The Colonial BancGroup, Inc (fka CBCGQ)

[Noil1]

Hearings

There are no future Hearings events for this case.


Court Calendar Case Number: 09-32303

[Noil1]

****************************************

Withdrawal of Determination of Insufficient Assets To Satisfy Claims Against Financial Institution in Receivership

A Notice by the Federal Deposit Insurance Corporation on 06/10/2014

ACTION Notice.

SUMMARY The FDIC has withdrawn and set aside its determination that insufficient assets exist in the receivership of Colonial Bank, Montgomery, Alabama, to make any distribution on general unsecured claims and that such claims have no value.

TABLE OF CONTENTS DATES:

FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:

DATES: The FDIC withdrew its determination on June 4, 2014.

FOR FURTHER INFORMATION CONTACT: If you have questions regarding this notice, you may contact an FDIC Claims Agent at [phone]. Written correspondence may also be mailed to FDIC as Receiver of Colonial Bank, Attention: Claims Agent, 1601 Bryan Street, Dallas, Texas 75201.

SUPPLEMENTARY INFORMATION: On April 15, 2013, the FDIC determined that the assets of Colonial Bank, Montgomery, Alabama, were insufficient to make any distribution on general unsecured claims, and that such claims therefore had no value. Notice of the determination was published in the Federal Register on April 19, 2013. 78 FR 23565. The FDIC has now withdrawn its determination because the Receivership's theoretically possible recoveries have been revised upward as a result of changed circumstances and could possibly exceed the previously calculated $1.698 billion deficit, which in turn could possibly result in payment on non-deposit claims under the most favorable circumstances.

Dated: At Washington, DC, June 4, 2014.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014-13423 Filed 6-9-14; 8:45 am]
BILLING CODE 6714-01-P

https://www.federalregister.gov/articles/2014/06/10/2014-13423/withdrawal-of-determination-of-insufficient-assets-to-satisfy-claims-against-financial-institution

[Noil1]

Colonial BancGroup, Inc. Securities Litigation - Settlement with Remaining Defendants


.....
If you purchased or acquired publicly traded securities of The Colonial BancGroup, Inc.
(“Colonial” or the “Company”) during the period between April 18, 2007 and August 6, 2009,
inclusive (the “Class Period”), you may be eligible for a payment from a class action settlement.....

more informations

[Enterprising Investor]

Colonial Seeks OK For $15M Loan To Fight FDIC Claims

By Daniel Wilson

Law360, New York (August 06, 2012, 9:18 PM ET) -- Bankrupt Colonial BancGroup Inc. asked an Alabama bankruptcy court Wednesday to approve a $15 million financing agreement with three hedge funds, which the defunct bank holding company will partly use to fund a $610 million dispute with the Federal Deposit Insurance Corp. over tax refund and securities claims.
Colonial needs the funding after an Alabama federal court in January vacated a bankruptcy court order allowing the bank access to disputed accounts, according to its motion to approve the term loans. Under the terms of the deal with New York-based hedge funds Owl Creek Asset Management LP, Stonehill Institutional Partners LP and Tenor Special Situation II LLC, Colonial will receive $7.5 million to fund the FDIC litigation and $7.5 million to implement its Chapter 11 plan, the bank said.

The dispute between the bank holding company and the FDIC, receiver for Colonial Bank, involves $260 million in tax refunds, $300 million in CBG Florida REIT Corp. securities and more than $50 million in fidelity bond insurance coverage claims against Federal Insurance Co., the bank said.

Despite a “strong majority view” among several courts that a bank holding company, not a bank, is the owner of any tax refund due and that a bank only has a claim in a holding company bankruptcy case, the FDIC had taken an “uncompromising” stance toward tax refund litigation involving several other banks, according to Colonial.

“The FDIC-receiver's litigation stance not only means that the debtor must litigate its claims to final judgments but also that this litigation is likely to be protracted and expensive,” Colonial said. “Both the debtor and the FDIC-receiver can be expected to appeal adverse decisions.”

The FDIC litigation financing is interest-free, with repayment to come from any proceeds of the litigation — 27.5 percent of any recoveries without an appeal, 33.3 percent if the case involves an appeal and a 5.8 percent reduction on those figures for any settlement within 90 days of the closing of the finance agreement — according to Colonial.

The plan financing agreement is mostly subject to a 15 percent annual interest rate, with repayments spread over three years, the bank said. Any portion used to pay a pending Alabama Department of Revenue settlement is subject to a 7.5 percent interest rate, according to Colonial.

If the financing agreements aren’t consummated, the bank will owe collateral agent Wilmington Trust Co. $675,000 and up to $300,000 for legal expenses, Colonial said. The plan trustee had explored alternative funding proposals, but the hedge funds’ proposal was the only funding source of the size to properly pursue the FDIC litigation, according to the bank.

Colonial filed for Chapter 11 bankruptcy in August 2009, after a multibillion-dollar collapse, prompted by the purchase of more than $1 billion in fraudulent mortgages from the also-defunct Taylor, Bean & Whitaker Mortgage Corp., led Colonial Bank into FDIC receivership. Its amended Chapter 11 liquidation plan was approved in June 2011 after an initial rejection by U.S. Bankruptcy Judge Dwight H. Williams Jr., despite the FDIC arguing the case should be converted to a Chapter 7 liquidation to improve the take for creditors.

Colonial’s suit against the FDIC over the refund and securities claims, filed in 2009, was transferred from the bankruptcy court to Alabama federal court in May 2010. The FDIC moved for dismissal of the case in June 2010. That motion was still pending when U.S. District Judge Myron H. Thompson stayed the case in October 2010 to allow other claims between the two parties to play out. The FDIC and Colonial engaged in settlement talks, but these collapsed in September 2011 and the FDIC refused to mediate, Colonial said. The case is still stayed.

The FDIC was not immediately available for comment Monday.

Colonial is represented by Nicholas DiCarlo and Christopher Caserta of DiCarlo Caserta McKeighan & Phelps PLC and Andrew P. Campbell and Caroline Smith Gidiere of Leitman Siegal Payne & Campbell PC.

The hedge funds are represented by Schulte Roth & Zabel LLP and Burr & Forman LLP.

The case against the FDIC is The Colonial BancGroup Inc. v. Federal Deposit Insurance Corp., case number 2:10-cv-00410, in the U.S. District Court for the Middle District of Alabama.

The bankruptcy case is In re: The Colonial BancGroup Inc., case number 2:09-bk-32303, in the U.S. Bankruptcy Court for the Middle District of Alabama.

--Additional reporting by Ian Thoms. Editing by Lindsay Naylor.

http://www.law360.com/articles/367048/colonial-seeks-ok-for-15m-loan-to-fight-fdic-claims

Note: I am just storing this document.

[Enterprising Investor]

Hedge Funds Outwit FDIC in Fight for Failed-Bank Assets (7/16/13)

The Federal Deposit Insurance Corp. has been engaged in a running battle over the past three years with unsecured creditors over rights to assets owned by the holding companies of dozens of failed banks.

The disputes would be unremarkable except for one surprising fact: the unsecured creditors are beating the pants off the feds.

The assets at issue are essentially table scraps left behind by bankrupt banking companies. They include tax refunds, miscellaneous cash balances and claims against management. In some cases these scraps amount to hundreds of millions of dollars.

When the FDIC takes over a failed bank, it typically lays claim to such assets with the holding company. Its demands are backed by the "source-of-strength doctrine" which the Federal Reserve Board issued nearly three decades ago and requires bank holding companies to support their banks financially.

In a recent twist, however, hedge funds have led a group of debt holders in buying up billions of dollars' worth of failed-bank debt at pennies on the dollar. Then they have challenged the source-of-strength doctrine's validity in bankruptcy court with remarkable success.

Their victories have exposed a costly flaw in the FDIC's failed-bank resolution process that threatens its ability to recoup billions of dollars in assets. In the meantime, the FDIC has been relegated to settling some claims for far less than full value and appealing bankruptcy cases it has lost to higher courts. As with the original cases, it appears to face an uphill battle.

"The FDIC has had a hard time convincing the bankruptcy courts that the source-of-strength doctrine meets the requirements of the bankruptcy code," says Paul Lee, an attorney at Debevoise and Plimpton in New York City who represents large domestic and international banks and has written extensively on the doctrine.

The FDIC said it does not comment on ongoing legal matters.

Source of Weakness

The FDIC's right to seize failed-bank assets from their former holding companies has been disputed since the source-of-strength doctrine was first issued. For twenty years, however, it had rarely been challenged. Then the 2008 financial crisis brought the issue back into bankruptcy courts.

In what appears to be the most recent hedge fund victory, a federal judge in May awarded to the company's creditors a $30 million tax refund left behind by the bankrupt Imperial Capital Bancorp. The FDIC has said it may appeal the case to the U.S. Court of Appeals for the Ninth Circuit.

To prevail, it will need to convince appeals court judges to make a ruling that contrasts with the victories achieved by hedge fund-led creditors in the bankruptcies of IndyMac, BankUnited, AmFin and others.

The FDIC's argument is straightforward: If a bank was responsible for most or all of its holding company's revenue, its tax refunds should rightfully be the property of the bank and in bankruptcy be granted to the FDIC.

For the bank overseer, the catch is that such cases are decided on the basis of the precise wording of tax-sharing agreements between the holding companies and their banks, which differ slightly in each instance. In cases where the agreements fail to specify that a holding company must return refunds to a bank, bankruptcy judges have been ruling that the assets are rightfully the property of the holding company's creditors and not the FDIC.

These agreements "could easily have said that any refund received by the parent company belongs to the bank. Any lawyer worth his salt could have written it that way," says hedge fund partner Vik Ghei. "They did not say that, and in fact they said the opposite."

Ghei, a 31-year-old New York City native, has invested in the holding companies of over 70 failed or distressed banks. HoldCo Advisors, the fund he co-founded two years ago, has been involved in "virtually every community bank restructuring since the 2008 financial crisis," it said in a bankruptcy court filing last month. It has also outflanked the FDIC in several high-profile bankruptcy court cases in which it has sponsored creditor-friendly liquidations.

Currently, HoldCo owns $1.5 billion of debt in the parents of bankrupt or distressed financial firms. That makes it the largest creditor in IndyMac and owner of debt issued by Imperial Capital, BankUnited and Corus Bancshares.

Ghei's reputation as one of the most aggressive and successful investors in the business has garnered the ire of regulators and state agencies. An FDIC attorney characterized the fund as "a speculator whose views are entitled to no deference" and called its principals "gamblers" in a U.S. bankruptcy court filing. In another case, an attorney for the state of Michigan described the hedge fund's business as "buying up severely distressed debt for deep discounts and picking over the bones for scraps of flesh."

Beginning at WaMu

Ghei's career in dead-bank investing began with the Washington Mutual bankruptcy. Ghei was an analyst at the hedge fund Owl Creek Asset Management looking for investment opportunities in WaMu in September 2008 as financial markets were collapsing.

With a limited background in the field, he was tasked with investing in distressed banks based on his previous work with distressed companies at a private equity firm and as a Goldman Sachs analyst covering financial institutions.

The debt of Washington Mutual Inc., the holding company for the operating bank, was organized in a complex, multi-tranche structure and was trading at deep discounts. Ghei studied the company's corporate structure and realized that behind the debt was more than $4 billion of cash, as well as projected tax refunds.

"The holding company, in theory, was supposed to have nothing," Ghei says. "That's what I think people assumed. People did not realize there were so many assets, or who owned what."

The FDIC seized WaMu on September 25, 2008 after a nine-day bank run and sold it to JPMorgan Chase. On the morning of its failure, its holding company's approximately $4 billion of senior bonds were trading at pennies on the dollar of face value. Ghei had spent the previous night in the office analyzing the company and decided to pounce.

By that evening, the value of the debt he'd acquired had risen to around forty cents on the dollar. Over the next several months, Owl Creek increased its holdings in other types of WaMu debt, eventually becoming one of the holding company's largest creditors.

After one of the most complex bankruptcies in history, WaMu's creditors were repaid at par, plus accrued interest. That made Ghei's trades hugely lucrative for Owl Creek, which earned hundreds of millions of dollars and turned him from an analyst into a partner, Ghei says.

The WaMu bankruptcy also gave Ghei a crash course in how the bankruptcy process works for a bank holding company. He realized that he could potentially replicate the trade that had worked so spectacularly for Owl Creek with the hundreds of banks that had failed during the financial crisis.

Ghei decided to leave Owl Creek to invest in distressed financial firms at Tricadia Capital Management, the hedge fund famous for pioneering the CDO-squared. A year and a half later, he set up HoldCo, with Misha Zaitzeff, a former Tricadia analyst. Despite the large number of bank failures at the time, and bank holding companies with large amounts of debt, Ghei had a tough time convincing potential investors that his investment thesis was viable.

"People said 'Look, the FDIC is never going to let you get this money,'" Ghei recalls. "We were buying things that we thought had a lot of value but the market was basically laughing at us."

Brett Jefferson, who runs the hedge fund Hildene Capital, had serious doubts before investing with HoldCo. "At first I didn't trust him," Jeferson says of Ghei. "Everybody was trying to figure out ways to get something out of these deals, but he's already gotten us some recoveries."

More are likely on the way, if court decisions to date are any guide.

Creditors have prevailed over the FDIC in case after case. In March, a federal judge in Ohio rejected the FDIC's claim of rights to a $195 million tax refund due to AmFin Financial Corp., the holding company for AmTrust bank in Cleveland, which failed in December 2009. That decision followed a September ruling in the U.S. Court of Appeals for the Sixth Circuit denying the FDIC's claim to $765 million from AmFin's estate.

Separately, a U.S. District Court judge for the Central District of California ruled last year that IndyMac Bancorp's creditors, and not the FDIC, were entitled to its $55 million tax refund.

In 2011, a U.S. bankruptcy judge in Florida awarded the creditors of BankUnited Financial Corp., the holding company for the Florida bank that failed in 2009, the company's $45 million tax refund. In the case of NetBank, the U.S. bankruptcy court for Florida affirmed that the company's $6.2 million tax refund belongs to the creditors. The ruling was later upheld by a U.S. district court in Florida.

A $1 Billion Appeal

The legal scrum over large tax refunds harks back to a 2009 law permitting companies to use losses incurred in 2008 and 2009 to offset taxes paid during the previous five years. All told, more than $1 billion worth of tax refunds are at stake in cases in which the FDIC is either awaiting a ruling or appealing a bankruptcy court verdict.

The agency's victories have been few. In 2011, a U.S. district court in Georgia awarded the FDIC more than $10 million in tax refunds from the estate of Integrity Bancshares. Unlike with many other banks, the tax-sharing agreement between Integrity and its holding company clearly granted ownership to the bank.

In cases where tax agreements fail to stipulate that holding company assets belong to the creditors of failed bank subsidiaries, the FDIC has marshaled a range of legal arguments. They include the claim that the agreements are ambiguous or flawed, and the invocation of decades-old case law involving nonbanks and in which tax agreements are absent.

Bankruptcy judges have rarely been persuaded and delivered some stinging rebukes. In the IndyMac opinion, Judge Sheri Bluebond of the U.S. Bankruptcy Court for Los Angeles said the agency was, in essence, throwing up a legal smokescreen through the "sheer number of arguments and theories" it advanced, in order to complicate a straightforward case.

With AmFin, Judge John Adams of the U.S. District Court for the Northern District of Ohio wrote that the company's tax-sharing agreement "unambiguously" grants the refund to the holding company, and that "the remaining arguments raised by the FDIC," have already been rejected by "numerous other courts."

As the case law against the FDIC mounts, hedge funds holding claims against failed bank holding companies have become bolder in pressing courts to reject the agency's arguments.

That boldness has even involved financing litigation against the FDIC. Owl Creek and two other hedge funds last year agreed to lend the estate of Colonial Bancgroup $15 million to fund legal expenses in the dispute with the FDIC. At stake: over $610 million in tax assets and other claims. One of the loans was structured to pay the hedge funds 15% annually in interest; the other involved the hedge funds receiving between 27.5% and 100% of the estate's litigation recoveries, depending on how much they recoup.

The FDIC objected on the grounds that the estate's case against the FDIC had been dormant for nearly eight months before the hedge funds stepped in. Judge Dwight Williams of the U.S. bankruptcy court for the Northern District of Alabama permitted the loan to go through, and litigation is ongoing.

Among cases where the FDIC could still prevail: the Corus litigation over a $250 million tax refund and the Downey Financial case involving a $374 million refund.

Some observers expect more losses for the FDIC. Creditors "are likely (though not certain) to prevail in all of the publicly tradable cases," wrote CRT Capital Group analyst Kevin Starke, who specializes in failed banks' debt.

The FDIC officials have "a bad argument," and have been losing these cases "because they should be losing them," says an attorney who asked to remain anonymous because he is involved in litigation against HoldCo.

There are signs that the FDIC is softening its stance, having concluded that expensive litigation offers less hope of recovery than do settlements.

In April, it agreed to a 50-50 split of a $3.3 million tax refund owed to Team Financial, which went bankrupt in 2009. Ghei, who helped negotiate that settlement, calls it a "fair" split and says he's hopeful that the FDIC will be willing to strike deals in other cases.

Beyond the current lawsuits, reforming the resolution process before the next round of bank failures is a major issue for the FDIC.

Strengthening the source-of-strength doctrine would require a legislative change and could take years. The banking industry would likely object, arguing that changing the law would make it harder to raise capital. Meanwhile, the FDIC has yet to propose any legal reforms, say lawyers involved in related litigation.

Another possible route for the FDIC would be to pressure banks to sign capital-maintenance agreements. That would involve requiring the directors of the holding companies for viable banks to pledge that they will use the parent's capital to support the bank, even in bankruptcy.

Even Ghei admits that such a move could solve the agency's problems.

"Guarantee agreements are written all the time and are enforceable," he says. "You can do that in a one-page agreement. You can probably do that in two sentences. But it didn't happen."

http://www.americanbanker.com/issues/178_136/hedge-funds-outwit-fdic-in-fight-for-failed-bank-assets-1060622-1.html

Note: I am just storing this document.

[Enterprising Investor]

U.S. Bankruptcy Court
Middle District of Alabama (Montgomery)
Bankruptcy Petition #: 09-32303

[israel vinner]

what does it means to us ?

[Noil1]

U.S. judge tosses BofA suit vs FDIC over $1.7 billion investor losses
By Jonathan Stempel
Mon Aug 26, 2013 6:51pm EDT

(Reuters) - A federal judge on Monday threw out Bank of America Corp's (BAC.N) lawsuit against the Federal Deposit Insurance Corp over $1.7 billion of investor losses stemming from the collapses in 2009 of a large regional bank and a large mortgage lender.

The lawsuit concerned the FDIC's role as receiver for an banking unit of Alabama's Colonial BancGroup Inc and the implosion of Taylor, Bean & Whitaker Mortgage Corp, home to what federal prosecutors called a $2.9 billion mortgage fraud.

Bank of America, as trustee for notes issued by Taylor Bean's Ocala Funding LLC unit, had contended that the FDIC wrongly denied claims by Ocala noteholders to recover from Colonial Bank. Among the buyers of Ocala's notes were Deutsche Bank AG (DBKGn.DE) and France's BNP Paribas SA (BNPP.PA).

[UNITED]

The answer to your question, nobody, we are damned to wait if we're dumped out of the company or if we get any Cent.

You just have to wait and no possibility to sue.

But it takes a long time.

AIMHO
United

[israel vinner]

so who is fighting for us - if there is such a thing ?

[UNITED]

Hi israel vinner,

no idea what will happen to CBCGQ. It is very difficult to state an opinion. If the case is closed we will see what will happen.

Following the plan all common shares will be cancelled, but trading is still suspended by SEC.

Greetings
United

[israel vinner]

thank you at least i know somewhere in the world this thing is alive...
what is the chances to ever see something from this ?

[Noil1]

Current Court News:
https://ecf.almb.uscourts.gov/pub/opinions?878575711684514-L_967_0-1


Court Calendar
https://ecf.almb.uscourts.gov/pub/calendar

On the left side you find the possibility to type in the Case Number:

List Hearings for
Case Number 09-32303

If you do so, there will be a new page with the upcoming court dates. In the header of the new page you find informations about the last fillings. Nearly every day there are new fillings but I don´t know where you can read it without a pacer account.

[israel vinner]

anybody knows the current status ? .
is there a place where i can find more info ?

[Noil1]

Free sample article courtesy of Dow Jones Daily Bankruptcy Review

Print | Email
FDIC: Bank Of America Owes $900M For Colonial Mortgages
By Patrick Fitzgerald
17 January 2012

The Federal Deposit Insurance Corp. says Bank of America Corp. owes the failed Colonial Bank $900 million for losses suffered when Colonial collapsed in the wreckage of Taylor Bean & Whitaker Mortgage Corp.'s multibillion-dollar bank fraud.

The FDIC said in a court filing Friday that Bank of America, as the middleman between Colonial and Taylor Bean's Ocala Funding unit "stripped" more than 4,800 mortgage loans from the bank but didn't pay for them.

The FDIC, which was named the receiver of Colonial when the bank collapsed, says Bank of America, in its conflicting roles as a custodian for Colonial as well as Ocala, "injured" the defunct bank.

"That injury caused a $900 million loss to Colonial that was borne by FDIC-R[eceiver] and Colonial's innocent creditors," the FDIC said in papers filed in federal court in Washington, D.C.

Bank of America spokesman William Halldin declined to comment on the FDIC's filing.

Colonial was Taylor Bean's main lender. Both Bank of America and the FDIC, as Colonial's receiver, claim they were victims of the massive fraud at Taylor Bean, which involved the falsifying of books to allow the triple pledging of the same mortgage loans to different buyers.

The exposure of the Taylor Bean fraud, which federal prosecutors claim has resulted in more than $7 billion in losses to investors, resulted in the criminal convictions of some Taylor Bean and Colonial executives and triggered a flurry of civil lawsuits involving investors, banks, regulators and creditors.

At the center of the fraud was the Ocala Funding LLC conduit, a mortgage-financing vehicle that Taylor Bean created in 2005 to purchase its home loans, which were then bundled into securities and sold to investors such as Freddie Mac. It funded its business by issuing short-term notes that it sold to investors.

The investors---Deutsche Bank AG and the mortgage subsidiary of BNP Paribas SA---sued Bank of America in 2009 for breach of contract over the bank's alleged failure to secure $1.75 billion in cash and mortgage loans on their behalf. Bank of America, which served as the trustee for the notes issued by Ocala, has denied any wrongdoing. The litigation between the bank and the investors is pending.

Bank of America in turn sued the FDIC, as receiver for Colonial, back in the fall of 2010 to recover $1.75 billion in losses suffered by investors in Ocala.

The FDIC, which sought to have the Bank of America lawsuit dismissed, countersued, alleging the bank "executed demonstrably false documents---that indicated that BoA had rights in the loans and purported to strip Colonial of its ownership rights---in order to sell the loans to Freddie Mac." The FDIC claims Bank of America's actions constitute breach of contract, malfeasance, bad faith, gross negligence and willful misconduct with respect to Colonial. Bank of America is seeking a dismissal of the FDIC's countersuit.

The Ocala conduit was a key element in the seven-year fraud orchestrated by Taylor Bean founder Lee Farkas.

The scheme involved Colonial "purchasing" mortgage loans from Taylor Bean that had already been sold to other investors. In this way, Taylor Bean masked its financial problems and maintained its licenses as mortgage lender, seller and, importantly, issuer of mortgage-backed securities. Colonial, which was Taylor Bean's main lender and "co-conspirator," according to Bank of America's lawyers, provided the lender with $3 billion in mortgage financing, much of which went through Ocala.

Farkas also tried to pump $300 million into Colonial as part of a fraudulent scheme that would have enabled the struggling bank to become eligible for a $550 million federal bailout under the government's Troubled Asset Relief Program.

Farkas, a Florida businessman who built Taylor Bean from a small mortgage company into the U.S.'s largest mortgage lender not owned by a bank, is serving a 30-year prison sentence for his role in the scheme. A handful of other executives from Colonial and Taylor Bean have also been sentenced to prison for their roles in the fraud.

Taylor Bean collapsed after federal regulators uncovered evidence of fraud and suspended its authority to make loans insured by the government agencies.

Colonial Bank, which had $25 billion in assets and $20 billion in deposits, was the biggest bank failure of 2009. The FDIC estimates Colonial's collapse will cost its insurance fund around $5 billion, making it one of the most expensive bank failures in U.S. history.

The FDIC was named receiver of Colonial Bank after regulators seized the Montgomery, Ala., bank on Aug. 14, 2009, and sold its assets to BB&T Corp. Taylor Bean filed for Chapter 11 bankruptcy protection 10 days later.



Document DJFDBR0020120117e81hl2wqv

(c) 2012 Dow Jones & Company, Inc.

Source: https://www.fis.dowjones.com/WebBlogs.aspx?aid=DJFDBR0020120117e81hl2wqv&ProductIDFromApplication=&r=wsjblog&s=djfdbr

[Noil1]

New document:

https://ecf.almb.uscourts.gov/docpub/01608391998

[Noil1]

11/07/2011 1:00 PM
115-A) 09-32303 The Colonial BancGroup, Inc.
Chapter: 11
C. Edward Dobbs representing Debtor
John J. Clark representing FDIC
1607 Motion OF THE FDIC-RECEIVER FOR AN ORDER (1) CONFIRMING THAT THE AUTOMATIC
STAY DOES NOT APPLY OR, (2) IN THE ALTERNATIVE, MODIFYING THE AUTOMATIC STAY TO
PERMIT THE FDIC-RECEIVER TO COMMUNICATE WITH THE INTERNAL REVENUE SERVICE Filed by
Michael A. Fritz Sr. on behalf of Federal Deposit Insurance Corporation, in its capacity as receiver for Colonial
Bank, Montgomery, Alabama. (Attachments: # 1 Exhibit) (Fritz, Michael) (Entered: 11/03/2011)

1608 Motion to Strike FDIC-Receiver's Motion for Relief from Stay Pursuant to 11 U.S.C. §§ 105(a) and
107(b) and Bankruptcy Rule 9018 and Request for Expedited Hearing Filed by Rufus T. Dorsey IV on behalf of
The Colonial BancGroup Inc. (RE: related document(s)1607 Motion filed by Interested Party Federal Deposit
Insurance Corporation, in its capacity as receiver for Colonial Bank, Montgomery, Alabama). (Dorsey, Rufus)
(Entered: 11/04/2011)

[Noil1]

Colonial Execs, Investors Settle Fraud Suit For $10.5M

Law360, New York (August 12, 2011) -- Colonial BancGroup Inc. shareholders reached a $10.5 million settlement in a putative class action Friday in Alabama to resolve claims the company's executives engineered a multipart fraud that gutted investors and drove the company into bankruptcy.

In a motion requesting preliminary approval of the settlement, the shareholders called the agreement an "outstanding result" for the class, which was battling a company with limited resources.

"Although lead plaintiffs and their counsel believe their case to be strong, their ability to construct a case would be hampered by the fact that Colonial was in bankruptcy," the plaintiffs said.

The latest consolidated complaint, filed in April, alleges that Colonial's officers misled investors and drove the company into bankruptcy in 2009.

Investors also claim that its former auditor PricewaterhouseCoopers LLP engaged in fraud and that underwriters Banc of America Securities LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. are liable for shareholder losses.

Colonial BancGroup was the holding company for Colonial Bank, a regional bank that aggressively and, investors say, unscrupulously expanded its lending operations. Colonial executives also allegedly conspired with their largest client, Taylor Bean & Whitaker Corp., to inflate Colonial's warehouse lending assets.

Taylor Bean’s former Chairman Lee Farkas and other executives, meanwhile, have been convicted of defrauding banks of $2.9 billion. The securities that Colonial held on its books for Taylor Bean were in reality backed by fictitious or unmarketable loans and contributed to the bank’s collapse, according to the complaint.

On Aug. 1, the underwriter defendants moved to dismiss claims that they misled Colonial investors about the quality of Colonial Bank's mortgage portfolio and business practices. The underwriters maintain the Colonial investors lack standing to bring claims against the financial firms and are unable to tie their losses to the alleged misstatements in connection with Colonial's note and stock offerings.

PwC also urged the court to let the auditor exit the arena, contending that the investors are asserting securities fraud by hindsight and disregarding the fact that the auditor had limited involvement with Colonial.

While PwC audited Colonial’s financial statements in 2007 and 2008, the company cannot be held liable for failing to detect the fraud perpetrated by the head of Colonial’s mortgage warehouse lending arm and Taylor Bean executives.

Representatives for the parties could not immediately be reached for comment on Friday.

The plaintiffs are represented by liaison counsel Tyrone Means, H. Lewis Gillis and Gerald Brooks of Thomas Means Gillis & Seay PC, and proposed lead counsel Thomas Dubbs, James Johnson and Matthew Moehlman of Labaton Sucharow LLP, among others.

The director and officer defendants are represented by Larry B. Childs and William C. Athanas of Waller Lansden Dortch & Davis LLP.

The case is In re: Colonial BancGroup Inc. Securities Litigation, case number 2:09-cv-00104, in the U.S. District Court for the Middle District of Alabama.

--Additional reporting by Samuel Howard. Editing by Andrew Park.

[Pixyel]

Thanks.

[UNITED]

Hey Pixyel,

the only thing we have to do is sit and wait. Trade of stock is suspended due to missing 8k filing, FDIC is suing against CBCGQ execs and will not give back money. All is in Judge William Dwight's hands. We just have to wait for victory or loosing all.

GLTA
- UNITED -

us dot unidedintlequity dot org

[Pixyel]

No thoughts?

[Pixyel]

Colonial Bank Bankruptcy Plan Wins Approval

http://online.wsj.com/article/SB10001424052702303657404576363551899748130.html

By PATRICK FITZGERALD

A federal judge approved Colonial BancGroup Inc.'s revamped Chapter 11 plan a week after the former Colonial Bank parent made changes to address the judge's criticism that the plan was "not in the best interests of creditors."

Judge Dwight H. Williams Jr., of the U.S. Bankruptcy Court in Montgomery, Ala., on Thursday signed off on Colonial BancGroup's Chapter 11 liquidation plan over the objection of the Federal Deposit Insurance Corp., the bank-holding company's longtime sparring partner. The Colonial BancGroup plan envisions paying off creditors by suing the FDIC.

The FDIC was named receiver of Colonial Bank in the summer of 2009, after state regulators seized the Alabama bank. It then sold most of Colonial's holdings to North Carolina's BB&T Corp.

Since then, the two sides have battled over creditors' efforts to recoup some $1.5 billion in funds the parent transferred to its struggling banking subsidiary in the months before it was seized.

"We are very pleased that the court has confirmed the Colonial's liquidation plan, which was supported overwhelmingly by those unsecured creditors holding allowed claims," said Colonial BancGroup's attorney C. Edward Dobbs, a partner at Atlanta's Parker, Hudson, Rainer & Dobbs.

Colonial, which has no revenue or business prospects, isn't seeking to reorganize, according to the FDIC. Instead, the Chapter 11 bankruptcy has become a platform for hedge funds and other institutions that bought debt at a deep discount to pursue "an aggressive litigation strategy" aimed mostly at the FDIC, the agency said recently.

FDIC spokesman Andrew Gray couldn't immediately comment on the ruling.

The decision represents a reversal for Colonial's creditors and is another setback for the FDIC in bankruptcy court, where the agency, as receiver, has faced off against creditors of a number of bank holding companies that are under Chapter 11 protection as a result of the wave of bank closures by regulators in recent years.

Less than two weeks ago, Judge Williams sided with the FDIC, finding Colonial's Chapter 11 plan would be more expensive than Chapter 7 liquidation but would accomplish the same thing. The judge also faulted the plan for allowing a committee to decide what lawsuits to bring.

But that victory was short-lived. Colonial filed a new plan, saying it made changes to cure the problems identified by the judge and asking for a fast hearing to reconsider confirmation of the plan.

Those changes included a cut in the compensation structure for the Chapter 11 trustee, who will be paid under the same guidelines that apply to Chapter 7 trustees. Additionally, the company said it would give the judge the final word on what lawsuits are pursued after the bankruptcy plan is in place.

In a key ruling last fall, Judge Williams rejected the FDIC's bid to hold the holding company accountable for failing to maintain capital levels at the bank. The FDIC, however, said Judge Williams erred and appealed the ruling.

The fight over capital commitments adds to other battles between the two over tax refunds estimated at $253 million, real-estate investment trust preferred securities valued at $300 million, insurance and other assets. That litigation is pending in U.S. District Court in Montgomery.

According to court filings, the FDIC had offered to settle the Colonial litigation. The offer involved a carve-out of some $63 million in disputed assets—minus the fees and expenses racked up in the Chapter 11 case—to be earmarked for the estate's unsecured creditors. But no deal was ever reached, and the FDIC withdrew its settlement offer.

Colonial, which had $25 billion in assets and $20 billion in deposits, was the biggest bank failure of 2009. The FDIC estimates Colonial's collapse will cost its insurance fund $3.8 billion, making it one of the most expensive bank failures in U.S. history.

Bobby Lowder, the so-called Auburn University "kingmaker" whom ESPN once called the most powerful booster in college sports, founded Colonial more than 20 years ago and built it into a regional banking power largely through mortgage-lending activities in the southeast.

The bank suffered big losses as the housing market cratered but its fate was sealed with the collapse of mortgage lender Taylor Bean & Whitaker Mortgage Corp., which filed for bankruptcy in August 2009. Colonial was Taylor Bean's main lender and the two firms had a close relationship.

Meanwhile Lee Farkas, Taylor Bean's former chairman, was convicted in April on criminal fraud charges related to a seven-year, multibillion-dollar scheme that contributed to Colonial's collapse. Mr. Farkas, who faces spending the rest of his life behind bars, is slated to be sentenced later this month.

Write to Patrick Fitzgerald at [e-mail]

[Pixyel]

Colonial asks judge to reconsider bankruptcy plan

http://www.marketwatch.com/story/colonial-asks-judge-to-reconsider-bankruptcy-plan-2011-05-26-122180

[Pixyel]

Judge Rejects Colonial Bank Parent's Chapter 11 Exit Plan


By Patrick Fitzgerald
Of DOW JONES DAILY BANKRUPTCY REVIEW


A federal judge rejected Colonial BancGroup Inc.'s Chapter 11 plan as "not in the best interest of creditors," a victory for the Federal Deposit Insurance Corp. in its long-running court fight with creditors of the former parent of Colonial Bank.

Judge Dwight H. Williams Jr. of the U.S. Bankruptcy Court in Montgomery, Ala., Friday issued an opinion objecting to Colonial's Chapter 11 liquidation plan to pay off creditors by suing the FDIC.

Since then, the two sides have battled over creditors' efforts to recoup some $1.5 billion in funds the parent transferred to its struggling banking subsidiary in the months before it was seized.

"The court concludes that confirmation of the debtor's proposed chapter 11 plan should be denied because it fails to meet the 'best interest of creditors test,'" Williams wrote in a 13-page opinion.

That test requires a debtor to show that creditors who vote against a plan will fare as well under a Chapter 11 plan as under a hypothetical Chapter 7 case.

Williams agreed with the FDIC's argument that Colonial's inclusion of a plan trustee and plan committee would likely be more expensive than if the bankruptcy estate was liquidated under a Chapter 7 trustee.

The FDIC was named receiver of Colonial Bank in the summer of 2009, after state regulators seized the Montgomery-based bank. It then sold most of Colonial's holdings to North Carolina's BB&T Corp. (BBT). Both the regulator and the Winston Salem, N.C., bank had opposed the plan, asserting it wasn't in the creditors' best interests.

Colonial, which has no revenue or business prospects, isn't seeking to reorganize, according to the FDIC. Instead, the Chapter 11 bankruptcy has become a platform for creditors who bought debt at a deep discount to pursue "an aggressive litigation strategy" aimed mostly at the FDIC, the agency said recently.

In a key ruling last fall, Williams rejected the FDIC's bid to hold the holding company accountable for failing to maintain capital levels at the bank. The decision represented a setback for the FDIC in bankruptcy court, where the agency, as receiver, has sparred with a number of bank-holding companies that are under Chapter 11 protection because of hundreds of bank closures by regulators in recent years. The FDIC, however, said Williams erred and appealed the ruling.

The fight over capital commitments adds to other battles between the two over tax refunds estimated at $253 million, real-estate investment trust preferred securities worth $300 million, insurance and other assets. That litigation is pending in U.S. District Court in Montgomery.

The fate of Colonial BancGroup's Chapter 11 case is unclear. Colonial BancGroup's attorney C. Edward Dobbs, a partner at Atlanta's Parker, Hudson, Rainer & Dobbs, declined to comment.

Last month, the FDIC had called for the case to be converted to a Chapter 7 liquidation. It later withdrew that request pending the outcome of the plan hearing.

According to court filings, the FDIC had offered to settle the Colonial litigation. The offer involved a carve-out of some $63 million in disputed assets--minus the fees and expenses racked up in the Chapter 11 case--to be earmarked for the estate's unsecured creditors. But no deal was ever reached, and the FDIC withdrew its settlement offer earlier this month.

Whether the bankruptcy-court ruling will spur new discussions on a settlement remains to be seen. FDIC spokesman Andrew Gray couldn't immediately comment.

Colonial, which had $25 billion in assets and $20 billion in deposits, was the biggest bank failure of 2009. The FDIC estimates Colonial's collapse will cost its insurance fund $3.8 billion, making it one of the most expensive bank failures in U.S. history.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

-By Patrick Fitzgerald; Dow Jones Daily Bankruptcy Review; 202-862-3544; [e-mail]

[Pixyel]

Judge Rejects Colonial Bank Parent's Chapter 11 Exit Plan

http://online.wsj.com/article/BT-CO-20110523-710126.html

[sf]

i do believe fdic is cooked along with jpm. they are stopping the inquiry because a big payout is about to happen in all the "q" illegal takedowns....ie: lehmq,wamuq,thrmq.and cbcgq. they want this to go away big time. fdic is in deep and they better find deep pockets to pay the piper. jmo.

[Double E]

Sad to watch. You don't win against the government...

[Noil1]

DJ Judge Halts Discovery In Legal Fight Between Colonial, FDIC
06/05/2011 18:32 | BB&T Corp



By Patrick Fitzgerald

Of DOW JONES DAILY BANKRUPTCY REVIEW



A federal judge agreed to a temporary halt in Colonial BancGroup Inc.'s upcoming trial with the Federal Deposit Insurance Corp. over more than $1.5 billion in disputed assets, allowing him to rule on the holding company's plan to exit bankruptcy.

Judge Dwight H. Williams Jr. of U.S. Bankruptcy Court in Montgomery, Ala., Thursday signed off on a consent order, staying discovery in the case through May 26. That's almost two weeks after the May 13 hearing at which Williams is set to consider confirmation of Colonial's Chapter 11 exit plan.

The FDIC agreed to the discovery extension despite sharply criticizing what it called Colonial's courtroom "gamesmanship" and "stalling tactics."

Williams acknowledged the FDIC's concerns regarding the pace of the case in his order, noting "the FDIC strongly objects to any extension of the trial and the discovery bar dates." But the judge also stressed that he has the "inherent power" to control the court's schedule.

Judge Myron H. Thompson of the U.S. District in Montgomery is overseeing Colonial's lawsuit against the FDIC. Thompson, however, referred all discovery-related issues to the bankruptcy court.

The FDIC, which is the receiver for Colonial Bank, has been sparring with the bank's parent since it took over the bank in 2009. Colonial BancGroup is suing the FDIC to recoup some $1.5 billion in funds transferred to its banking subsidiary in the months before it was taken over.

A trial on the dispute is slated to start this fall in federal court in Alabama, but Colonial had sought a stay of discovery pending the hearing on its plan to exit bankruptcy protection. That request, the FDIC argued, would throw off the trial schedule and should be rejected.

In a key ruling last fall, Williams rejected the FDIC's bid to hold the holding company accountable for failing to maintain capital levels at the bank.

The decision represented a setback for the FDIC in bankruptcy court, where the agency, as receiver, has sparred with a number of bank-holding companies that are under Chapter 11 protection as the result of hundreds of bank closures by regulators in recent years. The FDIC, however, says Williams erred and appealed the ruling.

In addition to the fight over capital commitments, two sides are also battling over tax refunds estimated at $253 million, real-estate investment trust preferred securities worth $300 million, insurance and other assets.

Colonial, which has no revenue or business prospects, isn't seeking to reorganize, according to the FDIC. Instead, the Chapter 11 bankruptcy has become a platform for creditors who bought debt at a deep discount to pursue "an aggressive litigation strategy" aimed mostly at the FDIC, the agency said recently.

The FDIC was named receiver of Colonial Bank after state regulators seized the Montgomery, Ala., bank. It then sold most of Colonial's holdings to North Carolina's BB&T Corp. (BBT).

Colonial, which had $25 billion in assets and $20 billion in deposits, was the biggest bank failure of 2009. The FDIC estimates Colonial's collapse will cost its insurance fund $3.8 billion, making it one of the most expensive bank failures in U.S. history.



(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection)



-By Patrick Fitzgerald; Dow Jones Daily Bankruptcy Review; 202-862-3544; [e-mail]






(END) Dow Jones Newswires

May 06, 2011 13:32 ET (17:32 GMT)

Copyright (c) 2011 Dow Jones & Company, Inc.


http://www.morningstar.co.uk/uk/markets/newsfeeditem.aspx?id=138501958340710

[WisePerson]

Hi what is the latest; we have financials for 2010... they made plenty of monies... We should trade soon... anybody got more on this...

http://www.centredaily.com/2011/03/30/2616351/colonial-financial-services-inc.html

is this the same company...

[WisePerson]

Hi what is the latest; we have financials for 2010... theym made plenty of monies... We should trade soon... anybody got more on this...

http://www.centredaily.com/2011/03/30/2616351/colonial-financial-services-inc.html

is this the same company...