MFN trims operations
LAKE FOREST, Ill. - Subprime auto lender MFN Financial Corp., the former Mercury Finance Co., closed or stopped acquiring new loans at 46 branch offices in the second quarter and stopped originating new business in Texas, according to a second-quarter report filed with the Securities and Exchange Commission. That left the company with 105 branches at the end of June, vs. 158 at the end of 1998.
Since 1997, the company has closed 110 branches. Effective July 29, MFN also sold its nonautomotive loan portfolio to First Tower Corp. of Jackson, Miss., plus branch offices in Texas, Louisiana, Mississippi and Alabama. Mercury Finance filed for Chapter 11 bankruptcy protection in July 1998, reorganized, then emerged from U.S. Bankruptcy Court in March.
The company admitted in January 1997 that it had overstated its earnings.
STAMFORD, Conn. - The NASDAQ National Market delisted Warrantech Corp. because the company was late in filing its first-quarter report. Warrantech, which markets and administers extended service contracts, said it would appeal the delisting, which took effect Sept. 3.
Warrantech disagrees with its former auditors, Ernst & Young LLP, over whether revenues from the sale of service contracts should be recognized immediately or spread out over the life of the contract. Warrantech records revenues immediately. It maintains that the risk for paying claims is covered by a third-party insurance company.
Warrantech stock is still traded, but being dropped from the NASDAQ automated listing makes trading less convenient.
AUSTIN, Texas - Subprime lender AutoBond Acceptance Corp. warned investors Sept. 13 that it would be de-listed by the American Stock Exchange, although the delisting had not occurred by the middle of last week. AutoBond is embroiled in a suit and countersuit with its main lender, Dynex Capital Inc. As a result of the dispute, Dynex cut off funding, which forced AutoBond to stop buying new loans in February. An Amex spokesman said the exchange does not discuss specific reasons why a company might be delisted. However, one of the criteria the exchange considers is a minimum share price of $3; AutoBond's recent low was only 6 cents, vs. a 52-week high of $5.63. Amex also has minimum requirements for pretax income, market value, and stockholders equity.