The parent company of two Las Vegas Valley community banks has filed for bankruptcy protection.
Capitol Bancorp Ltd., whose subsidiaries include Bank of Las Vegas and 1st Commerce Bank in North Las Vegas, said Thursday it will seek “quick approval” from the court for its pre-packaged reorganization plan. It said the Chapter 11 filing “will not affect the operations or deposits of any of Capitol’s affiliate banks.”
Bank of Las Vegas CEO Pete Atkinson and 1st Commerce Bank CEO Jim Howard could not immediately be reached for comment Thursday night.
Lansing, Mich.-based Capitol Bancorp, which owns 13 community banks nationwide, filed its Chapter 11 case Thursday in U.S. Bankruptcy Court for the Eastern District of Michigan. As part of its reorganization, the company says it wants to raise $70 million to $115 million of new capital from investors, potentially giving them a 47 percent ownership stake.
The bankruptcy filing comes after the company’s debt holders were asked to swap their debts for ownership stakes. In case that plan fell through, debt and stock holders were also asked to vote on a Chapter 11 reorganization plan.
Capitol Bancorp posted a $45.4 million loss last year, down from its $225.2 million loss in 2010.