Colonial BancGroup disclosure statement hearing continued to Feb. 22

By Lisa Kerner

Charlotte, N.C., Feb. 3 - Colonial BancGroup, Inc. and its interested parties were given extra time to come to an agreement on details of the company's disclosure statement.

The court continued Thursday's disclosure statement hearing to Feb. 22, according to an attorney familiar with the case. There were a total of four objections to the statement filed, said the attorney.

As previously reported, Colonial BancGroup filed an amended plan of liquidation Feb. 2 with the U.S. Bankruptcy Court for the Middle District of Alabama to tweak proposed stockholder and convenience claim treatment.

Preferred stockholders will be paid in an amount equal to the greatest of the allowed amount of any fixed liquidation preference to which holders are entitled, any fixed redemption price to which they are entitled, or the value of the interests.

Preferred stockholders will only be paid after all allowed unsecured claims and all statutorily subordinated claims are paid in full.

Common stockholders will receive no distribution and holders of convenience claims will recover 75%, compared with payment in full under the original plan.

Colonial BancGroup is the Montgomery, Ala.-based holding company for Colonial Bank. The company filed for bankruptcy on Aug. 25, 2009. Its Chapter 11 case number is 09-32303.

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