It might do a dead cat bounce...but I agree...it is heading into the sub penny range eventually...as soon as they sell off all their assets...it will become a public shell..
New Century Financial Corp. (Other OTC:NEWC.PK - News), the largest U.S. subprime lender in bankruptcy, won the right to sell about 2,000 mortgages to a unit of Royal Bank of Scotland Group Plc (LSE:RBS.L - News) for $47.3 million, and make $7.34 million of incentive payments to loan workers.
U.S. Bankruptcy Judge Kevin Carey in Wilmington, Delaware, on Thursday authorized the sale of the mortgages to RBS' Greenwich Capital Financial Products Inc. unit, provided that no bidders make competing offers in an auction scheduled to end April 30.
The $47.3 million purchase price was reduced from an original $50 million. New Century would pay Greenwich Capital a $945,000 break-up fee if another bidder wins the mortgages.
Carey also authorized the payment of wages and benefits that workers earned before New Century filed for Chapter 11 bankruptcy protection on April 2.
These payments don't cover workers with the rank of senior vice president or higher, provided that New Century obtains releases from such employees, Carey wrote.
The payments are also separate from $6.3 million of bonuses that New Century wants to pay executives and other key employees for selling assets. The company has said it needs to sell major assets by mid-May so they don't lose value.
New Century had been the largest independent U.S. provider of home loans to people with poor credit histories.
It collapsed amid rising delinquencies and defaults, a federal criminal probe and demands by at least 17 U.S. states that it stop lending. The company fired 3,200 employees on April 2.
New Century agreed to sell its loan servicing unit to hedge fund Carrington Capital Management LLC for $133 million. It is trying to sell its loan origination unit but has not disclosed any bids.
New Century shares were unchanged at 89 cents in morning trading on the Pink Sheets.
