Advanta Corp, which issues credit cards to small businesses, has filed for bankruptcy protection in a US court after the global economic crisis adversely impacted the company's small business customers.
In a statement on Sunday, Advanta Corp said it has filed for a voluntary petition for reorganisation under the US Bankruptcy Code.
"The economic debacle over the last two years devastated Advanta's small business customers and Advanta itself," its Chairman and CEO Dennis Alter said.
Advanta has about $138 million of liabilities. The company specified it would not be able to meet all its existing obligations, although Advanta has currently close to $100 million in cash and equivalents on hand.
The company said it is reviewing both existing and potential business opportunities in connection with the reorganisation.
Meanwhile, Advanta said its subsidiary Advanta Bank Corp, is not included in the bankruptcy filing. However, the company said the subsidiary's capital is below the regulatory requirement and over time it will be turned over to banking regulator Federal Deposit Insurance Corporation.
he proceedings would not have any impact on Advanta Bank Corp's outstanding credit card balances and customer payment obligations would continue on normal schedules.
The company said it is currently collecting $2.7 billion portfolio of managed receivables from 3,60,000 customers but the cards are not open to new charges.