New Century Financial Corporation announced today that the U.S. Bankruptcy Court for the District of Delaware has approved a motion permitting the Company, on an interim basis, to access up to $50 million of the $150 million debtor-in-possession (DIP) financing arranged for the Company by The CIT Group and Greenwich Capital Financial Products, Inc. The Court also approved New Century’s other “first day” motions that will facilitate the Company’s operations as it pursues the sale of its assets and operations through the chapter 11 process. Among the relief granted by the Court is a motion permitting New Century to continue its customer programs uninterrupted, including, but not limited to, a customer restitution plan and the funding of manufactured home loans under a program regulated by the Federal Housing Authority. The Court also approved motions that will permit New Century to continue its employee benefits programs and insurance policies.
“We are pleased with the prompt action by the Bankruptcy Court in approving our first day motions, which will help New Century provide for its Associates and continue operating without interruption,” said Brad A. Morrice, president and CEO of New Century. “Over the next several weeks, we will continue to work diligently to sell the company’s assets and operations through an orderly process.” The Bankruptcy Court has also scheduled a hearing on April 10 to consider the bidding procedures for the company’s previously-announced agreement to sell its servicing assets and servicing platform to Carrington Capital Management, LLC and its affiliate, and its agreement to sell to Greenwich Capital Financial Products, Inc. certain loans originated by the company, as well as residual interests in certain securitization trusts owned by the company, for an aggregate price of $50 million. Both transactions are subject to court approval and will be subject to higher and better offers pursuant to procedures to be established by the Bankruptcy Court. For more information, visit http://www.ncenrestructuring.com.
