NovaStar CEO, CFO Head for the Exits

Once high-flying subprime specialist NovaStar Financial, Inc., reeling from a $598 million loss in the third quarter and struggling to stay solvent, will face its future without its current CEO and CFO. NovaStar announced Wednesday after market close that co-founder Scott Hartman, current chairman and CEO, will leave the company and step down from the company’s board of directors; CFO Gregory Metz and General Counsel Jeff Ayers are also on their way out. All three will leave the company effective January 3, the company said. Lance Anderson, NovaStar’s other co-founder and its current president and COO, will assume the positions of chairman and CEO upon Hartman’s departure. The company sold off its entire servicing portfolio to Saxon Mortgage Services, a unit of Morgan Stanley, on November 1 in a deal worth $147 million, and warned in reporting its third quarter results that bankruptcy is a possibility given the operational challenges it now faces.

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