GM, Visteon, General Growth, Mesa Air, RathGibson, HSH, DBSD: Bankruptcy

Professionals working for old General Motors Corp. will be waiting for some of their fees as the result of a May 21 ruling by the bankruptcy judge in New York.

Lawyers and consultants for old GM and creditors sought final approval for some $35.07 million in fees covering the first four month of the case from June 1 through Sept. 30, excluding the financial advisers.

At the urging of the U.S. Trustee, U.S. Bankruptcy Judge Robert E. Gerber allowed payment of 90 percent of approved fees, with 10 percent held back. In addition to the so-called fee holdback, the judge cut fees by 1.2 percent to a total of about $34.6 million.

Weil Gotshal & Manges LLP, chief bankruptcy counsel for old GM, was awarded $17.7 million for the four-month period. Kramer Levin Naftalis & Frankel LLP was approved for $4.5 million.

Old GM sold the core business in exchange for 10 percent of the stock of the new company plus warrants for 15 percent. The warrants will have value if the new company is profitable enough to raise the company’s value to specified levels.

New GM is 60.8 percent owned by the U.S. government. Old GM began the largest manufacturing reorganization in history by filing under Chapter 11 on June 1. The sale was completed on July 10. GM listed assets of $82.3 billion against debt totaling $172.8 billion.

The case is In re Motors Liquidation Co., 09-50026, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Updates

Visteon Cool to JCI Acquisition of Interiors Business

Auto-parts maker Visteon Corp. reacted coolly to the unsolicited offer from Johnson Controls Inc. to buy its interiors and electronics business for $1.25 billion.

Visteon responded to the statement from JCI by issuing a press release of its own saying it has had “extensive and difficult experiences” in the past with Milwaukee-based JCI. Visteon said the offer comes “very late” in the Chapter 11 reorganization process. Visteon also noted that JCI is a direct competitor and “stands to benefit by introducing delay.”

Visteon said it would continue toward confirmation of the pending Chapter 11 plan although it “anticipates further dialogue” with JCI.

Visteon said that JCI’s offer is “vaguely defined,” lacks “important information,” and is “highly conditional.” For other Bloomberg coverage of the JCI offer, click here.

Earlier this month the bankruptcy judge in Delaware turned back three efforts by shareholders to derail or slow the reorganization process. U.S. Bankruptcy Judge Christopher S. Sontchi denied shareholders’ motion for the appointment of an official committee, for the appointment of an examiner and end the company’s exclusive right to file a reorganization plan.

Visteon has support from creditors for a Chapter 11 plan filed where bondholders can own the company by providing $1.25 billion cash in return for all the new stock. If the cash isn’t forthcoming, Visteon instead would confirm a plan similar to the March version where term loan lenders owed $1.63 billion would receive about 85 percent of the stock, with noteholders splitting the remaining shares.

For details on the newest plan, click here for the May 7 Bloomberg bankruptcy report. For specifics the March plan, click here for the March 16 Bloomberg bankruptcy report.

Visteon filed for reorganization in May 2009, listing assets of $4.6 billion against debt totaling $5.3 billion. Sales in 2008 were $9.5 billion, including $3.1 billion to Ford Motor Co. Visteon was spun off from Ford in 2000. Van Buren Township, Michigan-based Visteon at the outset owed $2.7 billion for borrowed money, including $1.5 billion on a secured term loan, $862 million on unsecured bonds, and $214 million on other debt obligations.

The case is In re Visteon Corp., 09-11786, U.S. Bankruptcy Court, District of Delaware (Wilmington).

WaMu Reaches Formal Settlement With FDIC, JPMorgan

Washington Mutual Inc. made good on a promise made to the bankruptcy judge at a May 19 hearing by signing the Federal Deposit Insurance Corp. to a global settlement with JPMorgan Chase & Co. and the official creditors’ committee. The FDIC came on board May 21, clearing the way for the bankruptcy judge in Delaware to approve WaMu’s disclosure statement at a June 3 hearing.

The disclosure statement explains the Chapter 11 plan where WaMu will distribute more than $7 billion to creditors. WaMu filed amended versions of the disclosure statement and plan on May 21.

The new version of the disclosure statement says that WaMu will receive about $2.37 billion of an estimated $5.5 billion to $5.8 billion in tax refunds. In the prior version, WaMu said its share would be $2.3 billion to $2.6 billion.

The new disclosure statement explains how holders of non- subordinated bank bond claims will receive as much as $150 million from the tax refunds if they vote in favor of the plan.

In addition to slicing up tax refunds among WaMu, the FDIC and JPMorgan, the settlement gives WaMu the $4 billion that the holding company had in deposit accounts at the bank when it was taken over and transferred to JPMorgan.

Click here to read the May 18 Bloomberg bankruptcy report for a summary of the settlement and WaMu’s Chapter 11 plan designed to distribute $7 billion.

The WaMu holding company filed under Chapter 11 in September 2008, one day after the bank subsidiary was taken over. The bank was the sixth-largest depository and credit-card issuer in the U.S. and the largest bank failure in the country’s history. The holding company filed formal lists of assets and debt showing property with a total value of $4.49 billion against liabilities of $7.83 billion.

The holding company Chapter 11 case is Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (Wilmington).

General Growth and Lenders Dispute Conversion Rights

General Growth Properties Inc. scheduled a May 27 hearing to settle a dispute with some of the lenders over whether the mall owner waived the right to convert financing into equity as part of a reorganization plan.

Lenders who provided $400 million in financing for the reorganization contend that General Growth was required to give notice of the election to convert the debt to equity when the bankruptcy court on May 7 selected a group including Brookfield Asset Management Inc. to be the lead bidder in providing equity- purchase and financing commitments underpinning a reorganization plan.

General Growth contends the lenders are misreading the loan documents. Properly read, the company isn’t required to give notice of the conversion election until a backstop party is approved by the court, General Growth says. That didn’t occur on May 7, the mall owner submits.

Blackstone Group LP is talking with Brookfield about contributing $500 million of the $7 billion that the group will provide General Growth in return for equity. To read Bloomberg coverage, click here.

The May 7 court order set up a procedure to determine who makes the best offer to finance the holding company’s reorganization and end up owning part of the stock. Other investors can submit competing proposals by June 2. General Growth will pick the best proposal by July 2. The hearing for approval of a disclosure statement will take place July 30, with the confirmation hearing for approval of the plan to take place Sept. 30.

General Growth began the largest real-estate reorganization in history by filing under Chapter 11 in April 2009. The books of Chicago-based General Growth had assets of $29.6 billion and total liabilities of $27.3 billion as of Dec. 31, 2008. The company owns or manages more than 200 shopping-mall properties.

The case is In re General Growth Properties Inc., 09-11977, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Midway Games’ Liquidating Chapter 11 Plan Confirmed

Midway Games Inc., once the owner and developer of “Mortal Kombat” and other video games, has a confirmed Chapter 11 plan. The bankruptcy judge in Delaware approved the reorganization at a May 21 hearing.

Unsecured creditors of the parent were told in the disclosure statement that they stand to recover 16.5 percent. Unsecured creditors of subsidiaries should see 25 percent.

Midway sold assets to generate $43 million cash, leaving no substantial secured claims unpaid. A unit of New York-based Time Warner Inc. bought most of the assets in July for $33 million plus accounts receivable. The non-bankrupt European subsidiaries were sold in August for nominal consideration.

Unsecured creditors of the parent company have claims estimated to total $155 million, while there are almost $37 million of unsecured claims against the subsidiaries. Holders of subordinated notes aren’t receiving a distribution.

The distribution to unsecured creditors could have been larger had the creditors’ committee not seen most of their claims dismissed in a suit against former owner Sumner Redstone and companies he controls. The committee believed that Redstone carried out a “disastrous and ill-advised” $90 million transaction in February 2008 that saddled Midway with $70 million in new debt that it “had no ability to satisfy.”

The bankruptcy judge allowed the committee to continue prosecuting claims aiming to recharacterize parts of the transaction as secured lending, rather than so-called true sales. If the committee wins on recharacterization, the judge said the committee may succeed on preference and constructive fraudulent transfer claims.

Chicago-based Midway filed under Chapter 11 in February 2009, listing assets of $168 million and debt of $281 million. Including foreign subsidiaries not in bankruptcy, the asset and liability totals were $178 million and $337 million.

Midway’s debt originally included $150 million in convertible notes, $29 million on a secured term loan and revolving credit, $40 million on a secured loan facility and $20 million on a subordinated loan. Unsecured claims by suppliers totaled $96 million, the company said in a court filing at the outset.

The case is In re Midway Games Inc., 09-10465, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Sex.com Domain Name to be Sold in Bankruptcy Court

The Internet domain name “sex.com” will be sold under procedures to be approved by the bankruptcy court in Woodland Hills, California, if the judge goes along with a settlement between contending creditors of Escom LLC, the owner of the name.

Three creditors filed an involuntary Chapter 7 petition in March against Calabasas, California-based Escom. The petition halted foreclosure by secured creditor DOM Partners LLC, owed $4.5 million. The companies that filed the involuntary petition are controlled by an individual named Michael Mann, who is Escom’s manager.

Court papers say the stalemate among company owners precluded disposition of the assets.

The bankruptcy court denied a motion by DOM to dismiss the petition as having been filed in bad faith. The judge also refused to allow DOM to continue foreclosure.

With a motion pending for the appointment of a Chapter 11 trustee, the company and creditors agreed on a settlement filed with the bankruptcy court last week. The settlement calls for the domain name to be sold under procedures approved by the bankruptcy court. Escom is to put itself into Chapter 11.

The settlement says that Sedo.com LLC is to be the exclusive agent to market and sell the property. Terms of the marketing and sale weren’t disclosed.

If approved by the judge, the settlement would have net sale proceeds immediately turned over to secured creditors, with any surplus available for unsecured creditors and Escom’s owners.

The settlement agreement says that the claims of DOM and the petitioning creditors are almost $15 million.

Escom acquired the domain name in January 2006, according to a company statement.

The case is In re Escom LLC, 10-13001, U.S. Bankruptcy Court, Central District of California (Woodland Hills).

Plains All American, Flying J Spar over 180,000 Barrels

Flying J Inc., an oil producer, refiner and marketer, is in a dispute over whether subsidiaries of Plains All American Pipeline LP completely and properly foreclosed 180,000 barrels of petroleum before Flying J filed for Chapter 11 reorganization in December 2008.

Houston-based Plains said in a lawsuit filed on May 20 in bankruptcy court in Delaware that Flying J subsidiary Big West Oil LLC defaulted on futures contracts. Plains contends it completed foreclosure of 180,000 barrels of products that at the time were worth $21 to $31 a barrel. Plains says it was left with $15.6 million in claims that it asserted in the Chapter 11 case.

Now that the price of the products has risen to $60 to $65 a barrel, Plains says Flying J asserts that the foreclosures weren’t completed before bankruptcy and that Plains has violated the so-called automatic stay by not turning over the products.

Plains argues in its lawsuit that the bankruptcy judge should rule that the foreclosure was complete before bankruptcy and that the prices should be those at the time. Even if the foreclosure weren’t complete, Plains says that 100,000 barrels involved futures contracts which have exemptions from the automatic stay and could be completed after bankruptcy.

Flying J has a hearing tomorrow for an extension of the exclusive right to propose a Chapter 11 plan. The company filed a reorganization plan in February to pay creditors in full, with the excess going to existing shareholders. For details on the plan and the underlying financing, click here for the Feb. 12 Bloomberg bankruptcy report.

At the outset of the reorganization, Flying J had a $53 million revolving credit, along with a $395 million secured term loan. Pipeline-owner Longhorn Partners Pipeline LP owed $45 million on a revolving credit and $166 million on a secured note. The companies also owed $90 million on an unsecured revolving credit with Zions Bank.

The case is In re Flying J Inc., 08-13384, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Mesa Air Reports $1.6 Million Net Loss in April

Regional airline Mesa Air Group Inc. reported a $1.6 million net loss in April on revenue of $70.6 million.

Operating income for the month was $1.5 million. Reorganization items in the month were $2.6 million while interest expense was $1.3 million.

Cash grew from $54.1 million at March 31 to $57.5 million on April 30.

Since the inception of the bankruptcy reorganization, the cumulative net loss is $3.6 million on revenue of $271.5 million.

Mesa, which filed under Chapter 11 in January, at the time had a fleet of 178 aircraft and operated 130, making 700 daily departures serving 127 cities in 41 states, Canada, and Mexico. Mesa now operates 99 aircraft, with 580 daily flights serving 104 cities. Revenue in 2009 was $968 million.

Phoenix-based Mesa listed assets of $976 million against debt totaling $869 million. Liabilities include $393 million on loans secured by 24 owned aircraft, $26 million on three note issues, and $33.6 million secured by 20 other aircraft. In addition, there is $1.62 billion in potential liability on aircraft leases. Mesa operates regional aircraft under code- sharing agreements with US Airways Group Inc., UAL Corp.’s United Airlines, and Delta Air Lines Inc. Delta currently is coming out on top in a lawsuit where it may be able to terminate the so-called code-sharing agreement giving Mesa the right to operate flights for Delta as Delta Connection.

Mesa’s subsidiary in Hawaii, go! Mokulele, did not file.

The case is In re Mesa Air Group Inc., 10-10018, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

RathGibson Plan Confirmed, Business Sold to Creditors

The bankruptcy judge signed a confirmation order on May 21 approving the reorganization plan for RathGibson Inc. based on a settlement with creditor groups, court records say.

With all creditor classes voting for the plan, the manufacturer of welded tubing products can prepare to implement the plan where secured creditors with $83.6 million in claims are to be paid in full.

Holders of unsecured notes and other RathGibson unsecured creditors are expected to receive 1.2 percent on their claims, according to the explanatory disclosure statement. Creditors of affiliate Greenville Tube, with $209 million in claims, are to have a 0.2 percent dividend. Greenville Tube guaranteed the notes.

Holders of $152.2 million holding company pay-in-kind notes also can expect a 0.2 percent recovery.

Most of the claims are on account of borrowed money. The disclosure statement says that trade debt amounts to $6.4 million.

The approved plan is based on a sale of the business for $93 million cash to a group including some of the existing secured lenders and holders of 70 percent of the $209.5 million in 11.25 percent unsecured notes. No competing offers were made.

The bankruptcy court approved a disclosure statement last year explaining a previous version of the plan. It was dropped following objection from creditors of affiliates not dealt with in the original reorganization.

The original plan was negotiated with holders of 73 percent of the senior unsecured notes before the Chapter 11 filing in July 2009. The original plan would have paid $6.6 million of unsecured creditors in full while noteholders received 82.5 percent of the new stock. Another 7.5 percent would have gone to the lenders for the reorganization.

The Lincolnshire, Illinois-based company listed assets of $305 million against debt totaling $319 million. In addition to $209 million in senior notes, debt included $55.3 million on secured credit agreements and $10.4 million owing to trade suppliers. The holding company was also liable on $115 million in pay-in-kind notes. A group including management and an affiliate of DLJ Merchant Banking Partners acquired control of RathGibson in June 2007.

The case is In re RathGibson Inc., 09-12452, U.S. Bankruptcy Court, District of Delaware (Wilmington).

HSH Trustee and Exclusivity Motions on for June 14

HSH Delaware GP LLC, a company formed in 2006 by J.C. Flowers & Co. LLC to buy 26 percent of the German bank HSH Nordbank AG, said it spent the first four months in Chapter 11 in litigated disputes with secured lenders including Royal Bank of Scotland NV.

The company therefore believes it’s entitled an extension of the exclusive right to propose a reorganization plan until Sept. 20. The hearing on the so-called exclusivity motion will take place June 14, the same time as trial on the lenders’ motion for appointment of a Chapter 11 trustee.

Much of HSH’s time has been spent defending the motion filed 33 days into the Chapter 11 case where the lenders, owed $550 million, seek the appointment of a trustee. The bankruptcy judge scheduled a two-day trial for June 14 and 15.

HSH says there have been “some discussions” with the lenders about a “possible economic resolution.”

The company was also called upon to resist a motion by the U.S. Trustee seeking the appointment of an examiner. The bankruptcy judge said she will consider the examiner motion after dealing with the motion for a Chapter 11 trustee.

The lenders contend that the company has no employees or operations while the banks’ collateral is worth less than the debt. HSH, on the other hand, contends the stock is worth enough to pay the lenders in full while providing a “sizeable recovery for the debtors’ equity holders.”

As an alternative to a Chapter 11 trustee, the banks are seeking the right to file a Chapter 11 plan of their own.

HSH Delaware GP LLC and affiliates filed under Chapter 11 in January.

Court papers say that the 1.25 billion euros ($1.7 billion) purchase price was financed in part with the bank loan. The inability to negotiate a workout with the banks resulted in the Chapter 11 filing to avoid what the company called a “firesale” of the HSH Nordbank stock.

The case is In re HSH Delaware GP LLC, 10-10187, U.S. Bankruptcy Court, District of Delaware (Wilmington).

DBSD Seeks Longer Exclusivity ‘Just in Case’

Although DBSD North America Inc. won approval of the Chapter 11 plan in a November confirmation order, it’s still awaiting permission from the Federal Communications Commission to transfer licenses. The plan can’t be implemented until then.

Just in case FCC approval isn’t forthcoming, DBSD filed a motion last week for an extension from June 9 to Oct. 7 of the exclusive right to propose a plan.

DBSD is a development-stage company to provide wireless communications by satellite to mass-market customers anywhere in North America. It said that FCC approval is usually given within four to six months after the application that was filed in December.

The new exclusivity motion will be the subject of a hearing in bankruptcy court on June 9.

Confirming the plan required U.S. Bankruptcy Judge Robert E. Gerber to write a precedent-setting opinion cramming down on two classes of creditors, one being first-lien creditor DISH Network Corp. and the other including unsecured creditor Sprint- Nextel Corp. To read about the 67-page opinion and details on the plan, click here to see the Oct. 28 Bloomberg bankruptcy report.

DISH and Sprint so far have been unsuccessful in winning a stay from the bankruptcy court or district court prohibiting implementation of the plan pending appeal from confirmation.

DBSD, based in Reston, Virginia, is intended to provide service in areas where traditional cellular service isn’t available. It has a geosynchronous satellite placed in orbit in April 2008.

The petition listed assets of $630 million and debt totaling $813 million as of March 31, including $51 million in first-lien debt. The Chapter 11 filing was caused in part by the illiquidity of $98 million in auction-rate securities purchased in 2008.

The case is In re DBSD North America Inc., 09-13061, U.S. Bankruptcy Court, Southern District New York (Manhattan).

Watch List

Vertis Continues Pursuing Exchange Offer and Refi

Vertis Inc., an advertising and marketing services company, is attempting to reduce debt a net of $185 million through a pending exchange offer and refinancing. The offer comes less than two years after Vertis and American Color Graphics Inc., the third largest insert printer in North American, merged by confirming companion Chapter 11 reorganizations.

Completed in August 2008, the companies’ previous reorganizations reduced their combined debt by almost $1 billion.

Vertis announced the exchange offer in April when it had support from holders of 70 percent of $241.9 million of 13.5 percent senior pay-in-kind notes due 2014 and over 75 percent of the $380 million in 18.5 percent second lien notes due 2012.

The expiration date for the offer has been extended twice, with the new expiration date now June 11. Vertis previously allowed everyone who tenders to receive the premium that was originally offered for early tenders.

In late April Moody’s Investors Service said it would be “difficult” for Vertis to avoid another “balance sheet restructuring” without a “material reduction in leverage.” Moody’s gives Vertis a Caa1 corporate rating.

Despite the two extensions, holders so far have tendered only 85 percent of the senior notes and 94 percent of the second-lien notes.

If the exchange offer succeeds, Avenue Capital Group would become the majority equity holder, according to Moody’s. Revenue for fiscal 2009 was $1.3 billion, Moody’s said.

With votes from creditors already in hand, the companies began their so-called prepackaged reorganization in July, 2008. All of the new stock and $550 million in new notes went to existing noteholders.

Brentwood, Tennessee-based ACG had $528 million in debt before the prior bankruptcy while the debt of Baltimore-based Vertis was $1.7 billion at the holding company. Vertis was the survivor in the merger.

The prior cases were In re ACG Holdings Inc., 08-11467, and In re Vertis Holdings Inc., 08-11460, both in U.S. Bankruptcy Court, District of Delaware (Wilmington).

Briefly Noted

U.S. Concrete Has Final Approval for $80M Financing

U.S. Concrete Inc., one of the 10 largest producers of ready-mixed concrete in the U.S., received final approval from the bankruptcy court on May 21 for $80 million in secured financing, including a $45 million term loan and a $35 million revolving asset-backed loan. The Houston-based company has a June 3 hearing for approval of the disclosure statement explaining the prepackaged reorganization plan negotiated before the Chapter 11 filing on April 21. The plan reduces debt by $285 million through conversion of 8.325 percent subordinated notes into the new equity. For details on the plan, click here for the April 30 Bloomberg bankruptcy report.

The Chapter 11 petition listed assets of $389 million and debt of $399 million. Liabilities include $40 million on a pre- bankruptcy secured credit facility where JPMorgan Chase Bank NA serves as agent. There is another $17.9 million on undrawn letters of credit. U.S. Concrete’s balance sheet on Dec. 31 listed assets of $392.4 million and liabilities totaling $402.5 million. It has 125 fixed and 11 portable plants serving markets in California, New Jersey, Texas, and Michigan.

The case is In re U.S. Concrete Inc., 10-11407, U.S. Bankruptcy Court, District of Delaware (Wilmington).

GSI Equity Committee Unanimously Supports Reorg Plan

The official shareholders’ committee for GSI Group Inc. announced unanimous support for the reorganization plan for the provider of laser-based systems that aid manufacturing. The plan is scheduled for approval at a May 27 confirmation hearing. The new plan enables shareholders to retain up to 87.3 percent of the stock if they participate to the maximum in a $85 million equity rights offering. If stockholders buy to the fullest extent, noteholders will have 12.7 percent of the reorganized equity and $90 million in new secured notes. For details on the plan, click here for the May 12 Bloomberg bankruptcy report.

The petition listed assets of $555 million and debt totaling $370 million. Bedford, Massachusetts-based GSI has no substantial secured debt. The decline into bankruptcy was caused in part by accounting mistakes requiring a restatement. The original version of the plan and explanatory disclosure statement were filed along with the Chapter 11 petition in November.

The case is In re MES International Inc., 09-14109, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Neff Has July 12 Hearing on Disclosures Statement

Neff Corp., the closely held equipment-rental company that filed a prepackaged reorganization on May 16, scheduled a July 12 hearing for approval of the disclosure statement. Neff has 63 branches in 14 U.S. states. The plan described in the disclosure statement would reduce debt by more than $400 million while giving most of the new equity to first-lien lenders owed $90 million on a term loan. For details on the company’s finances and the plan, click here for the May 17 Bloomberg bankruptcy report. Court papers said assets of the Miami-based company are $299 million while debt is $609 million.

The case is In re Neff Corp., 10-12610, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

International Aluminum Consummates Reorganization Plan

International Aluminum Corp. implemented the reorganization plan on May 21 that the Delaware bankruptcy judge approved in an April 30 confirmation order. The plan didn’t pay secured creditors in full on their $145 million term loan and revolving credit, thus justifying a ruling by the bankruptcy court that noteholders weren’t entitled to anything. The plan gave excess cash to senior secured creditors, together with $38 million in secured notes and almost all of the new stock. The disclosure statement projected a 64.2 percent to 73.7 percent recovery by senior creditors. The company is changing its name to International Architectural Group LLC. For details of the plan, click here for the May 3 Bloomberg bankruptcy report.

IAC filed under Chapter 11 on Jan. 4, already having support for the plan from holders of 72 percent of the first- lien debt. It has 21 facilities throughout the U.S. Assets were listed at $198 million with debt totaling $217 million on Nov. 30. Revenue for a year ended in November was $177 million. The company was acquired in April 2007 by Genstar Capital LLC in a $228 million transaction. Carlyle Mezzanine Partners LP held $22.3 million of the mezzanine debt, according to a court filing. Affiliates in Canada didn’t file.

The case is In re International Aluminum Corp., 10-10003, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Bank Failure

Minnesota Bank Failure Brings Year’s Total to 73

Pinehurst Bank in St. Paul, Minnesota, was taken over on May 21 by regulators, making it the 73rd bank to fail this year. The bank had $61.2 million in assets and $58.3 million in deposits.

The failure will cost the Federal Deposit Insurance Corp. $6 million.

To read Bloomberg coverage, click here.

There were 140 bank failures in 2009, five times more than 2008. The failures in 2009 were the most since 1992, when 179 institutions were taken over by regulators.

To contact the reporter on this story: Bill Rochelle in New York at wrochelle@bloomberg.net.

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