New Century gets financing approved

Bankruptcy

New Century Financial Corp. (NEWC.PK: Quote, Profile, Research), the largest U.S. subprime lender now under bankruptcy protection, was authorized on Thursday to obtain up to $150 million of financing to keep operating under Chapter 11.

The package, which was announced Monday as the company announced its bankruptcy filing, includes up to $150 million of debtor-in-possession financing from The CIT Group and Greenwich Capital Financial Products Inc.
 
According to the Associated Press, U.S. Bankruptcy Judge Kevin Carey said he would agree to the interim financing. Carey earlier granted the lender interim authority to pay "its utility bills, remaining employees and other necessary expenses until the company's assets can be sold next month" the AP reported.

The Irvine, California-based company collapsed amid rising delinquencies and defaults, a federal criminal investigation into its accounting and trading in its securities, and orders by or agreements with at least 17 U.S. states to stop lending.

New Century has said it agreed to sell its loan servicing unit to hedge fund Carrington Capital Management LLC for $139 million, and some loans to Greenwich Capital for $50 million.

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