Fieldstone Goes Bankrupt, Files Chapter 11

Fieldstone Mortgage Company filed for Chapter 11 bankruptcy protection late on Friday, according to numerous media reports on Monday. From Reuters:

“Due to the wide-ranging economic downturn in the credit markets, and the severe financial pressures facing the debtor, the debtor was unsuccessful in its efforts to resolve its liquidity crisis outside the bankruptcy forum,” lawyers for the company wrote.

Fieldstone said it had more than $100 million of liabilities and between $1 million and $100 million of assets, court papers show.

Fieldstone listed several big financial companies among its largest unsecured creditors, saying it owed $38.5 million to Morgan Stanley, $23.3 million to a unit of HSBC Holdings PLC, $15.3 million to Bear Stearns Cos and $10.4 million to Countrywide Financial Corp.

Ouch.

Fieldstone was purchased in July by troubled scratch-and-dent operation C-BASS, a joint venture between mortgage insurers MGIC Investment Corp. and Radian Group Inc., and stopped funding loans on August 3 according to a report in National Mortgage News.