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Michael Terry
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Michael Terry, CFA has nearly 20 years of experience in the investment management industry focused on the analysis, investment and management of fixed income and preferred stock portfolios. Over the years, Mr. Terry has analyzed and invested in both public and private companies around the world... More
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  • Colonial Bancgroup - Money for Nothing, Loans for Free 0 comments
    Aug 13, 2009 8:51 AM | about stocks: CNB
    Colonia Bankgroup has some interesting news out today:
    Bank of America Corp. is suing Colonial Bank, the ailing Alabama lender under federal criminal investigation, for more than $1 billion in cash and loans held by Colonial and asked a federal court to bar Colonial from selling or otherwise disposing of the assets.   The lawsuit, filed today in U.S. District Court in Miami, alleges Colonial is holding the cash and loans as a custodian for Ocala Funding Inc. Ocala is a commercial-paper vehicle sponsored by Taylor, Bean & Whitaker Mortgage Corp., the 12th-largest U.S. home lender, which received funding from Colonial.  The commercial paper, or short-term IOUs, was backed by residential mortgages.  Cash sent by Freddie Mac to Colonial, which was acting as an intermediary and required to pass the money to Ocala, was never delivered, according to the lawsuit.

    Given that Colonial has said that their bank may be placed into receivership this week, I am thinking that BAC might end up being a larger creditor in what should end up as the Colonial bankruptcy.


    Disclosure: Long CNB preferreds (unfortunately)
    Stocks: CNB
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