The bankruptcy reorganization plan for Anchor BanCorp Wisconsin of Madison is one step away from taking effect, the Wisconsin State Journal reported Friday. Bankruptcy Judge Robert Martin approved the proposal Friday morning after a hearing in U.S. District Court in Madison. All that’s left now is for the Federal Reserve System to approve the arrangement, and that “could happen any day,” said Van Durrer, a partner with the Skadden law firm in Los Angeles, who represented Anchor in court. Under the terms of the arrangement, Anchor BanCorp, parent of AnchorBank, will pay $49 million to settle $183 million in principal and interest owed to U.S. Bank, Bank of America and Associated Bank from a 2008 loan. It will also give the U.S. Treasury about $6 million in stock in the reorganized company to pay off $139 million owed from funds received in 2009 through TARP, the Troubled Asset Relief Program. The payments are coming from $175 million in new investment capital Anchor has amassed. Eight letters were filed with the court objecting to the bankruptcy, primarily from shareholders upset at losing their investment. The chapter 11 settlement cancels Anchor’s existing shares; new ones will be issued when the reorganization takes effect.
