The U.S. Treasury Department aims to stand in the way of private equity legend Wilbur Ross' bid to buy a small Ohio bank.
Treasury last week warned that Ross' $45 million offer for the bankrupt First Place Financial Corp. would "chill bidding" and could keep the government from recovering the bailout money it gave to First Place three years ago. Ross' Talmer Bancorp made the offer for Warren, Ohio-based First Place Bank after First Place Financial filed for bankruptcy protection last month.
"There is a material risk that Treasury will receive no recovery on account of its investment in the debtor," the U.S. said in a court filing. Treasury wants First Place Financial to "fully market" its bank and to give the government "consultation rights."
First Place Financial borrowed $72.9 million from the government's Troubled Asset Relief Program and has yet to repay it.
"It's unfortunate that it did not work out well for the creditors of the holding company, but you can't invent bids that don't exist," Ross said.