A major New York firm headed South recently to help with the acquisition of a troubled Georgia bank.

Wachtell, Lipton, Rosen & Katz lawyers represented Columbia, S.C.-based SCBT Financial Corp. in its agreement with the Federal Deposit Insurance Corp. to assume all deposits and some of the liabilities of Community Bank & Trust, based in Cornelia.

The Georgia Department of Banking and Finance closed the bank in January, and appointed the FDIC as receiver. Community Bank & Trust was founded in 1900 and operates 36 banks in 10 Georgia counties. Based on a June 2009 FDIC summary of deposits, ranked 7^th in market share statewide.

According to a transaction overview SCBT provided in a Securities and Exchange Commission filing, the bank purchased approximately $1 billion in assets and $753 million in loans, with the FDIC assuming 80 percent of losses—which include acquired loans and foreclosed real estate—up to a threshold of $233 million. The FDIC will assume 95 percent of losses in excess of that. The filing also said SCBT assumed approximately $1.1 billion in deposits, for which the bank did not pay a premium.

Matthew M. Guest, the lead Wachtell partner for SCBT on the deal, did not return a call seeking comment. Community Bank & Trust was represented by FDIC in-house counsel.

The transaction closed Jan. 29.

Troutman Sanders is representing Taylor Bean & Whitaker Mortgage Corp. in the bank’s attempt to reclaim assets frozen by its primary bank, Colonial BancGroup. Colonial, which is the subject of several governmental investigations, filed for Chapter 11 reorganization in August and is in receivership.

Ocala, Fla.-based Taylor, Bean itself petitioned for reorganization in U.S. Bankruptcy Court for the Middle District of Florida on Aug. 24, and had a variety of troubles prior to that. In early August, the Federal Housing Administration suspended Taylor Bean’s authority to issue FHA-insured loans; then Ginnie Mae and Freddie Mac suspended the bank as an issuer of mortgage-backed securities and mortgage sales and service, transferring their servicing from Taylor Bean to other providers. As a result, the company, which was once the largest non-depository-owned mortgage lender in the United States, laid off 2,000 of its 2,400 employees. 

“The company believes that these events are related to various investigations surrounding the failure of Colonial Bank, which for years was Taylor Bean’s primary bank,” the company said in a press release. “[A]pproximately 100 Taylor Bean bank accounts were frozen by Colonial Bank. This action created myriad problems in processing borrower payments and making payments on their behalf—such as homeowner’s insurance premiums and real estate taxes.”

Tampa, Fla.-based Stichter, Reidel, Blain & Prosser is Taylor Bean’s primary Chapter 11 counsel, but Troutman Sanders has been approved as special counsel, serving, according to its application to employ, as “general outside counsel,” which includes working to unfreeze the bank’s custodial accounts, now locked in the Alabama-based Colonial’s Federal Deposit Insurance Corp. receivership.

Troutman, according to the application, has represented Taylor Bean since 2007 as litigation counsel, with representation expanding in June to include responding to allegations of default, government investigations and regulatory actions, among other things.

Partners expected to be involved in the engagement, along with their practice areas and hourly rates, include: David J. Dantzler, governmental regulatory actions, investigations and litigation ($535); Jeffrey W. Kelley, bankruptcy and litigation ($600); Ezra H. Cohen, bankruptcy ($640); Brian Lavine, governmental investigations ($575); and David W. Ghegan, corporate governance and bank regulation ($475).

As SunTrust Banks Inc. General Counsel Ray Fortin tells it, in the course of a single, hectic weekend, a phalanx of lawyers and investment bankers managed to put together the bank's recent offering of 124.2 million shares of common stock—resulting in more than $1.5 billion in new capital.

“It did move fast,” he said. “We had a shelf registration statement which permitted us to do this, and we moved it pretty quickly.”

A team of lawyers from King & Spalding, led by partner Keith M. Townsend, represented the bank. The underwriters' lead counsel was Mark J. Welshimer at Sullivan & Cromwell in New York.

The impetus for the offering was the federal government's so-called stress test on the nation's 19 largest banks, including SunTrust, to determine how they would fare if the economic situation worsens. “The Fed indicated that we needed to raise $2.2 billion in common equity,” Fortin said. “We were well capitalized, but they wanted to change the composition of capital.”

Under the terms of the stress test, completed May 7, the bank had 30 days to submit a plan to raise capital, and until Nov. 8 to carry it out. But SunTrust, which like many other financial institutions was hit with soured real estate loans and resulting lower share prices, moved much faster than that.

Fortin said the bank submitted a capital plan and in May launched an at-the-market transaction, meaning that SunTrust could release small amounts of shares into the market, an approach which ultimately yielded about $258 million. SunTrust also sold some Visa shares for a net after-tax gain of $70 million. But eventually, Fortin said, “We just decided to get it all done.”

So, he said, SunTrust executives consulted with the bank's board and with investment bankers at Morgan Stanley, Sandler O'Neill, SunTrust Robinson Humphrey and Goldman Sachs. Starting on the last Friday in May, in-house lawyers from SunTrust, with the King & Spalding team and counsel for the underwriters, put the deal together and launched the common stock offering four days later, on June 1.

“Because we were in the capital-raising mode, we had already been discussing with the underwriters and our board the various capital-raising options, so all we really did was change the methodology of how we'd do it,” he said. “We were already in the process, so that's another reason it moved relatively quickly.”

SunTrust's shelf registration statement—documents filed with the Securities and Exchange Commission that outline the basics of stock offerings a company might wish to pursue in the future—also helped speed the process. That's because when the bank decided to launch this latest offering, it did not need to start from scratch with the SEC, and instead needed only to produce a prospectus supplement to describe exactly what it was doing, Fortin said.

Fortin called the most recent stock offering a success because shares from the new offering sold for roughly what existing shares were trading for on the open market. That's a good result, he said, because normally such shares would be purchased at a discount when sold in large blocks to institutional investors. On June 1, the opening date of the new offering, shares began selling at about $13; by June 5, the last day of the offering, prices had risen to almost $17, according to Google Finance.

Now, Fortin said, SunTrust needs to raise about $100 million more to meet its obligations under the Federal Reserve's Supervisory Capital Assessment Program, known as SCAP. He said the bank was looking at a variety of ways to do that.

“We have … an exchange offer where we are offering to buy with cash some of our preferred stock,” he said. “That's outstanding, and that is actually going to produce some gains and thereby produce some capital. There's also additional discussions with the Fed as to … things that they will allow to be treated as capital, such as tax-loss carry-forwards.”

A tax-loss carry-forward, he said, allows the bank to apply tax losses in one year to earnings in another, thereby lowering its tax burden.

“We're highly confident that we are basically done,” he said of the bank's mandate to comply with the stress test. “We now are very, very, very solidly capitalized. You know we have enough capital to go through what the Fed called the most adverse scenario and still be well-capitalized. So we're in great shape.”

Shortly before noon on Tuesday, the Equitable Building, one of the city's landmark office towers, was sold for $29.5 million at auction on the steps of the Fulton County Courthouse.

The building was purchased by 100 Peachtree Street Atlanta, a limited liability corporation formed by the building's lender, Capmark Bank, for the purpose of acquiring the building, according to Sutherland Asbill & Brennan partner William G. Rothschild, who represents Capmark. There were no competing bids.

Sutherland associate Jason C. Kirkham read the auction notice and placed the winning bid for the lender.

Capmark foreclosed on the building's borrower, Equastone LLC, in early April. According to Rothschild, the loan amount outstanding is about $43.2 million.

The Atlanta firm Slutzky Wolfe & Bailey is representing a developer whose retail and movie theater complex near Hilton Head Island has fallen into foreclosure. 

Sea Turtle Entertainment LLC this month defaulted on a $23.5 million loan for its Berkeley Place shopping center in Bluffton, S.C., according to the Island Packet newspaper. Wells Fargo Bank has begun foreclosure proceedings against Sea Turtle, the Island Packet said, citing records in Beaufort County Circuit Court.

Slutzky Wolfe & Bailey commercial real estate partner Brad Wolfe is representing Sea Turtle in the matter, the paper said. Kilpatrick Stockton partner James Pulliam in Charlotte is counsel to Wells Fargo. Wells Fargo filed its complaint to initiate foreclosure on May 15.

Berkeley Place includes a movie theater and an Outback Steakhouse. The shopping center located in Bluffton, about 10 miles northwest of Hilton Head Island.

A group of Atlanta attorneys from Paul, Hastings, Janofsky & Walker advised a struggling Florida bank on its acquisition by a private equity group after it was shut down by federal regulators.

In the deal, BankUnited Financial Corp. of Coral Gables, Fla., was acquired by a consortium of private equity funds, including WL Ross & Co., Carlyle Investment Management LLC, Blackstone Capital Partners and Centerbridge Capital Partners LP. Former North Fork Bancorp Chief Executive Officer John Kanas was also an investor and will become BankUnited’s new CEO.

The WL Ross/Kanas group beat out a competing offer by Goldman, Sachs & Co. and TD Bank, according to newsletter The Deal.

BankUnited had assets of $12.8 billion and deposits of $8.6 billion as of May 2. BankUnited’s failure will cost the FDIC about $4.9 billion.

The reorganized BankUnited will retain its status as the largest banking institution with a Florida headquarters, according to the Federal Deposit Insurance Corp. It operates 86 branches primarily in south Florida.

Paul Hastings partner Walter Jospin was lead adviser to BankUnited’s board of directors. The Paul Hastings group was also regulatory and bankruptcy counsel to BankUnited’s holding company. Paul Hastings banking partner John Douglas and corporate partner Erik Belenky in Atlanta, and bankruptcy partner Richard Chesley in Chicago worked with Jospin.

Skadden, Arps, Slate, Meagher & Flom partners David Ingles and William Rubenstein in New York and William Sweet in Washington advised Kanas and WL Ross, Carlyle, Blackstone and Centerbridge. Simpson Thacher & Bartlett also advised Blackstone, Carlyle and Centerbridge. Wachtell, Lipton, Rosen & Katz also advised WL Ross.

The BankUnited deal is the second acquisition of a bank by private equity investors this year. Banks have been failing in the U.S. at a rapid pace; BankUnited is the 34^th  bank insured by the FDIC to be closed this year.

They say there’s a credit crunch, but you wouldn’t know that to look at the $775 million in loans that IntercontinentalExchange, Inc., just landed with the help of a team of lawyers from Locke Lord Bissell & Liddell.

According to an 8-K for the Atlanta-based company, which operates Internet-based marketplaces to trade futures, over-the-counter energy and commodity contracts and derivatives, the publicly-traded ICE swapped some outstanding credit facilities for the new $775 million in loans provided by a syndicate of banks. The syndicate was led by Wachovia Bank, N.A., and Bank of America, N.A.

Locke Lord partner Philip A. Cooper was lead outside counsel on the deal, working with ICE’s Associate General Counsel Andrew J. Surdykowski and Assistant General Counsel David C. Clifton, as well as Locke Lord associates Valerie Barton and Alexis Summers.

The banks were represented by partner Jeffrey A. Henson and associate Neill G. McBryde Jr. with Robinson Bradshaw & Hinson in Charlotte.

The new credit facilities provide for a 364-day senior revolving credit facility in the aggregate principal amount of $300 million, a three-year senior revolving credit facility in the aggregate principal amount of $100 million, a three-year senior term loan facility in the aggregate principal amount of $200 million and an amended senior term loan facility in the aggregate principal amount of $175 million.

Members of the bankruptcy bar in Atlanta have repeatedly told the Deal Watch blog that most of the exciting action in restructuring these days takes place outside of bankruptcy court.

Those types of deals, however, are hard to find and even harder to report, since they typically don’t involve publicly accessible court documents. And when documents can be found, attorneys who are working on the transactions are loathe to discuss them, since their clients aren’t keen to air their dirty laundry in public.

Sometimes, though, an out-of-court restructuring will bubble to the surface. That was the case with a $17 million loan workout handled by Charles J. “Chuck” Driebe of Jonesboro. Driebe is a partner, along with his son, Charles Driebe Jr., in the firm Driebe & Driebe.

Driebe was lead counsel to Deerfield Group LLC of Hampton, Ga. Deerfield renegotiated the terms of a $17 million mortgage it held on more than 200 acres in south Fulton, Clayton and Henry counties, Driebe said. Deerfield, which was in default the loan, restructured the terms with the two lenders, Palmetto Capital Corp. and Nexity Financial Corp.’s Nexity Bank.

Chamberlain, Hrdlicka, White, Williams & Martin partner Jimmy Paul advised Deerfield on issues related to bankruptcy law, Driebe said.

Cushing, Morris, Armbruster & Montgomery partners Mac Cushing and Parker Gilbert advised Palmetto Capital, according to court records.

Paul, Cushing and Gilbert did not return calls and emails seeking comment.

Nexity Bank was advised by McKenna Long & Aldridge partner Gary Marsh, with assistance from partner Jimmy Barkin and senior counsel Thomas Hall. Marsh declined to discuss his work for Nexity.

Like many banks, Nexity, of Birmingham, Ala., has been struggling due to the economic downturn. The Federal Deposit Insurance Corp. and the State of Alabama Banking Department issued a cease-and-desist order to Nexity this month, according to the Birmingham News.

TitleMax, one of the largest title-lending companies in the U.S. and a frequent advertiser on Atlanta television stations, filed for bankruptcy in Savannah on Monday.

DLA Piper partners Thomas Califano and Jeremy Johnson in New York, and Gray & Pannell partner Marvin Fentress in Savannah are representing TitleMax Holdings LLC in the Chapter 11 case in U.S. Bankruptcy Court for the Southern District of Georgia.

The bankruptcy filing was triggered by the maturity of a $165 million loan from Merrill Lynch Mortgage Capital Inc. and Fortress Investment Group LLC.

Savannah-based TitleMax reported $100 million of debts and $100 million of assets. Several affiliated companies filed for Chapter 11 simultaneous with TitleMax, including CheckMax of Tennessee and TitleMax Funding. Fentress filed a motion for the court to jointly administer the cases.

Additionally, Fentress filed a motion seeking approval for TitleMax to use its cash collateral to fund operations. If TitleMax were not able to use the cash it generates from its ongoing operations, it would be forced to cease operations, Fentress wrote.

Fentress also filed a motion seeking authorization to pay about $2.3 million in employee wages and salaries on the company’s next payroll date on Apr. 29. TitleMax employs about 1,800 people and operates more than 500 locations in eight states, according to a court filing.

One of Alabama’s largest banks recently had to scramble to raise $300 million from private investors to trigger a crucial influx of federal money. A client of Locke Lord Bissell & Liddell partner Philip Cooper is the lead investor on the deal.

Locke Lord’s client, Taylor, Bean & Whitaker Mortgage Corp., led the investor group that agreed to acquire $300 million in convertible preferred stock from Colonial BancGroup Inc. of Montgomery, Ala. Colonial Bank’s parent company needed the money in order to qualify to receive about $540 million from the U.S. Treasury’s Troubled Asset Relief Program. The agreement is pending regulatory approvals and other conditions.

Colonial Bank was hit hard by the economic downturn, and specifically the collapse of the homebuilding industry. The bank lost $880.5 million in 2008 through its exposure to Florida's real estate collapse, according to the Wall Street Journal.

Colonial Bank will convert to a federal savings and loan association if the $300 million investment is approved by federal banking regulators, according to a regulatory filing. Taylor, Bean & Whitaker already has a federal thrift license.

Taylor, Bean & Whitaker is putting up about half of the total $300 million, according to the Mobile Press-Register. About 20 other mortgage companies are contributing a total of $50 million total, and two private equity groups will invest $100 million.

The new investors would own about 75 percent of Colonial BancGroup, although Colonial would remain a standalone company. Colonial Bank is Alabama’s second-largest bank. Its chairman and chief executive is Bobby Lowder, an Auburn University trustee and influential backer of the school’s football team [photo, right].

Taylor, Bean & Whitaker, of Ocala, Fla., is regulated by the federal Office of Thrift Supervision. Taylor, Bean & Whitaker is one of the largest U.S. wholesale mortgage brokers.

Cooper is co-lead counsel on the deal, supervising a team of more than 25 Locke Lord lawyers. Partners Douglas Faucette and John Bruno in Washington are also co-leaders of the transaction with Cooper. Balch & Bingham is advising Colonial, including lawyers from its Birmingham and Mobile, Ala. offices.