New Century Gets Loans

New Century (NEWC Quote) got funding to pursue its plan to sell itself in parts.

U.S. Bankruptcy Judge Kevin J. Carey approved a debtor-in-possession loan Tuesday. The bankruptcy judge said the beleaguered subprime mortgage lender can borrow up to $150 million from CIT Group (CIT Quote) and Greenwich Capital.

A call to a bankruptcy court attorney handling New Century's case was directed to a spokeswoman in Washington, D.C., who did not immediately return a call.

Calls to bankers at CIT and Greenwich Capital were directed to representatives who were unable to comment or did not return calls. A spokeswoman at New Century also did not immediately respond to a call.

Irvine, Calif.-based New Century filed for a much-anticipated Chapter 11 bankruptcy protection on Monday and said it would lay off more than half of its staff.

New Century's planned asset sales will be a critical part of its attempt to extract value from its lending operation. The mortgage lender believes funds from its DIP won't last for more than 45 days. As a result, it has pushed to expedite the approval process for its credit agreement and its planned selloff.

It also has agreed to sell its servicing assets and servicing platform to Carrington Capital Management and its affiliate for approximately $139 million. Greenwich is attempting to purchase a portion of its mortgage assets as well. Any sale must win court approval.

< Previous

1 2

Next >