Integra bank's holding company has taken the expected step of declaring bankruptcy after federal regulators shut down the failed bank Friday.
Federal banking regulators arranged for the bank's assets to be purchased by Old National Bank, leaving Integra Bank Corp. without its main asset. The bank's failure triggered the holding company to file Chapter 7 bankruptcy Saturday in U.S. Bankruptcy Court in Evansville.
Initial filings show that Integra Bank Corp.'s debts are much larger than its assets.
Attorney Jay Jaffe of the Indianapolis firm Baker & Daniels is representing Integra Bank Corp. in the bankruptcy case.
Jaffe said it's "really, really premature" to say at this point which creditors will recover money in the case.
"That's something that's going to get sorted out as the case winds itself out," Jaffe said.
Old National is not involved with Integra Bank Corp.'s bankruptcy filing.
According to the bankruptcy filing, Integra Bank Corp. had assets of $8.2 million as of June 30. Jaffe said much of that amount is based on the book value of stock holdings and other company interests, and those assets are likely to bring in far less than book value when liquidated.
The holding company's main asset, Jaffe said, is just over $784,000 cash that was in a checking account at Integra Bank.
Total liabilities as of June 30 were about $106.6 million, with the vast majority of that held by creditors with unsecured nonpriority claims.
The majority of those liabilities come in the form of securities held by a number of institutional investors: Wilmington Trust Company, Bank of New York, U.S. Bank and LaSalle Bank.
Mike Alley serves as the holding company's president and board chairman.
Until Friday, he also was the chairman and chief executive officer of Integra Bank. Alley said he resigned Friday when the bank failed.
Alley previously worked as a Fifth Third Bank executive in the bank's Central Indiana market, and he said he was "semiretired" when he joined Integra Bank's board and became its top executive in 2009.
Alley said he will focus his time on his holding company, Patriot Investments, LLC, which is involved with a variety of business interests and investment properties.
Deborah Caruso of Indianapolis firm Dale & Eke is serving as trustee in Integra Bank Corp.'s case. She could not be reached for comment Monday.
In court filings, Baker & Daniels said it began advising Integra Bank Corp. on restructuring and bankruptcy issues in November.
Alley said even though the bank started consulting with bankruptcy attorneys months earlier, bank officials "continued to fight to the very end" in hopes of saving the company from failure.
"I genuinely think our team did everything we possibly could," Alley said.
In a letter addressed to Integra's "Shareholders and Friends," Alley said the bank reduced its expenses, restructured its investments and sold branches and loans as a way to raise additional capital. The bank also spent more than two years working with investment bankers and other advisers and meeting with "numerous investors, potential buyers and merger partners and regulators in search of a resolution."
"I feel good about the efforts. I'm disappointed in the result," Alley said.