Defeat Of Hostile CU Takeover Cost Members $5 Million Payout

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CHICAGO – Alliant CU has landed in new markets with the completion of its acquisition of Continental FCU, the target of the unsuccessful 2007 hostile takeover which eventually cost members of the airline employees credit union a promised $5 million payout.
Continental fended off a proposed 2007 takeover by Wings Financial CU in which the Minnesota credit union promised to pay out $5 million of Continental’s excessive capital to members after completion of the bid, which was noted for being the first non-consensual–or hostile-- merger offer among credit unions. But by the time Alliant, the one-time American Airlines employees credit union, completed its deal for Continental, losses had erased almost all of the smaller credit union’s capital and eliminated any chance of a merger dividend.
The hostile offer by Wings Financial caused such a controversy in the credit union movement that the one-time Northwest Airlines employees credit union was forced to withdraw its offer and with it the promised $5 million member payout. As a result, Continental members ended up with nothing, with the credit union piling on additional losses since then that wiped out virtually all of its capital.
Continental, a one-time $210 million credit union which serves employees of Continental Airlines and U.S. Airways, reported a $9.6 million loss for 2009 and a $9.3 million loss for 2010, as net worth declined to just $561,000 on $150 million in assets.

The Continental deal will give $7.6 billion Alliant seven additional branches in Arizona, California, Texas and New Jersey, including facilities at George Bush Intercontinental and Newark International airports, in Houston and Newark, N.J., respectively. 

CHICAGO – Airline employees credit union giant Alliant CU has landed in new markets with the completion of its acquisition of Continental FCU, the target of the unsuccessful 2007 hostile takeover which eventually cost members of the airline employees credit union a promised $5 million payout.

Continental fended off a proposed 2007 takeover by Wings Financial CU in which the Minnesota credit union promised to pay out $5 million of Continental’s excessive capital to members after completion of the bid, which was noted for being the first non-consensual–or hostile-- merger offer among credit unions. But by the time Alliant, the one-time United Airlines employees credit union, completed its deal for Continental, losses had erased almost all of the smaller credit union’s capital and eliminated any chance of a merger dividend.

The hostile offer by Wings Financial caused such a controversy in the credit union movement that the one-time Northwest Airlines employees credit union was forced to withdraw its offer and with it the promised $5 million member payout. As a result, Continental members ended up with nothing, with the credit union piling on additional losses since then that wiped out virtually all of its capital.

Continental, a one-time $210 million credit union which serves employees of Continental Airlines and U.S. Airways, reported a $9.6 million loss for 2009 and a $9.3 million loss for 2010, as net worth declined to just $561,000 on $150 million in assets.

The Continental deal will give $7.6 billion Alliant seven additional branches in Arizona, California, Texas and New Jersey, including facilities at George Bush Intercontinental and Newark International airports, in Houston and Newark, N.J., respectively.

 

 

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