The parent of First NLC Financial Services LLC has had enough.
Friedman, Billings, Ramsey Group Inc. announced today it would liquidate the Boca Raton, Fla.-based subsidiary through a Chapter 11 bankruptcy. The move is reportedly supported by the subprime lender's senior secured lender.
FBR, which blamed continued deterioration of the nonprime market for the collapse, said it does not expect to recover its remaining $12 million investment in the unit. The company had reported a third quarter loss was $215 million -- with First NLC playing a big role in the earnings.
First NLC reported $7.4 billion in 2006 production and employed 700 people as of Aug. 2, 2007, after laying off around 640 people. At the time, 25 retail branches remained following the closure of 23 branches.
FBR, which acquired First NLC in early 2005, announced last July that Sun Capital Partners had agreed to buy the unit in a deal that apparently fell apart.
"FBR Group announced that it would not close the previously disclosed recapitalization and sale of FNLC," the investment banker said in today's statement.