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First BanCorp (FBP) in San Juan, Puerto Rico, has resolved a large outstanding loan to Doral Financial (DRL) by taking on $242 million on mortgages that were used as collateral for the loan.
June 3 -
The Puerto Rican company is looking to shore up its capital levels after the FDIC invalidated about 40% of its Tier 1 capital. Management will have plenty of challenges as it looks to fill the capital hole.
May 20 -
Doral Financial (DRL) is evaluating its legal options after Puerto Rico rejected the company's request for a $230 million refund of overpaid taxes.
May 15 -
Doral, under pressure from the FDIC to boost capital or sell assets, is demanding a refund from the territory tied to certain receivables. The capital issue prompted to downgrades from several ratings agencies.
May 13
A group of Doral Financial (DRL) investors continues to mix activism and pop culture references in their efforts to support the San Juan, Puerto Rico, bank.
Doral is demanding that the Puerto Rican government return $230 million in what the bank says were tax overpayments. Doral needs the money to meet regulatory demands for higher capital. The Puerto Rican government has rebuffed those claims;
"We are increasing our stake in Doral Financial since we believe the money owed by the Puerto Rican government to Doral... will be paid in some way, shape or form," Bluestone Financial, Attiva Capital Partners and two individual investors said May 30 in the latest regulatory filing that expresses their views on the tax spat.
The group then quoted Latin musician Ricky Martin, urging the Puerto Rican government to stop "Livin' La Vida Loca." Rather, they urged island authorities to honor an agreement the investors say the government made to repay the money and focus instead on attracting investment from mainland and international interests.
"If Puerto Rico cannot honor a signed agreement with U.S. corporations, what would Japanese, European and Latin American corporations expect?" the filing said.
Pop culture references have appeared before in the investors' filings. A few weeks earlier, they referred to
The group which own about 6% of the $8.5 billion-asset company's stock also lobbed some criticism at Doral Chairman and Chief Executive Glen Wakeman, suggesting that the company look to reduce his pay. Wakeman's compensation topped $4 million in 2012, the last year such information was available.
The filing compared Wakeman's pay to that of Richard Carrion, the chairman and CEO of Popular (BPOP), who received $2.5 million in total compensation last year (and $2.7 million in 2012). Popular is much larger than Doral, with $36.7 billion in assets.
Still, the investors expressed support for Wakeman's efforts to repair the company. "We believe that Doral is making progress by selling noncore assets."
It could be some time before any other companies on the island draw the interest of the pop-savvy investors. They noted in their filing that they are "immediately postponing future investments" in Puerto Rican companies until the territory "regains lost credibility."
