First Mariner takes $19.13 million bid, ousted stalking horse objects

By Kali Hays

New York, April 14 - First Mariner Bancorp selected National Penn Bancshares, Inc. as its successful bidder in the auction of its subsidiary 1st Mariner Bank with a bid in the amount of $19.13 million and a replacement debtor-in-possession loan, according to a notice filed April 11 with the U.S. Bankruptcy Court for the District of Maryland.

Subsequently, the company's confirmed stalking horse bidder, RKJS Bank, objected to the sale and asked that the sale hearing be continued to April 21 from April 14, according to a motion with the court.

RKJS claims that it was the high bidder during the company's April 10 auction with a final, submitted bid exceeding National Penn's by $1 million, but that First Mariner took National Penn's as the best bid with no explanation.

"The selection of National Penn as the successful bidder is contrary to the auction procedures, which mandate that RKJS be determined to be the successful bidder if it is the highest bidder, and is contrary to the debtor's earlier statements as to how it was valuing the bids," the motion stated.

RKJS is asking for the continuation of the hearing because "it is critical that the court be informed of, and RKJS be given the opportunity to discover, the underlying reasons for the selection of Nat Penn as the successful bidder," according to the motion.

As previously reported, RKJS is a new bank formed by investors of First Mariner.

Under the stalking horse agreement, RKJS is entitled to a $1 million breakup fee if it is not the high bidder, along with a reimbursement up to $1.75 million for transaction-related fees and expenses.

First Mariner, the Baltimore-based holding company for 1st Mariner Bank, filed bankruptcy on Feb. 10. The Chapter 11 case number is 14-11952.

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