Irvine lender requests secrecy

Irvine-based New Century Financial Corp., the biggest sub-prime lender in bankruptcy proceedings, asked a judge to keep secret a report on whether the company wrongly spent cash set aside as collateral.

The report by bankruptcy examiner Michael Missal contains information protected by attorney-client privilege, New Century lawyers said in court papers filed Tuesday.

A “cursory reading” of the report, filed under seal last month, “will reveal to any reader the substance of the privileged legal advice,” the company said in its motion, filed in U.S. Bankruptcy Court in Wilmington, Del.

Before New Century sought bankruptcy protection, state regulators revoked its lending licenses, federal officials launched two probes and shareholders filed more than 25 lawsuits claiming securities law violations, according to court papers.

When a company is in bankruptcy, it may not spend cash set aside as collateral for its creditors without court approval.