NEW YORK - BNC Mortgage LLC, a subprime mortgage unit of Lehman Brothers Holdings Inc , filed for bankruptcy protection on Friday, and like its parent plans to wind down operations.
BNC filed for Chapter 11 protection from creditors with the US bankruptcy court in Manhattan. It has more than $1 billion (S$1.47 billion) of both assets and liabilities, and in excess of 100,000 creditors, a court filing shows.
The Irvine, California-based lender had offered mortgages to people with poor credit.
BNC asked the bankruptcy court to combine its case with that of another Lehman unit, Luxembourg Residential Properties Loan Finance S.a.r.l., which filed for Chapter 11 protection on Wednesday. A hearing is set for Jan 14.
Lehman used BNC to create mortgages that it could later package into securities that could be sold to investors.
Losses on securitisations were a key cause of Lehman's own bankruptcy last Sept 15, the largest in US history. Lehman has since been selling or otherwise shedding assets through the bankruptcy process.
The case is In re BNC Mortgage LLC, 09-10137, US Bankruptcy Court, Southern District of New York (Manhattan). -- THOMSON REUTERS
