UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 715, 2010

Performance Capital Management, LLC ~~(Exact name of registrant as specified in its charter)~~

(Exact name of registrant as specified in its charter)

	California		0 – 50235		03-0375751
	(State or other Jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

	7001 Village Drive, Suite 255
	Buena Park, California		90621
	(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (714) 736-3790

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry Into a Material Definitive Agreement.

~~Termination~~Sale of ~~Credit~~Performance ~~Facility~~Capital Management, LLC Portfolios

On ~~July~~ ~~13,~~January ~~2004~~15, ~~effective June 10~~2010, ~~2004,~~ Performance Capital Management, LLC (the “Company”) entered into aan ~~definitive~~Account ~~Master~~Purchase ~~Loan~~ Agreement (“~~MLA~~Agreement”) with ~~Varde Investment~~Oliphant ~~Partners~~Financial Group, LLC, ~~L.P.~~a Florida limited liability company (“~~Varde~~Oliphant”), awhich ~~well-known~~was ~~participant~~approved inby the ~~debt~~ ~~collection~~Company’s ~~industry~~Board of Directors on January 14, 2010, to ~~augment its~~sell ~~portfolio~~all ~~purchasing~~of ~~capacity~~the ~~using~~Company’s ~~capital~~loan ~~provided~~portfolios, by“as ~~Varde.~~is”, Toto ~~implement~~Oliphant ~~the~~for ~~MLA~~a purchase price of $925,000. ~~the~~The Agreement ~~Company~~also ~~created~~provides athat Oliphant shall receive all collections revenue ~~wholly-owned~~on ~~subsidiary~~the loan accounts being purchased that was generated from December 1, ~~Matterhorn~~2009 through ~~Financial~~January ~~Services~~15, ~~LLC~~2010, ~~(“Matterhorn”)~~the closing date of the sale. This amount, totaling ~~which~~approximately is$113,000, ~~also~~remained with the Company as a ~~party~~deposit toon the ~~MLA~~purchase price. ~~The~~Oliphant ~~facility~~paid ~~provided~~the ~~for~~Company upthe tobalance of approximately $25812,000 ~~million~~in ofcash. ~~capital~~The ~~(counting~~Agreement ~~each~~includes ~~dollar~~a ~~loaned~~mutual onindemnification aand ~~cumulative~~hold ~~basis)~~harmless ~~with~~provision athat will ~~term~~survive ~~ending~~the execution and delivery of the loan account transfer documents. inA ~~June~~copy ~~2009~~of the Agreement is attached hereto as Exhibit 10.1 Inand ~~June~~incorporated herein ~~2009~~by reference, ~~Varde~~and ~~agreed~~the toforegoing ~~extend~~disclosure ~~the~~is ~~termination~~qualified ~~date~~in ofits ~~the~~entirety ~~MLA~~by reference to ~~June~~the ~~2010~~Agreement.

Matterhorn served as the entity that purchased portfolios under the MLA. Varde had a first priority security interest in all the assets of Matterhorn securing repayment of its loans and payment of its interest in residual collections. The Company also entered into a Servicing Agreement with Matterhorn as part of the MLA, whereby the Company serviced the portfolios owned by Matterhorn for a fee, and Varde had a security interest in Matterhorn's rights to proceeds under the Servicing Agreement.

Varde had the option of exercising its rights under its various security interests and the guaranty if an event of default occurred. These rights included demanding the immediate payment of all amounts due to Varde, as well as liquidating the portfolios owned by Matterhorn. A failure to make payments when due, if not cured within five days, was an event of default. Other events of default included:

— Material breaches of representations and warranties;

— Uncured breaches of agreements having a material adverse effect;

— Bankruptcy or insolvency of Performance Capital Management, LLC or Matterhorn;

— Fraudulent conveyances;

— Defaults in other debt or debt-related agreements;

— Failure to pay judgments when due;

— Material loss or damage to, or unauthorized transfer of, the collateral;

— Change in control of Performance Capital Management;

— Termination of Performance Capital Management as the Servicer under the Servicing Agreement; and

— Breach of Varde's right of first refusal to finance portfolio acquisitions.

Matterhorn had not kept up with its scheduled principal and interest payments to Varde over the past couple of years, which had entitled Varde to declare Matterhorn in default and commence with seizing the portfolios and selling them to pay amounts owed by Matterhorn to Varde. In an effort to prevent such an outcome, Matterhorn sought and received extensions for amounts owing to Varde. In lieu of commencing with a default, Varde had taken amounts that would have otherwise been paid to the Company to pay for amounts owing to it by Matterhorn.

In light of these circumstances, and the Board’s decision to dissolve and liquidate the Company, the Board determined that was in the best interests of the Company and its Members to structure a settlement among the Company, Varde and Matterhorn that included the sale of the portfolios owned by Matterhorn and the use of the sale proceeds to settle amounts owing by Matterhorn to Varde and the Company.

As a result, on January 7, 2010, the Company entered into an Agreement Regarding Loan (“Settlement Agreement”) with Varde and Matterhorn, the Company’s Board having approved the same on January 6, 2010. The Settlement Agreement provided for the payment of $1,075,425.36 to Varde in full settlement of all amounts owing to it by Matterhorn, including principal, interest and Varde's residual equity value in the portfolios. Varde also released all security interests it had in the portfolios owned by Matterhorn. The Settlement Agreement also provided that Matterhorn would retain $500,000 as a net settlement payment to the Company for its equity interest in the portfolios. The closing of the Settlement Agreement was January 11, 2010 and the effective date of the termination of the MLA was January 7, 2010. A copy of the Settlement Agreement is attached hereto as Exhibit 10.1 and incorporated herein by reference, and the foregoing disclosure is qualified by reference to the Termination Agreement.

Sale of Loan Portfolios

In connection with the Settlement Agreement, and conditioned upon its execution, Matterhorn entered into a Purchase and Sale Agreement (“PSA”) with North Star Capital Acquisition LLC, a Florida limited liability company (“North Star”) on January 8, 2010, the Company’s Board having approved the same on January 6, 2010. The closing of the PSA was January 11, 2010. Matterhorn sold all of its loan portfolios to North Star for $1,575,425.36. Under the PSA, North Star purchased the debt accounts “as is”, thereby relieving Matterhorn of any obligation to repurchase the accounts if North Star should determine that an account is deficient. A copy of the PSA is attached hereto as Exhibit 10.2 and incorporated herein by reference, and the foregoing disclosure is qualified in its entirety by reference to the PSA.

Termination of Servicing Agreement with Matterhorn

With the termination of the MLA and sale of all of the Matterhorn portfolios, the Servicing Agreement between the Company and Matterhorn also terminated on January 7, 2010.

Outsourcing of Collections of the Company’s Portfolios

The Company’s cost to collect exceeded 100% of its collection revenues in December 2009. In an effort to reduce its operating expenses and preserve cash, the Company terminated all but four of its full-time employees and three of its part-time employees effective January 1, 2010, which was disclosed in a Report on Form 8-K dated January 1, 2010 and filed with the SEC on January 7, 2010.

As previously disclosed in a Report on Form 8-K dated December 15, 2009 and filed with the SEC on December 21, 2009, Mr. Darren Bard will be resigning as Chief Technology Officer effective January 15, 2010. The Board has agreed to retain him on a part-time, consulting basis to assist from time-to-time with transitional matters.

As a result of dismantling its collections infrastructure, the Company entered into an Agency Service Agreement (“Agency Agreement”) with Oliphant Financial Group, LLC, a Florida limited liability company (“Oliphant”) on January 11, 2010. The Agency Agreement provides for Oliphant to service all of the Company’s portfolios in exchange for a servicing fee of between 45% and 52% of gross receipts. Either party may terminate the Agency Agreement upon 30 days advance written notice to the non-terminating party. A copy of the Agency Agreement is attached hereto as Exhibit 10.3 and incorporated herein by reference, and the foregoing disclosure is qualified in its entirety by reference to the Agency Agreement.

Item 1.02. Termination of a Material Definitive Agreement.

~~The~~With the ~~Master~~sale ~~Loan~~of ~~Agreement,~~all asof ~~amended,~~the ~~by and among Varde Investment Partners, L.P.,~~ Performance Capital Management, LLC ~~and~~(the ~~Matterhorn~~“Company”) ~~Financial~~loan portfolios ~~Services,~~to ~~LLC~~Oliphant ~~was terminated~~Financial ~~effective~~Group, ~~January 7~~LLC, ~~2010.~~a ~~For~~Florida ~~additional~~limited ~~disclosure~~liability ~~regarding the~~company ~~termination~~(“Oliphant”), of the ~~Master~~Agency ~~Loan~~Service Agreement, ~~see~~between the ~~section~~Company ~~entitled~~and ~~Termination of Credit~~Oliphant ~~Facility~~dated ~~under~~January ~~Item~~11, ~~1.01~~2010 inwas ~~this~~terminated effective ~~Report~~January on15, ~~Form 8-K above~~2010, ~~which~~the ~~disclosure~~closing isdate ~~incorporated~~of ~~herein~~the ~~by reference~~sale.

Item 2.01. Completion of Acquisition or Disposition of Assets

On January 815, 2010, ~~Matterhorn Financial Services, LLC, a wholly-owned subsidiary of~~ Performance Capital Management, LLC, ~~entered~~(the “Company”) entered into aan Account Purchase ~~and Sale~~ Agreement with ~~North~~Oliphant ~~Star~~Financial ~~Capital~~Group, ~~Acquisition~~ LLC, a Florida limited liability company (“Oliphant”), to sell all of its portfolios to Oliphant for $1925,~~575,425~~000.36 inThe ~~connection~~closing ~~with the termination~~ of the ~~credit~~sale ~~facility~~was ~~with Varde Investment Partners, L.P. The Purchase and Sale Agreement closed on~~ January 1115, 2010. For ~~additional~~ additional disclosure regarding the sale of the ~~Matterhorn~~Company’s ~~Financial~~portfolios ~~Services, LLC~~to ~~portfolios~~Oliphant, see ~~the~~Item ~~section~~1.01, ~~entitled~~Entry ~~Sale~~Into ofa ~~Loan~~Material ~~Portfolios~~Definitive ~~under Item~~Agreement, ~~1.01~~ in this Report on Form 8-K above, which disclosure is incorporated herein by reference.

Item 8.01. Other Events.

Legal Proceedings

InOn ~~addition~~January to22, ~~the~~2010, ~~two class action lawsuits disclosed in~~ Performance Capital Management’s, LLC (the “Company”) ~~report~~agreed onto settle ~~Form~~a ~~10-Q~~lawsuit ~~for~~with Mark Palmer, a plaintiff who filed a lawsuit against the Company ~~period~~in ~~ended~~November ~~September~~2009 in the United States District Court for the District of 30Connecticut, ~~2009~~for $3,900 ~~two~~and ~~other~~a ~~lawsuits~~release ~~have~~from ~~been~~the ~~filed~~debt ~~against~~that ~~the~~he ~~Company~~owes asto the ~~follows~~Company.

InEstimated ~~November~~Liquidating 2009, a lawsuit was filed against the Company in Orange County Superior Court in the United States District Court for the Eastern District of New York by Mark Palmer (“Plaintiff”). An amended complaint was filed with the Court on November 30, 2009. Plaintiff makes broad, general assertions that the Company violated the Fair Debt Collection Practices Act, 15 U.S.C. Section 1692 et seq. with respect to its debt collection practices. Plaintiff seeks statutory and punitive damages as well as attorney’s fees and court costs. This lawsuit has been referred to legal counsel. The merits of the case have not yet been determined. The Company expects to prevail in this lawsuit; however, as litigation is inherently unpredictable, there can be no assurance in this regard. If the plaintiff does prevail, the results could have a material effect on the Company’s financial position.Distributions

OnThe net ~~November~~proceeds ~~10,~~to ~~2009,~~Performance aCapital ~~purported~~Management, ~~class~~PLLC ~~action~~(the ~~lawsuit~~“Company”) ~~was~~from ~~filed~~the ~~against~~sale of the ~~Company~~ inMatterhorn ~~the~~Financial ~~United~~Services, ~~States~~LLC ~~District~~(“Matterhorn”) ~~Court~~loan ~~for~~portfolios and the Company’s ~~District~~loan ofportfolios ~~Massachusetts, Boston~~was ~~Division~~estimated to be $1,432,000 on ~~behalf~~December of15, ~~Ronald~~2009, as A.disclosed ~~Luippold~~in ~~and~~the aCompany’s ~~broad~~definitive ~~proposed~~proxy ~~class~~statement ~~of debtors~~ (“~~Plaintiffs~~Proxy Statement”). filed ~~Plaintiffs~~with ~~make~~the ~~broad~~SEC on January 12, ~~general~~2010 ~~assertions~~and ~~that~~posted on the Company’s ~~violated~~web ~~the~~site ~~Fair~~at: http://www.cfpproxy.com/9101sm. ~~Debt~~The ~~Collection~~actual ~~Practices~~net ~~Act,~~proceeds 15received ~~U.S.C.~~by ~~Section~~the ~~1692~~Company etfrom ~~seq.~~the ~~with~~sale ~~respect~~of tothe ~~its~~portfolios ~~debt~~were ~~collection~~approximately ~~practices~~$1,425,000. ~~Plaintiffs~~The ~~seek~~sale ~~statutory~~of the ~~and~~Company’s ~~punitive~~portfolios ~~damages~~is asdisclosed ~~well~~in asthis ~~attorney’s~~report ~~fees~~on ~~and~~Form ~~court~~8-K ~~costs.~~under ~~This~~Item ~~lawsuit~~1.01, ~~has~~Entry ~~been~~Into ~~referred~~a toMaterial ~~legal~~Definitive ~~counsel~~Agreement. The ~~merits~~sale of the ~~case~~Matterhorn portfolios ~~have~~was ~~not~~disclosed ~~yet~~in ~~been determined~~a report on Form 8-K dated January 7, 2010 and nofiled with ~~class~~the ~~has~~SEC ~~been~~on ~~certified~~January 13, 2010. ~~The~~With the sale of the Company’s ~~expects~~and toMatterhorn’s ~~prevail~~portfolios, inthe Company will not receive ~~this~~any ~~lawsuit;~~further ~~however,~~servicing asfees ~~litigation~~or isrevenues ~~inherently~~from ~~unpredictable~~portfolio collections, ~~there~~with ~~can be~~the noexception ~~assurance~~of inpotential ~~this~~payments ~~regard.~~from Ifaccounts ~~the~~held ~~Plaintiffs~~back dofrom ~~prevail~~the sales, including ~~the~~those ~~results~~that ~~could have~~are athe ~~material~~subject ~~effect~~of onpending lawsuits against the Company’s ~~financial~~or a ~~position~~bankruptcy order.

Should the Company proceed with dissolving and liquidating after a vote by its members (“Members”), all pending lawsuits will need to be resolved before the Company can distribute its remaining assets to its Members and dissolve.1

The net proceeds received from the sale of the Company’s loan portfolios to Oliphant are being held in a separate bank account pending the vote by the Company’s members of record as of December 31, 2009 (“Members”) on the Board’s proposal to dissolve the Company contained in the Proxy Statement. The deadline for Members to submit their consents or revoke their consents is February 19, 2010. If the members approve the dissolution and liquidation of the Company, the proceeds will be distributed as provided in the Plan of Dissolution, a copy of which is attached to the Proxy Statement. If the Members vote against the proposal to dissolve the Company or there are insufficient votes submitted to take action, the Board will seek a decree of judicial dissolution pursuant to California state law and distribute any remaining assets to the members and economic interest owner (together, “Unit Holders”), and/or file for bankruptcy, depending upon the circumstances.

The proceeds from the sale of the Matterhorn portfolios are being used to settle amounts owing to creditors, including the termination fee in connection with the termination of the office lease, and to pay ongoing business expenses.

While the actual amount of the Company’s future liabilities, other obligations and expenses and claims against it is unknown, the Board has taken steps to preserve the value of the Company’s assets and reduce its expenses while awaiting a vote by the Members. At the time of this filing, the Company believes that available cash will be adequate to provide for the satisfaction of its liabilities, other obligations and expenses and claims against it and that it will make one or more cash distributions to its Unit Holders.

The amount the Company estimates it will distribute to its Unit Holders remains at between $0.16 to $0.61 per unit (based on 548,443 total units outstanding), as disclosed in the Proxy Statement. This estimated liquidating distribution range assumes that the dissolution and liquidation of the Company pursuant to the Plan of Dissolution will be approved and ratified by the Members and that there will be assets remaining after all claims, liabilities and expenses (such as salaries and benefits, severance, directors’ and officers’ insurance, payroll and local taxes, legal and accounting fees and miscellaneous office expenses) are paid.

The Company will continue to defend any pending lawsuits and pay any claims, liabilities and expenses following approval of the dissolution of the Company pursuant to the Plan of Dissolution. Such claims, if not settled, may continue for up to 4 years following the Effective Date. Satisfaction of these claims, liabilities and expenses will reduce the amount of assets available for ultimate distribution to Unit Holders. Any contingency reserve established by the Company’s Board as a setoff against these amounts will be deducted before the determination of amounts available for distribution to Unit Holders. To the extent that the amount of the Company’s liabilities or the amounts that the Company expends during the liquidation are greater than the contingency reserve, the Unit Holders may receive substantially less than the amount currently estimated, or no distribution.

Solicitation of Member Votes

As ~~previously announced, and as~~ described in the Company’s definitive proxy statement filed with the SEC on January 12, 2010, the Company is soliciting votes from the Members ~~its members~~ to take action by written consent, in lieu of a special meeting of the Members, on ~~members~~a proposal to ~~seek~~approve ~~approval~~and ofratify athe ~~voluntary~~ dissolution and liquidation of the Company. If such approval is received, the Company intends to proceed with an orderly dissolution ~~wind~~of ~~down~~the ~~and~~Company ~~dissolution~~pursuant ofto the ~~Company~~Plan of Dissolution, and cease its ~~reporting~~ reporting obligations under the Securities Exchange Act of 1934, as amended.

4A CONSENT THAT HAS BEEN DELIVERED TO THE COMPANY MAY BE REVOKED BY THE MEMBER GIVING IT BY SIGNING AND DELIVERING A NEW CONSENT TO THE COMPANY BEARING A LATER DATE, OR BY DELIVERING A WRITTEN NOTICE OF REVOCATION TO THE COMPANY.

A copy of the Consent is being mailed to you on or about January 22, 2010. Or you may access and print a copy of the Consent on the Company’s web site at http://www.cfpproxy.com/9101sm. A Consent or revocation of a Consent may delivered to the Company by:

mailing it to Mr. David Caldwell, Performance Capital Management, LLC, 7001 Village Drive, Suite 255, Buena Park, California 90621; or

scanning and sending it by email to: members@pcmllc.us; or

faxing it to the attention of Mr. David Caldwell at 1-714-736-3733.

The deadline for delivering Consents and revocations of Consents to the Company is 5:00 p.m. PT on Friday, February 19, 2010.

The Board strongly urges each Member to complete, sign and deliver a Consent as soon as possible to ensure that sufficient Member units are submitted for the Members to take action on the proposal.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

The disclosure in this ~~Report~~ report on Form 8-K is incorporated by reference in the definitive proxy statement filed by the Company with the SEC on January 12, 2010. Members are urged to read the definitive proxy statement and other relevant materials filed by the Company with the SEC carefully, including this Report on Form 8-K, because they contain important information about the Company, the proposal and related matters. Members may to obtain free copies of the consent solicitation documents filed with the SEC on the Company’s web site at: http://www.cfpproxy.com/9101SM. Members may also request a copy of any ~~document~~ document posted on the Company’s web site by writing to Performance Capital Management, LLC, 7001 Village Drive, Suite 255, Buena Park, California 90621, Attn: David J. Caldwell or by calling 1-714-736-3790 or toll-free 1-800-757-7700 ~~extension~~, extension 0.

FORWARD-LOOKING STATEMENTS

Except for the historical information presented in this document, the matters discussed in this Form 8-K or otherwise incorporated by reference into this document contain “forward-looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements can be identified by the use of forward-looking terminology such as “believes,” “plans,” “expects,” “may,” “will,” “intends,” “should,” “plan,” “assume” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by Performance Capital Management, LLC (the “Company”). You should not place undue reliance on forward-looking statements. Forward-looking ~~statements~~ statements involve risks and uncertainties. The actual results that we achieve may differ materially from any forward-looking statements due to such risks and uncertainties. These forward-looking statements are based on current expectations, and we assume no obligation to update this information. Readers are urged to carefully review and consider the various disclosures made by us in this report on Form 8-K and in ~~our~~the Company’s other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect ~~our~~ the Company’s business.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.		Description
10.1		Agreement Regarding Loan by and among Matterhorn Financial Services, LLC, Performance Capital Management, LLC and Varde Investment Partners, L.P. dated January 7, 2010
10.2		Purchase and Sale Agreement by and between Matterhorn Financial Services, LLC and North Star Capital Acquisition LLC dated January 8, 2010
10.3		Agency Service Agreement by and between Performance Capital Management, LLC and Oliphant Financial Group, LLC dated January 11, 2010

Exhibit No.

Description

510.1 Account Purchase Agreement by and between Performance Capital Management, LLC and Oliphant Financial Group, LLC dated January 15, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PERFORMANCE CAPITAL MANAGEMENT, LLC
January 13, 2010		By:	/s/ David J. Caldwell
January 22, 2010		By:	/s/ David J. Caldwell
(Date)		~~David J. Caldwell~~	David J. Caldwell
		~~Its: Chief Operations Officer~~	Its: Chief Operations Officer

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