Capitol Bancorp Ltd. sought bankruptcy protection in a bid to implement a debt-for-equity swap, warning that its community banks are "dangerously close" to an FDIC takeover, Dow Jones DBR Small Cap reported today. Under the company's proposed reorganization plan, holders of nearly $6.82 million outstanding in senior notes would receive stock in the reorganized company valued at $6.82 million. Holders of $151.3 million outstanding in trust preferred securities would receive new stock valued at about $50 million.
