Printer Friendly

FIRST CITY BANCORPORATION OF TEXAS RECEIVES FAVORABLE COURT RULING

 HOUSTON, Sept. 23 /PRNewswire/ -- First City Bancorporation of Texas, Inc. announced that earlier this week it received a favorable court ruling on its request to limit trading of the company's Preferred B and common stock. The ruling was requested in order to preserve an estimated $331 million tax loss carryforward. U.S. Bankruptcy Court Judge Harold Abramson's order restricts investors who own, or seek to acquire, 5 percent ownership of the company's Preferred B or common stock. The restriction would prevent triggering a "change of control" which would result in the loss of a potential $116 million in future tax savings, assuming a 35 percent tax rate.
 In response to Judge Abramson's inquiry about the need to preserve these tax savings, a company official testified regarding management's estimate of the surplus due from the FDIC as receiver for the 20 former First City banks. Joe Greak, First City's tax manager, stated that analysis of certain receivership records, to the extent they were made available, reflect receivership equity of approximately $652 million. After subtracting management's estimate of loan losses to be charged against receivership assets, but without taking into account the FDIC's receivership expenses after March 1993, the company believes the surplus should be in excess of $480 million. However, the amount the company ultimately receives will depend on a multitude of factors, primarily the disposition of the remaining receivership assets by the FDIC at fair prices, the ability of the FDIC to minimize receivership costs, and the FDIC's ultimate liability under its guaranty of losses in the loan pool. First City has no control over these factors nor of the timing of any surplus distribution to the company. First City's estimate of the surplus is based on the information currently available to it and has not been confirmed by the FDIC.
 Separately, First City management stated that it expects to file a lawsuit against banking regulators on or before the statutory deadline of Sept. 24, 1993. The lawsuit will seek substantial damages from the banking regulators and equitable redress for the destruction caused by the closure of First City's banking system and subsequent actions.
 -0- 9/23/93
 /CONTACT: Suzy W. Taylor of First City Bancorporation of Texas, Inc., 713-652-1810/


CO: First City Bancorporation of Texas ST: Texas IN: FIN SU:

WB -- NY065 -- 5298 09/23/93 14:39 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 23, 1993
Words:390
Previous Article:INTERNATIONAL GAMING MANAGEMENT, INC., ANNOUNCES PLANS TO ACQUIRE OWNERSHIP INTEREST IN 'SPLASH' CASINO IN TUNICA, MISS.
Next Article:MNC FINANCIAL'S REGULATORY AGREEMENTS TERMINATED
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters