Colonial Bancgroup granted final approval of trading restrictions

By Caroline Salls

Pittsburgh, Nov. 24 - The Colonial Bancgroup, Inc. received final court approval to restrict transfers of its stock in order to preserve net operating loss carryforwards and carrybacks and other tax attributes, according to a Monday filing with the U.S. Bankruptcy Court for the Middle District of Alabama.

Under the restrictions, any holder of at least 9.63 million shares of Colonial's stock must notify the company of its substantial equity holder status.

In addition, those equity holders must notify the court and the company within 15 days of any proposed transfer of the stock.

Colonial and its official committee of unsecured creditors would then have 10 days to object to the transfer.

If an objection is raised, the transfer cannot be made without a final, non-appealable order of the court.

Colonial Bancgroup is the Montgomery, Ala.-based holding company for Colonial Bank. The company filed for bankruptcy on Aug. 25. Its Chapter 11 case number is 09-32303.

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