United Western Bancorp enters bankruptcy amid receivership lawsuit

By Caroline Salls

Pittsburgh, March 5 - United Western Bancorp, Inc. filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the District of Colorado to facilitate its reorganization and move forward with a lawsuit against the Office of the Comptroller of the Currency (OCC), according to a news release.

United Western said the filing subsidiaries include Matrix Bancorp Trading, Inc., whose sole asset is the ownership of Matrix Funding Corp. Matrix is expected to seek court approval to sell its Coyote Creek real estate in Fort Lupton, Colo., during the bankruptcy proceedings.

OCC lawsuit

The company said the suit titled United Western Bank v. Office of the Comptroller of the Currency was originally filed in the U.S. District Court for the District of Columbia on Feb. 18, 2011 against the Office of Thrift Supervision (OTS) and the Federal Depository Insurance Corp. (FDIC).

The OTS was merged into the Office of the Comptroller of the Currency in late 2011, and the OCC became a substituted defendant in the case. The FDIC was dismissed from the OCC Litigation on June 24, 2011.

In addition, United Western said the court has dismissed the company and some individual plaintiffs from the lawsuit.

In the OCC litigation, United Western Bancorp subsidiary United Western Bank is seeking the return of control of the bank's assets, liabilities and operations.

The bank alleged that the OTS "acted in an arbitrary and capricious manner without due regard to law and regulation" when it appointed the FCIC as receiver for the bank on Jan. 21, 2011.

As a result, the bank claims the OCC should be ordered to return control to its board of directors and, indirectly, to the company.

The lawsuit is in a preliminary stage, according to the release.

As of Friday, the company said it and the bank were awaiting additional information from the OCC with regard to the OTS's administrative record in support of the receiver appointment.

Under court order, all discovery relative to the administrative record is to be completed by March 7, and the parties are to propose a calendar for further motions by March 9.

United Western said it expects the OCC to file a motion for summary judgment against the bank seeking dismissal of the lawsuit, and the bank plans to file a motion for summary judgment in its favor against the OCC.

Debt information

According to court documents, United Western Bancorp has $1 million to $10 million in assets and $50 million to $100 million in debt.

The company's largest unsecured creditors include:

• Matrix Bancorp Capital Trust II of Wilmington, Del., with a $12.4 million claim;

• JPMorgan Chase Bank, NA of Chicago with a $12.31 million claim;

• Matrix Bancorp Capital Trust VI of Jersey City, N.J., with a $10.31 million claim;

• Regional Diversified Funding 2004-1 Ltd. of Wilmington, Del., with a $10 million claim; and

• Matrix Bancorp Capital Trust VIII of Wilmington, Del., with a $7.73 million claim.

According to an 8-K filed with the Securities and Exchange Commission, the bankruptcy filing constituted an event of default on the company's $13.49 million credit agreement with JPMorgan Chase Bank, NA, its $10.35 million of floating-rate subordinated debt securities and its $34.10 million of junior subordinated debentures owed to unconsolidated subsidiary trusts.

The company is represented by Harvey Sender of Denver.

United Western is the holding company for a Denver community-based bank. The Chapter 11 case number is 12-13815.

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