Bankruptcy

When Banks Can?t Pay? So Far Not Much Has Happened!

By mcbride

TARP was the first government stimulus program, pushed through by President Bush, with much vocal support of VP Dick Cheney.  Now there are over 90 banks who got these cash infusions (in the form of a purchase of preferred shares of the bank?s stock) from the federal government who cannot pay the required dividend on the government?s preferred shares.  ?The statistics, compiled by SNL Financial from U.S. Treasury data, showed 91 banks and thrifts skipped the May dividend payment under the Troubled Asset Relief Program, or TARP. It was the first missed payment for 23 of the banks; for the others, it was at least their second miss.   The number of banks missing their TARP payments rose for the third straight quarter. In February, 74 banks deferred their payments; 55 deferred last November.   SNL Financial’s analysis found 20 banks have missed four or more payments since the program began in 2008, while eight banks have missed five payments.

Under the TARP program, the U.S. Treasury invested in preferred shares issued banks looking for funds. The banks were to make regular dividend payments to the Treasury, and have the right to repurchase the shares at some point in the future.?

Here is a link: http://www.cnbc.com/id/37732312

Michael

Full post as published by Texas Lawyer Blog on June 17, 2010 (boomark / email).