The saga continues for embattled independent auto lender Union Acceptance Corp. in its attempts to retain the servicing rights to its auto loan portfolio. The Indianapolis-based lender announced Dec. 17 that it had completed a planned portfolio sale, raising an estimated $11 million to $15 million in proceeds.
While ASR was on hiatus, the company announced that it had once again received an court-ordered extension on the deadline for bond insurer MBIA to seek a servicing transfer through Tuesday, Jan. 7. This week the U.S. Southern District Bankruptcy Court of Indiana is expected to decide whether or not to further extend this deadline through the end of March, according to a company spokesperson.
Unable to obtain debtor-in-possession financing in the wake of its Oct 31, 2002 chapter 11 bankruptcy filing, UAC quickly turned to a possible asset sale for liquidity. The sale, which subsequently winds down a $200 million facility with Wachovia Bank, sends the loans to a joint venture between First Investors Financial Services Group and First National Bank of Omaha. Additionally UAC continues seeking a buyer for roughly $300 million of receivables currently warehoused by Bank of America N.A., as part of its previously announced plan to sell $500 million of loans.