(Source: The Miami Herald)
By Martha Brannigan, The Miami Herald
Jun. 9--A federal bankruptcy judge blocked large investors in BankUnited Financial Corp. from trading stock or convertible debt in a bid to preserve potentially valuable tax credits belonging to the thrift holding company.
U.S. Bankruptcy Judge Laurel M. Isicoff issued the restriction on trading Monday at the request of BankUnited Financial's lead bankruptcy counsel, Mark D. Bloom of Greenberg Traurig.
The court order covers security holders with at least 4.75 percent of BankUnited Financial's class A and class B common stock, or its noncumulative convertible series B preferred stock, senior convertible notes, and 6.75 percent HiMEDS Units, which are convertible into common shares. BankUnited Financial's shares traded on the NASDAQ until they were delisted May 22. They have since begun trading on the pinksheets.
Bloom said Coral Gables-based BankUnited Financial, the former holding company for BankUnited, expects to report significant losses for fiscal 2007 and fiscal 2008, which will generate net operating loss tax carry-forwards that could be worth millions of dollars. Corporations can use such tax-loss carry-forwards to offset their federal income taxes; however, if there is a change of ownership at a company, those tax credits are in jeopardy of being lost. To avoid a "change of ownership," the company petitioned to have trading by large investors put on hold.
BankUnited Financial Corp. filed for protection from creditors May 22 a day after its main operating unit, BankUnited, was seized by federal regulators and sold to a group of private equity firms led by New York banker John Kanas.
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