Cal Star Financial Services Files Petition for Chapter 7 Bankruptcy
Cal Star Financial Services Inc., a Costa Mesa mortgage banking firm that declared itself insolvent and ceased operations in February in the midst of a federal grand jury probe of its activities, has filed a Chapter 7 bankruptcy petition in federal court here.
The company, which listed $66.7 million in assets and $65.8 million in liabilities, said its books and records have been seized by the FBI. Federal agents apparently are investigating Cal Star’s dealings with federally funded mortgage programs.
Among the company’s creditors are an estimated 300 shareholders who collectively bought $1.5 million worth of stock. Chapter 7 allows for the orderly liquidation of a firm’s assets.
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