Oct 11, 2008
More Financial Woes For YTB
Last month, we posted about the only source of funding for YTB being investigated for improper loans and unsound banking practices. Well, it seems that Meridien Bank, whose owners represent 22% of YTB's Board of Directors, also don't like to play by the rules. The bank was closed yesterday morning by the Federal Government and taken into receivership.
Sure times are tough for banks, but Meridien was given ample warning to comply with federal regulations but apparently they were either a little too late, or just did not want to. Thankfully, their depositor's money is safe because the FDIC has taken the reins before the unsound practices could continue.
According to the St. Louis Post Dispatch, in a recent SEC filing, YTB said it can draw "no further amounts under that loan," and that it has no other credit available.
With a market cap that is dwindling each day, no access to credit, $225M in pending lawsuits, not many (if any) sources will be willing to lend any capital. What is next? Will the FDIC begin to foreclose on the new Headquarters?
And how long will the bank's principal's remain on the Board? Will Clay Winfield and Tim Kaiser feel the same heat that Burt Saunders currently is and undoubtedly the same heat that John Simmons did? Well, at least Simmons may get a nice house out of his deal.
Posted by John at 8:03 AM