To: RockyBalboa who wrote (1793 ) 3/16/2007 4:15:01 AM From: RockyBalboa Read Replies (3) | Respond to LEND: News out and it is very bad. This explains the huge drop afterhours. The book value is reduced by $13 (~320 Mio); further issues: the deferred tax asset; plus the waivers...The $2.7 billion of loans held for sale will be sold at a substantial discount in order to alleviate recent pressures from margin calls.holdback reserve of approximately $40 million to satisfy all future claims against the loans, including early payment defaults. Claims in excess of the holdback reserve will have no recourse against the Company. The sale is expected to be completed over the next couple of days.The Company estimates that this discounted loan sale will result in a pre-tax charge of approximately $150 million. Accredited will retain approximately $120 million of loans held for sale in its warehouse facilities, comprised mostly of loans originated since March 7, 2007.will not file its Annual Report on Form 10-K by March 16, 2007 as previously announced on March 2, 2007. Accredited has determined that changes are required to the amount of goodwill established in its acquisition of Aames Investment Corporation ("Aames") in the fourth quarter of 2006. The previous goodwill estimate was based on the market price of the Company's common stock as of the closing date of the transaction, which was October 1, 2006. The Company has determined that the goodwill should have been established based on the market price of the Company's common stock on the announcement date of the transaction of May 25, 2006, resulting in total goodwill of approximately $130 million. Further, Accredited has determined that the entire amount of goodwill established has been impaired and will be charged-off in the quarter ended December 31, 2006. This goodwill charge-off will not affect Accredited's operations, tangible book equity, cash, or liquidity. In addition, the company is still evaluating whether the deferred tax assets acquired in the Aames acquisition are realizable.is continuing to seek waivers and extensions of waivers of certain financial and operating covenants, including waivers relating to required levels of net income and requirements to file the Form 10-K by March 16, 2007. There can be no assurance that the Company will be successful in receiving any of the required waivers.
