Brea-based Fremont General Corp., once one of the country’s largest subprime lenders, says it might file for bankruptcy.
The company could file for bankruptcy to complete the sale of its banking arm to Maryland’s CapitalSource Inc.
Fremont said it may not be able to put together a shareholder solicitation required by the Securities and Exchange Commission to complete the deal.
Filing for bankruptcy could allow the deal to go without a shareholder vote under bankruptcy court proceedings.
The announcement came a day after the company said it was selling its mortgage servicing business for an undisclosed price to Litton Loan Servicing LP, an affiliate of Goldman Sachs Group Inc.
Regulators started to crack down on Fremont a year ago when they ordered it to stop making subprime loans. Earlier this year they told Fremont’s banking arm to raise money or be sold.
In November, a group of Orange County bankers led by chief executive Stephen Gordon took over Fremont. Early this year, they moved the company’s headquarters from Santa Monica to Brea.
Gordon once ran Irvine-based Commercial Capital Bancorp Inc., which Washington Mutual Inc. bought for $1 billion in 2006.
