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Cecil Bancorp Prepackaged Bankruptcy

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Cecil Bancorp filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Maryland, case number 17-19024. The Company, which operates as the holding company for Cecil Bank, is represented by Valerie P. Morrison of Nelson Mullins Riley & Scarborough. Concurrent with the Chapter 11 petition, the Company also filed a Plan of Reorganization and related Disclosure Statement.

According to the Disclosure Statement, “The Plan provides for a reorganization and restructuring of the Debtor’s capital structure in a manner designed to maximize recoveries for creditors and to enhance the financial stability of the Reorganized Debtor and the Bank. Under the Plan, the Debtor will be recapitalized with $30 million in new capital. The new investment will yield a minimum distribution of $1 million to the outstanding claims of trust preferred securities holders.”

In addition, “As part of the Plan confirmation process, the Debtor will conduct an auction of its stock in the Bank in accordance with proposed bidding procedures to determine if there are any higher and better bids for the Bank stock that will yield a greater return for the TruPS Claims. The Plan will cancel the existing common stock in the Debtor in accordance with the closing process set forth in the Plan. The Debtor will redeem and convert certain preferred stock and associated warrants, issued by the Debtor to the Department of the Treasury as part of the Capital Purchase Program, to common stock. Treasury will sell that common stock to the new investors for $880,000.”

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The post Cecil Bancorp Prepackaged Bankruptcy appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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