SPFC Files for Chapter 11

October 02, 1998, 1:00 p.m. EDT 1 Min Read

Southern Pacific Funding Corp., Lake Oswego, Ore., has filed for protection under Chapter 11 of the Bankruptcy Code.This filing does not affect the operations of the following subsidiaries of SPFC: National Capital Holdings Inc.; Oceanmark Financial Corp.; Home America Financial Services Inc.; Hallmark America Corp.; and its United Kingdom operations, Southern Pacific Mortgage Ltd. However, the filing will have a negative impact on its largest shareholder, Imperial Credit Industries Inc., Torrance, Calif., which has a 47% stake in SPFC. ICI said it will write down its investment in SPFC to zero. Therefore its third quarter losses, which had been estimated at $65-75 million, will now be in the $85-95 million range. To continue its operations temporarily, SPFC has an agreement with Greenwich Capital Markets Inc. for a $100 million warehouse facility and a $12 million working capital line of credit. SPFC said it hopes to have permanent debtor-in-possession financing in place by Oct. 16.

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