Make us your home page
Instagram

Colonial BancGroup files for bankruptcy protection

MONTGOMERY, Ala. — 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.

The 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. 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.

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.

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242. Follow him on Twitter at twitter.com/jeffmharrington.

Colonial BancGroup files for bankruptcy protection 08/26/09 [Last modified: Tuesday, September 22, 2009 2:15pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]