Investors in the holding company for St. Paul-based American Bank are trying to push the parent company into involuntary Chapter 11 bankruptcy reorganization, claiming it owes them $48 million.
The creditors of American Bancorporation are Alesco Preferred Funding II, XV and XVI Ltd, according to the involuntary bankruptcy petition filed in Minnesota bankruptcy court on May 1.
Neither the creditors nor Norlin Boyum, chairman of the holding company's board of directors, could immediately be reached for comment.
The claims are listed in the petition as trust preferred guarantees. Such securities usually were structured to allow deferred interest payments for up to five years, and some holding companies whose banks ran into trouble during the recession defaulted on the payments.
Russell Gaydos, American Bank's president and CEO, said the holding company's litigation with its unsecured creditors "has no impact on the bank."
Gaydos said in a statement that American Bank is performing strongly and is in solid financial condition. He said its capital ratios far exceed the FDIC's "well-capitalized" standards.
He said the bank's operations, customers and employees would not be affected by the proceedings.