Magazine article American Banker

Ruling Clears Union Planters to Buy Trade Finance Bank

Magazine article American Banker

Ruling Clears Union Planters to Buy Trade Finance Bank

Article excerpt

Union Planters Corp. expects to enhance its trade finance capabilities now that a court decision last week has cleared the way for it to buy a Venezuelan-owned bank near Miami.

The deal would be the Memphis bank's first move outside the mid-South. "This acquisition was never a signal by us of an intention to start building a Florida retail banking franchise," said Union Planters chief financial officer Jack W. Parker. "Rather, we were attracted to this bank for what we thought would be the good fee-income potential in the trade finance business."

Union Planters, which has $11.4 billion of assets, expects to complete its $31 million acquisition of $280 million-asset Eastern National Bank by the end of June.

Judge Edward B. Davis of the Southern District of Florida ruled that the acquisition could proceed, with the proceeds to be placed in escrow until Eastern National's Venezuelan owners could reach an agreement on dividing the money.

Union Planters first announced the deal in May 1995 after six months of negotiations with Eastern National's Venezuelan owners. But Federal Reserve approval was delayed by conflicting claims to the bank's stock.

Eastern National's chairman, Juan Santaella, had been president of Bancor, a Venezuelan bank that failed in 1994. Although Eastern National and Bancor operated independent of one another, the Venezuelan government claimed an ownership interest in Eastern National after Bancor's collapse.

Judge Davis' ruling essentially allows Union Planters to proceed with the deal while deferring the ownership dispute to further litigation between the Venezuelan parties. …

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