Written by Robert Frank and Originally Published in The Wall Street Journal on March 20, 2010
Ken Cage is racing through a private aviation terminal near Orlando when his BlackBerry buzzes with bad news. The plane he is about to repossess is scheduled to take off for Mexico in three minutes.
Even worse, the Cessna's owner and pilot is on his way back from lunch—and he is rumored to be six-feet, six-inches tall.
"I'd rather not stick around to find out," Mr. Cage says.
Mr. Cage, 44, stands guard by the door as his partner Randy Craft walks onto the tarmac and approaches a shiny white turbo-prop. He quickly picks the lock on the door and ushers in the repo team's pilot, Dave Larson. The plane's propellers roar to life, and after clearance from the control tower, the $350,000 ride lifts off the runway and into the sky.
Mr. Cage and Mr. Craft climb back into their Ford pickup and tear out of the parking lot, just as the plane's owner pulls in.
"He's a minute late," says Mr. Cage, peering out the window. "Lucky for us."
Ken Cage isn't your typical repo man. Rather than snatch cars from an over-extended middle class, he takes back yachts, planes and other toys from the over-leveraged rich.
Business is thriving, even as the economy begins to improve. His company, Orlando-based International Recovery Group, repossessed more than 700 boats, planes, helicopters and other property last year valued at more than $100 million. Business, he says, is up six-fold from 2007.
He has reclaimed everything from $18 million Gulfstream jets and Bell helicopters to 110-foot Broward yachts, $500,000 recreational vehicles and even a racehorse. Before the financial crisis, most of the luxury items he pulled in were valued between $30,000 and $50,000. Today, they are valued at $200,000 to $300,000—meaning defaults are hitting people at a much higher income level.
Most repo men take cars and trucks. But Ken Cage and Randy Craft repossess yachts, planes, helicopters and other luxury toys of the formerly wealthy. WSJ's Robert Frank reports.
The folly of the wealthy has been good news for an elite cadre of repo men. Nick Popovich, the self-proclaimed "Learjet Repo Man" and head of Indiana-based Sage-Popovich, and Michigan boat specialists like Harrison Marine report brisk business. Reality-TV producers have been knocking on their doors. Last year, says Mr. Cage, International Recovery's revenues soared to the eight figures, up from just a few hundred thousand when he and two partners bought the company in 2005.
Banks hire Mr. Cage to retrieve their collateral after a borrower has defaulted. Once he grabs the property, he cleans it up or makes needed repairs and sells it to a new buyer. He then gives the proceeds, minus his fees and expenses, back to the bank. While the standard commission for most repossessions is between 6% to 10% of the resale price, Mr. Cage has lowered his fee to as little as two percent as a way to beat back growing competition.
"They're very quick in their response time," says Steve De Amico, vice president in charge of lending at Illinois-based Allied First Bank, which hires Mr. Cage for recoveries. "It's also helpful to have one company that can get the property, restore it and sell it for us."
Mr. Cage can't name names. But he estimates that 70% of his targets made and lost their money from real estate—either as developers, Realtors or contractors. Most of his jobs are in Florida, Arizona, California, Nevada and other sun states where real estate was hit hardest.
The son of a Philadelphia-area trucking-company owner, Mr. Cage never planned to land in the rarefied repo ranks. He started out in the cash-management department of J.P. Morgan, then worked in the collections department at Chrysler Finance, where he hired repo companies to pick up cars.
Even though he never did the repos himself, he said the work became depressing.
"Here we were, taking minivans with child seats in the back, or going to someone's job to take their car," he says. "I had a tough time with that."
Separating flashy toys from their owners seemed to be much easier—especially from a logistical perspective. Unlike cars, which can be hard to find and take, yachts and planes are often traceable through Federal Aviation Administration or marine records. Mr. Cage relies on a vast a network of marine captains, tow-boat operators, jet-terminal crews, dock workers and aircraft pilots who feed him information.
With his Phillies cap, jeans, scruffy goatee and genial smile, the stout Mr. Cage is an unassuming presence. For muscle, he relies on his partner Mr. Craft, a tall, broad-chested former professional wrestler known as "Rockin' Randy."
Mr. Craft prides himself on being able to break into just about anything, whether boat, plane or RV. Not that planes or yachts are that hard to steal. Mr. Cage says most yacht owners keep their keys near the ignition and rarely lock the doors. Plane doors can often be easily picked.
"A jet is much easier to take than a car," he says. His company works with about 30 pilots, all of whom are experts at flying various kinds of aircraft.
Occasionally, the rich rear up to protect their prizes. Mr. Cage says that he and Mr. Craft have been hit by cars, threatened with shovels and chased on foot countless times. Recently, Mr. Cage says he was on a yacht assignment in Jacksonville, Fla., when the owner boarded another boat and zoomed after him, Bond-style. He soon gave up the chase, and Mr. Cage kept his craft.
Most repo targets never even know Mr. Cage is coming.
Early one morning at the Hontoon Marina just outside Orlando, Mr. Cage and Mr. Craft walk along the docks until they spot their prey—a 65-foot Sea Ray. Mr. Cage says they had been tipped off by a boat captain who saw the craft ease into the docks the night before without any running lights—a sign that the owner was trying to avoid notice.
Mr. Craft hops onto the boat, finding no one aboard. A telltale pair of socks and sneakers near the door suggests someone may be headed back soon.
After a quick check of the registration number, the team revs up the engine and backs away from the dock. As they motor down the river, Mr. Cage reclines in a plush leather chair and takes a moment to soak in the sun.
"Someday I'd like to get a boat," he says. "But I'd pay all cash."