By Alisha Gomez
TOP STORIES
A U.S. bankruptcy trustee approved New Century Financial Corp.’s plan to sell about 2,000 mortgages to a unit of Royal Bank of Scotland Group PLC for $47.3 million and make $7.3 million of incentive payments to loan workers. U.S. Bankruptcy Judge Kevin Carey in Delaware last week authorized the sale of the mortgages to RBS’ Greenwich Capital Financial Products Inc. unit, provided that no bidders make competing offers in an auction scheduled to end April 30. The $47.3 million purchase price was reduced from an original $50 million. New Century would pay Greenwich Capital a $945,000 break-up fee if another bidder wins the mortgages. Meanwhile, a hearing regarding New Century’s request to pay executives and key employees a $6.3 million bonus for selling assets was postponed last week. The bankruptcy trustee called the mortgage lender’s rationale “unsubstantiated.” New Century had asked a judge to approve the bonus plan on April 24 and to limit creditors’ ability to review the strategy. The company said it needed the fast track to “motivate leadership and to address the steeply declining morale of its employees.” A lawyer for U.S. Bankruptcy Trustee Kelly Beaudin Stapleton argued against hasty approval of bonuses. The company hopes to pay Chief Executive Brad Morrice and seven other officials $3.5 million if they find buyers for its main assets. In addition, 123 other employees would get slightly less than $3 million regardless of whether the assets were sold.
Newport Beach-based SRS Technologies Inc., a privately held engineering contractor for the government, said last week it inked a deal to be bought by ManTech International Corp. Fairfax, Va.-based ManTech is paying $195 million in cash for SRS. The deal is expected to close in the quarter. SRS Technologies, which was started 30 years ago, does systems integration and engineering for the defense sector and security agencies.
Irvine’s Broadcom Corp. again is on the attack in its running battle over patents with San Diego rival Qualcomm Inc. Broadcom said last week it’s filed another suit against Qualcomm, this one alleging Qualcomm violated California competition laws. Broadcom is asking the court to bar Qualcomm from enforcing some patents.
Investors hammered Irvine-based BioLase Technology Inc. last week on news that the company would post a first-quarter loss and lower-than-expected revenue. Shares fell about 24% on the news. The maker of dental and cosmetic lasers said it expects first-quarter sales to come in at $14.5 million to $15 million. Wall Street forecasted sales of $18.6 million. It also expected the company to post a profit of $238,000. BioLase didn’t give a number for its expected loss.
Newport Beach healthcare software company TriZetto Group Inc. said last week it expects first-quarter results to come in at the top end of expectations. The company also detailed plans to offer $200 million worth of convertible debt due in 2012 in a private offering. Word of the debt offering tempered investor reaction to the higher quarterly forecast. TriZetto said it would use the offering’s proceeds to pay for convertible hedge and warrant deals it expects to enter into with the offering. For the first quarter, TriZetto said that it expects profits of $3.6 million to $5.4 million. Sales are seen coming in at $100 million to $110 million. Results are due April 30.
Two former top executives at Irvine medical device maker Endocare Inc. were indicted last week over allegations that they defrauded investors of at least $200 million. Paul Mikus, the former chief executive and chairman, and John Cracchiolo, the former chief financial officer and chief operating officer, were charged with more than 20 federal counts of wire and securities fraud. The men are accused of creating phony sales of a cancer-treatment device and repeatedly overstating the company’s revenues in 2001 and 2002 to investors, auditors and the Securities and Exchange Commission.
Struggling mall retailer Anaheim-based Pacific Sunwear of California Inc. reported its best same-store sales said in months. Pacific Sunwear said sales at stores open at least a year rose 14% for the five weeks through April 7. The gain smashed analysts’ expectations of about 3% growth. Same-store sales “were positive in all regions with the greatest strength in California,” Chief Financial Officer Gerry Chaney said. Through April 7, sales at the company’s dominant PacSun surfwear stores rose 16%. Sales at its smaller demo chain selling urban styles were up 4%.
ECONOMIC INDICATORS
The median price of an Orange County home rose slightly in March from February to $629,000 but again saw sales slow from a year earlier. The median home price here rose $9,000 from February to March and now is 0.6% higher than the $625,000 price seen a year ago, according to La Jolla-based DataQuick Information Systems. February saw a 0.4% drop in year-over-year prices, the first yearly decline here in nearly a decade. Prices now stand about 2% below the county’s record high, set in June. There were 3,130 homes sold here in March, a 28% increase from February. Last month’s results were 26% below year-ago sales levels.
