Tuesday, April 12, 2011

Ex-Parent of Colonial Bank Sues BB&T for Return of $300 Million

Colonial BancGroup Inc. is suing BB&T Corp., which took over Colonial Bank after it was seized by regulators, to recover some $300 million in preferred stock in a real estate investment trust that it says was wrongly transferred BB&T, Dow Jones Daily Bankruptcy Review reported today. In a lawsuit filed on Friday, Colonial BancGroup, the former parent of Colonial Bank, sought the return of 300,000 shares of preferred stock in CBG Florida REIT Corp., an indirect subsidiary of Colonial Bank and its former parent. Colonial BancGroup says that the shares were wrongly transferred to BB&T when BB&T bought the bank's assets from the Federal Deposit Insurance Corp.