The Delaware Chancery Court permanently enjoined the sale of a bank holding company's subsidiary after finding that the sale would violate certain indenture debt covenants prohibiting the bank holding company from selling all or substantially all of its assets in instances where the purchaser would not assume the debt.  The court found the transaction at issue was intended to segregate the banking subsidiary's performing assets from its non-performing assets by creating a "good bank" and "bad bank" and thereafter selling the "good bank."  This transaction would trigger a default provision permitting the full acceleration of the indebtedness under the indenture since the purchaser of the "good bank" would assume none of the debt obligations under the indenture.  The court issued the permanent injunction after finding that the bank holding company would be unable to pay the accelerated debt following the sale of the "good bank."

In re BankAtlantic Bancorp, Inc. Litig., C.A. No. 7068-VCL (Del. Ch. Ct. Feb. 27, 2012).