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""Fremont General Corp."":http://www.fremontgeneral.com/phoenix.zhtml?c=106265&p=irol-fremontHome is back in business. The Anaheim, California-based company, once one of the nation’s largest[IMAGE]
subprime lenders, has officially exited Chapter 11 bankruptcy proceedings, following the completion of a court-approved reorganization plan by ""Signature Group Holdings, LLC"":http://www.signaturecap.com/, a private investment firm headquartered in Sherman Oaks, California.
The successful reorganization of Fremont puts an end to the contested bankruptcy case that began in June 2008 and set off an intense battle for control of the company by multiple creditor, equity, and interested constituents. At one time, the case attracted as many as six different plan proponents.
But Signature's plan of reorganization, which includes a $10.3 million equity infusion and the issuance of warrants to purchase additional shares, prevailed over the five competing plans.
[COLUMN_BREAK]""We are excited about putting our plan to work and believe it represents a long-term win for Fremont's investors and creditors,"" said Craig Noell, managing director at Signature. ""This is a tremendous opportunity to turn Fremont into a profitable business - one that can take a lead role in lending to and acquiring middle market companies, a sector that continues to be starved for capital and quality credit.""
Under Signature's plan, which became effective on June 11, 2010, Fremont changed its name to Signature Group Holdings, Inc., and the company will now focus on credit-oriented special situation lending and investments in middle-market companies on a national basis. This plan was previously approved by Fremont's impaired debt and equity constituents and was confirmed by Judge Erithe Smith of the U.S. Bankruptcy Court for the Central District of California in Santa Ana.
Signature said one of the key features of its plan is the preservation of Fremont's equity. According to the company, existing Fremont shareholders will hold approximately two-thirds of the outstanding shares of the reorganized company. In addition, Signature's plan projects that approximately $769 million in net operating loss carry-forwards will be available to offset future taxable income.
""This is a true turnaround story, considering the fate of many of the nation's other major subprime lenders,"" said Kenneth Grossman, a managing director for Signature Capital. ""The 'old' Fremont, now known as Signature Group Holdings, Inc., has a second lease on life.""
