AmTrust creditor seeks information from CFO related to bank failure

By Jennifer Lanning Drey

Portland, Ore., June 16 - AmTrust Financial Corp. creditor The Bancorp Bank asked the U.S. Bankruptcy Court for the Northern District of Ohio for approval to examine the company's chief financial officer and to force AmTrust to produce documents related to the failure of AmTrust Bank, according to a Tuesday filing.

Bancorp believes AmTrust and its principals, as well as insiders and agents, knowingly failed to disclose material facts related to the risks involved with its Alt-A loans, the inadequacy of loss reserves and the consequent undercapitalization of AmTrust Bank.

Bancorp said it believes AmTrust's chief financial officer Alan Presby has information related to the failure of AmTrust Bank.

Bancorp bought $2.3 million of trust preferred securities issued by a nominal trust wholly owned by AmTrust in 2005.

The creditor said the extent of misrepresentations made to investors by AmTrust will not be known unless the requested 2004 discovery motion is granted.

AmTrust Financial is the Cleveland-based holding company for AmTrust Bank. The company filed for bankruptcy on Nov. 30, 2009. Its Chapter 11 case number is 09-21323.

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