* Court Also Authorizes Continuation of Customer Programs, Employee
Benefits and Insurance Policies
IRVINE, Calif., April 6 /PRNewswire-FirstCall/ -- New Century Financial
Corporation (OTC: NEWC) 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.
(Logo: http://www.newscom.com/cgi-bin/prnh/20061012/LATH070LOGO)
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 Chief Executive Officer 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.
New Century's case has been assigned number 07-10416 before the
Honorable Kevin J. Carey.
More information about New Century's chapter 11 case is available on
its Web site at http://www.ncenrestructuring.com.
About New Century Financial Corporation
New Century Financial Corporation is a real estate investment trust
(REIT) founded in 1995 and headquartered in Irvine, California. To find out
more about New Century, please visit http://www.ncen.com.
Forward-Looking Statements
Certain statements contained in this press release may be deemed to be
forward-looking statements under federal securities laws and the Company
intends that such forward-looking statements be subject to the safe-harbor
created thereby. Such forward-looking statements include, but are not
limited to: (i) the Company's intention to access up to $150 million in
debtor-in-possession (DIP) financing from The CIT Group and Greenwich
Capital Financial Products, Inc. based on subsequent events; (ii) the
Company's expectation that the DIP financing will provide it with funding
to facilitate the chapter 11 process; (iii) the Company's expectation that
it will continue to encourage competing bids for the certain loans and
residual assets that it has entered into an agreement to sell to Greenwich
Capital Financial Products, Inc. and the servicing assets that it has
entered into an agreement to sell to Carrington Capital Management, LLC, in
order to obtain the best possible price; (iv) the Company's hope that it
will be able to find buyers of its servicing and loan origination
operations that will be financially sound and in a stronger position than
the Company to employ many of its Associates on an on-going basis; (v) the
Company's expectation that in connection with the chapter 11 filing, it
will reduce its workforce by approximately 3,200, or 54%, to better align
the Company's cost structure with the current operating environment and to
properly size these businesses in preparation for sale; (vi) the Company's
belief that the sub-prime sector will remain an important part of the
American economy; and (vii) the Company's hope that the platforms and
operations that it has built will continue to be utilized to help support
the growth of the sub-prime sector of the mortgage industry. The Company
cautions that these statements are qualified by important factors that
could cause actual results to differ materially from those reflected by the
forward-looking statements. Such factors include, but are not limited to:
(i) the execution and delivery, and the U.S. Bankruptcy Court's approval
of, the definitive agreements governing the various asset sales and the DIP
financing agreement; (ii) the U.S. Bankruptcy Court's approval of any other
contemplated transactions or activities involving the Company; (iii) the
Company's ability to find better offers for its servicing platform, loans
and residual assets using an auction process in bankruptcy; (iv) the
satisfaction of the closing conditions for the Company's sale of its
servicing platform to Carrington Capital Management, LLC and certain of its
loans and residual assets to Greenwich Capital Financial Products, Inc.;
(v) the company's ability to satisfy the subsequent conditions that would
allow it to access additional DIP financing from The CIT Group and
Greenwich Capital Financial Products, Inc.; (vii) the Company's ability to
continue its servicing operations while it seeks a purchaser of those
assets; (viii) the Company's ability to preserve the value of its
origination platform while it seeks a purchaser of those assets; and (ix)
the outcome of litigation or regulatory actions pending against the
Company. Additional information on these and other factors is contained in
the Company's Annual Report on Form 10-K for the year ended December 31,
2005 and the other periodic filings of the Company with the Securities and
Exchange Commission. The Company assumes no, and hereby disclaims any,
obligation to update the forward-looking statements contained in this press
release.
SOURCE New Century Financial Corporation
 back to top
Related links:
http://www.ncen.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20061012/LATH070LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Investor Relations, Carrie Marrelli, Vice
President, +1-949-224-5745, or Amanda Fowler, Assistant Vice
President, +1-949-862-7647, or Media Relations, Laura Oberhelman,
Director, +1-949-255-6716, all of New Century Financial
Corporation; or Hugh Burns or Dan Gagnier, +1-212-687-8080, or
Paul Kranhold or Ron Low, +1-415-618-8750, all of Sard Verbinnen
& Co, for New Century Financial Corporation
|
