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July 29, 2014
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Sept 17 Update: Bankrupt Thornburg Mortgage had planned to start a "bank" (Podcast)
(2009-09-16)
(KSFR) -

Update Sept 17: The president and the chief financial officer of bankrupt Thornburg Mortgage both have left their jobs amid questions about alleged financial irregularities at the company, which is in bankruptcy protection. Documents filed in bankruptcy court in Baltimore say that President and CEO Larry Goldstone and others may have misused Thornburg funds being managed under bankruptcy protection for setting up a new business, most likely a bank. Just before Thornburg filed for bankruptcy in March, Goldstone told KSFR he thought there was a good chance that the company could attract investors to help Thornburg buy an existing bank or start up a new one. The bank would be a source of funds to finance new mortgage loans. Thornburg Mortgage filed for bankruptcy a few days later as a result of the crisis in credit markets. This audio clip is of Goldstone on KSFR on March 18:

Reuters has more on this story.

From Sept.16 -- The president and chief financial officer of bankrupt Thornburg Morgage, Santa Fe, have left their positions after the possibility of financial irregularities surfaced in bankruptcy court in Baltimore.

Larry Goldstone, the president and CEO, and Clarence Simmons, chief financial officer, "resigned" effective yesterday, according to a company statement.

The alleged irregularity involves possible use by Goldstone and Simmons of Thornburg funds that are in bankruptcy protection to set up a new business entity. The new entity apparently was not previously disclosed to the court. It would be a violation of the rules of the bankruptcy process to use money set aside to operate Thornburg for any other purpose while the company is going through bankruptcy.

Thornburg was a lender of jumbo home loans. It filed for bankruptcy protection this spring after financing channels for funding new mortgages fell under the weight of the nation's financial crisis.

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