SPFC Files for Chapter 11

Published October 02, 1998, 1:00 p.m. EDT

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Updated October 02, 1998, 1:00 p.m. EDT

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Southern Pacific Funding Corp., Lake Oswego, Ore., has filed for protection under Chapter 11 of the Bankruptcy Code.This filing does not affect the operations of the following subsidiaries of SPFC: National Capital Holdings Inc.; Oceanmark Financial Corp.; Home America Financial Services Inc.; Hallmark America Corp.; and its United Kingdom operations, Southern Pacific Mortgage Ltd. However, the filing will have a negative impact on its largest shareholder, Imperial Credit Industries Inc., Torrance, Calif., which has a 47% stake in SPFC. ICI said it will write down its investment in SPFC to zero. Therefore its third quarter losses, which had been estimated at $65-75 million, will now be in the $85-95 million range. To continue its operations temporarily, SPFC has an agreement with Greenwich Capital Markets Inc. for a $100 million warehouse facility and a $12 million working capital line of credit. SPFC said it hopes to have permanent debtor-in-possession financing in place by Oct. 16.

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