Banking & Capital Markets

Fremont General: Days Late, Dollars Short

The financial services company, reeling from bad subprime loans, will miss its extended deadline to file its annual report.
Stephen TaubMarch 13, 2008

In yet another kind of fallout from the subprime crisis, Fremont General Corp. said it will not meet its extended deadline to file its 2007 annual report due to ongoing reviews of the company’s financial statements by its accounting firm.

Late last month, the company, which primarily does business through its wholly owned bank subsidiary, Fremont Investment & Loan, had sought an extra 15 days to complete the report.

It said at the time it would need to record additional asset write-downs and reserves, which could result in further losses or require the bank to adjust downward its regulatory capital. The company announced on March 4 that it had received default notices from two affiliated third-party purchasers of $3.15 billion of residential subprime mortgages.

Fremont also reiterated that as a result of the annual-report filing delay, it will have to delay its combined 2007 and 2008 shareholders meeting, which was scheduled for April 16.

The company explained that it did not hold an annual meeting in 2007 because of regulatory enforcement orders and related business restructurings. It worked out an agreement with the New York Stock Exchange that the NYSE annual shareholder meeting requirement would be satisfied if it held a combined meeting for both 2007 and 2008 by April 30, 2008.

Fremont now says it intends to hold the meeting “as soon as it is able to do so.” It also said it intends to communicate further with the NYSE on this matter, presumably about its ability to retain its Big Board listing.