A judge yesterday said that Doral Financial Corp. could auction off its insurance arm with a $10.75 million bid by Anglo-Puerto Rican Insurance Corp. serving as the lead offer, the Wall Street Journal reported today. Bankruptcy Judge Shelley C. Chapman approved procedures for the auction of Doral Insurance Agency LLC, which Doral Financial had said would likely experience a “rapid and substantial decline” in value if it isn’t sold soon. Anglo-Puerto Rican, the lead bidder, would receive a $250,000 breakup fee if another party wins at auction, which will be held May 12 if competing bids emerge. Doral Financial, whose primary asset was Puerto Rico’s Doral Bank that failed in February, didn’t place the insurance unit into Chapter 11 when it filed for bankruptcy last month. But because about 40 percent of Doral Insurance’s commissions come from business generated by Doral Bank customers, that flow would be gone if Doral Bank is placed in receivership in Puerto Rico.
