Commitments and Contingencies

12 Months Ended

Sep. 30, 2011

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE H — COMMITMENTS AND CONTINGENCIES

Employment Agreements

On January 25, 2007, the Company entered into an employment agreement (the “Employment Agreement”) with Gary Stern, the Company’s Chairman, President and Chief Executive Officer, which was to expire on December 31, 2009, provided, however, that Gary Stern was required to provide ninety days’ prior written notice if he did not intend to seek an extension or renewal of the Employment Agreement. The Company and Mr. Stern are in the process of finalizing an extension of this agreement. In the interim period Mr. Stern continues his duties as Chief Executive Officer at the discretion of the board of directors of the Company. In January 2008, the Company entered into a similar two year employment agreement with Cameron Williams, the Company’s former Chief Operating Officer. The contract was not renewed and expired December 31, 2009. The Company entered into a Consulting Services Agreement with Mr. Williams for services through December 31, 2010.

Leases

The Company leases its facilities in (i) Englewood Cliffs, New Jersey, (ii) Houston, Texas and (iii) Long Beach, New York. The leases are operating leases, and the Company incurred related rent expense in the amounts of $305,000, $395,000 and $611,000 during the years ended September 30, 2011, 2010 and 2009, respectively. The future minimum lease payments are as follows:

Year Ending September 30,
2012	$	307,000
2013		291,000
2014		292,000
2015		252,000
2016		41,000
	$	1,183,000

Contingencies

In the ordinary course of its business, the Company is involved in numerous legal proceedings. The Company regularly initiates collection lawsuits, using its network of third party law firms, against consumers. Also, consumers occasionally initiate litigation against the Company, in which they allege that the Company has violated a federal or state law in the process of collecting their account. The Company does not believe that these matters are material to its business and financial condition. The Company is not involved in any material litigation in which it was a defendant.

The Company received subpoenas from three jurisdictions seeking information and/or documentation regarding its business practices. The Company is fully cooperating with the issuing agencies. The Company has not made any provision with respect to these matters in the financial statements because the Company does not believe that they are material to its business and financial condition.