AMWEST IS BANKRUPT INSURANCE FIRM SEEKS CHAPTER 11 PROTECTION.Byline: Evan Pondel Staff Writer CALABASAS - Amwest Insurance Group Inc., an underwriter of surety bonds surety bond An insurance fee required before a duplicate security is issued to replace one that has been lost. The fee is approximately 4% of the market value of the security to be replaced. nationwide that's buried under $18 million in debt, has filed for Chapter 11 bankruptcy protection. The filing follows Nebraska Director of Insurance L. Tim Wagner's declaration last month that Amwest is insolvent INSOLVENT. This word has several meanings. It signifies a person whose estate is not sufficient to pay his debts. Civ. Code of Louisiana, art. 1980.. A person is also said to be insolvent, who is under a present inability to answer, in the ordinary course of business, the responsibility . ``We're now going to take a look at what assets are available and prepare for a reorganization of the business,'' said Jose Valesco, an attorney representing Amwest. The company's two wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Far West Insurance Co. and Amwest Surety Insurance, specialize in selling various types of bonds, including bail and contracting. On June 7, Judge John A. Colborn entered an order for the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of Amwest Surety Insurance. Far West Insurance remains in operation, but the company may also face liquidation as Amwest pools its remaining assets. ``Far West is on the block for sale,'' said Ann Frohman, serving as general counsel for the Nebraska Department of Insurance. Though the liquidation of Amwest Surety Insurance and its parent's filing are completely separate, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Valesco, the company has been in financial tumult for quite some time. ``The company went through a rapid deterioration when it was hit with losses in the year 2000 that they couldn't absorb,'' Frohman said. In Amwest's third quarter, ending Sept. 30, 2000, the company reported a net loss of $3,127,000, or 73 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with a net loss of $2,746,000, or 64 cents per share, from the same period a year earlier. Trading of Amwest was stopped April 17 and the company announced it was reducing its work force from 347 to 255, or 26 percent, through branch closings. Earlier this month, Amwest filed an application with the Securities and Exchange Commission to delist delist To drop a security from trading on an organized exchange. Delisting may occur for a number of reasons including failure to meet an exchange's standards or placement of a new listing on another exchange. Compare list. its common stock from the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. . The commission said Amwest had not filed all its required periodic reports, including its annual report for the period ending Dec. 31, due to its inability to complete its audited statements. Amwest also has filed an application to delist its stock from the Pacific Stock Exchange, Valesco said. In addition to financial woes, Amwest has gone through a series of management changes in recent months. Jeffrey Shonka resigned as president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Amwest Insurance Group on June 27. Shonka said he began serving as president in April 2001 to ``turn around'' the company's financial status. ``Obviously if I came in as a turnaround officer, I foresaw problems,'' Shonka said. But the wounds were already too deep for Shonka to mend, and he stepped down, leaving the president's seat to Charles Schultz, the chairman of Amwest. Shonka is now president of Far West Insurance. Despite Amwest filing for bankruptcy protection, Shonka said, ``it's still business as usual at Far West.'' On Amwest's Web site, the company has addressed a note to potential claimants that proof-of-claim forms against Amwest Surety Insurance company will not be available until October. The note also said any claimants will need to present their claims by no later than June 7, 2002. |
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