Irvine’s New Century Financial Corp. is fighting a government bid to replace its executives with a bankruptcy trustee.
New Century argued in a recent bankruptcy court filing that the Justice Department request for a trustee ignores the efforts of Chief Executive Brad Morrice and others to sell off assets fast and wind down the subprime lender, according to a Reuters report.
U.S. Trustee Kelly Beaudin Stapleton, who watches bankruptcy cases for the government, argued putting a trusting in charge last month because of accounting issues at New Century.
A lawyer for New Century called the argument a “broad and sweeping attack on well-respected executives.”
A unit of creditor Deutsche Bank AG has 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.
Morrice, a New Century cofounder, has said to be putting in long hours at the company’s Irvine Center Towers headquarters working to wind down the company, which filed for bankruptcy in April.
He 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.
