Folsom's EDF REsource Capital has closed its doors after losing its final legal bid to stave off extinction.
One of the nation's top Small Business Administration lenders, REsource shut down late Friday after failing to secure a court order that would have kept it alive.
"The vast majority of employees have been laid off," said company spokesman Doug Elmets. REsource employed about 60 workers.
A week ago, the SBA said it was revoking REsource's authority to issue SBA-guaranteed loans. The agency also said it would seize the Folsom company's loan portfolio.
The SBA said REsource, founded in 1978, had become insolvent due to millions of dollars in bad loans.
REsource sued the SBA last Thursday in U.S. District Court in Washington, D.C., saying the company was a "responsible small business lender" but was the victim of a smear campaign by the SBA. The lawsuit said the SBA had a vendetta against company Chief Executive Frank Dinsmore, who had been critical of agency policies.
According to Elmets, Dinsmore believed the SBA's moves were a "retaliation" for his active support of Republican political candidates.
Judge John D. Bates, however, refused REsource's plea for a temporary restraining order that would have prevented a shutdown. In his ruling, he said REsource already had plenty of chances to show that it was financially sound. He noted the SBA has been investigating the company for nearly two years.