Yesterday, the Office of the Comptroller of the Currency closed BC National Banks, headquartered in Butler, Missouri, and appointed the FDIC receiver.
Yesterday, the Department of Insurance, Financial Institutions & Professional Regulation of the Missouri Division of Finance closed Champion Bank, headquartered in Creve Coeur, Missouri, and appointed the FDIC receiver.
The recent financial collapse has provided a strategic opportunity for healthy financial institutions, and non-traditional investors, to capitalize on the misfortune of failing banks. The FDIC is accelerating this process by revamping its loss share program. This program gives prospective buyers of failing institutions billions of dollars in government guarantees for risking the purchase of a failing bank, inclusive of all “toxic” assets.
Yesterday, the Michigan Office of Financial and Insurance Regulation closed CF Bancorp, headquartered in Port Huron, Michigan, and the FDIC was appointed receiver. As receiver, the FDIC entered into a purchase and assumption agreement with First Michigan Bank, headquartered in Troy, Michigan, to assume all of the deposits of CF Bancorp.
KEY POINTS
- A US Bankruptcy Court decision held that loans to a homebuilding company that subsequently filed for bankruptcy constituted a fraudulent transfer.
On April 26th, the Eleventh Circuit held that the anti-injunction provision of the Financial Institutions Reform, Recovery and Enforcement Act prohibits a federal district court from enjoining the FDIC. A trial court had initially imposed a TRO against a failing bank prohibiting it from taking any action with respect to $1 billion worth of mortgage proceeds it held in trust for petitioner, Bank of America, who held legal title. When the FDIC was appointed receiver, the FDIC moved to dissolve the TRO. The trial court refused converting the TRO into a preliminary injunction.
Yesterday, the Washington Department of Financial Institutions closed Frontier Bank, headquartered in Everett, Washington, and appointed the FDIC receiver.
Yesterday, the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico closed Eurobank, headquartered in San Juan, Puerto Rico, and the FDIC was appointed receiver.
On May 5th, the Senate voted 93-5 to adopt an amendment proposed by Senators Christopher Dodd and Richard Shelby that would give the FDIC authority to liquidate failing financial institutions without the creation of a controversial $50 billion "bailout" fund. Instead, the FDIC would use a new line of credit with the Treasury Department, supported by the assets of the failed institution, to pay the liquidation expenses.
In In re Kohls, 2007 LEXIS 76 (Bankr NDWVa 2007), the debtor filed this adversary proceeding against the Bank to cancel indebtedness and recover damages related to a $34,864 loan that the Bank made to the Debtor on the grounds that the loan was unconscionable at the time it was executed in violation of W. Va. Code § 46A-2-121.