Troubled Irvine Lender Preferred Credit Bought

A Minneapolis firm has bought Preferred Credit Corp., an Irvine lender that was booming last year until revelations that it shortchanged borrowers and tried to sell stock without revealing its top officers’ run-ins with regulators.

NJK Holdings Corp. of Minneapolis bought Preferred on Oct. 31, 1997, for an undisclosed amount. NJK president James McGuire said Friday that Preferred founder Todd Rodriguez, 30, was replaced as chief executive by Gene DePalma, 62, who previously had run one of NJK’s businesses.

Nasser J. Kazeminy, the chairman of privately owned NJK, is now also chairman of Preferred. McGuire said Preferred will continue its main business, lending to clients with good credit but little home equity, and will probably diversify into loans to people with blemished credit.

Preferred blamed $1.5 million in overcharges to 17,700 borrowers on a slow processing system. When it filed to sell $100 million in stock in June 1997, it didn’t tell investors that state regulators had suspended the real estate licenses of Rodriguez and another officer for mishandling trust funds and using unlicensed employees.