Federal Deposit Insurance Corporation v. AmFin Financial Corp.
United States District Court for the Northern District of Ohio
2011 WL 2200387 (2011)
AmFin Financial Corporation (defendant) was the parent holding company of AmTrust Bank, and had entered agreements with its regulator, the Office of Thrift Supervision (OTS), requiring AmFin to submit a plan for maintaining an acceptable level of the Bank's operating capital. A year later, OTS found the Bank significantly undercapitalized and subject to corrective action; AmFin then filed for bankruptcy, OTS closed the Bank, and the FDIC (plaintiff) took over as receiver. The FDIC moved in bankruptcy court to force AmFin to immediately cure what it characterized as a capital-maintenance commitment under section 365(o) of the bankruptcy code.
Whether, under section 365(o) of the bankruptcy code, a bankruptcy trustee must immediately satisfy an obligation that merely required the debtor to submit a capitalization plan, as opposed to a full commitment to actually maintain the bank's capital.