Anaheim Hills-based Fremont General Corp., one of the casualties of the subprime mortgage meltdown, has emerged from bankruptcy with a new name, key owner and strategy.
The company said Monday it emerged from bankruptcy under a reorganization plan drafted by Los Angeles-based distressed buyout firm Signature Group Holdings LLP.
Fremont now goes by Signature Group Holdings Inc. The company also changed its stock ticker to “SGGH.”
The shares trade on the low-profile Pink Sheets exchange.
Shareholders of the former Fremont General own about two-thirds of the company under the reorganization with Signature Group Holdings owning a minority.
That allows the company to take advantage of Fremont’s $769 million in net operating losses that can be used to offset future taxes.
Signature Group Holdings plans to invest about $10 million for an 11% stake in the new company and get warrants that would convert into more shares.
The new company is expected to make or acquire loans to midsize companies.
John Nickoll, cofounder and former chairman of Los Angeles-based Foothill Capital Corp.—now part of Wells Fargo & Co.—is expected to lead the new company.
Fremont filed for bankruptcy in 2008. The company once ran a bank and made home loans to borrowers with imperfect credit.
It packaged loans and sold them as bonds to Wall Street. When loans started going bad in 2007 and 2008, Fremont was forced to buy them back, crushing the company.
Under threat from regulators, Fremont sold its banking unit to Maryland’s CapitalSource Inc. in 2008.
