BankAtlantic files suit on consents dispute against Bank of NY Mellon

By Jennifer Chiou

New York, April 28 - BankAtlantic Bancorp, Inc. filed a lawsuit on Monday in the Circuit Court in Broward County, Fla., seeking a declaratory judgment and order directing the Bank of New York Mellon, as trustee, to accept the company's offer relating to the $25.2 million principal amount of the fixed-/floating-rate capital securities of BBC Capital Statutory Trust X held by Preferred Term Securities IX, Inc., according to an 8-K filing with the Securities and Exchange Commission.

As already noted, the company said it received consents from the holders of more than two-thirds of the most-senior classes of notes issued by Preferred Term Securities IX. The consents direct the trustee to accept the offer for the fixed-/floating-rate capital securities.

As stated prior to the suit, BankAtlantic believes the consents received exceed the threshold required by the indenture to authorize Bank of New York Mellon to accept the offer for the trust preferreds, but Bank of New York Mellon has said it will not accept the tender offers in which it is involved without receiving a greater percentage of consents.

The company already had said it disagrees with Bank of New York Mellon's interpretation, adding that it would seek to pursue the acceptance of the tender offer by Preferred Term Securities IX based on the consents received.

The company previously extended its cash tender offer and consent solicitation for 12 series of non-publicly traded trust preferred securities totaling $230 million to 5 p.m. ET on May 20.

Because each series of the trust preferreds is held as part of a larger pool of securities by one or more trustees, each trustee will not act until it believes it has the requisite authority from the ultimate beneficial holders.

BankAtlantic added that there is no assurance that it will succeed with the litigation and be in a position to complete the offer, which began on Jan. 21. It was originally scheduled to end on Feb. 22 before being extended to March 22 and then April 21.

Affected securities include the following:

• $25 million of capital securities of BBX Capital Trust 2007 I;

• $5 million of floating-rate capital securities of BBX Capital Trust 2007 II;

• $25 million of floating-rate capital securities of BBC Capital Statutory Trust 2007 III;

• $25 million of floating-rate capital securities of BBC Capital Statutory Trust 2007 IV;

• $10 million of BBC Capital Trust V floating-rate preferred securities;

• $15 million of BBC Capital Trust VI floating-rate preferred securities;

• $25 million of floating-rate capital securities of BBC Capital Statutory Trust VII;

• $15 million of floating-rate trust preferred securities of BBC Capital Trust VIII;

• $10 million of floating-rate trust preferred securities of BBC Capital Trust IX;

• $50 million of fixed-/floating-rate capital securities of BBC Capital Statutory Trust X;

• $10 million of fixed-/floating-rate trust preferred securities of BBC Capital Trust XI; and

• $15 million of securities of BBC Capital Trust XII.

The company is offering $200 per $1,000 principal amount for all securities.

Notwithstanding any consents received from beneficial holders, the company already said that no trustee has tendered any trust preferred to its knowledge as of 5 p.m. ET on April 21.

The tender offer is conditioned on the receipt of consents from enough holders to approve proposed amendments to the trust preferreds.

On Feb. 12, BankAtlantic filed an S-3 shelf registration statement registering up to $75 million of securities that it may issue from time to time in an effort to explore options for raising funds needed to satisfy the financing condition to the tender offer.

Hexagon Securities is the dealer manager for the offer.

BankAtlantic Bancorp is a Fort Lauderdale, Fla., bank holding company.

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