Regulators with the Federal Deposit Insurance Corp. closed a Nova Bank unit on Oct. 26 and as a result of this closure, Nova Financial Holdings Inc. decided to file for Chapter 7 bankruptcy.
Nova announced on Oct. 30 that their board decided that liquidating their assets in a bankruptcy court will be the best options for them. The Chapter 7 bankruptcy petition was filed in the U.S. Bankruptcy Court of Philadelphia.
After the closure of the banking unit, the FDIC attempted to enlist another banking institute to receive the unit, but they were unable to. This means that the FDIC is now the receiver and that the closure may cost them more than $90 million.
Despite the bank’s progress to increase capital under a plan put in motion by the Federal Reserve Bank of Philadelphia in 2010, lawsuits filed by unhappy shareholders has made the situation more difficult.
The company attempted to settle with shareholders, but most of the settlement efforts were rejected. Other discussions on how to raise capital for the company were also rejected by interest groups.
If your business is struggling with debt, no matter the situation, you should discuss your options with experienced and knowledgeable representation. Contact the bankruptcy attorney Paula Greenway by calling (205) 324-4000 today.