Southeast Banking Corporation (fka STBPQ)

[Enterprising Investor]

Website updated.

Question 50 (posted September 17, 2009): What is the current status of the Trustee's efforts to pursue a transaction with an alternative investor?

Following a conference call on September 15, 2009, with the Ad Hoc Committee, the Indenture Trustees, the Legal Representative for Holders of SEBC Common Stock and other parties in interest in this case, each of whom have signed a confidentiality agreement, the Trustee has filed a motion for a further extension of the Effective Date Deadline through October 30, 2009. A copy of the motion is posted separately on this website. As set forth in the motion, SCS, the Estate's investment banker, is currently engaged in advanced discussions with at least two major financial institutions that have expressed significant interest (including having retained and/or consulted with outside counsel for this purpose) in entering into a transaction similar to the Transaction to be implemented under the Plan. Of course, the Trustee cannot predict whether or not any institution will determine to commit to undertaking a transaction with the Estate. Should any of these discussions lead to the execution of a letter of intent (a draft of which has been exchanged with one of these financial institutions) and should the counterparty to the letter of intent negotiate with the Estate a definitive agreement to undertake a transaction, the Trustee will then need to file a motion pursuant to 11 U.S.C. § 1127(b) to modify the Plan, and confirm such Plan as modified, in order to implement any such alternative transaction (a "Plan Modification Motion"). To the extent necessary, such Plan Modification Motion will also seek a further extension of the Effective Date Deadline.