Southeast Banking Corporation


 

Southeast Banking Corporation Global Settlement:

Frequently Asked Questions (FAQs)

  1. What events prompted the Global Settlement?
  2. What is the rate of post-petition interest paid on allowed claims under the Global Settlement?
  3. Will that single interest rate be applicable to all distributions of interest to be made in the case?
  4. Why after more than a decade in Chapter 7 would the case be converted to Chapter 11?
  5. Will the holders of Senior and Subordinated Notes share in distributions of post-petition interest on a pro rata basis?
  6. What other payments were provided for under the Global Settlement?
  7. When did the Bankruptcy Court consider the Global Settlement?
  8. Did I need to appear at the hearing or file any papers in order to receive future distributions from the bankruptcy estate?
  9. What impact will the Global Settlement have on distributions of post-petition interest to creditors other than the holders of Senior and Subordinated Notes?
  10. Are the terms of the Global Settlement Order binding on me?
  11. When were the payments under the Global Settlement made?
  12. How much post-petition interest am I entitled to, and how much will I receive?
  13. Will I be required to pay state and federal income taxes on payments of post-petition interest?
  14. Does the Global Settlement provide for any distribution or payment to holders of the Debtor's common stock?
  15. How can I obtain answers to other questions about the Global Settlement?

Ongoing Frequently Asked Questions and News

  1. I have heard that all allowed claims of bondholders and other creditors have been paid in full. Does that mean that there will there be any value for the common stock of SEBC coming from the bankruptcy liquidation?
  2. If the remainder of that $80 million or more in interest is paid, will the holders of SEBC common stock then receive a distribution?
  3. What if anything can be done to create value for the holders of SEBC common stock?
  4. What form of equity infusion transaction is envisioned?
  5. How can I contact the stock transfer agent to confirm that my holdings of SEBC common stock are reflected accurately on the shareholder list?
  6. Notwithstanding entry of the Trading Injunction Order, what level of trading has existed in the SEBC common stock?
  7. What is the likelihood and contemplated timing of any future distributions to bondholders and other creditors?
  8. What is the current status of cash on hand and SEBC net operating loss carryovers, and what number of shares of SEBC common stock are outstanding?
  9. What is the status of the remaining properties owned by SEBC and what happened to the sale to Liberty Properties that was approved by the Court?
  10. Is there a summary of all Interim Distributions made over the course of the case, and how much post-petition interest remains unpaid?
  11. Has the Bankruptcy Court ruled on the Trustee's Motion to Convert the case to a case under Chapter 11, and what happens next?
  12. What is the purpose behind the conversion of the case to Chapter 11?
  13. What are the details, status and timing of the proposed transaction which was discussed in the motion to convert the Southeast Banking Corporation case to Chapter 11?
  14. Now that the case has been converted, will creditors and shareholders be required to file proofs of claim or interest in order to participate in the distribution under any Chapter 11 plan?
  15. The answer to Question No. 28 above indicates that no information about the proposed transaction will be disclosed until after a deal is already struck. Should there not be some form of public competitive bidding process for the remaining assets of SEBC?
  16. As the case moves forward in Chapter 11, will the interests of shareholders be represented in the process of developing and presenting a plan of reorganization?
  17. What additional information is the Trustee in a position to disclose about the status of the investor and the proposed transaction that is intended to serve as a basis for the Chapter 11 plan?
  18. What is the precise extent of the bankruptcy estate's interest in the Jacksonville Properties described in FAQ #24?
  19. What additional information can the Trustee provide about the common stock to be issued in connection with the proposed investor transaction described in FAQ #32 above?
  20. Now that the Bankruptcy Court has authorized the Legal Representative for Holders of SEBC Common Stock to engage a financial advisor, can you explain the respective roles of the Legal Representative, the Chapter 11 Trustee and their advisors?
  21. When will you post more information about SEBC or the transaction discussed in the recent postings on the website?
  22. Has the Trustee reached a definitive agreement with the Investor for the filing of a Chapter 11 Plan, and how will the confirmation process proceed?
  23. I received in the mail or have seen on this website a Notice of Deadline for the Filing of Requests for the Payment of Administrative Claims. What is an administrative claim and who is required to file and serve a request for payment of an administrative claim?
  24. On February 9, 2009 the Bankruptcy Court entered a series of Orders which have been posted on this website. How does the bankruptcy process proceed from here?
  25. Will SEBC Holdings, LP Common Units be traded on an exchange or in the "Pink Sheets"?
  26. Will SEBC Holdings, LP pay dividends on its Common Units?
  27. Assuming that the Plan is confirmed and the Transaction contemplated in the Plan closes, how and when will current Holders of shares of SEBC Common Stock convert such shares into the SEBC Holdings Common Units to which they are entitled under the Plan?
  28. Assuming that the Plan is confirmed and the Transaction contemplated by the Plan closes, how will Holders of Senior Notes, Subordinated Notes, Claims and Series A and Series E Preferred Stock receive the Cash Distribution, Reorganized SEBC Series K Junior Preferred Stock and/or SEBC Holdings Senior and Junior Preferred Units to which they are entitled under the Plan?
  29. Now that the Bankruptcy Court has confirmed the Plan, what happens next?
  30. Has the Effective Date of the Plan occurred?
  31. What is the status of the Trustee's efforts to pursue the Transaction with the Investor and/or an alternative investor?
  32. Has the Trustee sought a further extension of the deadline for the occurrence of the Plan Effective Date?
  33. Has the deadline for the occurrence of the Plan Effective Date been extended further, and, if so, what is the status of the Trustee's efforts to pursue the Transaction with the Investor and/or an alternative investor?
  34. The extended Effective Date Deadline for the confirmed Chapter 11 Plan expired on August 31, 2009 without the Trustee having sought to further extend this deadline.  Does this mean that the Effective Date can no longer be extended?
  35. What is the current status of the Trustee's efforts to pursue a transaction with an alternative investor?
  36. The Trustee recently sought a further extension of the Effective Date Deadline under the confirmed Chapter 11 Plan through and including December 31, 2009. Is there anything to report on whether an alternate Transaction may close by that date?
  37. What are the tax status, financial position and asset status of the SEBC estate?
  38. Why has the Trustee sought a further extension of the December 31, 2009 Effective Date Deadline?
  39. What is the latest update on the Trustee's efforts to pursue an alternative transaction that could realize further value from SEBC's remaining assets and has the Trustee sought a further extension of the Effective Date of the confirmed Plan?
  40. Why has the Trustee sought a further extension of the Effective Date of the confirmed Plan?
  41. Why are quotations for shares of common stock of SEBC no longer available on the Pink OTC Markets (pinksheets.com)?
  42. What did the Trustee report to the Court at the August 17, 2010 status conference?
  43. Has SEBC's common stock been de-registered?
  44. What is the latest status of the SEBC bankruptcy case?
  45. What is the latest status of the SEBC bankruptcy case?
  46. What would need to transpire in order for stockholders to receive any distribution in the SEBC case?
  47. I am a creditor of SEBC. Now that the case has been re-converted back to Chapter 7, how does that affect my claims?
  48. I am a stockholder of SEBC. Now that the case has been re-converted back to Chapter 7, how does that affect my equity interests?
  49. I am a former employee of Southeast Bank, N.A.n How does the re-conversion of SEBC’s case back to Chapter 7 affect me?
  50. What is the latest status of the SEBC bankruptcy case?
  51. When does the Trustee expect to wind up and close the SEBC bankruptcy case, and how much does the Trustee expect to distribute in a final distribution to creditors?
  52. When will final distributions be made?
  53. Now that the Trustee’s Final Report has filed, when will final distributions be made?
  54. Will there be a distribution to shareholders of Southeast Banking Corporation?

Question 1: What events prompted the Global Settlement?

Beginning in 1993 the Chapter 7 Trustee made a series of Interim Distributions to creditors of the Southeast bankruptcy estate, including the holders of one class of Senior Notes and five different issues of Subordinated Notes.

As a result of the Sixth Interim Distribution made on or about July 31, 2002, all allowed, timely-filed general unsecured claims (including all allowed claims arising from the Senior Notes and Subordinated Notes) were paid in full, in cash, including interest through the date of the bankruptcy filing (i.e., pre-petition interest), but without interest since such date (i.e., post-petition interest).

Under the scheme of priorities established in the Bankruptcy Code, the Trustee was required next to pay those allowed claims that were filed after the bar date established by the Bankruptcy Court back in 1992, and then to pay post-petition interest on all allowed claims. In addition, the Trustee must pay ongoing administrative expenses relating to the bankruptcy case, which expenses take priority over the payment of post-petition interest. The Trustee estimated that after the resolution and payment of the late-filed claims and the payment of such administrative expenses, there will be additional funds on hand with which to pay some amount of post-petition interest to creditors.

A dispute arose between the holder of a majority of the Senior Notes and certain holders of Subordinated Notes (and their respective Indenture Trustees) regarding the effect of the subordination provisions contained in the Subordinated Note Indentures on the respective rights of Senior Noteholders and Subordinated Noteholders to receive post-petition interest, after the bankruptcy estate had paid all allowed claims in full as described above. The majority Senior Noteholder and the Senior Indenture Trustee contended that (i) holders of the Senior Notes were entitled to receive all distributions of post-petition interest that would otherwise be distributed on a pro rata basis to Subordinated Noteholders, until the Senior Noteholders received all of their post-petition interest, and (ii) for purposes of the reallocation, the post-petition interest on the Senior Notes should be calculated and compounded at the 11.25% contract rate under the Senior Indenture. The Ad Hoc Committee of Subordinated Noteholders and the Subordinated Indenture Trustee asserted that (i) the subordination provisions of the various Indentures did not apply to distributions of post-petition interest under the Bankruptcy Code, (ii) the post-petition interest on all claims should be calculated at the "legal rate" (as discussed below), not the contract rate; and (iii) they were entitled to receive distributions of post-petition interest on a ratable basis with Senior Noteholders. The Global Settlement resolved these and other important issues.

An additional dispute developed relating to the claims of the various Indenture Trustees to receive attorneys' fees and expenses and indenture trustee fees and expenses under their respective Indentures, as well as the claim of the majority Senior Noteholder and Ad Hoc Committee for reimbursement of their attorneys fees and expenses. The Global Settlement also resolved these issues, as well as a number of other issues described in the Settlement Motion posted on the Southeast website.

Question 2: What is the rate of post-petition interest paid on allowed claims under the Global Settlement?

The statute under which post-petition interest is payable speaks of the "legal rate" of interest, without specifying that rate, and does not make clear whether interest is compounded on an annual or other periodic basis. Two of the Subordinated Notes provide for floating interest rates, while the other Senior and Subordinated Notes carry fixed rates ranging from 4.75% to 11.25%. The Global Settlement provided for a uniform post-petition interest rate of 5.57% per annum through May 31, 2002 for all allowed claims, based on the statutory federal judgment rate in effect at the time the Southeast bankruptcy case was filed, and for no compounding of interest.

Question 3: Will that single interest rate be applicable to all distributions of interest to be made in the case?

Since its filing in 1991, the Southeast bankruptcy case has been pending under Chapter 7 of the Bankruptcy Code. The Global Settlement provides that the 5.57% rate will apply if the case remains pending under Chapter 7; if, however, the case were to be converted to a case under Chapter 11 of the Bankruptcy Code, the rate of interest would increase to 8% per annum from the Petition Date, and the allowed claim of each creditor eligible to receive post-petition interest shall include an amount equal to the difference between (i) post-petition interest on its allowed claim at the rate of 8% per annum through May 31, 2002 and (ii) the aggregate amount of distributions made to such creditor on account of post-petition interest during the Chapter 7 case.

Question 4: Why after more than a decade in Chapter 7 would the case be converted to Chapter 11?

At present there is no plan to convert the case to Chapter 11. If, however, the Trustee and other parties in interest are to determine that such conversion would be necessary to realize additional incremental value for creditors, the Court may be asked by separate motion to consider such conversion. The reallocation of "Chapter 11 Attributable Distributions" in a Chapter 11 case is addressed in the accompanying Summary.

Question 5: Will the holders of Senior and Subordinated Notes share in distributions of post-petition interest on a pro rata basis?

No. The Indentures governing the several issues of Subordinated Notes contain various subordination provisions which require that certain amounts owed in respect of the Senior Notes be "paid in full" prior to any payment on the Subordinated Notes. From 1994 through 1999 certain holders of the Senior and Subordinated Notes and their respective Indenture Trustees were involved in litigation and a series of appeals over the application of those provisions to the Senior Noteholders' claims for post-petition interest at the contract rate out of that portion of the Interim Distributions allocable to Subordinated Noteholders; however, it was unclear whether the disposition of that litigation resolved the issue of whether the distribution of post-petition interest on the Subordinated Notes is subordinated to distributions of post-petition interest on the Senior Notes. The Global Settlement adopted a formula under which a portion of the post-petition interest payable in respect of the Subordinated Notes is reallocated to holders of the Senior Notes until the Senior Noteholders have received, out of the distribution of post-petition interest otherwise allocable to the holders of Subordinated Notes, up to 48% of the difference between (i) approximately $13 million and (ii) the Senior Noteholders' ratable share of the distributions of post-petition interest to creditors. The effect of the subordination of the FDIC Claims on this reallocation is addressed in the accompanying Summary.

Question 6: What other payments were provided for under the Global Settlement?

In addition to the payment and reallocation of post-petition interest as described above, the Global Settlement also provided that certain of the parties who participated in the settlement negotiations would receive payment or reimbursement from the bankruptcy estate of their attorneys' fees incurred in connection with the bankruptcy case through July 31, 2002. This portion of the Global Settlement resolved an appeal pending in the District Court, in which the Senior Indenture Trustee and majority holder of the Senior Notes were seeking the payment of some $1.35 million in fees.

Under the Global Settlement, the Senior and Subordinated Indenture Trustees (but not any individual holder of Senior or Subordinated Notes) receivde certain post-petition attorneys' fees as provided under the terms of the various Indentures, and the Ad Hoc Committee of Subordinated Noteholders also received payment of attorneys' fees relating to its activity in the bankruptcy case over the past several years. However, unless the bankruptcy case is converted to a case under Chapter 11 of the Bankruptcy Code, the Indenture Trustees will give up any claim against the bankruptcy estate (but not against the distributions to Senior and Subordinated Noteholders under the terms of the applicable Indentures) for any fees and expenses incurred after July 31, 2002, and the Ad Hoc Committee will give up any claim for attorneys' fees and expenses incurred after that date as well. Any other creditor asserting a right to recover attorneys fees from the bankruptcy estate was afforded a period of time within which to file a claim for those fees, as incurred through and including July 31, 2002. However, the Chapter 7 Trustee and all other parties in interest in the bankruptcy case reserved the right to object to any such claim for fees.

Question 7: When will the Bankruptcy Court consider the Global Settlement?

The Bankruptcy Court conducted a final hearing on the Global Settlement for Monday, November 3, 2003 at 1:00 p.m., at the location specified in the Notice Order, which is posted on the Southeast website. The Notice Order also provided that any creditor or party in interest affected by the Global Settlement who desires to object must file a written Objection by not later than October 1, 2003, and serve copies of that Objection on counsel for the Trustee and other parties identified in the Notice Order so as to be received by that same date.

Question 8: Did I need to appear at the hearing or file any papers in order to receive future distributions from the bankruptcy estate?

No. You did not need to appear at the hearing or file anything with the Bankruptcy Court in order to receive future distributions of post-petition interest to which you may become entitled. If you failed to appear or object on a timely basis, you were deemed to have waived your right to be heard on the issues addressed in the Settlement Motion, and the reallocation provisions described in the Settlement Order will govern distributions of post-petition interest on the Senior and Subordinated Notes.

Question 9: What impact will the Global Settlement have on distributions of post-petition interest to creditors other than the holders of Senior and Subordinated Notes?

Creditors other than holders of the Senior and Subordinated Notes who are entitled to receive post-petition interest and whose distributions are not subject to contractual subordination provisions will also receive distributions of their pro rata shares of post-petition interest at the legal rate described in Answer No. 2 above. The reallocation provisions of the Global Settlement are intended and designed to have no impact on the post-petition interest distributions to such non-noteholder creditors.

Question 10: Are the terms of the Global Settlement Order be binding on me?

Yes. The Settlement Order has become final under the Federal Rules of Bankruptcy Procedure, its terms have become binding on the Trustee, the Indenture Trustees, all holders of the Senior and Subordinated Notes, and all other creditors asserting claims against the estate.

Question 11: When were the payments under the Global Settlement made?

The payments of post-petition attorneys' fees were made as soon as the Settlement Order became final and was no longer subject to rehearing or appeal under the Federal Rules of Bankruptcy Procedure. Payments of post-petition interest will be made on an irregular basis as the Chapter 7 Trustee may determine, based upon the availability of funds and other factors within his judgment. In order for any distributions of post-petition interest to proceed, the Chapter 7 Trustee was required first to resolve and pay all of the late-filed claims, including the FDIC Claim of $22.1 million plus interest described in the Settlement Motion and the Settlement Order, and all pending administrative expenses.

Question 12: How much post-petition interest am I entitled to, and how much will I receive?

The amount of post-petition interest payable on each claim can be calculated by applying the 5.57% annual interest rate to the amount of the claim, on a simple basis without compounding through May 31, 2002; however, the amount of the claim on which interest is calculated is reduced by the amount of each Interim Distribution made since the bankruptcy filing, with each reduction taking place on the date on which the Interim Distribution was made to the Indenture Trustees or first made available to holders of the Subordinated Notes. The Settlement Order describes the formula for reallocation of post-petition interest between holders of the Senior Notes and Subordinated Notes. The accompanying Summary (which is also posted on the Southeast website) includes a chart describing the amount of post-petition interest payable on claims arising under the Senior Notes, Subordinated Notes, and other obligations of the Debtor, based upon hypothetical distribution amounts. It is not possible at this stage to predict the total amount of such distributions, or the amount of post-petition interest that will be paid to each creditor.

Question 13: Will I be required to pay state and federal income taxes on payments of post-petition interest?

The tax consequences associated with your receipt of post-petition interest may vary depending on a number of factors. You are advised to consult with your personal tax advisor about your particular situation.

Question 14: Does the Global Settlement provide for any distribution or payment to holders of the Debtor's common stock?

No. The Bankruptcy Code affords priority to the payment of post-petition interest on all allowed claims before any distribution is made to the holders of equity securities. The Global Settlement addresses only the payment of such post-petition interest, as well as professional fees and costs incurred by the Indenture Trustees and creditors of the estate.

Question 15: How can I obtain answers to other questions about the Global Settlement?

You may post a question on the bulletin board of the Southeast Website by accessing the on-line forum through the link located on the Website. The Chapter 7 Trustee and his staff will attempt to post an answer to every question within three (3) United States business days, but cannot guarantee that every question will be answered and cannot offer legal or financial advice about any individual situation. All questions and answers posted on the forum will be available to anyone who may access the Website, so inquiries of a personal or confidential nature should be discussed with your own counsel or advisor rather than posted on the website.

You may also contact counsel for the Chapter 7 Trustee in writing or by e-mail at the addresses indicated below; however, counsel is not in a position to provide any legal advice to you or maintain the confidence of any inquiries directed to him. The best way to obtain further answers and information unique to your personal situation would be to consult with counsel of your own choosing.

GREENBERG TRAURIG, P.A.
Counsel for Jeffrey H. Beck, Chapter 7 Trustee
333 Avenue of the Americas (S.E. 2nd Avenue)
Suite 4400
Miami, Florida 33131
Telephone: (305) 579-0500


Ongoing Frequently Asked Questions and News

Question 16: I have heard that all allowed claims of bondholders and other creditors have been paid in full. Does that mean that there will there be any value for the common stock of SEBC coming from the bankruptcy liquidation?

SEBC is in a Chapter 7 bankruptcy case. In a Chapter 7 liquidation, holders of common stock are not entitled to receive any funds realized from the liquidation of assets until creditors and preferred shareholders have been paid in full the amounts to which they are entitled. Creditors are entitled to be paid the full amount of their claims, which is the amount due at the time of the bankruptcy filing in September of 1991, plus interest on those claims from the date of the bankruptcy filing until the date of payment of the full amount of their claims. While the claims of creditors have been paid in full through a series of Interim Distributions in the bankruptcy case, interest on those claims amounting to more than $130 million became due prior to the payment in full. Of that amount approximately $50 million of interest has been paid, and therefore, over $80 million of interest remains due to creditors and unpaid, all payable before any distribution can be made to holders of common stock in a Chapter 7 case.

Question 17: If the remainder of that $80 million or more in interest is paid, will the holders of SEBC common stock then receive a distribution?

First, it does not appear that the Chapter 7 bankruptcy estate has sufficient assets from which to pay the remainder of the interest to creditors and bondholders in full. In addition, at the time of the bankruptcy filing SEBC also had outstanding two series of preferred stock, each of which is similarly entitled to priority in payment or other distribution from the bankruptcy estate ahead of common stock. The remaining assets of SEBC consist of land holdings in Jacksonville, Florida. The value of such holdings is not certain as it is dependent upon the outcome of permit applications now pending before regulatory agencies and upon the results of sales efforts which will occur upon receipt of the permits. However, there is no prospect for the results of liquidation of the remaining land holdings to be sufficient to pay the remaining interest due to creditors or the amounts which would be due to satisfy preferred shareholders' entitlements. Thus, there is little or no likelihood of value for common shareholders if the SEBC case remains pending under Chapter 7 and the remaining assets are liquidated.

Question 18: What if anything can be done to create value for the holders of SEBC common stock?

The Trustee recently sought and obtained approval of the Bankruptcy Court to retain an investment banker to determine whether it may be possible to enter into a business transaction with an investor willing to invest new equity which, if accomplished, might create value for the common stock. The investment banker has been retained on a contingent fee basis, holds considerable experience in transactions of this type, and has been in contact with a number of potential investors known to be financially capable of entering into such a transaction.

Question 19: What form of equity infusion transaction is envisioned?

The form, substance and economic structure of any such transaction remain uncertain at this time, and depend entirely upon whether the efforts to attract a suitable investor will be successful. The implementation of any such transaction might require first that the bankruptcy case be converted to a case under Chapter 11, which would require the filing of a motion and a hearing in the Bankruptcy Court. In connection with any such filing, the Trustee will issue a press release that will be posted on this website, and provide other notice and a hearing in the Bankruptcy Court as required by the Bankruptcy Code and Rules.

Question 20: How can I contact the stock transfer agent to confirm that my holdings of SEBC common stock are reflected accurately on the shareholder list?

The last known shareholder list compiled by or for SEBC is dated February 4, 1989. One of the prior bankruptcy trustees for SEBC determined that there was no benefit to the estate from continuing to pay the fees typically charged by a stock transfer agent, and accordingly there has been no transfer agent for several years. The prior trustee did, however, seek and obtain a Trading Injunction Order from the Bankruptcy Court on July 7, 1994, prohibiting and enjoining the sale, trade or transfer of SEBC common and Series E Preferred Stock by any person or entity that owned, or would own after such sale, trade or transfer, 5% of the issued and outstanding shares of SEBC common stock or any amount of shares of the Series E Preferred Stock. At the direction of the Bankruptcy Court the Order was published in major metropolitan newspapers throughout the country.

Question 21: Notwithstanding entry of the Trading Injunction Order, what level of trading has existed in the SEBC common stock?

As the stock does not trade on any recognized market and there is currently no prospect for distribution to shareholders, the Trustee is not aware of the level of trading activity in the SEBC common stock. As necessary, the Trustee will seek enforcement of the Trading Injunction Order against any persons or entities who may have sold, traded, transferred or acquired any common or Series E Preferred Stock in violation of that Order.

Question 22: What is the likelihood and contemplated timing of any future distributions to bondholders and other creditors?

The Trustee has no immediate plans to make any further distribution at this time. The likely source of any such distribution would be the proceeds from a sale of the remaining properties in Jacksonville. The ultimate value of those properties, which are owned by a non-debtor subsidiary of the bankruptcy estate, will depend upon finalizing a wetlands permit application which has been pending before the Army Corps of Engineers since August of 2005. Unfortunately the Corps is not subject to any regulation governing the time frame to act on such an application; however, the Trustee expects the application to be processed within the next few months, after which the properties can be marketed and sold, most likely in the last quarter of 2007 or first quarter of 2008. At that time, the Trustee may be in a position to make a further distribution of post-petition interest to creditors and bondholders in accordance with the Global Settlement Agreement described on this website.

In addition, as reflected in Question 18 above, the Trustee recently retained an investment banker to explore and pursue a form of equity infusion transaction with an investor that could realize some additional financial benefit for the estate. At this time it is not possible to predict whether the efforts of the investment banker will be successful, whether or when any such additional value may be realized, and how the timing of any such transaction may affect the disposition of the Jacksonville properties.

Question 23: What is the current status of cash on hand and SEBC net operating loss carryovers, and what number of shares of SEBC common stock are outstanding?

The Trustee has the following approximate cash on hand as of April 30, 2007:  

Southeast Banking Corporation:     $6.1 million

Southeast Bank, N.A.                   $10.8 million  

The net operating carryover of SEBC as of December 31, 2005, was $801,586,099.  According to SEBC's 10Q filing for the fiscal year ended December 31, 1990, there were 34,329,064 million shares of common stock outstanding as of that date.

Question 24: What is the status of the remaining properties owned by SEBC and what happened to the sale to Liberty Properties that was approved by the Court?

SEBC owns several companies which own outright or interests in several parcels of real estate in Jacksonville, Florida. They are referred to as the Southwest Quadrant and Belfort properties and will be addressed separately below.

Southwest Quadrant Property

Through wholly owned subsidiaries SWQ Properties, Inc. and Southeast Properties, Inc. a 70% interest was held in undeveloped residential and commercially zoned acreage located south of J.T. Butler Boulevard and west of Southside Boulevard in Jacksonville. This property has been referred to over the period of ownership by the estate's subsidiaries as the "Southwest Quadrant" property. As of the appointment of the current successor Trustee in 1998, a settlement had just been reached and approved by the Bankruptcy Court in long standing litigation with the co-owners of the property. Since 1998, the Trustee has engaged in a significant and orderly sequence of steps to realize the full potential of the Southwest Quadrant property regarding zoning, planning, access and wetlands issues.

First, after engaging planning and engineering firms and after engaging the local co-owners of the property for management and oversight assistance, the Trustee successfully moved to rezone and change land use plan treatment of this property to categories commensurate with the highest and best use of the properties. Then, because of steps taken by local authorities which, it was believed, had the effect of inappropriately restricting access to the Southwest Quadrant property, the Trustee initiated litigation with the Jacksonville Transportation Authority ("JTA") over access issues. This litigation was settled after Bankruptcy Court approval, with the agreement by the JTA to compensate the estate's subsidiaries and their co-owners with a combination of payment of $2.25 million and the construction of an urban 4 lane divided roadway traversing the Southwest Quadrant property providing excellent access. In addition to the cash and roadway, the JTA agreed to allow the estate's subsidiaries and co-owners to utilize the construction costs over the Southwest Quadrant property as a means of obtaining a credit with local authorities toward what are called "concurrency" impact fees that would otherwise be due upon the development of the property. Using this right, the Trustee negotiated a "Fair Share" impact fee credit agreement with the City of Jacksonville for a credit in excess of $5 million toward such concurrency impact fees. The roadway, which is estimated to have cost well in excess of $10 million was partially completed in July 2005.

Because of the then strength of the residential market, the lack of wetlands issues on the residential parcel at the Southwest Quadrant and the partial completion of the roadway, the Trustee determined to sell the residential parcel at the Southwest Quadrant. In July 2005, the Trustee was able to sell the residential parcel of approximately 32.5 upland acres for $400,000 per acre or $13 million (for the interest of both the estate's subsidiaries and its co-owners) to D.R. Horton Homes.

In addition to monitoring the completion of the balance of the JTA roadway, the next step in the sequence of readying the remainder of the property for development and sale was the completion of plans for development and sale of the remaining acreage of the Southwest Quadrant property coupled with efforts to obtain a permit to fill certain of the wetlands areas of the property. In order to prepare for the requirements anticipated to be imposed for obtaining this wetlands fill permit, the Trustee sought and obtained Bankruptcy Court approval to purchase 110 "mitigation credits" from an appropriate regional mitigation bank. Mitigation credits represent the commitment to convert upland acreage to wetlands within the same geographic area and water basin. The Trustee, utilizing the services of engineers and environmental consultants, filed in the summer of 2005, applications with the local water management district, the St. Johns River Water Management District and with the US Army Corps of Engineers, for permission to fill certain wetland areas within the Southwest Quadrant property. The amount of upland acreage that will be available to be developed and sold will depend upon the outcome of such permit applications to the regulatory authorities. A permit was approved in early April 2007 by the local water management district. The US Army Corps of Engineers continues to process the application. A decision is expected in the next few months.

The JTA roadway was completed in late 2006. In addition, a sale had been negotiated in late 2006 with Liberty Properties, Inc. for the sale of a parcel adjacent to the residential property sold to D.R. Horton. The buyer was to use the property to construct a facility to be leased to the US General Services Administration and was subject to the buyer and this site being selected by that agency. The sale was conditioned upon the issuance of the wetlands permit sufficient to deliver to Liberty Properties approximately 11 upland acres for the construction of the anticipated facility. Unfortunately, the sale was cancelled by the buyer within the time period it was permitted to do so under the contract of sale. The Trustee believes that this was based, largely, on the fact that the wetlands permit had not been issued by both the local authority and the Army Corps of Engineers by the time a decision had to be made for the site selection for the anticipated facility.

As the outcome of the permit application process nears a close and the outcome can be anticipated, the Trustee will actively prepare the balance of properties for development and sale. As indicated, there is a wide range of the amount of upland acreage that will be available for development or sale which depends upon the final outcome of the permit application. That range is between 40 and 70 upland acres. The 110 mitigation credits are still owned and a portion or all of them will be used to meet the requirements of the regulatory agencies in the conditions of the permit to be obtained for the Southwest Quadrant property and the Belfort property discussed below. Any unused credits will be resold. It is anticipated that this property and the mitigation credits will either be sold outright or will be included in a development venture within the next year.

Belfort Property

Through Second Pioneer Corporation, a wholly owned subsidiary of First Pioneer Corporation, a wholly owned subsidiary of SEBC, a 100% interest is held in 7.32 acres of undeveloped commercially zoned land at the intersection of Skinner Parkway and Salisbury Road in Jacksonville, Florida referred to as the "Belfort" property. Since the current Trustee's appointment, marketing efforts have proceeded with several active offers and a sale contract approved by the Court. Unfortunately, such contract offers and approved contract were terminated by buyers for a number of reasons. The most important reason was the existence of wetlands on the property which would impair the use of the property for its highest and best use.

The Trustee determined that the full value of the Belfort parcel would not be obtained unless the wetlands issues there were properly addressed. Thus, the Trustee employed management assistance on the property and employed engineers and environmental consultants to seek a permit to fill the wetlands on the parcel from the local water management district, the St. Johns River Water Management District, and from the US Army Corps of Engineers. The Army Corps of Engineers has approved the application for permit. Additional information as requested has been provided to the water management district and its approval is anticipated in the coming months.

As with the Southwest Quadrant property, as the permit process winds to a close, the Trustee is preparing to actively pursue development and sale of the Belfort parcel. It is anticipated that this property will be sold outright or will be included in a development venture within the next year.

Question 25 (posted August 17, 2007):  Is there a summary of all Interim Distributions made over the course of the case, and how much post-petition interest remains unpaid?

Yes.  Our financial advisors have prepared a Summary of Distributions to Bondholders and Other Creditors, which you may access by clicking on the foregoing link.  The Summary reflects the aggregate amounts of claims allowed, post-petition interest accrued, and payments made to the holders of Senior and Subordinated Debt and to other Creditors in each of the nine Interim Distributions, including the amounts paid in respect of the Subordinated FDIC Claims and 48% Guarantee Reserve as required by the Global Settlement Order.  The Summary also reflects the post-petition interest that remains unpaid for each of the foregoing creditor groups.  Note, however, that in accordance with the Global Settlement Order the Summary calculates post-petition interest at the rate of 5.57%, and that if the case is converted to a case under Chapter 11 the effective interest rate may be adjusted and recalculated as provided in the Global Settlement Order or a Chapter 11 Plan. 

Question 26 (posted September 21, 2007): Has the Bankruptcy Court ruled on the Trustee's Motion to Convert the case to a case under Chapter 11, and what happens next?

Yes. The Court granted the Motion to Convert the Case at a hearing held on September 11, 2007, and issued an Order Granting Motion to Convert Case to Chapter 11 on September 17, 2007. The Court also approved a request at the September 11 hearing that a Chapter 11 Trustee be appointed by the United States Trustee, and entered an Order Granting Motion to Appoint Trustee on September 17, 2007 as well. The United States Trustee has announced that Jeffrey H. Beck will be appointed as Chapter 11 Trustee.

It is anticipated that the United States Trustee will decide whether to appoint an official committee of creditors and a separate committee of equity holders, or a representative for equity holders. In his capacity as Chapter 11 Trustee, Mr. Beck will continue to work with the proposed investor and any such committee, committees, and/or representative to finalize the terms of the transaction which will serve as the basis for a Chapter 11 Plan. Once those terms are finalized the Chapter 11 Trustee will file the Plan, along with an accompanying Disclosure Statement which must be approved by the Bankruptcy Court as containing adequate information before votes can be solicited to accept the Plan. As soon as a Disclosure Statement and Plan are filed, additional information will be posted on this website.

Question 27 (posted September 21, 2007): What is the purpose behind the conversion of the case to Chapter 11?

As previously reported, over the past several months the Trustee and his professionals have been exploring the possibility of a business transaction that would serve as the basis to reorganize Southeast Banking Corporation ("SEBC") through a Chapter 11 Plan. With the conversion to Chapter 11, the Trustee is now in a position to propose and seek confirmation of such a Plan.

The aim of the Chapter 11 Plan will be to facilitate an infusion of new capital into SEBC, continue the existence of SEBC (or a portion of it) in the financial services industry (not including banking) in which it and its affiliates had participated, allow SEBC to utilize certain of its remaining assets (including certain tax attributes), and create a modest amount of additional value not only for bondholders and other creditors, but possibly also for the holders of SEBC Preferred and Common Stock.

Toward that objective, the Chapter 7 Trustee sought and obtained approval of the Bankruptcy Court to retain an investment banker, Structured Capital Solutions, LLC ("SCS"), to determine whether it may be possible to enter into a business transaction with an investor willing to invest new capital to facilitate the reorganization. The Trustee then proceeded to enter into a non-binding term sheet with a well-financed and legitimate institutional investor, subject to provisions of a confidentiality agreement pending completion of the investor's due diligence, that provided a basis for conversion of the case to Chapter 11.

While the investor proposal requires that the transaction be implemented through confirmation of a Chapter 11 Plan, the ultimate form of the Plan and the potential benefits for all parties in interest has yet to be finalized. The more specific details of the transaction, along with the treatment of each class of SEBC creditors and shareholders will be disclosed in the Plan and detailed Disclosure Statement to be filed in due course. As required by the Bankruptcy Code and Rules, the Plan will be subject to approval by vote of SEBC creditors and shareholders as well as the Bankruptcy Court.

Question 28 (posted October 16, 2007): What are the details, status and timing of the proposed transaction which was discussed in the motion to convert the Southeast Banking Corporation case to Chapter 11?

Because of confidentiality restrictions, there is no more additional information to disclose at this point than is indicated in the recent pleadings (motion to approve employment of SCS, as investment banker, and motion to convert to chapter 11), and elsewhere on this website.

As previously stated, the assets of the Southeast Banking Corporation estate (including its non-bankrupt subsidiaries) currently consist of cash; an operating history in financial services and financial investments; registered marks and related intellectual property; ownership through subsidiaries of undeveloped land in Jacksonville, Florida; and existing tax attributes, including accumulated net operating loss carryovers. The Chapter 7 Trustee executed a non-binding letter of intent with a highly qualified institutional investor to enter into a transaction that would bring SEBC out of bankruptcy through a Chapter 11 plan, and on the basis of that letter, moved successfully to convert the case to Chapter 11. The investor has engaged an accounting firm and counsel to complete due diligence and to propose and negotiate deal documents. If effectuated, the transaction would bring modest additional value to creditors and a modest amount of value to existing preferred and common shareholders. The proposed transaction does not involve reopening a bank or engaging in retail banking activity.

The letter of intent contains confidentiality provisions that preclude the Chapter 11 Trustee from disclosing any additional details until we are in a position to file a Chapter 11 plan and related disclosure statement. The Trustee will file a plan and disclosure statement if and when a definitive agreement is signed with the institutional investor, and seek approval of the disclosure statement and confirmation of the plan in accordance with the requirements of the Bankruptcy Code. The Chapter 11 Trustee and his professionals do not control the timing or completion of the investor's due diligence, nor the final form of agreement, and cannot predict whether and when that process will be completed.

The Trustee anticipates that as soon as a final form of agreement is signed, a Chapter 11 plan and disclosure statement disclosing the identity of the proposed investor and the details of the proposed transaction will be filed. The plan and disclosure statement will also describe the treatment of, and value of the transaction for each class of SEBC creditors and shareholders created under the plan. The Bankruptcy Court will issue an order setting forth the dates of hearings and other relevant deadlines arising in connection with the disclosure and plan confirmation process. Copies of that order, along with the disclosure statement, plan and other relevant court documents, will be posted to this website.

Question 29 (posted October 25, 2007):  Now that the case has been converted, will creditors and shareholders be required to file proofs of claim or interest in order to participate in the distribution under any Chapter 11 plan?  

The answer is different for creditors than for shareholders.  

As for creditors, shortly after the commencement of the Chapter 7 case the Bankruptcy Court issued a Notice establishing a bar date of February 10, 1992 for the filing of proofs of claim.  More than 1,135 proofs of claim were filed, and after an extended period of review, negotiation and, in some cases, objection to disputed claims, a total amount of $384 million in unsecured claims of bondholders and creditors were allowed.  That bar date is long past, and bondholders and creditors are not required to re-file proofs of claim in order to participate in any distribution under a Chapter 11 plan.  

As for shareholders, the Notice referenced above did not establish any bar date for the filing of proofs of interest.  As it is now contemplated that any Chapter 11 plan will include some modest recovery for the holders of preferred and common stock, the Trustee will seek either by motion or through such plan to provide a mechanism and extended deadline for stockholders to file proofs of interest, or otherwise establish the extent of their holdings so as to participate in any distribution to be made under a plan.

Question 30 (posted October 29, 2007): The answer to Question No. 28 above indicates that no information about the proposed transaction will be disclosed until after a deal is already struck. Should there not be some form of public competitive bidding process for the remaining assets of SEBC?

The sale of SEBC assets and the potential restructuring through a Chapter 11 plan has been and will remain a competitive process. When it is permissible and appropriate to do so in accordance with existing confidentiality agreements and the requirements of the Bankruptcy Code and Rules, all relevant information will be disclosed. To understand how that is so, this answer will provide an explanation of two different methods of realizing value for the constituents of a company in bankruptcy. In addition, this answer will indicate how the requirements of competition and disclosure of those methods are being followed in the SEBC case.

The first method is a sale of the debtor's assets, either individually or collectively. The procedures that govern sales during a Chapter 7 or Chapter 11 case are different from those applicable to a restructuring of the shares and finances of a company through a Chapter 11 plan. Asset sales require some form of competitive bidding process and approval of the Bankruptcy Court and, in most instances, are accomplished through a notice or motion seeking that approval. In addition to the competitive process leading up to the proposal of a sale, every proposed sale brought before the Court is subject to higher or better offers. Generally the debtor or trustee works to generate interest on the part of buyers, and negotiates with a number of prospective buyers in order to achieve the best price and terms of sale. Note, however, that the negotiations leading to a proposed sale and the particular terms of a sale are not disclosed until a specific proposal is made and approval of a particular sale is requested.

The second method to realize value for creditors and, where possible, shareholders is the restructuring of the shares and finances of the company through a Chapter 11 plan. Unlike a sale of assets as described above, this process requires the filing of a Chapter 11 plan which appropriate constituents of the company actually vote to accept or reject, after receiving a disclosure statement approved by the Bankruptcy Court as containing "adequate information" about the nature of the company and the proposed restructuring. Generally, the debtor or trustee works to find a method to finance the restructuring of the company internally or through outside financing, or to seek qualified investors to invest in the restructuring. When a Chapter 11 trustee has been appointed, as has occurred in this case, the right to file a plan does not rest exclusively with the trustee; rather, any creditor or party in interest can propose a plan, and in many cases two or more competing plans are proposed and considered.

It is important to note that the outcome of competition for a sale of assets is determined solely by an order of the Bankruptcy Court after notice and opportunity to object, while the confirmation of any Chapter 11 plan -- even where competing plans are proposed -- is addressed by the Court after a vote of the affected constituents on whether to accept or reject each plan under consideration. As with a sale of assets, the negotiations leading to a particular restructuring plan are generally not disclosed until a definitive plan is proposed.

During the lengthy period of time when this case was pending under Chapter 7 of the Bankruptcy Code, substantially all of the asset sales which occurred were conducted under some form of competitive bidding process, in which sales were placed before the Bankruptcy Court subject to higher and better offers. At present, other than the historic business, tax attributes and capitalization structure of the company, the principal tangible assets remaining in the SEBC estate consist of real estate holdings. If those real estate holdings are sold during the course of the bankruptcy case, the sale will occur through a competitive process as occurred repeatedly during the Chapter 7 phase of this case, with full disclosure of the terms of sale and identity of a buyer after the negotiations have led to a definitive agreement.

As indicated in an Question No. 17 above, the value of the remaining tangible assets in the SEBC bankruptcy estate is not sufficient to pay in full the remaining post-petition interest obligations to bondholders and other creditors. Thus, absent a consensual restructuring of SEBC under a Chapter 11 plan involving new financing or a new investment, there will be no distribution to shareholders. The only potential for a distribution to shareholders would have to arise from a transaction involving the restructuring of shares and finances of the company through a Chapter 11 plan under the process briefly described above. Shareholders can only receive value if the restructuring either provides more than sufficient value to pay creditors in full or if the creditors vote to accept the Chapter 11 plan and consent to the shareholders receiving some value even though the creditors are not paid in full.

For a number of years, the Trustee and his professionals have sought an investor willing to invest in such a restructuring of shares and finances. More recently, the Trustee employed an investment banker to seek potential qualified investors willing to invest in a restructuring of SEBC. Through the efforts of the Trustee, his professionals and the investment banker, virtually all of the qualified potential investors have been identified and approached. Several of those potential investors have undertaken substantial due diligence activities to determine the suitability and terms on which such they might make an investment in SEBC. From that group of potential investors, the Trustee received and negotiated proposals for a form of financing or investment that would provide the greatest benefit to SEBC creditors and shareholders.

The highest and best of those proposals was received from the investor with which the Trustee recently executed a letter of intent ("LOI"). Although the transaction contemplated in the LOI will provide modest additional value to the creditors, the transaction does not provide that the post-petition interest which remains unpaid to creditors will be paid in full. Thus, as indicated in the discussion above, the approval of this transaction by creditors through their acceptance of a Chapter 11 plan is a necessary requirement for shareholders to receive any distribution from the bankruptcy estate. For these reasons, it is not possible to effectuate the proposed transaction through a traditional sale of assets. It was on the basis that the transaction contemplated in that LOI could only be approved under a Chapter 11 plan that the Trustee moved for conversion of the SEBC case from Chapter 7 to Chapter 11.

Among other provisions, the LOI requires that the Trustee maintain confidentiality as to the identity of the investor and specifics of the proposed transaction at the present time. The investor has engaged counsel and accounting professionals to complete further due diligence and negotiate and/or prepare further documents. It is anticipated that if a final and definitive agreement is negotiated, it will be subject to approval as part of a Chapter 11 plan for restructuring of SEBC, which will involve the full disclosure of all relevant information about the transaction and the identity of the proposed investor. Until that time, however, the Trustee cannot disclose such information. If the transaction goes forward, creditors and shareholders will be asked to vote to accept or reject that plan only after delivery to them of a Court approved disclosure statement describing the transaction in detail. If the required vote for approval is received after all of the votes are calculated, the Bankruptcy Court will be asked to approve the transaction as part of its confirmation of the Chapter 11 plan. Once again, as with any Chapter 11 case in which a trustee has been appointed, any party in interest may propose a Chapter 11 plan with any alternative restructure and proposed investment in SEBC, subject to the disclosure, classification and other requirements of the Bankruptcy Code and Rules.

Question 31 (posted November 2, 2007): As the case moves forward in Chapter 11, will the interests of shareholders be represented in the process of developing and presenting a plan of reorganization?

The Trustee intends shortly to file a Motion requesting the Bankruptcy Court to appoint a Special Representative for Holders of SEBC Common Stock. As presently contemplated, the proposed duties of the Special Representative will be to represent and further the interests of Common Stock Holders generally in connection with the process of developing, negotiating and confirming a Plan with the Trustee, the sponsor of the Plan, and other constituents; advise on the form and substance of supplemental notice to Common Stock Holders and their participation in the Plan process, including communication with Common Stock Holders regarding Plan issues; and otherwise act on their behalf in connection with issues arising in connection with the confirmation of a Plan. The Trustee will also request that with respect to matters that may fall within the scope of the foregoing responsibilities, the Special Representative be granted the ability to appear and be heard on such matters before the Court, and to seek payment of fees and reimbursement of expenses from the Estate.

In an effort to streamline the process associated with the Motion requesting this appointment, the Trustee and his counsel have discussed these matters with the Indenture Trustees for the various issues of senior and subordinated notes, as well as members of the Ad Hoc Committee of Subordinated Noteholders formed in the Chapter 7 phase of the case. While the ultimate decision necessarily is left to the Bankruptcy Court, the Trustee believes as of this writing that none of the other principal constituencies who have been consulted will interpose an objection to the appointment. Copies of the Motion and Notice of Hearing will be posted on this web site as soon as filed with the Court.

Question 32 (posted January 9, 2008):    What additional information is the Trustee in a position to disclose about the status of the investor and the proposed transaction that is intended to serve as a basis for the Chapter 11 plan?

On November 14, 2007, the Trustee entered into a non-binding enhanced letter of intent (the "ELOI") with a bulge bracket U.S. investment bank headquartered in New York (the "Investment Bank"), the same investor with whom he had executed an earlier non-binding letter of intent which served as the basis to convert the case to Chapter 11.  The original letter of intent and ELOI describe the broad outline for the Investment Bank to purchase (i) approximately $1.5 billion in a new class of SEBC preferred stock and (ii) approximately $3.5 million of new SEBC common stock, constituting approximately 22.5% of the total SEBC common stock (the "Transaction").  The terms of the common and preferred stock will be set forth in the documentation to be created under a Chapter 11 Plan, and the consummation of the Transaction is subject to approval as part of that Plan.  In the ELOI, subject to the confirmation of a Chapter 11 Plan and definitive documentation acceptable to it in its sole and absolute discretion, the Investment Bank has reaffirmed its intention to undertake the Transaction with a view toward closing the Transaction in early 2008 (subject to the conditions set out above and the acquisition of all internal approvals, as determined in the Investment Bank's sole discretion).  

Prior to entering into the original letter of intent and ELOI with the Investment Bank, the Trustee and his professionals evaluated a number of potential transaction structures and conducted an exhaustive search of institutional and other investors with an interest in pursuing a form of equity infusion transaction that would provide additional value for bondholders and creditors and, for the first time in the case, some form of return for equity holders as well.  The Trustee's determination that the SEBC Estate pursue the proposed Transaction with the Investment Bank comes after an exhaustive pursuit and analysis of both those other transaction structures and variations on a similar equity infusion transaction with other potential candidates.  Although a number of the potential investors so contacted expressed initial interest in the concept of such a transaction, it was ultimately the Investment Bank which stepped forward with a proposal that was acceptable to the Trustee as the basis for a Chapter 11 Plan to be proposed for consideration by parties in interest in the case.  In addition, the Investment Bank's proposal would result in greater value to the Estate than the terms proposed by or discussed with any other potential investor.  As a result of the foregoing, the Trustee believes that the Investment Bank Transaction represents the most favorable transaction available to SEBC to realize a greater value for the Estate and its various constituents than that available under a liquidation plan.

It is the Trustee's understanding -- and the ELOI confirms that it is the Investment Bank's understanding as well -- that the terms set forth in the ELOI reflect the basic business terms of the transaction, and that the issues remaining to be negotiated are mostly legal in nature.  Consummation of the Transaction, however, remains subject to receipt of the Investment Bank's internal approvals and other conditions set out in the ELOI and, except as might be provided in the definitive Transaction documents, the Trustee will not have a claim for damages against the Investment Bank if the Transaction does not close. 

It is anticipated that the remaining negotiations will be conducted between and among representatives of the Senior and Subordinated Indenture Trustees, significant holders of senior and subordinated bonds, the holders of SEBC Series A and E Preferred Stock, and the Legal Representative for Holders of SEBC Common Stock recently appointed by the Court.  Currently, the Trustee and his professionals are preparing a financial analysis and term sheet for such parties to illustrate the likely economics of the Transaction, as well as a comparison of the Transaction with the potential result of liquidation under either a liquidating Chapter 11 plan or through re-conversion to and liquidation under Chapter 7.  Such analysis will be included in the Disclosure Statement that would accompany the filing of the Chapter 11 Plan to approve and implement the Transaction.  Upon completion and dissemination of that analysis, the Trustee anticipates that the negotiation of the definitive Transaction documents will be completed.

The Transaction contemplates that Reorganized SEBC will use the funds contributed by the Investment Bank to make a number of fixed income investments, and thereby continue to be engaged in a financial investment business.  Prior to the bankruptcy filing SEBC was a storied name in Florida finance; the Transaction will result in the revival of a portion of the (non-bank) financial investment activities in which it previously engaged.  The Jacksonville Property (more fully described in FAQ #24 above) will not be transferred to Reorganized SEBC under the Chapter 11 Plan, but rather will be transferred to a Liquidating Trust to be created under the Plan for the sole benefit of bondholders and creditors.  Holders of existing SEBC preferred and common stock will receive a total of 52.5% of the new common stock to be issued by Reorganized SEBC under the Plan, with the remainder distributed 22.5% to the Investment Bank and 25% to existing bondholders (both senior and subordinated) and general creditors of the estate.  

SEBC does not anticipate that dividends will be paid on the new issue of common shares for at least 5 years.  At the end of the fifth year after issuance, SEBC anticipates that 52.5% of the common shares to be issued to existing SEBC preferred and common shareholders will have a value of approximately $10.9 million and that the 25% of common shares to be issued to bondholders and general creditors will have a value of $5.2 million.  In addition, such bondholders and general creditors will receive a new issue of preferred shares, junior to the preferred shares to be issued to the Investment Bank.  The junior preferred shares will be entitled to a stream of payments and ultimate redemption totaling $7.5 million over 5 years. These amounts are based on the prevailing market rates in October of 2007, and accordingly, may fluctuate depending on market conditions at closing, asset performance (the assets could be worth more or less than forecasts, and therefore, the common shares may fluctuate in value), and timing of financial close (with the exception of the junior preferred shares which are expected to remain stable).  

One of the terms required by the Investment Bank is that trading of the new common shares be restricted in order to preserve the benefits of the Transaction for the Investment Bank, for the existing common and preferred shareholders, and for the existing bondholders and other general creditors.  Accordingly, the terms of the Plan and the corporate documents governing the creation of Reorganized SEBC and the issuance of the new common stock will provide that trading in that class of stock be restricted for a considerable period of time, which is currently anticipated to be 5 years.

There are, of course, tax and other significant implications of the Transaction and the Chapter 11 Plan that would approve and implement the Transaction.  A detailed description of the terms and conditions of the Transaction will be set forth in the Chapter 11 Plan and accompanying Disclosure Statement to be filed in the Bankruptcy Court.  Until such time as the Bankruptcy Court enters an Order approving the Disclosure Statement as containing "adequate information" within the meaning of Section 1125 of the Bankruptcy Code no person is permitted to solicit acceptances for the Chapter 11 plan.  The posting of this FAQ to this website is for informational purposes only and does not constitute such a solicitation.

Question 33 (posted February 5, 2008):  What is the precise extent of the bankruptcy estate's interest in the Jacksonville Properties described in FAQ #24?

As indicated in FAQ #24, the SEBC bankruptcy estate indirectly owns a 70% interest in the Southwest Quadrant property through its wholly owned subsidiaries SWQ Properties, Inc. and Southeast Properties, Inc., and a 100% interest in the Belfort property through Second Pioneer Corporation, a second-tier subsidiary wholly owned by First Pioneer Corporation which, in turn, is owned by the SEBC estate.  Neither of the properties is encumbered by any lien, mortgage or other interest of record, such that upon disposition of the properties the proceeds of sale, net of expenses of sale, will be divided in accordance with the ownership interests.

Question 34 (posted February 6, 2008):  What additional information can the Trustee provide about the common stock to be issued in connection with the proposed investor transaction described in FAQ #32 above?

The substance and business terms of the proposed equity infusion remain substantially as described in FAQ #32 above, and the final details, timing and mechanics remain under active discussion with the investor.  It is anticipated that the Chapter 11 plan pursuant to which the shares will be issued will provide for trading restrictions on the common stock of the reorganized company at least as restrictive as those that have governed the existing stock since the entry of the Trading Injunction Order in 1994, as described in FAQ #20 above.  The final details of the proposed transaction, including but not limited to the extent of the trading restriction, the issuance of shares, and other mechanics of implementation, have not been finally determined.  The Trustee and his professionals met with representatives of the investor during the last week of January, and remain engaged in ongoing discussions about the transaction.

While we have received a great number of specific and thoughtful questions requesting additional information, the precise terms of the proposed transaction will be described in the plan and disclosure statement to be filed with the Bankruptcy Court. The existing capital structure of SEBC is described in the Annual Report on Form 10-K for the fiscal year ended December 31, 1990.

Upon the filing of the plan and disclosure statement, the Bankruptcy Court will schedule a hearing to determine whether the disclosure statement contains adequate information to enable a reasonable investor in the position of a creditor to determine whether to accept the plan.  Until the Court has approved the disclosure statement as containing adequate information, neither the Trustee nor any other party in interest in the case is permitted to solicit acceptances for the plan.  Once the disclosure statement has been approved it will be circulated to those impaired classes of creditors and shareholders who may be entitled to vote on the plan, along with the full plan and a form ballot to accept or reject the plan.  After the votes of those parties who are entitled to vote are tabulated and certified to the Court, the Court will conduct a further hearing to determine whether the plan meets the requirements for confirmation under the Bankruptcy Code.  If the plan is confirmed it will then become effective on the effective date provided in the plan and the Confirmation Order issued by the Bankruptcy Court, and the transaction with the investor can be implemented.   The Trustee is required to provide notice of the foregoing events to creditors, shareholders and other parties in interest in the case, and will do so through service, publication and additional postings on this website.  Parties in interest will be afforded the opportunity to pose questions or file objections to the disclosure statement and/or the plan, and any objections which cannot be resolved consensually will be addressed by the Court at the disclosure or confirmation hearing, as appropriate.

The proposed transaction remains under negotiation and a definitive agreement between SEBC and the prospective investor has not yet been executed.  Accordingly, there can be no assurance that a definitive agreement will be reached, either on the current terms under discussion or other terms.  Furthermore, because consummation of a transaction contemplated by any definitive agreement, if executed, will be subject to certain conditions precedent, including, without limitation, confirmation of the plan of reorganization, no assurance can be given that any such transaction will actually occur.

Question 35 (posted July 10, 2008): Now that the Bankruptcy Court has authorized the Legal Representative for Holders of SEBC Common Stock to engage a financial advisor, can you explain the respective roles of the Legal Representative, the Chapter 11 Trustee and their advisors?

As more fully described in FAQ #31 above, the role of the Legal Representative is to represent and further the interests of Common Stock Holders generally in connection with issues arising in connection with the confirmation of a Chapter 11 plan of reorganization. The Chapter 11 Trustee's request for appointment of the Legal Representative was motivated in part by the recognition that in his own capacity as a fiduciary for all creditors and shareholders of the bankruptcy estate he is not in a position to represent or advocate the interests of any one constituency, and accordingly that the holders of common stock should have separate representation.

Directly upon his appointment as Legal Representative on November 21, 2007, Jerry Markowitz, Esq. entered into a confidentiality agreement with the Chapter 11 Trustee. Pursuant to that agreement, the Trustee has provided to the Legal Representative certain confidential, non-public information and material to enable him to understand the nature and history of the proposed transaction to date. Mr. Markowitz has now sought and obtained authority to engage James S. Feltman and Mesirow Financial Corporation as his financial advisor, to assist him in analyzing that information along with such additional information as may be made available in connection with the negotiation and filing of a Chapter 11 plan.

The Trustee and his financial advisor, Structured Capital Solutions, continue to work with the Investor on the terms of a proposed transaction that would serve as the basis for a Chapter 11 reorganization plan which the Trustee will file as proponent. In advance of filing that plan and the accompanying disclosure statement, the Trustee intends to work cooperatively with Mr. Markowitz and the representatives of other constituencies to obtain their input in order to finalize the terms of the transaction and formulate the Chapter 11 plan. As a party in interest on behalf of the holders of SEBC common stock, the Legal Representative will have many of the same legal rights as other parties in interest in the bankruptcy case, including the right to appear and be heard in connection with any issue related to the disclosure statement and plan. Ultimately, after considering the votes of any impaired classes of parties which are determined to be entitled to vote on the plan, and any indications of support or objections filed by the Legal Representative or any other party in interest, the Bankruptcy Court will determine whether to confirm the plan.

Question 36 (posted July 31, 2008): When will you post more information about SEBC or the transaction discussed in the recent postings on the website?

The website will continue to be used for the purpose of sharing public information about SEBC and the transaction discussed in the recent postings to the website.  The Trustee and his professionals continue to work on the administration of SEBC and the transaction discussed above. As to the transaction, we understand the desire of interested parties to be fully informed, but disclosure of the negotiations of a transaction is neither prudent not permitted under the operative letter of intent discussed above in earlier FAQs. Accordingly, we do not plan to post information about the nature and content of continuing discussions between the SEBC estate and the potential investor or the issues under review. We currently anticipate that we will make an additional posting to our website concerning the transaction only at such time as either one of two definitive events occurs: that we have reached a definitive agreement with the potential investor that will lead to the filing of a chapter 11 plan and disclosure statement to approve and implement such agreement; or that either the Trustee or the potential investor has categorically terminated negotiations toward reaching such a definitive agreement.

Question 37 (posted November 21, 2008): Has the Trustee reached a definitive agreement with the Investor for the filing of a Chapter 11 Plan, and how will the confirmation process proceed?

On November 19, 2008, the Trustee and the proposed Investor executed a Master Subscription Agreement ("MSA"), which, together with a Chapter 11 plan, disclosure statement and related documents, constitutes a definitive agreement providing for the comprehensive restructuring of SEBC. The MSA and related documents are the product of over a year's effort to negotiate and conclude an agreement that began with the ELOI (enhanced letter of intent) for a Transaction referred to in the response to Question 32 posted to this site on January 9, 2008. On November 20, 2008 the Trustee filed a Chapter 11 Plan of Reorganization with the Bankruptcy Court, including the MSA as an exhibit. Copies of the Plan may be obtained at no charge by e-mail request to dominguezk@gtlaw.com.

The Trustee is prohibited from soliciting votes to accept the Plan until a Disclosure Statement is approved by the Bankruptcy Court. The Trustee intends to file a Disclosure Statement during the week of November 24, 2008, along with a series of Motions intended to govern the confirmation process. All of those filings will be posted on this site within one day of filing with the Court and service on parties in interest who have appeared in the bankruptcy case or otherwise are entitled to notice by mail. The Bankruptcy Court will schedule hearings to consider those Motions and the adequacy of the Disclosure Statement, and fix a deadline for the filing of objections to the Disclosure Statement. The Notice setting those dates will also be posted to this website when available.

Both the Plan and Disclosure Statement remain subject to revision through the date of the hearing on the Disclosure Statement. Additional postings reflecting any such revisions will be made to this site.

Question 38 (posted January 7, 2009): I received in the mail or have seen on this website a Notice of Deadline for the Filing of Requests for the Payment of Administrative Claims. What is an administrative claim and who is required to file and serve a request for payment of an administrative claim?

An administrative claim under the Bankruptcy Code is a claim that arises out of a transaction with the company while it was in bankruptcy (for example, a claim for professional services rendered by attorneys and accountants who were retained by the bankruptcy estate). Only persons or entities who assert an administrative claim that has not yet been allowed and paid are required to file and serve a request for payment of an administrative claim. If you hold an investment in SEBC pursuant to stock, notes, or other debt obligations of SEBC issued before September 20, 1991 (the date SEBC filed for bankruptcy), you do not need to file a request for payment of an administrative claim even if you acquired the stock, notes or other obligations after the bankruptcy case was filed. Likewise, if you incurred an administrative claim during the pendency of SEBC's bankruptcy case and that administrative claim has already been allowed and paid, you do not need to file another request for payment of an administrative claim.

If you are a stockholder of SEBC and have further questions, you should contact the Legal Representative for Holders of Common Stock appointed by the Court, Jerry Markowitz, who may be reached at 305 670-5000. If you still have further questions about whether you should file a request for payment of an administrative claim, you should contact an attorney.

Question 39 (posted February 17, 2009): On February 9, 2009 the Bankruptcy Court entered a series of Orders which have been posted on this website. How does the bankruptcy process proceed from here?

The process of confirming the Trustee's Third Amended Chapter 11 Plan will now proceed in accordance with two of the Orders entered by the Bankruptcy Court at the February 9, 2009 hearing.

The Order Approving Amended Disclosure Statement, Etc. enables the Plan confirmation process to proceed by determining that the Trustee's Amended Disclosure Statement -- which was extensively revised and amended to include and address comments offered by various parties in interest, including the United States Trustee, Securities and Exchange Commission, Senior and Subordinated Indenture Trustees, Ad Hoc Committee of Subordinated Noteholders, and Legal Representative for Holders of SEBC Common Stock -- contains "adequate information" sufficient to enable the Classes entitled to vote under the Plan to make an informed judgment about the Plan. Thus, the Trustee as Plan Proponent may now proceed to solicit acceptances from those Classes, and to seek Confirmation of the Plan at a hearing to be conducted on March 9, 2009. That same Order sets forth a series of deadlines associated with the Plan confirmation process, including a deadline of February 27, 2009 to file ballots and any objections to confirmation, and March 4, 2009 for the Trustee to file a report and affidavit to be considered by the Court at the Confirmation Hearing on March 9, 2009. Please note, as more fully explained below, that Holders of Senior and Subordinated Notes, Allowed Claims and Common Stock Interests are not required to and are not permitted to file ballots, which will not affect their entitlement to the Distributions provided for them under the Plan.

The Third Amended Plan of which the Trustee will seek confirmation provides that Holders of Senior and Subordinated Notes and other Allowed Claims (classified in Classes 1, 2 & 3, respectively) are unimpaired and therefore not entitled to cast ballots to accept or reject the Plan. In addition, the Order Granting Motion for Entry of an Order Governing Solicitation of Ballots for Trustee's Chapter 11 Plan provides that Holders of Common Stock Interests in Class 6 will not vote, since (a) the books and records available to the Trustee at this stage are insufficient to solicit the acceptances of those Holders without considerable delay and expense, and (b) the amount of unpaid interest owed in respect of the senior Classes of Claims is greater than the value of the remaining assets in the SEBC Estate, such that Holders of Common Stock would receive nothing if the case were liquidated under Chapter 7 of the Bankruptcy Code. The Court will treat all of such Holders of Common Stock Interests as having cast ballots rejecting the Plan. In order to confirm the Plan without the acceptance of these Class 6 Holders, the Trustee will have to demonstrate to the Court at the Confirmation Hearing that the value of the SEBC Holdings LP Common Units to be issued to each such Holder under the Plan is equal to the value of the SEBC Common Stock Interests held by such Holder. As indicated above, if the Plan is confirmed and is effectuated, notwithstanding that they will not be filing ballots, Holders of Senior and Subordinated Notes, Allowed Claims and Common Stock Interests will be nevertheless be entitled to receive the Distributions provided for them under the Plan.

Question 40 (posted March 2, 2009): Will SEBC Holdings, LP Common Units be traded on an exchange or in the "Pink Sheets"?

It is not anticipated that the SEBC Holdings, LP Common Units will be listed for trading on an exchange. It is the Trustee's understanding that brokers may quote trades in a particular securityin the "Pink Sheets" only if a broker has filed detailed information regarding the issuer of such security with the Financial Industry Regulatory Authority. As a practical matter, such a filing requires participation by the issuer because the required information may not otherwise be available, particularly if the issuer is not a reporting issuer under the federal securities laws. SEBC Holdings does not yet exist, will only come into existence if the currently pending Third Amended Chapter 11 Plan (the "Plan") is confirmed and becomes effective, and will not be a reporting issuer until, in all likelihood, early 2010. Accordingly, it will not be possible for SEBC Holdings LP to facilitate the filing of the information required in order for its Common Units to be listed in the Pink Sheets at its inception. Ultimately, it will be up to the management of SEBC Holdings to determine whether to facilitate Pink Sheet trading.

Question 41 (posted March 2, 2009): Will SEBC Holdings, LP pay dividends on its Common Units?

As reflected in the Amended Disclosure Statement for the Plan, the business plan and legal structure of SEBC Holdings, LP do not permit payment of dividends on Common Units until after the retirement in full, by redemption or otherwise, of the SEBC Holdings Senior Preferred Units and Junior Preferred Units. Following such retirement, dividends may be paid on the Common Units to the extent that cash is available as determined by the general partner. Based upon the business plan as described in the Amended Disclosure Statement, it is uncertain when that retirement of the Preferred Units will occur, as the timing remains dependent upon cash flows of SEBC Holdings.

Question 42 (posted March 2, 2009): Assuming that the Plan is confirmed and the Transaction contemplated in the Plan closes, how and when will current Holders of shares of SEBC Common Stock convert such shares into the SEBC Holdings Common Units to which they are entitled under the Plan?

The Plan and the SEBC Holdings Charter provide that outstanding shares of SEBC Common Stock will, in effect, automatically convert into SEBC Holdings Common Units on a one-for-one basis as of the Effective Date of the Plan. The Plan and Plan Supplement provide that SEBC Holdings LP will act as the Disbursing Agent for the securities SEBC Holdings will issue and distribute pursuant to the Plan. It is currently anticipated that SEBC Holdings LP will engage a Transfer Agent/Registrar, which will also act as an exchange agent to facilitate the exchange of SEBC Common Stock for SEBC Holdings Common Units. The Transfer Agent/Registrar is identified in the Plan Supplement filed with the Bankruptcy Court on February 27, 2009 and posted elsewhere on this website. The Transfer Agent/Registrar will employ customary and industry standard mechanisms, such as letters of transmittal, to effectuate the exchange of certificates representing SEBC Common Stock for SEBC Holdings Common Units, either through physical or book entry means of delivery. It is also currently anticipated that Holdings Common Units will be "DTC-eligible" to facilitate book entry delivery. Further announcements will be made and posted to this website as to specifics of these matters when the mechanism is in place and ready to be employed.

Question 43 (posted March 2, 2009): Assuming that the Plan is confirmed and the Transaction contemplated by the Plan closes, how will Holders of Senior Notes, Subordinated Notes, Claims and Series A and Series E Preferred Stock receive the Cash Distribution, Reorganized SEBC Series K Junior Preferred Stock and/or SEBC Holdings Senior and Junior Preferred Units to which they are entitled under the Plan?

The Plan and the Plan Supplement provide that SEBC Holdings, LP and Reorganized SEBC will act as the Disbursing Agent for the securities to be issued and distributed from such entities under the Plan. SEBC Holdings LP and Reorganized SEBC will engage a Transfer Agent/Registrar to facilitate issuance of, register and provide transfers of the various securities to be issued under the Plan. The Transfer Agent/Registrar is identified in the Plan Supplement filed with the Bankruptcy Court on February 27, 2009 and posted elsewhere on this website. It is currently anticipated that the Transfer Agent/Registrar will employ customary and industry standard mechanisms, such as letters of transmittal, to facilitate the issuance of the Reorganized SEBC Series K Junior Preferred Stock, SEBC Holdings Senior and SEBC Holdings Junior Preferred Units to the current holders of SEBC Senior Notes, SEBC Subordinated Notes, SEBC General Unsecured Claims, SEBC Series A Stock and SEBC Series E Preferred Stock, either through physical or book entry means of delivery. It is also currently anticipated that such securities will be "DTC-eligible" to facilitate book entry delivery.

As provided for in the Plan and the Plan Supplement, the Cash Distribution to Holders of General Unsecured Claims is anticipated to be made by the SEBC Estate through the Chapter 11 Trustee, in his capacity as Disbursing Agent for Cash Distributions under the Plan. The Cash Distribution to Holders of SEBC Senior Notes is expected to be made through Bank of New York Mellon, and to Holders of SEBC Subordinated Notes through U.S. Bank (the Chapter 11 Trustee anticipates working with U.S. Bank to employ the Transfer Agent/Registrar to act as its agent for the purpose of facilitating Cash Distribution in respect of the EuroNotes). Holders of SEBC Senior Notes and SEBC Subordinated Notes will be required to comply with the requirements of the Plan and the requirements of Bank of New York Mellon and U.S. Bank, respectively, including, but not limited to, the surrender of their Notes, in order to receive their share of the Cash Distribution and securities under the Plan. Further announcements will be made and posted to this website as to specifics of these matters when the mechanisms are in place and ready to be employed.

Current holders of SEBC Senior Notes and SEBC Subordinated Notes and General Unsecured Claims are reminded that, in addition to other required submissions, such as, in the case of the holders of Senior and Subordinated Notes, surrender of the Notes, they will be required to submit the Creditor Questionnaire to EPIQ by June 1, 2009 in order to participate fully in the Mixed Securities Distribution contemplated by the Plan. The Creditor Questionnaire is available by contacting Maribel Fontanez, Greenberg Traurig, P.A., 333 Avenue of the Americas (S.E. 2nd Avenue), Suite 4400, Miami, FL 33131, 305-579-7837 (tel.), 305-579-0717 (fax), e-mail: fontanezm@gtlaw.com or by clicking here: Creditor Questionnaire.

Question 44 (posted April 3, 2009): Now that the Bankruptcy Court has confirmed the Plan, what happens next?

Answer: The Order of the Bankruptcy Court confirming the Third Amended Plan of Reorganization ("Plan") became final on March 23, 2009. The Effective Date of the Plan is to occur when the Transaction contemplated in the Plan actually closes. The terms of the Transaction call for a closing on or before April 30, 2009, unless extended by mutual agreement of the Investor and the Trustee. As of the date of this posting, the Investor has not confirmed a definitive closing date, and there can be no assurance that a closing will take place by April 30, 2009 or any subsequent date. Further developments concerning the closing of the Transaction and thus the occurrence of the Effective Date, will be posted on this website, and a Notice of such posting filed with the Court as circumstances warrant.

All of the various transactions and Distributions contemplated under the Plan are intended to occur on or following the Effective Date. In his capacity as Disbursing Agent the Trustee will make Cash Distributions directly to general non-bondholder creditors, and to Bank of New York Mellon and U.S. Bank to make Cash Distributions to Holders of Senior Notes and Subordinated Notes, respectively. On behalf of Reorganized SEBC (SEBC Financial Corporation) and SEBC Holdings, Inc., the Trustee will retain Computershare, Inc. to serve as Transfer Agent and Registrar for all of the classes of securities to be issued to SEBC creditors and shareholders under the Plan, and as sub-agent to make Cash Distributions due to Holders of EuroNotes.

In order to receive distribution of their pro rata portions of the $4 million in securities that are part of the Mixed Securities Distribution (consisting of Reorganized SEBC Series K Junior Preferred Stock and/or SEBC Holdings Senior Preferred Units), bondholders and creditors must complete and return the Creditor Questionnaire so that it is received at the address set forth in the Questionnaire by June 1, 2009. This requirement is in addition to all other conditions of distribution, including the surrender by bondholders of their bonds. Creditors or bondholders who have not returned such Creditor Questionnaire by June 1, 2009, will remain entitled to receive their respective pro rata portions of Cash and SEBC Holdings, Inc. Junior Preferred Units, but will be deemed to have forfeited any right to their pro rata distributions of the securities that are part of the Mixed Securities Distribution. Those forfeited securities will be redistributed on a pro rata basis to timely responding creditors or bondholders within the same Class as those creditors or bondholders who failed timely to return the Creditor Questionnaire. Any creditor or bondholder who has not received a Creditor Questionnaire may print a copy from the link contained in the "Court Pleadings" section of this website.

Upon the occurrence of the Effective Date Reorganized SEBC will publish and post on this website a Notice stating that the Effective Date has occurred. The Bankruptcy Court has also scheduled a post-confirmation Status Conference for May 26, 2009 at 10:30 a.m., to consider a series of matters depending upon whether the Effective Date has occurred.

Question 45 (posted April 30, 2009): Has the Effective Date of the Plan occurred?

No. The Effective Date of the Plan was to occur when the Transaction contemplated in the Plan actually closed, on or before April 30, 2009. On April 28, 2009, the Trustee received from the Investor a notice of its election to terminate the Master Subscription Agreement pursuant to Section 6.12(f) thereof, which terminated the Investor's obligations to close the Transaction with no liability whatsoever to the Investor. Thus, the Effective Date of the Plan has not occurred.

Even though the Investor has terminated the Master Subscription Agreement and is no longer under any obligation to close the Transaction, the Trustee believes that the Investor will continue to work to attempt to find a third party investor that might enable the Investor to close the Transaction in the relatively near future. Likewise, the Estate's investment banker, SCS, believes that there are alternative prospects for investors who might independently and/or in conjunction with the Investor engage in the Transaction or perhaps an alternative transaction.

In order to preserve for a reasonable period of time the possibility of a future closing of the Transaction with the Investor and/or alternative investors procured by it or by SCS, the Trustee has filed a motion seeking authority from the Court to extend the April 30, 2009 deadline for occurrence of the Effective Date through and including June 30, 2009, with the ability to grant further extensions if deemed reasonable and appropriate upon consultation with parties in interest in the bankruptcy case.

Copies of the Trustee's motion seeking the extension and the related Notice of Non-Occurrence of Effective Date as filed with the Bankruptcy Court are posted separately on this website.

Question 46 (posted June 15, 2009): What is the status of the Trustee's efforts to pursue the Transaction with the Investor and/or an alternative investor?

As represented to the Court at hearings on May 19 and 26, 2009, and as discussed above in the answer to Question 45, the Estate's investment banker SCS believes that there are alternative prospects for investors who might independently and/or in conjunction with the Investor engage in the Transaction or perhaps an alternative transaction.

Based upon SCS's efforts and the possibility of a future closing of the Transaction with the Investor and/or alternative investors, and in order to maximize the Trustee's ability to generate value for the Estate from the Transaction, the Trustee has also sought and obtained authority to extend the Effective Date Deadline through and including June 30, 2009, and to seek further extensions of the Effective Date Deadline for one or more additional periods upon further motion and notice by the Trustee to all known creditors, equity security holders, and other parties in interest, providing such parties an opportunity to object to any proposed further extension. A copy of the Order Modifying Confirmed Chapter 11 Plan to extend the deadline for the occurrence of the Effective Date is posted separately on this website.

Likewise, by order entered on June 1, 2009, the Court modified and extended the terms of SCS's retention through and including September 30, 2009, or such earlier date as the modified engagement may be terminated on not less than 30 days' notice, so that SCS can continue its efforts to pursue a transaction. A copy of the Order Modifying Retention and Employment of Structured Capital Solutions, LLC as Investment Banker for Chapter 11 Trustee, Nunc Pro Tunc to May 1, 2009, is posted separately on this website.

Question 47 (posted July 1, 2009): Has the Trustee sought a further extension of the deadline for the occurrence of the Plan Effective Date?

Yes.  A copy of the Trustee's motion seeking a further extension of the deadline for the occurrence of the Plan Effective Date is posted separately on this website.

Question 48 (posted August 4, 2009): Has the deadline for the occurrence of the Plan Effective Date been extended further, and, if so, what is the status of the Trustee's efforts to pursue the Transaction with the Investor and/or an alternative investor?

At a hearing on August 3, 2009, the Bankruptcy Court approved a further extension of the deadline for the occurrence of the Plan Effective Date through and including August 31, 2009, without prejudice to the Trustee seeking additional extensions of this deadline. The Trustee, with the assistance of the Estate's investment banker, SCS, continues to pursue alternative investors, including two well-recognized international and U.S. financial institutions who have begun the process of exploring the details of the Transaction and are beginning to undertake their own due diligence.

Question 49 (posted September 3, 2009):  The extended Effective Date Deadline for the confirmed Chapter 11 Plan expired on August 31, 2009 without the Trustee having sought to further extend this deadline.  Does this mean that the Effective Date can no longer be extended?

The Order which extended the Effective Date Deadline to August 31, 2009 provides that a further extension may be sought up to five days prior to the next post-confirmation status conference before the Bankruptcy Court on September 22, 2009.  The Trustee and his professionals continue to pursue the possibility of concluding the Transaction with one or more alternative investors, including a number of well-recognized international and U.S. financial institutions which are in the process of exploring the details of the Transaction and undertaking their own due diligence.  Should circumstances warrant, the Trustee will consider filing a motion to further extend the Effective Date Deadline not later than five days before the September 22, 2009 status conference.

Question 50 (posted September 17, 2009): What is the current status of the Trustee's efforts to pursue a transaction with an alternative investor?

Following a conference call on September 15, 2009, with the Ad Hoc Committee, the Indenture Trustees, the Legal Representative for Holders of SEBC Common Stock and other parties in interest in this case, each of whom have signed a confidentiality agreement, the Trustee has filed a motion for a further extension of the Effective Date Deadline through October 30, 2009. A copy of the motion is posted separately on this website. As set forth in the motion, SCS, the Estate's investment banker, is currently engaged in advanced discussions with at least two major financial institutions that have expressed significant interest (including having retained and/or consulted with outside counsel for this purpose) in entering into a transaction similar to the Transaction to be implemented under the Plan. Of course, the Trustee cannot predict whether or not any institution will determine to commit to undertaking a transaction with the Estate. Should any of these discussions lead to the execution of a letter of intent (a draft of which has been exchanged with one of these financial institutions) and should the counterparty to the letter of intent negotiate with the Estate a definitive agreement to undertake a transaction, the Trustee will then need to file a motion pursuant to 11 U.S.C. § 1127(b) to modify the Plan, and confirm such Plan as modified, in order to implement any such alternative transaction (a "Plan Modification Motion"). To the extent necessary, such Plan Modification Motion will also seek a further extension of the Effective Date Deadline.

Question 51 (posted October 21, 2009): The Trustee recently sought a further extension of the Effective Date Deadline under the confirmed Chapter 11 Plan through and including December 31, 2009. Is there anything to report on whether an alternate Transaction may close by that date?

One of the potential investors with which the Trustee's investment bankers at SCS have been negotiating the terms of a possible Transaction indicated recently that it will not be in a position to go forward. SCS continues to negotiate with at least one other potential investor that continues to express interest in pursuing such a Transaction; however, in light of recent Orders issued by the Bankruptcy Court and the diminishing prospects that a Transaction will occur the Trustee and his professionals have embarked on the consideration of other alternatives to wind up the bankruptcy case. In addition, the Trustee and SCS have agreed that effective October 31, 2009 SCS no longer will receive a monthly fee for services from the estate, but will look solely to the contingent fee payable to it upon the closing of a Transaction. There can be no assurance that the form of any modified or future Chapter 11 Plan will contain the same provisions or offer the same recovery to any of the classes of creditors or equity holders as provided in the confirmed Plan.

Question 52 (posted December 7, 2009): What are the tax status, financial position and asset status of the SEBC estate?

The SEBC estate holds the following assets: a) cash; b) as described in the Amended Disclosure Statement with respect to the Trustee's Third Amended Chapter 11 Plan of Reorganization Dated February 9, 2009 (the "Amended Disclosure Statement"), an ownership interest in certain real estate holdings in Jacksonville, Florida and attendant rights appurtenant to the real estate; c) ownership of certain mitigation bank credits in the Loblolly Mitigation Bank; and d) a right to be reimbursed certain sums expended for the preservation and improvement of such real estate from co-owners of its real estate holdings.

The SEBC estate has filed all required tax returns through 2008 and is current through October 2009 with all required Trustee in Possession reports due to be filed with the Bankruptcy Court. The SEBC estate has substantial net operating loss carry-forwards and, accordingly, has neither past nor current income tax obligations. The SEBC estate does, however, owe certain current reimbursement obligations to certain indenture trustees and creditors for their fees and expenses incurred in connection with the case, as well as amounts to professionals and others performing services to the Estate.

The Trustee has prepared a summary of selected financial and tax information entitled "Select Financial Data as of October 31, 2009" which is available to be viewed and downloaded. The Trustee has also compiled additional information on the Jacksonville Property, which was discussed in detail in Section V.A.3.(a) of the Amended Disclosure Statement (at pages 24 – 26) posted on the "Court Pleadings" page of this website (warning: the Amended Disclosure Statement is a very large file, in excess of 16 MB). In addition, listed below are links to various documents relating to the Jacksonville Property (capitalized terms not otherwise defined in this FAQ shall have the definitions set forth in the Amended Disclosure Statement and in the Trustee's Third Amended Chapter 11 Plan of Reorganization dated February 9, 2009, which is also posted on the "Court Pleadings" page of this website):

Attached as Exhibit "A" is a copy of an agreement in respect of the Southwest Quadrant Property by which SEPI and SWQ hold the right to receive 70% from the proceeds of any sale, and the Southwest Quadrant Joint Venture ("SQJV") – an unrelated joint venture in which the Estate has no interest – owns the right to receive the remaining 30% of the proceeds, entered into by, between, and among the Estate, SEPI, SWQ, and SQJV in April of 1998, and approved by the Bankruptcy Court in the Chapter 7 Case.

Attached as Exhibit "B" is a copy of an agreement by SEBC, SEPI and SWQ employing the principals of SQJV as local onsite management for the maintenance, planning and disposition activities of the Southwest Quadrant Property, which agreement is renewable annually through December 31 of each year (the "SQJV Management Agreement"). This Agreement has been renewed through and including December 31, 2009 and is likely to be renewed through and including December 31, 2010.

Attached as Exhibit "B-1" is a copy of a Motion filed with the Bankruptcy Court seeking approval of the SQJV Management Agreement as well as the Order of the Bankruptcy Court approving the SQJV Management Agreement.

Attached as Exhibit "C" is a copy of the agreement by and between the City of Jacksonville on the one hand and SEPI, SWQ and SQJV (collectively the "Southwest Quadrant Parties") on the other hand, pursuant to which the City of Jacksonville agreed to provide credits to the Southwest Quadrant Parties to be used toward transportation contributions that would otherwise have been due from the Southwest Quadrant Parties or their successors in applying for and obtaining permits for further development and construction on the Southwest Quadrant Property. The Trustee is currently engaged in negotiations with the City of Jacksonville to amend and extend the effect of this agreement.

Attached as Exhibit "D" are copies of permits sought and obtained by the Southwest Quadrant Parties from the St. Johns River Water Management District and the United States Army Corps of Engineers regarding fill and/or modification of certain wetlands within the Southwest Quadrant Property. The Trustee is currently considering clearing and/or filling certain of the wetlands which are subject to these permits.

Attached as Exhibit "E" are copies of parcel maps for the three parcels together comprising 69.4 acres of upland saleable acreage of the Southwest Quadrant Property, which have been divided into (a) 45.3 developable acres referred to as the "North Parcels"; (b) 11.7 developable acres referred to as the "South Parcel"; and (c) 12.4 developable acres referred to as the "Southside Parcel."

Attached as Exhibit "F"  is a copy of the parcel map of the Belfort Property.

Attached as Exhibit "G" is a copy of the agreement between Second Pioneer Corporation ("Second Pioneer") and James Efstathion, one of the principals of SQJV, and his company Siga Development Company, to employ Mr. Efstathion as local onsite management for the maintenance, planning and disposition activities of the Belfort Property, which agreement is renewable annually through December 31 of each year. This agreement has been renewed through and including December 31, 2009 and is likely to renewed through and including December 31, 2010.

Attached as Exhibit "H" are copies of the permits Second Pioneer has sought and obtained from the St. Johns River Water Management District and the United States Army Corps of Engineers regarding fill and/or modification of certain wetlands within the Belfort Property. The Trustee is currently considering clearing and/or filling certain of the wetlands which are subject to these permits.

Any potential investors desiring additional information for due diligence purposes should contact the Trustee or his counsel to discuss entry into a confidentiality agreement in order to receive further information.

Question 53 (posted January 19, 2010): Why has the Trustee sought a further extension of the December 31, 2009 Effective Date Deadline?

Although presently the Trustee does not have a commitment from any party interested in entering into a transaction similar to the Transaction to be implemented under the Plan, the Trustee and his professionals, including SCS (the Estate's investment banker), continue to pursue potential investors. The Trustee is aware of at least four potential qualified and substantial institutional and/or corporate investors that continue to have dialogue with SCS about the Estate, the Plan and a potential transaction.

The Trustee understands that these four potential investors are considering a transaction, but it is uncertain at this point whether these or any other entities that may be contacted in the future would ultimately consummate a transaction. SCS believes it is still possible, even some time into 2010, that an investor will determine to engage in a transaction with the Estate on terms similar to those embodied in the Plan. Accordingly, SCS is willing continue to pursue efforts at realizing a transaction into 2010 without current compensation other than the prospect of its success fee if a transaction closes. SCS has informed the Trustee, however, that a commitment from an investor is not imminent and that it will be several months before it is realistic to expect such a decision to be made by any prospective investor.

Given SCS's willingness to continue its efforts without current compensation, the cost to the Estate of further extending the Effective Date Deadline should be relatively minimal. At the same time, because no potential investor is presently committed to a transaction that would incorporate or require the retention of the Jacksonville Property, the Trustee continues to manage the Jacksonville Property and hold it open for sale. Given current market conditions, however, the likelihood of sale of such unimproved real property at a reasonable price in the immediate future is not strong. Nevertheless, the Trustee will consider and act on any reasonable offer to purchase all or a portion of the Jacksonville Property.

Thus, while the Trustee has no immediate opportunity to consummate reorganization of SEBC under the Plan (or any alternative version thereof), the possibility of reorganization remains, and the continued pursuit of that possibility does not portend to drain Estate resources significantly. Moreover, no immediately available and desirable liquidation alternative presently exists which would require cessation of reorganization efforts. The Trustee, in consultation with the Indenture Trustees and Noteholders who have signed confidentiality agreements, has therefore determined that it is in the best interests of the Estate and its constituents to seek to extend the Effective Date Deadline through April 30, 2010. On January 14, 2010, the Bankruptcy Court granted the Trustee's request, and extended the Effective Date Deadline through April 30, 2010, without prejudice to seek further extensions.

Question 54 (posted April 30, 2010): What is the latest update on the Trustee's efforts to pursue an alternative transaction that could realize further value from SEBC's remaining assets and has the Trustee sought a further extension of the Effective Date of the confirmed Plan?

The Trustee and SCS (the Estate's investment banker) continue to pursue potential investors and alternative transactions.  All such potential transactions are in the early stages of discussion, and the likelihood that any such transaction will be consummated is speculative at this point.  The Trustee and his professionals expect to have more feedback within the coming month as to the viability of and interest by investors in such potential transactions.

By motion filed on April 30, 2010, the Trustee has sought a further extension of the Effective Date Deadline for the confirmed Chapter 11 Plan, through and including July 31, 2010, without prejudice to seek additional extensions.  As noted in the motion seeking this further extension, however, in the absence of a desire by the key case constituents to extend the Effective Date Deadline beyond July 31, 2010, the Trustee is not inclined to seek a further extension.

In the event no further extension is sought beyond July 31, 2010, the Trustee and his Professionals will continue to work with the Noteholders and Indenture Trustees, holders of SEBC preferred equity, and Legal Representative for Holders of SEBC Common Stock, all of whom have executed confidentiality agreements, to review and evaluate a series of alternatives for winding up and closing the Bankruptcy Case in the event that no reorganization transaction can be consummated.

Question 55 (posted August 2, 2010): Why has the Trustee sought a further extension of the Effective Date of the confirmed Plan?

Although at the present time the Trustee does not have a commitment from any party interested in entering into a transaction similar to the Transaction to be implemented under the Plan, the Trustee and his professionals, including SCS (the Estate's investment banker), continue to pursue potential investors for alternative transactions, although the likelihood that any such transaction will be consummated is speculative at this point. The Trustee also continues to manage the Jacksonville Property and hold it open for sale, although there is not a strong likelihood of sale at a reasonable price in the immediate future.

With no immediate opportunity to either consummate reorganization under the Plan or an alternative version of the Plan, and no reasonable likelihood of sale of the Jacksonville Property on the horizon, the Trustee and his professionals continue to consult with the Noteholders, Senior and Subordinated Indenture Trustees, holders of preferred SEBC equity, and Legal Representative for Holders of SEBC Common Equity, all of whom have executed confidentiality agreements (collectively, the "Confidentiality Parties"), to review and evaluate a series of alternatives for winding up and closing the Bankruptcy Case in the event that no reorganization transaction can be consummated. Based on those discussions, which are still ongoing, the Trustee has determined to move for a further extension of the Effective Date Deadline through and including December 31, 2010. Pending further discussions with the Confidentiality Parties, however, the Trustee may consider withdrawing his request for further extension of the Effective Date Deadline at or before the August 17, 2010 status conference hearing in this case.

Question 56 (posted August 17, 2010): Why are quotations for shares of common stock of SEBC no longer available on the Pink OTC Markets (pinksheets.com)?

We understand that the Pink OTC Markets has discontinued the display of quotations on pinksheets.com for shares of SEBC common stock because the Securities and Exchange Commission ("SEC") has instituted a proceeding under Section 12(j) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and in connection has temporarily suspended trading in such shares pursuant to Section 12(k) of the Exchange Act from 9:30 a.m. eastern time on August 10, 2010 until 11:59 p.m. on August 23, 2010. According to the SEC, these steps have been taken because SEBC has not filed reports with the SEC since prior to the time it entered bankruptcy protection in 1991. A proceeding under Section 12(j) of the Exchange Act could result in the suspension or revocation of SEBC's Exchange Act registration. In the event that Exchange Act registration were suspended or terminated, Section 12(j) of the Exchange Act would prohibit market making and broker dealer activity in shares of SEBC common stock.

The Trustee first became aware of these matters on August 12, 2010 and, through counsel, has been informed by the staff of the SEC that the only remedy to prevent suspension or termination of registration would be the filing of all delinquent reports. The Trustee believes, however, that the costs of becoming compliant with SEC reporting requirements would require hundreds of thousands of dollars in legal, accounting, audit, administrative, and other professional expenses. In addition, maintaining such compliance would require significant ongoing legal, accounting, audit, administrative and other professional expenses.

Neither the current Trustee nor his predecessors chose to make SEC filings during the 19 year history of the case because of such significant expenses associated with doing so, particularly when there was little likelihood that the assets of SEBC would produce any recovery for common shareholders. The Trustee had intended to undertake SEC reporting compliance in connection with the transaction contemplated by the proposed plan of reorganization because that transaction provided a prospect of recovery for common shareholders. Because that transaction was not consummated and no alternative transaction has yet become available, the Trustee continues to believe that these costs are not warranted. If the Trustee later determines that an available transaction will generate a recovery to common shareholders and warrants public reporting status for SEBC, then SEBC could once again become a reporting company by filing a new Exchange Act registration statement, a process that would be more cost effective than attempting to file all delinquent reports. In the interim, the Trustee continues to file periodic reports with the Bankruptcy Court as required, and to provide additional information to the public through the posting of these FAQs on this website.

For the foregoing reasons, the Trustee currently anticipates that SEBC will consent to deregistration in order to preserve a relationship of cooperation with the SEC.

Question 57 (posted August 18, 2010): What did the Trustee report to the Court at the August 17, 2010 status conference?

On August 17, 2010, the Bankruptcy Court held a status conference, at which the Trustee reported to the Court that he does not presently have a commitment from any party interested in entering into a transaction similar to the Transaction to be implemented under the Plan. SCS, the estate's investment banker, believes that, although the chances are diminished, there remains a possibility of securing an investor for a business transaction through the end of this year. However, SCS believes that there will be little or no possibility of accomplishing such a transaction after the end of 2010. Accordingly, SCS continues to pursue potential investors for alternative transactions, but the likelihood that any such transaction will be consummated is speculative at this point. Compensation for SCS is contingent on consummation of a transaction.

The Trustee reported that he continues to hold the Jacksonville real estate for sale, but that, although there has been some interest from prospective purchasers, there are no immediate prospects for sale. The Trustee also indicated that he is exploring the possibility of obtaining a reduction of the real estate property tax assessment of the real property holdings and undertaking steps to extend or preserve the wetlands permits for the property. The Trustee recommended that it would not be advisable to attempt to sell the real estate by auction at the present time and that he believes that the passage of time will improve the prospects for sale and pricing.

With no immediate opportunity to either consummate reorganization under the Plan or an alternative version of the Plan, and no reasonable likelihood of sale of the Jacksonville Property on the horizon, the Trustee believes that the estate would be best served by continuing to the end of the year to seek an investor for a business transaction and to continue to offer the real estate for sale. Should there be no transaction or sale of real estate by year end or early 2011, the Trustee believes that the estate's alternatives should be revisited. The Trustee and his professionals continue to consult with the Noteholders, Senior and Subordinated Indenture Trustees, and Legal Representative for Holders of SEBC Common Equity, all of whom have executed confidentiality agreements (collectively, the "Confidentiality Parties"), to review and evaluate a series of alternatives for winding up and closing the Bankruptcy Case in the event that no reorganization transaction can be consummated. Based on those discussions, the Trustee has determined to proceed forward with his previously filed motion for a further extension of the Effective Date Deadline through and including December 31, 2010. At the conclusion of the August 17, 2010, status conference, the Court noted that it does not contemplate any further status conferences at this time, and that a future status conference will be set only upon request of the Trustee or another party in interest.

Finally, the Trustee reported that the estate currently has cash of approximately $1.9 million. The Trustee indicated that he and the estate professionals are endeavoring to minimize expenses as the estate seeks the most productive approach and timing to consummating a transaction or sale of its real estate portfolio.

Question 58 (posted October 1, 2010): Has SEBC's common stock been de-registered?

For the reasons set forth in FAQ #56 , the Trustee sought bankruptcy court approval to consent to the deregistration of SEBC's common stock.  By Order entered on September 17, 2010, the Bankruptcy Court authorized the Trustee to consent to deregistration of SEBC's common stock.  Pursuant to the Bankruptcy Court's authorization, the Trustee then consented to de-registration of SEBC's common stock.  Accordingly, on September 27, 2010, the SEC issued an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Southeast Banking Corp.

Question 59 (posted December 1, 2011): What is the latest status of the SEBC bankruptcy case?

Jeffrey H. Beck, Trustee ("Trustee") of Southeast Banking Corporation, Debtor ("SEBC" or "estate"), last filed and posted to the estate's website, www.sebcglobalsettlement.com, a status update as of August 2010. The update is found here: http://sebcglobalsettlement.com/faq.htm#Q57. The following is a further update on the status of SEBC as of December 1, 2011.

Business Transaction/Legal Representative for Holders of SEBC Common Stock

From the time of the August 2010 update through the present, the Trustee and his professionals have continued their efforts to locate a counter party to a business transaction similar to that embodied in the confirmed chapter 11 plan of SEBC, or a counter party to any reasonable business transaction which would benefit SEBC and its stakeholders. Unfortunately, although there have been discussions with a number of parties since August 2010, including some as recently as October and November of 2011, no transaction has been proposed by an investor to date.

As a result, aside from monitoring the case for the possibility of a transaction, Jerry Markowitz, the Legal Representative for Holders of SEBC Common Stock appointed by the Court (Legal Representative) has had no duties to perform. The Legal Representative suggested and the Trustee agrees that there is no benefit to the holders of common shares of SEBC stock to having the Legal Representative's appointment remain active. Thus, while the Trustee will continue to explore the possibility of a transaction, in cooperation with the Legal Representative, the Trustee has filed a motion to suspend the responsibilities and appointment of the Legal Representative pending reactivation should a transaction materialize. That motion is set for hearing on December 13, 2011.

Real Estate Interests of SEBC Estate

Through its wholly owned subsidiaries, the SEBC estate continues to own substantial unimproved real estate in Jacksonville, Florida. The nature and extent of these interests are described here: http://sebcglobalsettlement.com/faq.htm#Q33; and here: http://sebcglobalsettlement.com/faq.htm#Q52. Since the status update in August 2010, the Trustee, in conjunction with his professionals and management consultants, has continued to actively market the properties for sale and to manage the properties in order to realize the maximum potential from the estate's interests. To that end, the estate has succeeded in obtaining a Fair Share agreement with the City of Jacksonville to extend and amplify the rights of the estate entities and their co-owners .

In addition, the estate has successfully challenged the real property tax assessments, resulting in a lowering of the assessed values. Also, the estate has moved to extend the duration of permits obtained from governmental authorities concerning wetlands. The estate will implement the requirements for such permits as soon as possible. Finally, the estate has proposed and obtained local government approval of a forestry plan for these unimproved properties to harvest and replant saleable trees on the properties. SWQ and Belfort will enjoy an agricultural exemption from real estate taxes while such forestry activities are implemented and active.

In addition to the management activities, the estate has continued to keep the properties available for sale. Market conditions have not been conducive to sale of such unimproved real property and little interest was seen until recently. Since mid-summer 2011, a number of property developers have expressed interest in the potential acquisition and development of commercial and residential projects on estate property. The estate will continue to explore the realization of maximum value from its properties.

The estate has entered into a settlement agreement to resolve certain disputes with co-owners ("SQJV") of a 50% interest in a portion of the properties known as the Southwest Quadrant . Here is a copy of the agreement and of the order of the bankruptcy court approving it: http://sebcglobalsettlement.com/pleadings/ExhibitA.pdf. Under the agreement, the interest of SQJV was set at 30% of all of the Southwest Quadrant properties, and SQJV became obligated to repay the estate for its share of the expenses incurred by the estate in management and sale of the properties. This obligation carried an interest rate of 8.5%, which at the time of the agreement in 1998 was the "prime rate" of interest as published in the Wall Street Journal. Also under the agreement, the parties contemplated sale of the entire of the Southwest Quadrant Properties for $5 million. Certainly, it was not known at the time of the effective date of the agreement that the disposition of the properties would continue into 2011.

In addition, although the estate had exclusive right to manage the Southwest Quadrant properties under the settlement agreement with SQJV, the estate determined to employ the principals of SQJV as property management and marketing consultants for the Southwest Quadrant properties and one of such principals for the other significant estate property holding, the Belfort property. A copy of the agreements and order approving them for such management of the properties is found here: http://sebcglobalsettlement.com/pleadings/ExhibitB.pdf. These management agreements have been renewed annually as allowed under the agreements. SQJV and its principals have been instrumental in the successful management and marketing of the properties. Notwithstanding the settlement agreement provision for sale at $5 million, a sale was consummated in 2005 for $13 million of a portion of the Southwest Quadrant properties.

In early 2011, SQJV and its principals requested a reduction of the interest rate on the carried reimbursement obligation of SQJV in the settlement agreement, arguing that the rate was onerous given current market conditions. They requested that the rate be reduced to 2% fixed. In addition, because of their significant contributions to the management and sale of the properties, they requested that estate acknowledge that they had earned all compensation provided for in the management agreements. After consultation with the principal creditor representatives, the Trustee determined to propose to SQJV and its principals that as of January 1, 2011 the interest rate on accrued expense reimbursement be set at a floating rate at the prevailing "prime rate" as published by the Wall Street Journal. That rate has been 3.25% for the duration of 2011. After such consultation, the Trustee further proposed to the principals of SQJV to modify the management agreements to provide that they be terminable by the estate only for cause so long as the estate owned an interest in the properties covered by such agreements. SQJV and its principals have accepted both proposals. Accordingly, the estate has filed a motion to approve such changes in early November 2011, and that motion is also set for hearing on December 13, 2011.

Anticipated Actions Going Forward

Although it remains unlikely, the estate plans to continue to explore a business transaction so long as there remains a viable possibility of executing such a transaction and to the extent that there are parties interested in pursuing such a transaction. However, the estate will not expend significant resources on such a transaction unless a serious and significant offer is received, and only after further consultation with the principal creditors. The estate will continue to manage its real estate holdings and endeavor to realize the maximum proceeds from disposition of the properties. The estate will minimize expenses commensurate with protection of the estate's vested rights in permits and entitlements. The Trustee believes that an ordinary course of business sale of the real estate would realize the maximum value for the estate and that this might require additional time to accomplish. As of October 31, 2011, the estate had cash of approximately $1.553 million. On December 13, 2011, the Court will consider fee applications by estate professionals, as well as payment of indenture trustee fees and expenses and substantial contribution claims of the Ad Hoc Committee and Gabriel Capital. The total amount of requested fees and expenses is approximately $787,000. If all fee and expense requests are approved by the Court, the remaining amount of cash on hand after payment of these fees and expenses would be approximately $765,000. The Trustee believes that, by conserving expenses, the cash on hand would be sufficient to allow the estate to take the time necessary to maximize the estate's value in its assets and attributes.

The Trustee consulted with the principal creditors as to whether the estate should remain in chapter 11 with the possibility of modification of the confirmed chapter 11 plan should a business transaction materialize or a bulk sale of real estate be possible, or instead to seek to convert the SEBC case to chapter 7. The Trustee believes that there is no advantage or compelling reason, at present, to convert the case to chapter 7, especially as there remains a possibility (although not a probability) of a business transaction. It remains possible as well that a modified chapter 11 plan could facilitate a bulk sale of the real estate holdings. The consensus among the principal creditors was to continue the case at present in chapter 11 pending further developments. As circumstances unfold, this decision will be revisited.

Question 60 (posted June 29, 2012): What is the latest status of the SEBC bankruptcy case?

Despite the Trustee’s continued efforts to locate a counter-party to a business transaction similar to that embodied in the March 13, 2009 confirmed Chapter 11 plan, or a counter-party to any reasonable business transaction which would benefit SEBC and its stakeholders, no transaction has been proposed by an investor to date. The Trustee has, however, continued to actively market the real estate owned by subsidiaries of the SEBC estate, and on March 27, 2012, the Bankruptcy Court entered an Order authorizing the Trustee to exercise the estate’s interest in one of its subsidiaries to effectuate a sale of certain real estate for a minimum purchase price of $4,200,000. By motion filed on June 18, 2012, the Trustee sought approval of certain modifications to the contract for the sale of this real property. That motion is scheduled for hearing on July 3, 2012. In the event that motion is granted, the Trustee anticipates closing on the sale of the real property by July 20, 2012.

After the real estate sale closes, and in light of the inability to consummate the Chapter 11 Plan, the Trustee intends on moving to convert this case back to a case under Chapter 7 of the Bankruptcy Code in order to liquidate SEBC’s remaining assets. In determining to pursue this course of action, the Trustee has engaged in continuous dialogue with the Confidentiality Parties regarding available options for winding up this case and liquidating SEBC’s remaining assets. After considering several options – including modification to the Chapter 11 Plan under 11 U.S.C. §1127(b) and conversion to Chapter 7 – and discussing those options with the Confidentiality Parties, and in accordance with his business judgment, the Trustee believes that conversion to Chapter 7 is in the best interests of the Estate and its creditors at this time. The Trustee believes that the disposition of the remaining real estate parcels can be accomplished in an orderly fashion after the case is converted to Chapter 7. Because the Trustee believes that the prospect of any form of reorganization is very remote, the administration of the case under Chapter 7 is more appropriate and preserves all possible avenues for realization of value for the SEBC estate.

Question 61 (posted June 29, 2012): What would need to transpire in order for stockholders to receive any distribution in the SEBC case?

In order for stockholders to receive any distribution in the SEBC case, SEBC would either (1) need to realize value from its remaining assets in excess of the amount of remaining unpaid post-petition interest due to creditors, or (2) engage in an equity infusion transaction of the type proposed in the Chapter 11 plan.

As noted in previous FAQs ( see #46, #48, #49, #50, #51, #53, #54, #55, #57 and #59), despite the efforts of the Trustee and his professionals since 2009, the Trustee has been unable to locate an investor for an equity infusion transaction. The Trustee believes that the prospect of an equity infusion transaction is very remote and, for that reason, as indicated in response to the immediate prior question, the Trustee will be moving to convert the case to Chapter 7. With respect to the ability to realize value from SEBC’s remaining assets in excess of the amount of remaining unpaid post-petition interest due to creditors, the Trustee believes that the prospect of realizing such value is nil given the amount of post petition interest remaining to be paid to creditors.

Question 62 (posted October 31, 2012):  I am a creditor of SEBC. Now that the case has been re-converted back to Chapter 7, how does that affect my claims?

On October 10, 2012, the Bankruptcy Court entered an Order re-converting SEBC’s case back to a Chapter 7 liquidation. The case was re-converted at the Trustee’s request after the Trustee was unable – after diligent efforts – to find a counterparty for an equity infusion transaction similar to that embodied in the March 13, 2009 confirmed Chapter 11 plan. Creditors are not required to file new claims in order to participate in future distributions in the case. The February 10, 1992 claims bar date in this case passed over twenty years ago, and all filed claims have been resolved long ago. Any future distributions of post-petition interest will be paid to the holders of allowed claims in accordance with the same principles of the Bankruptcy Code that have governed in the past. The source of payment of such interest will be cash on hand and the proceeds of future sales of the estate’s subsidiary real estate holdings. It is not possible to predict the amount of proceeds that will come from the disposition of the real estate.

Question 63 (posted October 31, 2012) I am a stockholder of SEBC. Now that the case has been re-converted back to Chapter 7, how does that affect my equity interests?

On October 10, 2012, the Bankruptcy Court entered an Order re-converting SEBC’s case back to a Chapter 7 liquidation. The case was re-converted at the Trustee’s request after the Trustee was unable – after diligent efforts – to find a counterparty for an equity infusion transaction similar to that embodied in the March 13, 2009 confirmed Chapter 11 plan.

The Bankruptcy Code requires that creditors of SEBC must be paid in full, with interest, before any distribution is made to preferred or common stockholders in respect of their equity interests. While creditors have been paid the full principal amount of their claims and a portion of post-petition interest, the Trustee believes that the amount of unpaid post-petition interest on their claims far exceeds the value of the remaining tangible assets of SEBC.

The bankruptcy case was initially filed under Chapter 7, and converted to a case under Chapter 11 in September 2007 in an effort to maximize realizations in general and provide some recovery for shareholders under an investment transaction that had been negotiated with an institutional investor. Such a transaction would have been the only source of providing a distribution to shareholders. On the basis of global financial events in 2008, and specifically the impact of those events on the investor, the investor exercised its right to cancel the transaction. Efforts to attract an alternate investor for a similar, down-sized form of transaction have been unsuccessful, and without such an investor, the case has been re-converted back to a liquidation under Chapter 7 of the Bankruptcy Code. To date there has been no distribution to holders of SEBC preferred or common stock, and no such distribution is expected now that the case is proceeding as a Chapter 7 liquidation.

Question 64 (posted October 31, 2012) I am a former employee of Southeast Bank, N.A. How does the re-conversion of SEBC's case back to Chapter 7 affect me?

On October 10, 2012, the Bankruptcy Court entered an Order re-converting SEBC’s case back to a Chapter 7 liquidation. The case was re-converted at the Trustee’s request after the Trustee was unable after diligent efforts to find a counterparty for an equity infusion transaction similar to that embodied in the March 13, 2009 confirmed Chapter 11 plan.

Nothing about the re-conversion of this case back to Chapter 7 affects any former employees of Southeast Bank, N.A. All claims of former employees of Southeast Bank, N.A., were resolved long ago in the FDIC receivership for Southeast Bank, N.A. The re-conversion of the bankruptcy case of its parent holding company, Southeast Banking Corporation, to a Chapter 7 liquidation does not affect any former employees of Southeast Bank, N.A.

Cautionary Statement Regarding Forward-Looking Statements

The Trustee and his representatives from time to time make written or oral forward-looking statements concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are "forward-looking statements." Generally, the inclusion of the words "believe," "could," "should," "estimate," "expect," "intend," "anticipate," "will," "project," "plan," "goal," "target," "forecast" and similar expressions identify statements that constitute "forward-looking statements." All statements addressing events or developments that the Trustee expects or anticipates will occur in the future, including statements relating to future financial condition, assets and real property, as well as statements expressing optimism or pessimism about future results, are forward-looking statements.

The forward-looking statements are and will be based upon the Trustee's then-current views and assumptions regarding future events and developments and are applicable only as of the dates of such statements. The Trustee assumes no obligation to update or revise any forward-looking information or the discussion of such risks and uncertainties to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, whether as a result of new information, future events or otherwise.

By their nature, all forward-looking statements involve risks and uncertainties. Actual results could differ materially from those anticipated in such forward-looking statements as a result of several important factors, including, without limitation, uncertainties inherent in government permitting for the Jacksonville properties, including, without limitation, the ability to obtain required permits that will allow the development of the Jacksonville properties on a financially favorable basis, the ability to fulfill on a commercially reasonable basis any conditions or requirements set forth in any permits already issued or in additional required permits and potential adverse challenge, modification or expiration of any issued permits before the initiation or completion of any development project; potential changes in applicable development, zoning, building code, environmental and other laws and regulations affecting the commercial development of real property; the ability to attract equity investors on a basis that will permit the confirmed plan of reorganization or an amended version thereof to be implemented; the ability to negotiate, propose and confirm a modified form of the confirmed plan of reorganization that will not adversely affect the anticipated additional value for the benefit of creditors and shareholders resulting from such confirmed plan; the continuing downturn in the real estate market; the availability of financing and the difficult conditions affecting capital markets, particularly in respect to commercial real estate and development projects; the ability to preserve certain tax attributes, including, without limitation, the expiration of net operating losses in accordance with current law and regulation, changes in tax laws, regulations and interpretations that might adversely affect current tax attributes, as well as the effect on existing tax attributes of any transaction ultimately available to the Trustee and the Estate; and extraordinary or unforeseeable events.

The foregoing list is not exhaustive. There can be no assurance that the Trustee has correctly identified and appropriately assessed all factors affecting the Estate and its assets, or that the publicly available and other information with respect to these matters is complete and correct. Additional risks and uncertainties not presently known or that the Trustee currently believes to be immaterial also may adversely impact the Estate. Should any risks and uncertainties develop into actual events, these developments could have a material adverse effect on the financial condition of the Estate. For these reasons, you are cautioned not to place undue reliance on any forward-looking statements.

Question 65 (posted September 5, 2014): What is the latest status of the SEBC bankruptcy case?

In mid-2012, this Southeast Banking Corporation (“SEBC”) case was pending under Chapter 11 of the Bankruptcy Code. At that time, the estate’s principal assets (held through non-debtor subsidiaries (the “Subsidiaries”)) consisted of: (1) a 70% interest in approximately 70 acres of undeveloped land near the southwest corner of J. Turner Butler and Southside Boulevards in Jacksonville, Florida (the “Southwest Quadrant Parcels”), of which the remaining 30% interest was held by the Southwest Quadrant Joint Venture (“SQJV”); (2) a reimbursement obligation of SQJV to SEBC for expenses advanced by SEBC on the Southwest Quadrant Parcels; and (3) a 100% interest in approximately 7.3 acres of undeveloped land at the intersection of AC Skinner Parkway and Salisbury Road, also in Jacksonville, Florida (the “Belfort Parcel”).

A 17-acre portion of the Southwest Quadrant Parcels was sold and closed in August 2012 with net proceeds to the estate of $3,872,776, inclusive of a partial expense reimbursement from SQJV. The bankruptcy case was converted to Chapter 7 on October 10, 2012. At that time, 53 acres of the Southwest Quadrant Parcels and the Belfort Parcel remained, along with the continuing expense reimbursement obligation of SQJV.

In October 2013, the Subsidiaries and SQJV entered into a $5.4 million contract to sell 15 acres of the remaining 53 acres of the Southwest Quadrant Parcels to Eckstein Investments, LLC. The Subsidiaries and SQJV closed on that contract on May 1 2014. See Trustee’s Report of Sale of Non-Debtor Subsidiary Real Property (ECF No. 6172). The net cash to the estate from the sale was $3,948,577.61, including a partial reimbursement of the continuing expense reimbursement from SQJV.

In February 2014, the Subsidiaries and SQJV entered into a $2.4 million contract to sell approximately 10 of the remaining 38 acres of the Southwest Quadrant Parcels to Charter Schools Development Corporation. The estate’s non-debtor subsidiaries closed on that contract on March 12, 2014. See Trustee’s Report of Sale of Non-Debtor Subsidiary Real Property (ECF No. 6145). The net cash to the estate from the sale was $1,851,498.45.

In March 2014, the Subsidiaries and SQJV entered into a $6.0 million contract to sell 13 of the remaining 28 acres of the Southwest Quadrant Parcels to DeMedici Investments, LLC. The buyer under this contract has exercised its right to terminate the sale agreement within the inspection period. See Notice of Termination of Non-Debtor Subsidiary Sale Contract (ECF No. 6173). As a result, there remains 28 acres of the Southwest Quadrant Parcels.

In May 2014, the Subsidiaries and SQJV entered into a $5.4 million contract to sell 15 of the remaining 28 acres of the Southwest Quadrant Parcels to AC Packer, LLC. The buyer is moving forward with planning, has submitted a site plan to the sellers and has engaged counsel for the required zoning. The inspection period on this contract expired on September 3, 2014, and the buyer has not terminated the contract; conditioned, however, on a credit that has been agreed to be applied at closing for $360,000 in respect of soil and other issues found by the buyer during the inspection period.

If the AC Packer Sale closes, then the estate’s principal remaining assets (held through its nondebtor subsidiaries) will be: (a) the remaining approximately 13-acre portion of the Southwest Quadrant Parcels that DeMedici Investments was originally under contract to buy; (b) the 7.3-acre Belfort Parcel; and (c) the remaining expense reimbursement due from SQJV. In addition, there are certain excess wetlands mitigation credits and some vacant acreage severely negatively impacted by wetlands and a conservation easement. Significant progress has been made in wrapping up the estate. Of the 77 acres of undeveloped land at the Southwest Quadrant and Belfort Parcels held in mid-2012, 42 acres have been sold and closed and an additional 15 acres are under a binding contract to sell. The Trustee continues to pursue buyers for the remaining real estate, and is evaluating options for liquidating the wetlands mitigation credits. The estate has cash on hand of $8,569,778 as of August 20, 2014.

Question 66 (posted January 13, 2016): When does the Trustee expect to wind up and close the SEBC bankruptcy case, and how much does the Trustee expect to distribute in a final distribution to creditors?

On January 11, 2016, Second Pioneer Corporation (“Second Pioneer”), an indirectly wholly-owned non-debtor subsidiary of Southeast Banking Corporation (“SEBC”), closed on a sale of the “Belfort” property – an undeveloped parcel of real property – to Rimrock Devlin Development LLC, for a total cash purchase price of $2,000,000. After expenses and other closing costs, the proceeds of the sale upstreamed to the SEBC estate were $1,859,838.90.

After the closing of the Belfort sale, the last remaining material non-cash assets of SEBC are the interests of its wholly-owned nondebtor subsidiaries Southeast Properties, Inc. and SWQ Holdings, Inc. (the “Non-Debtor Subsidiaries”) in undeveloped real property and other related property interests (“Southwest Quadrant”) owned 70% by the Non-Debtor Subsidiaries and 30% owned by a partnership not affiliated with SEBC, the Southwest Quadrant Joint Venture (“SQJV”).

By order entered on September 9, 2015, the Bankruptcy Court authorized SEBC to proceed with the sale of the Non-Debtor Subsidiaries’ real and other related property interests in the Southwest Quadrant to Kent Schmidt and James H. Efstathion (who are the joint venture partners in SQJV) or their successors, assigns or designees (“Purchasers”), for a total cash purchase price of $3 million, plus half of all closing costs and assumption of all ongoing obligations (the “SQJV Sale”). Under the terms of the sale contract as amended, the Purchasers have made a non-refundable deposit of $25,000 and an additional refundable deposit of $100,000 with the inspection period to expire February 8, 2016. Assuming the Purchasers do not elect to cancel on or prior to February 8, 2016, the Purchasers have until March 9, 2016 to close.

If the SQJV Sale closes, the Trustee will then begin to take the necessary steps to wind up the SEBC Chapter 7 bankruptcy case, prepare his final report, and make distribution to creditors of the funds to which they are entitled. The choice of the mechanics of making such distribution will be explored and discussed with the constituents, United States Trustee and, as appropriate, the Court.

As of January 12, 2016, and including the proceeds of the Belfort sale, the SEBC estate has cash on hand of approximately $13,635,556.75. If the SQJV Sale closes, the SEBC estate expects to receive additional cash of approximately $2,700,000, resulting in approximately $16,335,556.75 in cash on hand. Projected expenses to close the case, including payment of trustee and professional fees, as well as a conservative contingency reserve, are approximately $2,335,717.85, resulting in estimated projected funds available for distribution to creditors of approximately $14,000,000. See attached chart. Preliminary estimates of projected distributions are set forth in the attached table, along with Exhibit A thereto. The foregoing amounts are estimates only and could vary materially.

As indicated above, the mechanics of making distributions to creditors will be discussed with various parties and has not been determined. Given the logistics involved in making distributions to holders of six different bond issues, including two issues of EuroNotes and the need to prepare and file final tax returns and to comply with other requirements of winding down the estate, the Trustee anticipates that it will take several months following the closing of the Southwest Quadrant property before final distributions can be made and the SEBC Chapter 7 case can be closed.

Question 67 (posted July 18, 2016): When will final distributions be made?

As of June 3, 2016, all assets of Chapter 7 Debtor Southeast Banking Corporation and its subsidiaries have been administered, all proceeds have been received, the 2015 and short year Final 2016 income tax returns have been filed and prompt determination requests have been made for the returns. It is expected that the prompt determination period on the 2015 and 2016 returns will have passed on or about August 1, 2016. Assuming that the Internal Revenue Service does not select one or both of the returns for audit, final fee applications of professionals will be filed with the Court and the Trustee’s Final Report (“Final Report”) will be filed with the Office of the United States Trustee for review shortly after August 1, 2016. The Final Report will cover the period of the current Chapter 7 that commenced October 10, 2012. Upon completion of the United States Trustee’s review of the Final Report and resolution of any questions or issues raised by the United States Trustee, the United States Trustee will forward the Final Report to the Court. There is no set time period for the review of the Final Report by the United States Trustee.

Upon the filing of the Final Report with the Court, a notice of filing of the Final Report is sent to all creditors. The notice informs the creditors: that the Final Report is on file with the clerk of the Court; that the Trustee and estate professionals have applied for the compensation indicated; that the money on hand will be used to satisfy the Trustee’s fees and expenses, the fees and expenses of the Trustee’s professionals and to make the final distribution to creditors; and that the creditors have a right to object to the Final Report. Court orders are necessary prior to payment of fees and expenses and to resolve any objections filed to the Final Report. Upon all such orders becoming final, distributions will be made in accordance with the Final Report, or otherwise as provided in the order.

Subject to the timing of the steps of this process not within his control, Jeffrey H. Beck, as Chapter 7 Trustee, will make every effort to complete the final distribution prior to the end of 2016. Estate cash on hand was $16,643,255.07 as of June 3, 2016. The Trustee and his professionals have made projections of the fees, expenses and other estate costs going forward, including a modest contingency. Based upon these projections and subject to changes after completing the steps described above, it is anticipated that the amount available for final distribution to noteholders and general creditors will be $15,200,000.

A copy of the projections of expenses and resulting cash available for distribution is attached as Exhibit A. Based upon this projection of cash available for the final distribution, the Trustee and his professionals have prepared an estimate of the amounts that would be distributed to each creditor and to the indenture trustee for each bond issue in the final distribution. A copy of that projection for the final distribution is attached as Exhibit B. Based upon this projection, the Trustee and his professionals have prepared a summary of all distributions from case inception through the final distribution. A copy of that summary is attached as Exhibit C.

As indicated in Exhibit C, the estate has already paid in full the principal amount of the petition date claims of creditors in the amount of $407,169,317, along with $47,649,997 of post-petition interest. Based upon the projection of $15,200,000 of additional cash available for the final distribution shown in Exhibit A, the total post-petition interest paid will be $62,849,997, for total combined distributions to creditors of $470,019,314. Of course, the actual final distribution could vary from the projection and will not be finalized until after all of the steps outlined above are completed.

Cautionary Statement Regarding Forward-Looking Statements

The Trustee and his representatives from time to time make written or oral forward-looking statements concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are “forward-looking statements.” Generally, the inclusion of the words “believe,” “could,” “should,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “project,” “plan,” “goal,” “target,” “forecast” and similar expressions identify statements that constitute “forward-looking statements.” All statements addressing events or developments that the Trustee expects or anticipates will occur in the future, including statements relating to future financial condition, assets and real property, as well as statements expressing optimism or pessimism about future results, are forward-looking statements.

The forward-looking statements are and will be based upon the Trustee’s then-current views and assumptions regarding future events and developments and are applicable only as of the dates of such statements. The Trustee assumes no obligation to update or revise any forward-looking information or the discussion of such risks and uncertainties to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, whether as a result of new information, future events or otherwise.

By their nature, all forward-looking statements involve risks and uncertainties. Actual results could differ materially from those anticipated in such forward-looking statements as a result of extraordinary or unforeseeable events.

There can be no assurance that the Trustee has correctly identified and appropriately assessed all factors affecting the Estate and its assets, or that the publicly available and other information with respect to these matters is complete and correct. Additional risks and uncertainties not presently known or that the Trustee currently believes to be immaterial also may adversely impact the Estate. Should any risks and uncertainties develop into actual events, these developments could have a material adverse effect on the financial condition of the Estate. For these reasons, you are cautioned not to place undue reliance on any forward-looking statements.

Question 68 (posted November 9, 2016): Now that the Trustee’s Final Report has filed, when will final distributions be made?

On November 4, 2016, the Office of the United States Trustee filed the Trustee’s Final Report ("TFR") with the Court. Jeffrey H. Beck, as Chapter 7 Trustee (the "Chapter 7 Trustee") then served a Notice of Trustee’s Final Report ("NFR") and the Trustee's Summary of Requested Fees and Expenses (“Fee Summary”) on all creditors and parties in interest on November 7, 2016. The deadline for objections to the NFR is November 28, 2016.

If no objections to the NFR are timely filed, then shortly after November 28, 2016, the Chapter 7 Trustee intends to submit to the Court for entry a proposed form of final fee order, approving the final fees of the Chapter 7 Trustee and estate professionals in the amounts set forth in the Fee Summary (the “Final Fee Order”). Once the Court enters the Final Fee Order, the Chapter 7 Trustee will then serve the Final Fee Order on all creditors and parties in interest. If no party in interest appeals or seeks rehearing or reconsideration of the Final Fee Order within fourteen days of its entry, then immediately after the expiration of such 14-day period, the Chapter 7 Trustee will be in a position to make final distributions in accordance with the TFR.

Subject to the steps in this process that are not within his control, the Chapter 7 Trustee will continue to make every effort to make final distributions as soon as practicable after the expiration of all application deadlines. In the event no objections are timely filed with respect to the NFR, and no appeals, motions for reconsideration or rehearing are filed with respect to the Final Fee Order, it remains possible, but not assured, that final distributions will be made before the end of 2016.

If you are a non-bondholder creditor, final distribution checks will be sent to you at the address listed on your proof of claim, or any updated address previously filed with the Court. In order to be sure that we have your current address, please confirm or update your address with the Chapter 7 Trustee by contacting Meredith Walker of Kapila/Mukamal LLP (the accountants for the bankruptcy estate) either via email to MWalker@kapilamukamal.com, or by phone at 954/323-2025, by no later than November 28, 2016. In the event the address we have on file for you is not your current address, Ms. Walker will provide directions to you to submit to her a signed letter or notice of address change, which we will then file with the Court for you.

Cautionary Statement Regarding Forward-Looking Statements

The Trustee and his representatives from time to time make written or oral forward-looking statements concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are “forward-looking statements.” Generally, the inclusion of the words “believe,” “could,” “should,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “project,” “plan,” “goal,” “target,” “forecast” and similar expressions identify statements that constitute “forward-looking statements.” All statements addressing events or developments that the Trustee expects or anticipates will occur in the future, including statements relating to future financial condition, assets and real property, as well as statements expressing optimism or pessimism about future results, are forward-looking statements.

The forward-looking statements are and will be based upon the Trustee’s then-current views and assumptions regarding future events and developments and are applicable only as of the dates of such statements. The Trustee assumes no obligation to update or revise any forward-looking information or the discussion of such risks and uncertainties to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, whether as a result of new information, future events or otherwise.

By their nature, all forward-looking statements involve risks and uncertainties. Actual results could differ materially from those anticipated in such forward-looking statements as a result of extraordinary or unforeseeable events.

There can be no assurance that the Trustee has correctly identified and appropriately assessed all factors affecting the Estate and its assets, or that the publicly available and other information with respect to these matters is complete and correct. Additional risks and uncertainties not presently known or that the Trustee currently believes to be immaterial also may adversely impact the Estate. Should any risks and uncertainties develop into actual events, these developments could have a material adverse effect on the financial condition of the Estate. For these reasons, you are cautioned not to place undue reliance on any forward-looking statements.

 

Question 69 (posted December 21, 2016): Will there be a distribution to shareholders of Southeast Banking Corporation?

All assets of Southeast Banking Corporation have now been liquidated. There will be no distribution to shareholders. The final distribution in the Chapter 7 bankruptcy case is the last distribution before the close of the case, and consists of a further partial payment to creditors of post-bankruptcy interest. Because the creditors’ claims for post-petition interest exceeds the remaining funds, there are not now and there will never be any funds for distribution to shareholders.

Cautionary Statement Regarding Forward-Looking Statements

The Trustee and his representatives from time to time make written or oral forward-looking statements concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are “forward-looking statements.” Generally, the inclusion of the words “believe,” “could,” “should,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “project,” “plan,” “goal,” “target,” “forecast” and similar expressions identify statements that constitute “forward-looking statements.” All statements addressing events or developments that the Trustee expects or anticipates will occur in the future, including statements relating to future financial condition, assets and real property, as well as statements expressing optimism or pessimism about future results, are forward-looking statements.

The forward-looking statements are and will be based upon the Trustee’s then-current views and assumptions regarding future events and developments and are applicable only as of the dates of such statements. The Trustee assumes no obligation to update or revise any forward-looking information or the discussion of such risks and uncertainties to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, whether as a result of new information, future events or otherwise.

By their nature, all forward-looking statements involve risks and uncertainties. Actual results could differ materially from those anticipated in such forward-looking statements as a result of extraordinary or unforeseeable events.

There can be no assurance that the Trustee has correctly identified and appropriately assessed all factors affecting the Estate and its assets, or that the publicly available and other information with respect to these matters is complete and correct. Additional risks and uncertainties not presently known or that the Trustee currently believes to be immaterial also may adversely impact the Estate. Should any risks and uncertainties develop into actual events, these developments could have a material adverse effect on the financial condition of the Estate. For these reasons, you are cautioned not to place undue reliance on any forward-looking statements.

 

 



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