Guaranty Financial Group Inc. sought bankruptcy protection from creditors less than a week after collapsing in the 11th-biggest bank failure in U.S. history.
The Austin company listed assets of $24.3 million and debt of $323.4 million as of June 30 in Chapter 11 documents filed last week in U.S. Bankruptcy Court in Dallas. The asset and debt figures did not include the value of Guaranty's equity interests in its units, according to court papers. Three units also sought protection.
Guaranty, the second-largest lender in Texas, with about $13.5 billion in assets and $12 billion in deposits, was closed by regulators on Aug. 21 after it collapsed under the weight of soured loans. Its banking unit was sold to Banco Bilbao Vizcaya Argentaria SA, Spain's second-biggest lender.
"Beginning in 2007, volatility in the credit and residential housing markets resulted in extensive impairment of existing mortgage-backed securities held by GFG and its subsidiaries," the company said in court papers.
After the shutdown, billionaire Carl Icahn sold 3.4 million shares of Guaranty at 12 cents to 14 cents each, according to an Aug. 25 Securities and Exchange Commission filing. The sales left Icahn with about 15 million shares, the filing showed, or about 14% of the total outstanding. The stock has plunged 98% in the past year.
Guaranty was spun off in December 2007 by Temple-Inland Inc., a paper-packaging maker, and began trading that month at $17.50. The lender has more than 150 offices in Texas and California, according to its Web site.
Guaranty has not reported financial results since the third quarter of last year when it recorded a $162 million loss on delinquent home builder loans.
The company said in July that it was unable to raise capital as demanded by regulators and probably would fail. The Office of Thrift Supervision took over board functions, directed the bank to turn itself over to the Federal Deposit Insurance Corp. and is pursuing transactions likely to wipe out shareholders, Guaranty said in a July 23 SEC filing.
The company's 20 largest consolidated creditors without collateral backing their claims are owed about $308.5 million, according to court documents.
Wilmington Trust Co., the indenture trustee, is listed as the largest unsecured creditor. The principal amount due under trust-preferred securities is $305 million.
