Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Parent Company of 1st Mariner Bank Files for Bankruptcy
Author: Joel R. Glucksman
Date: February 20, 2014
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Following the mortgage crisis in 2007, many of the nation’s banks entered difficult times. One of these financial institutions – First Mariner Bank – has struggled to pull itself out of the crisis, which has now led its parent company to file for protection under Chapter 11 of the U.S. bankruptcy law in the hope that the filing would facilitate the sale of the bank.
First Mariner Bancorp filed in Baltimore’s federal court on February 10, 2014, and it agreed to sell 1st Mariner Bank, which is the largest in the region, to a group of investors who will recapitalize it with around $100 million, according to the Baltimore Sun. The hope is that the move will help the company end the struggle to pull itself out of the mortgage crisis.
Deposits, loan commitments and vendor contracts at 1st Mariner Bank will not be impacted, as officials have said the bank is not included in the bankruptcy filing. However, shareholders and creditors of the parent company will feel the impact of the bankruptcy, as it is the parent First Mariner Bancorp that is going through the Chapter 11 reorganization.
Company officials said that this type of arrangement was the best option available for the bank, and that the sale should be completed in April if approved by the court.
“For four years, the bank has been under a regulatory order that it’s been trying to satisfy, and we’ve reached the finish line,” Mark Keidel, interim president of 1st Mariner Bank, told the news source. “This agreement … puts the bank on much firmer financial ground — and quite frankly gives us the ability to be back on offense.”
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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