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Friedman, Billings, Ramsey mortgage origination unit files Chapter 11 bankruptcy
By Caroline Salls
Pittsburgh, Jan. 18 - Friedman, Billings, Ramsey Group, Inc.'s mortgage origination subsidiary First NLC Financial Services, LLC filed for Chapter 11 bankruptcy Friday with the U.S. Bankruptcy Court for the Southern District of Florida to liquidate its assets.
Friedman announced that the subsidiary would file for bankruptcy on Jan. 11.
As previously reported, Friedman, Billings, Ramsey said the decision to liquidate First NLC's assets in bankruptcy was prompted by the continued deterioration of the non-prime market.
Friedman, Billings, Ramsey said it has taken steps to limit its ongoing exposure to First NLC, and, in connection with the bankruptcy filing, Friedman, Billings, Ramsey said it does not expect to recover its remaining $12 million investment in the subsidiary.
In addition, the company has requested court approval to hire Mesirow Financial Interim Management LLC to provide First NLC with restructuring management.
Mesirow's Thomas J. Allison will serve as chief restructuring officer.
The company listed between $50 million and $100 million in both assets and debt.
First NLC's largest unsecured creditors include:
• Goldman Sachs Mortgage Co., New York, with a $5.03 million reps and warranties claim;
• HSBC Mortgage Services, Fort Mill, S.C., with a $2.96 million reps and warranties claim;
• Deutsche Bank Securities Inc., New York, with a $2.15 million reps and warranties claim; and
• U.S. Bank Corporate Trust Services, St. Paul, Minn., with a $1.02 million reps and warranties claim.
First NLC is located in Boca Raton, Fla. Its Chapter 11 case number is 08-10632.
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