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Fremont Mulls Chapter 11 Filing
The company said it doesn't know when it will be able to provide regulators with financial information to complete the sale of its branches and deposits to CapitalSource.
May 9, 2008
In the freewheeling days of subprime lending, it was one of the most active players in the business. Soon, it may simply be one on a growing list of lenders that has sought bankruptcy court protection.
Fremont General said Friday it may file for Chapter 11, a day after disclosing its intent to sell the rest of its mortgage services operations to Litton Loan Servicing, an affiliate of Goldman Sachs. With that sale, Fremont will have unloaded essentially all of the assets of its Fremont Investment & Loan business.
The company also said it doesn't know when it will be able to provide regulators with financial information to complete the sale of its branches and deposits to CapitalSource. Fremont said that unless it can arrange a sale of the rest of its assets, a Chapter 11 filing is likely.
Last year, bank regulators ordered Fremont to tighten its loan policies and operations to avoid future losses from defaults by borrowers.
To read the announcement from Fremont General, click here.
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