Doral Financial (DFC), Doral Properties and the official committee of unsecured creditors filed with the U.S. Bankruptcy Court a joint motion to approve a settlement with the Federal Deposit Insurance Corporation in its capacity as receiver for Doral Bank Puerto Rico (FDIC-R) and related parties.
The motion explains, “From early in these bankruptcy cases, one of the major issues has been the treatment of the myriad claims filed by the Debtors against the Doral Bank Puerto Rico (‘Doral Bank’) receivership and by the FDIC-R against the Debtors in their bankruptcy cases. In addition, given the past corporate relationship between these entities, the Debtors and the FDIC-R also have asserted competing ownership claims to a variety of assets. Absent settlement, these claims and asset ownership disputes would result in lengthy, complex, and expensive litigation.”
The motion further notes, “The Settlement Agreement provides the Debtors’ estates with the following benefits: the settlement of the FDIC-R’s servicing-related claims and allowance of the Doral Bank POC for significantly reduced amounts, solely to the extent of: an administrative expense claim of $700,000; and an unsecured claim of $4,250,000….DFC’s entitlement to 100% of any recoveries up to $20 million on account of the Tax Assets, and 80% of any recoveries in excess of $20 million; DFC’s entitlement to 80% of any recoveries on account of the DFC Overpayment; DFC’s retention of 100% of the net proceeds of the sale of the OA Parking Lot (approximately $1.5 million); the disallowance of the Doral Recovery II POC; reservation of each of the parties’ rights with respect to the proceeds of directors and officers insurance policies historically maintained by the DFC Group; mutual releases; and cessation and dismissal of the pending litigations.”
The Court scheduled a September 7, 2016 hearing on the motion, with objections due by August 26, 2016. Read more Doral Financial bankruptcy news.
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