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Irvine’s New Century Financial Corp. hired an adviser known for work on corporate restructuring and bankruptcy cases. The subprime lender tapped New York-based Lazard Ltd., creditors familiar with the situation told Reuters. The move is the latest indication New Century could be headed toward possible bankruptcy, following a precipitous stock plunge since February, a lack of funding and the halting of loans. Meanwhile, New Century said it would see a $46 million loss from a deal it struck with Barclays PLC that released the subprime lender from buying back $900 million in loans. The lender still could have to buy back some $8 billion in loans if investors demand. New Century also said in an SEC filing last week that it no longer can sell mortgages to Fannie Mae, the largest funder of home loans. The company’s also barred from servicing mortgages for Fannie Mae. The company was terminated “for cause” by Fannie Mae for alleged breaches of a contract.
The parent of Irvine-based subprime lender People’s Choice Financial Corp. has filed for Chapter 11 bankruptcy protection. People’s Choice Home Loan Inc., the parent of People’s Choice Financial, filed a petition last week in the Central District of California. The company’s petition lists assets and liabilities both in excess of $100 million. It counts 10,000 to 25,000 creditors. The move comes less than a week after the company withdrew plans for a $193 million public offering.
Santa Monica-based Fremont General Corp. said it’s selling $4 billion of loans made by its shuttered Brea-based subprime mortgage division. The company said it expects to see a $140 million pre-tax loss from the sale. The buyer wasn’t disclosed. The loss reflects a discount to face value of about 4%, or 96 cents on the dollar, a better deal than most industry watchers had expected. The company recently was ordered by federal regulators to halt subprime lending. Fremont is letting go a number of its 2,400 workers at its Brea offices. Fremont said it is in talks with several potential buyers for the subprime division.
Shu Li, who guided Newport Beach-based Jazz Semiconductor Inc. since its spinoff from Conexant Systems Inc. in 2002, resigned from the company that was bought out and taken public less than a month ago. His replacement as chief executive and president is Gil Amelio, a former chief executive of Apple Inc. and one of three principals in Acquicor Inc., a blank check company that bought Jazz for $260 million. A statement only said Li would “pursue other opportunities.”
Alliance Imaging Inc., the Anaheim medical diagnostic services provider, last week said a pair of investors bought a combined 49.7% stake in the company. Funds managed by Oaktree Capital Management LLC of Los Angeles and New York-based MTS Health Investors LLC bought about 24.5 million shares of Alliance from Kohlberg Kravis Roberts & Co. for $153 million. Once the deal wraps up in July, Kohlberg Kravis Roberts, which had been Alliance’s majority shareholder for seven years, will own less than 3%.
A group of Anaheim tourism and community leaders called Save Our Anaheim Resort Area filed a ballot initiative with the city of Anaheim that would give voters a say over changes to the Anaheim Resort District. The initiative would require voter approval to change the city’s general plan, land use designation or boundaries of the resort district. It also would require environmental impact reports to be complete before any housing project within the resort district could be built. Once the petition is certified, the group plans to start collecting the required 20,000 signatures to put it on a ballot. Walt Disney Co., which opposed efforts by Irvine’s SunCal Cos. to build houses near its theme parks, is leading the effort. Disney has sued the city over a SunCal housing proposal.
The Santa Ana City Council approved a plan to lure high-rise condominium development to 200 acres between the Costa Mesa (55) and Santa Ana (I-5) freeways. The council gave a nod to the first new project proposed for the area,two condo towers with 374 homes, ground-floor stores and a rooftop swimming pool at 1901 E. First St. The first phase will take a little less than two years to build. Developer NDC Development is part of Newport Beach-based Capital Pacific Holdings Inc.
The California Postsecondary Education Commission voted 8-3 against construction of a $70 million law school at the University of California, Irvine. The vote is a blow to the university’s plans for a 92,000-square-foot facility for 600 students. UC Regents could opt to push the project despite the vote. But substantial funding must come from the state, and the Legislature and governor have never approved a school of that magnitude without the commission’s support. In rejecting UC Irvine’s law school, the commission said existing schools supply more than enough lawyers to meet market demand, he said.
