The judge who blocked BankAtlantic's sale this week provided fun reading in his order — especially its portrait of Chairman and Chief Executive Alan Levan's negotiating style.
BankAtlantic Bancorp agreed in the fall to sell its thrift's branches, deposits and most of its performing assets to BB&T Corp. Delaware Court of Chancery Judge J. Travis Laster sided with investors in the company's trust preferred securities who said that the buyer should have to take their debt holdings or repay them promptly.
Levan rebuffed a more workable but less lucrative offer than it would later accept from BB&T, Laster wrote in his 57-page order. The high price Levan felt he got in a separate deal with PNC Financial Services Group Inc. for 19 BankAtlantic branches in Tampa in 2011 emboldened him to demand a lot – and Levan made no bones about.
"In a moment of probably part stupidity, part ego, I said, ‘Well, I'll sell it to you at 10% premium,'" Levan testified about his talks with PNC, the order said. "Nobody had gotten a 10% premium in this country for deposits in four years, and our other two bids were 2% and 4%."
The deal with PNC "inspired" Levan to craft a complicated deal to sell the bank that excluded certain problem assets, Laster's order said. He sought a 10% premium in the latter deal, too, the order said.
Nine companies expressed an interest, but three of those said they needed more time to consider, the order said. BB&T was the only company that met BankAtlantic's 10% premium demand, the order said.
Besides the investor issues, Laster also raised concerns about the payout Levan would have received. At closing the top three BankAtlantic executives would have received a combined $10 million in severance -- an amount greater than the company's total book value at Sept. 30, the order said.
"Through the sale transaction, Levan extracted personal consideration for himself and other insiders, moving them to the head of the line," Laster said.
Calls to Levan were not returned Thursday.