A judge overseeing the bankruptcy of Irvine’s New Century Financial Corp. has rejected a government bid to replace the subprime mortgage lender’s management with a trustee, according to Reuters.
Bankruptcy Judge Kevin Carey ruled that Chief Executive Brad Morrice and other New Century executives are handling the sale of assets well, according to the report.
U.S. Trustee Kelly Beaudin Stapleton, who monitors bankrupcty cases for the Justice Department, had urged for the ouster of New Century executives because of accounting issues at the company prior to its bankruptcy filing.
A unit of creditor Deutsche Bank AG had backed the appointment of a trustee and ouster of management because of what it said was a lack of records on loans bought from New Century.
Unsecured creditors in the case opposed the removal of New Century management.
The company filed for bankruptcy in April. Morrice and others hit a setback earlier this month when no buyer emerged for New Century’s loan making business, resulting in layoffs for some 2,000 workers.
