DALLAS - Amresco Inc. announced Monday that it had voluntarily filed for protection from creditors under Chapter 11 of the federal Bankruptcy Code.
In conjunction with the filing, the company said it had entered an asset purchase agreement with NCS I LLC through which it will sell substantially all of its assets, exclusive of its cash and cash equivalents, for about $309 million.
The commercial finance company lost more than $200 million last year and auctioned off many of its assets. It sold its homebuilder lending and servicing division to Prism Financial, a unit of Royal Bank of Canada; its asset management, commercial mortgage banking, and real estate structured finance platforms to Lend Lease Services Inc.; and its $182 million loan portfolio.
"Given the projected losses and anticipated default under the company's outstanding senior subordinated notes caused by the devaluation of the business lending residuals, the company believes a Chapter 11 filing, in conjunction with an auction process, will maximize the value to stakeholders and provide a process for other potential buyers to bid for the company," Randy Brown, chairman and chief executive of Amresco, said in a press statement.
"Because the company has been unsuccessful to date in finding traditional warehouse financing to fund loan origination activities, this process will also allow Amresco to preserve the value of its loan origination franchise."