Advanta Corp. Files For Chapter 11 Bankruptcy

NEW YORK (AP) — Small business credit card lender Advanta Corp. has filed for Chapter 11 bankruptcy protection.

Its shares plunged more than 70 percent in midday trading Monday, dropping 25 cents to 8 cents. Earlier in the session, the stock hit an all-time low of 7.5 cents.

The filing late Sunday at U.S. Bankruptcy Court in Delaware comes five months after the company said it was shutting down its credit card lending business in a last-ditch effort to preserve cash as loan losses mounted.

The Spring House, Pa., company said it has nearly $100 million in cash on hand, but that would not be enough to meet its debt obligations over time. In its filing, the company listed total assets of $363 million and total debts of $331 million.

Advanta is the holding company of Advanta Bank Corp., which is not included in the bankruptcy filing. The bankruptcy will not have any impact on Advanta Bank's outstanding credit card balances and customer payments will continue on normal schedules, the company said. Advanta Bank is currently collecting $2.7 billion in outstanding balances from 360,000 customers. As of June, the credit card accounts were closed to new charges.