Greenlight, REIT End Dispute

New Century Financial Corp. said Wednesday that Greenlight Capital Inc., its largest shareholder, had agreed to end a proxy fight that sought to oust three directors on the U.S. real estate investment trust’s board.

New Century, an Irvine-based mortgage lender, agreed to boost the size of its board to 11 members from 10, with Greenlight President David Einhorn serving as a new director starting March 31. New Century also will give Greenlight an exception to its 9.8% shareholding limit and permit ownership of as much as 19.6% of New Century’s shares.

“We look forward to Mr. Einhorn’s active participation in his new capacity as a member of our board,” Fredric J. Forster, New Century’s lead independent director, said in a statement.

New Century’s shares have languished because of a “history of capital misallocation,” expectations from investors that the misallocations would continue “and a number of other self-inflicted actions,” Einhorn said in a Feb. 16 letter to Forster. The letter was included in a filing last month with the Securities and Exchange Commission.

Greenlight had wanted to replace the three directors with those of its choosing, the companies said. Greenlight said last month that it wanted to change the makeup of New Century’s board to help its stock, which has fallen 7% in the last year.

On Wednesday, New Century shares rose $2.78 to $43.10.