"Bank Holding Company Nexity Being Liquidated in Chapter 7
Nexity Financial Corp., the holding company for a failed bank, is no longer in a Chapter 11 reorganization. At the company's own request, the case was converted last week to a liquidation in Chapter 7, where a trustee has already been appointed.
Before the Chapter 11 filing in July 2010, the Nexity holding company had worked out a so-called prepackaged plan that had been accepted by holders of 96 percent of the $22 million in trust preferred securities who voted. Winning court approval and implementing the plan required raising $175 million through a private placement.
Nexity was unable to raise the required new capital. Consequently, regulators took over Nexity Bank in April.
A Chapter 11 plan was no longer feasible, even though $812,000 in cash remained, the company said in a court filing in May.
For details on the plan that Nexity had hoped to confirm, click here for the July 23, 2010, Bloomberg bankruptcy report.
The case is In re Nexity Financial Corp., 10-12293, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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