Taylor Bean Files Chapter 11

Taylor, Bean & Whitaker Mortgage Corp. (TBW) has filed for relief under Chapter 11 following a series of events in recent weeks that the Ocala, Fla.-based lender says ‘crippled the company's business operation.’

On Aug. 3, TBW was suspended by the Federal Housing Administration from issuing FHA-insured loans. Shortly thereafter, Ginnie Mae and Freddie Mac suspended the company as an issuer of mortgage-backed securities and mortgage seller/servicer.

TBW appealed the Freddie Mac termination and intends to appeal the HUD and Ginnie Mae terminations later this month, but "has no way to continue normal business operations in the interim," a company statement says. About 2,000 employees have been laid off since the beginning of the month.

The company believes that these events are related to various investigations surrounding the failure of Colonial Bank, which for years was TBW's primary bank. On or about Aug. 6, approximately 100 Taylor Bean bank accounts were frozen by Colonial Bank.

"This action created myriad problems in processing borrower payments and making payments on their behalf, such as homeowner's insurance premiums and real estate taxes," TBW says.

These events also resulted in the issuance of cease-and-desist orders and other administrative proceedings by numerous state regulators.

Under Chapter 11, Taylor Bean will operate on a scaled-down basis and begin the work of recovering, restructuring and possibly liquidating its assets. The Chapter 11 case will be administered before the U.S. Bankruptcy Court in Jacksonville.

Taylor Bean also announced that the business will be directed by two newly appointed independent directors – Bill Maloney and Bruce Layman, both of whom have extensive experience in restructuring distressed businesses. This new board has appointed Neil Luria of Navigant Capital Advisors as chief restructuring officer.

The company's previous board and management team worked closely with the Office of Thrift Supervision to obtain expedited, conditional approval of Messrs. Maloney, Layman and Luria.

"This is a very complicated business, and the speed of its collapse has been stunning," said Luria in the TBW press release, adding that "Much remains to be done, but we are committed to creating and realizing the value of the company's assets."

SOURCE: Taylor, Bean & Whitaker


Please enter your comment!
Please enter your name here