Irvine’s New Century Financial Corp. received bankruptcy-court approval on Thursday to sell its loan-servicing business for a minimum of $133 million.
The lead bidder is Carrington Capital Management LLC, a hedge fund formed by New Century insiders in 2004, according to a Reuters report.
About 25 other bidders have expressed interest in the loan servicing unit, one of the more valuable remaining assets of New Century, which filed for Chapter 11 bankruptcy in on April 2.
Carrington’s bid will be reviewed at a May 18 hearing at the Delaware bankruptcy court. Any other bidders will have to offer $5 million more than Carrington in order to win. Carrington had been seeking overbid protection of as much as $14 million.
Another auction could be on the books for New Century’s shuttered loan making business, although a hearing for that sale has been postponed, according to reports.
Last week, Royal Bank of Scotland Group PLC made a $50 million opening bid for more than 2,000 loans being auctioned by the company.
