Subprime lender Southern Pacific Funding Corp. said late Monday night that it had replaced its chief executive officer and chief financial officer amid a meltdown in the company's stock and its looming bankruptcy.
Southern Pacific has steadily lost equity since the capital for such lenders began evaporating early this year. The company's stock has fallen more than 90% in the past three weeks.
E. James Hedemark, a member of the company's board of directors and former chief executive of Napa Valley Bank, will replace Southern Pacific's chief executive, Robert W. Howard. Timothy A. Breedlove, formerly controller of Southern Pacific, will replace the chief financial officer, Peter F. Makowiecki.
Southern Pacific also said Monday it had obtained a restraining order against Wilshire Real Estate Partnership, a unit of distressed asset specialist Wilshire Financial Services Group Inc., Portland, Ore. Wilshire extended a $40 million loan to Southern Pacific earlier this month, and now claims that the lender is in default. Southern Pacific said in July that it was exploring "strategic alternatives," including a sale, but got no takers.