Southeast Banking Corp. Trustee Announces Payment of Additional Distribution to Pay Creditors and Bondholders in Full.

Business Editors/Legal Writers

MIAMI--(BUSINESS WIRE)--July 31, 2002

The bankruptcy trustee for Southeast Banking Corporation today announced that he has made a further Interim Distribution of over $23 million to creditors and bondholders in the company's Chapter 7 bankruptcy case, to pay all of the timely-filed allowed claims in full, without interest accruing since the bankruptcy filing. With this payment, nearly $360 million in cash has been paid to creditors, most of whom are holders of subordinated bonds issued by Southeast over a period of several years prior to the bankruptcy filing.

The distribution was made by Jeffrey H. Beck of J Beck & Associates, Inc. of Boca Raton, the bankruptcy trustee and attorney who was appointed successor trustee in the case in April, 1998. Mr. Beck also serves as Successor Agent to the Federal Deposit Insurance Corporation as Receiver for the failed Southeast Bank, N.A. It was the seizure of Southeast Bank, N.A. and its sister institution by federal and state regulators that prompted Southeast Banking Corporation to file for Chapter 7 bankruptcy on September 20, 1991.

The bankruptcy estate had already made six prior Interim Distributions to creditors and bondholders since 1993. The present payout, previously approved by Bankruptcy Judge Paul G. Hyman, Jr., as the second installment to the Sixth Interim Distribution, leaves sufficient funds in both the Receivership and the bankruptcy estate to pay late-filed and disputed claims, anticipated costs of administration and litigation, and tens of millions of dollars in interest accrued on all allowed claims in the eleven years since the bankruptcy filing.

"We are delighted to have reached a stage in a very long case, at which all creditors with timely filed and allowed claims have received a full return of their principal," said Mr. Beck. "We now proceed with the task of recovering and clearing additional funds to pay interest that has accrued on those claims since the bankruptcy case was filed in 1991."

The assets of the Southeast bankruptcy estate in 1991 consisted of real estate and corporate investments, including the ownership of Southeast Bank, N.A., claims against third parties, claims in the receivership of Southeast Bank, N.A., tax refunds, the reversionary interest in Southeast Banking Corporation's retirement plan and other miscellaneous assets. Most of these assets have now been liquidated and the proceeds reserved or distributed. Remaining assets include real estate holdings in Jacksonville, Florida and potential unresolved third party claims.

"The creditors and the estate have been well served by a highly competent and motivated group of professionals and staff members who deserve credit for this most unusual and successful result," said Mr. Beck. "As with all substantial and successful undertakings, results are obtained by teamwork and professionalism. Such is the case in the Southeast Case as well."

Professionals employed to assist in the liquidation of these assets and administration of the bankruptcy estate have included: Mark Bloom, Hilarie Bass, John Hutton, Luis Salazar and others of the law firm Greenberg Traurig of Miami, who have acted as general counsel and prosecuted litigation matters since the estate's inception in September, 1991; Michael Josephs, Tamara McKeown, Joseph Beasley and others of the law firm Josephs, Jack, Miranda & McKeown of Miami, who have acted as special litigation counsel since 1998; Kendall Coffey, Carla Barrow and others of the law firm Coffey & Wright of Miami, who have acted as special litigation and appellate counsel since 1996; James McCarthy, Arley Finley, Gregory Taylor and others of the law firm Diamond, McCarthy, Taylor and Finley of Dallas and Austin, Texas, who have acted as special litigation counsel since 1998; Emmet Bondurant, Frank Lowery and others at the law firm Bondurant, Mixson of Atlanta, Georgia, who have acted as special litigation and appellate counsel since 1998; David Rogers, Lawson Green and others at the law firm McDermott, Will & Emery of Washington, D.C., who have acted as special employee benefits and ERISA counsel to the estate since 1992; Soneet Kapila, Maggie Smith, Sherry Bennett, Lesley Johnson and others of the accounting firm Kapila & Co. of Fort Lauderdale, who have acted as the estate's accountants and tax advisors since 1998; Stephen Busey and others of the law firm Smith, Hulsey & Busey of Jacksonville, who have acted as special litigation counsel to the estate's subsidiary companies; T. R. Hainline, Susan McDonald and others of the law firm Rogers Towers of Jacksonville, who have acted as zoning and land-use counsel to the estate's subsidiary companies; Douglas Miller, Peter Ma and others of the engineering firm of England, Timms & Miller of Jacksonville, who have acted as engineering consultants to the estate's subsidiary companies; Jerry Malcolm and others of the accounting firm PricewaterhouseCoopers of Miami, who have acted as special tax accountants for the estate since 1996; Kenneth Robinson and others of the law firm Rice, Pugatch, Robinson & Schiller of Miami, who have acted as special litigation counsel for the estate since 1996; and Craig Budner and others of Hughes & Luce of Dallas, Texas, who have acted as special litigation counsel to the estate since 1998.

Staff members employed by the estate include Daniel Owen, who has served as chief financial officer since 1998; Karen Madsen, who acted as employee benefits and retirement plan administrator from 1991 to 2001; and Marilyn Davis, who served as paralegal/administrative assistant from 1998 to 2001. Since his appointment in 1998, Mr. Beck has employed Iris Mendoza in his own office as his assistant for financial administration on the Southeast case. Previous trustees of the Southeast estate include William A. Brandt, Jr., James S. Feltman and Jules I. Bagdan, all of Miami.