Bankruptcy Judge approves TBW settlement with FDIC
Judge Jerry Funk of the U.S. Bankruptcy Court approved a settlement between the Federal Deposit Insurance Corp. (FDIC) and Taylor Bean & Whitaker, settling a dispute over $1 billion in mortgage notes. In August 2009, the US Department of Housing and Urban Development, Ginnie Mae and Freddie Mac (FRE) suspended TBW from originating more loans. That action came after the Federal Deposit Insurance Corp. took the Alabama-based Colonial Bank, which was TBW's warehouse lender, into receivership. TBW filed for Chapter 11 bankruptcy protection at the end of that month. Since then, the company had been scaled and the new leadership had been combing through the complicated maze of financial documents. More than $1 billion of loans the company resold or transferred came under dispute. The FDIC and TBW have fought over the ownership of those loans. According to the approved settlement, the FDIC was awarded a 99% interest in 3,839 loans TBW sold to Colonial. The loans have $696 million in unpaid principal balance. TBW received 3,285 loans worth $464 million in unpaid principal balance. Write to Jon Prior.