More bad news came in from the California subprime sector Tuesday.
People's Choice Home Loan Inc., a subprime lender in Irvine, filed for Chapter 11 bankruptcy protection, and LoanCity Inc., an Alt-A lender in San Jose, said it plans to shut down to avoid bankruptcy.
John Madden, an attorney for People's Choice, said the lender was using Chapter 11 "to explore our financial and strategic alternatives." He said the company, which employs 350 people, has not announced any layoffs. The filing in U.S. Bankruptcy Court for the Central District listed more than $100 million of assets and liabilities.
Rick Soukoulis, the chairman and chief executive officer LoanCity, said it was unable to raise capital to continue funding loans and laid off 300 employees Tuesday. LoanCity originated $5 billion of loans last year.