Mercury Finance Defaults On Debt

Mercury Finance Co., which this week revealed its books had been falsified, on Friday defaulted on $17 million in debt as its stock plummeted 85 percent, nearly wiping out its market value.

The company, which for years stood out as a gem in the high-risk auto loan business, was negotiating with lenders to reschedule nearly $83 million more in loans.

“This is the critical period in terms of liquidity,” said Joseph Kopec, a company spokesman.

Mercury Finance on Wednesday stunned the investment community when it announced an outside audit had found phony bookkeeping had massively overstated its earnings for four years through 1996, with profits in that year actually only $56.7 million instead of $120.7 million.