Stearns Holdings has filed for chapter 11 bankruptcy after what is said was an agreement to stay in operation and preserve jobs. So report Bloomberg and USA Today.
Stearns, the 20th-largest U.S. home mortgage lender and parent to Stearns Lending, said in a court filing that the bankruptcy was partly due to rising interest rates from late 2016 through 2018. As part of a restructuring agreement, Stearns’ majority owner Blackstone Group will give the company a $60 million cash infusion along with a loan to keep the business running, Stearns said in a statement.
Stearns had cut annual costs by 40%, in part through layoffs, but its debt load remained unsustainable, according to the court filing.