Capital Bancorp Ltd. on Thursday filed for bankruptcy with a prepackaged reorganization plan after failure of a proposed restructuring of the bank holding company.
In its Chapter 11 petition filed in U.S. bankruptcy court in Detroit, Capital Bancorp, which owns 1st Commerce Bank and Bank of Las Vegas, listed assets of $112.2 million and debt of $195.6 million. The company based in Lansing, Mich., also reported a net loss of $10.3 million, or 25 cents a share, for the second quarter, down slightly from the $16.4 million, or 40 cents per share, loss in the same period last year.
"Capitol continues to focus on liquidity to manage its balance sheet in the face of ongoing economic challenges and regulatory constraints," the company said in its earnings report.
Capital Bancorp in June announced a voluntary restructuring plan that asked debt holders to exchange their debt for preferred and common stock. Conditions for the offer were not met, company officials said Thursday.
Joseph Reid, chairman and CEO of Capital Bancorp, said the plan would help restore the company's "capital ratios, as well as the capital ratios of our affiliate banks, providing a more stable platform for future growth." Capital Bancorp said it's seeking to raise as much as $115 million in new equity financing, which would give potential investors 47 percent of the bank.
Calls for comment from the two Las Vegas banks were not returned.