Goldman Sachs has agreed to buy the bankrupt subprime lender Southern Pacific Funding Corp. for $35 million plus a portion of future cash flows, Southern Pacific said.

The deal will allow Southern Pacific to pay off existing working capital loans and "allow creditors to participate in the cash flow generated through the management of the company's assets," Southern Pacific's president, Kevin D. Padrick, said in a written statement.

Those assets most likely include residuals, or traunches of securitized loan pools, that Southern Pacific held on its books.

Goldman and Southern Pacific did not return calls.

Southern Pacific filed for bankruptcy protection in October after the market for asset-backed securities fell apart.

The deal is subject to bankruptcy court approval.

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