P.M. BRIEFING : Texas’ MCorp to File Chapter 11
MCorp, the second largest banking company in Texas, said today it will file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code because of involuntary bankruptcy petitions filed against it.
The Texas-based banking concern, which last autumn stopped making interest and principal payments on about $470 million of debt while it attempted to recapitalize, said three noteholders last week filed a petition in federal bankruptcy court in New York seeking to have MCorp liquidated involuntarily.
MCorp spokesman George A. McCane said it learned Friday that the involuntary bankruptcy petitions had been filed.
Gene H. Bishop, MCorp’s chairman and chief executive officer, said he hoped the action by a very small number of noteholders seeking to force MCorp to liquidate its holdings would not disrupt or interfere with ongoing discussions by prospective investors with the Federal Deposit Insurance Corp. on the terms of a comprehensive recapitalization plan.
Under federal bankruptcy law, the MBanks cannot be made subject to a bankruptcy petition, and MCorp’s Chapter 11 filing would supersede the Chapter 7 petition.
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