Colonial BancGroup asks court to declare ownership of CBG REIT shares

By Lisa Kerner

Charlotte, N.C., April 11 - Colonial BancGroup, Inc. filed an adversary proceeding against Branch Banking and Trust, according to an April 11 filing with the U.S. Bankruptcy Court for the Middle District of Alabama.

The company is seeking a declaratory judgment that it is the sole owner of 300,000 shares of preferred stock in CBG REIT.

Colonial BancGroup wants the court to order BB&T to turn over the shares or their value.

Alternatively, Colonial BancGroup seeks avoidance and recovery of a preference from BB&T in the amount of $300 million, the filing said.

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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