New Century Is A Drag For KPMG

New Century was one of the first mortgage provider failures to signal the coming tidal wave of issue and problems in this sector for KPMG and the rest. They’re in bankruptcy now and KPMG, their former auditors, resigned a while ago. But KPMG will be tied up in this mess for a long time to come. Look for them to make a quick settlement of any shareholder claims.


New Century Possibly Mishandled Cash
In the “chaotic and pressured environment” of its bankruptcy collapse, New Century Financial Corp. may have wrongly spent as much as $20 million that belonged to Wall Street backers, a court-ordered investigator has concluded.
Michael J. Missal, named by a bankruptcy court to probe the company’s finances, concluded that New Century spent money claimed by banks that financed its home lending operation without getting court permission as it should have done after filing for Chapter 11 protection.


“There does not appear to be a basis for New Century to have expended properly such funds,” Missal wrote in a report filed in November in the U.S. Bankruptcy Court in Wilmington, Del., but kept under seal until late Thursday.


KPMG was named in earlier articles as contributing to the significant delays in the completion of the examiner’s report.


New Century bankruptcy examiner seeks more time
A court-appointed lawyer probing the collapse of subprime mortgage lender New Century Financial Corp has asked for more time to finish his investigation, saying the company, former executives and former auditor KPMG LLP have delayed his work.


Michael Missal, a specialist in securities enforcement and investigations, asked U.S. Bankruptcy Judge Kevin Carey in a Tuesday court filing to give him until March 17 to complete his report, two months after the current January 15 deadline. Carey, who sits in Wilmington, Delaware, appointed Missal in June as New Century’s examiner, to investigate alleged misconduct at the Irvine, California-based company. New Century had been the largest independent U.S. provider of home loans to people with poor credit before filing for Chapter 11 bankruptcy protection last April 2, in one of the first major collapses of the current U.S. housing crunch. It is now defunct, having liquidated many assets.


In the filing, Missal said he has made substantial progress in his investigation, but that “significant delays” in obtaining information from New Century and KPMG require that he obtain more time to review documents, conduct interviews and finish his analysis.