Capitol Bancorp Files For Ch. 11 To Avoid FDIC Seizures

Law360, New York (August 9, 2012, 10:03 PM EDT) -- Michigan-based bank holding company Capitol Bancorp Ltd. on Thursday filed a prepackaged Chapter 11 proceeding to avoid Federal Deposit Insurance Corp. seizure of its subsidiary banks that are "dangerously close" to minimum capitalization requirements thanks to the real estate downturn.

In a petition filed in the Michigan bankruptcy court, CBC, which operates a network of individual banks in 10 states, claimed $112 million in assets and $196 million in liabilities and said a seizure of one of its banks would destroy the value held by CBC's...
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