DENVER — Credit unions with Centrix Financial subprime loans in their portfolio were hopeful last week that a bankruptcy court's tentative approval of the company's sale might improve service performance. "The final changes made in the settlement appear to alter service agreement terms and for some credit unions that might prove helpful and for others it could be worse," projected one West Coast CEO whose CU has sharply reduced its subprime holdings. The key, he said, is whether the new East Coast investment firm, Kendrick CF Acquisitions, buying Centrix could upgrade service, which some CUs have questioned in light of the NCUA fallout.

However, at a hearing last week U.S. Federal Bankruptcy Judge Elizabeth E. Brown approved the sale to Kendrick on condition that CU interests approve final terms, a development attorneys expect prior to a final Feb. 1 ruling.

Kendrick is the designated name for an insider group that includes senior lender Falcon Investment, Everest Reinsurance Holdings of Liberty Center, N.J., and Robert Sutton, the founder/CEO of Centrix.