Financial Corp. of America Seeks Liquidation
Financial Corp. of America, once the parent company of American Savings & Loan, has applied for formal liquidation, it was announced Wednesday.
A motion will be filed in bankruptcy court to change the company’s petition from Chapter 11 of the U.S. Bankruptcy Code to Chapter 7, said David A. Gill, FCA’s trustee. That means that FCA will be liquidated and not reorganized.
FCA, which had its headquarters in Irvine, became a shell company last September when federal thrift regulators placed its major asset, American Savings, in receivership. FCA filed for Chapter 11 bankruptcy protection the next day. American Savings was later sold to Texas billionaire Robert M. Bass.
FCA now has only about $3 million in cash to satisfy its huge debts, including $85 million in bondholder claims and a $50-million claim from the Internal Revenue Service arising from a past tax dispute, said Richard K. Diamond, Gill’s attorney.
FCA’s shareholder value vanished when American Savings was placed in receivership. “The shareholders should not expect anything (in the liquidation),” Diamond said. “The bondholders may get some pennies on the dollar.”