A California bankruptcy judge confirmed the reorganization plan for former subprime lender and servicer Fremont General Corp. Fremont previously was one of the largest lenders and servicers of subprime mortgages during the housing boom, before selling its $4bn subprime business in March 2007. On June 18, 2008, Fremont filed for Chapter 11 bankruptcy protection and continued to operate its business as “debtor-in-possession,” with residential and commercial real estate lending operations in several states. Private investment firm Signature Group Holdings reorganized and renamed the company, which will shift focuses away from residential lending to commercial credit and special situation investments, according to a statement. The reorganization plan involves a $10.3m equity infusion and issuance of warrants to purchase additional shares. It also includes “preservation of equity,” meaning existing Fremont shareholders now hold roughly two-thirds of the new company’s shares, Signature said in the statement. Signature also projected $769m in net operating loss carry-forwards to offset future taxable income. “This is a tremendous opportunity to turn Fremont into a profitable business — one that can take a lead role in lending to and acquiring middle market companies, a sector that continues to be starved for capital and quality credit,” said Signature managing director Craig Noell. The reorganized company will focus on credit-oriented special situation lending and investments in middle-market companies nationally, with principal offices in Thousand Oaks, CA and New York. Fremont recently saw three executives resign, effective July 5, after the Signature bankruptcy reorganization plan called for a scaling back of their responsibilities, according to a regulatory filing. Write to Diana Golobay.
Most Popular Articles
A former Fannie Mae employee will spend more than the next six years in prison after being found guilty of accepting more than a million dollars in bribes and kickbacks in exchange for selling Fannie Mae-owned foreclosures for less than market value.
Matuszewski will join James Hecht of Caliber and Haley Parker of Fairway to discuss the impact of company culture on attracting and retaining top talent.