Two trust companies are owed more than $20 million by The Bank Holdings, the Reno-based company that filed a petition for bankruptcy liquidation.
The Bank Holdings was the parent company for Nevada Security Bank, which was closed by state and federal regulators in June 2010. The bank's deposits were acquired by Umpqua Bank of Roseburg, Ore.
In its bankruptcy filing on Dec. 30, The Bank Holdings said it owes $15.4 million to Corporate Trust Services and $5.1 million to Wilmington Trust.
The two companies hold capital trust pass-through securities issued in 2005 to support lending by Nevada Security Bank and by Northern Nevada Bank, a Reno institution that was acquired by The Bank Holdings.
The securities, which were commonly issued by bank holdings companies during the boom, allowed them to raise capital without diluting their shareholders' equity.
The Bank Holdings estimates its assets today are worth about $238,000 while its debt totals $20.8 million.
The company's bankruptcy filing had been long expected. Its board of directors approved the paperwork for a filing in late January 2010, saying they wanted to be ready in case state or federal regulators closed Nevada Security Bank.
The Bank Holdings, which was publicly held, lost $37.4 million in 2008, $45 million in 2009 and $4.5 million in the first half of 2010 as the real estate loans that had been its bread and butter soured during the recession.
Las Vegas attorney Richard Holley represents The Bank Holdings in its bankruptcy filing.
