A year of realignment in the specialty finance sector drew to a close with one company finding new investors and another seeing its deal come apart.

The subprime lender Aames Financial Corp., Los Angeles, which has been on the block since August 1997, said last week that Capital Z Partners, a fund partly owned by European insurer Zurich Financial Services Group, would invest up to $100 million in the company.

But capital-strapped FirstPlus Financial Group Inc., a high-loan-to- value lender based in Dallas, said Monday that its strategic alliance with Superior Bank of Oakbrook Terrace, Ill., has been shelved. The deal, announced in mid-October, called for Superior to buy FirstPlus' servicing department and help the company securitize loans.

The two announcements come amid a tumultuous year in the specialty finance sector. The companies, which make loans that banks consider too risky, have suffered as capital evaporated. Several, including IMC Mortgage Corp. and New Century Financial Crop., were forced to find wealthy partners to assure their ongoing entities.

The Capital Z deal, announced last week, could give the fund anywhere from 53% to 76% of Aames' outstanding shares when it closes in February. The exact stake depends on stockholder participation in a concurrent offering.

Capital Z, a private investment group started in 1990, is run by several former Zurich fund managers, including Adam Mizel and Steven M. Gluckstern.

The Capital Z Financial Services Fund II has $1.8 billion under management and is eyeing additional investments in financial services firms, said Mr. Mizel.

"It's an industry that is undergoing dramatic change," said Mr. Mizel. "If you can find the right business, it can be a very good thing."

The fund will elect four of Aames' nine directors, with the option to nominate a fifth. Several analysts suggested that Capital Z has plans to liquidate Aames' assets, which Mr. Mizel vigorously denies.

The Capital Z fund is not a vulture fund, Mr. Mizel said, and intends to maintain Aames as an ongoing entity.

"We look at Aames as a platform to grow into an industry leader in the subprime home equity industry," said Mr. Mizel.

"This is an industry that overheated as Wall Street threw huge amounts of capital at these businesses," Mr. Mizel said. Since then, "the market has corrected dramatically," he said.

The FirstPlus deal, though on hold, is not entirely dead, executives said.

"We couldn't work out mutually agreeable terms," said Eric C. Green, president of FirstPlus. "There were disagreements between us and them about certain formulas and relationships," he said.

Superior is still negotiating with FirstPlus, said Nelson Stephenson, the bank's chief executive. "We understand that they have interim needs," he said, but Superior is concentrating on solving FirstPlus' long-term problems.

FirstPlus also said Monday it has secured a $35 million credit line from a Dallas-based thrift, Beal Bank, $15.3 million of which went to Superior to pay off a loan. The Superior transaction was scrapped in part on Beal's request, said a source close to the deal.

Analysts said they were not shocked by the latest turn of events for FirstPlus.

"I was surprised that their original deal was with a regulated entity, because of the concerns that the OTS has had with high-LTV lending," said Mike McMahon, an analyst with Sandler O'Neill. Several months ago the Office of Thrift Supervision put out a report warning lenders about the risks of making such loans.

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