Colonial Bank failed today and was acquired by BB&T. [Click here and here for articles.] Relevant here is the temporary restraining order entered by Southern District of Florida Judge Adalberto Jordan yesterday. The TRO can be found here and is discussed at the AM Law Litigation Daily here. Judge Jordan's TRO states:
Relations between Bank of America and Colonial soured when it came to light in late-July of 2009 that Colonial was not in compliance with the Federal Reserve’s capital requirements and was on the verge of insolvency. See Complaint at ¶¶ 18–19. Subsequent revelations indicated that Colonial was the subject of a criminal probe by the Department of Justice, in part due to accounting irregularities related to its mortgage warehouse lending division.***In its motion, Bank of America argues that the circumstances warrant the ex parte injunctive relief sought here. On this record, I agree.***
Pending the hearing and determination of the motion for preliminary injunction, Colonial Bank and the John Doe Defendants, and all persons acting under their direction or control, or in concert with them, are hereby enjoined and restrained from selling, pledging, assigning, liquidating, encumbering, transferring, or otherwise disposing of all or any portion of (a) the proceeds paid by Freddie Mac to Colonial Bank, as trustee, custodian, bailee, and agent, for certain mortgage loans and corresponding loan documents owned by Ocala Funding, LLC (”Ocala”), and (b) certain mortgage loans and corresponding loan documents delivered to Colonial Bank, as trustee, custodian, bailee, and agent, which were not purchased by Freddie Mac as set forth on the schedule annexed hereto as Schedule A to the complaint in this action.
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