Community Bank Fights Involuntary Bankruptcy Filed by TruPS Owners
Atlanta associate Matt Brooks had his article, “ Community Bank Fights Involuntary Bankruptcy Filed by TruPS Owners,” published in the latest edition of the ABI Journal.
The article discusses the recent FMB Bancshares involuntary bankruptcy proceeding (MDGA, Case No. 14-70716) involving a significant standing dispute and several other issues between the community bank holding company and the purported holder of $12M in trust preferred securities (or TruPS). In using FMB Bancshares as an example, the piece discusses the growing number of TruPS defaults and how some holders are using involuntary bankruptcy as a mechanism to press for a sale of the underlying bank.
According to Matt, FMB represented the first real fight on that issue compared with many other bank holding companies consenting to a sale.