NextCard Drops Reorganization, Decides to Liquidate
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Bankrupt credit card lender NextCard Inc. has abandoned plans to reorganize and is planning to liquidate, according to court documents.
The San Francisco-based company filed liquidation plans Monday with U.S. Bankruptcy Court in Wilmington, Del., under which it would pay $2.5 million to $17 million to creditors, far short of the $464 million in claims filed against the company.
Under terms of the plan, payouts are set to be funded by NextCard’s cash holdings of $4.7 million and a small amount of receivables, furniture and possible litigation awards.
NextCard says the majority of the claims against it relate to a $397-million class-action lawsuit filed by former shareholders.
A onetime darling of the dot-com boom, NextCard fell into trouble with regulators a year ago after issuing too many credit cards to deadbeat borrowers.
Shareholders aren’t expected to receive any payments from the liquidation. NextCard’s stock peaked at $53.12 in 1999.
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