Archive for the 'New Century' Category
April 1st, 2009, 5:46 pm by John Gittelsohn
 A trustee for bankrupt New Century Financial Corp. is suing KPMG for more than $1 billion, alleging the former auditor of the defunct Irvine-based subprime lending company was grossly negligent in its fiduciary duties.
Two lawsuits, filed today in Los Angeles County Superior Court and U.S. District Court in New York, say the KPMG auditors lacked independence and failed to exercise control, bowing to maintain good relations with a paying client.
“KPMG did not act like a watchdog. Instead, KPMG assisted in the misstatements and certified materially misstated financial statements,” the complaint in Los Angeles Superior Court says. “KPMG acted as a cheerleader for management, not the public interest.”
KPMG spokesman Dan Ginsburg issued a statement denying his company was responsible for New Century’s demise: “KPMG acted in accordance with professional standards in New Century, and we will vigorously defend our audit work. Any implication that the collapse of New Century was related to accounting issues ignores the reality of the global credit crisis. This was a business failure not an accounting issue.”
Many of the lawsuit’s allegations were first aired in a February 2008 bankruptcy examiner’s report that also cited failures by KPMG as important factors behind New Century’s collapse.
Ginsburg noted that the examiner’s report also said his company would be able to defend its actions against a possible a lawsuit. “While we have not seen the complaint yet, any claim that we acquiesced to client demands is unsupportable,” he said. “As the bankruptcy examiner’s report that was seeking to identify entities to sue said: ‘KPMG would have significant defenses to any such suit.’ ”
The Los Angeles lawsuit demands compensatory damages of “not less than $1 billion” plus punitive damages and other compensation to cover the cost of the suit.
Founded in 1995, New Century Financial issued $36.9 billion in loans in 2006, ranking No. 1 among the nation’s subprime lenders, according to a Register analysis of federal lending data. In February 2007, New Century announced its previous financial statements could not be relied upon, triggering a loss of faith among its creditors.
In April 2007, New Century announced it was filing for bankruptcy. Shareholders were wiped out. A report last July said secured creditors, whose claims ranged from an estimated $790 million to $1.6 billion, were expected to collect as little as 3.5 pennies on the dollar.
To see the Los Angeles lawsuit, CLICK HERE.
To see the New York lawsuit, CLICK HERE.
More stories on New Century …
Posted in: Company Watch • Investigations • New Century • Subprime news • Irvine • KPMG | 11 Comments »
January 9th, 2009, 11:40 am by Mathew Padilla
(Update II: Quote from Kerry Vandell added, more background on Gotschall.)
Edward Gotschall, co-founder of a former market leader in loans to people with spotty credit and a man who pledged millions of dollars to Mission Hospital in Mission Viejo and other causes, died Thursday of natural causes, according to Coto de Caza neighbor Paul Scheper and a family friend. He was 53.
 Gotschall and three others founded New Century Financial in 1995. He managed the company’s books and worked with Wall Street investment bankers, helping build the Irvine-based lender into one the largest subprime lenders in the nation, with nearly $60 billion in loans in a single year.
“Ed was a life-giver, full of energy and passion,” said Scheper, vice president of lender Trust One Mortgage in Irvine. “He always lit up the room with his smile and his kind heart. He was very caring and fun. Heck, we just took a walk together two weeks ago and then saw each other at the Mission Hospital Gala, where he anonymously donated millions to the Mission Trauma Center. He was so caring and charitable.”
Bill Kaszton, a friend of the Gotschalls, said Gotschall died quietly while watching a football game last night.
“He had a remarkable love for sports, especially football, especially his Ohio Buckeyes,” Kaszton said. Gotschall attended Ohio State University as an undergraduate but later switched to Arizona State University, getting a bachelor’s degree in business administration.
New Century prospered during the housing boom, but ran out of cash after its home loans began defaulting in large numbers. It filed for bankruptcy liquidation in 2007 and was sold in pieces.
The company previously disclosed it is under federal investigation for sales of securities and accounting errors, but it has never said if any former executives are being investigated.
Kerry Vandell, professor of finance and director of UCI’s Center for Real Estate, said while subprime lenders have received much criticism they helped expand credit and homeownership to a wider pool of consumers.
Subprime lenders played a role in creating the credit crisis, but they were playing by the rules and in the environment set up by others, Vandell said. If one wants to look for true instigators of the credit boom and bust, start with former Fed Chairman Alan Greenspan, who cut interest rates and left them low for too long, Vandell said.
Vandell expects a rebound in subprime to some degree, after President-Elect Barack Obama and Congress improve oversight of home lending and investment banking.
“There is no intrinsic reason why we can’t move down the credit quality queue and market these mortgages, as long as credit risk is properly priced,” Vandell said.
Gotschall was the son of a coal miner and grew up in a small mining town in Ohio. In addition to raising money for and donating to Mission Hospital, he supported the Boy Scouts of Irvine and San Juan Capistrano High School.
Funeral arrangements are pending. Gotschall was married to his wife Susan for more than 25 years and raised three children.
And here’s highlights from New Century’s final days…
And in other news…
Posted in: New Century | 104 Comments »
October 13th, 2008, 3:00 am by Ronald Campbell
The loans that shook the financial world started small.
In 2004, the first year that the Fed’s Home Mortgage Disclosure Act database tracked high-priced subprime loans, subprime was a bit player in the California home market.
But a Register analysis of HMDA data shows that subprime quickly grabbed market share in lower middle-class neighborhoods up and down the state in 2005 and 2006. In 2007, as subprime giants like Orange-based Ameriquest and Irvine-based New Century downsized or shut down, subprime again became a bit player.
These maps show the spread and retreat of subprime loans in Orange County and neighboring counties from 2004 through 2007. Another set of maps below describe a similar pattern statewide.
These maps represent what we’re calling the subprime penetration rate, the percentage of total home loan volume in each census tract that was high-priced. Yellow on the map indicates that subprime accounted for 15 percent or less of total loan volume; green is for 15 percent to 25 percent; light blue for 25 percent to 35 percent; dark blue for more than 35 percent.
A caution: The industry defines subprime using credit scores; the Fed defines high-priced loans as those that cost at least 3 percentage points higher than a Treasury bill of comparable maturity. The two terms don’t match, but the Fed’s high-priced category appears to capture most subprime and some alt-A loans.
In 2004 there are just a few pockets where subprime lenders grabbed more than 15 percent of the market: most notably in central Los Angeles between the I-110 and I-710 freeways, and in the Inland Empire, especially along the I-10 corridor.
In 2005 and 2006, however, the picture changed dramatically. Suddenly the subprime guys and gals were making more than 35 percent of home loan volume in a huge swath of LA and the Inland Empire. They also started doing big business in Orange County, where many of them were headquartered. Look at the I-5 corridor and especially at Anaheim, Garden Grove and Santa Ana.
By 2007, business was cooling down almost everywhere outside central L.A. and portions of San Bernardino County.
Click on images to get a larger view.
2004
2005
2006
2007
For the statewide view and more maps, continue reading.
Read the rest of this entry »
Posted in: Alt A news • Ameriquest • Fed • New Century • Subprime news • Uncategorized | 18 Comments »
October 4th, 2008, 3:00 am by Ronald Campbell
Orange County may have been home to the largest subprime lenders in the country, but to really see subprime lending in action you have to go elsewhere:
- To traditionally poor areas like the Rio Grande Valley in Texas and to parts of Arkansas, Louisiana and Mississippi.
- To fast-growing exurbs and paved-over farmland like the Inland Empire and the San Joaquin Valley.
- And to two of the hottest centers of the late housing boom, Nevada and Florida.
We’re looking today at geographic patterns in home lending. Our source is the Fed’s Home Mortgage Disclosure Act database.
Since 2004 the Fed has required lenders in their HMDA reports to break out loans carrying interest rates at least 3 percentage points higher than the comparable Treasury bill. The Fed believes these high-priced loans are equivalent to subprime and Alt-A loans, though the industry defines those loan categories by credit scores, not interest rates.
Here are maps showing subprime volume as a percentage of all home loan volume by county and by year. The scale is the same for every map: yellow where subprime is 20 percent or less of total volume, green for 20 percent to 30 percent, light blue for 30 percent to 40 percent and dark blue where the subprime volume exceeds 40 percent.
The patterns are striking. In 2004 subprime was big in only a few areas of the country, most notably Texas and the Deep South. By 2005 it had built strongholds in Riverside and San Bernardino counties and especially in the San Joaquin Valley. By 2006 subprime was everywhere. But in 2007, when big players like Irvine-based New Century abruptly collapsed, the subprime wave rolled back.
Click on the thumbnails to see larger maps.
2004
2005
2006
2007
2004-2007 summary
Coming next week: a closer look at California.
Here’s more of our coverage of the mortgage meltdown:
Posted in: Alt A news • Bank woes • Loan volume • Meltdown • New Century • Subprime news | 8 Comments »
October 1st, 2008, 3:00 am by Ronald Campbell
The list of major subprime lenders for 2006 and 2007 resembles the casualty roster from the Battle of Verdun in World War I. Only difference: way fewer walking wounded this time.
Of the 30 biggest subprime home lenders in 2006, measured by dollar volume, 22 have gone bankrupt, shut down, been sold or been seized by Uncle Sam. Most of the survivors have scaled back.
Yesterday we began exploring The Fed’s Home Mortgage Disclosure Act database by describing how Washington Mutual quadrupled its bet on subprime lending in 2007, just in time for the housing downturn.
Today we’re going deeper, using HMDA data to show what happened to the top 30 subprime lenders nationwide in 2006; these 30 together accounted for 64 percent of the subprime home loans made that year.
The list makes for grim reading:
| Lender |
Rank 2006 |
Volume 2006 (billions) |
Rank 2007 |
Volume 2007 (billions) |
Status |
| New Century Mortgage Corp. |
1 |
$36.9 |
NA |
$- |
Bankrupt |
| Countrywide Home Loans |
2 |
$36.4 |
2 |
$17.4 |
Bought by BofA |
| Fremont Investment & Loan |
3 |
$30.0 |
26 |
$3.0 |
Shut down |
| National City Bank |
4 |
$30.0 |
17 |
$4.3 |
Struggling |
| WMC Mortgage Co. |
5 |
$27.1 |
330 |
$0.1 |
Shut down |
| Option One Mortgage Corp |
6 |
$23.9 |
7 |
$9.4 |
Shut down, servicing unit sold |
| Argent Mortgage Co. |
7 |
$21.2 |
36 |
$2.0 |
Shut down |
| Long Beach Mortgage Co. |
8 |
$18.2 |
NA |
$- |
Shut down |
| Wells Fargo Bank |
9 |
$16.4 |
9 |
$7.1 |
Wholesale unit closed |
| American Home Mortgage Corp. |
10 |
$14.5 |
0 |
$- |
Shut down |
| Accredited Home Lenders Inc |
11 |
$13.4 |
23 |
$3.4 |
Wholesale unit closed |
| Indymac Bank |
12 |
$12.2 |
3 |
$12.6 |
Seized by FDIC |
| BNC Mortgage |
13 |
$11.8 |
14 |
$5.0 |
Shut down |
| Decision One Mortgage |
14 |
$11.2 |
30 |
$2.5 |
Shut down |
| Equifirst Corp. |
15 |
$9.8 |
10 |
$6.7 |
Switched to FHA |
| Countrywide Bank |
16 |
$9.3 |
5 |
$11.1 |
Bought by BofA |
| Chase Manhattan Bank USA |
17 |
$8.0 |
8 |
$9.2 |
Wholesale unit closed |
| Greenpoint Mortgage Funding |
18 |
$7.3 |
15 |
$5.0 |
Shut down |
| Wilmington Finance Inc. |
19 |
$7.2 |
19 |
$4.1 |
Wholesale unit closed |
| Novastar Mortgage Inc. |
20 |
$7.1 |
39 |
$1.8 |
Shut down |
| Resmae Mortgage Corp. |
21 |
$6.8 |
48 |
$1.2 |
Shut down |
| Homecomings Financial Network |
22 |
$6.8 |
18 |
$4.2 |
Shut down |
| Beneficial Co. |
23 |
$6.0 |
11 |
$6.7 |
Operating |
| First Magnus Financial Corp. |
24 |
$5.9 |
NA |
$- |
Shut down |
| Washington Mutual Bank |
25 |
$5.6 |
1 |
$19.7 |
Seized by FDIC, sold to JPMorgan Chase |
| Encore Credit Corp. |
26 |
$5.0 |
NA |
$- |
Shut down |
| Lehman Brothers Bank |
27 |
$5.0 |
12 |
$6.2 |
Bankrupt |
| First NLC Financial Services |
28 |
$4.5 |
NA |
$- |
Shut down |
| People’s Choice Financial Corp. |
29 |
$4.5 |
NA |
$- |
Shut down |
| HFC Co. |
30 |
$4.4 |
16 |
$4.9 |
Operating |
Countrywide shows up twice by the way because it operates under two federal regulators. The Fed oversees Countrywide Home Loans while the Office of Comptroller of the Currency supervises Countrywide Bank.
WaMu was not the only major lender that rolled the dice on subprime in 2007.
World Savings made WaMu look timid, expanding its subprime business by seven times, from $1.5 billion in 2006 to $10.65 billion in 2007. Banking operations of its parent, Wachovia, were just taken over by Citigroup in a shotgun marriage arranged by the Fed.
And then there’s Bear Stearns — remember them? — who doubled their subprime lending from $1.95 billion in 2006 to $3.9 billion in 2007.
World Savings and Bear Stearns were both too small in 2006 to make our list.
Thanks to Matt for digging up the status of all the lenders. In many cases that involved grave-digging.
We’ll continue our exploration of HMDA in future posts. If you have an idea, please tell us in the Comments section or send me an e-mail.
Here’s more mortgage meltdown coverage:
Posted in: Bank woes • Bear Stearns • Citigroup • Countrywide • Credit Crunch • Fed • Fremont • IndyMac • New Century • Option One • Subprime news • Uncategorized • Washington Mutual | 18 Comments »
July 24th, 2008, 8:26 am by Mathew Padilla
A federal grand jury is investigating New Century Financial of Irvine, IndyMac Bancorp of Pasadena, and Calabasas-based Countrywide, reports the Los Angeles Times, which quotes anonymous sources.
Subpoenas have been issued in recent months that seek e-mails, phone bills and bank records of the three companies, according to the Times. Subpoenas come on the heels of interviews that federal investigators conducted with employees and others close to the failed lenders.
New Century disclosed last year that federal regulators were probing securities transactions and its accounting practices. And previous press reports have said the Federal Bureau of Investigation is conducting a sweeping probe of the mortgage and securities industries, including IndyMac and Countrywide.
A bankruptcy court examiner in March issued a damning report against New Century and its auditor KPMG that said, among other things, the auditor allowed the company to change its accounting practices so it could report a profit rather than a loss in the second half of 2006.
Investigators also are looking at home loans that former Countrywide CEO Angelo Mozilo personally handled for members of Congress and other influential figures, the Times said.
Spokesmen and lawyers for the the companies and FDIC, which controls IndyMac, declined to comment or could not be reached, and federal investigators declined to comment on the record, according to the Times.
Related news…
Posted in: Bank of America • Company Watch • Countrywide • IndyMac • New Century | 3 Comments »
July 3rd, 2008, 12:00 pm by Mathew Padilla
Bloomberg reports that a bankruptcy judge ruled against former top employees of failed subprime lender New Century Financial in Irvine, and they must share their savings with other creditors as a judge prepares to sign a formal confirmation order on July 14.
The affected employees — high-earning managers and sales leaders, but not top executives — were the last to object to the bankruptcy settlement, saying $43 million in a deferred compensation fund was in trust for them alone, reports Bloomberg. U.S. Bankruptcy Judge Kevin Carey disagreed. He used the so-called cramdown process to confirm the plan, after all other creditor classes approved it.
Previous media reports said the deferred compensation plan operated like a retirement fund but without the special protections of a 401(k).
Creditors will get a range of pennies on the dollar. Bill Rochelle of Bloomberg writes: “The plan provides that creditors of the operating company whose claims total between $790 million and $1.6 billion should see somewhere between 3.5 percent and 23.6 percent. Unsecured creditors of the holding company could expect between 1.9 percent and 14.3 percent on their claims ranging between $340 million and $520 million.”
As previously reported, stockholders get nothing. At its peak, New Century was worth about $3 billion on Wall Street and made some $60 billion in loans in a year.
Related News:
Posted in: Company Watch • New Century | 8 Comments »
May 28th, 2008, 12:01 am by Andrew Galvin
Newsweek has the story of Cleveland neighborhood devastated by questionable subprime practices.
It tells of hot-dog stand owner Mark Kellogg, whose other business was brokering mortgages, including loans from some once-prominent Orange County-based lenders.
Here’s a clip:
According to county records obtained by NEWSWEEK, Kellogg was the broker of record for the purchase of 71 houses in Slavic Village from 2003 to 2006—during the height of the subprime investment boom. All of them went into foreclosure within a year or two. In each case, mortgages were issued for Kellogg’s houses—by well-known nationwide lenders, such as Argent Mortgage and New Century—for multiple times the value of what the home had been purchased for, often only months before, the records show. Local Councilman Tony Brancatelli, who first passed on information about Kellogg to county prosecutors, says the prices were so inflated beyond the house’s actual value that any income gained from rent or resale could not possibly pay off the huge mortgage, and the borrowers quickly defaulted. In one instance, a house purchased for $14,000 on Feb. 9, 2005, was sold three months later, on May 9, 2005, with Kellogg acting as broker, for $84,000; it went into foreclosure a year later, on May 31, 2006.
Wow.
Posted in: Ameriquest • New Century • Subprime news • Argent • subprime | 7 Comments »
April 14th, 2008, 3:00 pm by Andrew Galvin
A couple of interesting articles from Sunday’s papers:
1) The New York Times takes a long look at what responsibility auditor KPMG might bear for the extent of the subprime crisis. By failing to root out accounting irregularities at New Century Financial Corp., the paper suggests, KMPG enabled New Century to stay in business longer than it otherwise would have been able to.
Specifically, the article looks into whether KPMG should have pushed New Century harder on its inadequate reserves for loan repurchases. When New Century’s loans started to go bad, Wall Street investors required New Century to buy the loans back.
Although New Century sold more than $40 billion in loans in the first nine months of 2006, it had reserved only $13.9 million as of Sept. 30 that year to repurchase loans, according to the firm’s securities filings. Those filings were not audited by KPMG, but they were reviewed by the firm.
The reserve was woefully inadequate, according to the examiner’s report. By the end of September 2006, New Century already had $400 million in pending repurchase requests — meaning that the $13.9 million it had set aside represented just 3.5 percent of that troubled pool of loans. Officials in New Century’s accounting department and on the KPMG audit team told the examiner that they were not aware of the rising backlog of repurchase claims.
… …
By underreserving, New Century was able to show still-rising profits in the second quarter and declining, yet positive, earnings in the third quarter of 2006. Had New Century been more conservative about its reserves, second-quarter profits would have been halved and it would have reported a loss in the third quarter, the examiner determined.
Eventually, these problems burst into public view. In March 2007, after New Century disclosed that it would need to restate its earnings and would probably be shown as unprofitable during the last six months of the previous year, its lenders pulled the plug on the company. In April, it filed for bankruptcy.
But some experts say that regardless of what KPMG did, New Century would have collapsed.
“The business model of New Century depended on real estate values that would continue to go up and certainly not go down,” said Roman L. Weil, an accounting professor at the University of Chicago Graduate School of Business. “The economic model here is what is at fault. It’s the cause of what happened, not anything that KPMG did.”
Read the rest of this entry »
Posted in: Bailout Buzz • Company Watch • New Century | 5 Comments »
March 27th, 2008, 12:01 pm by Jon Lansner
 In a speech on housing in New York’s Wall Street district, Democratic presidential hopeful Barack Obama referenced a bankruptcy court report that alleged that O.C. lender New Century and its auditors KPMG inflated the subprime mortgage specialist’s profits. From Obama’s prepared text …
A decade later, we have deregulated the financial services sector, and we face another crisis. A regulatory structure set up for banks in the 1930s needed to change because the nature of business has changed. But by the time the Glass-Steagall Act was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework. Since then, we have overseen 21st century innovation – including the aggressive introduction of new and complex financial instruments like hedge funds and non-bank financial companies – with outdated 20th century regulatory tools. New conflicts of interest recalled the worst excesses of the past – like the outrageous news that we learned just yesterday of KPMG allowing a lender to report profits instead of losses, so that both parties could make a quick buck. Not surprisingly, the regulatory environment failed to keep pace. When subprime mortgage lending took a reckless and unsustainable turn, a patchwork of regulators were unable or unwilling to protect the American people.
To read his entire speech, CLICK HERE
To see today’s Register story on New Century and KPMG, CLICK HERE
(Associated Press photo of Obama from Wednesday speech in Greensboro, N.C.)
Posted in: Company Watch • Credit Crunch • New Century • Subprime news | 5 Comments »
March 26th, 2008, 2:22 pm by John Gittelsohn
 (Update: for a more complete article about the examiner’s report CLICK HERE.)
A bankruptcy examiner’s report on New Century Financial Corp. accuses the Irvine company’s auditor, KPMG, of allowing the company to change its accounting practices so it could report a profit rather than a loss in the second half of 2006.
Michael J. Missal, the bankruptcy examiner, said in the 581-page report that “New Century’s loan originations created a ticking time bomb that detonated in 2007.”
He said the company “had a brazen obsession with increasing loan originations, without due regard to the risks associated with that business strategy.”
In a statement, New Century did not address specific criticisms about the report, however it said: ““The Company is pleased that the Examiner’s report is finally completed and that we can take the next steps of confirming the plan of liquidation, therefore substantially concluding the bankruptcy process.”
The bankruptcy examiner’s report said KPMG, one of the nation’s biggest accounting firms, could be held liable for the misstatements.
KPMG spokesman Dan Ginsburg said the document is being reviewed and declined further comment.
In a phone interview, Missal said he was shocked to see the kind of accounting he saw at New Century in a “post-Enron, Sarbanes-Oxley” world.
“We found a real failure here,” he said.
Missal’s mission was to analyze the causes of the bankruptcy, not to assess the finances of the company.
New Century, once the second-largest subprime lender in the nation, filed for bankruptcy last April 2.
Click HERE to see the examiner’s report.
Posted in: Company Watch • New Century | 16 Comments »
March 24th, 2008, 11:00 am by Mathew Padilla
Carrington Capital Management, which last year bought Irvine-based New Century Financial’s loan servicing operation, is trying to persuade investors to lend it $200 million to replace bank loans, according to the Web site of the UK’s Financial Times.
The move could be the latest sign hedge funds are having difficulty getting financing from banks.
Here’s more from the Times:
Carrington, part-owned by failed US subprime lender New Century, has offered investors an 18 percent interest rate on new preferred shares it plans to issue. The fund said it was concerned about short-term reverse repurchase, or “repo”, financing, although it told investors it maintained good relations with its remaining lenders.
To read on CLICK HERE.
Posted in: Company Watch • New Century | 6 Comments »
February 28th, 2008, 4:07 pm by Andrew Galvin
More bad news from Fremont General, the troubled Brea lender that was forced out of the subprime business last year by federal banking regulators:
In a news release today, the company warns that it may need to record additional asset write-downs and says it’s exploring a possible sale of the company and will defer paying interest on some of its debts to conserve cash.
To read Reuters’ story about it, click here. Or for Marketwatch.com, click here.
In other news, Reuters, following an earlier report by CNBC, says Merrill Lynch plans to wind down most of its First Franklin subprime unit as the mortgage and housing markets continue to decline.
I called the president of NationPoint, a Lake Forest-based unit of First Franklin, and was told to call Merrill Lynch. I did that but the company declined to comment. Merrill also declined to comment to Reuters.
So this could be just media chasing other media and blowing things out of proportion. With that in mind, here’s more from Reuters:
The move could result in the elimination of 400 to 500 jobs starting next week, CNBC reported. Merrill would keep First Franklin’s loan servicing business, which could perform well in the current mortgage and housing markets, CNBC said.
Merrill spokeswoman Jessica Oppenheim declined to comment.
Merrill, which ceased originating subprime mortgages on December 28, on Monday said it was “evaluating our continued involvement in this market.”
To read the Reuters piece, CLICK HERE.
And, last but not least, New Century Financial estimates that its bankruptcy liquidation will result in unsecured creditors getting from 2 percent to 17 percent on the dollar, reports The Associated Press. The company previously said, since it was hit with more than $35 billion in creditor claims, shareholders would likely get nothing.
To read the AP story, CLICK HERE.
Posted in: Fremont • New Century • Subprime news | 4 Comments »
February 19th, 2008, 6:00 pm by Mathew Padilla
Bankrupt subprime lender New Century Financial in Irvine lost a bid last week to get the Internal Revenue Service to refund $66 million, reports the Associated Press. Here’s more:
Judge Kevin Carey sided with the government in a quarrel over the cash, money New Century says should come back to it because of big losses in 2006. In a decision filed Thursday in the U.S. Bankruptcy Court in Wilmington, Del., Carey said New Century has not yet followed the entire IRS process for getting a refund.
Does this surprise anyone? New Century has yet to say how far off were its 2006, and for that matter 2005, financial reports — though I guess it’s possible the company told the IRS but not the SEC. The details of the IRS case are more technical, and you can read all about it by CLICKING HERE.
New Century is set to present its liquidation plan on March 5.
And in other news regarding the once top subprime lender:
- IP Recovery on Feb. 12 said it’s selling some of the lender’s trademarks, Internet domain names, and other intellectual assets. For more, CLICK HERE.
- On Feb. 7, Bloomberg reported that New Century lawyers must face a 5-year-old lawsuit overseen by a Texas judge who says the company and its lawyers deceived him in the case worth as much as $580 million. To read on CLICK HERE.
- Last month the Federal Bureau of Investigations said it’s investigating 14 companies related to subprime, but declined to name them and said it could be sometime before charges are brought, reports Reuters. (In March 2007, New Century said the U.S. Attorney is investigating trading in its securities prior to a Feb. 7 announcement that it planned to restate its 2006 profit.) For more, CLICK HERE.
It appears the end is near for what remains of New Century, although the investigations could drag on.
Posted in: Company Watch • New Century | 1 Comment »
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