Colonial files for chapter 11

Colonial BancGroup filed for chapter 11 bankruptcy at the US bankruptcy court for the middle district of Alabama yesterday. The filing was expected, as the bank was placed under receivership by the Federal Deposit Insurance Corporation on 14 August.

On 18 August, Standard & Poor’s downgraded the counterparty credit rating of Colonial from CC to D.

The bank had also sold most of the assets and deposits of its primary subsidiary, Colonial Bank, to BB&T.

Colonial listed total outstanding debts of $3.9 billion as of its August SEC filing.