What Can An Attorney Do To Stop Dubious Business Practice?
posted by Deven Desai
New Century Financial was once the second largest subprime lender in the country. It is now in bankruptcy. Michael Missal is the chief examiner in this case and served in the same capacity on the Worldcom bankruptcy. Here is a link to the report. Warning it is a pdf and 581 pages. Apparently the report finds that then general counsel explicitly told his fellow senior managers that the lending practice of evaluating ability to pay based on teaser rates and relying on refinance bets in the following years was unsound and would result in “sticker shock.” The question has become whether he and other attorneys should have done more after such an analysis.
So Enron-type discussions will likely flow in the near future. For now I wanted to share the link to the report in case those who write in this area could use it. Still if folks have thoughts on this one or the big changes in financial regulations, please share them in the comments.
March 31, 2008 at 12:15 pm
Posted in: Corporate Law
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