FDIC Announces Winner of Assets from Tennessee Bank

Regulators have announced the winning bidder for assets of a failed bank in Tennessee.

The Federal Deposit Insurance Corp. said Thursday that a partnership between an unnamed minority-owned business and Oaktree Capital Management based in Los Angeles, will pay $23.9 million in cash for 25% of a company formed to own 93 commercial real estate loans the FDIC inherited from Tennessee Commerce Bank in Franklin, Tenn.

Regulators seized Tennessee Commerce in January after the bank became critically undercapitalized.  The loans have a combined unpaid balance of roughly $166.2 million, secured mostly by land and other collateral in Tennessee, according to the FDIC.

The winning team was among ten groups who bid for the assets, which the FDIC sold as part of its program for small investors.  The sale was the FDIC's fourth under the program, which aims to give smaller investors, including minority- and women-owned business, opportunities to buy assets from failed banks.

The FDIC forms partnerships with winning bidders, who buy a minority stake in the venture, manage the assets, and share proportionally in any appreciation.

Oaktree, which managed roughly $79 billion in assets at the end of June, declined to comment. The FDIC did not immediately identify the minority-owned business.

In March, the FDIC auctioned a slew of gemstones, bracelets and other trinkets that served as collateral for a loan by Tennessee Commerce to a jewelry store that later defaulted.