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EXHIBIT 99.1
FROM: CONTIFINANCIAL CORPORATION
277 Park Avenue
New York, NY
Contact: Frank Baier Tel.: 212 207 2808
Rubenstein Associates
Public Relations
Contact: Rick Matthews Tel.: 212 843 8007
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CONTIFINANCIAL FILES FOR CHAPTER 11 PROTECTION
New York, NY, May 18, 2000 --- ContiFinancial Corporation (OTCBB: CFNI)
announced today that it has filed for protection under Chapter 11 of the Federal
bankruptcy laws. The Company has taken the action as part of its efforts to
reorganize the Company's capital structure and preserve value for its creditors.
The possibility of a Chapter 11 filing had been disclosed publicly by the
Company in previous announcements over the course of several months while
management explored its strategic options. Last week, the Company announced that
it had reached a definitive agreement to sell its ContiMortgage home equity loan
servicing platform and rights to Fairbanks Capital Corporation. ContiMortgage is
seeking prompt Bankruptcy court approval of sale procedures. The Company also is
in negotiations regarding the future of its loan origination operations.
Transactions will be subject to approval under Section 363 of the bankruptcy
code.
The Company has more than sufficient cash resources to meet trade
obligations and employee expenses while in Chapter 11.
Alan Fishman, CEO of ContiFinancial, said, "The Chapter 11 filing is a
necessary step in the process of reorganizing ContiFinancial to preserve value.
This moves us closer to completing that reorganization process."
ContiFinancial Corporation is a financial services company with
headquarters in New York City.
Certain statements contained in this press release, including, but not
limited to, statements relating to the Company's strategic objectives,
maximizing value and future performance, which are not historical fact, may be
deemed to be forward-looking statements under the federal securities laws. There
are many important factors that could cause the Company's actual results to
differ materially from those indicated in the forward-looking statements. Such
factors also include, but are not limited to, general economic conditions;
interest rate risk; prepayment speeds; delinquency and default rates; credit
losses; demand for the Company's services; real estate values; its needs for
financing; the continued availability of the Company's credit facilities; the
risk of margin calls on the Company's credit facilities and hedge positions; the
performance of the Company's subsidiaries and affiliates; that creditors not a
party to the Forbearance Agreement will not accelerate their debt and commence
enforcement actions; and other risks identified in the Company's Securities and
Exchange Commission filings. In addition, it should be noted that past financial
and operational performance of the Company is not necessarily indicative of
future financial and operational performance.
