Franchise Sales

The FDIC works with chartering authorities and federal regulators to resolve failing institutions in the least costly manner. Insured depository institutions meeting supervisory criteria can be invited to a failing institution acquisition.

At the time a failing institution is marketed, it is an open and operating entity. All aspects of marketing activities and information concerning the failing institution must be held in strict confidence. After executing a confidentiality agreement, interested bidders are granted access to failing institution information to conduct due diligence and review FDIC transaction terms. The FDIC conducts a sealed, competitive bid process and evaluates bids against FDIC’s cost of liquidation and the cost of other bids.

The resolution process usually occurs over a period of 50 to 70 days, but may be concluded more rapidly. Alternatively, solutions to the troubled condition may be found at any time during the marketing process, and the institution may not fail. A failing institution not able to improve its troubled condition is closed by its chartering authority. Once closed, the FDIC is appointed receiver for the institution and can immediately enter a Purchase and Assumption Agreement (P&A) with the winning bidder.