The sale of AmericanWest Bank (AmWest) as part of chapter 11
bankruptcy proceedings has used a novel sale structure that
avoids the target being placed into receivership. And
it’s likely the deal’s lawyers have
set the groundwork for bigger bank sales to come.
SKBHC acquired the community bank from its struggling parent
AmericanWest Bancorporation for $6.5 million pursuant to
Section 363 of the Federal Bankruptcy Code (363 Sale). The
Bankruptcy Court of Washington approved the transaction on the
condition SKBHC recapitalised the target; it did this by
injecting $185 million at closing.
"People have been considering for some time whether a
Section 363 sale might be a viable means of dealing with a bank
holding company near failure where the principal creditors are
holders of trust preferred securities of the bank holding
company," said Jeffrey Cohen, partner with Skadden Arps Slate
Meagher & Flom which acted for...