Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

Colonial BancGroup files for Chapter 11 protection

Send a link to a friend

[August 26, 2009]  MONTGOMERY, Ala. (AP) -- Colonial BancGroup Inc., the Montgomery-based real estate lender whose banking unit was shut down by the government and sold to BB&T Corp. earlier this month, has filed for Chapter 11 bankruptcy protection.

InsuranceThe company listed debts of $380 million and assets of just $45 million in its Tuesday filing in U.S. Bankruptcy Court in the Middle District of Alabama. A list of creditors holding the 20 largest unsecured claims shows that Bank of New York Trust Co. has a $253.7 million claim and Bank of New York Trust Co. of Fla., a $104.1 million claim.

With about $25 billion in deposits, Colonial Bank represents the largest U.S. bank failure so far this year, and the sixth-largest in U.S. history. The FDIC sold most of its deposits, 346 branches in five states and about $22 billion in assets to BB&T. Colonial Bank's collapse is expected to cost the insurance fund $2.8 billion.

Colonial BancGroup remains under criminal investigation by the Justice Department over alleged accounting irregularities at its mortgage warehouse lending unit in Orlando, Fla. It also was the subject of a Securities and Exchange Commission investigation related to its bid for federal bailout funds and its accounting for loan loss reserves.

[to top of second column]



The company posted losses for several straight quarters, as it wrote off millions in residential construction and mortgage loans, most tied to hard-hit markets in Florida. Delinquencies on commercial real estate loans remain a hot spot of potential trouble for many regional banks, as many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans.

Taylor, Bean & Whitaker Mortgage Corp., one of the nation's biggest independent mortgage bankers, said Monday it filed for bankruptcy protection in the wake of Colonial Bank's failure. Colonial, which for years had been Taylor Bean's primary bank, froze about 100 of its accounts earlier this month.

[Associated Press]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


< Recent articles

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor