The Colonial BancGroup, Inc (fka CBCGQ)

[HDOGTX]

Had Colonial lost, the FDIC would have had a $1 billion priority claim for the unpaid capital deficiency. Williams’ ruling can be appealed. A valid priority claim would have meant no recovery by the holding company’s unsecured creditors.

This week Colonial and the FDIC are arguing in bankruptcy court over who has the right to receive $247 million in tax refunds. Colonial and the FDIC previously agreed to hold tax refunds in a segregated account until ownership is decided.

There are other unresolved disputes between the holding company and the FDIC, including disagreement over the validity of three secured claims. The FDIC is claiming a security interest in several bank accounts at BB&T holding $38.4 million that had been deposit accounts of the holding company. Wilson, North Carolina-based BB&T contends it has a security interest in the same accounts. Alabama tax authorities are claiming $7 million.

http://www.bloomberg.com/news/2010-09-02/colonial-bancgroup-texas-rangers-mexicana-ronson-cozumel-bankruptcy.html