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NovaStar unit faces involuntary bankruptcy filing
Wed Jan 23, 2008 6:44pm EST
NEW YORK, Jan 23 (Reuters) - A unit of subprime mortgage lender NovaStar Financial Inc NOVS.PK was hit with an involuntary Chapter 7 bankruptcy petition accusing it of failing to pay a $48.9 million judgment, court records show.
American Interbanc Mortgage LLC of Irvine, California filed the petition against NovaStar Home Mortgage Inc on Wednesday in the U.S. bankruptcy court in Kansas City, Missouri, the city where NovaStar is based.
According to NovaStar's latest quarterly report, American Interbanc last June won a $46.1 million judgment against the home mortgage unit, following an Orange County, California jury trial in which it accused NovaStar of false advertising and unfair competition. Interest has subsequently accrued on the judgment.
In its report, NovaStar said the home mortgage unit could not afford the judgment, which was appealed, and that the parent "may be forced to consider bankruptcy" if American Interbanc sought to hold it responsible. NovaStar said it does not believe American Interbanc has a legal basis to hold it responsible for the judgment.
Robert Berry, a lawyer for American Interbanc, said on Wednesday that NovaStar Home Mortgage is "not paying its obligations, and doesn't appear likely to pay them." He said his client has not ruled out the possibility of trying to enforce the judgment against NovaStar Financial.
Lance Anderson, NovaStar's chief executive, did not immediately return a call seeking comment.
NovaStar in the last year halted subprime mortgage lending, quit its brokerage operations, and fired most of its staff. It once specialized in making home loans to customers with weak credit, but like dozens of rivals was battered by soaring delinquencies and defaults. NovaStar's business now consists mainly of managing a mortgage securities portfolio.
Shares of NovaStar closed Wednesday down 1 cent at $1.75 on the Pink Sheets. (Reporting by Jonathan Stempel; Editing by Carol Bishopric)
http://www.reuters.com/article/marketsNews/idUKN2333643220080123?rpc=44
Million dollar question..Will Wachovia make them pay or not?..Will they extend the time frame or not? Can NovaStar recover? Hmmmmm...Total Lotto at this point..Your guess?
Still good though, maybe a litte over exited, but Its good, Heeaded in the right direction.
What's so huge about it?
That is just till day after tomorrow. It would be huge if they waived the net worth requirement entirely.
BT
NovaStar Stock Jump Piques NYSE Interest
Monday December 3, 4:51 pm ET
NovaStar Shares Jump 69 Percent 2 Days Before Possible Delisting, Attracting NYSE Interest
KANSAS CITY, Mo. (AP) -- Shares of NovaStar Financial Inc. jumped 69 percent Monday, two days before the New York Stock Exchange was to consider delisting the troubled mortgage lender.
The Kansas City-based company's shares gained $1.36 to $3.33.
The increase was enough to arouse the stock exchange's interest, with exchange officials asking the company what was fueling the rise. The company has not made any public announcements in more than two weeks.
NovaStar officials declined to comment Monday.
"The company's policy is not to comment on market fluctuations," said spokesman Richard Johnson.
NovaStar, whose shares traded at $105.80 at the beginning of the year, has struggled as rising interest rates and falling home prices led more people with shaky credit, or "subprime" borrowers, to default on their loans. This, in turn, scared off investors who bought the loans in the secondary market.
The NYSE told NovaStar in October that it planned to delist the company's shares because the company was out of compliance with the exchange's requirements. NovaStar has asked the company to reconsider at a Wednesday hearing but acknowledged last month a "high likelihood" that it would have to find a new market for its shares.
The NYSE's move came a month after NovaStar said it was terminating its status as a real estate investment trust because it determined it could not pay investors a required dividend.
Under the stock exchange's rules, the company would then have to list its shares as a regular corporation, but the NYSE told NovaStar that it didn't qualify because of its market capitalization and other factors.
Any idea why the upsurge on Friday? Will it carry through today?
ugh//// there is a reason th stock has a large short position -- it's not going to exist.
Perhaps we have a double bottom cooking...
Looks like this is already outdated information -- but it should include the mythical exempt (aka "grandfathered") short position (if there ever really was one, which I doubt anyway):
NFI: Short Interest DN 0.8% to 7.4M in Oct 2007
Friday , October 19, 2007 17:04ET
According to new short interest data from NYSE, short interest for Novastar Financial, Inc. (NYSE: NFI) DECREASED 0.8% to 7,399,937 shares for the month ended mid-October, 2007.
SYMBOL SEPTEMBER OCTOBER CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
NFI 7,462,323 7,399,937 -62,386 -0.84% 8
Ya the credit bubble is gone for sure now.. No bottom in sight.
I took a little hit here but made most of it back flipping it since the RS...
I have mostly Canroys now and am real happy!
-shorts
Yup
The Put/Share dump conversion of 2MM shares yesterday (21% of the company) an hour before the news release, gave Big Short enough ammunition to drive the share price down to nothing.
It's Pink Sheets for NFI soon.
They put up a good fight but it will all be over soon.
BT
Stolibox looks like its lights out for NFI now.
They are being delisted from the NYSE...
http://www.reuters.com/article/marketsNews/idUKN1736312620071017?rpc=44
=] still holding a few freebies here, no complaints
energy email me, i'm pretty sure you have it..
Cool! Looks like we're gonna close green, three days in a row.......
Prince, thanks for the invite! Think I will!
Or you can gift me a free 1 yr premium subscribtion!!!
If anyone would like too gift me a free Ihub subscription, I would be more then happy to give you many winning trades. Im all about the barter system. I would gladly pay you for a hamburger on wednesday for one today. Its not the money, I just hate filling out the forms.
So if anyone feels so inclined
thanks so much
Your welcome, It happens to the best of us at times. Just need to win bigger and more then you lose and by the end of the year. You will be GREEN~~
I just started hanging around on this new Ihub board the Winners Circle, small board right now but some very good ideas and traders. Stop on Bye you will find me there.
LOL! Hey, don't tempt me! But I'll take a peek......
How to make a fibber
Out of Energyguy. (g)
Check out ZYNX. Do Your DD first.
BT
OT: Gotcha! Well, I'll tell you one thing I learned, I don't hold on too long these days......I seriously doubt I'll ever do a pinky again, but that's just me....I do like the liquidity of the big boards though. Easy to sell when you want, easy to buy......Enjoy Blue!
OT : Energy, unfortunately all the money i used to have is now worth crap in the penny markets. It wiped me out to be honest and now i'm just throwing in a few hundered here and there when i can to a bigger board stock. Although i still hope something happens so i can at least get out with some money from the Sh*(*Ty picks i've made in the past.
Good Luck man, NFI looking good
I'm not sure if Prince and others are only trading this or think of this a long term play, at this point with my measley 200 shares i'm hoping its long term and we can at least some nice gains.
OT: Blue, just curious......are you mainly sticking with big board plays now? I know I am........I think without margin and not being in front of puter 24/7 it's more difficult to play the pinkies.....just my own thoughts...
Well Prince and Blue, thanks! I needed some upside desperately! I "bought the crap" outa something else and it went south......LOL!
Double digits by end of weeek????????
Yes the market is up, but with it holding up on large volume after the divy announcement, i'm liking where this is going.
Energy, Prince among thieves informed me on this one, so thanks again prince, this seems to be a winner...!
Nice run up to 9.00 this morning too.....Nice to have a play go GREEN for me! Especially since, well, you know......that unmentionable stock! lol! GLTA!!
Good work paulie Cya @ the winners circle!
Hey Prince, I jumped out for FCCN. They had a good PR come out today. Rode that up 30%. I'll still keep my eye on this one though. Thanks for your help.
Sorry paul was gone all day, Im holding till fed meets, technicals look like consolditaion then move up still here.
fwiw
for small caps keep a eye on cngt triggered volume alert, could be easy swing 1-2+.
See ya at the winners circle board paul....
If you want send me a private message with your contact email.
B good!
What do you think today Prince? Up? Down?
Here Bruce
US Chamber of Commerce urging SEC to "tighten rules" on naked shorting
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20070914%5cACQDJON200709141137DOWJONESDJONLIN.
Bruce thanks for your effots did you see News today naked shorts, I think i posted it on the winners circle.
Yes paul its the short interest, combined with profit taking and it being friday. The shorts are trying to get out cheap, the volume today indicates that.
I took some profits in the 8.60+ range and kept a few to ride for a swing. Then added a few as shorts attacked, mon will look to see for additonal add points.
Mondays session will tell us alot going into fed meeting, I cant complain about this trade, have a great average and intitial investment and profits off the table.
have a great weekend
I was out all day, weird trading, does anyone know why?
2.30 shake over adding a few on this dip for next week
gl
Touched near 9 waiting for fed next week
Yes, paul that ihub board is new and small, but seems to be a decent lot over there. Gonna make it my home.
Nope. I don't miss much about NFI
Here is my most recent comment letter to the SEC on Reg SHO proposed amendments.
http://www.sec.gov/comments/s7-19-07/s71907-238.htm
Here are some more comments I have made:
http://www.sec.gov/comments/s7-19-07/s71907-9.htm
http://www.sec.gov/comments/s7-19-07/s71907-10.htm
http://www.sec.gov/comments/s7-19-07/s71907-11.htm
http://www.sec.gov/comments/s7-19-07/s71907-12.htm
http://www.sec.gov/comments/s7-19-07/s71907-13.htm
Bruce you are missing, the fact that was 92% short interest and factor in recent with Wachovia.
Am I missing something?
Yup. The 13MM++ naked short shares sold into the market by the options MM to hedge his open Put positions. That figure is 150% of the entire issue, not the float, and grows by 2-3 hundred thou a day.
BT
awesome volume here this morning! pushing 1 mill in two hours!IMO
The float has got to get bought up soon, This is still 42%owned by institutions so the actual float is only like 5 million - which we have traded in the last few days!!!???
Am I missing something? Flipping?
Thanks Prince, i just posted over there. GO NFI GO!!!!
If anyone would like too gift me a free Ihub subscription, I would be more then happy to give you many winning trades. Im all about the barter system. I would gladly pay you for a hamburger on wednesday for one today. Its not the money, I just hate filling out the forms.
So if anyone feels so inclined
thanks so much
Paul with the short interest here, 2.4 mil today volume shorts still have to cover more then 3/4 of the float. Now you have technicals as well pushing it up. Could get very exciting, as fed meeting aproaches.
Come say hello at the new board I found and will make my home, a couple good traders making good trades so far.
http://investorshub.advfn.com/boards/read_msg.asp?message_id=22856197
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