Newspaper article THE JOURNAL RECORD

First Penn Corp. Files Plan for Reorganization / Calls for Liquidation

Newspaper article THE JOURNAL RECORD

First Penn Corp. Files Plan for Reorganization / Calls for Liquidation

Article excerpt

A Chapter 11 reorganization plan was filed Thursday by the trustee for First Penn Corp., holding company of Penn Square Bank which was declared insolvent in July 1982.

The plan, filed in U.S. Bankruptcy Court in Oklahoma City, calls for the liquidation of all assets held in the estate and the immediate distribution of all of the available cash to holders of allowed claims. First Penn filed bankruptcy on Sept. 3, 1982.

Cash as of Oct. 1 was equivalent to $3 million and total assets were valued at $3.59 million including a motor bank land fund which is held by the Federal Deposit Insurance Corp. and is in litigation. The FDIC has asserted setoff rights, the plan said.

Asserted claims against First Penn total $27.87 million, of which $20.2 million is allowed claims, with the exception of administrative claims.

The plan contemplates an immediate distribution of $1.55 million to holders of allowed claims. Each allowed claimant would receive about 7 cents on the dollar.

The plan would reserve $967,000 of the more than $3 million in cash for potential administrative claims, specifically trustee, attorney and accoutant fees, and a disputed FDIC interest claim of $450,000.

Of the remaining $2 million, $537,075 would be reserved for potential payment of disputed claims.

As a provision of the plan, the trustee, Kenneth Spears, would continue to pursue litigation with the FDIC regarding ownership of real estate used for the Penn Square Bank motor bank facility, ownership of state and federal income tax refunds and interest totaling $5.3 million and ownership of certain loan participations.

Other than the cash amounts, all other assets of First Penn are the subject of litigation, the plan stated.

Claims asserted against First Penn include administrative claims of $523,476 which have been previously incurred and paid. The FDIC has asserted administrative claims of approximately $450,000 based on alleged lost interest it claims it was entitled to arising out of the trustee's treatment of certain tax refunds. …

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