Bankrupt PrimaLend Blames Subprime ‘Cycle’ as It Seeks Bank Help

Auto dealers who lend money to buyers with spotty credit histories pushed subprime lender PrimaLend Capital Partners into bankruptcy, the company said in court papers.

The Texas-based firm, which filed for court protection Wednesday following months of negotiations with creditors, blamed its troubles on slowing auto sales to customers with poor credit. Higher interest rates, inflation and volatile prices for used cars all contributed as well, Tanya Meerovich, PrimaLend’s chief restructuring officer, said in a court filing Wednesday.

Delinquent borrowers and other auto-dealer woes “can quickly create a cycle that affects all industry participants,” Meerovich said.

PrimaLend’s bankruptcy is ...