Colonial BancGroup Inc. is seeking more time to control its bankruptcy as it works to resolve ownership disputes over the assets of its failed bank subsidiary.
Colonial wants a two-month extension of the period during which it alone can file a plan detailing how it will liquidate its assets and distribute the proceeds to creditors. It is contending that there is no point in filing such a plan as long as it and its creditors stake competing claims on the assets of the defunct Colonial Bank.
"Despite the debtor's progress in this Chapter 11 case, significant unresolved issues and contingencies remain impediments to the debtor's ability to propose any plan of liquidation," Colonial said Friday in court papers. The Federal Deposit Insurance Corp. was appointed receiver of the estate of Colonial's Montgomery, Ala., bank upon its collapse last August, after which Colonial filed for Chapter 11 bankruptcy protection and the FDIC sold substantially all of the bank's assets to BB&T Corp.
Since the sale, Colonial has battled the FDIC and BB&T, as well as Alabama state taxing authorities, over ownership of various assets. While Colonial waits for a bankruptcy court ruling on these disputes, it is asking the court to extend its exclusive plan-filing rights through Aug. 20. They are currently slated to expire June 18.