BankUnited Financial eyes FDIC settlement, disclosure statement hearing rescheduled

By Lisa Kerner

Charlotte, N.C., June 6 - BankUnited Financial Corp.'s hearing to approve the official committee of unsecured creditor's disclosure statement related to its plan of liquidation was not held on Monday as the company asked the court to approve a settlement with the Federal Deposit Insurance Corp.

The hearing to consider the disclosure statement will be held on July 13, according to an attorney familiar with the case.

Last week, the company asked the U.S. Bankruptcy Court for the Southern District of Florida to defer consideration of the committee's motion for approval of liquidation plan solicitation procedures to allow changes to be made to the plan to incorporate an FDIC settlement.

Monday's proposed settlement agreement between BankUnited and the FDIC, in its capacity as receiver of BankUnited (FDIC-R), is significant for creditors and bondholders because it would resolves the FDIC-R's asserted $1.467 billion capital maintenance claim, according to a court filing.

Without the resolution, or if the asserted amount would have been allowed in full, any distribution to holders of other allowed claims, or the possibility of any recovery for unsecured creditors, would have been eliminated, the filing said.

While the settlement compromises and resolves most issues, some issues remain pending among the debtors, the committee and the FDIC.

Competing plans filed

As previously reported, in April the committee filed a plan of liquidation under which all of BankUnited's assets will vest in Liquidating BankUnited, which will monetize the assets, continue litigation and make distributions to creditors.

Treatment of creditors will include:

• Administrative claims, priority claims and priority tax claims will be paid in full in cash;

• Holders of secured claims will either be paid in full in cash, receive the collateral securing their claims or have their claims rendered unimpaired;

• Holders of senior note claims and general unsecured claims will receive a share of a residual net free cash distribution;

• Holders of subordinated notes claims will receive a share of residual net free cash, subject to subordination provisions;

• BankUnited Financial Corp. preferred stock interests and common stock interests will be deemed to be canceled; and

• Holders of BankUnited Financial Services, Inc. stock interests and CRE America Corp. stock interests will receive a share of any residual net free cash remaining after all other claims have been paid in full.

Company plan

BankUnited filed a plan in November under which treatment of creditors was slated to include:

• Holders of administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Holders of secured claims will either receive the property securing their claims or the lesser of the full amount of the claim and the net proceeds of the liquidation of the property securing the claims;

• Holders of senior notes claims will receive creditor cash, liquidating trust interests and reorganized BankUnited Financial junior preferred stock.

In addition, noteholders making an eligible creditor election will also receive a share of new BankUnited common stock, provided, however, that no more than 90 creditors can receive common stock under the election;

• Holders of general unsecured claims and FDIC claims will receive a share of creditor cash, liquidating trust interests and junior preferred stock;

• Holders of BankUnited Financial Services, Inc. and CRE America Corp. unsecured claims will receive a share of cash up to the value of the applicable debtor's assets;

• The creditor cash, liquidating trust interests and junior preferred stock that would have been allocated to holders of subordinated notes claims will be redistributed in accordance with indenture subordination provisions; and

• Holders of preferred equity interests and common equity interests will receive no distribution.

BankUnited Financial, the holding company for BankUnited FSB, filed for bankruptcy on May 22, 2009. The company is based in Coral Gables, Fla. The Chapter 11 case number is 09-19940.

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