In Brief : Financial Corp. to Liquidate
Irvine-based Financial Corp. of America, the former holding company for American Savings, said today that it intends to convert its Chapter 11 bankruptcy to a Chapter 7 liquidating case.
Reorganization of the company as a going concern wasn’t feasible, the trustee said in a news release, repeating statements previously made by Financial Corp. officials and others.
Without American, there was little left of Financial Corp.
Bankruptcy trusteee David Gill has said it is likely that stockholders will lose their entire investments.
Financial Corp. filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Sept. 9, when the Federal Savings & Loan Insurance Corp. seized American, then the nation’s largest insolvent thrift.
American was turned over to the Robert M. Bass Group of Ft. Worth, Tex. , in exhcange for an injection of $350 million.
The government promised to provide up to $1.7 billion.
Under Bass ownership, the new American Savings is being operated as a much smaller, solvent S&L; with assets of about $15 billion.
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