Filing Alert: CashCall Chapter 11

Update (July 20, 2026): A comprehensive case summary is now available for the Chapter 11 bankruptcy filing of CashCall, Inc.

CashCall, Inc., a La Jolla, CA-based consumer finance company providing unsecured personal loans and mortgages, filed for Chapter 11 protection on Jul. 20 in the U.S. Bankruptcy Court for the Southern District of California.

The filing follows the effective wind-down of its consumer-lending business and is intended, per the Debtor, as the best available means of delivering value to creditors. The Debtor is a non-operating entity: it ceased substantially all lending by 2021, resumed only limited California originations in March 2024 under the state's new 36% rate cap, made just 21 loans totaling $94,619 in March 2026, and terminated its remaining employees on June 30, 2026. Ahead of filing, the Debtor retained Manatt, Phelps & Phillips as counsel and Dundon Advisers as financial advisor and appointed Leslie Gladstone as Chief Restructuring Officer and Craig Jalbert as Independent Director.

The Debtor attributes its distress to the long-term erosion of its subprime lending model and, more immediately, to two adverse litigation judgments. The business was structurally pressured by default rates that exceeded 45% and later surpassed 50%, by penalty-free prepayments that eroded interest income, and by the collapse of its funding sources during the 2008 recession, which drove financing costs to roughly 30% of amounts loaned. Regulatory enforcement rendered its Bank Lending and Tribal Lending models unviable.

The filing was precipitated by the exhaustion of the Debtor's appeals in two long-running matters. In the San Mateo Case (De la Torre v. CashCall), alleging unconscionable interest rates on the Debtor's $2,600 loans, the California Court of Appeal affirmed a $245.5 million restitution judgment on February 27, 2026 (entered August 31, 2023) covering a certified class of 119,844 borrowers. In the CFPB Case, concerning the Tribal Lending Model under the Consumer Financial Protection Act, the Ninth Circuit affirmed on April 24, 2025, and the U.S. Supreme Court denied certiorari on March 2, 2026, leaving a $157.05 million judgment in place. A related Fraudulent Transfer Case—challenging an October 2021 distribution to sole shareholder J. Paul Reddam as intended to hinder the San Mateo judgment—remains pending, the Debtor's summary-judgment motion having been denied on July 14, 2026. Together with approximately $45 million in additional asserted litigation claims and roughly $5 million in trade debt and professional fees, these judgments constitute substantially all of the Debtor's prepetition obligations.

CashCall, Inc. reports $1 million to $10 million in assets and $100 million to $500 million in liabilities. The filing indicates that there will be funds available for distribution to unsecured creditors. The case number is 26-03102.

Top Unsecured Claims

Key Parties

Counsel:

• Schuyler G. Carroll
  Manatt, Phelps & Phillips, LLP
  Email: SCarroll@manatt.com

Financial Advisor:

• Dundon Advisers, LLC

Signatories:

• Leslie Gladstone – Chief Restructuring Officer

Equity Security Holders:

• John Paul Reddam – Sole Shareholder

Bondoro Insights is continuing to monitor this case and will provide further coverage as appropriate.

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