A group of institutional and private investors has agreed to bolster Anchor BanCorp, parent of AnchorBank, with $175 million to help the struggling financial institution get out from under a mountain of debt. As a part of the agreement, Anchor BanCorp filed for Chapter 11 bankruptcy reorganization. The company owes $183 million for a 2008 loan from a group of lenders led by U.S. Bank, and $139 million to the U.S. Treasury for money obtained in 2008 through the Troubled Asset Relief Program.
If the deal is approved by a bankruptcy judge, Anchor will settle with the U.S. Bank group for $49 million and give the U.S. Treasury Department 3.3% of the stock in the reorganized company (about $6 million).
Bank business will not be affected by the action, and no employees will lose their jobs, according to reports. In fact, once complete, the reorganization will reportedly double AnchorBank’s capitalization and allow the bank to hire an additional 70 employees and add new programs over the next couple of years.
