NEW YORK: Advanta Corp, a small business credit card lender in the United States, said on Sunday it filed for bankruptcy protection after the economic crisis over the last two years devastated its small business customers.
In the filing with the U.S. Bankruptcy Court for the District of Delaware, Advanta listed total assets of about $363 million and total debt of about $331 million.
The company, which listed 14 of its units in the filing, excluded Advanta Bank Corp, a subsidiary, which issues credit cards for small businesses. The filing will not have any impact on outstanding credit card balances, Advanta said.
The Spring House, Pennsylvania-based Advanta, which earlier this year shut 1 million accounts, said it is currently collecting its $2.7 billion portfolio of managed receivables from 360,000 customers, but the cards are not open to new charges.
It cautioned that Advanta Bank's capital is below regulatory capital requirements and over time Advanta Bank Corp may be turned over to an FDIC receivership.
It said the parent corporation has decided not to fund the capital deficiency in order to preserve value for the senior retail note holders and other Advanta Corp. stakeholders.
Advanta Corp said it has close to $100 million in cash and equivalents on hand, but over time it would not be able to meet all of its existing obligations. It has about $138 million of senior retail investment notes outstanding.
The case In re: Advanta Corp, U.S. Bankruptcy Court, District of Delaware, No 09-13931.