Boymelgreen’s bank at risk of seizure, could mark first NY bank failure since crisis began

November 30, 2009 04:32PM

The LibertyPointe Bank,
whose chairman is troubled developer Shaya Boymelgreen, is in danger of
being seized by regulators after failing to raise the $25 million
ordered by the Federal Deposit Insurance Corporation. After issuing the
New York-based bank a cease and desist order
in July, reports showed that the bank’s total risk-based capital ratio
was only 3.7 percent as of Sept. 30, well below the minimum threshold
of 8 percent for an “adequately capitalized” bank. On Oct. 20, the FDIC
decided to give the bank 30 days to raise additional capital. However,
the bank failed to raise the cash by the deadline and chief executive
Meron Corn said it is “unclear what will happen next.” The failure of
LibertyPointe Bank would be added to the list of difficulties recently encountered by Boymelgreen, who is also dealing with stalled downtown office building conversions and various lawsuits
from lenders and creditors. Also, if LibertyPointe Bank goes under, it
would be the first failure of a New York bank since the financial
crisis started two years ago. [Crain’s]