1 million in the hole," he recalls thinking in his blacker moments. "There isn't a person in this community who will talk to you anymore. You don't know anything about collecting delinquent loans."
Maybe so. But he kept collecting them, and kept trying to repay his own creditors, and kept trying to keep those creditors from forcing him into bankruptcy. In 1988, after three years of acrimony and $50,000 in legal fees, Bartmann v. Maverick Tube Corp. had reached the 10th circuit court of appeals. And there, at last, the court adjudicated that Bartmann was not bankrupt. He had won his right to owe a million dollars.
The legal victory set the stage for a full-blown comeback. For it was only a matter of months before Commercial Financial Services--as Bartmann christened the company upon its incorporation--generated enough income to repay Bartmann's creditors, the bank included. Remarkably, he had dug himself out of his million-dollar hole.
In the process, CFS had picked up an unexpected head of steam. Profitable since year one, it reached 71 employees by 1990. And as the wave of bank failures that had begun in Oklahoma rolled through the rest of the country, it occurred to Bartmann that he might be sitting on an opportunity the size of the Glenn Pool Strike, the massive oil reserve discovered near Tulsa in 1905. So he did the obvious: he decided to shut down the business and start it all over again.
The way Bartmann figured it, if he were to really make a killing, he'd have to move the business from Muskogee to Tulsa, with its more sophisticated capital sources and workforce. He'd also have to stop buying the "double-ugly" loans in favor of less delinquent ones, which, though more expensive, afforded better net margins. The solution: he sold off the company's entire inventory of loans, summoned his 71 employees to a staff meeting, and summarily fired 54 of them.
This from the man who'd become emotionally unhinged by his workers' farewells at Hawkeye Pipe? "I refer to it as the lifeboat theory," says Bartmann. "If you're the senior person on the lifeboat with a capacity of 10 people, and an 11th person swims up to the boat, what do you do? Do you let that 11th person climb in and therefore put everyone at risk? Or do you mercifully execute the person--reach over the side of the boat and shoot 'em? That's what I had to do to 54 people. I made it as merciful as I could."
However calculated it was, the near-liquidation of the company left Bartmann, in splendid symmetry to his starting point, with $1 million in his bank account. And then he was confronted with an unexpected last temptation. He knew he'd burn through that start-up capital quickly in Tulsa. Why not simply return home to Iowa a millionaire? Why tempt failure so soon after escaping its clutches?
To weigh the question, Bill and Kathy Bartmann retreated to Delhi, Iowa, where Kathy's family kept a summer cottage. Bill, the teenage drifter, had spent the summer of his 14th year there, living in a barn and working odd jobs. It's where he'd met then-11-year-old Kathy for the first time. Now, after two days of intense debate, the two of them headed down to a favorite fishing dock at dusk and watched the sun settle into a lagoon on the far side of Lake Delhi. "Do we bet $1 million, everything we own," Bartmann recalls asking, "that we can make this thing work, differently, in the next six months?"
Sure.
And in that instant, both the Bartmann family and the multitrillion-dollar collection industry were changed forever.
Alchemy.
"Two-thousand-dollar settlement! It's raining money!" Amid applause, the employee excitedly runs to the board and draws another gold bar on top of the existing pile.
Here, on CFS's floor of operations, there's little hint of the unsavory, low-tech, vaguely scary world that is the collection business. If anything, the atmosphere feels like a PBS telethon. There are the silly games to track progress, the raucous self-congratulation as goals are met. But the most striking thing, here inside the beating heart of the most effective collection machine in history, is that the collectors are, well, nice.
"You currently owe $5,500 on your MasterCard account," Marty Moore is saying in a voice worthy of a flight attendant. "Are you able to pay that today?" She's careful to follow Bartmann's cardinal rule: that debtors are "customers" and must be referred to as such. "They're not deadbeats, not derelicts, not pond scum," Bartmann says. "I know it sounds Pollyanna-ish, but I believe that 90% are good people who ran into a bad problem. Just like me: I found myself in a hole one morning, and I wanted to dig myself out, but I didn't know how. Having been broke, I understand the customer."
