Irvine-based New Century Financial Corp. said on Thursday it is laying off close to 2,000 workers, after the bankrupt subprime lender reportedly failed to receive any bids for its mortgage loan lending unit.
Delaware’s bankruptcy court had set May 2 as the due date for bids for the shuttered unit, starting at minimum of $1 million. No buyers stepped up to the plate, New Century chief executive Brad Morrice told employees.
An attempt to extend the deadline was not supported by New Century’s creditors committee, prompting the layoffs.
The company had kept workers in the loan lending unit for the past month, despite no longer making loans, in hopes of attracting a buyer.
New Century will reportedly retain only service personnel and about 250 members of its corporate team going forward, as additional liquidation efforts are completed.
The subprime lender still plans to sell its loan servicing unit for a minimum of $133 million. Carrington Capital Management LLC, a hedge fund created by New Century, is the lead bidder for that unit. The loan servicing auction is set for May 16.
The company said it was laying off about half of its staff when it filed for Chapter 11 bankruptcy in early April.
