The holding company for First Bank & Trust Co. of Illinois filed a Chapter 11 petition on April 29 in Chicago together with a reorganization plan to sell the bank and reduce debt at the parent (In re Northwest Bancorporation of Illinois Inc., Bankr. N.D. Ill., 15-15245, petition filed 4/29/15).
Northwest Bancorporation of Illinois Inc., the bank’s owner, sold $35 million of debt in 2001 known as trust-preferred securities, or Trups. The loan had a feature where Northwest could defer paying interest up to 20 quarters.
The recession crippled the bank subsidiary’s finances, resulting in a consent ...
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