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EXHIBIT 99
For more Information, Contact:
Lawrence J. Ramaekers
Chief Executive Officer
(225) 987-2760
Release Date: May 30, 2000
UNITED COMPANIES SIGNS PURCHASE AGREEMENTS WITH EMC MORTGAGE CORPORATION AND EMC
MORTGAGE ACQUISITION CORP. FOR THE SALE OF ITS WHOLE LOAN PORTFOLIO, RESIDUAL
INTERESTS AND SERVICING OPERATION
BATON ROUGE, LA - United Companies Financial Corporation (OTC: UCFNQ), which has
been operating in chapter 11 reorganization since March 1, 1999, announced that
today it signed an Asset Purchase Agreement and a Mortgage Loan and REO Property
Purchase Agreement for the sale of substantially all of its whole loan portfolio
and REO properties, assets related to its mortgage servicing operations and its
interest only and residual interests as of December 31, 1999, to EMC Mortgage
Corporation and EMC Mortgage Acquisition Corp., subsidiaries of The Bear Stearns
Companies, Inc., for an aggregate cash purchase price of approximately $781
million, subject to adjustments, plus the assumption of certain liabilities.
United Companies' cash on hand and certain other assets are not included in the
sale. The sales are subject to the approval of the United States Bankruptcy
Court and the submission of higher or better offers pursuant to proposed bidding
procedures, as well as the satisfaction of certain other conditions.
Under the proposed bidding procedures, which are also subject to
Bankruptcy Court approval, interested parties will have an opportunity to submit
separate bids on (1) the Company's whole loan portfolio and REO properties and
(2) the Company's mortgage servicing operations and interest only and residual
interests prior to the respective sale hearings. The agreements contemplate that
the whole loan and REO properties transaction shall be consummated no later than
July 31, 2000 and the other transaction no later than September 15, 2000.
On June 1, 1999, United Companies sold its loan origination platform to
Aegis Mortgage Corporation. Since that time, United Companies has continued to
service a multi-billion dollar portfolio of home equity and manufactured housing
loans while developing strategies to address its financial difficulties.
The foregoing definitive agreements, which will be filed with the
Bankruptcy Court, were reached as a result of negotiations following United
Companies' previous announcement that it had entered into a letter agreement
with EMC.
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"The EMC transactions will allow the Company to substantially complete
its reorganization efforts. We believe that these transactions, and the
Bankruptcy Court approval process, will maximize the value of United Companies
and ensure parties-in-interest an opportunity to be heard," said Lawrence
Ramaekers, Chief Executive Officer of United Companies.
United Companies is a specialty finance company that services
non-traditional consumer loan products.
The following is a "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995: The statements contained in this release that are
not historical facts are forward-looking statements based on the Company's
current expectations and beliefs concerning future developments and their
potential effects on the Company. There can be no assurance that future
developments affecting the Company will be those anticipated by the Company.
Actual results may differ from those projected in the forward-looking
statements. These forward-looking statements involve significant risks and
uncertainties (some of which are beyond the control of the Company) and are
subject to change based upon various factors, including but not limited to the
following risks and uncertainties: the developments in and outcome of the
Company's Chapter 11 reorganization proceedings; the ability to access loan
facilities in amounts necessary to fund the Company's operations; the successful
disposition of its existing loan portfolio and repossessed real estate
properties; the ability of the Company to successfully restructure its balance
sheet; the ability of the Company to retain an adequate number and mix of its
employees; the effect of the Company's policies including the amount of Company
expenses; actual prepayment rates and credit losses on loans sold as compared to
prepayment rates and credit losses assumed by the Company at the time of sale
for purposes of its gain on sale computations; the quality of the Company's
owned and serviced loan portfolio including levels of delinquencies, customer
bankruptcies and charge-offs; adverse economic conditions; competition; various
legal, regulatory and litigation risks and other risks detailed from time to
time in the Company's Securities and Exchange Commission filings. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as the result of new information, future events or
otherwise.
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