Team Financial seeks OK of trustee appointment motion compromise

By Caroline Salls

Pittsburgh, Oct. 3 - Team Financial, Inc. requested court approval of a compromised related to a motion by the U.S. Trustee for Region 20 for appointment of a Chapter 11 trustee for the company's case or conversion of the case to Chapter 7 bankruptcy, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Kansas.

Under the compromise, the U.S. Trustee's motion would be withdrawn, and the company's present restructuring/liquidation officer would be given additional authority and responsibility.

The parties to the compromise said this would avoid delay and costs related to appointment of a separate or new trustee who had to learn the background and status of the case, avoid the costs of a trustee's bond and allow Team Financial and the Federal Deposit Insurance Corp. to continue litigation concerning whether specified tax refunds are property of the estate.

The parties said the tax refunds are the principal asset of the company's case.

As previously reported, U.S. trustee Richard A. Wieland said in his motion that the Team Financial debtors had ceased day-to-day business operations and liquidated assets during the Chapter 11 proceeding.

In addition, Wieland said all the debtors' managing officers resigned during the case, leaving debtors' counsel to make decisions on behalf of the companies.

"The appointment of a Chapter 11 trustee would provide the debtors with independent management to direct the filing and content of a Chapter 11 plan," the U.S. Trustee said in his motion.

"The plan can be filed prior to a final resolution of the litigation with FDIC, and provide for how the debtors' assets will be distributed in the event that either the debtors or the FDIC prevail in the litigation."

If objections to the compromise are filed, a hearing will be held on Nov. 8.

Team Financial, located in Paola, Kan., is the financial holding company for TeamBank, NA and Colorado National Bank. The company filed for bankruptcy April 13, 2009. Its Chapter 11 case number is 09-10925.

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