Pax Holdings Inc. has called off its deal to buy the $39 million-asset Surety Bank in Fort Worth, according to a Securities Exchange Commission filing on Tuesday by the bank's parent company.
Pax agreed in October to buy the bank from Surety Capital Corp. Now the two companies disagree over which should pay a termination fee.
Pax, which was formed last year to buy Surety Bank, sent a letter dated May 29 terminating the agreement because Surety Capital had failed to obtain shareholder approval for the sale, the filing said. Pax demanded a termination fee of $250,000, or 2.5% of the bank's common stock. But Surety Capital said in its filing that Pax should pay, because it was unable to fulfill its obligations under the agreement. The filing did not detail the unmet obligations.
In February the Office of the Comptroller of the Currency charged that Surety Capital's chairman and chief executive officer, Richard Abrams, used unsafe and unsound banking practices, and in June it barred him from the banking industry and required him to pay a $15,000 fine.
