Taylor, Bean & Whitaker filed for Chapter 11 bankruptcy protection Monday under a new management team vowing to salvage what it can from the severely crippled home mortgage lender.
On Aug. 5, Taylor Bean abruptly laid off 2,000 employees nationwide, including 1,000 in its Ocala headquarters, after the Federal Housing Administration suspended its authority to issue FHA-insured loans.
Left in the wake of the collapse were thousands of confused homeowners unsure where to send mortgage payments, a small number of Taylor Bean staffers still on the job in Ocala and an array of state and federal authorities trying to sort out the mess of an $80 billion mortgage portfolio.
After a couple of tumultuous weeks, Taylor Bean has begun regrouping.
With the approval of the Office of Thrift Supervision late last week, Taylor Bean's board accepted two new outside board members who the company says have "extensive experience in restructuring distressed businesses." Another outsider, Neil Luria of Navigant Capital Advisors, was named chief restructuring officer.
After the new board members were approved, the entire current board resigned, including board chairman and longtime Taylor Bean leader Lee Farkas.
"Everyone wanted the assurance of complete independence in administering the bankruptcy proceeding," said David Dantzler, a partner with Troutman Sanders, an Atlanta law firm involved with the bankruptcy.
Taylor Bean, which was the country's third-largest issuer of FHA-insured loans, listed assets and debts of more than $1 billion each in paperwork at the U.S. Bankruptcy Court in Jacksonville. The 101-page filing includes names of more than 1,000 creditors.
The Florida Office of Financial Regulation said last week that Taylor Bean has 60 days to transfer servicing of existing loans to other approved lenders. Bank of America will service the company's FHA-insured loans.
Under Chapter 11, Taylor Bean plans to continue operating on a scaled-down basis "and begin the work of recovering, restructuring and possibly liquidating its assets," its attorneys said in a statement.
But they're not closing the door completely on a comeback. Taylor Bean has already appealed the Freddie Mac termination and it intends to appeal the Housing and Urban Development Department and Ginnie Mae terminations this month. It's also trying to resolve cease-and-desist orders from financial regulators in Florida and other states.
"I think everybody recognizes that restructuring Taylor Bean as it once existed is a long shot, but today no options have been foreclosed completely," Dantzler said.
In a statement, the company placed some of the recent confusion over loan processing directly on Colonial Bank, the Alabama institution that failed a week ago and for years was Taylor Bean's primary bank.
"On or about Aug. 6, 2009, approximately 100 Taylor Bean bank accounts were frozen by Colonial Bank," Taylor Bean said.
"This action created myriad problems in processing borrower payments and making payments on their behalf — such as homeowner's insurance premiums and real estate taxes."
Taylor Bean said it's in talks with the Federal Deposit Insurance Corp., the receiver for Colonial Bank, on how to gain access to Colonial accounts to help individual borrowers.
Jeff Harrington can be reached at email@example.com or (727) 893-8242. Follow him on Twitter at twitter.com/jeffmharrington.