Bankruptcy Judge OKs Bid for Deak & Co.

A federal bankruptcy judge Tuesday approved the sale of Deak & Co., parent of one of the nation’s best-known currency and bullion dealers, to a mysterious investor group represented by a Singapore lawyer.

The major prize for the investors appears to be Foreign Commerce Bank of Zurich, Deak’s Swiss banking unit, and the entree it provides into the restricted field of Swiss banking. But, if the deal is consummated, it would also give the investors control of Deak-Perera U.S. Inc., the subsidiary that runs the coast-to-coast foreign exchange and bullion dealership.

Bankruptcy Judge Burton K. Lifland accepted a $58-million bid by Chan Cher Boon, the Singapore attorney, and rejected a competing offer of $59 million from Mensaport S.A., a Swiss company that also sought to take over Deak’s assets.

Though slightly higher, the Mensaport offer would not have provided as much immediate cash as the deal with Cher Boon, attorneys said. Cher Boon refused to discuss or identify his clients to reporters, and Lifland did not ask for that information.

Under terms of the agreement, Cher Boon’s clients are to pay $49.5 million this week to acquire Foreign Commerce Bank immediately.

Deak officials had said in court papers that the bank, though not directly involved in the bankruptcy proceedings, has been deteriorating rapidly since Deak sought protection under Chapter 11 of the U.S. Bankruptcy Code. The company said that, unless it was quickly sold, the bank--which has attracted several offers--would be essentially worthless.

The second phase of the Cher Boon deal calls for the investors to pay another $8.5 million for the remainder of Deak’s assets as soon as a plan to financially reorganize the company is in place. In this second phase of the deal, the investors would get control of Deak-Perera U.S., which, like the Swiss bank, is not directly included in the bankruptcy proceedings.