Greenlight Capital president to serve as director for REIT
By MortgageDaily.com staff
3/15/2006

New Century Financial Corp. has reached a truce with investors who were battling for more seats on its board of directors.

The real estate investment trust announced today it reached an agreement with Greenlight Capital Inc. to increase the number of directors to 11 and appoint Greenlight President David Einhorn as a class III director effective March 31. As part of the agreement, Greenlight is permitted to take as much as a 19.6% stake in New Century's common stock.

Last month, New York-based Greenlight filed an amended 13D form with the Securities and Exchange Commission indicating its intention to file a proxy statement and nominate three directors to New Century's board.

Greenlight's Einhorn has reportedly expressed his desire to be a board member so he can actively help New Century focus on "per share" value maximization. A director for Irvine, Calif.-based New Century responded to the SEC filing, noting it "mischaracterizes the ever changing set of issues Greenlight has raised since its amended 13D filing in April 2005, in which it indicated its dissatisfaction with the company's portfolio strategy a mere seven months after our REIT conversion was approved by well over 90 percent of shares voted."

In today's announcement, New Century said, "Greenlight has also agreed that it will not initiate a proxy contest against the company while Mr. Einhorn is serving as a director and that it will vote its shares in favor of the three incumbent directors who are up for reelection at the 2006 Annual Meeting of Stockholders."

Einhorn will stand for reelection at New Century's 2006 Annual Meeting scheduled for May 10, the statement said.

"Our discussions with the company over the last few weeks have been very productive," Einhorn said in the announcement. "New Century is a unique and valuable franchise. I look forward to sharing my perspective as the Board oversees effective allocation of the company's capital to the most attractive risk-adjusted opportunities, and to working with the other Board members to enhance per share value for all stockholders."

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