SAN DIEGO - HomeFed Bank said its operations were not affected by an involuntary bankruptcy petition filed recently against its parent, HomeFed Corp.
"This is a claim against the holding company, not the bank," bank president Thomas Wageman said of the action brought by a group of HomeFred Corp. bondholders. "In no way does it affect the operations of HomeFed Bank, the insurance of our client's accounts, or the safety of our depositors' funds."
Mr. Wageman pointed out that financial institutions are not subject to bankruptcy court jurisdiction.
U.S. thrift regulators have placed HomeFed Bank in their accelerated resolution program because of its failure to meet capital requirements as a result of problem loans and real estate.
The bondholders said they sued because HomeFed failed to pay $3.8 million in interest due May 15. HomeFed had announced that the Office of Thrift Supervision ordered it not to make the payment for fear it would weaken the bank.