Albina Community Bancorp Files for Bankruptcy

American Banker
Thursday, September 18, 2014

Albina Community Bancorp in Portland, Ore., has filed for bankruptcy. Albina had been deferring interest payments to Hildene Capital Management for five years. The hedge fund invested in a collateralized debt obligation backed by Albina's debt. But the bank has been operating under a written agreement with the Federal Reserve Board that forbids it from paying its trust-preferred debt without regulatory approval. Hildene had threatened to force the company into involuntary liquidation if it defaulted. The company's board resigned as of the bankruptcy filing, which showed $7.5 million in liabilities and $1.3 million in assets. Hildene has raised the possibility of legal action against Albina's directors, as well as Beneficial State Bank, which recapitalized Albina last year.