Still holding shares of Tennessee Commerce Bancorp? Good luck getting rid of them now.
Officials at the Securities and Exchange Commission late last week took what looks like the final step in the closing of their books on the Franklin-based bank, which failed in January of 2012. Citing Section 12(j) of the Securities Exchange Act, they revoked the registration of each class of Tennessee Commerce stock, which last traded over the counter in late March for $0.0001.
A company that took over a bunch of loans from the failed Tennessee Commerce Bank is taking to court Doug Mathews, the 104.5 The Zone radio show host and former University of Tennessee football coach. Sandton Capital, which is pursuing a similar claim against Bristol Development Group, is looking for about $1.2 million.
Local lawyers P.K. Bramlett and Robert Bramlett and peers from New York's Rosen Law Firm on Friday filed a putative class action against Tennessee Commerce Bancorp and four current or former top executives — Art Helf, Mike Sapp, Lamar Cox and Frank Perez. On behalf of lead plaintiff Carolyn Lynn, the attorneys say, among other things, that Tennessee Commerce's execs "knowingly or recklessly" made false statements about the bank's financial health and the state of its internal controls starting with their 2008 annual report.
"During the Class Period, defendants engaged in a scheme to deceive the market and a course of conduct that artificially inflated TNCC's share price and operated as a fraud or deceit on purchasers of TNCC shares by misrepresenting the Company's financial condition and business prospects," the complaint says. "The Individual Defendants' false and misleading statements had the intended effect and caused TNCC stock to trade at artificially inflated levels throughout the Class Period."
Download the suit by clicking here. Its filing is not altogether unexpected, but the big question is how — if they win the day — shareholders will be compensated. There's not much for the Tennessee Commerce holding company to scrounge up: Its shares (Ticker: TNCC) are actually still being traded but are worth a total of $2,445.
When Republic Bank & Trust executives in January struck a deal to buy the remnants of the failed Tennessee Commerce Bank, they talked about its potential as a growth platform in the Middle Tennessee area. But since then, they've unloaded or run off much of what they acquired: In the first four months under Republic ownership, Tennessee Commerce's loan book shrank from $99 million to $52 million. That number has been whittled down even more since, coming in at $46 million on Sept. 30, less than half the amount Republic bought in January.
Republic Bancorp, the Louisville lender that in January snapped up some Tennessee Commerce Bancorp assets and liabilities, reported its nice second-quarter profit growth Thursday morning. Its numbers included some details of the Tennessee Commerce situation, chief among them is word that — after shedding $20 million in loans in Q1 — it has unloaded more of the acquired local assets since March.
From Republic’s first-quarter report: “RB&T purchased approximately $99 million in loans with a fair value of approximately $73 million. Subsequent to the Acquisition Date, the FDIC agreed to repurchase approximately $20 million of these loans at a price of approximately $17 million.”
And from its Q2 earnings release: “Overall, the contractual amount of the loans purchased reduced from $79 million as of March 31, 2012 to $52 million as of June 30, 2012.”
Federal Deposit Insurance Corp. officials have asked a Boston-based marketer of loans to unload almost $360 million of assets that used to belong to the late Tennessee Commerce Bancorp. DebtX says the loans, leases and participations are backed by various types of collateral located across the country.
SEE ALSO: Tennessee Commerce buyer ships batch of loans back to FDIC from April