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Lender Asks Court To Liquidate NovaStar Unit

Law360 (January 24, 2008, 12:00 AM EST) -- American Interbanc Mortgage LLC is trying to force a NovaStar Financial Inc. subsidiary into Chapter 7 bankruptcy in order to collect the $48.9 million it won last year in an antitrust lawsuit.

The mortgage lender filed the petition for involuntary bankruptcy against Novastar Home Mortgage Inc. on Wednesday in the U.S. Bankruptcy Court for the Western District of Missouri.

NovaStar Financial is finding itself in increasingly dire financial straits.

The petition came just two weeks after Novastar announced it was ending all mortgage origination operations, slicing...
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