The Alabama-based bank holding company, Colonial BancGroup, voluntarily filed bankruptcy chapter 11 based on reports. The move was done 11 days after the company was seized by the government and was taken over by BB&T Corp., a Northern Carolina lender.
Colonial BancGroup has a reported $380 million of debts and only $45 million in assets based on its filing. It is one of the largest banks that have sought the protection of chapter 11 bankruptcy in the US. Funding of the Taylor and Whitaker Mortgage Corp. should have saved Colonial BancGroup but the former has filed bankruptcy as well.
The company’s collapse was believed to have been led by its ventures which were affected by foreclosures and others from loses from default construction loans to Florida developers.
The case is In re Colonial BancGroup Inc, 09-32303, U.S. Bankruptcy Court, Middle District of Alabama.
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