Guaranty trust preferreds holder objects to plan, seeks conversion

By Caroline Salls

Pittsburgh, April 18 - Guaranty Financial Group Inc. trust preferred securities holder Tricadia Financials Restructuring Partners, Ltd. objected to the company's proposed plan of liquidation, arguing that the plan "rises and falls on a settlement" that benefits securities trustee Wilmington Trust to the detriment of all other creditors, according to an April 18 filing with the U.S. Bankruptcy Court for the Northern District of Texas.

Tricadia is asking the court to deny confirmation of the plan and immediately convert Guaranty Financial's Chapter 11 case to Chapter 7.

Tricadia said the proposed settlement distributes all of the company's material assets to Guaranty Bank's receiver and gifts a significant post-confirmation role to Wilmington Trust.

According to the objection, the plan proponents bound themselves to the settlement "without any meaningful examination of the claims that the receiver and the debtors hold against each other."

"Remarkably, both the plan and the disclosure statement say precious little regarding the claims and litigation between and among the debtors, the receiver and Wilmington Trust, much less the reasons that justify the settlement of these claims on the basis contemplated by the proposed plan," Tricadia said in the objection.

Guaranty Financial, a Dallas-based unitary thrift holding company, filed for bankruptcy on Aug. 27, 2009. Its Chapter 11 case number is 09-35582.

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