Dallas-based Jayhawk Acceptance Co. said it plans to reorganize under Chapter 11 of U.S. bankruptcy law after bankers cut off access to new funds. Spokeswoman Virginia Cleveland said the company’s lawyers are expected to make the filing no later than this morning. Jayhawk’s $65-million credit line with its main lender, Fleet Financial Group Inc., is backed by its loan portfolio, according to a person familiar with the lending agreement. The bankruptcy comes a week after Jayhawk, which makes car loans to people with poor credit, took a $15.5-million charge for bad auto loans, resulting in a fourth-quarter loss. Trading in Jayhawk’s shares was halted after falling 12.5 cents to $4 on Nasdaq.
Jayhawk Acceptance to File for Bankruptcy
Times Staff and Wire Reports