FDIC APPROVES IN PRINCIPLE SETTLEMENT OF PENDING LITIGATION WITH FIRST CITY BANCORPORATION, INC., HOUSTON TEXAS
FOR IMMEDIATE RELEASE
The Board of Directors of the Federal Deposit Insurance
Corporation today approved in principle a settlement of the pending
litigation between First City Bancorporation of Texas, Inc., and
the FDIC in its corporate capacity and in its capacity as receiver
of the failed bank subsidiaries of First City. The 20 bank
subsidiaries were closed in October 1992 by their respective
chartering authorities and in January 1993 were sold to multiple
The FDIC and First City in December of 1993 agreed to an
arrangement under which the FDIC would advance to First City
partial recovery of amounts that First City ultimately would be
expected to be entitled to as part of the receivership process
stemming from the failures.
No funds from the Bank Insurance Fund will be expended in
connection with the settlement approved in principle today. The
FDIC as receiver of the First City banks will pay to First City an
initial distribution of the surplus from the receiverships in the
amount of $200 million. The distribution will consist of $107
million in cash and $93 million in other assets, and will be paid
following the approval of the settlementby the bankruptcy court.
Further surplus distributions will be made by the FDIC as receiver
if additional funds become available from the receiverships. Prior
to the payment of the initial distribution, all depositors and-2-
other creditors of the First City banks whose proven claims have
been allowed by the FDIC as receiver will be paid in full.
The settlement is subject to the preparation of the definitive
agreements and the approval of the bankruptcy court having
jurisdiction over First City and its assets.