Credit-Based Asset Servicing and Securitization LLC (C-Bass) and seven of its affiliate companies have announced that they have filed for Chapter 11 protection with the U.S. bankruptcy court in Manhattan. It has been reported that C-Bass has between $10 million and $50 million of assets, and more than $1 billion of liabilities.
Founded in 1996, C-Bass was an early leader in the securitization of mortgages issued to borrowers with sub-prime credit and has served as a servicer. C-Bass has been liquidating its holdings and giving proceeds to lenders and investors.
In a Reuters report, C-Bass Treasurer Andrew Rickert said the company believed at the time it would have "substantial equity" in its collateral to ensure survival, but said "it became clear" that no such equity existed" once the U.S. mortgage crisis "deepened by an order of magnitude that no one could have predicted." Rickert claims the company still owes $170 million under a senior credit facility, "well in excess" of the value of the remaining collateral.
For more information, visit www.c-bass.com.