Acme Files Chapter 11 to Avoid Takeover

by George Waldon  on Monday, May. 5, 2014 12:00 am  

Lex and Alex Golden, father and son executives at Acme Holding Co., are fending off creditors with a Chapter 11 bankruptcy filing in hopes of preserving equity in Acme’s ownership of the $138 million-asset  Allied Bank of Mulberry (Crawford County). | (Photo by Jason Burt)

The parent company of Allied Bank of Mulberry (Crawford County) was steered into bankruptcy court to stave off a possible takeover by a fellow lender.

The defensive move buys Acme Holding Co. more time in hopes of working out a solution with Chambers Bank of Danville and other creditors. Last week’s preliminary Chapter 11 filed April 29 by Acme doesn’t detail how much is owed to Chambers.

But the family of Lex Golden of Little Rock, which controls a 75.4 percent stake in Acme, is convinced the value of the stock is worth more than the debt it’s pledged against.

“We believe there’s equity there,” said his son, Alex Golden, president of Acme Holding and president and chief executive officer of Allied Bank.

The Chambers loan is secured by Acme stock, which represents control of the $138 million-asset Allied Bank. Acme Holding lists estimated liabilities of between $1 million and $10 million in its Chapter 11 reorganization petition.

Acme’s annual report listed debts of more than $7.9 million at year-end 2013. The debt was taken on to replace capital depleted by loan losses.

Allied Bank recorded equity capital of $10.6 million as of March 31. That figure reflects a drop of more than 40 percent since the end of 2010, when equity capital stood at $18 million.

Allied Bank lost $3.25 million related to its dealings with Little Rock lawyer Kevin Lewis, who is in federal prison for using bogus special improvement district bonds as security for loans from Allied and other lenders. That scam was uncovered in late 2010.

Battered by loan losses, Allied Bank drew the critical eye of bank regulators. That culminated in a 2012 consent order designed to improve the Golden family’s management of loan operations, liquidity and capital.

Along the way, Lex Golden’s role with the bank changed from chief lending officer to executive vice president/special assets officer, and his daughter, Amy Golden McCay, exited the bank as vice president.

The supervisory agreement with the Federal Reserve Bank of St. Louis also restricted the bank’s fiscal options for contending with the holding company debt while safeguarding its equity capital.

“The problem is debt,” said Alex Golden. “If the bank can’t dividend up to the holding company, it’s got a problem. It just got to the point where [Chapter 11] was a prudent thing to do to protect the investors from the primary lender taking possession.”

 

 

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