Posted 8/19/2013 12:00 am
Updated 11 months ago
Who won the give-and-take of sorting out details of the pending bankruptcy court auction of Little Rock’s Metropolitan National Bank?
By our count, the score was 3-2 in favor of the debtor, Rogers Bancshares Inc.
Holding company creditors won on two points: lowering the breakup fee to $640,000 and requiring the stalking horse bidder, Ford Financial Fund II of Dallas, to put up a $1 million deposit required of other bidders.
Rogers Bancshares won on its positions to not extend the time period to complete the sale beyond 43 days, to require all bids to be cash-only and to limit contact between bidders to prevent the possibility of collusion.
The historic auction, the first of its kind in Arkansas banking history, starts at 9 a.m. Sept. 9.
A hearing before Bankruptcy Judge James Mixon is scheduled for Sept. 12 to consider approval of the winning bid.
Regarding the topic of cash-only bids, Rogers Bancshares received an offer in September 2012 that involved some horse trading. The deal could’ve been worth more than $16 million (Ford Financial’s base starting bid) or maybe not.
The cause of the uncertainty was the medium of exchange: OREO, 13 pieces of raw land Metropolitan had repossessed in connection with failed loans.
The deal partially involved giving the holding company undeveloped property from Metropolitan’s OREO portfolio to buy certain assets and liabilities and deposits of the bank in exchange for recapitalizing the bank.
This zero-cash, OREO offer with exceptions from an unnamed bank wasn’t deemed workable by the holding company/bank leadership.