I have a friend whos wife is (was) working there. He just told me that they are having massive layoffs, most of the company is closing down including the IT division.
My understanding is that they’re going to announce a Chapter 7 bankruptcy (liquidation) within the next 30-45 days. One of the challenges has been that virtually all of the bulge bracket investment banking firms that would otherwise handle NEW’s investment banking needs right now are prohibited due to conflicts of interest (they’re lenders to NEW and will thus be seeking reparations in the bankruptcy), so NEW has had to go a little further afield for banking services which has delayed things a bit. But the outcome will be the same… kaput.
Yeah, I hear they’re having trouble moving the MBS of their refi’d employee mortgage paper even though it has the attractive terms of 10% neg-AM, I-O with a ten years fixed 0% teaser rate minimum payment. 😉
NEW dropped another 25% today to 3.87, with trading volume of 50 million shares (pretty much the entire float).
I know little about the inner workings of the subprime mortgage industry but I do know a little bit about failing/failed companies. Seems to me that NEW has passed the point of no return …
Well, I got the timing right, but my understanding was that they were heading for Chapter 7. I guess their creditors must have found something of value in keeping the operation alive for a while so they opted for Chapter 11. In this case, they say tomato, I say tomahto. Either way… kaput and a big ‘ole goose egg for the equity holders. Good riddance.
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