Bank of Commerce Parent Company Sees Bankruptcy Filing as Lifesaver

by San Antonio Attorney

In a bid to stay afloat, the holding company of The Bank of Commerce has filed for a voluntary petition under Section 363 of the US Bankruptcy Code, effectively placing the company up for grabs to an interested investor.

The holding company’s attempts to remain solvent are currently weighed down by a $10 million debt in trust securities owed to various investors.  As such, interested buyers need to settle the debt before investing more money in order to revitalize the struggling bank, whose assets have decreased from a peak of $350 million to a mere $209 million as of the middle of the year.  At present, more than 200 investors of the Bank of Commerce stand to lose approximately $13.7 million used to establish the bank almost two decades ago.  Court approval of the bankruptcy suit could serve as a crucial lifeline for the bank—as all its financial obligations are erased before it can be bought by a new investor.

Chattanoga-based entrepreneur Byron DeFoor has expressed interest in becoming the new sole owner of the bank.  He wanted to buy it a few years ago, but held back due to the large amount of debt that came with owning the bank.  A successful bankruptcy suit could erase the bank’s obligations—and sway DeFoor into finally purchasing the company.

Mostly known as a real estate developer, DeFoor currently owns multiple businesses in a variety of industries, including Grace Healthcare, as well as a lending company. He also has high stakes in the banking industry, being a major stockholder of the Millennium Bank of Chattanooga and the Alliance Bank & Trust in North Carolina. DeFoor has issued a statement expressing his eagerness to acquire the Bank of Commerce and invest in Sarasota.

After the sale, Allan Smith, one of DeFoor’s representative’s is expected to head the Bank of Commerce as its’ new chairman, together with other DeFoor team members set to become the bank’s Board of Directors.

The bank’s current representative has assured the public that it will remain operational and that all of the bank’s current employees and senior managers will be retained post-sale.

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