Aug 22, 2007

Accredited Home – From Milk And Honey To S**t And No Money

Accredited agreed on June 4 to be acquired by Dallas-based Lone Star for $15.10 per share, or about $400 million. Less than two weeks ago it filed suit against Lone Star to complete that merger. Lone Star has said Accredited may be entitled to nothing more than a $12 million breakup fee.

Accredited Home issued a news release this morning stating that 1,600 staffers will be let go. As companies go, they gave a little more information than most. From their news release:

"Substantially all of the retail lending business consisting of 60 retail branch locations and 5 centralized retail support locations will be effectively closed as of September 5, 2007, impacting approximately 480 positions nationwide. Accredited will continue to operate its San Diego-based customer retention unit that assists the Company's loan servicing customers."
"Five of the Company's ten wholesale divisions will be substantially closed effective September 5, 2007. These closures, combined with reductions in staff at the remaining five divisions, will reduce the wholesale workforce by approximately 490 positions, leaving approximately 340 employees in the wholesale operation."
"Effective immediately, no new U.S. loan applications will be accepted, although the Company will honor existing commitments. Accredited intends to resume wholesale loan originations based upon improvement in market conditions."
"The Company's settlement and insurance services division, Inzura Settlement Services, which provides appraisal, title insurance and other settlement services, will be substantially reduced. Headquarters staff in San Diego, CA will be significantly reduced to approximately 220 people from its current workforce of approximately 400."