State

County Bank parent files Chapter 11

Capital Corp of the West, the parent company of what was County Bank, filed for Chapter 11 bankruptcy with debts totaling $68 million.

With the loss of its main enterprise in February, the parent company's bankruptcy was inevitable.

Capital Corp of the West has about $6.7 million in cash and other assets, according to bankruptcy filings published this week.

The records name some of the people who lost the most when County Bank was seized by the government.

Most of its debts are to financial institutions, though it has 10 million stock shares that are worthless and workers left without retirement plans.

The company has about 800 creditors. Records show it owes $25 million to Wilmington Trust Co., in Delaware, $25 million to U.S. Bank National Association and $6 million to State Street Bank and Trust Co. of Connecticut.

A Minneapolis company is owed $652,881 for computers, equipment and office furnishings and a North Carolina software firm is owed $132,457.

Of the 20 largest unsecured claims, 14 are for the cash value of managements' retirement plans, amounting to about $11 million.

Besides listing its debts, the filings retell the story of County Bank's fall.

The bank had $2.1 billion in assets when 2007 ended. Much of its lending was to developers rapidly building neighborhoods in Merced and the rest of the valley.

As the market's bottom fell out, County Bank was forced to put more and more money aside, even on loans that weren't late on payments.

Then developers began defaulting on their loans as home sales dried up. When foreclosures started to wash over the region, home prices collapsed and the value of housing projects backed by the bank sank.

The company tried to drum up more cash to offset the losses, but the bad news continued to mount and investors were scarce. County Bank was not awarded any federal Troubled Asset Relief Program funds and was closed by regulators.

After the seizure, Capital Corp of the West sold Bay View Funding and netted $5.6 million. It also sold its 4,731 shares of Farmers & Merchants stock for $1.6 million.

Westamerica recently signed a lease with Merced to move into one of the slots in the downtown parking structure.

County Bank's Main Street headquarters, owned by the Federal Deposit Insurance Corp., is being appraised and a real estate agent may be hired soon.

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