The financial engine behind subprime auto lending, PrimaLend Capital Partners LP, has hit the brakes and filed for Chapter 11 bankruptcy protection, listing more than $100 million in debt and launching a strategy to sell off its assets while continuing to operate under court supervision.
The Plano-based company, which has financed auto dealerships across the U.S. since 2007, filed its petition Wednesday in the U.S. Bankruptcy Court for the Northern District of Texas. According to filings, PrimaLend and its two affiliates — Good Floor Loans LLC and LNCMJ Management LLC — reported between $100 million and $500 million in both assets and liabilities, with up to 1,000 creditors affected.
“Best Path Forward,” Says Company President
In a declaration accompanying the filing, Mark Jensen, president of PrimaLend, said that entering Chapter 11 is “desirable and in the best interests of the debtors, creditors, and all interested parties.” The move, he explained, will allow the company to maximize value through asset sales while maintaining business continuity.
The lender confirmed that it has secured debtor-in-possession financing from its existing creditors to support daily operations and the sales process. PrimaLend assured partners and clients that it intends to continue operating in the ordinary course of business during the restructuring.
