Vineyard National Bancorp's plan faces objection by creditor FDIC

By Lisa Kerner

Charlotte, N.C., March 25 - Vineyard National Bancorp's joint plan of liquidation is being opposed by Federal Deposit Insurance Corp., as receiver for Vineyard Bank National Association, according to a Thursday filing with the U.S. Bankruptcy Court for the Central District of California.

A hearing is scheduled for April 8.

FDIC, in filing its objection, said it has been damaged in an amount in excess of $60 million.

Vineyard's plan fails to address how FDIC "will be repaid or dealt with regarding its super priority claim for avoidable and recoverable fraudulent conveyances," the filing said.

The plan also does not provide a separate and distinct class for this priority claim which does not fall into any other classes.

FDIC said it does not believe Vineyard's plan is feasible, since there appears to be only about $1 million in the estate.

"The receiver, as the largest creditor, and the one protecting the consumer depositors of the injuries caused to them, does not believe the plan should be confirmed," according to the filing.

As previously reported, in November Vineyard filed its plan of liquidation under which all of its assets will be liquidated and proceeds will be distributed to creditors by a liquidating trustee.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims and other priority claims will be paid in full in cash;

• Holders of secured claims will either be paid in full in cash or receive the property securing the claim;

• Holders of general unsecured claims will receive a share of net estate cash proceeds; and

• Holders of preferred stock interests and common stock interests will receive no distribution.

Vineyard National, the Corona, Calif., holding company for Vineyard Bank, filed for bankruptcy on July 21, 2009. Its Chapter 11 case number is 09-26401.

© 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.