Bankruptcy

New Century Faces $8.4 Billion in Buybacks; ‘Done’ 

In an updated filing with the Securities and Exchange Commission this morning, New Century Financial (NYSE:NEW) disclosed that it faces nearly $8.4 billion in forced buybacks from nearly all of its credit providers, and that most had or were moving to terminate servicing agreements in place with the troubled mortgage banking operation. The vast majority of the company’s forced loan buybacks were the result of cross-default and cross-acceleration provisions associated with each of its credit lines, it said, and defaulting on one was enough to start a massive ‘cascading’ series of repurchase claims associated with all of the company’s creditors.