Bloomberg News

Nova Financial Files to Liquidate Under Chapter 7

October 30, 2012

Nova Financial Holdings Inc. filed for bankruptcy after its banking unit was closed by regulators, making it the 47th bank to fail in the U.S. this year.

The Chapter 7 petition for the bank holding company, filed in U.S. bankruptcy court in Philadelphia, listed assets of as much as $100,000 and debt of as much as $50 million. Nova Bank had about $483 million in assets and $432 million in deposits as of June 30, according to a Federal Deposit Insurance Corp. statement.

Shareholder lawsuits “created enough ongoing uncertainty throughout the investment community that the company’s negotiations with investor groups that had expressed interest in providing new capital were unsuccessful,” the Berwyn, Pennsylvania-based company said Oct. 30 in a statement.

The Pennsylvania Department of Banking closed Nova Bank on Oct. 26, according to the FDIC, which became the receiver. The FDIC was unable to find another financial institution to take over the banking operations. Nova Bank’s failure will cost the Deposit Insurance Fund about $91.2 million, the FDIC estimated.

Nova said Oct. 30 its board decided to liquidate in bankruptcy court. The company had been following a plan to reinforce its capital base that was adopted in 2010 in conjunction with an accord with the Federal Reserve Bank of Philadelphia, according to its statement.

The case is In re Nova Financial Holdings Inc. (12-20140), U.S. Bankruptcy Court, Eastern District of Pennsylvania.

To contact the reporter on this story: Dawn McCarty in Wilmington at dmccarty@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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