FDIC appeals district court's AmTrust capital maintenance opinion

By Caroline Salls

Pittsburgh, June 21 - AmTrust Bank receiver Federal Deposit Insurance Corp. has appealed a district court order related to AmTrust Financial Corp.'s obligation to maintain the bank's capital, according to a June 20 filing with the U.S. Bankruptcy Court for the Northern District of Ohio.

As previously reported, judge Donald C. Nugent ruled on June 6 that AmTrust Financial was not obligated to maintain the bank's capital after the FDIC asked the court to rule that the company made a commitment to maintain the capital by agreeing to a cease-and-desist order in November 2008.

However, the company argued that none of the documents cited by the FDIC, which also included a capital management policy submitted to the Office of Thrift Supervision and a three-year strategic business plan, contains a commitment to maintain the bank's capital.

According to the ruling, the OTS accepted a risk reduction plan from the company that "expressly disavowed any notion that [AmTrust] intended to provide any capital contributions in order to maintain the capital of the bank."

AmTrust Financial is the Cleveland-based holding company for AmTrust Bank. The company filed for bankruptcy on Nov. 30, 2009. Its Chapter 11 case number is 09-21323.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.