UPDATED Wednesday, August 14, 2013--6:15p.m.
MADISON--Anchor BanCorp has filed for Chapter 11 bankruptcy. They're the parent company of AnchorBank. "The bank is part of a larger holding company, so it's the holding company that has actually filed bankruptcy the bank itself has not filed bankruptcy and it's not going to file bankruptcy," explained Professor Jim Seward, of the UW's Nicholas Center for Corporate Finance and Investment Banking. "So there's really no difference between the day before and the day after."
In a letter to customers posted on the bank's website, the president and CEO says "....AnchorBank operates separately from the holding company and is not part of the chapter 11 reorganization process. In fact, customers of the bank will not notice any changes or interruptions in service as a result of the effort, which allows the bank to remain outside of bankruptcy and continue normal operations."
He also goes on to add that "This will position AnchorBank for a return to profitability and growth."
Professor Seward predicts the move will be a positive one for the bank: "Now there's $251 million that they would have owed to these creditors that can be used to create new products, open new banks, you know, hire people," he said. "So for the bank itself this is probably a very good thing, it's a very unusual outcome."
We also asked Seward about ways to monitor the health of your bank--no matter which one you use. He says there are three sources that will paint a picture of how things are going: "Credit rating agencies, state regulatory agencies and the stock market you pretty much can tell what's happening with the company," he said.
Posted Wednesday, August 14, 2013 --- 9:54 a.m.
MADISON, Wis. (AP) -- Madison-based AnchorBank says it filed for bankruptcy only after rival Associated Bank declined a deal to settle a debt by AnchorBank's parent company.
A Wisconsin State Journal report says three banks loaned Anchor BanCorp Wisconsin $116 million in $2008. With interest, the debt is now $183 million.
Anchor BanCorp Wisconsin had proposed a deal in which US Bank, Bank of America Corp. and Associated Bank would be paid back a total of $49 million. US Bank and Bank of America agreed, but Associated Bank voted against the proposal.
Anchor BanCorp has since filed for Chapter 11 reorganization. In a court filing Monday, Anchor chief executive Chris Bauer says the bank wouldn't have had to do so had Associated approved the deal.
Associated has declined to comment.
Copyright 2013: Associated Press