Posted on 08/13/2007 5:21:54 AM PDT by Hydroshock
Accredited Home Lenders (LEND - Cramer's Take - Stockpickr - Rating) sued Lone Star in a bid to force the firm to complete its $400 million buyout of Accredited.
San Diego-based Accredited said Lone Star indicated in a filing with regulators that it doesn't expect to complete its purchase of Accredited, based on the assumption that Accredited won't be able to satisfy conditions to the closing.
Accredited said it believes all conditions to closing have been satisfied and said it sued "to hold Lone Star to its obligations, and to hold it fully responsible for any damages caused by its failure to satisfy those obligations."
Accredited added that the companies' merger plan "expressly provides that changes generally affecting the non-prime industry in which the Company operates which have not disproportionately affected the Company do not provide a basis for Lone Star to fail to honor its obligations."
The news comes as the market for the subprime mortgage-backed securities has seized up, forcing many lenders out of business. Last week American Home Mortgage (AHM - Cramer's Take - Stockpickr - Rating) filed for Chapter 11 bankruptcy protection, and Luminent Mortgage (LUM - Cramer's Take - Stockpickr - Rating) got notices of default from lenders.
Accredited said neither Lone Star's effort to back out of the merger nor its likely failure to close its $15.10-a-share tender offer Tuesday will constitute an event of default under Accredited's warehouse lending facilities
PING
Research your “take”....
Amazing the sheer number of people that make bad decisions seem to look to refuse self accountability, individuals and corporations alike.
Our government and several around the globe are seriously scrambling to lessen the impart of poor legislation and regulation. All those involved (lenders and lendees)in the sub-prime fiasco should be responsible, not you and me.
JUst liek int he S&L bailout, the taxpayers will be left holding the bag. The Congress is bought and paid for and has been for years.
I agree. In simple terms, the taxpayers have just lined the pockets of the flippers and the sub-prime managers now out of work.
Very astute posts today my FRfriend. All high level corporate types pray for and hope for the Golden Parachute. Must be very disappointing for some to realize that they have gutted a fat, healthy cash cow with greed.
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