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First NBC Bank Chapter 11 Trustee Sought

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First NBC Bank Holding’s official committee of unsecured creditors filed with the U.S. Bankruptcy Court a motion seeking the appointment of a Chapter 11 trustee.

The motion explains, “The Committee respectfully moves for appointment of a trustee pursuant to 11 U.S.C. sections 1104(a)(1) and (2) because the Debtor is rudderless and conflicted, and cannot fulfil its fiduciary duties to the Debtor’s bankruptcy estate, for at least the following two reasons: a. The Debtor’s management no longer is employed by the Debtor, leaving the Debtor’s day-to-day operations in the hands of Mr. Blake Jones, one of its directors, who by training and experience is not suited to operating the Debtor during this complex chapter 11 case. A trustee experienced in and familiar with the complex and esoteric issues that arise in bank holding company bankruptcy cases is needed to do what the Debtor has not yet begun to do – commence litigation against the Debtor’s officers, directors and former auditor, resolve potential regulatory and tax issues with the Federal Deposit Insurance Company (‘FDIC’), preserve and monetize the Debtor’s tax assets and attributes, and otherwise take control of the directionless and drifting Debtor and maximize recovery for creditors.”

In addition, “The Debtor is hopelessly conflicted and cannot maximize the value of the Debtor’s serious claims against its officers and directors. Mr. Jones has serious conflicts and cannot realistically bring suit against, among others, himself. The Debtor risks coverage disputes with its insurers if Mr. Jones tries. By its plain terms, the Debtors’ directors and officers liability insurance policies (allegedly in the amount of at least $60 million) require the Debtor’s directors, including the director who is managing the Debtor, to cooperate with the insurer in defending covered claims. Each of the directors, therefore, including Mr. Jones, is hopelessly conflicted.”

The Court scheduled a September 12, 2017 hearing on the motion.

Read more bankruptcy news.

The post First NBC Bank Chapter 11 Trustee Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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