New Century Financial Corp. gets bankruptcy examiner
NEW YORK, June 6 (Reuters) - The U.S. government has appointed an examiner to look at why New Century Financial Corp. NEWCQ.PK slid into Chapter 11 bankruptcy, the largest U.S. subprime lender to do so, according to court papers.
The proposed examiner, Michael Missal, is a partner at Kirkpatrick & Lockhart Preston Gates Ellis LLP in Washington, D.C., specializing in securities enforcement and investigations.
He was lead counsel to the examiner in WorldCom Inc.'s bankruptcy case, former U.S. Attorney General Richard Thornburgh, and for a CBS Corp. (CBSa.N) panel that reviewed a "60 Minutes" program segment in 2004 concerning President George W. Bush's service in the Texas Air National Guard, the law firm's Web site shows.
Missal will be charged with investigating alleged misconduct at Irvine, California-based New Century, which filed for protection from creditors on April 2 and is liquidating assets.
The company had been the largest independent provider of home loans to people with poor credit before collapsing amid mounting customer defaults, and after uncovering accounting errors that caused it to overstate 2006 earnings. It has since said it probably also overstated 2005 earnings.
Federal prosecutors in California are also examining trading in the company's securities and accounting errors, New Century has said.
U.S. Bankruptcy Judge Kevin Carey, who sits in Wilmington, Delaware, must approve Missal's appointment. The judge previously rejected a government request to appoint a trustee, who would have had greater powers, including overseeing a liquidation. To view additional stories about the subprime lending crisis, click on [nN16195443]
((Reporting by Jonathan Stempel, editing by Maureen Bavdek; Reuters Messaging: jon.stempel.reuters.com@reuters.net, 646 223 6317)) Keywords: NEWCENTURY EXAMINER/
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