By Eric Morath Of DOW JONES DAILY BANKRUPTCY REVIEW Credit-Based Asset Servicing and Securitization LLC, a joint venture owned by MGIC Investment Corp. (MTG) and Radian Group Inc. (RDN) that invested in risky mortgage assets, filed for Chapter 11 bankruptcy protection Friday, listing more than $1 billion in debt. Known as C-Bass, the company filed for bankruptcy in U.S. Bankruptcy Court in Manhattan, listing assets of between $10 million and $50 million and debt of more than $1 billion. The company said it had between 100 and 200 creditors. Seven C-Bass affiliates also sought bankruptcy protection Friday. MGIC and Radian each hold a 45.5% stake in the company, court papers said. C-Bass, based in New York, was an issuer, servicer and investor in subprime residential mortgage loans. The collapse of the subprime-mortgage market three years ago and the general credit crunch that followed devastated the company's business. The company has been in the process of liquidating its portfolio since it sold its Litton Loan Servicing subsidiary in 2007 to Goldman Sachs Group Inc. (GS) and exited the securitization business. C-Bass is also the focus of a class-action lawsuit against co-owner MGIC alleging violations of federal securities law. In a regulatory filling in October, MGIC said the U.S. Securities and Exchange Commission has been investigating the company, along with Radian, since October 2007 over its investments in C-Bass. MGIC has warned for years that C-Bass may have to seek bankruptcy protection. Three years ago, the company hired Blackstone Group LP (BX) as its financial adviser in the wake of what it called "an unprecedented amount of margin calls due to the current state of disruption in the credit markets." The law firm of Hunton & Williams LLP is representing the company. The case has been assigned to Judge Allan L. Gropper. The case number is 10-16040. (Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.) -By Eric Morath, Dow Jones Daily Bankruptcy Review; 202-862-9279; eric.morath@dowjones.co
