Creditors Seek Ch. 7, Trustee For Colonial BancGroup

Law360, New York (December 9, 2009, 12:33 PM EST) -- A group of Colonial BancGroup Inc. creditors has asked a judge to convert the failed bank holding company's Chapter 11 case to Chapter 7, saying that there was no way to reorganize the company and that liquidating it with the help of a trustee would yield more returns for creditors.

Sixteen people filed a motion Tuesday in the U.S. Bankruptcy Court for the Middle District of Alabama asking the court to convert the case. The motion did not explain the movants' relationship to the debtor, except...
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