Cityscape Financial Corp. said last week that Asher Fensterheim, 67, had resigned from its board.
Mr. Fensterheim is the father-in-law of Robert Grosser, who resigned as chief executive and president but remains with the company as interim chairman.
Cityscape last month reported a third-quarter loss of $70.7 million, or $2.18 a share, because of delinquent loans. The company had said a month before that it expected earnings to fall "materially" short of estimates because of overdue loan payments.
According to a filing he made with the Securities and Exchange Commission, Mr. Fensterheim between December 1996 and April 1997 put up millions of Cityscape shares as collateral for loans.
The lenders were Bear Stearns Securities Corp., Smith Barney Inc., Oppenheimer & Co., BankBoston Investors Service, Prudential Securities Inc., and Hudson Valley Bank.
In October, while Cityscape's stock tumbled, the firms sold 3.4 million of the shares Mr. Fensterheim had put up.
Cityscape executives could not be reached for comment about his resignation.
In the last few months the company's debt was downgraded to just above a distressed rating and Cityscape was named in five shareholder lawsuits alleging it misled them about its financial condition.
Mr. Grosser resigned his executive posts the day after he was named in one of the shareholder lawsuits.