2-23-2011 - Third Amended Disclosure Statement Accompanying Second Amended Chapter 11 Plan

UNITED STATES BANKRUPTCY COURT
FOR THE MIDDLE DISTRICT OF ALABAMA

NORTHERN DIVISION

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:
In re : Chapter 11
:
THE COLONIAL BANCGROUP, INC., : Case No. 09-32303 (DHW)
:
Debtor. :
:
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THIRD AMENDED DISCLOSURE STATEMENT
ACCOMPANYING SECOND AMENDED CHAPTER 11 PLAN OF
LIQUIDATION OF THE COLONIAL BANCGROUP, INC.
PARKER HUDSON RAINER & DOBBS LLP
C. Edward Dobbs, Esq.
Rufus T. Dorsey, IV, Esq.
J . David Freedman, Esq.
285 Peachtree Center Avenue, Suite 1500
Atlanta, GA 30303
(404) 523-5300
Attorneys for The Colonial BancGroup, Inc.

Dated: February 23, 2011
Montgomery, Alabama

1814056_3
Case 09-32303 Doc 1111-1 Filed 02/23/11 Entered 02/23/11 14:04:11 Desc Third
Amended Disclosure Statement Page 1 of 207
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THIS DISCLOSURE STATEMENT HAS BEEN PREPARED PURSUANT TO
SECTION 1125 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3016(b) AND
IS NOT NECESSARILY IN ACCORDANCE WITH THE FEDERAL OR STATE
SECURITIES LAWS OR SIMILAR LAWS. THIS DISCLOSURE STATEMENT CONTAINS
SUMMARIES OF CERTAIN PROVISIONS OF THE PLAN AND CERTAIN OTHER
DOCUMENTS AND FINANCIAL INFORMATION. THE INFORMATION CONTAINED IN
THIS DISCLOSURE STATEMENT IS PROVIDED FOR THE PURPOSE OF SOLICITING
ACCEPTANCES OF THE PLAN AND SHOULD NOT BE RELIED UPON FOR ANY
PURPOSE OTHER THAN TO DETERMINE WHETHER AND HOW TO VOTE ON THE
PLAN. THE DEBTOR BELIEVES THAT THESE SUMMARIES ARE FAIR AND
ACCURATE. THE SUMMARIES OF THE FINANCIAL INFORMATION AND THE
DOCUMENTS THAT ARE ATTACHED TO, OR INCORPORATED BY REFERENCE INTO,
THIS DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY
REFERENCE TO SUCH INFORMATION AND DOCUMENTS. IN THE EVENT OF ANY
INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THIS
DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN, OR
THE OTHER DOCUMENTS AND FINANCIAL INFORMATION INCORPORATED IN
THIS DISCLOSURE STATEMENT BY REFERENCE, THE PLAN OR THE OTHER
DOCUMENTS AND FINANCIAL INFORMATION, AS THE CASE MAY BE, SHALL
GOVERN FOR ALL PURPOSES.

THE STATEMENTS AND FINANCIAL INFORMATION CONTAINED IN THIS
DISCLOSURE STATEMENT HAVE BEEN MADE AS OF THE DATE OF THIS
DISCLOSURE STATEMENT UNLESS OTHERWISE SPECIFIED. HOLDERS OF CLAIMS
AND EQUITY INTERESTS REVIEWING THIS DISCLOSURE STATEMENT SHOULD
NOT INFER AT THE TIME OF SUCH REVIEW THAT THERE HAVE BEEN NO
CHANGES IN THE FACTS SET FORTH IN THIS DISCLOSURE STATEMENT SINCE THE
DATE OF THIS DISCLOSURE STATEMENT. EACH HOLDER OF A CLAIM OR
INTEREST ENTITLED TO VOTE ON THE PLAN SHOULD CAREFULLY REVIEW THE
PLAN AND THIS DISCLOSURE STATEMENT IN THEIR ENTIRETY BEFORE CASTING
A BALLOT. THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE LEGAL,
BUSINESS, FINANCIAL, OR TAX ADVICE. ANY ENTITIES DESIRING ANY SUCH
ADVICE OR ANY OTHER ADVICE SHOULD CONSULT WITH THEIR OWN ADVISORS.

NO ONE IS AUTHORIZED TO GIVE ANY INFORMATION WITH RESPECT TO
THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS DISCLOSURE
STATEMENT. NO REPRESENTATIONS CONCERNING THE DEBTOR OR THE VALUE
OF ITS PROPERTY HAVE BEEN AUTHORIZED BY THE DEBTOR OTHER THAN AS
SET FORTH IN THIS DISCLOSURE STATEMENT AND THE DOCUMENTS ATTACHED
TO THIS DISCLOSURE STATEMENT. ANY INFORMATION, REPRESENTATIONS, OR
INDUCEMENTS MADE TO OBTAIN AN ACCEPTANCE OF THE PLAN THAT ARE
OTHER THAN AS SET FORTH, OR INCONSISTENT WITH, THE INFORMATION
CONTAINED IN THIS DISCLOSURE STATEMENT, THE DOCUMENTS ATTACHED TO
THIS DISCLOSURE STATEMENT OR THE PLAN SHOULD NOT BE RELIED UPON BY
ANY HOLDER OF A CLAIM OR EQUITY INTEREST.
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WITH RESPECT TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS,
AND OTHER PENDING, THREATENED, OR POTENTIAL LITIGATION OR OTHER
ACTIONS, THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT
BE CONSTRUED AS, AN ADMISSION OF FACT, LIABILITY, STIPULATION, OR
WAIVER, BUT RATHER AS A STATEMENT MADE IN THE CONTEXT OF
SETTLEMENT NEGOTIATIONS PURSUANT TO RULE 408 OF THE FEDERAL RULES
OF EVIDENCE.

THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR
DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION, NOR HAS THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE
STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT OR UPON THE
MERITS OF THE PLAN.

ALTHOUGH THE DEBTOR BELIEVES THAT THE PLAN COMPLIES WITH ALL
APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE, THE DEBTOR CANNOT
ASSURE SUCH COMPLIANCE OR THAT THE BANKRUPTCY COURT WILL CONFIRM
THE PLAN.

ALTHOUGH THE DEBTOR HAS USED ITS BEST EFFORTS TO ENSURE THE
ACCURACY OF THE FINANCIAL INFORMATION PROVIDED IN THIS DISCLOSURE
STATEMENT, THE FINANCIAL INFORMATION CONTAINED IN OR INCORPORATED
BY REFERENCE INTO THIS DISCLOSURE STATEMENT HAS NOT BEEN AUDITED,
EXCEPT AS SPECIFICALLY INDICATED OTHERWISE. PLEASE REFER TO CHAPTER
XII OF THIS DISCLOSURE STATEMENT, ENTITLED "RISK FACTORS" FOR A
DISCUSSION OF CERTAIN CONSIDERATIONS IN CONNECTION WITH A DECISION
BY A HOLDER OF AN IMPAIRED CLAIM TO ACCEPT THE PLAN. UNLESS
OTHERWISE SPECIFICALLY INDICATED, THE FINANCIAL INFORMATION
CONTAINED IN THIS DISCLOSURE STATEMENT HAS NOT BEEN AUDITED AND IS
BASED ON AN ANALYSIS OF DATA AVAILABLE AT THE TIME OF THE
PREPARATION OF THE PLAN AND THIS DISCLOSURE STATEMENT.

TO BE COUNTED, THE BALLOTS UPON WHICH HOLDERS OF IMPAIRED
CLAIMS ENTITLED TO VOTE SHALL CAST THEIR VOTE TO ACCEPT OR
REJECT THE PLAN INDICATING ACCEPTANCE OR REJECTION OF THE PLAN
MUST BE RECEIVED IN ACCORDANCE WITH THE INSTRUCTIONS ON SUCH
BALLOT.

THIS DISCLOSURE STATEMENT CONTAINS FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 27A AND SECTION 21E OF THE
SECURITIES ACT, AS AMENDED. SUCH STATEMENTS MAY CONTAIN WORDS
SUCH AS "MAY, "WILL," "MIGHT," "EXPECT," "BELIEVE, "ANTICIPATE," "COULD,"
"WOULD," "ESTIMATE," "CONTINUE," "PURSUE," OR THE NEGATIVE THEREOF OR
COMPARABLE TERMINOLOGY, AND MAY INCLUDE, WITHOUT LIMITATION,
INFORMATION REGARDING THE DEBTOR'S EXPECTATIONS REGARDING FUTURE
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EVENTS. FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN,
PARTICULARLY IN LIGHT OF THE UNCERTAINTIES OF LITIGATION, AND ACTUAL
RESULTS MAY DIFFER FROM THOSE EXPRESSED OR IMPLIED IN THIS
DISCLOSURE STATEMENT AND THE FORWARD-LOOKING STATEMENTS
CONTAINED HEREIN. IN PREPARING THIS DISCLOSURE STATEMENT, THE
DEBTOR RELIED ON FINANCIAL DATA DERIVED FROM ITS BOOKS AND RECORDS
OR THAT WAS OTHERWISE MADE AVAILABLE TO IT AT THE TIME OF SUCH
PREPARATION AND ON VARIOUS ASSUMPTIONS. WHILE THE DEBTOR BELIEVES
THAT SUCH FINANCIAL INFORMATION FAIRLY REFLECTS THE FINANCIAL
CONDITION OF THE DEBTOR AS OF THE DATE HEREOF AND THAT THE
ASSUMPTIONS REGARDING FUTURE EVENTS REFLECT REASONABLE BUSINESS
J UDGMENTS, NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE
ACCURACY OF THE FINANCIAL INFORMATION CONTAINED HEREIN OR THE
DEBTOR'S FORECAST OF POTENTIAL DISTRIBUTIONS UNDER THE PLAN. THE
DEBTOR EXPRESSLY CAUTIONS READERS NOT TO PLACE UNDUE RELIANCE ON
ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN. AMONG THE
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
CURRENT ESTIMATES OF FUTURE PERFORMANCE ARE THE FOLLOWING: (1) THE
DEBTOR'S ABILITY TO DEVELOP, PROSECUTE, CONFIRM, AND CONSUMMATE A
PLAN WITH RESPECT TO THIS CHAPTER 11 CASE; (2) THE OUTCOME AND TIMING
OF THE DEBTOR'S EFFORTS TO SELL CERTAIN ASSETS; AND (3) OUTCOMES OF,
AMONG OTHER THINGS, LITIGATION WITH THE FDIC-RECEIVER AND OTHERS.

THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS AS OF
THE FILING DATE OF THIS DISCLOSURE STATEMENT AND THE DEBTOR IS UNDER
NO OBLIGATION, AND EXPRESSLY DISCLAIMS ANY OBLIGATION, TO PUBLICLY
UPDATE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF
NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE.
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TABLE OF CONTENTS
Page

Chapter I. INTRODUCTION...................................................................................................1
Chapter II. SUMMARY .............................................................................................................3
A. Overview............................................................................................................................. 3
B. Frequently Asked Questions............................................................................................... 5
1. Who is the Debtor?................................................................................................. 5
2. How long has the Debtor been in Chapter 11?....................................................... 5
3. What is Chapter 11?................................................................................................ 6
4. Has the Debtor proposed a plan of liquidation?...................................................... 6
5. What type of Plan was filed?.................................................................................. 6
6. How does the Plan work?....................................................................................... 6
7. What is confirmation of the Plan?.......................................................................... 7
8. Who votes on the Plan?........................................................................................... 7
9. How can I determine if my Claim is allowed?....................................................... 7
10. How can I determine if my Claim or Equity Interest is impaired?......................... 7
11. How can I determine in which Class my Claim or Equity Interest has been
placed?.................................................................................................................... 8
12. How can I determine what I will receive under the Plan?...................................... 8
13. Do I have to vote for the Plan to receive a Distribution based on my Claim?........ 8
14. How is the Plan accepted?...................................................................................... 8
15. If my Class votes to accept the Plan, do I get what the Plan provides for my
Class?...................................................................................................................... 8
16. How do I vote on the Plan?..................................................................................... 9
17. Is my Claim or Equity Interest being paid in full under the Plan?......................... 9
18. What is the amount of my Claim or Equity Interest?............................................. 9
19. When will the Distribution on my Claim be made?............................................... 9
20. To what address will the Distribution be sent?..................................................... 10
21. Is the Debtor suing people responsible for any losses suffered by the Debtor?... 10
22. Do I have additional rights or remedies against third parties?.............................. 11
23. Are there risk factors associated with consummation of the Plan?...................... 11
24. Have there been settlement discussions with the FDIC-Receiver?...................... 11
Chapter III. GENERAL INFORMATION ABOUT THE DEBTOR.......................................11
A. Debtor's Business and Events Leading to Bankruptcy Filing........................................... 12
B. Debtor's Capital Structure................................................................................................. 13
1. Common Stock...................................................................................................... 13
2. Preferred Stock...................................................................................................... 13
3. Public Debt............................................................................................................ 14
a. Preferred Securities Debentures -- $103,092,800..................................... 14
b. 2003 Indenture -- $5,155,000.................................................................... 18
c. 2008 Indenture -- $250,000,000................................................................ 20
4. Other Liabilities. ................................................................................................... 23

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C. Debtor's Major Benefit Plans............................................................................................ 24
1. 401(k) Plan............................................................................................................ 24
2. Pension Plan.......................................................................................................... 25
3. Non-Qualified Deferred Compensation Plan........................................................ 26
4. Certain Director Benefit Plans.............................................................................. 26
Chapter IV. THE DEBTOR'S CURRENT AND FORMER MANAGEMENT.......................27
Chapter V. THE DEBTOR'S SIGNIFICANT ASSETS AND LIABILITIES.........................28
A. The Debtor's Assets.......................................................................................................... 28
1. The Debtor's Bank Account Deposits................................................................... 28
2. Funds Derived From the Liquidation of a Deferred Compensation Account....... 30
3. Debtor's Interest in Potential Tax Refunds. .......................................................... 31
4. Fidelity Policies and Claims Relating Thereto. .................................................... 33
5. D&O Policies and Derivative Claims................................................................... 34
6. CBG Florida REIT Corp....................................................................................... 35
7. CBG Real Estate, LLC.......................................................................................... 37
8. Refunds of Unearned Premiums........................................................................... 38
9. Real Property in Orlando, Florida......................................................................... 38
a. Dispute with FDIC-Receiver.................................................................... 38
b. Condemnation Proceeding........................................................................ 39
10. Furniture, Art and Office Equipment.................................................................... 39
11. Claims Against Certain Subsidiaries. ................................................................... 40
a. Colonial Bank........................................................................................... 40
b. Colonial Brokerage, Inc............................................................................ 42
12. LBSF Claim. ......................................................................................................... 42
13. Other Claims......................................................................................................... 43
B. The Debtor's Liabilities..................................................................................................... 43
Chapter VI. PENDING LEGAL ACTIONS AND REGULATORY PROCEEDINGS.........46
A. Pre-Petition Actions Against the Debtor........................................................................... 46
1. Pending Investigations.......................................................................................... 46
2. Regulatory Orders................................................................................................. 46
3. Pending Litigation................................................................................................. 47
a. Securities Litigation.................................................................................. 47
b. Shareholder Derivative Litigation............................................................. 48
c. ERISA Litigation...................................................................................... 49
d. Other Litigation......................................................................................... 50
e. Present Posture of All Litigation............................................................... 51
B. Potential Estate Causes of Action..................................................................................... 51
Chapter VII. POTENTIAL CLAIMS BY AND AGAINST THE DEBTOR.............................51
A. Claims By the Debtor........................................................................................................ 51

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1. Claim Against Insiders.......................................................................................... 53
2. Professional Liability............................................................................................ 53
3. Insurance Claims................................................................................................... 53
4. Piercing Corporate Veil. ....................................................................................... 53
5. Preferences and Fraudulent Conveyances. ........................................................... 54
B. Claims Against the Debtor................................................................................................ 55
Chapter VIII. SIGNIFICANT POST-PETITION DEVELOPMENTS AND STATUS............55
A. Filing of Chapter 11 Case................................................................................................. 55
B. Establishment of a Bar Date............................................................................................. 55
C. Formation of Unsecured Creditors Committee................................................................. 55
D. Stock Trading Motion....................................................................................................... 55
E. FDIC-Receiver Litigation................................................................................................. 56
1. 365(o) Litigation and Fraudulent Transfer Litigation........................................... 56
a. Alleged Capital Maintenance Commitment Under Section 365(o);
Bankruptcy Court's Denial of FDIC-Receiver's Motion; Appeal to District
Court......................................................................................................... 56
b. Fraudulent Transfer Litigation; Withdrawal of Reference; Stay of
Proceedings............................................................................................... 57
2. Deposit Account Litigation................................................................................... 58
a. Original Stay Relief Motion...................................................................... 58
b. Amended Stay Relief Motion................................................................... 58
c. Renewed Stay Relief Motion.................................................................... 59
3. Debtor's Claim in Colonial Bank Receivership.................................................... 60
4. FDIC-Receiver's Claim in Debtor's Chapter 11 Bankruptcy Case. ...................... 60
5. Tax Return and Refund Litigation........................................................................ 61
6. Fidelity Policies Litigation.................................................................................... 62
7. Garland Avenue Property Litigation..................................................................... 63
F. Deferred Compensation Litigation................................................................................... 63
G. Litigation with the Alabama Revenue Department.......................................................... 63
H. Claims Against Directors and Officers............................................................................. 64
I. Custody and Disposition of Debtor's Business Records................................................... 64
1. Ownership Disputes.............................................................................................. 65
2. 2004 Examination and Document Production Request. ....................................... 65
3. Current Status of Document Retrieval.................................................................. 66
J . SEC Administrative Proceeding....................................................................................... 66
K. Costs of Administration of Debtor's Bankruptcy Case..................................................... 67
Chapter IX. SUMMARY OF THE PLAN...............................................................................68
A. Overview of the Plan........................................................................................................ 68
B. Classification and Treatment of Claims under the Plan.................................................... 69
1. Payment and Treatment of Priority Claims. ......................................................... 69

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a. Administrative Claims.............................................................................. 70
b. Priority Tax Claims................................................................................... 72
c. Class A (Priority Non-Tax Claims) .......................................................... 72
2. Classification and Treatment of Non-Priority Claims. ......................................... 73
a. Class B (Certain Secured Claims)............................................................. 73
b. Class C (Secured Claim of Alabama Revenue Department) .................... 74
c. Class D (Convenience Class Claims) ....................................................... 74
d. Class E (Certain General Unsecured Claims)........................................... 74
e. Class F (Indenture Claims) ....................................................................... 75
f. Class G (Statutorily Subordinated Claims)............................................... 75
g. Class H (Preferred Stock) ......................................................................... 75
h. Class I (Equity Interests other than Preferred Stock)................................ 75
C. Structure of the Debtor After the Effective Date.............................................................. 76
D. Management of the Debtor............................................................................................... 76
E. Identity and Compensation of Insiders............................................................................. 76
Chapter X. IMPLEMENTATION OF THE PLAN...............................................................77
A. The Debtor and the Plan Trustee...................................................................................... 77
B. The Plan Committee......................................................................................................... 79
C. Claims Administration...................................................................................................... 81
1. Allowance of Claims............................................................................................. 81
2. Objections to Claims............................................................................................. 82
3. Temporary Allowance and Estimation of Claims................................................. 82
a. Temporary Allowance of Claims for Voting Purposes............................. 82
b. Estimation of Claims for Distribution Purposes....................................... 83
4. Reserve for Disputed Claims. ............................................................................... 83
C. Funding of the Plan........................................................................................................... 83
D. Discharge of Claims.......................................................................................................... 83
E. Plan Injunction.................................................................................................................. 84
F. Exculpation of the Debtor, the Case Committee and the Indenture Trustees................... 84
G. Means of Implementing the Plan...................................................................................... 84
H. Abandonment of Estate Property...................................................................................... 85
Chapter XI. CONDITIONS PRECEDENT TO CONFIRMATION CONTAINED IN THE
BANKRUPTCY CODE.................................................................................................................86
A. Section 1129 of the Bankruptcy Code.............................................................................. 86
B. Acceptance of the Plan...................................................................................................... 88
C. Confirmation Without Acceptance of All Impaired Classes - Cramdown....................... 89
D. "Best Interests" Test.......................................................................................................... 89
E. Feasibility.......................................................................................................................... 91
Chapter XII. RISK FACTORS...................................................................................................92
A. Certain Bankruptcy Law Considerations.......................................................................... 92

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l. Objections to Plan's Classification of Claims and Equity Interests...................... 92
2. Failure to Satisfy Voting Requirements................................................................ 92
3. Inability to Secure Confirmation of Plan.............................................................. 92
4. Nonconsensual Confirmation................................................................................ 93
5. Objections to Amount or Classification of a Claim.............................................. 93
6. Risk of Non-Occurrence of Effective Date........................................................... 94
7. Effect of Certain Contingencies............................................................................ 94
B. Certain Risk Factors that May Affect Recovery............................................................... 94
1. The Debtor Cannot State with Certainty Recovery Amounts............................... 94
2. Uncertainties of Litigation.................................................................................... 95
a. Capital Maintenance Claim....................................................................... 95
b. Tax Refund Dispute with FDIC-Receiver................................................ 95
c. Dispute Over Fidelity Policies with FDIC-Receiver................................ 96
d. Bank Account Disputes with FDIC-Receiver........................................... 96
e. Bank Account Disputes with BB&T......................................................... 96
f. Garland Avenue Property Dispute with FDIC-Receiver.......................... 97
g. D&O Policies Dispute with FDIC-Receiver and Others.......................... 97
3. Settlement Discussions with FDIC-Receiver........................................................ 98
C. Disclosure Statement Disclaimers.................................................................................. 101
1. Information Contained Herein is for Soliciting Votes........................................ 101
2. Disclosure Statement Not Approved by the SEC; Registration Exemption....... 101
3. No Legal or Tax Advice Provided by Disclosure Statement.............................. 101
4. No Admissions.................................................................................................... 101
5. Failure to Identify Litigation Claims or Projected Objections............................ 101
6. No Waiver of Debtor's Rights............................................................................. 102
7. Debtor Professionals' Reliance. .......................................................................... 102
8. Potential for Inaccuracies; No Duty to Update................................................... 102
9. No Representations Outside Disclosure Statement Are Authorized................... 102
Chapter XIII. ALTERNATIVES TO THE PLAN...................................................................102
A. Chapter 7 Liquidation..................................................................................................... 103
B. Alternative Liquidation Plans......................................................................................... 104
Chapter XIV. OTHER MATTERS...........................................................................................104
A. Tax Consequences of the Plan........................................................................................ 104
B. Disclaimers..................................................................................................................... 104
C. Confirmation Hearing..................................................................................................... 105
D. Conditions to Effectiveness of the Plan.......................................................................... 105
E. Plan Injunction................................................................................................................ 106
F. Retention of J urisdiction by the Bankruptcy Court........................................................ 106
G. Amendments to the Plan................................................................................................. 108
H. Cram down...................................................................................................................... 108
I. No Admissions................................................................................................................ 108
Chapter XV. CONCLUSION AND RECOMMENDATION.................................................109

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EXHIBIT A Plan of Liquidation...................................................................................................A
EXHIBIT B Brief Explanation of Chapter 11..............................................................................B
EXHIBIT C Debtor's Known Subsidiaries as of J une 30, 2009...................................................C
EXHIBIT D List of Individuals / Entities.....................................................................................D
EXHIBIT E Resume of Ben S. Branch.........................................................................................E
EXHIBIT F Liquidation Analysis................................................................................................. F


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Chapter I. INTRODUCTION
On August 25, 2009 (the "Petition Date"), The Colonial BancGroup, Inc. (the "Debtor")
filed with the United States Bankruptcy Court for the Middle District of Alabama (the
"Bankruptcy Court") a voluntary petition for relief under Chapter 11 of Title 11 of the United
States Code, 11 U.S.C. 101, et seq. (the "Bankruptcy Code").
The Debtor is a corporation formed under the laws of the State of Delaware and, prior to
the Petition Date, was headquartered and conducted business at 100 Colonial Bank Boulevard,
Montgomery, Alabama 36117. Prior to the Petition Date, the Debtor owned 100% of the
common stock of Colonial Bank and also owned certain non-banking, non-debtor subsidiaries.
On August 14, 2009, Colonial Bank was closed by the Alabama State Banking
Department, and the Federal Deposit Insurance Corporation (the "FDIC") was appointed as
receiver for Colonial Bank (in such capacity, the "FDIC-Receiver"). On the same day, the
FDIC-Receiver and the FDIC (in its corporate capacity) entered into a Purchase and Assumption
Agreement dated as of August 14, 2009, with Branch Banking & Trust Company ("BB&T") (as
at any time amended, the "P&A Agreement") pursuant to which BB&T acquired certain former
assets and assumed certain former liabilities of Colonial Bank. Since the Petition Date, the
Debtor has continued to manage its business affairs as debtor in possession pursuant to Sections
1107(a) and 1108 of the Bankruptcy Code.
The Debtor now seeks confirmation of a proposed First Amended Chapter 11 Plan of
Liquidation of The Colonial BancGroup, Inc. (the "Plan"), a copy of which is attached to this
Disclosure Statement as Exhibit A. This Disclosure Statement (the "Disclosure Statement") is
designed to provide creditors with adequate information to enable them to make a decision
whether to vote for or against the Plan. This Disclosure Statement discusses, among other
things, (i) voting instructions, (ii) classification of claims against the Debtor, (iii) payments of
claims, and (iv) the Debtor's history, business, and property. This Disclosure Statement also
contains a summary and analysis of the Plan. All creditors and interest holders of the Debtor are
advised and urged to read this Disclosure Statement, the Plan and any other Exhibit attached to
this Disclosure Statement in its entirety before voting to accept or reject the Plan. This
Disclosure Statement was approved by Order of the Bankruptcy Court.
NO REPRESENTATIONS ABOUT THE DEBTOR OR THE PLAN ARE
AUTHORIZED EXCEPT AS CONTAINED IN THIS DISCLOSURE STATEMENT AND
THE PLAN, AND, IN MAKING YOUR DECISION WHETHER TO VOTE FOR OR
AGAINST THE PLAN, YOU SHOULD NOT RELY ON ANY REPRESENTATION
THAT IS NOT CONTAINED HEREIN. INSTEAD, ANY SUCH REPRESENTATION
OR INDUCEMENT SHOULD BE REPORTED DIRECTLY TO THE BANKRUPTCY
COURT OR TO THE DEBTOR OR ITS COUNSEL. THE BANKRUPTCY COURT HAS
NOT VERIFIED THE ACCURACY OF THE INFORMATION CONTAINED IN THIS
DISCLOSURE STATEMENT, AND THE BANKRUPTCY COURT'S APPROVAL OF
THIS DISCLOSURE STATEMENT DOES NOT IMPLY THAT THE BANKRUPTCY
COURT ENDORSES OR APPROVES THE PLAN, BUT ONLY THAT, IF ACCURATE,
THE INFORMATION SET FORTH IN THIS DISCLOSURE STATEMENT IS
SUFFICIENT TO PROVIDE AN ADEQUATE BASIS FOR CREDITORS AND EQUITY

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INTEREST HOLDERS TO MAKE INFORMED DECISIONS WHETHER TO ACCEPT
OR REJECT THE PLAN.
Accompanying this Disclosure Statement are copies of:
1. the notice fixing the time for submitting acceptances or rejections of the
Plan, the time for filing objections to the Plan, and the date and time of the
hearings to consider confirmation of the Plan and related matters; and
2. for those Holders of Claims or Preferred Stock entitled to vote on the Plan,
a ballot for voting on acceptance or rejection of the Plan.
Section 1126(b) of the Bankruptcy Code provides that only classes of claims or equity
interests that are "impaired" under a plan are entitled to vote on that plan unless deemed not to
accept the plan. Under the Plan, the following classes of claims (all as described more fully in
the Plan) will be impaired: Class D - Convenience Claims; Class E - Certain General Unsecured
Claims; Class F - Indenture Claims; and Class G - Statutorily Subordinated Claims. The Plan
also impairs the equity interests in Class H - Preferred Stock and Class I - Equity Interests other
than Preferred Stock. The Debtor is sending ballots to all of the Holders of impaired Claims
known to the Debtor except Class G, as there are no known members of that Class at this time.
The Debtor will also not be sending ballots to the Holders of Common Stock (Class I), who are
deemed to have rejected the Plan as they are not entitled to receive or retain anything under the
Plan.
Defined Terms and Conflict between Plan and Disclosure Statement. Most words or
phrases used in this Disclosure Statement shall have their usual and customary meanings. Words
or phrases used in this Disclosure Statement that are defined in the Plan, and not otherwise
defined in this Disclosure Statement, shall have the definitions set forth in the Plan. Otherwise,
the capitalized terms used but not defined in this Disclosure Statement shall have the meaning
ascribed to such terms in the Bankruptcy Code or the Federal Rules of Bankruptcy Procedure
(the "Bankruptcy Rules"). In the event of any conflict between any statement in this Disclosure
Statement and in the Plan, the Plan will control.
Voting Instructions. After carefully reviewing the Disclosure Statement and its
Exhibits, please indicate your vote on the enclosed ballot. IN ORDER FOR YOUR VOTE TO
COUNT, YOUR BALLOT (OR, IN THE INSTANCE OF CLASS F - INDENTURE
CLAIMS, THE MASTER BALLOT) MUST BE RECEIVED BEFORE 4:00 P.M.,
CENTRAL TIME, ON APRIL 25, 2011, unless such deadline is extended by the Debtor to
the extent authorized (the "Voting Deadline"). If you have a Claim in more than one Class
under the Plan, you should receive a separate ballot for each such Claim. If you need additional
ballots, please contact the person identified in the instructions to the ballot that you receive.
It is important that you exercise your right to vote to accept or reject the Plan. You
should read the ballot carefully and follow the instructions. In voting for or against the Plan,
please use only the ballot(s) sent to you with this Disclosure Statement or obtained from the
person identified in the instructions to the ballot. Ballots that are signed and returned, but not

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expressly voted either for acceptance or rejection of the Plan, will be counted as an acceptance of
the Plan.
YOU SHOULD RETURN YOUR COMPLETED BALLOT(S) TO THE PERSON
IDENTIFIED IN THE INSTRUCTIONS TO YOUR BALLOT(S) BY THE DEADLINE
NOTED IN YOUR BALLOT(S).

Chapter II. SUMMARY
A. Overview
On the Petition Date, the Debtor filed with the Bankruptcy Court a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code. The Debtor continues to operate its business as
debtor in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. No request
has been made in this Chapter 11 bankruptcy case for the appointment of a trustee or an
examiner.
The Debtor's core assets on the Petition Date consisted primarily of: (a) the Debtor's bank
account deposits in the approximate amount of $36,000,000 (which amounts are the subject of
asserted, but disputed, secured claims and setoff rights); (b) approximately $1,900,000 of
deposits derived from the liquidation of a deferred compensation account; (c) the Debtor's
interest in certain potential tax refunds in excess of $253,000,000 (which requests remain
pending with the Internal Revenue Service and are the subject of litigation with the FDIC-
Receiver); (d) the Debtor's interest in claims made under and proceeds of Fidelity Policies with
policy limits of $25,000,000 (which is the subject of a dispute as to ownership and entitlement
with the FDIC-Receiver); (e) the Debtor's interest in certain derivative claims against former
officers and directors of the Debtor and in the proceeds of the D&O Policies with policy limits of
$35,000,000 (less attorneys' fees and expenses of certain defense counsel currently in excess of
$3,000,000); (f) the Debtor's interest in and claims relating to certain 300,000 shares of preferred
securities in CBG Florida REIT Corp. that had an original par value of $1,000 (which interests
and claims are disputed by the FDIC-Receiver and likely BB&T); (g) the Debtor's interest in and
claims relating to the CBG Real Estate, LLC, the Debtor's wholly-owned Alabama limited
liability company, which purchased loans in the approximate face amount of $120,000,000 in
December 2008 from Colonial Bank and later appears to have granted a 65% participation
interest in such loans (which is asserted by the current holder to be senior in priority to the
repayment of the non-participated portion of the loans) and thereafter transferred that
participation interest to Colonial Bank; (h) refunds for unearned premiums under various policies
of insurance; (i) an interest in certain real property in Orlando, Florida; (j) proceeds from the sale
of certain furniture, art and office equipment located in Montgomery, Alabama at the Debtor's
former headquarters building; (k) claims against certain subsidiaries such as Colonial Brokerage,
Inc., which filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in
Montgomery, Alabama; (l) claims asserted in the bankruptcy case of Lehman Brothers Special
Financing Inc. ("LBSF") in the amount of $4,053,591 that have been asserted in a proof of claim
filed by the Debtor (which proof of claim has been or likely will be objected to by LBSF); and
(m) a claim in both liquidated and unliquidated amounts against Colonial Bank in its receivership
proceeding administered by the FDIC-Receiver that was disallowed by the FDIC-Receiver but
remains the subject of pending litigation, all as described more fully herein (collectively, the

- 4 - 4
"Core Assets"). As described in greater detail in later sections of this Disclosure Statement,
the FDIC-Receiver, BB&T and the Alabama Revenue Department assert claims to, liens
upon, or rights of offset with respect to substantially all of the Core Assets and any judicial
rulings adverse to the Debtor with respect to any or all of these claims, liens and asserted
rights of offset would substantially diminish the proceeds available for distribution to
Holders of General Unsecured Claims and Preferred Stock.
Since the Petition Date, the Debtor has focused its efforts on pursuing and liquidating to
varying degrees these Core Assets. This process will continue in 2011 and, in the absence of
resolutions between the Debtor and the relevant parties in interest with respect to Core Assets in
dispute, likely beyond 2011. The FDIC-Receiver contends that virtually all assets that the
Debtor asserts are part of its Chapter 11 estate constitute property of the FDIC-Receiver
and/or BB&T and that, irrespective of the outcome of litigation regarding ownership of
such assets, the FDIC-Receiver is entitled to receive substantially all of the proceeds of such
assets by virtue of an asserted priority claim under Sections 507(a)(2) and/or 507(a)(9) of
the Bankruptcy Code. For an additional description of the risks associated with the Plan
resulting from litigation with the FDIC-Receiver and others, see "Risk Factors" (Chapter
XII). In addition to liquidating the Core Assets, the Debtor is assessing the existence and
collectability of claims against other third parties, the pursuit of which may supplement the
proceeds of the Core Asset liquidation. These claims include, but are not limited to, bankruptcy
avoidance claims (such as preference and fraudulent conveyance actions), potential claims
against professionals (including attorneys and accountants) employed by the Debtor prior to the
Petition Date, and claims against other affiliated and related companies and former officers,
directors and professionals for such companies. These actual and potential claims held by the
Debtor for the benefit of Holders of Claims and Equity Interests are described in greater detail in
Chapter VII of this Disclosure Statement.
In furtherance of the Debtor's goal to liquidate its assets and distribute the proceeds
thereof to its creditors, the Debtor has prepared this Disclosure Statement and the Plan. The Plan
provides a structure for the continuation and completion of the liquidation process and the
distribution of the resulting proceeds. The Plan, if confirmed by the Bankruptcy Court, will be
binding on the Debtor and its creditors and interest holders as to the issues addressed in the Plan,
including, but not limited to, (i) the ongoing structure of the Debtor during the remaining
liquidation process, (ii) the guidelines for conducting the liquidation, (iii) the manner in which
creditors' claims will be determined, (iv) the method for distributing liquidation proceeds, (v) the
classification of creditors' claims based on their relative rights, (vi) the entitlement of each
creditor, in accordance with such classification, to a Distribution in whole or partial satisfaction
of its claim, and (vii) certain injunction, stay and exculpation provisions. For this reason, the
terms of the Plan and the treatment of Claims and Equity Interests under the Plan are significant
issues that each creditor and interest holder should consider carefully.
Under the Bankruptcy Code, a disclosure statement serves the purpose of providing
information regarding a debtor and a proposed plan. The information contained in a disclosure
statement is required to be sufficient to allow a creditor to make an informed decision regarding
the terms of a plan and should be reviewed carefully. Even so, a proposed plan ultimately
defines the rights and obligations of the parties and must be referred to for an accurate
determination of such rights and obligations.

- 5 - 5
The ultimate return for creditors under the Plan will depend on the success of the
liquidation process, the successful pursuit of third party claims, the determination and resolution
of Disputed Claims (including the FDIC-Receiver's Disputed Claim) and the successful outcome
of litigation with the FDIC-Receiver and others regarding ownership of and interests in the
Debtor's Core Assets. See Risk Factors, Chapter XII. The Debtor believes, however, that the
Plan is the best method for completing the liquidation process and maximizing the return on the
Debtor's assets. Given the considerable knowledge and information developed by the Debtor,
and the need for quick action to preserve the value of the Debtor's assets and to maximize the
return to its creditors, other alternatives, such as converting this bankruptcy case to a Chapter 7
liquidation, would simply delay distribution of funds to creditors and add unnecessary expense.
Creditors should note that any Distributions they receive under the Plan, if confirmed by
the Bankruptcy Court, will represent the total amount that creditors can expect to receive from
the Debtor or Estate Property in payment of their Claims because all available assets of the
Debtor that can be recovered in a cost-effective manner will be liquidated and distributed in
accordance with the Plan. However, depending on the circumstances surrounding a given
creditor's claim, the creditor may have independent claims, rights and remedies against
individuals or entities other than the Debtor (or against property other than Estate
Property) for recovery of all or a part of any deficiency existing after all of the Debtor's
assets that can be recovered in a cost-effective manner have been liquidated and
distributed. This Disclosure Statement provides some information that may be relevant to the
consideration of such independent rights and remedies, and the Plan, if confirmed by the
Bankruptcy Court, will not prevent creditors from pursuing such claims, if any, that may exist
while the Debtor's bankruptcy case is pending or after the bankruptcy case is closed. Creditors
also should be aware that any such claims against Persons other than the Debtor are
subject to state and federal statutes of limitations (which require that claims be brought
within a specified period of time or possibly be waived) and that the filing of the Debtor's
bankruptcy case does not toll the running of these statutes of limitations. The Debtor
recommends that each creditor seek independent legal advice regarding the existence and
nature of any such independent rights and remedies.
B. Frequently Asked Questions
Set forth below is a list of frequently asked questions and answers to assist each creditor
in understanding the Debtor's bankruptcy case and the proposed Plan:
1. Who is the Debtor?
The Debtor is a Delaware corporation which, prior to the Petition Date, was
headquartered in Montgomery, Alabama. The Debtor was a publicly traded corporation with its
principal assets consisting of the capital stock of Colonial Bank.
2. How long has the Debtor been in Chapter 11?
As noted above, the Debtor filed its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code on August 25, 2009.

- 6 - 6
3. What is Chapter 11?
Chapter 11 is the chapter of the federal Bankruptcy Code frequently used for the
reorganization or liquidation of a business. Under Chapter 11, a company may attempt to
restructure its finances so that it can continue to operate its business or to liquidate its assets in an
orderly manner so that all creditors will be treated fairly.
Formulation of a plan of reorganization or liquidation is the primary purpose of a Chapter
11 case. A Chapter 11 plan sets forth and governs the treatment and rights to be afforded to
creditors and interest holders with respect to their claims against and equity interests in a debtor.
According to Section 1125 of the Bankruptcy Code, acceptances of a Chapter 11 plan may be
solicited by a debtor only after a written disclosure statement approved by the Bankruptcy Court
has been provided to each creditor or interest holder who is entitled to vote on the plan. This
Disclosure Statement is presented to the Debtor's creditors and interest holders to satisfy the
disclosure requirements contained in Section 1125 of the Bankruptcy Code. A more detailed
description of the Chapter 11 process may be found at Exhibit B to this Disclosure Statement.
4. Has the Debtor proposed a plan of liquidation?
Yes. On December 9, 2010, the Debtor filed its initial plan and disclosure statement.
The Plan and this Disclosure Statement amend (and supersede) the initial plan and disclosure
statement in their entirety. The Plan provides for an orderly liquidation of the Debtor's assets. A
copy of the Plan is attached to this Disclosure Statement as Exhibit A.
5. What type of Plan was filed?
The Plan calls for an orderly liquidation of the Debtor's assets and the Distribution of the
proceeds to its Holders of Allowed Claims and, in the unlikely event that all such Claims are
paid in full, to Holders of its Preferred Stock.
6. How does the Plan work?
Under the Plan, the Plan Trustee will continue the task of liquidating the assets of the
Debtor and distributing the proceeds of these assets to the Debtor's creditors in accordance with
the Plan. After confirmation of the Plan, the Plan Trustee, acting on behalf of the Debtor, will be
authorized to pursue, collect and liquidate the remaining assets of the Debtor. In the event of the
death, incapacity, resignation or the Bankruptcy Court's removal of the Plan Trustee for any
alleged misconduct, a new Plan Trustee will be appointed by the Plan Committee as a successor
Plan Trustee, subject to the rights of creditors to file an objection with the Bankruptcy Court to
such designated successor Plan Trustee.
The Debtor's available cash, together with the proceeds (if any) obtained as a result of
litigation or from the liquidation of other assets, will be used to fund the costs of implementing
the Plan. The balance of these funds, upon the completion of the liquidation process, will be
distributed to creditors and interest holders in accordance with the Plan.
Under the Plan, the Debtor, acting through the Plan Trustee, will investigate and evaluate
claims the Debtor may have against both affiliated companies and third parties, the pursuit of

- 7 - 7
which may supplement this cash. These claims include, but are not limited to, bankruptcy
avoidance claims (such as preference and fraudulent conveyance actions), claims for breach of
fiduciary duties by former officers and directors of the Debtor, and claims against professionals
(such as attorneys and accountants) employed by the Debtor before bankruptcy. In addition, the
Plan Trustee will investigate and pursue, where appropriate, contingent claims that the Debtor
may have against third parties based on transactions that occurred prior to the commencement of
this bankruptcy case. These claims constitute a part of the assets of the Debtor and, if recovered,
may produce an additional source of funds for Distribution to creditors depending on the
outcome of the litigation and the collectability of any judgments. Additional information
regarding potential claims the Debtor may have is set forth in Chapter VII, Section A of this
Disclosure Statement.
7. What is confirmation of the Plan?
Confirmation means that the Bankruptcy Court approves the Plan, at which time the Plan
becomes binding on the Debtor and its creditors and Equity Interest Holders. The Bankruptcy
Court must hold a confirmation hearing before it approves the Plan. The Bankruptcy Court has
ordered that the confirmation hearing shall be held on May 11, 2011 at 10:00 a.m., Central Time,
at the United States Bankruptcy Court, Middle District of Alabama, One Church Street,
Montgomery, Alabama 36104. Chapter XI and Exhibit B to this Disclosure Statement contain
more information on the requirements for confirmation of the Plan.
8. Who votes on the Plan?
Creditors holding Allowed Claims (other than Class G) may vote on the Plan provided
that their Claims are impaired by the treatment proposed in the Plan. The following classes of
Allowed Claims (all as described more fully in the Plan) will be impaired under the Plan: Class
D - Convenience Claims; Class E - Certain General Unsecured Claims; Class F - Indenture
Claims; Class G - Statutorily Subordinated Claims; and Class H - Preferred Stock. Common
Stock -- Class I (Equity Interests other than Preferred Stock) -- will also be impaired, but the
Holders thereof will be deemed to reject the Plan and not allowed to vote thereon.
9. How can I determine if my Claim is allowed?
Chapter X, Section C of this Disclosure Statement explains how to determine if your
Claim or Equity Interest is allowed for voting purposes. Only Holders of Allowed Claims may
vote on and receive Distributions under the Plan. Each Holder of an Allowed Claim impaired by
the treatment proposed in the Plan will receive a ballot to vote on the Plan. If you do not receive
a ballot and believe that you should have, you should contact J . David Freedman at (404) 523-
6995.
10. How can I determine if my Claim or Equity Interest is impaired?
Article 5 of the Plan describes in detail which Claims and Equity Interests are impaired,
and that Article should be read carefully. Allowed Claims in the following categories or classes
are not impaired: Administrative Claims; Priority Tax Claims; Class A - Priority Non-Tax
Claims; Class B - Certain Secured Claims; and Class C - Secured Claim of Alabama Revenue
Department. The following classes of Allowed Claims will be impaired under the Plan: Class D

- 8 - 8
- Convenience Claims; Class E - Certain General Unsecured Claims; Class F - Indenture Claims;
Class G - Statutorily Subordinated Claims; Class H - Preferred Stock; and Class I - Equity
Interests other than Preferred Stock. Equity Interests other than Preferred Stock will be impaired
under the Plan and, additionally, Holders of Common Stock will not be entitled to receive or
retain any property under the Plan.
11. How can I determine in which Class my Claim or Equity Interest has been
placed?
Chapter IX, Section B of this Disclosure Statement and Article 2 of the Plan describe the
Classes of Claims and Equity Interests. The ballot that you receive will advise you in which
Class the Debtor has placed your Claim, subject to objections as to the allowance of your Claim.
If you disagree with the Class in which the Debtor has placed your Claim, you must file an
objection with the Bankruptcy Court. Refer to Chapter XIV, Section C of this Disclosure
Statement for further information on filing objections to confirmation of the Plan.
12. How can I determine what I will receive under the Plan?
Chapter IX, Section B of this Disclosure Statement and Articles 3 through 6 of the Plan
also describe the treatment of each class of Claims and Equity Interests under the Plan.
13. Do I have to vote for the Plan to receive a Distribution based on my Claim?
No, provided the Plan is confirmed. If confirmed, the Holders of Allowed Claims will
receive whatever the Plan provides for the Class in which such Claims have been placed,
whether or not you vote for or against the Plan by sending in your ballot. If you are the Holder
of a Claim and support confirmation of the Plan, however, you should be sure to fill out the
ballot correctly and return it before the deadline noted on your ballot. It is not anticipated that
the Holders of Statutorily Subordinated Claims or the Holders of Preferred Stock will receive
any Distribution under the Plan even if the Plan is confirmed, but they are entitled to receive
Distributions if there is Available Cash for that purpose after all other Allowed Claims are Paid
in Full.
14. How is the Plan accepted?
For a class of Claims to accept the Plan, creditors holding at least two-thirds (2/3) in
dollar amount and more than one-half (1/2) in number of the "voting" Claims must accept the
Plan. If you do not vote, you lose your right to be part of the determination as to which way your
Class will vote. The votes from each Class will be counted separately to determine whether the
Class as a whole voted to accept or reject the Plan.
15. If my Class votes to accept the Plan, do I get what the Plan provides for my
Class?
Usually, but not automatically. The Plan first must be confirmed by the Bankruptcy
Court. You must also have an Allowed Claim, which is a Claim that is not a Disputed Claim.
The Plan defines what is an Allowed Claim and a Disputed Claim. If you have filed a timely

- 9 - 9
proof of claim and no objection is made to your claim, your Claim is deemed allowed. You will
be notified of any objection to your Claim.
16. How do I vote on the Plan?
To vote on the Plan, mark the accompanying ballot and return it in accordance with the
instructions noted on your ballot. Chapter X, Section C and Chapter XI of this Disclosure
Statement contain additional information relating to voting.
17. Is my Claim or Equity Interest being paid in full under the Plan?
The Plan provides a structure for the liquidation of the assets and distribution of the
proceeds thereof to creditors in accordance with their priorities as set forth in the Bankruptcy
Code and the Plan and as may be determined by the Bankruptcy Court in resolving objections to
Claims and Disputed Claims. The Debtor's ability to make any Distributions with respect to
Claims and Preferred Stock (as well as the amount of any such Distribution) is directly related to,
among other things, the outcome of certain pending litigation between the Debtor and third
parties (including the FDIC-Receiver, BB&T and the Alabama Revenue Department) and the
value of all assets available for liquidation and the Debtor's results in liquidating these assets,
after payment of the reasonable and necessary expenses that the Debtor and the Plan Committee
(and the professionals retained by the Debtor and the Plan Committee with Bankruptcy Court
approval) incur during the liquidation process. The Debtor believes that Allowed Claims in the
following categories and classes will be paid in full: Administrative Claims; Priority Tax Claims;
Class A - Priority Non-Tax Claims; Class B - Certain Secured Claims; and Class C - Secured
Claim of Alabama Revenue Department. The Debtor does not believe that Allowed Claims in
the following categories and classes will be Paid in Full: Class D - Convenience Claims; Class E
- Certain General Unsecured Claims; and Class F - Indenture Claims. The Debtor does not
anticipate that the liquidation of its assets will result in any payment to the Holders of Claims in
Class G - Statutorily Subordinated Claims or the Holders of Preferred Stock in Class H -
Preferred Stock. Under the Plan, Holders of Equity Interests (other than Preferred Stock) in
Class I - Equity Interests other than Preferred Stock will not receive or retain any property under
the Plan on account of such Equity Interests.
18. What is the amount of my Claim or Equity Interest?
The amount of your Claim depends on the amount owed to you by the Debtor or the
value of the goods or services you provided to the Debtor. Therefore, the amount of each
creditor's Claim against the Debtor varies. The amount of your Equity Interests depends on the
number of such interests you hold. As discussed above, each Holder of an impaired Allowed
Claim (other than Class G) will receive a ballot. If you do not receive a ballot and believe you
should have, you should contact J . David Freedman at (404) 523-6995. If the Debtor objects to
your Claim, you will receive notice of this objection and will have an opportunity to contest the
objection.
19. When will the Distribution on my Claim be made?
Before any Distributions can be made, the Plan first must be confirmed by the
Bankruptcy Court, a topic discussed at greater length in Chapter XI and in Exhibit B to this

- 10 - 10
Disclosure Statement. The initial Distribution to Holders of Allowed Priority Non-Tax
Claims and Allowed General Unsecured Claims will be made on the Initial Distribution
Date, which pursuant to Section 9.3(a) of the Plan is a date no later than thirty (30) days
after the later of the Effective Date or the first date on which the Debtor determines it has
Available Cash in an amount sufficient to make an initial Distribution in accordance with
the Plan to the Holders of Priority Non-Tax Claims.
20. To what address will the Distribution be sent?
The Debtor, through the Plan Trustee, intends to send any Distribution directly to each
creditor holding an Allowed Claim or, in the case of Class F, to the applicable Indenture Trustee.
In the case of an Allowed Claim that is not impaired under the Plan, Distributions will be sent to
the last known address of the Holder of such Claim. The ballot sent to each Holder of an
impaired Allowed Claim will include an address for the creditor. The initial Distribution will be
sent to that address, unless the creditor notifies the Court (and the Plan Trustee) in writing prior
to the date on which the hearing on confirmation of the Plan is initially scheduled that the
address listed on the ballot is incorrect or should be changed. The ballot will contain spaces for
the creditor to correct the listed address. Unless a creditor gives timely written notice of a
change or correction in address, the Distribution to each creditor holding an impaired Allowed
Claim will be sent to the address listed on the ballot. Any subsequent Distributions will be sent
to the same address, unless that address is superseded by proofs of claim or transfer of claims
filed pursuant to Bankruptcy Rule 3001 (or at the last known address of such creditor if the Plan
Trustee has been notified in writing of a change in address). Neither the Debtor nor the Plan
Trustee will be liable to any creditor in the event that a Distribution made on account of the
creditor's claim is sent to an incorrect address. If any Distribution is made to Holders of
Preferred Stock, the Debtor will be authorized to rely upon information regarding such Holders
from DTCC.
21. Is the Debtor suing people responsible for any losses suffered by the Debtor?
The Debtor and the Case Committee are evaluating potential claims against third parties
when a question exists as to whether their conduct caused any loss to the Debtor and such
conduct is actionable. The Plan Trustee will continue this process. Under the Plan, all Claims
are reserved except those Claims expressly released under the Plan, an order confirming the Plan
or other order of the Bankruptcy Court. Claims that are reserved include (i) potential claims
against the former management of the Debtor and former professionals retained by the Debtor
(such as accountants and attorneys) with respect to acts or omissions prior to the Petition Date
and (ii) potential claims for the recovery of assets of the Debtor. A description of the types of
potential claims being evaluated may be found in Chapter VII of this Disclosure Statement. The
Debtor's evaluation, however, is limited to the rights which the Debtor, as a corporate entity, may
have against these third parties, and any recovery would become an asset of the Debtor's
bankruptcy estate subject to distribution in accordance with the terms and priorities set forth in
the Plan, if confirmed by the Bankruptcy Court. In addition, the Debtor may pursue, when
appropriate, the recovery of preferential and fraudulent transfers. Any person who received a
preferential or fraudulent transfer of an interest in the Debtor's property is subject to an action
under Sections 547 or 548 of the Bankruptcy Code (or applicable state law) to recover this
interest in the Debtor's property.

- 11 - 11
22. Do I have additional rights or remedies against third parties?
You may. Depending on the circumstances in which your Claim or Equity Interest arose,
you may have independent and direct rights and remedies against third parties for recovery of all
or a portion of your Claim(s) against or Equity Interests in the Debtor. Evaluation of such
Claim(s) is a factually intensive process and is best determined through consultation between
qualified counsel and you. Please note that any claim which you have against a third party is
subject to a statute of limitations which specifies the time by which any such claim must be
pursued or be barred. The length of time by which a claim must be asserted varies depending
upon the type of claim and the circumstances under which the claim arose. You should consult
with your legal counsel about the statute of limitations applicable to any claim you might have.
The Debtor and its counsel are not authorized or in a position to advise you on the potential
claims you might have against third parties or the time by which any such claims must be
asserted.
The Debtor expresses no opinion with regard to the existence, validity or merit of any
such claims against third parties and is not authorized under the Plan, or otherwise, to pursue
such claims that are held solely by third parties and not the Debtor. The Plan does not restrict
your right, if any, to bring such direct and independent claims against third parties in an
effort to recover all or a part of any unpaid Claim against the Debtor, except that (i) the
Plan, if confirmed, does restrict whatever right (if any) that any Holder of a Claim may
have to assert against another Holder of a Claim any alleged rights of Contractual
Subordination as to any Distribution being made under the Plan and (ii) Section 10.3 of the
Plan contains an exculpation of Exculpated Parties for acts or omissions during the
pendency of the Case and prior to the Effective Date (other than liabilities determined by a
Final Order to be attributable solely to an Exculpated Party's (a) own gross negligence or
willful misconduct or (b) violations of state or federal criminal laws).

23. Are there risk factors associated with consummation of the Plan?
There are substantial risk factors, more fully set forth in Chapter XII (Risk Factors) that
may significantly and adversely affect the timing and ability of the Debtor to make Distributions
(or the size of any Distributions) as contemplated by the Plan. In particular, if positions taken in
this Case by the FDIC-Receiver are sustained, either in the court of original jurisdiction or on
appeal, there is a substantial risk that there would be little, if any, Distributions for creditors and
that the Case could be converted to one under Chapter 7 of the Bankruptcy Code.

24. Have there been settlement discussions with the FDIC-Receiver?
Yes. Chapter XII, Section B.3 of this Disclosure Statement discusses in detail the
present status of efforts to settle a number of contested disputes between the Debtor and
the FDIC-Receiver. Settlement with the FDIC-Receiver is by no means assured.

Chapter III. GENERAL INFORMATION ABOUT THE DEBTOR
Some of the information set forth in this Chapter III of the Disclosure Statement is
taken from the filings by the Debtor with the Securities and Exchange Commission (the

- 12 - 12
"SEC"). For more detailed information regarding the events and transactions summarized
in this Chapter III, please refer to these SEC filings.
A. Debtor's Business and Events Leading to Bankruptcy Filing
The Debtor is a Delaware corporation that was organized in 1974 as a bank holding
company under the Bank Holding Company Act of 1956, as amended. The Debtor was
originally organized as "Southland Bancorporation," and its name was changed to The Colonial
BancGroup, Inc. in 1981. Pursuant to the Gramm-Leach-Bliley Financial Services
Modernization Act, the Debtor elected to become a financial holding company.
As a bank holding company, the Debtor, through Colonial Bank and other non-bank
subsidiaries, provided diversified financial services, including retail and commercial banking,
wealth management services, and mortgage origination and insurance products to consumers and
businesses. The principal activity of the Debtor was to supervise and coordinate the business of
its subsidiaries and to provide them with capital and services.
Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, the
Debtor consolidated its various banking subsidiaries into its wholly-owned and principal
operating subsidiary, Colonial Bank. Colonial Bank was converted from a national banking
association into an Alabama state-chartered, non-member bank on J une 10, 2008, and its legal
name was changed from "Colonial Bank, N.A." to "Colonial Bank."
Prior to the Petition Date, the Debtor and certain of its subsidiaries, including Colonial
Bank, filed consolidated federal income tax returns. A chart of the Debtor's known subsidiaries
as of J une 30, 2009 is attached to this Disclosure Statement as Exhibit C. As described in greater
detail in Chapter V, Section 3 and Chapter VII, Sections 3-5 of this Disclosure Statement, the
Debtor believes that it may be entitled to additional federal income tax refunds as a result of
losses for tax purposes during prior tax years.
On August 14, 2009, Colonial Bank was closed by the Alabama State Banking
Department, and the FDIC-Receiver was appointed as receiver for Colonial Bank. Subsequent to
the closure, BB&T assumed certain of the former deposits of Colonial Bank and certain other
former liabilities and purchased certain of Colonial Bank's former assets pursuant to the P&A
Agreement.
Several days prior to the Petition Date, the FDIC-Receiver sent an email to BB&T
requesting that BB&T place a "hold" on the Debtor's depository accounts. BB&T placed a hold
on the depository accounts which since that time has frustrated the Debtor's ability to withdraw
or otherwise utilize any funds in those accounts, with the exception of certain limited items of
minimal dollar amounts that were apparently honored by BB&T. The result of this hold was that
many checks issued by the Debtor after the closure of Colonial Bank and prior to the Petition
Date were returned by the drawee bank and the Debtor was unable to pay lawful expenses in the
ordinary course of its business.
As described below, the closure of Colonial Bank left the Debtor unable to service its
public debt instruments. The Alabama Revenue Department also assessed substantial tax
liabilities and filed tax liens in the month of August 2009 against the Debtor and certain of its

- 13 - 13
property totaling in excess of $12,000,000. These events further aggravated the Debtor's ability
to respond to the continued prosecution of civil litigation against the Debtor and the ongoing
investigations of the Debtor by federal criminal and regulatory authorities. Accordingly, the
Debtor determined that it was necessary and appropriate to file a petition for relief under Chapter
11 of the Bankruptcy Code to preserve its assets for the benefit of all of its creditors.
To assist the Debtor in implementing this decision to file bankruptcy and administering
its Chapter 11 case, the Debtor's board of directors authorized the Debtor's retention of a chief
recovery officer and the hiring of Kevin O'Halloran of Atlanta, Georgia, to fill that position (the
"CRO"). With the assistance of the CRO and Debtor's counsel, this Chapter 11 case was
commenced on August 25, 2009.
B. Debtor's Capital Structure
1. Common Stock.
Prior to the closure of Colonial Bank, the Debtor's stock was listed on the New York
Stock Exchange (the "NYSE"). As of August 14, 2009, there were approximately 202,741,587
shares of the Debtor's common stock outstanding. On August 17, 2009, the NYSE suspended
trading in the Debtor's common stock and its other securities. The NYSE determined that the
Debtor's securities were no longer suitable for listing on the NYSE due to the closure of Colonial
Bank, the Debtor's principal operating subsidiary. The NYSE filed with the SEC a Form 25-
NSE to remove its securities from listing and registration from the NYSE. On November 15,
2010, the registration of each class of the Debtor's securities registered with the SEC was
revoked, without opposition by the Debtor.
2. Preferred Stock.
As of the Petition Date, the Debtor had (or may be deemed to have had) outstanding
300,000 shares of preferred stock (the "New Preferred Stock") allegedly as a result of the
occurrence of an exchange event under which REIT preferred securities (the "REIT Preferred
Securities") in CBG Florida REIT Corp. (the "Trust") were transferred to the Debtor and the
Debtor issued (or was deemed to have issued) the New Preferred Stock to the former holders of
the REIT Preferred Securities. The Debtor believes that the New Preferred Stock was issued (or
deemed issued) by it on or about August 10, 2009, four days before Colonial Bank was placed in
receivership and 15 days before the Debtor filed for bankruptcy protection. The FDIC claims to
have sent a letter to the Debtor, Colonial Bank, the Trust and CBG Nevada Holding Corp. stating
that an "Exchange Event" had occurred within the meaning of the documents governing the
REIT Preferred Securities, which the FDIC-Receiver contends had the result of automatically
converting all REIT Preferred Securities in the hands of investors into shares of New Preferred
Stock. According to the Form 8-K filed by the Debtor on August 12, 2009 (the "REIT Preferred
8-K"), the exchange was consummated effective as of 8:00 a.m. New York time on August 11,
2009. In the REIT Preferred 8-K, the statement is made that, until certificates representing the
New Preferred Stock are issued, the certificates representing the REIT Preferred Securities "will
be deemed for all purposes to represent BancGroup [New Preferred Stock]." Issues and claims
related to this exchange and the issuance of preferred stock by the Debtor are described in greater
detail in Chapter V, Section 6 of this Disclosure Statement.

- 14 - 14

3. Public Debt.
1

The Debtor's capital structure is dominated by a preferred securities issuance made in
2003 (7.875% Preferred Securities) and two debt issuances made in 2003 (Floating Rate J unior
Subordinated Deferrable Interest Debentures Due 2033) and 2008 (8.875% Subordinated Notes
Due 2038). The Debtor's obligations under these preferred securities and debt issuances
constitute General Unsecured Claims.
a. Preferred Securities Debentures -- $103,092,800
As of the Petition Date, the Debtor had approximately $103,092,800.00 in principal
amount of 7.875% J unior Subordinated Debentures Due 2033 (the "Preferred Securities
Debentures") outstanding pursuant to an Indenture, dated as of March 21, 2002, between the
Debtor and The Bank of New York Mellon Trust Company, N.A., a national banking
association, as successor in interest to The Bank of New York (the "Preferred Securities
Indenture Trustee"), a New York banking corporation, as trustee, as supplemented by a Second
Supplemental Indenture, dated as of September 16, 2003, between the Debtor and such trustee
(together, the "Preferred Securities Indenture Agreement").
Pursuant to an Amended and Restated Declaration of Trust of Colonial Capital Trust IV,
dated as of September 16, 2003, among the Debtor, as sponsor, common securities holder and
debenture issuer, The Bank of New York Mellon Trust Company, N.A., as successor in interest
to The Bank of New York, as institutional trustee, The Bank of New York (Delaware), as
Delaware trustee, and the regular trustees named therein (the "Preferred Securities Declaration of
Trust"), Colonial Capital Trust IV purchased all of the Preferred Securities Debentures and
funded such purchase by issuing to investors $100,000,000.00 in aggregate liquidation amount of
7.875% Preferred Securities (the "Preferred Securities") and issuing to the Debtor $3,092,800.00
in aggregate liquidation amount of 7.875% Common Securities. Further, pursuant to a Preferred
Securities Guarantee Agreement, dated as of September 16, 2003, among the Debtor, as
guarantor, and The Bank of New York Mellon Trust Company, N.A., as successor in interest to
The Bank of New York, as preferred guarantee trustee, the Debtor guaranteed certain of Colonial
Capital Trust IV's obligations to Holders of Preferred Securities.
The commencement of the Debtor's bankruptcy case on the Petition Date (i) constituted
an "Event of Default" under the Preferred Securities Indenture Agreement and (ii) rendered all
amounts outstanding in respect of the Debtor's Preferred Securities Debentures immediately due
and payable.

1
The Indenture Claim amounts which were provided to the Debtor by the Preferred Securities Indenture Trustee
and are set forth in Chapter III, Section B.3 of the Disclosure Statement reflect the principal amount of public debt
outstanding as of the Petition Date, and do not reflect accrued but unpaid interest outstanding as of the Petition Date.
The face amounts of proofs of claim filed in respect of the Preferred Securities Debentures, the 2003 Debentures,
and the 2008 Debentures differ from the amounts set forth herein. The Debtor is not in a position to confirm these
amounts at this time and reserves all of its rights with respect to the foregoing.

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The Preferred Securities Indenture Trustee may collect payments in respect of the
Preferred Securities Debentures and distribute such payments to Holders of Preferred Securities.
According to, the Preferred Securities Indenture Trustee it is not authorized to consent to, accept,
adopt, or vote on any Chapter 11 plan of the Debtor on behalf of Colonial Capital Trust IV or
Holders of the Preferred Securities and each Preferred Securities Holder, as the Holder of a right
to payment in respect of the Preferred Securities Debentures, is entitled to vote on the Plan.
A question has been raised as to whether, and to what extent, the payment of amounts
owed by the Debtor with respect to the Preferred Securities Debentures are contractually senior
or junior in right of payment to any other indebtedness owed by the Debtor to other Holders of
Claims. In a Form S-3 registration statement filed with the SEC on February 26, 2002, the
Debtor described the Preferred Securities Debentures and stated, under a heading entitled
"Subordination," that:
Colonial BancGroup has agreed that any of the junior subordinated
debentures issued under the indenture will rank junior to all of the senior
indebtedness to the extent provided in the indenture. Upon any payment or
distribution of Colonial BancGroup's assets to creditors upon Colonial
BancGroup's liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding involving Colonial BancGroup, the allocable amounts, as
defined below, in respect of the senior indebtedness must be paid in full before
the holders of the junior subordinated debentures will be entitled to receive or
retain any payment in respect thereof. (emphasis added).

If the maturity of junior subordinated debentures is accelerated, the
holders of all senior indebtedness outstanding at such time will first be entitled to
receive payment in full of the allocable amounts in respect of such senior
indebtedness before the holders of junior subordinated debentures will be entitled
to receive or retain any payment in respect of the principal of or interest on the
junior subordinated debentures.

No payments on account of principal or interest in respect of the junior
subordinated debentures may be made if there is a default in any payment with
respect to senior indebtedness, or an event of default exists with respect to any
senior indebtedness that accelerates the maturity of the senior indebtedness, or if
any judicial proceeding shall be pending with respect to the default.

The Preferred Securities Indenture Agreement contains an article entitled "Subordination
of Securities," which states, under a provision entitled "Agreement to Subordinate," in relevant
part that:
The payment by the Company of the principal of, premium, if any, and
interest (including Compound Interest and Additional Sums, if any) on all
Securities issued hereunder shall, to the extent and in the manner hereinafter set
forth, be subordinated and junior in right of payment to the prior payment in full

- 16 - 16
of all Senior Indebtedness of the Company and rank pari passu and equivalent to
creditor obligations of those holding general unsecured claims not entitled to
statutory priority under the United States Bankruptcy Code or otherwise, in each
case whether outstanding at the date of this Indenture or thereafter incurred.
(emphasis added).
The term "Securities" is defined in the Preferred Securities Indenture Agreement in two
complimentary provisions, the first being the indenture's initial recital and the second being a
provision from the indenture's definition section, as follows:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance from time to time of its debt securities to be issued in one
or more series (the "Securities")
***
"Security" or "Securities" shall have the meaning stated in the first recital
of this Indenture and, more particularly, means any debt security or securities, as
the case may be, authenticated and delivered under this Indenture.
The term "Senior Indebtedness" is defined in the Preferred Securities Indenture
Agreement as follows:
"Senior Indebtedness" shall mean the principal of (and premium, if any)
and interest, if any, (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post petition interest is allowed in such proceeding), on all
Indebtedness, whether outstanding on the date of execution of this Indenture, or
hereafter created, assumed or incurred, except Indebtedness Ranking on a Parity
with the Securities or Indebtedness Ranking J unior to the Securities, and any
deferrals, renewals or extensions of such Senior Indebtedness. (emphasis added).
The terms "Indebtedness," "Indebtedness Ranking on a Parity with the Securities" and
"Indebtedness Ranking J unior to the Securities" are defined in the Preferred Securities Indenture
Agreement as follows:
"Indebtedness" shall mean, whether recourse as to all or a portion of the
assets of the Company and whether or not contingent, every obligation of the
Company for money borrowed, whether or not evidenced by bonds, debentures,
notes or other written instruments, except that "Indebtedness" shall not include
trade accounts payable accrued liabilities arising in the ordinary course of
business. (emphasis added)
"Indebtedness Ranking on a Parity with the Securities" shall mean (i)
Indebtedness, whether outstanding on the date of execution of this Indenture or
hereafter created, assumed or incurred, to the extent such Indebtedness by its
terms ranks pari passu with and not prior or senior to the Securities in the right of
payment upon the happening of the dissolution, winding-up, liquidation or
reorganization of the Company, and (ii) all debt securities issued to any Colonial

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Capital Trust, or a trustee of such trust, partnership or other entity affiliated with
the Company, that is a financing vehicle of the Company in connection with the
issuance by such financing entity of equity securities or other securities that are
similar to the Preferred Securities. The securing of any Indebtedness otherwise
constituting Indebtedness Ranking on a Parity with the Securities shall not be
deemed to prevent such Indebtedness from constituting Indebtedness Ranking on
a Parity with the Securities with respect to any assets of the Company not
securing such Indebtedness.
"Indebtedness Ranking J unior to the Securities" shall mean any
Indebtedness, whether outstanding on the date of execution of this Indenture or
hereafter created, assumed or incurred, to the extent such Indebtedness by its
terms ranks junior to and not pari passu with or prior to the Securities in right of
payment upon the happening of the dissolution, winding-up, liquidation or
reorganization of the Company. The securing of any Indebtedness otherwise
constituting Indebtedness Ranking J unior to the Securities shall not be deemed to
prevent such Indebtedness from constituting Indebtedness Ranking J unior to the
Securities with respect to any assets of the Company not securing such
Indebtedness.
These definitions suggest that the Preferred Securities Debentures could, under certain
circumstances, be deemed senior or junior in right of payment to certain other indebtedness owed
by the Debtor. The Debtor does not express any opinion as to whether, and to what extent,
amounts owed to a Holder of a Claim based on the Preferred Securities are senior or junior in
right of payment to the Debtor's obligation to pay the indebtedness owed to any other Holder of a
Claim. Each individual Holder of a Claim should make its own factual and legal determination,
as the Holder deems appropriate, including consultation with counsel of the Holder's own
election if deemed necessary by the Holder, as to whether the Preferred Securities are senior or
junior in priority to any other Claim. However, if confirmed, the Plan provides in Section 10.9
that "[a]ll Distributions under the Plan shall be made by the Debtor to the Holder of each
Allowed Claim, irrespective of (and without the Debtor or such Holder being obligated to honor
the terms of) any Contractual Subordination given by such Holder to the Holder or Holders of
any other Claim or Claims; any such Contractual Subordination shall be deemed to be void,
unenforceable and of no further force and effect from and after the Effective Date with respect to
any Distributions under this Plan; and Distributions made to the Holder of an Allowed Claim that
is or may be subordinated to another Claim, in whole or in part, pursuant to any Contractual
Subordination that was in existence prior to the Effective Date shall not be subject to levy,
garnishment, attachment, or other legal process by any Holder of a Claim based upon an alleged
Contractual Subordination in its favor. Without limiting the foregoing, each Holder of a Claim
who votes for this Plan or accepts any Distribution under this Plan, or who is a member of a
Class of Claims that consists of Holders who are the beneficiaries of a Contractual Subordination
and that accepts this Plan, shall be deemed specifically to have agreed to the foregoing. The
Confirmation Order shall constitute an injunction as of the Effective Date restraining and
permanently enjoining any Holder from enforcing or attempting to enforce any
Contractual Subordination." (emphasis in original).

- 18 - 18
b. 2003 Indenture -- $5,155,000
As of the Petition Date, the Debtor had approximately $5,155,000 in principal amount of
Floating Rate J unior Subordinated Deferrable Interest Debentures due 2033 (the "2003
Debentures") outstanding pursuant to an Indenture, dated as of March 26, 2003 (the "2003
Indenture Agreement"), between the Debtor, as successor in interest to P.C.B. Bancorp, Inc., and
U.S. Bank National Association, a national banking association, as trustee (the "2003 Debenture
Indenture Trustee").
Pursuant to an Amended and Restated Declaration of Trust of P.C.B. Bancorp Statutory
Trust II, dated as of March 26, 2003, among the Debtor, as successor in interest to P.C.B.
Bancorp, Inc., as sponsor, U.S. Bank National Association, as institutional trustee and the
administrators named therein (the "2003 Debentures Declaration of Trust"), P.C.B. Bancorp
Statutory Trust II purchased all of the 2003 Debentures and funded such purchase by issuing
$5,000,000.00 in aggregate liquidation amount of floating rate capital securities (the "Capital
Securities") and issuing to the Debtor $155,000.00 in aggregate liquidation amount of floating
rate common securities. The Debtor is informed that the Capital Securities were held as of the
Petition Date, and continue to be held by, a single holder. Further, pursuant to a Guarantee
Agreement, dated as of March 26, 2003, among the Debtor, as successor in interest to P.C.B.
Bancorp, Inc., as guarantor, and U.S. Bank National Association, as guarantee trustee, the Debtor
guaranteed certain of P.C.B. Statutory Trust IIs obligations to holders of the Capital Securities.
an "Event of Default" under the 2003 Indenture Agreement and (ii) rendered all amounts
outstanding in respect of the Debtor's 2003 Debentures immediately due and payable.
The 2003 Debenture Indenture Trustee may collect payments in respect of the 2003
Debentures and distribute such payments to holders of the 2003 Debentures, who in turn will
distribute such payments to holders of the Capital Securities. According to the 2003 Debenture
Indenture Trustee, it is not authorized to consent to, accept, adopt, or vote on any Chapter 11
plan of the Debtor on behalf of the holder of the 2003 Debentures or the holders of the Capital
Securities and the holder of the Capital Securities, as the holder of a right to payment in respect
of the 2003 Debentures, is entitled to vote on the Plan.
owed by the Debtor under the 2003 Debentures are contractually senior or junior in right of
payment to any other indebtedness owed by the Debtor to other Holders of Claims. The 2003
Indenture Agreement contains an article entitled, "Subordination of Debentures," which states,
under the heading "Agreement to Subordinate," in relevant part that:
The payment by the Company of the principal of, and premium, if any,
and interest on all Debentures shall, to the extent and in the manner hereinafter set
forth, be subordinated and junior in right of payment to the prior payment in full
of all Senior Indebtedness of the Company, whether outstanding as of the date of
this Indenture or hereafter incurred. (emphasis added).

- 19 - 19
The definition in the 2003 Indenture Agreement of "Senior Indebtedness" states as
follows:
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company; (ii)
all capital lease obligations of the Company; (iii) all obligations of the Company
issued or assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement; (iv) all obligations of the Company for the reimbursement of
any letter of credit, any banker's acceptance, any security purchase facility, any
repurchase agreement or similar arrangement, any interest rate swap, any other
hedging arrangement, any obligation under options or any similar credit or other
transaction; (v) all obligations of the type referred to in clauses (i) through (iv)
above of other Persons for the payment of which the Company is responsible or
liable as obligor, guarantor or otherwise; and (vi) all obligations of the type
referred to in clauses (i) through (v) above of other Persons secured by any lien on
any property or asset of the Company (whether or not such obligation is assumed
by the Company), whether incurred on or prior to the date of this Indenture or
thereafter incurred. Notwithstanding the foregoing, "Senior Indebtedness" shall
not include (1) any Additional J unior Indebtedness, (2) Debentures issued
pursuant to this Indenture and guarantees in respect of such Debentures, (3) trade
accounts payable to the Company arising in the ordinary course of business (such
trade accounts payable being pari passu in right of payment to the Debentures) or
(4) obligations with respect to which (a) in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that such
obligations are pari passu, junior or otherwise not superior in right of payment to
the Debentures and (b) the Company, prior to the issuance thereof, has notified
(and, if then required under the applicable guidelines of the regulating entity, has
received approval from) the Federal Reserve (if the Company is a bank holding
company) or the OTS (if the Company is a savings and loan holding company).
Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to
the subordination provisions irrespective of any amendment, modification or
waiver of any term of such Senior Indebtedness.
These provisions suggest that the 2003 Debentures could, under certain circumstances, be
deemed senior or junior in right of payment to certain other indebtedness owed by the Debtor.
The Debtor does not express any opinion as to whether, and to what extent, amounts owed to a
Holder of a Claim based on the 2003 Debentures are senior or junior in right of payment to the
Debtor's obligation to pay the indebtedness owed to any other Holder of a Claim. Each
individual Holder of a Claim should make its own factual and legal determination, as the Holder
deems appropriate, including consultation with counsel of the Holder's own election if deemed
necessary by the Holder, as to whether the 2003 Debentures are senior or junior in priority to any
other Claim. However, if confirmed, the Plan provides in Section 10.9 that "[a]ll Distributions
under the Plan shall be made by the Debtor to the Holder of each Allowed Claim, irrespective of
(and without the Debtor or such Holder being obligated to honor the terms of) any Contractual

- 20 - 20
Subordination given by such Holder to the Holder or Holders of any other Claim or Claims; any
such Contractual Subordination shall be deemed to be void, unenforceable and of no further
force and effect from and after the Effective Date with respect to any Distributions under this
Plan; and Distributions made to the Holder of an Allowed Claim that is or may be subordinated
to another Claim, in whole or in part, pursuant to any Contractual Subordination that was in
existence prior to the Effective Date shall not be subject to levy, garnishment, attachment, or
other legal process by any Holder of a Claim based upon an alleged Contractual Subordination in
its favor. Without limiting the foregoing, each Holder of a Claim who votes for this Plan or
accepts any Distribution under this Plan, or who is a member of a Class of Claims that consists
of Holders who are the beneficiaries of a Contractual Subordination and that accepts this Plan,
shall be deemed specifically to have agreed to the foregoing. The Confirmation Order shall
constitute an injunction as of the Effective Date restraining and permanently enjoining any
Holder from enforcing or attempting to enforce any Contractual Subordination."
(emphasis in original).
c. 2008 Indenture -- $250,000,000
As of the Petition Date, the Debtor had approximately $250,000,000 in principal amount
of 8.875% Subordinated Notes (the "2008 Debentures") outstanding pursuant to an Indenture,
dated as of March 1, 2008 (the "2008 Indenture Agreement"), between the Debtor and The Bank
of New York Mellon Trust Company, N.A., a national banking association, as successor in
interest to The Bank of New York Trust Company, N.A., as trustee.
an "Event of Default" under the 2008 Indenture Agreement and (ii) rendered all amounts
outstanding in respect of the 2008 Debentures immediately due and payable.
owed by the Debtor under the 2008 Indenture Agreement are contractually senior or junior in
right of payment to any other indebtedness owed by the Debtor to other Holders of Claims. The
2008 Indenture Agreement contains an article entitled, "Subordination of Securities," under
which is the following provision:
SECTION 14.01. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in the
manner hereinafter set forth in this Article, the indebtedness represented by the
Securities and the payment of the principal of (and premium, of any) and interest
on each and all of the Securities are hereby expressly made subordinate and
subject in right of payment to the prior payment in full of all Senior Indebtedness
and, to the extent set forth in Section 14.15, of all Other Financial Obligations.
(emphasis added).
The 2008 Indenture Agreement contains a definition of "Senior Indebtedness," which
states, in part, that:

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"Senior Indebtedness" means the principal of (and premium, if any) and
interest on (a) all indebtedness of the Company (including indebtedness of others
guaranteed by the Company), other than the Securities and obligations on account
of Existing Subordinated Indebtedness whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed, which is (i) for money
borrowed or (ii) evidenced by a note or similar instrument given in connection
with the acquisition of any businesses, properties or assets of any kind, and (b)
amendments, renewals, extensions, modifications or refundings of any such
indebtedness, unless in any case in the instrument creating or evidencing any such
indebtedness or pursuant to which the same is outstanding it is provided that such
indebtedness is not superior in right of payment to the Securities or is to rank pari
passu with or subordinate to the Securities.
The 2008 Indenture Agreement defines "Existing Subordinated Indebtedness" to mean
"the Company's Notes due" but lacks any definition of "Company's Notes."
With regard to the phrase "Other Financial Obligations," the 2008 Indenture Agreement
provides the following definition:
Other Financial Obligations means, unless otherwise determined with
respect to any series of Securities pursuant to Section 3.01, whether outstanding
on the date of the indenture or thereafter created, incurred or assumed, all
obligations of the Company to make payment pursuant to the terms of financial
instruments such as (i) securities contracts and foreign currency exchange
contracts, (ii) derivative instruments, such as swap agreements (including interest
rate and foreign exchange rate swap agreements), cap agreements, floor
agreements, collar agreements, interest rate agreements, foreign exchange rate
agreements, options, commodity futures contracts and commodity options
contracts and (iii) financial instruments similar to those set forth in (i) or (ii)
above; provided, however, that Other Financial Obligations shall not include (A)
obligations on account of Senior Indebtedness and (B) obligations on account of
indebtedness for money borrowed ranking pari passu with or subordinate to the
Securities, including, without limitation, Existing Subordinated Indebtedness.
(emphasis added).
Section 14.15 of the 2008 Indenture Agreement, which appears to qualify the term of
Other Financial Obligations in its use in Section 14.1, provides, in pertinent part, as follows:
SECTION 14.15. Securities to Rank Pari Passu with Existing
Subordinated Indebtedness; Payment of Proceeds in Certain Cases.
(a) Subject to the provisions of this Section and to any provisions
established or determined with respect to Securities of any series pursuant to
Section 3.01, the Securities shall rank pari passu in right of payment with all other
Securities and the Existing Subordinated Indebtedness.

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(b) Upon the occurrence of any of the events specified in clauses (a), (b)
and (c) of the first paragraph of Section 14.02, the provisions of that Section to
determine the amount of cash, property or securities which may be payable or
deliverable as between the holders of Senior Indebtedness, on the one hand, and
the Holders of Securities, on the other hand
(d) In the event that, notwithstanding the foregoing provisions of
subsection (c) of this Section, after the occurrence of any of the events specified
in clauses (a), (b) and (c) of the first paragraph of Section 14.02, the Trustee or
Holder of any Security shall have received any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or securities,
before Senior Indebtedness and all Other Financial Obligations are paid in full or
payment thereof duly provided for, and if such fact shall, at or prior to the time of
such payment or distribution, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event, subject to any obligation that the
Trustee or such Holder may have pursuant to Section 14.02, such payment or
distribution shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for payment in accordance with
subsection (c).
Section 14.15 of the 2008 Indenture Agreement references Section 14.2 thereof. Section
14.2 in turn states, in pertinent part, as follows:
SECTION 14.02. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or to its
assets, or (b) any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company, then and in any such event
the holders of Senior Indebtedness shall be entitled to receive payment in full of
all amounts due or to become due on or in respect of all Senior Indebtedness, or
provision shall be made for such payment in money or moneys worth, before the
Holders of the Securities are entitled to receive any payment on account of
principal of (or premium, if any) or interest on the Securities, and to that end the
holders of Senior Indebtedness shall be entitled to receive, for application to the
payment thereof, any payment or distribution of any kind or character, whether in
cash, property or securities, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other indebtedness
of the Company being subordinated to the payment of the Securities, which may
be payable or deliverable in respect of the Securities in any such case, proceeding,
dissolution, liquidation or other winding up or event.

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In the event that, notwithstanding the foregoing provisions of this Section,
the Trustee or the Holder of any Security shall have received any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Securities, before all Senior
Indebtedness is paid in full or payment thereof provided for, and if such fact shall,
at or prior to the time of such payment or distribution, have been made known to
the Trustee or, as the case may be, such Holder, then and in such event such
payment or distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness
These definitions suggest that the 2008 Debentures could, under certain circumstances,
be deemed senior or junior in right of payment to certain other indebtedness owed by the Debtor.
The Debtor expresses no opinion as to whether, and to what extent, amounts owed to a Holder of
a Claim based on the 2008 Debentures are senior or junior in right of payment to the Debtor's
obligation to pay the indebtedness owed to any other Holder of a Claim. Each individual Holder
of a Claim should make its own factual and legal determination, as the Holder deems
appropriate, including consultation with counsel of the Holder's own election if deemed
necessary by the Holder, as to whether the 2008 Debentures are senior or junior in priority to any
other Claim. However, if confirmed, the Plan provides in Section 10.9 that "[a]ll Distributions
under the Plan shall be made by the Debtor to the Holder of each Allowed Claim, irrespective of
(and without the Debtor or such Holder being obligated to honor the terms of) any Contractual
Subordination given by such Holder to the Holder or Holders of any other Claim or Claims; any
such Contractual Subordination shall be deemed to be void, unenforceable and of no further
force and effect from and after the Effective Date with respect to any Distributions under this
Plan; and Distributions made to the Holder of an Allowed Claim that is or may be subordinated
to another Claim, in whole or in part, pursuant to any Contractual Subordination that was in
existence prior to the Effective Date shall not be subject to levy, garnishment, attachment, or
other legal process by any Holder of a Claim based upon an alleged Contractual Subordination in
its favor. Without limiting the foregoing, each Holder of a Claim who votes for this Plan or
accepts any Distribution under this Plan, or who is a member of a Class of Claims that consists
of Holders who are the beneficiaries of a Contractual Subordination and that accepts this Plan,
shall be deemed specifically to have agreed to the foregoing. The Confirmation Order shall
constitute an injunction as of the Effective Date restraining and permanently enjoining any
Holder from enforcing or attempting to enforce any Contractual Subordination."
(emphasis in original).
4. Other Liabilities.
On August 14, 2009, the Alabama Revenue Department entered notices of final
assessments of financial institution excise taxes against the Debtor and its subsidiaries and final
assessments of business income tax against certain of the Debtor's subsidiaries for certain past

- 24 - 24
years for substantial amounts. The Debtor and its subsidiaries dispute their liability for the
assessed taxes and the amounts assessed and are in ongoing discussions with the Alabama
Revenue Department concerning these assessments. On information and belief, the Alabama
Revenue Department filed against the Debtor a notice of tax lien for alleged past due taxes in
excess of $12,000,000.
Other debts owed by the Debtor as of the Petition Date were primarily owed to
miscellaneous vendors and professionals, such as attorneys, accountants and consultants, and
were incurred in connection with the Debtor's performance of its obligations as a public
company, including, but not limited to, preparing filings with the SEC and bank regulatory
agencies, assisting in connection with the closure of Colonial Bank and handling various
litigation matters. During the course of this Chapter 11 bankruptcy case, numerous other Claims
have been asserted against the Debtor as summarized in Chapter V, Section B.
The source of funds historically available to the Debtor to pay holding company
expenses, including principal and interest on outstanding indebtedness such as the 2003
Indenture Agreement, the 2008 Indenture Agreement and the Preferred Securities Indenture
Agreement, has been the distribution to the Debtor of funds by Colonial Bank and the Debtor's
other subsidiaries and funds raised by the Debtor in the debt and equity markets. With the
closure of Colonial Bank and the bankruptcy of Colonial Brokerage, Inc., an important wholly-
owned subsidiary of the Debtor, a significant source of such funds no longer exists.
C. Debtor's Major Benefit Plans.
1. 401(k) Plan.
Prior to the Petition Date, the Debtor sponsored a 401(k) savings plan (the "401(k) Plan")
that provided deferred compensation benefits at retirement, death, disability and termination of
employment under a qualified plan with a "cash or deferred arrangement" under Sections 401(a)
and 401(k) of the Internal Revenue Code. Participants in the 401(k) Plan made elective
contributions through payroll deduction, and from time to time, the Debtor made matching
contributions to the 401(k) Plan for the benefit of employees. An employees interest in the
Debtors contributions became 100% vested after five years of service. Participants in the
401(k) Plan had options as to the investment of their plan funds, one of which included purchase
of the Debtor's common stock.
On or about August 14, 2009, as a result of the mass termination of employment of
substantially all of the Debtor's employees and employees of the Debtor's current and former
affiliates stemming from the closure of Colonial Bank (all or substantially all of whom were
401(k) Plan participants), a partial termination of the 401(k) Plan occurred. As of August 2009,
the 401(k) Plan had an aggregate balance for vested participants of approximately $60,000,000.
In order not to disrupt the proper vesting of accounts in the 401(k) Plan and the proper
processing of distribution and rollover requests from former employees, the Debtor sought
authorization from the Bankruptcy Court to fully terminate and wind up the 401(k) Plan [Doc.
No. 88]. On September 25, 2009, the Bankruptcy Court entered an order approving this motion
[Doc. No. 119]. By unanimous written consent, the Debtor's board of directors terminated the
401(k) Plan effective as of September 30, 2009.

- 25 - 25
As of this date, the Debtor is working with its service providers to effect the complete
liquidation of the approximately $13,000,000 in plan assets remaining in the 401(k) Plan and the
distribution of all participants' accounts to the approximately 2,000 remaining participants.
Remaining activities over the next several months are likely to include distribution of a
"Sarbanes-Oxley" notice to all remaining participants in advance of any blackout period
preceding the liquidation, automatic rollovers of certain participants' account balances to IRAs,
and an Internal Revenue Service determination letter submission as to the qualified status of the
401(k) Plan as terminated.
2. Pension Plan.
The Debtor was a contributing sponsor of, or a member of a contributing sponsor's
controlled group (as defined below), with respect to The Colonial Retirement Plan, Employer
Identification No./Plan No. 63-0661573/001 (the "Pension Plan"). The Pension Plan is a single-
employer pension plan covered by Title IV of the Employment Retirement Income Security Act
of 1974 ("ERISA"), as amended, 29 U.S.C. 1301-1461 (2006 & Supp. III 2009), which
created a mandatory pension plan termination insurance program administered by the Pension
Benefit Guaranty Corporation (the "PBGC"). The PBGC is a wholly owned United States
Government corporation that guarantees the payment of certain benefits upon termination of a
pension plan covered by Title IV of ERISA.
Under ERISA, the contributing sponsor of a pension plan covered by Title IV of ERISA
and each member of its "controlled group" are jointly and severally liable for certain obligations
relating to such plan. For purposes of ERISA, a "controlled group" is determined pursuant to 29
U.S.C. 1301(a)(14).
The Pension Plan provided benefits based on final average earnings, covered
compensation and years of benefit service. On December 31, 2005, the Debtor froze
participation in the Pension Plan to new employees and froze the plan compensation amount and
years of service that could be considered in calculating future benefits for participants. Actuarial
computations for financial reporting purposes are based on the projected unit credit method. The
plan measurement date is December 31. As of December 31, 2008, plan assets included 164,520
shares of the Debtor's common stock.
Because the ongoing costs of administering the Pension Plan were significant and the
Debtor did not have adequate funds to pay such costs, the Debtor filed a motion with the
Bankruptcy Court on November 12, 2009 seeking authorization to seek termination of the
Pension Plan in accordance with Title IV of ERISA (the "Pension Plan Termination Motion")
[Doc. No. 282]. By the Pension Plan Termination Motion, the Debtor did not seek any
determination by the Bankruptcy Court regarding the funding status of the Pension Plan or
whether termination thereof was a "distressed" termination within the meaning of applicable law.
On December 14, 2009, the Bankruptcy Court entered an order approving the Pension Plan
Termination Motion requiring, in relevant part, that any termination of the pension plan "shall
comply with the requirements of Title IV of ERISA" [Doc. No. 362]. Effective April 27, 2010,
the Pension Plan was terminated under 29 U.S.C. 1342(c) by letter agreement with the PBGC;
the PBGC was appointed as statutory trustee of the Pension Plan; and the Pension Plan's date of
plan termination was established as August 14, 2009, under 29 U.S.C. 1348.

- 26 - 26

As described more fully below, the PBGC has asserted substantial claims against the
Debtor in excess of $30 million in connection with the Pension Plan which, as of the filing of
this Disclosure Statement, remain unresolved.

The PBGC filed four estimated proofs of claim in the Debtor's bankruptcy case.
According to the PBGC, the PBGC'c claims (contingent upon termination of the Pension Plan)
arise out of: (1) the unfunded benefit liabilities of the Pension Plan under 29 U.S.C. 1362(b),
totaling $18,883,111; (2) the unliquidated statutorily required minimum funding contributions
due to the Pension Plan under 26 U.S.C. 412(c)(11) and 430 and 29 U.S.C. 1082(c)(11); (3)
the unliquidated statutory liability to the Pension Plan for the shortfall and waiver amortization
charge under 29 U.S.C. 1362(c); and (4) the insurance premiums owed to PBGC with respect
to the Pension Plan under 29 U.S.C. 1306(a)(3) and (a)(7), totaling $12,217,500. The PBGC
asserts that portions of these claims are entitled to priority status under Section 507 of the
Bankruptcy Code. The Debtor reserves all of its rights with respect to the PBGC's claims.

3. Non-Qualified Deferred Compensation Plan.
Effective J anuary 1, 2006, the Debtor adopted The Colonial BancGroup, Inc. Non-
Qualified Deferred Compensation Plan (the "NQDC Plan") to provide deferred compensation
and supplemental retirement income to key senior management or highly compensated
employees selected from time to time by the Debtor as eligible to participate in the NQDC Plan.
Most of the participants in the NQDC Plan were former employees of Colonial Bank. As of the
Petition Date, the assets of the NQDC Plan consisted of approximately $1,900,000 invested with
The Charles Schwab Trust Company. As described more fully below in Chapter V, Section A.2
and Chapter VIII, Section F of this Disclosure Statement, the Debtor, pursuant to a settlement
agreement entered into by the Debtor and certain participants in the NQDC Plan and approved
by the Bankruptcy Court, was authorized to retain approximately $1,875,000 in value of the
assets of the NQDC Plan as property of the Debtor's Chapter 11 estate.
4. Certain Director Benefit Plans.
In April 2007, the Debtor, upon approval of the stockholders, instituted a compensation
plan whereby directors of the Debtor and Colonial Bank were required to receive at least a
certain portion of director fees in the form of common stock and could elect to receive additional
portions of director fees in common stock. Directors serving on regional or local boards of
Colonial Bank could also participate in the plan; however, they were not required to receive a
portion of their fees in the form of common stock. Shares earned under the plan for regular fees
were issued quarterly, while shares earned for supplemental fees were issued annually. All
shares became vested at the end of the respective plan year. The plan also allowed for the
granting of restricted stock awards which become vested at the end of the directors term.
The plan authorized the issuance of up to 500,000 shares of common stock, and as of
December 31, 2008, had issued 139,801 shares of common stock for director fees and granted
33,015 shares of restricted stock. Prior to the implementation of this plan, the Debtor had
another compensation plan for directors whereby the receipt of fees in the form of common stock

- 27 - 27
was optional, and under which a total of 18,348 shares of common stock were issued for director
fees during 2007.
During 2008, 81,353 shares of common stock were issued under the plans, representing
approximately $853,000 in directors fees.
Chapter IV. THE DEBTOR'S CURRENT AND FORMER MANAGEMENT
As of the Petition Date, the Debtors Board of Directors consisted of twelve (12)
members, as follows:
Lewis E. Beville Mobile, AL
Augustus K. Clements III Montgomery, AL
Robert S. Craft Gulf Shores, AL
Patrick F. Dye Notasulga, AL
Hubert L. Harris J r. Atlanta, GA
Clinton O. Holdbrooks Sapphire, NC
Milton E. McGregor Montgomery, AL
J ohn Ed Mathison Montgomery, AL
J oseph D. Mussafer Montgomery, AL
William E. Powell III Montgomery, AL
J ames W. Rane Abbeville, AL
Simuel Sippial, J r. Pike Road, AL
The Chairman of the Board is Simuel Sippial, J r. The prior Chairman of the Board was
Robert E. Lowder.

At a Board meeting held prior to the Petition Date, the Debtor's directors authorized the
retention and appointment of Kevin O'Halloran of Atlanta, Georgia, as the CRO and, following
such authorization, the Debtor entered into a letter agreement for the employment of the CRO.
The CRO continues to exercise day-to-day control over the administration of the affairs of the
Debtor.
As of the Petition Date, the complete list of principal officers of the Debtor was as
follows:

- 28 - 28
NAME TITLE

Lewis E. Beville President and Chief Executive Officer
Sarah H. Moore Senior Executive Vice President

David B. Byrne, J r. Senior Vice President, General Counsel
& Secretary

Kevin O'Halloran Chief Recovery Officer

After the Petition Date, David Byrne resigned, effective August 2009, and accepted a
position with BB&T. Lewis Beville and Sarah Moore continue to hold their positions.
Chapter V. THE DEBTOR'S SIGNIFICANT ASSETS AND LIABILITIES
A. The Debtor's Assets
As of the Petition Date, the Debtor's Core Assets consisted of the property in the
subsections that follow. As previously noted and as more fully set forth in Chapter XII of
this Disclosure Statement entitled "Risk Factors," the FDIC-Receiver has argued from the
outset of this Case that it owns or has a paramount interest in, or right of offset with
respect to, all or substantially all of the Core Assets, and therefore argues that Holders of
General Unsecured Claims and Equity Interests will receive no Distribution from the
Estate. In addition, the Alabama Revenue Department and BB&T claim rights of offset
with respect to and/or liens upon the Debtor's deposit accounts at BB&T, other than, in the
case of BB&T, the Debtor's Operating Account (defined below).
1. The Debtor's Bank Account Deposits.
As of the Petition Date, the Debtor had deposits in deposit accounts at BB&T with the
following approximate balances: (i) in Account No. XXXXXX1127 (the "Operating Account"),
the amount of $14,381,038.24; (ii) in Account No. XXXXXX5437, the amount of $4,000,000;
(iii) in Account No. XXXXXX5460, the amount of $5,091,170.82; (iv) in Account No.
XXXXXX5452, the amount of $5,045,815.06; (v) in Account No. XXXXXX5445, the amount
of $2,282,904.24; and (vi) in Account No. XXXXXX3218, the amount of $7,607,409.38 (the
balances in such bank accounts being collectively referred to as the "Deposits" and the bank
accounts themselves being collectively referred to as the "Bank Accounts").
The Debtor is aware of three entities that assert either security interests in, liens upon or
rights of setoff with respect to certain property of the Debtor's estate, including the Deposits.
Those entities (collectively, the "Bank Account Claimants") are as follows:
The Alabama Revenue Department, which, as noted above, asserts a tax lien with
respect to the Deposits and certain other property of the Debtor's estate. The
Alabama Revenue Department's assertion is based on a notice of tax lien with
respect to income and excise taxes in an aggregate principal amount exceeding
$12,000,000. The Debtor disputes the amount of the Alabama Revenue

- 29 - 29
Department's claim and has filed a motion with the Bankruptcy Court pursuant to
Section 505 of the Bankruptcy Code seeking a determination of the validity and
amount of the asserted claim [Doc. No. 70];

BB&T, which asserts a security interest in a portion of the Deposits in the
aggregate amount of $24,027,299.50 relating to the following account numbers:
XXXXXX5437, XXXXXX5460, XXXXXX5452; XXXXXX5445, and
XXXXXX3218. BB&T bases its assertion on the purchase of assets from
Colonial Bank as previously referenced, which purportedly included an Amended
and Restated Security Agreement dated J anuary 1, 2009, executed by the Debtor
in favor of Colonial Bank (the "Security Agreement"). BB&T states in its proof
of claim [Claim No. 163] that the $24,027,299.50 secures certain loans (the
"Affiliate Loans") made by Colonial Bank to various partnerships and other
ventures in which the Debtor made investments and that such loans are also
secured by real property owned by the borrowers. BB&T does not assert in its
proof of claim or otherwise any lien or interest in the balance of $14,381,038.24
in the Operating Account or any other property of the Debtor's estate. The
validity, extent and priority of BB&T's alleged lien interest is in dispute; and

The FDIC-Receiver, which asserts a right of offset with respect to the Deposits.
The FDIC-Receiver asserts this offset right in connection with what it contends is
a priority claim in the Debtor's Chapter 11 case in the approximate amount of
$900,000,000 (which claim was denied by the Bankruptcy Court and is the
subject of an appeal) and other contingent and unliquidated claims as described in
its proof of claim [Claim No. 139], which is the subject of a pending objection by
the Debtor.

The Debtor does not concede that any of the Bank Account Claimants has any lien upon,
interest in or right of offset with respect to any of the Deposits or other property of the Debtor's
estate.
On September 28, 2009, October 6, 2009, and October 13, 2009, the Court entered a
series of orders (collectively, the "Bank Deposit Orders") that ultimately authorized the Debtor to
use cash in the aggregate amount of $1,425,000. The source of the $1,425,000 in cash used was
from the balance of $14,381,038.24 in the Operating Account, leaving a balance of
approximately $12,956,038 in the Operating Account (the balance in which is not the subject of
any asserted lien by BB&T to secure Affiliate Loans under the Security Agreement). In a
subsequent stipulated order entered into on February 25, 2010 [Doc. No. 632], the Debtor was
authorized to use an additional $500,000 from the Operating Account pursuant to the terms of
the Bank Deposit Orders, with the resulting balance in the Operating Account of approximately
$12,456,038.
The remainder of the Deposits are the subject of pending litigation in the Bankruptcy
Court between the Debtor and the FDIC-Receiver. As discussed below in Chapter VIII, Section
A.2.c, on September 27, 2010, the FDIC-Receiver filed with the Bankruptcy Court a second
motion for relief from stay in which it sought an order from the Bankruptcy Court confirming
that the automatic stay did not apply or, alternatively, granting relief from the stay to permit the

- 30 - 30
FDIC-Receiver to take such actions as it deemed to be necessary to exercise purported setoff
rights against the Bank Accounts based on claims outlined in that motion [Doc. No. 922]. On
J anuary 24, 2011, the Bankruptcy Court entered an order denying the FDIC-Receiver's motion.
The FDIC-Receiver filed a notice of appeal of this order on J anuary 25, 2011, and request for
stay of the Bankruptcy Court's order. On J anuary 28, 2011, the Bankruptcy Court entered an
agreed order to dispose of the FDIC-Receiver's motion for a stay pending appeal, which, among
other things, allows the Debtor to use balances in its Operating Account to pay certain
administrative expenses in the Debtor's Chapter 11 case (up to a limit of $7 million) during the
pendency of the FDIC-Receiver's appeal of this decision. If the FDIC-Receiver prevails on its
appeal, then the Debtor may be unable to recover all or a part of the approximately $36 million
in its Bank Accounts.
For more information about the risks associated with the Debtor's ability to recover and
distribute its Deposits to creditors in accordance with the Plan, see Chapter XII, Section B.
2. Funds Derived From the Liquidation of a Deferred Compensation Account.
On or about November 2, 2007, the Debtor executed and established effective as of
J anuary 1, 2006, the NQDC Plan. On or about J anuary 4, 2006, the Debtor, as grantor, and The
Charles Schwab Trust Company, as trustee (the "Trustee"), entered into The Charles Schwab
Nonqualified Deferred Compensation Plan Trust Agreement (the "Trust Agreement"). Pursuant
to the Trust Agreement, the Debtor transferred to the Trustee the aggregate compensation
deferrals elected by those employees of the Debtor and/or its subsidiaries who participated in the
NQDC Plan (collectively, the "Plan Assets").
As of the Petition date, the aggregate value of the Plan Assets held under the Trust
Agreement was approximately $1,900,000. Beginning in September of 2009, the Debtor sought
authorization from the Bankruptcy Court to exercise its ownership rights over the Plan Assets.
On J une 25, 2010, the Bankruptcy Court entered an order ruling that the Plan Assets were
property of the Debtor's Chapter 11 estate [Doc. No. 777].
Certain participants in the NQDC Plan appealed the Bankruptcy Court's ruling to the
United States District Court for the Middle District of Alabama (the "District Court"). The
Debtor thereafter reached a settlement agreement (the "Settlement Agreement") with these
participants to settle the ownership dispute over the Plan Assets. The Settlement Agreement
provided that the sum of $175,000 would be set aside from the Plan Assets (the "Settlement
Amount"), of which $115,231.62 would be available for distribution on a pro rata basis to
participants in the NQDC Plan and the balance used to pay their legal counsel. On September
17, 2010, the Debtor filed a motion with the Bankruptcy Court seeking approval of the
Settlement Agreement. On October 14, 2010, the Bankruptcy Court entered an order approving
the Settlement Agreement [Doc. No. 945].
As a result of the approval of the Settlement Agreement, the Debtor received
approximately $2,050,000 from the liquidation of the Plan Assets, and retained approximately
$1,875,000 after distribution of the Settlement Amount pursuant to the terms of the Settlement
Agreement.

- 31 - 31
3. Debtor's Interest in Potential Tax Refunds.
For many years prior to the Petition Date, the Debtor and its subsidiaries elected to file
consolidated federal tax returns pursuant to the Internal Revenue Code. From 2003 through
2008, the Debtor, as the parent of the consolidated group for it and its subsidiaries, filed
consolidated federal tax returns with the IRS. Each of these returns were filed under the Debtor's
name and federal tax identification number. The Debtor believes that during each of these years
the Debtor made the quarterly estimated tax payments to the IRS under its name and using its tax
identification number. As a result of these quarterly estimated tax payments, the group's tax
liability for each year was paid in advance of the filing of any final tax return.
It is the position of the Debtor that it and its subsidiaries, including Colonial Bank,
established and operated in the ordinary course of business pursuant to the terms of a certain
intercompany tax allocation policy (the "Tax Allocation Agreement"); and that the Debtor's
actions with regard to tax matters were in each case implemented pursuant to the Tax Allocation
Agreement, including its annual filing of the consolidated federal income tax returns, the
payment of estimated tax liabilities to the IRS, and, as discussed below, the Debtor's request for a
refund for its 2008 tax year.
For each of the tax years from 2003 through 2007, the Debtor's consolidated federal
income tax return reflected a positive income, thereby generating a tax liability. For tax year
2008, however, the consolidated group's performance suffered significant losses and it became
apparent that tax refunds would be recoverable. Based on the apparent losses of the consolidated
group, the Debtor filed in May of 2009 an estimate of its 2008 losses and a Form 1139 request
for refund in the approximate amount of $166 million. By J une of 2009, the IRS responded to
the Debtor's Form 1139 and paid to the Debtor the estimated tax refund of $166 million and
thereafter the Debtor transferred that approximate amount to Colonial Bank in connection with
the Debtor's receipt of such tax refund.
The Debtor believes that it may be entitled to additional federal income tax refunds as a
result of losses for tax purposes during tax years 2008 and 2009. However, a dispute exists
between the Debtor and the FDIC-Receiver as successor to Colonial Bank regarding entitlement
to any tax refunds that may be received from any federal, state or local taxing authority. The
Debtor asserts that, based on the Tax Allocation Agreement and/or other applicable law, the
Debtor is entitled to all or a substantial part of any tax refunds received. Consistent with its
position throughout this Case with respect to virtually all of the Core Assets, the FDIC-Receiver
asserts entitlement to all or substantially all of any refund of taxes paid on the asserted grounds
that the Tax Allocation Agreement is unenforceable and that the refunds sought are based upon
taxes paid by Colonial Bank or losses sustained by Colonial Bank in the years at issue. Absent a
final adjudication of ownership or settlement of this dispute with the FDIC-Receiver, it is not
possible to state with certainty at this time the amount of the Debtor's entitlement to any tax
refund received from any federal, state or local taxing authorities. As described in greater detail
in Chapter VIII of this Disclosure Statement, the issue of ownership of tax refunds is presently
pending before the District Court. If any tax refund is received by the Debtor or the FDIC-
Receiver, that refund is required to be deposited into a separate, segregated account in the
Debtor's name pursuant to the Stipulation and Order Regarding Establishment of Segregated
Account for Tax-Related Payments (the "Segregated Tax Deposit Account") [Doc. No. 621]

- 32 - 32
pending resolution of the issue of ownership. To the extent that the Debtor prevails on its
position regarding entitlement to receive the tax refunds, the FDIC-Receiver will likely contend
(and the Debtor may dispute) that it holds a substantial Unsecured Claim against the Estate with
respect to the amount of refunds that constitute Estate Property.
The Debtor has retained the services of PricewaterhouseCoopers LLP to assist the Debtor
in analyzing how to maximize the value of the Debtor's tax attributes. The Debtor has also
conferred with the Case Committee and its professionals on this issue. At this time, the Debtor is
unable to state with any degree of certainty all steps that may be taken or issues which may need
to be addressed in connection with the Debtor's request for a refund of taxes from the IRS or the
amount or timing of any refund. However, the Debtor timely filed its 2009 federal income tax
return and has made its five-year carryback election. The FDIC-Receiver also filed a competing
2009 federal income tax return on behalf of Colonial Bank, a five-year carryback election and
requests for refunds for the affected years, and, as a result of the filing of such competing return,
there may be delays in the processing and payment of any tax refunds. As noted above, the
FDIC-Receiver asserts rights to all or substantially all of any tax refunds received by the
Debtor.
As for the additional tax refunds the Debtor believes it is entitled to receive, the Debtor
believes it may be entitled to an additional refund of up to $4,600,000 in connection with its
2008 federal income tax return. Again consistent with its overall position in the Case, the FDIC-
Receiver argues that this refund constitutes property of Colonial Bank and its subsidiaries and
therefore is property of the FDIC-Receiver as successor to Colonial Bank. By order of the
Bankruptcy Court entered on August 17, 2010 [Doc. No. 843], the Debtor received (and
deposited into the Segregated Tax Deposit Account) approximately $573,172 from the Internal
Revenue Service resulting from the Debtor's overpayment of federal income taxes for the 2008
tax year. Nothing in the Bankruptcy Court's order or in the relief provided therein constitutes a
finding for any purpose of the relative ownership of, or other rights with respect to, any tax
refunds, tax-related assets or other tax attributes as between the Debtor and either Colonial Bank
or the FDIC-Receiver.
With regard to the Debtor's 2009 federal income tax return, the Debtor believes that it is
entitled to a so-called "worthless stock deduction" based upon events surrounding the
commencement of the receivership of its wholly-owned subsidiary, Colonial Bank, on August
14, 2009. The FDIC-Receiver disputes the availability under applicable tax law of the so-called
"worthless stock deduction" and further maintains that the Debtor is not authorized to claim
federal tax refunds based upon such a deduction, and that such refunds are the property of the
receivership estate. The Debtor believes that its federal income tax filing for 2009 supports a
request for tax refunds from the Internal Revenue Service of approximately $247,000,000. The
FDIC-Receiver has advised the Debtor that the FDIC-Receiver filed a federal income tax return
and refund request with the IRS as an asserted fiduciary for Colonial Bank and its subsidiaries
that allegedly supports a request for tax refunds from the Internal Revenue Service of the same
aggregate amount (approximately $253,000,000). Accordingly, there are competing requests for
tax refunds seeking, on each entity's behalf, the maximum aggregate potential refund of
$253,000,000.

- 33 - 33
The FDIC-Receiver has also asserted that, to the extent that the Tax Allocation
Agreement is determined to be an enforceable executory contract and the Debtor is determined to
be the owner of the tax refunds thereunder, (i) the Debtor's rejection of such Tax Allocation
Agreement under the Plan or otherwise would prevent the Debtor from claiming ownership of
the tax refunds based on such agreement and (ii) the Debtor's assumption of the Tax Allocation
Agreement would give rise to an Administrative Claim in its favor for all tax refunds attributable
to Colonial Bank and its subsidiaries (which the FDIC-Receiver argues is in an amount of
approximately $253,000,000). The Debtor believes that, if and to the extent the Tax Allocation
Agreement constitutes an executory contract, the rejection thereof does not adversely impact the
Debtor's entitlement to receive any tax refund.
4. Fidelity Policies and Claims Relating Thereto.
The Fidelity Policies addressed in the Plan consist of three separate policies issued to the
Debtor as the first named assured by the Chubb Group of Insurance Companies, a holding
company for a number of insurance businesses. The three policies are as follows: Financial
Institution Bond: Form A (Policy No. 81158390 DFI); Financial Institution Bond: Form B
(Policy No. 81910594 DFI); and Financial Institution Electronic and Computer Crime Policy
(Policy No. 81260198 DFI). The Fidelity Policies cover a variety of risks, including, without
limitation, loss due to employee dishonesty, loss due to theft, damage or destruction of property
on the Debtor or its subsidiaries' premises and loss due to certain types of fraud or forgery. The
aggregate limit of liability under the Fidelity Policies is $25,000,000.
The Debtor submitted a proof of loss (the "Proof of Loss") under the Fidelity Policies on
February 2, 2010. The Debtor believes that the insurance carrier is obligated to pay the
aggregate limit of liability under the Fidelity Policies as a result of claims set forth in the Proof
of Loss (the "Fidelity Proceeds"), but no payments have been made to date and the Debtor cannot
state with certainty whether such payments will be made or whether the carrier will formally
contest the Proof of Loss in whole or in part.
The FDIC-Receiver contends that all of the misconduct alleged in the Proof of Loss
resulted in harm to Colonial Bank and not to the Debtor and that all of the Fidelity
Proceeds belong to Colonial Bank and are property of the FDIC-Receiver as its receiver.
The Debtor disputes the foregoing and maintains that all of the Fidelity Proceeds constitute
property of and are payable solely to the Estate pursuant to the plain language contained in
the Fidelity Policies. There are actions pending in the District Court between the Debtor and the
FDIC-Receiver seeking a judicial determination of issues relating to this dispute. No
determination has been made in any court as to whether the Fidelity Proceeds are, in whole or in
part, property of the FDIC-Receiver's receivership estate or of the Debtor's Chapter 11
bankruptcy estate.
In anticipation of the possible receipt of the Fidelity Proceeds, and in order to preserve
the parties' rights and positions with respect to the Fidelity Policies and Fidelity Proceeds until
such disputes are resolved, the parties entered into a protocol for the deposit and retention of the
Fidelity Proceeds in a segregated bank account, without prejudice to either the FDIC-Receiver's
or the Debtor's position regarding entitlement to the Fidelity Proceeds (the "Segregated Fidelity

- 34 - 34
Deposit Account"). On November 4, 2010, the Bankruptcy Court entered an order approving the
Segregated Fidelity Deposit Account [Doc. No. 972].
5. D&O Policies and Derivative Claims.
Prior to the Petition Date, the Debtor purchased directors' and officers' liability insurance
(defined in the Plan as the "D&O Policies") for the purpose of covering, among other things, any
costs incurred by the Debtor in connection with its obligations to indemnify its current and
former officers and directors for certain liabilities arising from their employment with or service
to the Debtor. The FDIC-Receiver contends that the D&O Policies also ensure claims asserted
against the directors and officers of Colonial Bank for breach of fiduciary duty or certain other
misconduct and therefore argues that the D&O Policies cover claims asserted by it against
Colonial Bank's directors and officers. Pursuant to Delaware law and its by-laws, the Debtor is
obligated to indemnify its current and former officers and directors for certain liabilities arising
from their employment with or service to the Debtor. As of the Petition Date, the Debtor had in
place the following policies:

Financial Institution Portfolio Policy (No. 7144-2614), for the policy period of
December 10, 2008 to December 10, 2009 [Chubb Group of Insurance
Companies (Federal Insurance Company)]

Excess Insurance Policy (No. 01-384-68-10), for the policy period December 10,
2008 to December 10, 2009 [American International Group, Inc. (National Union
Fire Insurance Company of Pittsburgh, Pa.)]

All Products Excess Follow Form Policy (No. C010937/001), for the policy
period December 10, 2008 to December 10, 2009 [Allied World Assurance
Company LTD]

The D&O Policies provide for an aggregate limit of liability of $35 million, which is
reduced not only by the amount of any claims paid on behalf of any insured under the D&O
Policies but also by amounts paid for costs incurred in defending claims covered under the D&O
Policies.
In February and March 2009, several shareholders of the Debtor filed separate
shareholder derivative actions on behalf of the Debtor in the Circuit Court of Montgomery,
Alabama, each seeking to recover damages allegedly caused to the Debtor by certain of its
current and former directors and officers. The Debtor was also named as a nominal defendant in
each of these shareholder derivative actions. On March 5, 2009, Robert Playford, a shareholder
of the Debtor, filed a shareholder derivative action on behalf of the Debtor with the District
Court, seeking to recover damages allegedly caused to the Debtor by certain of its current and
former directors and officers. The foregoing shareholder derivative litigation is discussed in
greater detail in Chapter VI, Section A.3.b of this Disclosure Statement (the "Shareholder
Derivative Litigation").

As a result of the commencement of the Debtor's Chapter 11 case, the Shareholder
Derivative Litigation is stayed as of the Petition Date with respect to any and all claims against

- 35 - 35
the Debtor. Because the claims brought forward by the plaintiffs in this litigation are shareholder
derivative claims, such claims constitute property of the Debtor's bankruptcy estate. Any actions
taken by the plaintiffs in these suits to collect or enforce such claims is also stayed pursuant to
Section 362 of the Bankruptcy Code. The FDIC-Receiver maintains that any claims in the
Shareholder Derivative Litigation are based on harm caused to Colonial Bank and therefore such
claims are not property of the Debtor but instead property of the FDIC-Receiver as successor to
Colonial Bank. The Debtor disputes this contention and notes that it has, or may have, claims
against its directors and officers for breaches of fiduciary duty other than those described in the
Shareholder Derivative Litigation.
The Debtor believes that it is beyond legitimate dispute that it is the owner of the D&O
Policies. There is, however, an unresolved dispute, as between the Debtor and the directors and
officers who are defendants in pending litigation, as to the entitlement of such directors and
officers to continue to receive from proceeds of the D&O Policies payments to reimburse them
for defense costs. To date, amounts disbursed under the D&O Policies for director and officer
defense costs have been subject to periodic approvals of the Bankruptcy Court.
In addition, there is an unresolved dispute as to the allocation of proceeds under the D&O
Policies between any judgments or other settlement recoveries with respect to the director and
officer defendants and recoveries on Claims asserted against the Debtor in pending litigation
involving both the Debtor and its directors and officers. In particular, the FDIC-Receiver has
taken the position that (a) all or substantially all of any recoveries against the Debtor's
officers and directors, and amounts that may be paid in connection therewith pursuant to
the D&O Policies, are not property of the Debtor's Estate and the FDIC-Receiver is
entitled to such amounts; and/or (b) the FDIC-Receiver's claims under the D&O Policies
with respect to alleged wrongful conduct of officers and directors of Colonial Bank take
precedence over any claims of the Debtor. Furthermore, certain plaintiffs in the ERISA
Litigation and the Securities Litigation (defined at Chapter VI, Section A.3, infra) claim an
interest in the proceeds of the D&O Policies by virtue of claims they assert against the
Debtor and current and former officers and directors of the Debtor. The Debtor disputes
the positions taken by the FDIC-Receiver and the plaintiffs in the ERISA Litigation and
Securities Litigation.
6. CBG Florida REIT Corp.
The Debtor may hold certain preferred securities relating to the Trust (defined above in
Chapter III to mean CBG Florida REIT Corp.) or claims relating to such preferred securities or
the value thereof.

On or about May 21, 2007, the Trust, an indirect subsidiary of Colonial Bank and the
Debtor, issued the REIT Preferred Securities to certain investors (the "Investors"). In connection
with the formation of the Trust, Colonial Bank contributed to the Trust a 100% participation
interest in the approximate face amount of $1 billion of mortgage loans represented to be secured
by commercial property in Florida. According to the offering documentation, the Investors, as
holders of the REIT Preferred Securities, would generally be entitled to the first recoveries or
distributions from the Trust because the Trust had no creditors.


- 36 - 36
The Debtor has been informed that, under the governing agreements, the terms of the
REIT Preferred Securities provided that the occurrence of an exchange event (an "Exchange
Event") would result in (a) each share of the Investors REIT Preferred Securities being
automatically exchanged for one share of new preferred stock (the "New Preferred Stock") of the
Debtor and (b) the Debtor receiving all 300,000 shares of the REIT Preferred Securities (the
"Conditional Exchange").

The Debtor believes that, on or about May 21, 2007, an Exchange Agreement was
entered into among the Debtor, the Trust and Colonial Bank (the "Exchange Agreement"), which
provided, among other things, that if an Exchange Event occurred and the Debtor became the
owner of the REIT Preferred Securities, the Debtor "shall contribute all of the [REIT Preferred
Securities] to [Colonial Bank] as a capital contribution and the [Trust] shall record, or cause to
be recorded, in its share registry [Colonial Bank] as owner of all of the REIT Preferred
Securities."

The Debtor believes that, on or about August 10, 2009, four days before Colonial Bank
entered into receivership and 15 days before the Debtor filed for bankruptcy protection, the
FDIC sent a letter to the Debtor, Colonial Bank, the Trust and CBG Nevada Holding Corp.
declaring that an Exchange Event had occurred. The FDIC-Receiver maintains that, as a result,
outstanding shares of the REIT Preferred Securities in the hands of investors automatically were
converted into shares of New Preferred Stock. According to the REIT Preferred 8-K filed on
August 12, 2009, the exchange (the "Exchange") was consummated effective as of 8:00 a.m.
New York time on August 11, 2009. In the REIT Preferred 8-K, the statement is made that until
certificates representing the New Preferred Stock are issued, the certificates representing the
REIT Preferred Securities "will be deemed for all purposes to represent BancGroup [New
Preferred Stock]."

The Debtor's records, many of which (as discussed more fully herein) are not in the
Debtor's possession, supposedly contain a document dated August 11, 2009, signed in the name
of the Secretary for the Debtor which certifies that the "exchange took effect at 8:00 a.m. New
York time on August 11, 2009" (the "Certificate"). The Certificate was provided to the Debtor
by the FDIC-Receiver. The Certificate also states that an attachment thereto reflects the
"impact" of the Exchange on the books and records on August 11, 2009.

The FDIC-Receiver contends that the REIT Preferred Securities were transferred by the
FDIC-Receiver to BB&T under the P&A Agreement. The Debtor asserts either that it is the
owner of the REIT Preferred Securities because such securities were never properly transferred
by the Debtor to Colonial Bank prior to the commencement of the Debtor's Chapter 11
bankruptcy case on August 25, 2009, or, if such securities were properly transferred by the
Debtor to Colonial Bank, the transfer is avoidable under applicable provisions of the Bankruptcy
Code and state fraudulent conveyance laws as to Colonial Bank and any subsequent transferee.
The FDIC-Receiver contends that (a) the Debtor's position with respect to the REIT Preferred
Securities does not take into account the terms of the governing agreements under which the
Debtor allegedly agreed to act as a mere conduit of the REIT Preferred Securities; (b) at the time
of the transfer to Colonial Bank, the Debtor was subject to a written direction from federal bank
regulators to increase its capital and therefore any fraudulent transfer claim against the FDIC-

- 37 - 37
Receiver or subsequent transferees are subject to a statutory prohibition under federal law
(specifically, 12 U.S.C. 1828(u)) and that no claim can be asserted against a subsequent
transferee for the value of such transfers and, pursuant to Section 550(a) of the Bankruptcy Code,
avoidance is a prerequisite to any such claim against a subsequent transferee; (c) to the extent the
Debtor failed to take steps necessary to effectuate the transfer of the REIT Preferred Securities,
the Debtor would be allegedly in violation of a capital maintenance commitment that the FDIC-
Receiver has argued (unsuccessfully, to date) exists under Section 365(o) and Section 507(a)(9)
of the Bankruptcy Code; and (d), to the extent the Debtor successfully avoided such transfer, the
FDIC-Receiver would be the Holder of a General Unsecured Claim in the approximate amount
of $300,000,000. The Debtor disputes each and every assertion made by the FDIC-Receiver.

As discussed more fully in Chapter VIII, Section E.3 of this Disclosure Statement, the
Debtor filed a proof of claim in the Colonial Bank receivership on November 19, 2009, in which
the Debtor set forth, among other claims, claims relating to the disposition of the REIT Preferred
Securities. The FDIC-Receiver disallowed this proof of claim and the Debtor is currently
contesting that disallowance in the District Court.

The Debtor understands that some or all of the original owners of the REIT Preferred
Securities take the position that no Exchange Event ever occurred or, even if it did, they remain
the owners of the REIT Preferred Securities, and that they do not presently own or have any
rights with respect to any of the New Preferred Stock.

All of the foregoing statements regarding the REIT Preferred Securities are based upon
information presently available to the Debtor and is believed to be correct but it is possible that
additional discovery efforts by the Debtor (which would include the Debtor's obtaining access to
records in the possession of the FDIC-Receiver and others) will confirm or disaffirm, in whole or
in part, the Debtor's present understanding of the transactions related to the REIT Preferred
Securities and may affect the Debtor's present assessment of any legal risks associated with
litigation over ownership of or rights to the REIT Preferred Securities. Without further
discovery, analysis and other due diligence in the various legal proceedings pending in the
District Court relating to the REIT Preferred Securities, the Debtor is unable to state with any
degree of assurance the range of possible recovery, if any, for the Debtors estate in connection
with the REIT Preferred Securities or the transactions described in connection therewith.

7. CBG Real Estate, LLC.
CBG Real Estate, LLC ("CBG Real Estate") is an Alabama limited liability company that
was organized pursuant to the Alabama Limited Liability Company Act on or about May 2,
2008. The Debtor is the sole member of CBG Real Estate.
The avowed purpose of CBG Real Estate was to own, develop, improve, maintain, lease
and manage real and personal property and to do everything necessary, proper, advisable or
convenient for the accomplishment of such purposes. Based upon the value that the Debtor
believes was assigned on its books and records, as of the Petition Date, to the equity interests in
CBG Real Estate, the Debtor believes that the value of such equity interests is at least
$1,818,148. However, the Debtor is unable to confirm the accuracy of this estimation due to a

- 38 - 38
lack of complete access to all of its books and records, some of which are in the custody or
control of the FDIC-Receiver and/or BB&T.
On information and belief, the Debtor states that CBG Real Estate holds (i) an undivided
35% interest in secured real estate loans originated by Colonial Bank and having an original
principal balance in excess of $120,000,000 (which interest is asserted to be subordinated to a
65% participation interest in the loans claimed by BB&T); (ii) approximately $502,853 in cash;
(iii) a 100% interest in a secured real estate loan to an entity known as Riverwalk Freeport
having an approximate unpaid balance of $11,000,000; and (iv) rights to condemnation proceeds
in connection with the Florida Department of Transportations eminent domain action affecting
mortgaged collateral (estimated value exceeding $340,000). It is possible that CBG Real Estate
has an interest in other loans, but the Debtor is unable to at this time determine the existence of
an interest in any such loans due to a lack of full access to records. Substantially all of the
secured real estate loans in which CBG Real Estate has an interest are delinquent and have a
value that is not able to be readily determined at this time. The Debtor does not believe that CBG
Real Estate has any outstanding obligations (other than alleged contractual obligations in
connection with the 65% participation interest claimed by BB&T), but the Debtor continues to
investigate both the assets and liabilities of this entity.
8. Refunds of Unearned Premiums.
The Debtor is the named insured or beneficiary on a number of insurance policies. At
this time, the Debtor is not certain whether and to what extent premiums paid on these policies
will be refundable, although the Debtor believes that some refunds of premiums may be
available upon termination of certain of these policies. At this time, the Debtor cannot state with
certainty the amount of refunds it may be entitled to receive.

9. Real Property in Orlando, Florida.
The Debtor asserts ownership of certain improved real property in Orlando, Florida, at
715 N. Garland Avenue, Orlando, Florida 38201, being: Lot 1 C & G Properties as recorded in
Plat Book 38, Page 84, Public Records of Orange County, Florida (less part taken for R/W on W
& S per 9482/1656) (the "Garland Avenue Property"), which was titled in the Debtor on the
Petition Date. Prior to the Petition Date, the Garland Avenue Property was utilized by Colonial
Bank as a branch bank location. After the closure of Colonial Bank, BB&T occupied and used
the Garland Avenue Property for a number of months, but the property is now without a tenant.
The Debtor has retained a real estate broker to market the Garland Avenue Property for lease
and/or sale. Any proposed sale of the property is subject to approval of the Bankruptcy Court.
a. Dispute with FDIC-Receiver
The FDIC-Receiver asserts an ownership interest in, or a prior claim to the
proceeds of, the Garland Avenue Property based on the FDIC-Receiver's contentions that the
Garland Avenue Property was listed as an asset of Colonial Bank on the Debtor's books, that
Colonial Bank financed or paid for the improvements to the property and paid no rent for use and
occupancy of the property, and the Debtor transferred a significant portion of a condemnation
award received from the Florida Department of Transportation with respect to the property to

- 39 - 39
Colonial Bank in an amount higher than the balance then due and owing under a mortgage
securing an obligation owed by the Debtor or owed in respect of the property. On March 5,
2010, the Debtor commenced an adversary proceeding in the Bankruptcy Court seeking a
declaratory judgment that the Garland Avenue Property is property of the Debtor's Chapter 11
estate under Section 541 of the Bankruptcy Code and that the FDIC-Receiver does not hold any
lien, claim, right or interest in the Garland Avenue Property or proceeds thereof (the "Garland
Adversary Proceeding"). The Bankruptcy Court has entered a scheduling order in the Garland
Adversary Proceeding leading up to a pre-trial conference in May, 2011, with a trial date to be
set thereafter.
b. Condemnation Proceeding
On or about J une 18, 2007, the Florida Department of Transportation (the "FDOT")
commenced a condemnation action in the Ninth J udicial Circuit Court of Florida (the "Florida
Circuit Court") against the Debtor (the "Condemnation Proceeding") to take a portion of the
Garland Avenue Property consisting of a drive-through and part of the parking area. On or about
October 16, 2007, the Florida Circuit Court entered a Stipulated Order of Taking. As part of the
Stipulated Order of Taking, the FDOT was required to deposit the amount of $2,592,900 into the
registry of the Court within 20 days after the court's entry of the Stipulated Order of Taking. The
FDOT timely deposited the funds and the Circuit Court entered an Order on Apportionment and
Disbursement directing the clerk of the court to disburse the funds to The Colonial BancGroup,
Inc., less only pro-rated real property taxes due on the portion of the Garland Avenue Property
actually acquired by the FDOT. The Debtor received those funds in the approximate amount of
$2,587,744 on or about November 15, 2007, and the Debtor understands that it subsequently
transferred all or substantially all of those funds to Colonial Bank.
Despite the entry of the Stipulated Order of Taking, there remain certain issues to be
resolved in the Condemnation Proceeding, including an additional damages award to the Debtor
for the loss in value of the Garland Avenue Property resulting from the partial taking and
business losses suffered by the Debtor (or, as alleged by the FDIC-Receiver, Colonial Bank) as a
result of the partial taking. However, as a result of the commencement of this Chapter 11 case,
further prosecution of the Condemnation Proceeding by the FDOT was stayed. The Debtor filed
a motion seeking authorization to continue the Condemnation Proceeding and on August 16,
2010 the Bankruptcy Court entered an order which, among other things, granted the relief
requested [Doc. No. 840]. By stipulation, the Debtor and the FDIC-Receiver have agreed to be
represented jointly by the same counsel in the Condemnation Proceeding.
On October 20, 2010, the Florida Circuit Court set a trial date for the remaining issues in
the Condemnation Proceeding (if necessary) for a trial term beginning September 12, 2011.
10. Furniture, Art and Office Equipment.
During the ordinary course of its operations, the Debtor accumulated certain assets
consisting of furniture, furnishings and office equipment, including, but not limited to, assets
described in a motion filed with the Bankruptcy Court on October 5, 2009 (the "FF&E Assets")
[See Doc. No. 155, pgs. 11-16] requesting the Bankruptcy Court's approval of certain procedures

- 40 - 40
to sell the FF&E Assets (the "FF&E Sales Procedures"). On October 14, 2009, the Bankruptcy
Court entered an order approving the FF&E Sales Procedures [Doc. No. 199].
On November 9, 2010, the Debtor entered into a purchase agreement with a proposed
buyer of the FF&E Assets for an aggregate purchase price of $110,000 and, in accordance with
the FF&E Sales Procedures, gave notice of the proposed transaction by filing a notice of sale
with the Bankruptcy Court [Doc. No. 990]. The sale of the FF&E Assets closed on November
16, 2010, and the Debtor received $110,000 on account of such sale.
11. Claims Against Certain Subsidiaries.
The Debtor holds 100% of the equity interests in certain entities and certain claims
against such entities as a result of pre-petition events.

a. Colonial Bank
Pursuant to Section 1821(d) of Title 12 of the United States Code, the FDIC-Receiver set
November 19, 2009, as the last day to file claims in the receivership proceeding of Colonial
Bank that are claims against Colonial Bank and/or the FDIC-Receiver. On November 19, 2009,
the Debtor timely filed a proof of claim in the receivership (the "Colonial Bank Proof of Claim"),
describing in detail numerous claims against the receivership estate of Colonial Bank to the
extent known by the Debtor as of November 19, 2009, based on the limited records in its
possession. On January 6, 2010, the FDIC-Receiver disallowed the Colonial Bank Proof of
Claim. The FDIC-Receiver's disallowance notice only addressed one of the numerous
claims included in the Colonial Bank Proof of Claim, but disallowed all of the claims, which
was based on the purported lack of "sufficient supporting documentation." The alleged
lack of supporting documentation was due solely to the FDIC-Receiver's seizure of the Debtor's
books and records and its refusal to allow the Debtor access to those records. As described in
more detail in Chapter VIII, Section E.3 of this Disclosure Statement, the Debtor has contested
the FDIC-Receiver's disallowance of the Colonial Bank Proof of Claim in an action pending
before the District Court and the FDIC-Receiver has asserted defenses to the various components
of the Colonial Bank Proof of Claim in that proceeding.
The District Court action relating to the Colonial Bank Proof of Claim alleges the
following discrete claims:
Intercompany Receivables: Claims relating to intercompany obligations,
including, without limitation, expenses incurred arising out of transactions in the
ordinary course of business between the parties.

Taxes: Claims relating to federal, state or local tax obligations, refunds and other
tax attributes as between the Debtor and Colonial Bank, including, without
limitation, the Tax Allocation Agreement.

Claims arising out of capital contributions and certain other transfers: Claims
relating to certain transfers by the Debtor to Colonial Bank, including, without

- 41 - 41
limitation, transfers that are or may be voidable preferences or fraudulent
conveyances under Sections 544, 547 or 548 of the Bankruptcy Code.

CBG Florida REIT Corp.: Claims relating to the REIT Preferred Securities and
transactions relating thereto.

Preference Claims: Claims relating to certain transfers by the Debtor to Colonial
Bank that are alleged to be voidable preferences.

Vendor Contract Claims: Claims for unpaid and outstanding obligations incurred
by the Debtor in connection with goods and services contracts which are alleged
to be for the benefit of Colonial Bank, the FDIC-Receiver, the FDIC (in its
corporate capacity) or BB&T.

Improper Asset Possession and Sales: Claims relating to the withholding and use
of the Debtor's property, including, but not limited to, furniture, fixtures,
equipment, intellectual property, records, and other tangible and intangible assets.

Deposit Claims: Claims relating to actions taken to cause the withholding of the
Deposits in the Bank Accounts belonging to the Debtor and damages relating
thereto.

Administrative Claims: Claims relating to costs and expenses incurred by the
Debtor after the appointment of the FDIC-Receiver as receiver for Colonial Bank.

Employee Related Costs: Claims relating to costs and expenses incurred by the
Debtor in the administration of the Debtor-sponsored benefit plans noted in
Chapter III of this Disclosure Statement.

Insurance Claims: Claims relating to rights and interests in the Debtor's insurance
policies and the proceeds thereof and liability for costs and expenses of premium
payments for such insurance policies.

Indemnification Claims: Claims for reimbursement of and indemnity against all
indemnification or contribution claims asserted by the Debtor's directors and
officers against the Debtor.

Other Contingent, Unliquidated Claims: Claims against Colonial Bank relating to
all claims asserted against the Debtor as co-obligor with, pledgor for the benefit of
or joint and several obligor with Colonial Bank.

Fees and Expenses Incurred in Bankruptcy Case: Claims for legal fees and other
expenses as a result of what the Debtor contends was the FDIC-Receiver's
violation of the automatic stay under Section 362 of the Bankruptcy Code with
respect to its actions denying the Debtor access to its Bank Accounts.


- 42 - 42
Interest: Claims against Colonial Bank for interest on account of sums claimed
by the Debtor to be owing to the Debtor.

Even if the Colonial Bank Proof of Claim is allowed in whole or in part, the FDIC-
Receiver presently does not have funds in the receivership estate of Colonial Bank with which to
pay any of such claim and it is uncertain whether the FDIC-Receiver will ever have sufficient
funds, after payment of statutorily preferred claims (including claims of the FDIC), with which
to make any meaningful distribution to other claimants.

b. Colonial Brokerage, Inc.
In addition to the proof of claim the Debtor filed in the receivership proceeding for
Colonial Bank, the Debtor filed a proof of claim in the bankruptcy proceedings for Colonial
Brokerage, Inc. ("Brokerage"), a wholly-owned subsidiary of the Debtor, prior to Brokerage's
filing of a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on J une 7, 2010
before the United States Bankruptcy Court for the Middle District of Alabama, Case No. 10-
31511, Honorable William R. Sawyer presiding.

In this proof of claim (the "Brokerage Proof of Claim"), the Debtor asserted various
claims arising out of intercompany transfers of funds in excess of $1,000,000 (which may
constitute fraudulent transfers, preferences or transactions otherwise recoverable by the Debtor
from Brokerage under applicable law), intercompany obligations, tax related payments, vendor
contract payments, employee related costs, insurance payments, indemnification claims and
other contingent and/or unliquidated claims.

The Debtor is unable to state with any degree of certainty the range of possible recoveries
(if any) the Debtor will receive in connection with the Brokerage Proof of Claim, but the Debtor
expects that any recovery will be substantially less than the amounts actually due to the Debtor.
12. LBSF Claim.
The Debtor and LBSF were parties to a 1992 ISDA Master Agreement dated as of March
14, 2002 ( the "Lehman Master Agreement"). Under the Lehman Master Agreement, the Debtor
and LBSF entered into an interest rate swap transaction (the "Swap Transaction"), the terms of
which were documented pursuant to a confirmation dated April 8, 2008 (together with the
Lehman Master Agreement, the "Lehman Agreement"). On September 21, 2009, the Debtor
filed a proof of claim against LBSF in LBSF's own Chapter 11 bankruptcy case with respect to
the Lehman Agreement in the amount of $4,053,591. LBSF disputes that amount and believes
that it is instead owed money by the Debtor under the Lehman Agreement.
LBSF has contended that it did not receive notice of the proof of claim bar date in the
Debtor's bankruptcy case. On April 19, 2010, LBSF filed a proof of claim in the Debtor's
bankruptcy case [Claim No. 176], in which LBSF asserts that the Debtor owes LBSF $2,974,321
as well as interest accruing subsequent to the Petition Date. At the present time, the Debtor is
investigating the basis of this asserted claim and may file an objection thereto.

- 43 - 43
13. Other Claims.
Finally, as discussed more fully below, the Debtor may have claims against various
Persons for, among other things, preferences, fraudulent conveyances, breach of fiduciary duties,
professional malpractice, breach of contract, and other wrongful conduct. The Debtor is
continuing to investigate these potential claims. Under the terms of the Plan, the Plan Trustee
will complete this investigation and may commence actions to recover on claims which the Plan
Trustee determines should be pursued. The proceeds of any recovery on these claims, less the
costs and expense incurred in pursuing these claims, will be distributed in accordance with the
Plan.

B. The Debtor's Liabilities
Based upon proofs of claim filed to date, pre-petition claims have been asserted against
the Debtor in an aggregate amount of approximately $2.1 billion. The primary pre-petition
liabilities asserted against the Debtor are as follows:
Claimant Description of Claim Approximate
Amounts Asserted

State of Alabama
Revenue
Department Claims
Asserted Tax Lien for Excise Taxes
(a) Asserted Secured
(b) Asserted Unsecured

(a) $12,000,000
(b) $400,000
FDIC-Receiver
Claims
(a) Asserted Priority Claim for an allegedly
uncured capital maintenance
commitment (denied by Bankruptcy
Court and appealed by FDIC-Receiver
to District Court)
(b) Asserted Secured Claim; and
(c) Other unspecified, contingent,
unliquidated or unsubstantiated claims

(a) $904,000,000

(b) $38,000,000
(c) Unknown

BB&T Claims (a) Asserted Secured
(b) Asserted Unsecured

(a) $24,000,000
(b) $12,500,000
Pension Benefit
Guaranty
Corporation
Asserted claims arising out of the Debtor-
sponsored Pension Plan
(a) Administrative Expense Claim and
Priority Claim
(b) Administrative Expense Claim
(c) Administrative Expense and Priority
Claim

(a) $18,000,000

(b) $12,000,000
(c) Unknown


- 44 - 44
Amounts Asserted

Indenture Trustees
as defined in Plan
2

Indenture Claims under:
(a) Preferred Securities Indenture
Agreement;
(b) 2003 Indenture Agreement; and
(c) 2008 Indenture Agreement

(a) $103,092,800

(b) $5,155,000
(c) $250,000,000
Employee Claims Asserted claims arising out of wages,
salaries or commissions allegedly earned
within 180 days before the Petition Date
(a) Priority claims
(b) General unsecured claims

(a) $123,000
(b) $300,000
LBSF Asserted swap agreement claim (late filed)

$3,000,000
Deferred
Compensation
Claims
Unsecured claims for compensation
deferred by participants in the Debtor's
NQDC Plan
$1,600,000, less
distributions made
under Settlement
Agreement

Trade Creditor
Claims
Asserted claims for services performed,
money loaned and/or goods sold to the
Debtor and/or its subsidiaries

$1,600,000

Bank of America
Claims as Indenture
Trustee, Collateral
Agent and
Custodian for Ocala
Funding Notes
Various unliquidated claims apparently
arising out of a financing facility relating to
an entity's purchase of residential mortgage
loans from the entity's owner and manager,
Taylor, Bean & Whitaker Mortgage Corp.,
a debtor in bankruptcy; while the claimant
alleges that its claims "currently are
unliquidated and cannot [as yet] be
Unknown
(unliquidated
secured and
unsecured claims)

2
The Indenture Claim amounts which were provided to the Debtor by the Preferred Securities Indenture Trustee
and are set forth in Chapter V, Section B of the Disclosure Statement reflect the principal amount of public debt
outstanding as of the Petition Date, and do not reflect accrued but unpaid interest outstanding as of the Petition Date.
The face amounts of proofs of claim filed in respect of the Preferred Securities Debentures, the 2003 Debentures,
and the 2008 Debentures differ from the amounts set forth herein. The Debtor is not in a position to confirm these
amounts at this time and reserves all of its rights with respect to the foregoing.

- 45 - 45
Amounts Asserted

determined the sum of each such claim is
up to $1.75 billion" [see Claim No. 130, pg.
11, 6]

D&O Claims Asserted claims of directors and officers
relating to asserted right to indemnification
for losses arising out of third-party
litigation

Unknown
(contingent and
unliquidated)
Securities Firms Asserted claims of underwriters for
possible indemnification against suits, if
any, related to the sale of $250 million in
8.875% subordinated notes due 2038
and/or the $38 million stock offering made
on April 21, 2008

Unknown
(contingent and
unliquidated)
Securities
Litigation Claims
Asserted securities violations in connection
with purchase and/or sale of certain of the
Debtor's securities

Unknown
(contingent and
unliquidated)
ERISA Litigation
Claims

Asserted claims relating to the Debtor-
sponsored 401(k) Plan and
$24,000,000
(contingent and
unliquidated)

REIT Preferred
Stock Claims
Claimants are the asserted beneficial
owners of REIT Preferred Stock and assert
damages claims in connection with REIT
Preferred

Unknown
(contingent and
unliquidated)
National Union Fire
Insurance Company
of Pittsburgh, PA
Asserted right of recoupment with respect
to obligations owed by Debtor to insurance
companies and asserted administrative
expense claim for services provided by the
insurance companies post-petition

Unknown
(contingent and
unliquidated)
Other Taxing
Authorities
(a) Secured Claims
(b) Priority Claims

(a) $13,000
(b) $133,000
SunTx Capital II
Management Corp.
Asserted breach of investment contract
alleged to be unsecured claim

$4,000,000


- 46 - 46
Some or all of the foregoing claims have been listed by the Debtor in its Schedules as
disputed, contingent, or unliquidated, and the Debtor may have defenses, setoffs or
counterclaims (including, without limitation, mandatory subordination under Section 510(b) of
the Bankruptcy Code) that would reduce or eliminate the Debtor's liability to some or all of such
claimants or subordinate such claimants' claims to the claims of senior creditors.
By Notice of Chapter 11 Bankruptcy Case, Meeting of Creditors, & Deadlines issued on
August 26, 2009 [Doc. No. 5], the Bankruptcy Court established November 30, 2009 as the last
day for filing proofs of claim against the Debtor (with the exception of governmental claimants,
who had until February 22, 2010 to file proofs of claim).
Chapter VI. PENDING LEGAL ACTIONS AND REGULATORY PROCEEDINGS
A. Pre-Petition Actions Against the Debtor
As of the Petition Date, any civil litigation filed against the Debtor prior to that date was
automatically stayed by operation of law, subject to a possible grant of relief from the automatic
stay by the Bankruptcy Court. The Debtor is aware of the following investigations and litigation
commenced against the Debtor and still pending as of the Petition Date:
1. Pending Investigations.
On or about August 6, 2009, the Debtor was informed by the U.S. Department of J ustice
that it was the target of a federal criminal investigation relating to the Debtor's mortgage
warehouse lending division in Orlando, Florida, and related alleged accounting irregularities
relating to more than one year's audited financial statements and regulatory financial reporting.
Earlier in 2009, the Debtor provided documents to the Special Inspector General for the
Troubled Asset Relief Program ("SIG-TARP") in response to a subpoena issued by SIG-TARP.
The SEC has issued subpoenas to the Debtor seeking documents related to, among other
things, the Debtor's disclosures related to its participation in the U.S. Treasury Department's
Troubled Asset Relief Program ("TARP") and the Debtor's disclosures respecting accounting for
loan loss reserves. On J une 30, 2009, the SEC issued a formal order of investigation to the
Debtor.
2. Regulatory Orders.
On J une 3, 2009, Colonial Bank entered into a Stipulation and Consent agreeing to the
issuance of an Order to Cease and Desist (the "Bank C&D") with the FDIC and the Alabama
State Banking Department (the "SABD"). Among other things, the Bank C&D required
Colonial Bank to:
Present a written capital plan to the FDIC and the SABD within 60 days of the
Order by which Colonial Bank would achieve a Tier I Leverage Capital Ratio of
not less than 8 percent and a Total Risk-Based Capital Ratio of not less than 12%
by September 30, 2009;


- 47 - 47
Formulate and implement a plan to reduce Colonial Bank's risk exposure in
classified assets and to reduce assets classified "substandard" in relation to Tier I
Capital plus the allowance for loan losses to not more than 100% by December
31, 2009, to not more than 75% by J une 30, 2010, to not more than 50% by
December 31, 2010 and to continue to reduce the volume of such assets after that
date;

Not pay cash dividends without the prior written consent of the FDIC and the
SABD;

Neither renew, roll-over nor increase the amount of brokered deposits above the
amount outstanding at the date of the Bank C&D without obtaining a waiver from
the FDIC; and

Adopt and implement a written plan for reducing Colonial Bank's reliance on
brokered deposits.

Effective J uly 22, 2009, the Debtor consented to the issuance of a Cease and Desist Order
(the "Debtor C&D") by the Federal Reserve Bank of Atlanta (the "Federal Reserve") and the
SABD. The Debtor C&D can be found on file with the Bankruptcy Court at Docket No. 156.

Prior to the Debtor's consent to the Debtor C&D, various other bank regulatory actions
were initiated by bank regulatory authorities against both Colonial Bank and the Debtor. Those
actions included the implementation of memoranda of understanding consented to by the boards
of directors of both Colonial Bank and the Debtor and an agreement (signed by the Debtor's
board chair without board approval) pursuant to Section 4(m) of the Bank Holding Company
Act. The Debtor believes that those memoranda of understanding vis--vis it were superseded by
the Debtor C&D.

The FDIC-Receiver contends that all of these regulatory actions and orders, both
informal and formal, created a capital maintenance commitment on the part of the Debtor within
the meaning of Section 365(o) of the Bankruptcy Code, which the Debtor was obligated to
assume in the Case and satisfy as a condition to proceeding in a Chapter 11 case. For further
discussion, see Chapter VIII, Section E, entitled "Significant Post-Petition Developments and
Status."

3. Pending Litigation.
a. Securities Litigation
Beginning in February 2009, several putative class action securities lawsuits were filed in
the District Court against the Debtor and certain of its officers and directors. These lawsuits
were ultimately consolidated into In re Colonial BancGroup, Inc. Securities Litigation, No. 3:09-
cv-00104-MHT-WC (M.D. Ala.) (the "Securities Litigation"). On J une 22, 2009, the plaintiffs
in the Securities Litigation filed a consolidated class action complaint asserting securities law
claims against the Debtor and certain of the Debtor's officers and directors. According to

- 48 - 48
counsel for the lead plaintiffs, motions filed by the non-Debtor defendants in the Securities
Litigation to dismiss the complaint were denied by orders of the District Court dated May 14,
2010. Motions for reconsideration with respect to the motions to dismiss were deemed moot by
order of the District Court dated December 17, 2010, and the Debtor is informed by counsel for
the lead plaintiffs that lead plaintiffs must file an amended class action complaint no later than
April 20, 2011.
The lead plaintiffs in the Securities Litigation have filed two class proofs of claim with
the Bankruptcy Court based upon alleged damages resulting from the purchase of common stock
of the Debtor and the purchase of certain subordinated notes of the Debtor, but the aggregate
amount of such claims is not specified. These claims are stated to arise from alleged securities
violations by the Debtor as described in the pleadings in the Securities Litigation. Although the
Debtor has not as yet filed any objection to these proofs of claim, the Debtor presently believes
that some or all of those Claims, to the extent they have any legal merit, are subject to
subordination under Section 510(b) of the Bankruptcy Code and therefore would fall into Class
G (Statutorily Subordinated Claims). See In re Geneva Steel Co., 281 F.3d 1173 (10
th
Cir.
2002); In re Enron Corp., 341 B.R. 141 (Bankr. S.D.N.Y. 2006); In re WorldCom, 329 B.R. 10
(Bankr. S.D.N.Y. 2005); International Wireless Communications Holdings, Inc., 279 B.R. 463
(D. Del. 2002); In re Audre, Inc., 210 B.R. 360 (Bankr. S.D. Cal. 1997). Lead plaintiffs
maintain that, regardless of the classification of their Claims, proceeds of the D&O Policies
should be available to satisfy their Claims, in part, if allowed.

Until subordinated or otherwise disallowed by order of the Bankruptcy Court, these
Claims, to the extent allowed, would constitute General Unsecured Claims in Class E. The
Debtor presently intends to object to those Claims, with the result that such Claims will
constitute Disputed Claims and will be dealt with accordingly under the Plan until entry of a
Final Order with respect to those Claims.

b. Shareholder Derivative Litigation
In February and March 2009, several shareholder derivative class actions were filed in
the Circuit Court for Montgomery County, Alabama and the District Court seeking to bring
claims derivatively on behalf of the Debtor and its shareholders against the Debtor's officers and
directors. See, e.g., Hudson v. Lowder et al., CV-2009-239 (Circuit Court of Montgomery,
County, Alabama); Stewart v. Lowder et al., CV-2009-402 (Circuit Court of Montgomery,
County, Alabama); Drysdale v. Lowder et al., CV-2009-593 (Circuit Court of Montgomery,
County, Alabama); Playford v. Lowder et al., 2:09-cv-00182 (M.D. Ala.).
The plaintiffs in the Shareholder Derivative Litigation allege, among other things, that
each individual defendant "knew, consciously disregarded or was reckless in not knowing the
adverse, non-public information about the Debtor's need and application for TARP funds." The
plaintiffs further claim that the individual defendants caused the Debtor to issue public filings
and statements concerning the Debtor's need and application for TARP funds, and the
defendants' failure to disclose all material information concerning the Debtor's need and
application for TARP funding resulted in investors filing suit against the Debtor in civil class
actions alleging various violations of federal securities laws, all of which caused the Debtor to

- 49 - 49
incur substantial costs in defending the lawsuits and in satisfying any adverse judgments or
settlements.
In addition to claims regarding the TARP participation and associated alleged
misconduct, the plaintiffs in the Shareholder Derivative Litigation also assert causes of action for
alleged issuance of materially false and misleading statements regarding the Debtor's business
and operating results; the Debtor's alleged failure to properly account for its troubled loan
portfolio and goodwill; the Debtor's alleged failure to reserve adequately for mortgage related
exposure and failure to write down impaired goodwill, causing its balance sheet and financial
results to be artificially inflated; and the Debtor's alleged failure to disclose that its exposure to
troubled assets extended beyond its residential construction portfolio. The plaintiffs further
allege that the Debtor represented to investors that it practiced conservative credit risk
management that differentiated from its peers, when, in reality, it pursued a high risk, high
growth lending strategy with respect to its commercial construction loan portfolios, which
ultimately led to increased loan defaults and brought the company to the brink of bankruptcy;
and originated so-called "subprime" residential mortgage loans to borrowers with low credit
ratings despite the Debtor's alleged public statements to the contrary.
The Shareholder Derivative Litigation actions are presently stayed pursuant to Section
362 of the Bankruptcy Code. The Debtor contends that Claims asserted in the Shareholder
Derivative Litigation against past or present directors or officers of the Debtor represent assets of
the Debtor's estate and any such claims may be pursued solely by the Debtor. The FDIC-
Receiver disputes the Debtor's entitlement to receive any monies on account of the Shareholder
Derivative Litigation on the grounds that any claims asserted therein are based on harm suffered
by Colonial Bank and only derivatively by the Debtor. The Debtor disagrees with the FDIC-
Receiver's legal analysis and also notes that it has, or may have, other claims against its directors
and officers that are not described in any of the Shareholder Derivative Litigation.
c. ERISA Litigation
In August and September 2009, various putative class actions alleging violations of
ERISA were filed asserting claims against certain of the Debtor's officers and directors and, in at
least two instances, the Debtor (the "ERISA Litigation"). See, e.g., Johnny Pompa v. The
Colonial BancGroup, Inc., et al., 2:09-cv-792 (M.D. Ala.); Anthony Petisco v. Simuel Sippial,
Jr., et al., 2:09-cv-821 (M.D. Ala.); Thelma Schaefer v. The BancGroup Benefits Administration
and Investment Committee, et al., 2:09-cv-822 (M.D. Ala.); Lora McKay v. The Colonial
BancGroup, Inc. et al., 2:09-cv-806 (M.D. Ala.); Kevin McFadden v. The BancGroup Benefits
Administration Committee, et al., 2:09-cv-839 (M.D. Ala.); Paula Chandler Renfroe and Linda
Shockley, v. The Colonial BancGroup Benefits Administration and Investment Committee, et al.,
2:09-cv-865 (M.D. Ala.); Geradin E. Burio-Pilch v. The Colonial BancGroup Benefits
Administration and Investment Committee, et al., 2:09-cv-848 (M.D. Ala.); Leonor M.
Torregroza v. Lewis E Beville, et al., 2:09-cv-881 (M.D. Ala.); and Mareisha Morrow v. The
Colonial BancGroup, Inc., et al., 2:09-cv-913.

The plaintiffs in the ERISA Litigation contend that they have Claims against the Debtor
for approximately $24 million in losses incurred as a result of the Debtor's alleged breaches of
fiduciary duties to them. The Claims, if any, of the ERISA Litigation plaintiffs are in Class E,

- 50 - 50
unless and until (a) they are subordinated by order of the Bankruptcy Court, in which event they
will be deemed to be in Class G and receive treatment as provided in the Plan for the Holders of
Claims in that Class; or (b) otherwise disallowed by order of the Bankruptcy Court. The Debtor
presently intends to object to those Claims, with the result that such Claims will constitute
Disputed Claims and will be dealt with accordingly under the Plan until entry of a Final Order
with respect to those Claims. In addition, the Debtor is assessing whether some or all of those
Claims may be subject to subordination and subject to classification as Statutorily Subordinated
Claims in Class G. The Debtor understands from counsel for the ERISA Litigation plaintiffs'
that such plaintiffs will oppose any effort to subordinate or seek disallowance of their alleged
claims, in whole or in part.
d. Other Litigation
On or about December 4, 2008, a complaint was filed in the United States District Court
for the Eastern District of Texas against the Debtor and certain other entities. The complaint is
styled Leon Stambler v. Merrill Lynch & Co., Inc., et al. The complaint asserts that the Debtor
and the other defendants thereto infringed upon two United States patents concerning online
banking products and services in violation of a variety of federal patent laws.
On or about August 11, 2009, the Debtor and Colonial Bank were named as defendants in
a class action complaint filed in United States District Court for the District of Nevada in a case
styled Don Anderson, individually and all others similarly situated v. The Colonial BancGroup,
Inc. and Colonial Bank. The complaint appears to allege violations by the defendants of the
Electronic Fund Transfer Act and seeks unspecified monetary relief.
On or about August 14, 2009, SunTx Capital II Management Corp. d/b/a SunTx Capital
Partners filed a complaint against the Debtor and Colonial Bank in the United States District
Court for the Northern District of Texas, Dallas Division. Styled SunTx Capital II Management
Corp. d/b/a SunTx Capital Partners v. The Colonial BancGroup, Inc. and Colonial Bank, N.A.,
the suit alleges that the Debtor failed to pay to the plaintiff a $4,000,000 breakup fee and certain
transaction expenses incurred by the plaintiff in connection with a letter agreement dated J anuary
27, 2009, with respect to the plaintiff's proposed purchase of contingent convertible preferred
stock in the Debtor.
An additional shareholder suit, styled Roper v. Colonial Bancorp [sic], Inc., et al., CV09-
1306, was brought in Madison County, Alabama naming the Debtor as a defendant. The
complaint asserts, among other claims, allegations of fraud, deceit, conversion, unjust
enrichment and breach of fiduciary duty by the Debtor and/or various officers and directors of
the Debtor.
The Debtor and certain of its subsidiaries have been named as defendants in other
currently pending litigation or arbitrations that have arisen in the ordinary course of the conduct
of their businesses, ranging from slip-and-fall claims to condemnation proceedings, in various
stages of proceedings.

- 51 - 51
e. Present Posture of All Litigation
Historically, the Debtor defended each of the cases filed against it. However, as a result
of the filing of the Chapter 11 case, the Debtor believes that all the litigation against it is stayed
unless and until otherwise ordered by the Bankruptcy Court. For a listing of those actions in
which the Debtor has filed a suggestion of bankruptcy and notice of automatic stay, please see
the Notice of Filing of Suggestions of Bankruptcy on file with the Bankruptcy Court [Doc. No.
202]. The Debtor presently intends to object to any Claims arising out of or related to any
litigation commenced against it. The Debtor's exposure, if any, to an award of damages in these
cases is not susceptible to an accurate determination at this time.
B. Potential Estate Causes of Action
As discussed below, the Debtor is investigating potential Estate Causes of Action it might
have for, among other things, preferences, fraudulent conveyances, diversion of corporate assets,
breach of fiduciary duties, professional malpractice, breach of contract, money had and received,
and other tortious or wrongful conduct. The Debtor has not completed its investigation and has
not commenced any actions on potential claims since the Petition Date. The Case Committee
also is investigating potential Estate Causes of Action. Under the terms of the Plan, the Plan
Trustee would complete this investigation and would commence actions on those claims which
the Plan Trustee determines should be pursued. Any recovery from these actions will be
distributed in accordance with the terms of the Plan, if confirmed by the Court.

Chapter VII. POTENTIAL CLAIMS BY AND AGAINST THE DEBTOR
There are a number of potential claims that may be asserted in this bankruptcy case or
following confirmation of the Plan, either by the Debtor against insiders (including officers,
directors and affiliated entities) or third parties or against the Debtor by third parties. Also, legal
and accounting firms who provided services pre-petition to the Debtor may be subject to suit by
the Debtor. These potential claims are discussed briefly below.
In addition, if the Plan Trustee determines that state or federal criminal or securities laws
may have been violated, the Plan Trustee may refer these matters to the appropriate government
authorities, such as the United States Attorneys' Office and the SEC. If, in investigating
potential claims, the Plan Trustee discovers possible instances of tax or bank fraud, the Plan
Trustee may refer the matter to the appropriate federal and state authorities.
A. Claims By the Debtor
Upon completion of their investigations, the Debtor or the Plan Committee may conclude
that Estate Causes of Action exist against a number of Persons, including (i) one or more
officers, directors, insiders or related or affiliated entities for, among other things, Avoidance
Claims (including, without limitation, preferences and fraudulent conveyances), diversion of
corporate assets, breach of fiduciary duties, mismanagement and other tortious or wrongful
conduct, (ii) legal and accounting firms for pre-petition professional malpractice, (iii) unrelated
third parties for Avoidance Claims (including, without limitation, preferences and fraudulent

- 52 - 52
conveyances) and other actionable conduct, and (iv) against third parties for amounts owed for
goods, loans, or services rendered.
The Debtor is continuing to identify and evaluate the basis for and the wisdom of
pursuing any claims on behalf of the Estate. Under the terms of the Plan, the Debtor is
authorized to decide whether to assert these claims and, if so, to initiate the proceedings to
pursue these claims and to compromise or otherwise settle the claims as provided in the Plan.
The Debtor may determine that there are no such claims in favor of the Estate or, if so, that the
cost of pursuing these claims is greater than the benefit of obtaining a judgment.
The Plan states that, except as expressly provided in Section 9.5 of the Plan, the Debtor
retains all Causes of Action accruing to it and its Estate (including all Estate Causes of Action),
all rights of setoff, and all other legal and equitable claims or defenses for the benefit of the
beneficiaries under the Plan. Such possible Causes of Action include possible Avoidance Claims
against (a) Persons who were paid or received the benefit of payments or other transfers of value
made by the Debtor within 90 days prior to the Petition Date for goods or services previously
provided; (b) insiders of the Debtor who were paid or received the benefit of payments or other
transfers of value made by the Debtor within one year prior to the Petition Date for goods or
services previously provided; (c) Persons who were paid or received the benefit of payments or
other transfers of value made by the Debtor within four years (or such longer reachback period as
may be effective under applicable law) prior to the Petition Date who did not provide reasonably
equivalent value for the consideration provided to them; (d) Persons who were paid or received
the benefit of payments or other transfers of value made with the intent to hinder, delay, or
defraud the Debtor's creditors; and (e) Persons who were paid or received the benefit of
payments or other transfers of value from the Debtor after the Petition Date without Bankruptcy
Court authorization. Without limiting the generality of the foregoing, the Persons listed on
Exhibit D are insiders, professionals and other individuals or entities whose pre-petition
acts or omissions or whose receipt of pre-petition or post-petition transfers of property of
the Debtor may be the subject of investigations by the Debtor or the Plan Committee as to
the existence of potential Estate Causes of Action.
The inclusion of a Person's name on the above list is not an expression of opinion or
representation as to the nature, extent or merit of any claim or claims that may be held by the
Debtor or Plan Trustee against such Person. However, all Persons identified in this Disclosure
Statement by category or name should understand that all claims against them held by the Debtor
or the Plan Trustee are preserved and may be asserted following confirmation and the Effective
Date of the Plan. Furthermore, this list of Persons is not intended, and shall not be construed, as
an exhaustive list of all Persons against whom the Debtor may have claims. The failure of the
Debtor to include any Person on this list is not intended, and shall not be construed, as a waiver,
discharge or release of any claims the Debtor may have against any Person not identified on this
list. The Debtor intends to preserve, and expressly reserves, all claims, rights and remedies, if
any, the Debtor may have against any and all Persons for the benefit of its Estate and creditors.
It is anticipated that many of the Estate Causes of Action, if asserted, will be vigorously
defended by the defendants.

- 53 - 53
1. Claim Against Insiders.
The Debtor has been, and will continue, investigating possible claims against the
principal members of the Debtor's present and former officers, directors and other management
personnel. Any and all such claims held by the Debtor are preserved for the benefit of the Estate
under the Plan.
2. Professional Liability.
To assist the Debtor in its formation and the operation of its business prior to the Petition
Date, the Debtor retained a number of attorneys, accounting and other professional firms. Any
and all claims held by the Debtor against any professional persons employed, retained, or
consulted by the Debtor are preserved for the benefit of the Debtor's creditors under the Plan,
whether or not the attorneys, accountants, or other professional persons are identified by name in
this Disclosure Statement.
Under state law, attorneys, accountants and other professionals generally have a duty to
use such skill, prudence and diligence as a professional of ordinary skill and capacity would
commonly possess and exercise in performance of all of the tasks they undertake. If an attorney,
accountant or other professional breaches this duty and the client suffers damages as a result, the
client would have a claim against the attorney or accountant for professional malpractice. In
addition, this duty to exercise care also may extend to certain third parties who relied upon the
services and functions performed by the attorneys and accountants that the Debtor retained. The
Debtor has not determined whether there may be a basis for asserting claims against some or all
of the legal, accounting or other professional firms that rendered services for the Debtor, and the
Debtor is continuing to evaluate these potential claims. The Debtor will continue and complete
this process.
3. Insurance Claims.
The Debtor is investigating claims that might be asserted under any policies of insurance
issued to, for the benefit of, or paid for by the Debtor, including the D&O Policies and the
Fidelity Policies. All claims held by the Debtor against any insurance company, insurance agent
or insurance broker, or under any insurance policy issued to, for the benefit of, or paid for by the
Debtor, are preserved for the benefit of the Debtor's creditors under the Plan, whether or not such
insurance company, insurance agent, insurance broker, or insurance policy is identified by name
in this Disclosure Statement. As noted elsewhere in this Disclosure Statement, the FDIC-
Receiver has challenged the Debtor's entitlement to receive any amounts paid pursuant to
the Fidelity Policies.
4. Piercing Corporate Veil.
Certain claims of the Debtor for the benefit of the Debtor's creditors, including some of
the claims described in this Disclosure Statement and accounts receivable and other ordinary
course of business claims, may be against corporate or limited partnership entities. In some
instances, further investigation may reveal that there may be a basis for the Debtor to "pierce the
corporate veil" to hold the shareholders and controlling persons of these corporations liable for
the indebtedness owed to the Debtor.

- 54 - 54
5. Preferences and Fraudulent Conveyances.
During the year preceding the Debtor's bankruptcy filing, there were transfers of the
Debtor's assets, including payments made on account of antecedent debts, that the Bankruptcy
Court may adjudge to be preferences or fraudulent conveyances under Sections 544, 547, 548 or
550 of the Bankruptcy Code. There may also have been post-petition transfers that could be
avoided under Section 549 of the Bankruptcy Code, but the Debtor is presently unaware of any
such transfers. Some preferential or fraudulent transfers may have been made to insiders or
related entities of the Debtor.
The Bankruptcy Court may determine that some of the payments or other transfers by the
Debtor constitute voidable preferences. Under Section 547 of the Bankruptcy Code, a debtor can
avoid any transfer of an interest in its property if the transfer (i) was made to or for the benefit of
a creditor, (ii) was for or on account of an antecedent debt owed by the debtor, (iii) was made
while the debtor was insolvent, (iv) was made on or within ninety (90) days before the date the
debtor filed for bankruptcy relief (or for an insider of the debtor within one (1) year of the
debtor's bankruptcy filing) and (v) enables the creditor to receive more than that creditor would
receive in a Chapter 7 liquidation of the debtor. If the Bankruptcy Court concludes that a
payment or other transfer of the debtor's assets was a preference under Section 547, these assets
(or their value) must be returned to the debtor's bankruptcy estate. The creditor receiving the
preference would have a claim against the debtor in the amount the creditor was required to
return to the debtor's bankruptcy estate.
The Bankruptcy Court also may conclude that some transfers of the Debtor's assets
constitute fraudulent conveyances. Under Section 548 of the Bankruptcy Code, a debtor can
avoid as a fraudulent transfer any transfer of an interest in its property, or any obligation incurred
by the debtor, that was made or incurred within two (2) years of the debtor's bankruptcy filing if
(i) the debtor made the transfer or incurred the obligation with the actual intent to hinder, delay
or defraud its creditors, or (ii) the transfer or obligation the debtor received was for less than a
reasonably equivalent value and
the debtor was insolvent on the date that the transfer was made or the obligation
was incurred (or became insolvent as a result of the transfer or obligation);

the debtor was engaged in a business or transaction, or was about to engage in a
business or a transaction, for which the debtor was unreasonably undercapitalized;
or

the debtor intended to incur, or believed that it would incur, debts that would be
beyond its ability to pay as these debts matured.

If the Bankruptcy Court concludes that a transfer was fraudulent, the transaction will be voided,
and the assets transferred (or their value as determined by the Bankruptcy Court) must be
returned to the Debtor's bankruptcy estate. All such claims held by the Debtor are preserved for
the benefit of the Debtor's creditors under the Plan.

- 55 - 55
B. Claims Against the Debtor
Creditors and others may assert a variety of Claims against the Debtor. The Debtor is not
aware of any Claims against the Debtor other than those identified in the Debtor's schedules with
the Bankruptcy Court, those Claims now on file with the Bankruptcy Court as proofs of claims
and those discussed in this Disclosure Statement. The bar date for filing proofs of claim against
the Debtor was November 30, 2009 (except for government claims, for which the bar date was
February 22, 2010). The Debtor and the Plan Trustee have the right under the Plan to object to
or seek equitable subordination of any Claim.
Chapter VIII. SIGNIFICANT POST-PETITION DEVELOPMENTS AND STATUS
A. Filing of Chapter 11 Case
As noted above, the Debtor is a Delaware corporation with its principal place of business
in Montgomery, Alabama. Prior to the Petition Date, the Debtor was organized as a bank
holding company and later became a financial holding company. Until August 14, 2009,
Colonial Bank was the Debtor's principal operating subsidiary. Pursuant to an order dated
August 14, 2009, the Alabama State Banking Department closed Colonial Bank and appointed
the FDIC-Receiver as its receiver. Eleven days later, on August 25, 2009, the Debtor filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
B. Establishment of a Bar Date
The Bankruptcy Court established November 30, 2009, as the date by which all Claims
must have been filed in order to receive a Distribution in the Case other than government claims,
which must have been filed by February 22, 2010.
C. Formation of Unsecured Creditors Committee
By Order entered September 28, 2009, the Bankruptcy Court approved the formation of
the Official Committee of Unsecured Creditors (the "Case Committee"), consisting of three (3)
members, Fine Geddie & Associates, The Bank of New York Trust Company, N.A., and U.S.
Bank National Association. By Order entered on December 9, 2009, the Bankruptcy Court
approved the employment of Burr & Forman LLP and Schulte Roth & Zabel LLP as co-counsel
for the Case Committee.
D. Stock Trading Motion
On August 26, 2009, the Debtor filed a motion (the "Stock Trading Motion") [Doc. No.
7] pursuant to Sections 105(a) and 362 of the Bankruptcy Code for entry of interim and final
orders authorizing the Debtor to establish procedures to protect the potential value of the
Debtor's net operating loss carryforwards ("NOLs") and certain other tax attributes (together with
the NOLs, the "Tax Attributes"). The procedures requested in the Stock Trading Motion were
designed to provide notification to holders of stock of the Debtor of an injunction prohibiting the
acquisition of ownership, disposition or other transfer of such stock above a certain threshold.
On November 23, 2009, the Bankruptcy Court entered a final order (the "Final Stock Trading
Order") imposing the procedures and restrictions on trading in the Debtor's stock (including any

- 56 - 56
option to acquire such stock) set forth in the Stock Trading Motion in order to preserve the Tax
Attributes [Doc. No. 311]. The procedures and restrictions set forth in the Final Stock Trading
Order were effective as of August 26, 2009, 11:13 a.m. Central Time. A more detailed
discussion of the Stock Trading Motion, the Final Stock Trading Order and the procedures and
restrictions set forth therein may be found and reviewed at www.phrd.com/forms.aspx.
E. FDIC-Receiver Litigation
1. 365(o) Litigation and Fraudulent Transfer Litigation.
a. Alleged Capital Maintenance Commitment Under Section 365(o);
Bankruptcy Court's Denial of FDIC-Receiver's Motion; Appeal to
District Court
The FDIC-Receiver has asserted in various pleadings filed with the Bankruptcy Court in
the Debtor's Chapter 11 bankruptcy case that (i) in J anuary 2009 and J uly 2009 the Debtor
incurred substantial obligations to maintain the capital of Colonial Bank, the Debtor's wholly
owned subsidiary pursuant to certain supervisory documents entered into by the Debtor or the
Debtor's board of directors with its banking regulators; (ii) pursuant to Section 365(o) of the
Bankruptcy Code, the Debtor is deemed to have assumed and is obligated immediately to cure
any deficit under these supervisory documents; and (iii) the FDIC-Receiver is entitled to a
priority claim under Section 507(a)(9) of the Bankruptcy Code as a result of the Debtor's failure
to honor these alleged commitments (the "Capital Maintenance Claim"). The FDIC-Receiver
originally asserted that the deficit under the Debtor's alleged capital maintenance commitment
exceeded $1 billion. The FDIC-Receiver subsequently revised this number to an amount just
over $900 million.

The supervisory documents that the FDIC-Receiver has claimed form the basis of the
Capital Maintenance Claim are (i) an agreement dated J anuary 6, 2009, among the Debtor and
the Federal Reserve Bank of Atlanta under Section 4(m) of the Bank Holding Company Act (the
"4(m) Agreement"); (ii) a memorandum of understanding dated J anuary 21, 2009 entered into
by the Debtor's board of directors, the SABD and the Federal Reserve Bank of Atlanta; and (iii)
the Debtor C&D, which was effective as of J uly 22, 2009.

The FDIC-Receiver sought to enforce its alleged Capital Maintenance Claim on
November 5, 2009 by filing its Motion of the Federal Deposit Insurance Corporation, as
Receiver for Colonial Bank, Montgomery, Alabama, for an Order (A) To Require Cure of
Deficiencies Under 11 U.S.C. 365(o) or (B) Converting Debtor's Bankruptcy Case to a
Liquidation Under Chapter 7 of the Bankruptcy Code (the "365(o) Motion") [Doc. No. 257].
The Debtor has vigorously disputed the FDIC-Receiver's Capital Maintenance Claim and the
relief requested in the 365(o) Motion. The Debtor filed a motion for summary judgment with
respect to the 365(o) Motion and, after the exchange of briefs pursuant to an agreed-upon
scheduling order, the Bankruptcy Court held a hearing on the motion on May 26, 2010.

On August 31, 2010, the Bankruptcy Court entered an order granting the Debtor's motion
for summary judgment with respect to the Section 365(o) Motion [Doc. No. 864] and issued a
memorandum opinion explaining the reasons therefor [Doc. No. 863]. The Bankruptcy Court

- 57 - 57
subsequently amended the memorandum opinion on September 1, 2010 to correct certain
typographical errors. On September 13, 2010, the FDIC-Receiver filed a notice of appeal with
respect to the foregoing.

The denial of the FDIC-Receiver's 365(o) Motion and Capital Maintenance Claim is now
on appeal to the District Court. The parties to this appeal have submitted briefs to the District
Court, and the District Court has taken the matter as submitted, without oral argument.

b. Fraudulent Transfer Litigation; Withdrawal of Reference; Stay of
Proceedings
While the Debtor believes that the District Court, and any court that hears any additional
proceedings in connection with the Capital Maintenance Claim, will conclude that the FDIC-
Receiver's assertions are without merit, the Debtor nevertheless commenced an adversary
proceeding in the Bankruptcy Court against the FDIC-Receiver on December 15, 2009, seeking
to avoid and invalidate any purported capital maintenance commitment as a fraudulent obligation
pursuant to Section 548(a) of the Bankruptcy Code (the "Fraudulent Obligation Proceeding").
See Adversary Proceeding No. 09-03087 (DHW) (Bankr. M.D. Ala.).

On J anuary 26, 2010, the FDIC-Receiver filed a motion [Doc. No. 16] and an
accompanying memorandum of law in support thereof [Doc. No. 17] to (i) dismiss the
Fraudulent Obligation Proceeding for failure to state a claim upon which relief can be granted, or
in the alternative, (ii) stay all proceedings in the Fraudulent Obligation Proceeding until the
Debtor cured all existing deficits under its alleged capital maintenance commitment or the
Debtor's Chapter 11 case has been converted to a Chapter 7 liquidation pursuant to Section
365(o) of the Bankruptcy Code.

On March 31, 2010, the FDIC-Receiver filed a motion to withdraw reference with respect
to the Fraudulent Obligation Proceeding. As will be discussed in more detail below, at the same
time, the FDIC-Receiver filed a motion to withdraw reference with respect to various other
matters the Debtor had commenced against the FDIC-Receiver in the Bankruptcy Court. On
May 11, 2010, the District Court, with the consent of the Debtor, granted the FDIC-Receiver's
withdrawal motions as to the Fraudulent Obligation Proceeding and certain of the other matters.
The Fraudulent Obligation Proceeding is now designated before the District Court by case
number 2:10-cv-00411-MHT-WC.

Shortly after the Bankruptcy Court held the May 26, 2010 hearing on the Capital
Maintenance Claim, the District Court ordered that the Fraudulent Obligation Proceeding be
stayed pending the Bankruptcy Court's decision on the Capital Maintenance Claim and that the
FDIC-Receiver's motion to dismiss and alternative motion to stay were denied with leave to
renew. As a result of the Bankruptcy Court's decision in the Debtor's favor, the Debtor and the
FDIC-Receiver jointly reported to the District Court on October 4, 2010, that there is no need for
the District Court to consider the proceeding, at this time, as it is relevant only if the Bankruptcy
Court's ruling on the 365(o) Motion is overturned and an order is entered adjudicating that the
Debtor made a capital maintenance commitment within the meaning of Section 365(o) of the
Bankruptcy Code.


- 58 - 58
2. Deposit Account Litigation.
As noted above, the Debtor has approximately $36 million on deposit in its Bank
Accounts at BB&T.
a. Original Stay Relief Motion
On October 5, 2009, the FDIC-Receiver filed its original motion for relief from the
automatic stay to exercise alleged setoff rights against the Bank Accounts (the "Original Stay
Relief Motion") [Doc. No. 156]. As the basis for its alleged setoff against the Bank Accounts,
the FDIC-Receiver contended that (i) it held a perfected security interest in the Bank Accounts
pursuant to a security agreement allegedly executed by the Debtor in favor of Colonial Bank (the
"Security Agreement") and (ii) the Debtor was obligated to Colonial Bank in the amount of
approximately $1 billion in connection with the Capital Maintenance Claim. On November 5,
2009, the FDIC-Receiver sought to establish the latter claim through the 365(o) Motion.
On J anuary 11, 2010, the Debtor filed a motion for summary judgment against the FDIC-
Receiver on its Original Stay Relief Motion [Doc. No. 468]. By the Agreed Order Amending
Order Setting Hearing entered by the Bankruptcy Court on J anuary 20, 2010 [Doc. No. 486], the
Debtor and the FDIC-Receiver stipulated, among other things:

That the Amended and Restated Security Agreement dated as of J anuary 1, 2009
(the "Security Agreement") and the amounts owed to Colonial Bank by the
borrowers listed on Exhibit B to the Security Agreement shall not form a basis for
granting relief from the stay to the FDIC-Receiver in the FDIC-Receiver's
Emergency Motion for an Order Modifying the Automatic Stay [Doc. No. 156]

[Doc. No. 486, 1].
b. Amended Stay Relief Motion
On J anuary 22, 2010, the FDIC-Receiver filed its amended motion for relief from the
automatic stay (the "Amended Stay Relief Motion") [Doc. No. 499]. The FDIC-Receiver states
that it filed the Amended Stay Relief Motion to "make clear that the FDIC-Receiver's setoff
rights were not limited to claims arising from the Debtor's failure to cure its capital maintenance
commitment but extended to all of the FDIC-Receiver's claims, which had since the filing of the
[Original Stay Relief Motion] been set forth in a protective proof of claim." [See Doc. No. 922,
pg. 17, 52].
In an agreed scheduling order on the Amended Stay Relief Motion and the 365(o) Motion
setting these motions for hearing on May 26, 2010, the parties stipulated that:

8. The FDIC-Receiver has asserted claims against the Debtor in its Amended
Motion for an Order Modifying the Automatic Stay [Doc. 499] and in its proof of
claim, as amended (the "Additional Claims") that are in addition to the FDIC-
Receivers claims based on the Debtors alleged capital maintenance commitment
that were described in the FDIC-Receivers original motion for relief from the

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automatic stay. The Debtor and the [Case] Committee stipulate that all of rights
the FDIC-Receiver may have, if any, with respect to the Additional Claims shall
be preserved notwithstanding the Courts determination with respect to the Stay
Relief Motion. On the basis of that stipulation, the FDIC-Receiver agrees that
issues relating to the Additional Claims and any objections thereto shall not be the
subject of the briefing or hearing schedule contained herein.

(emphasis added) [Doc. No. 578].
On April 26, 2010, the Debtor filed a summary judgment motion with respect to the
Amended Stay Relief Motion [Doc. No. 697]. On the same day, the Debtor also filed its motion
for summary judgment with respect to the 365(o) Motion.
The Court held a hearing on the Amended Stay Relief Motion concurrently with the
365(o) Motion on May 26, 2010. In ultimately denying the relief requested in the 365(o)
Motion, the Bankruptcy Court ruled in its order and memorandum opinion of August 31, 2010
that, to the extent the Amended Stay Relief Motion sought relief from the automatic stay
"predicated on a claim under 365(o), the motion for relief from stay is denied." [Doc. No.
869, pgs. 42-43]. The FDIC-Receiver also filed a notice of appeal from this portion of the
Bankruptcy Court's decision. As noted above, the parties to this appeal have submitted briefs to
the District Court, and the District Court has taken the matter as submitted, without oral
argument.
c. Renewed Stay Relief Motion
On September 27, 2010, the FDIC-Receiver filed a renewed motion for relief from stay
seeking authority to permit the FDIC-Receiver to exercise purported setoff rights against the
Debtor's Bank Accounts based on the FDIC-Receiver's claims in addition to the Capital
Maintenance Claim, all as outlined in the FDIC-Receiver's motion (the "Renewed Stay Relief
Motion") [Doc. No. 922]. By orders of the Bankruptcy Court, the parties filed joint stipulated
facts in connection with the Renewed Stay Relief Motion, submissions setting forth each party's
respective version of the remaining material disputed facts, and briefs and other pleadings. The
Bankruptcy Court heard argument on the Renewed Stay Relief Motion on December 14, 2010.

On J anuary 24, 2011, the Bankruptcy Court entered an order [Doc. No. 1051] and
accompanying memorandum opinion [Doc. No. 1050] denying the Renewed Stay Relief Motion.
On J anuary 25, 2011, the FDIC-Receiver filed a notice of appeal with respect to the foregoing.
In connection with the FDIC-Receiver's appeal, the Bankruptcy Court entered an agreed order
(previously discussed in Chapter V, Section A.1 of this Disclosure Statement) which, among
other things, allows the Debtor to use balances in its Operating Account to pay certain
administrative expenses in the Debtor's Chapter 11 case (up to a limit of $7 million without
further order of the Bankruptcy Court) during the pendency of the FDIC-Receiver's appeal.


- 60 - 60
3. Debtor's Claim in Colonial Bank Receivership.
As noted in Chapter V of this Disclosure Statement, the Debtor timely filed the Colonial
Bank Proof of Claim in the receivership proceeding for Colonial Bank on November 19, 2009.
On J anuary 6, 2010, the FDIC-Receiver disallowed the Colonial Bank Proof of Claim.

On March 5, 2010, the Debtor commenced a civil action with the District Court
contesting the FDIC-Receiver's disallowance of the Colonial Bank Proof of Claim, styled The
Colonial BancGroup, Inc. v. FDIC, 2:10-cv-00198-MHT-DHW (M.D. Ala.) (the "FIRREA
Action"). The FDIC-Receiver has filed an answer and an amended answer in response to the
Debtor's amended complaint [Doc. Nos. 22, 37], and a scheduling order has been entered that
provides for proceedings leading up to a scheduled trial date for the FIRREA Action in October
2011. At this time, the Debtor is unable to forecast with any degree of certainty what recovery,
if any, it may receive on account of the Colonial Bank Proof of Claim.

4. FDIC-Receiver's Claim in Debtor's Chapter 11 Bankruptcy Case.
The FDIC-Receiver filed a proof of claim in the Debtor's Chapter 11 bankruptcy case on
November 30, 2009 [Claim No. 139]. On February 19, 2010, the FDIC-Receiver filed an
amendment to that proof of claim [Claim No. 139 - Amended]. In the proof of claim as
amended, the FDIC-Receiver asserts the Capital Maintenance Claim and numerous other alleged
claims, some of which are contingent claims that the FDIC-Receiver asserts will arise if the
Debtor succeeds in certain litigation with the FDIC-Receiver (such as, by way of example, a
Claim against the Debtor for any tax refunds that the Debtor is entitled to receive from the IRS,
some of which are so ill-defined that the Debtor is incapable of ascertaining the nature and basis
for the Claim and all of which are disputed, contingent and unliquidated). On March 4, 2010, the
Debtor filed an objection to the FDIC-Receivers proof of claim (this contested matter being
referred to as the "Claim Objection") [Doc. No. 598].

On March 31, 2010, the FDIC-Receiver filed a motion to withdraw reference with respect
to the Claim Objection. In an order entered on May 10, 2010, the District Court withdrew the
reference of proceedings with respect to the Claim Objection, which is now pending before the
District Court under the caption In re The Colonial BancGroup, Inc., No. 2:10-cv-00409 (MHT)
(M.D. Ala.).

In its response to the Debtor's objection filed on J une 25, 2010 in the District Court, the
FDIC-Receiver asserted that many, if not all, of the issues raised in the FIRREA Action and the
Claim Objection overlap. The FDIC-Receiver believes that these overlapping issues include
"competing assertions of ownership of potentially significant income tax refunds, claims relating
to [the REIT Preferred Securities] valued at approximately $300 million, competing claims to
proceeds under various insurance policies and claims challenging various pre-receivership
transfers between [the Debtor] and Colonial Bank." [Doc. No. 15, pg. 8].

After briefing on the issue of whether the Claim Objection should be stayed or,
alternatively, be coordinated with the FIRREA Action, the District Court entered a scheduling
order providing for coordinated proceedings with the FIRREA Action leading up to a scheduled

- 61 - 61
trial date in J uly 2011. That schedule has been extended by agreement of the Debtor and the
FDIC-Receiver such that a trial is now scheduled for October 2011.

Even if some or all of the Claims asserted by the FDIC-Receiver in its proof of claim are
ultimately found to be legal and valid, the Debtor believes (and has asserted) that under Section
502(d) of the Bankruptcy Code, any such Claims should be disallowed until the FDIC-Receiver
disgorges transfers that are asserted by the Debtor to be avoidable under Sections 544, 547 and
548 of the Bankruptcy Code. The FDIC-Receiver disputes the applicability of Section 502(d) of
the Bankruptcy Code, and the existence of any avoidable transfers received either by it or
Colonial Bank and any requirement on its part to pay or otherwise satisfy any claim against it
other than through the issuance of a receivership certificate.

5. Tax Return and Refund Litigation.
Shortly after the commencement of this Chapter 11 case, it became apparent that there
would be significant disputes between the Debtor and the FDIC-Receiver regarding the Debtor's
tax attributes and the ownership of any tax refunds received in connection with consolidated tax
returns of the Debtor. These disputes have been raised a number of times, most notably in the
FIRREA Action and the Claim Objection. To eliminate any issues with regard to the disposition
of any tax refund, the Debtor and the FDIC-Receiver entered into a stipulation dated February
24, 2010, under which the parties agreed that any tax refunds received by either of them would
be deposited into the Segregated Tax Deposit Account pending a final determination as to the
ownership of and property rights in the tax refunds. On March 10, 2010, the Bankruptcy Court
entered an Order approving this stipulation [Doc. No. 621].

To address the ownership dispute with respect to tax refunds, the Debtor filed an
adversary proceeding in this Chapter 11 case styled The Colonial BancGroup, Inc. v. FDIC,
Adversary Proceeding No. 10-03018 (the "541 Proceeding"). The 541 Proceeding requested the
Court to resolve disputes between the Debtor and the FDIC-Receiver over ownership of various
assets, including the right to tax refunds attributable to the Debtor's consolidated tax returns. The
other disputed assets referenced in the 541 Proceeding are discussed below.

The FDIC-Receiver subsequently sought withdrawal of reference of the 541 Proceeding
to the District Court. The Debtor ultimately consented to the withdrawal, as the Debtor did in
response to the withdrawal motions the FDIC-Receiver filed with respect to the Fraudulent
Obligation Proceeding and the Claim Objection. As a result, the 541 Proceeding is currently
pending in the District Court as The Colonial BancGroup, Inc. v. FDIC, 2:10-cv-00410 (M.D.
Ala.). On J une 25, 2010, the FDIC-Receiver filed a motion to dismiss the 541 Proceeding for
lack of subject matter jurisdiction and, on October 13, 2010, the District Court entered an order
staying all proceedings in the 541 Proceeding and requiring the parties to report periodically
regarding whether circumstances have changed that would warrant consideration of the FDIC-
Receiver's motion to dismiss. The District Court will be responsible for adjudicating the
competing claims to ownership of all tax refunds, estimated to be in excess of approximately
$253,000,000.

Notwithstanding the protection afforded to the FDIC-Receiver by the Segregated Tax
Deposit Account, the FDIC-Receiver filed a motion on August 13, 2010, for relief from stay to

- 62 - 62
exercise certain alleged tax rights so that the FDIC-Receiver could pursue a claim for a refund
and/or a loss return for the 2009 tax year and effect any amendments to prior years' returns of the
Debtor as may be permitted under the law as a fiduciary of Colonial Bank (the "Tax Stay Relief
Motion") [Doc. No. 836]. The Debtor filed an objection [Doc. No. 855] and brief in support
thereof [Doc. No. 858] with respect to the Tax Stay Relief Motion. After a series of hearing
before the Bankruptcy Court, the parties agreed to the entry of an order settling the Tax Stay
Relief Motion [Doc. No. 880]. This settled order did not address the ownership dispute and
merely allowed the FDIC-Receiver to exercise certain alleged tax rights specifically set forth in
the settled order, without prejudice to any of the Debtor's rights. The FDIC-Receiver thereafter
filed its own federal tax returns and claims for refunds in the amount of approximately
$253,000,000.

6. Fidelity Policies Litigation.
On August 10, 2009, David B. Byrne, J r., acting as the Debtor's General Counsel, gave
notice to the insurance carriers under the Fidelity Policies of "possible claims to be asserted"
under the Fidelity Policies "on behalf of potential victims who may be the subject of dishonest
conduct by one or more employees." This notice to the insurance carriers was later
supplemented and ultimately culminated in the Debtor's filing of a proof of loss on February 1,
2010 setting forth damages suffered by the Debtor that are compensable under the Fidelity
Policies well in excess of the aggregate limits of liability of $25,000,000. The FDIC-Receiver
takes the position (disputed by the Debtor) that the proofs of loss filed by the Debtor with the
insurance carriers, which were prepared in large part by the FDIC-Receiver, describe misconduct
that resulted in harm to Colonial Bank and that any proceeds payable under the Fidelity Policies
therefore constitute assets of the receivership.
In addition to the claims the Debtor asserts against Colonial Bank (and the FDIC-
Receiver as its successor in interest) in the Colonial Bank Proof of Claim relating to the Fidelity
Policies, the Debtor also sought to address the ownership dispute with respect to the Fidelity
Policies in the 541 Proceeding (now pending, but currently stayed, before the District Court) as
the FDIC-Receiver had made various allegations that the Fidelity Policies and the Fidelity
Proceeds were property of the FDIC-Receiver.
Notwithstanding the fact that the ownership issue with respect to the Fidelity Policies
remains pending before the District Court, the FDIC-Receiver on October 10, 2010, filed a
motion in the Bankruptcy Court for relief from stay seeking, among other things, to pursue its
alleged claims under the Fidelity Policies (the "Fidelity Policies Stay Relief Motion"). The
Debtor objected to the relief requested in the Fidelity Policies Stay Relief Motion [Doc. No.
963]. As previously noted in this Disclosure Statement, on November 4, 2010, the Bankruptcy
Court entered an order establishing the Segregated Fidelity Deposit Account in which any
recovery of the Fidelity Proceeds will be held pending resolution of the parties' disputes as to
ownership of those funds. At a hearing before the Bankruptcy Court on December 8, 2010, the
Debtor and the FDIC-Receiver announced that the parties had settled the Fidelity Policies Stay
Relief Motion. On December 17, 2010, the Bankruptcy Court entered an order disposing of the
Fidelity Policies Stay Relief Motion in accordance with the parties' settlement. Under the
settlement, the Debtor and the FDIC-Receiver have agreed to cooperate in the recovery of claims
under the Fidelity Policies.

- 63 - 63

There can be no assurance that the insurer(s) under the Fidelity Policies will ultimately
allow or deny the asserted claims thereunder, in whole or in part, nor can any assurances be
given regarding the outcome of the dispute between the Debtor and the FDIC-Receiver regarding
entitlement to any payments under the Fidelity Policies.

7. Garland Avenue Property Litigation.
As discussed in Chapter V, Section A.9 of this Disclosure Statement, the FDIC-Receiver
has asserted an ownership interest in the Garland Avenue Property, despite the undisputed fact
that the Garland Avenue Property was titled in the Debtor as of the Petition Date. As a result of
the FDIC-Receiver's assertion of an interest in the Garland Avenue Property, on March 5, 2010,
the Debtor commenced the Garland Adversary Proceeding in the Bankruptcy Court seeking a
declaratory judgment that the Garland Avenue Property is property of the Debtor's Chapter 11
estate under Section 541 of the Bankruptcy Code and that the FDIC-Receiver does not hold any
lien, claim, right or interest in the Garland Avenue Property or proceeds thereof. The
Bankruptcy Court has entered a scheduling order in the Garland Adversary Proceeding leading
up to a pre-trial conference in May, 2011, with a trial date to be set thereafter.
F. Deferred Compensation Litigation
As noted in Chapter III, Section C.3 of this Disclosure Statement, the Debtor established
the NQDC Plan to provide deferred compensation and supplemental retirement income to key
senior management or highly compensated employees. As of the Petition date, the aggregate
value of the assets in the NQDC Plan was approximately $1,900,000. Beginning in September
of 2009, the Debtor sought authorization from the Bankruptcy Court to exercise its ownership
rights over these monies. After protracted litigation with certain participants in the NQDC Plan
(including the entry of an order by the Bankruptcy Court authorizing the Debtor to exercise its
ownership rights over these monies), the Debtor reached -- and the Bankruptcy Court approved -
- the Settlement Agreement with these participants to settle the ownership dispute over the assets
in the NQDC Plan.
As a result of the approval of the Settlement Agreement, the Debtor received
approximately $2,050,000 from the liquidation of the Plan Assets, and retained approximately
$1,875,000 after distribution of the Settlement Amount of $175,000 pursuant to the terms of the
Settlement Agreement.
G. Litigation with the Alabama Revenue Department
As set forth in Chapter V, Section A.1 of this Disclosure Statement, the Alabama
Revenue Department has asserted that the Debtor owes past due taxes to the State of Alabama in
excess of $12,000,000.
The Alabama Revenue Department issued a notice of preliminary assessment for
financial institution excise tax with respect to taxes owing by the Debtor and its subsidiaries,
purporting to enter a preliminary assessment on November 28, 2006 (the "Preliminary
Assessment"). The Preliminary Assessment appears to be a revision of preliminary assessments

- 64 - 64
purportedly entered on November 29, 2004, and on J uly 15, 2005. Final assessments were
entered against the Debtor for alleged tax liabilities in excess of $12,000,000 on August 14,
2009, the same date that Colonial Bank was taken over by the FDIC-Receiver (the "Final
Assessments"). Seven days later, on August 21, 2009, the Alabama Revenue Department filed
Certificates of Liens for Taxes in Montgomery County, Alabama. As a result of such filings, the
Alabama Revenue Department claims a Lien upon a substantial part of the Debtor's assets.
Without waiving its ability to challenge the validity, extent or priority of any tax liens
asserted by the Alabama Revenue Department, the Debtor filed a motion with the Bankruptcy
Court on September 10, 2009 pursuant to Section 505 of the Bankruptcy Code seeking a
determination that the Debtor has no tax liability to the State of Alabama of any type or nature,
including, without limitation, no liability with respect to the Final Assessments, interest thereon
or penalties purportedly accruing in connection therewith (the "State Tax Liability Motion")
[Doc. No. 70]. The State Tax Liability Motion has not as yet been set for hearing as the Debtor
and the Alabama Revenue Department are engaged in ongoing discussions to potentially resolve
issues relating to the Final Assessments.
H. Claims Against Directors and Officers
Prior to the Petition Date, the Debtor obtained the D&O Policies for the purpose of
covering, among other things, any costs incurred by the Debtor in connection with its obligations
to indemnify its current and former directors and officers for certain liabilities arising from their
employment with or service to the Debtor. Pursuant to Delaware law and its by-laws, the Debtor
is obligated to indemnify its current and former directors and officers for certain liabilities
arising from their employment with or service to the Debtor.

As noted above, the D&O Policies provide for an aggregate limit of liability of $35
million, which is reduced not only by the amount of any claims paid on behalf of any insured
under the D&O Policies but also by amounts paid for costs incurred in defending claims covered
under the D&O Policies. As of this date, the Debtor believes amounts available for covered
claims under the D&O Policies is approximately $30 million, but the policy limits continue to
erode with the costs of ongoing litigation.

Parties asserting claims against directors and officers of Colonial Bank and the Debtor on
account of acts or omissions covered by the D&O Policies, including the FDIC-Receiver, the
plaintiffs in the Securities Litigation, the plaintiffs in the ERISA Litigation and the Debtor, have
engaged in settlement discussions with the defendant directors and officers and, in certain
instances, among themselves, regarding a settlement of claims and a division of any amounts
payable under the D&O Policies; but as of this date, such efforts at settlement have not resulted
in an agreed upon settlement of disputes.

I. Custody and Disposition of Debtor's Business Records
In connection with the appointment of the FDIC-Receiver as receiver for Colonial Bank,
the FDIC-Receiver took possession of all documents and electronically stored information
relating to Colonial Bank as well as substantially all of the documents and electronically stored
information relating to the Debtor and its other subsidiaries. The FDIC-Receiver did not limit its

- 65 - 65
seizure of records (and the disposition of those records) to the property and records of Colonial
Bank. The FDIC-Receiver denies that it has acted improperly in seizing such records.

1. Ownership Disputes.
As part of its sale of the assets of Colonial Bank to BB&T pursuant to the P&A
Agreement, the FDIC-Receiver transferred to BB&T a substantial portion of the Books and
Records (including electronically stored information) at the Debtor's premises. Other Books and
Records were retained by the FDIC-Receiver. The Books and Records are voluminous. In doing
so, the FDIC-Receiver did not differentiate between the records, documents and electronically
stored information of Colonial Bank and the Debtor in implementing this transaction.
Thereafter, the FDIC-Receiver undertook to control and influence the access of the Debtor and
others to and the disposition of such documents and electronically stored information of the
Debtor through the exercise of certain alleged contractual rights under the P&A Agreement.

During this Chapter 11 bankruptcy case, the Debtor has made repeated requests for
access to such documents and electronically stored information in the possession of BB&T. At
one point, BB&T stated a willingness, subject to the FDIC-Receiver's agreement, to allow the
Debtor access to the documents and electronically stored information in its possession, provided
that by doing so neither the FDIC-Receiver nor BB&T would be deemed to have waived any
legally recognized privilege held by Colonial Bank or BB&T.

In hopes of obtaining immediate access to these important records in a form that the
Debtor could use to discharge its obligations under the Bankruptcy Code, the Debtor negotiated a
non-waiver stipulation with BB&T and the FDIC-Receiver (the "Non-Waiver Stipulation"). On
March 2, 2010, the Debtor filed with this Court a motion to approve this Non-Waiver Stipulation
[Doc No. 589] and by order entered on March 12, 2010 [Doc No. 626], the Court approved the
Non-Waiver Stipulation.

For a period of approximately 10 days to two weeks surrounding the entry of the order
approving the Non-Waiver Stipulation, the Debtor was provided very limited access to certain
documents (but not allowed the opportunity to remove or even make copies of these documents)
and no access to electronically stored information. However, the Debtor's access was terminated
by action of the FDIC-Receiver even as to the limited number of documents made available to it
shortly after the Debtor's review of records began. This denial of access continued unabated into
J une 2010.

The FDIC-Receiver disputes that it has improperly controlled or withheld the Debtor's
access to any of the Books and Records; and that many of the Books and Records contain
information regarding Colonial Bank and are therefore subject to the control and disposition of
the FDIC-Receiver, even if the records themselves were originated by officers or employees of
the Debtor.

2. 2004 Examination and Document Production Request.
As a result of this denial of access, the Debtor filed a motion on J une 17, 2010, pursuant
to Rule 2004 of the Bankruptcy Rules, requesting authorization for the Debtor to issue one or

- 66 - 66
more subpoenas to BB&T for the purpose of allowing the inspection and copying by the Debtor
of documents and electronically stored information relating to the Debtor, any of its subsidiaries
or the assets or liabilities of any of them and the examination of one or more representatives of
BB&T relating to such documents, electronically stored information and affairs of the Debtor
and its subsidiaries (the "2004 Motion") [Doc. No. 765]. On J une 28, 2010, BB&T filed a
response and objection to the 2004 Motion [Doc. No. 84]. On the same date, the FDIC-Receiver
also filed an objection [Doc. No. 788]. The parties ultimately consented to the entry of an
agreed-upon order authorizing the Debtor to issue subpoenas to BB&T for the above-mentioned
purposes [Doc. No. 853].

3. Current Status of Document Retrieval.
Since the filing of the 2004 Motion, the FDIC-Receiver, BB&T and the Debtor have
engaged in a voluntary production dialogue and process whereby the Debtor hopes eventually to
be granted access to the information sought in the 2004 Motion. As of the filing of this
Disclosure Statement, however, the Debtor has not yet had access to a substantial amount of
electronic records that it had expected to receive. Furthermore, the FDIC-Receiver may still
have in its possession and control Books and Records that the Debtor has been unable to review.

At this juncture, the Debtor believes that it has access to sufficient Books and Records,
after ongoing efforts of more than 18 months to obtain such Books and Records, in order to
provide adequate information to Holders of Claims and Equity Interests pursuant to this
Disclosure Statement. Nevertheless, it is possible that additional information will be discovered
in documents produced to the Debtor after the date of this Disclosure Statement that would make
some of the statements contained herein inaccurate or misleading.

J. SEC Administrative Proceeding
On J uly 14, 2010, the SEC instituted an administrative proceeding (the "Administrative
Proceeding") against the Debtor to revoke the registration of the Debtor's securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
pursuant to an Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to
Section 12(j) of the Securities Exchange Act of 1934 (the "Deregistration Order").

A copy of the
Deregistration Order is available at http://www.sec.gov/litigation/admin/2010/34-62497.pdf.
On August 4, 2010, the Debtor filed an answer to the Deregistration Order. After a
hearing before the administrative law judge on August 11, 2010, the SEC and the Debtor entered
into settlement discussions to resolve the Administrative Proceeding. On September 20, 2010,
the Debtor submitted an original executed offer of settlement to the SEC setting forth the
proposed terms of settlement of the Administrative Proceeding and the revocation of the
registration of the Debtor's securities (the "September Settlement Offer"). On September 21,
2010, the Debtor also disclosed the submission of the September Settlement Offer in a Form 8-K
filed with the SEC. At the time the Debtor submitted the September Settlement Offer, the
Debtor expected that the staff of the SEC would submit the offer to the SEC with a
recommendation of approval.

- 67 - 67
On October 4, 2010, the SEC's Division of Enforcement notified the presiding
administrative law judge that the SEC would not accept the September Settlement Offer. A
second prehearing conferences was held on October 8, 2010 in which the parties agreed to
continue settlement discussions. On October 13, 2010, the SEC's Division of Enforcement again
informed the presiding administrative law judge that the SEC would not accept any further
settlement offer the Debtor was willing to enter into.
On November 1, 2010, the SEC filed a motion for summary disposition and
memorandum of law in support thereof seeking the deregistration of the Debtor's securities on
the asserted basis that there were no disputed issues of material fact and the SEC was entitled to
summary disposition as a matter of law. The Debtor filed a response and limited objection to
this motion on November 9, 2010, to ensure that any order entered deregistering the Debtor's
securities did not include any factual findings beyond those expressly admitted by the Debtor in
its answer and that no monetary relief was granted to the SEC.
On November 15, 2010, the presiding administrative law judge entered an initial decision
ordering that the registration of each class of the Debtor's securities be revoked. This decision
became effective on December 6, 2010.

K. Costs of Administration of Debtor's Bankruptcy Case
As alluded to throughout this Disclosure Statement, this Chapter 11 case is complex, due
in large part to the receivership of Colonial Bank; the intervention and assertion of substantial
claims in this Chapter 11 case by the FDIC-Receiver; the assertion of substantial liens and claims
by the Alabama Revenue Department, BB&T and the PBGC; the Debtor's lack of access to its
Books and Records; the unwinding and/or termination of three significant benefit plans of the
Debtor that were maintained primarily for employees of Colonial Bank; the conflicting claims to
ownership to various assets in which the Debtor asserts ownership; and dealings with numerous
Governmental Agencies (as defined below).

While the Debtor's primary focus has been the identification of the assets of the Debtor
and liquidation of those assets for the benefit of creditors of the estate that are entitled thereto in
accordance with applicable provisions of the Bankruptcy Code and other applicable non-
bankruptcy law, the Debtor and the professionals retained in this Chapter 11 case have had to
devote a substantial amount of time and effort to addressing the conflicting ownership claims.
Accordingly, the amount of fees and expenses incurred in administering this Chapter 11 case for
the benefit of creditors and parties in interest has been significant.
As of the filing of this Disclosure Statement, the Debtor estimates that approximately $7
million in fees and expenses have been incurred by professionals retained in the Case. Five law
firms and two accounting firms have been retained as court approved professionals in this
Chapter 11 case: (i) Parker, Hudson, Rainer & Dobbs LLP, as counsel for the Debtor; (ii) Balch
& Bingham, LLP, as special counsel for the Debtor; (iii) Cohen Pollock Merlin & Small, as
special counsel for the Debtor; (iv) Schulte Roth & Zabel LLP, as co-counsel to the Case
Committee; (v) Burr & Forman LLP, as co-counsel to the Case Committee; (vi)
Pricewaterhouse Coopers LLP, as tax advisors for the Debtor; and (vii) Moore Stephens Tiller
LLC, as special tax accountants for the Debtor.

- 68 - 68

A majority of the expenses incurred to date stem from issues raised by a number of
governmental entities, including, without limitation, the following federal and state agencies
(collectively, the "Governmental Agencies"): (a) the FDIC-Receiver; (b) the United States
Department of J ustice; (c) the SEC; (d) the IRS; (e) the PBGC; (f) the United States Department
of Labor; (g) the Alabama Revenue Department; (h) the State of Alabama Banking Department;
and (i) the Florida Department of Transportation. While the Debtor and these governmental
entities have often taken positions in conflict with one another (and, at times, worked
cooperatively together), the involvement of these governmental entities in the Debtor's Chapter
11 case has substantially impacted both the costs of unwinding the Debtor's affairs and the length
of time in which this unwinding may be completed.

Chapter IX. SUMMARY OF THE PLAN
This part of the Disclosure Statement summarizes the provisions of the Plan. The Plan, if
confirmed by the Bankruptcy Court, will be binding on the Debtor and its creditors and interest
holders. This Disclosure Statement does not constitute, or change the provisions of, the Plan. If
there are any discrepancies between the Plan and the following summary of the Plan, the Plan
will control. Therefore, creditors are urged to review carefully all of the provisions of the Plan
for the full details of the proposed treatment of Claims against and Equity Interests in the Debtor
and are further urged to consult counsel to fully understand the Plan. A copy of the Plan is
attached to this Disclosure Statement as Exhibit A.
A. Overview of the Plan
The Plan calls for the liquidation of all assets of the Debtor and the distribution of the
proceeds to the Debtor's creditors. After the Plan is confirmed by the Bankruptcy Court, the Plan
Trustee will be authorized to continue the task begun by the Debtor of pursuing, collecting and
liquidating the remaining assets of the Debtor. In addition to liquidating the Debtor's Core
Assets (to the extent of the Debtor's interests in such assets), the Plan Trustee will investigate and
evaluate any claims the Debtor may have against insiders, affiliated companies and independent
third parties, the pursuit of which may supplement the proceeds recovered by liquidating the
Debtor's Core Assets.
The proceeds of this liquidation effort will be used to pay the outstanding Claims against
the Debtor in accordance with the classifications and order of priority of these Claims under the
Plan. These classes of Claims are listed in the Plan. Prior to the payment of any General
Unsecured Claims, the Plan provides for the payment of Administrative Claims and thereafter
Priority Claims. In addition, Secured Claims are paid either from an abandonment of the
Collateral securing such Secured Claims, delivery of the proceeds realized from any sale or other
disposition of such collateral or payments over time having a present value equal to the value of
such collateral. General Unsecured Claims are entitled to pro rata treatment, whether such
Claims are in Class E (Certain General Unsecured Claims) or Class F (Indenture Claims). The
Plan voids any provisions for Contractual Subordination in any Debt Instruments or other
documentation, with the result that all General Unsecured Creditors are entitled to receive pro
rata treatment irrespective of any pre-Petition Date subordination provisions. The Debtor does
not anticipate any Distribution will be available to Holders of Claims in Class G (Statutorily

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Subordinated Claims) or Class H (Preferred Stock). The Plan provides that the Holders of
Common Stock are not entitled to receive or retain any property under the Plan, and all Common
Stock is canceled under the Plan. If there are insufficient funds to pay Allowed Claims in a
particular Class in full, available funds will be distributed pro rata among the members of that
Class.
Reserves will be established for the payment of Disputed Claims to the extent required in
the Plan. As part of his duties, the Plan Trustee will evaluate and contest Claims and Equity
Interests (if necessary) asserted against the Debtor when, in his judgment and based on all of the
circumstances, the Plan Trustee concludes that the Claim or Equity Interest should be contested.
Other parties in interest also are entitled to object to and otherwise challenge Claims asserted
against the Debtor. Given the magnitude of the Disputed Claims of the FDIC-Receiver, which
include the disputed Capital Maintenance Claim on appeal and several other contingent, disputed
and unliquidated Claims, the Debtor may be unable to make any Distributions to the Holders of
General Unsecured Claims pursuant to the Plan until a final determination is made or settlement
reached regarding the validity of those Disputed Claims or the aggregate amount of the Disputed
Claims is estimated as provided in the Plan.
The initial Distribution to the Debtor's creditors under the Plan will be made on the Initial
Distribution Date, which will be within thirty (30) days after the later to occur of the Effective
Date or the first date on which the Debtor determines it has Available Cash to make an initial
Distribution to Holders of Priority Non-Tax Claims. The Effective Date will occur after, and
only after, each of the following conditions precedent have been met, unless otherwise waived by
the Debtor and the Case Committee: (a) the Confirmation Order has been entered, is in full force
and effect and is not stayed by order of a court of competent jurisdiction; (b) no order of a court
has been entered that remains effective that restrains the Debtor from implementing or
consummating the Plan; (c) all authorizations, consents and regulatory approvals required, if any,
in connection with the Plan's effectiveness have been obtained; (d) the Debtor has determined, in
consultation with the Case Committee, that there is sufficient Available Cash to make the
payments required under the Plan to Holders of Allowed Administrative Claims, Allowed
Priority Tax Claims, Allowed Secured Claims, and Allowed Priority Non-Tax Claims; (e) the
Plan Committee has been appointed in accordance with the terms of the Plan; (f) the Plan Trustee
has been appointed in accordance with the terms of the Plan; and (g) the Bankruptcy Court has
entered one or more orders (which may include the Confirmation Order) authorizing the
assumption and rejection of unexpired leases and executory contracts, if any, by the Debtor as
contemplated by the Plan.
B. Classification and Treatment of Claims under the Plan
1. Payment and Treatment of Priority Claims.
Under the Bankruptcy Code, Administrative Claims, Priority Tax Claims and Priority
Non-Tax Claims are all entitled to priority over the other Claims asserted against the Debtor.
These Claims are unimpaired under the Plan. Under Section 1124 of the Bankruptcy Code, a
class of Claims is impaired under a plan unless, with respect to each Claim of such class, (i) the
plan leaves unaltered the legal, equitable, and contractual rights to which such Claim entitles the

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Holder of such Claim; or (ii) all defaults are cured, the original maturity of the Claim is
reinstated, and the Claim is otherwise treated as provided in clause (i).
a. Administrative Claims
Administrative Claims under Section 503(b) of the Bankruptcy Code are Claims for the
actual and necessary costs of preserving the Debtor's bankruptcy estate and are entitled to
priority under Section 507(a)(2) of the Bankruptcy Code. The Bankruptcy Court has authorized
the Debtor and the Case Committee to retain attorneys and accountants to assist them during the
course of the Case. Pursuant to Section 330 of the Bankruptcy Code, the Bankruptcy Court may
authorize the Debtor to pay these professionals for the services they perform, and, pursuant to
Section 503(b)(1) of the Bankruptcy Code, the Claims of these professionals for payment
constitute Administrative Claims. Also included among the Claims in this class are any Claims
of post-petition trade creditors (if any) pursuant to the various trade agreements between the
Debtor and these trade creditors.
Furthermore, if the Debtor defaults under the terms of any executory contract or
unexpired lease assumed pursuant to an Order of the Bankruptcy Court as provided for in
Section 365 of the Bankruptcy Code or under the terms of any contract or lease entered into by
the Debtor after the Petition Date, or if the Debtor untimely rejects an unexpired lease or
executory contract that had not previously been assumed and the Debtor's estate received a post-
petition benefit under this contract, the other party to this contract or lease may assert an
Administrative Claim. As of the date of this Disclosure Statement, the Debtor has not assumed
any contract or lease. All executory contracts and leases, other than the Insurance Policies (to
the extent that any such Insurance Policy is deemed to be an executory contract), will be deemed
rejected by the Debtor on the Effective Date, although the Debtor reserves the right to change its
election with respect to the acceptance or rejection of any executory contract or lease at any time
prior to the Effective Date. Each of the Insurance Policies, to the extent any such policy is
deemed to be an executory contract, may be assumed by the Debtor. The Debtor is not in default
under any of the Insurance Policies and will not make any Cure payments in connection with the
assumption of the Insurance Policies under Section 7.1 of the Plan.
With respect to those executory contracts and unexpired leases to be assumed by the
Debtor under the Plan, the provisions of each such executory contract or unexpired lease which
are or may be in default will be satisfied solely by Cure. Any party to an executory contract or
unexpired lease that wishes to assert that Cure is required as a condition to assumption must file
with the Bankruptcy Court a proposed claim (a "Cure Claim") within forty-five (45) days after
service of the Confirmation Order, after which the Debtor will have twenty (20) days to file any
objections to such Cure Claim. If there is a dispute regarding (a) the nature or amount of any
Cure, (b) the ability of the Debtor to provide "adequate assurance of future performance" (within
the meaning of Section 365 of the Bankruptcy Code) under the contract or lease to be assumed,
or (c) any other matter pertaining to assumption, the matter will be set for hearing in the
Bankruptcy Court on the next available hearing date, or such other date as may be mutually
agreed upon, and Cure will occur following the entry of a Final Order of the Bankruptcy Court
resolving the dispute and approving the assumption and assignment, as the case may be;
provided, however, if there is a dispute as to the amount of Cure that cannot be resolved
consensually among the parties, the Debtor will have the right to reject the contract or lease for a

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period of five (5) days after entry of a Final Order establishing a Cure amount in excess of that
provided by the Debtor. If the Cure amount is not disputed, the Debtor will pay the Cure Claim,
if any, to the claimant within twenty (20) days after service of the Cure Claim. Disputed Cure
amounts that are resolved by agreement or Final Order will be paid by the Debtor within twenty
(20) days of such agreement or Final Order.
With respect to any executory contract or unexpired lease rejected by the Debtor, if the
rejection by the Debtor (pursuant to the Plan or otherwise) of such executory contract or
unexpired lease results in a Claim, then such Claim will be forever barred and will not be
enforceable against the Debtor or the Estate, or with respect to any Estate Property, unless a
proof of claim is filed and served upon counsel to the Debtor, the Case Committee and, if after
the Effective Date, the Plan Trustee and the Plan Committee, within thirty (30) days after service
of the later of (a) notice of the Confirmation Order or (b) other notice that the executory contract
or unexpired lease has been rejected.
In specifying the treatment of the Administrative Claims, the Plan distinguishes between
non-ordinary course Administrative Claims and ordinary course Administrative Claims. Any
Person who asserts an Administrative Claim that arises before the Confirmation Date, including
Claims under Section 503(b)(2)-(5) of the Bankruptcy Code, but excluding Claims of
Professional Persons for the payment of Professional Compensation and Claims described in
Sections 3.2 or 3.3 of the Plan, must, on or before the Administrative Claim Bar Date, file an
application with the Bankruptcy Court for allowance of such Claim as an Administrative Claim
specifying the amount of and basis for such Claim; provided, however, that applicants who have
filed an application with the Bankruptcy Court before the Administrative Claim Bar Date need
not file a new application. Failure to file a timely application for allowance will bar a claimant
from seeking recovery on such Administrative Claim. The Plan Trustee will have ninety (90)
days from the Effective Date (or such longer period as may be allowed by order of the
Bankruptcy Court) to review and object to any such Administrative Claims. Administrative
Claims that are allowed under applicable provisions of the Bankruptcy Code will be paid, in full,
in single cash payments on the later to occur of the Effective Date or thirty (30) days following
entry of a Final Order by the Bankruptcy Court allowing the Claim, unless the Holder agrees in
writing to a different treatment of such Administrative Claim.
All Case Professional Persons asserting entitlement to Case Professional Compensation
for services rendered to the Debtor or the Case Committee must file and serve on the Debtor, the
Case Committee and the Bankruptcy Administrator an application for final allowance of such
Case Professional Compensation not later than sixty (60) days after the Effective Date. Such
application may include requests for Case Professional Compensation for services rendered or
expenses incurred prior to the Effective Date or thereafter in connection with any applications for
allowance of Case Professional Compensation pending on or filed after the Effective Date,
including responding to or otherwise addressing any objections to such Case Professional
Compensation. All such Case Professional Compensation, when and if so awarded, will be paid,
in full, in single Cash payments within thirty (30) days following the date on which the order by
the Bankruptcy Court allowing the Case Professional Compensation becomes a Final Order,
unless the party entitled to payment thereof agrees in writing to a different and less favorable
treatment thereof. Notwithstanding the foregoing, any Case Professional Person who is entitled
to receive Case Professional Compensation pursuant to any prior order of the Bankruptcy Court

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establishing procedures for the allowance of such compensation may continue to receive such
Case Professional Compensation for services rendered before the Confirmation Date, without
further Bankruptcy Court review or approval. Case Professional Persons who are required to file
and serve applications for final allowance of their Claims for Case Professional Compensation
and who do not file and serve such applications by the deadline required in the Plan will be
forever barred from asserting such Claims for Case Professional Compensation against the
Debtor. Objections to any Claim for Case Professional Compensation must be filed and served
on the Debtor, the Case Committee, the Bankruptcy Administrator, and the Professional Person
asserting the Claim for Case Professional Compensation, not later than thirty (30) days (or such
longer period as may be allowed by order of the Bankruptcy Court) after the date on which an
application for allowance of such Claim for Case Professional Compensation was served.
As for Administrative Claims incurred in the ordinary course of the operation of the
Debtor or administration of the Estate during the pendency of the Case, the Debtor may satisfy
such administrative expenses by means of the Debtor's payment or performance of the
obligations in accordance with the terms and conditions of the agreement or applicable law
giving rise to such obligations; provided, however, that the Debtors failure to pay or perform
such obligations will not relieve the Holder of such Claim from the requirement to file and serve
before the Administrative Claim Bar Date an application with the Bankruptcy Court for
allowance of such Claim as an Administrative Claim.
All fees due the Bankruptcy Administrator under the Bankruptcy Code are to be paid in
the ordinary course, and the Bankruptcy Administrator will not be required to file a proof of
claim to recover those fees.
b. Priority Tax Claims
Tax Claims under Section 507(a)(8) of the Bankruptcy Code are entitled to priority. The
taxes entitled to such priority include (i) taxes on income or gross receipts that meet the
requirements set forth in Section 507(a)(8)(A); (ii) property taxes meeting the requirements of
Section 507(a)(8)(B); (iii) taxes that were required to be collected or withheld by the Debtor and
for which the Debtor is liable in any capacity as described in Section 507(a)(8)(C); (iv)
employment taxes on wages, salaries or commissions that are entitled to priority pursuant to
Section 507(a)(4), to the extent that such taxes also meet the requirements of
Section 507(a)(8)(D); and (v) pre-petition penalties related to any of the foregoing Priority Tax
Claims to the extent that these penalties are compensation for actual pecuniary loss as provided
for in Section 507(a)(8)(G). Unless the Holder of the Claim agrees to a different treatment, each
Holder of an allowed Priority Tax Claim will receive cash from the Debtor in the amount of the
Claim on the later to occur of the Effective Date or thirty (30) days after the date on which such
Priority Tax Claim becomes an Allowed Claim.

c. Class A (Priority Non-Tax Claims)
Class A consists of all Priority Claims other than Administrative Claims and Priority Tax
Claims. These Claims are entitled to priority under Section 507(a) of the Bankruptcy Code and
include the following: (i) Unsecured Claims for wages, salaries or commissions as described in
and limited by Section 507(a)(4); and (ii) Unsecured Claims for contributions to an employee

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benefit plan as described in and limited by Section 507(a)(5). The FDIC-Receiver asserts that, if
and to the extent that the FDIC-Receiver prevails on the appeal of its asserted Capital
Maintenance Claim under Section 365(o) of the Bankruptcy Code and establishes a Priority
Claim under Section 507(a)(9) of the Bankruptcy Code, then the FDIC-Receiver will have a
Claim in Class A for any uncured deficit under a capital maintenance commitment of the Debtor
as and to the extent provided in Sections 507(a)(9). The Holder of an allowed Priority Claim in
Class A is to receive cash on the Initial Distribution Date in the allowed amount of such Claim,
unless the Holder consents to a different treatment.
2. Classification and Treatment of Non-Priority Claims.
The remaining Classes of Claims under the Plan (Classes B through G), are not entitled to
priority under the Bankruptcy Code. The Claims in Classes B (Certain Secured Claims) and C
(Secured Claim of Alabama Revenue Department) are unimpaired. The Claims in Classes D
(Convenience Class Claims), E (Certain General Unsecured Claims), F (Indenture Claims), G
(Statutorily Subordinated Claims), H (Preferred Stock) and I (Common Stock and other Equity
Interests) are all impaired. The Holders of Claims or Equity Interests in these impaired Classes
(other than Class I) will receive Distributions set forth in the Plan in complete satisfaction of all
claims against the Debtor and, except as expressly set forth in the Plan, will have no other rights
or remedies against the Debtor or any of its assets. The Holders of Common Stock and other
Equity Interests (excluding Preferred Stock) are not entitled to receive or retain any property
under the Plan, and all Common Stock will be canceled on the Effective Date. Based on the
Debtor's estimates of the net realizable value of the liquidation of the property of the Estate,
neither Statutorily Subordinated Claims nor Preferred Stock are likely to receive any Distribution
under the Plan. The Debtor will not solicit ballots from the Holders of Statutorily Subordinated
Claims, as the members of that Class have not as yet been identified, or from Holders of Equity
Interests other than Preferred Stock, as the Holders of such Equity Interests are deemed to have
rejected the Plan. As discussed above, however, the Plan does not in any way restrict or impair
the rights of the Debtor's creditors to pursue whatever claims they may have arising from the
activities of the Debtor and its related entities against persons or property other than the Debtor
and its assets.
a. Class B (Certain Secured Claims)
Class B will consist of all Allowed Claims that are Secured Claims other than the
Secured Claim held by the Alabama Revenue Department. Unless the Holder of such Claim
agrees in writing with the Debtor to different treatment, each Holder of an Allowed Claim in
Class B will receive, on account of such Claim and in full satisfaction thereof, either (at the
Debtor's option) (a) abandonment from the Estate of the collateral securing the Claim or (b) Cash
in the allowed amount of such Class B Claim (including any interest on such Claim required to
be paid to such Holder pursuant to Section 506(b) of the Bankruptcy Code) until such Claim is
Paid in Full; provided, however, that the Debtor may elect by notice to the Holder of any such
Class B Claim to (i) cure all defaults with respect to such Class B Claim that occurred before or
after the Petition Date (other than a default of a kind specified in Section 365(b)(2) of the
Bankruptcy Code or of a kind that Section 365(b)(2) expressly does not require to be cured), (ii)
reinstate the maturity of such Class B Claim as such maturity existed before such default,
(iii) compensate the Holder of such Class B Claim for any damages incurred as a result of any

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reasonable reliance by such Holder on such contractual provision or such applicable law, (iv) if
such Class B Claim arises from any failure to perform a non-monetary obligation, compensate
the Holder of such Class B Claim for any actual pecuniary loss incurred by such Holder as a
result of such failure, and (v) otherwise comply with the legal, equitable and contractual rights to
which the Holder of such Class B Claim is entitled under the Debt Instruments evidencing such
Class B Claim. Distributions on account of a Class B Claim will be made on the later to occur of
the Initial Distribution Date or thirty (30) days after the date on which such Class B Claim
becomes an Allowed Claim. If and to the extent that it is subsequently determined on appeal that
the FDIC-Receiver has a valid right of setoff with respect to any of the Deposits at BB&T then
such right of setoff will constitute a Secured Claim in Class B to the extent that there are any
balances in the Deposits over and above the amount of any other Secured Claims having priority
thereto.
b. Class C (Secured Claim of Alabama Revenue Department)
Class C consists of any Allowed Claim of the Alabama Revenue Department that is a
Secured Claim. The Alabama Revenue Department will receive, on account of its Allowed
Claim in Class C, regular installment payments, in Cash, of a total value, as of the Effective
Date, equal to the allowed amount of such Claim, over a period ending not later than five (5)
years after the Petition Date, and in a manner not less favorable than the most favored general
unsecured claim in Class E as provided in Section 1129(a)(9)(C) of the Bankruptcy Code and is
not impaired under the Plan.
c. Class D (Convenience Class Claims)
Class D consists of all Allowed General Unsecured Claims that are Convenience Claims.
Convenience Claims do not include any Indenture Claims. The Holder of a General
Unsecured Claim that exceeds $5,000 and that desires treatment as a Convenience Claim
must make an election in writing (in the form annexed to the order of the Bankruptcy
Court approving this Disclosure Statement) and deliver such written election to the Debtor
on or before the Voting Deadline. On either (i) the Initial Distribution Date, if no objection to
such Claim has been timely filed by the Claims Objection Deadline, or (ii) the first Distribution
Date after the date on which any timely objection to such Convenience Claim is settled,
withdrawn or overruled pursuant to Final Order of the Bankruptcy Court, each Holder of an
Allowed Claim in Class D will receive Cash in an amount necessary to cause 75% of the
principal amount of such Holder's Claim to be paid.
d. Class E (Certain General Unsecured Claims)
Class E will consist of all Allowed Claims that are General Unsecured Claims, excluding
Convenience Claims and Indenture Claims. To the extent there are funds remaining after
payment, or a reserve for payment, of Allowed Claims in Classes A through D, and a reserve for
payment of any Disputed Claims in such Classes, upon the Initial Distribution Date and
thereafter as provided in Section 9.3 of the Plan, each Holder of an Allowed Claim in Class E
will be entitled to receive on account of such Holder's Claim a Pro Rata Share of the Available
Cash (calculated based on the aggregate amount on such date of all Allowed Claims in Classes E
and F) until all Allowed Claims in Class E are Paid in Full or the Estate Property is exhausted.

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e. Class F (Indenture Claims)
Class F will consist of all Allowed Claims that are Indenture Claims. To the extent there
are funds remaining after payment, or a reserve for payment, of Allowed Claims in Classes A
through D, and a reserve for payment of any Disputed Claims in such Classes, upon the Initial
Distribution Date and thereafter as provided in Section 9.3 of the Plan, each Holder of an
Allowed Claim in Class F will be entitled to receive on account of such Holder's Claim a Pro
Rata Share of the Available Cash (calculated based on the aggregate amount on such date of all
Allowed Claims in Classes E and F) until all Allowed Claims in Class F are Paid in Full or the
Estate Property is exhausted. All Distributions made with respect to Allowed Claims in Class F
will be made to the applicable Indenture Trustee, subject to the withholding of a reserve in
accordance with the Plan.
f. Class G (Statutorily Subordinated Claims)
Class G will consist of all Allowed Claims that are Statutorily Subordinated Claims. To
the extent there are funds remaining after payment, or a reserve for payment, of Allowed Claims
in Classes A through F, and a reserve for payment of any Disputed Claims in such Classes, each
Holder of an Allowed Claim in Class G, if any, will be entitled to receive on account of such
Holder's Claim a share of the Available Cash, as determined by Final Order of the Bankruptcy
Court that subordinates such Claim and specifies the degree of subordination of such Claim to
other Allowed Claims or Equity Interests, until such Holder's Allowed Claim is Paid in Full or
the Estate Property is exhausted. Based on the Debtor's estimates of the net realizable value of
the Estate Property, Statutorily Subordinated Claims will not be entitled to receive or retain any
property or Distribution under the Plan.

g. Class H (Preferred Stock)
Class H will consist of all Preferred Stock. To the extent that there are funds remaining
after payment, or a reserve for payment, of Allowed Claims in Classes A through G, and a
reserve for payment of any Disputed Claims in such Classes, each Holder of Preferred Stock will
be entitled to receive on account of such Preferred Stock a pro rata share of Available Cash
calculated upon the greatest of the allowed amount of any fixed liquidation preference to which
all Holders of Preferred Stock are entitled, any fixed redemption price to which all Holders of
Preferred Stock are entitled, or the aggregate value of all such Preferred Stock. Based on the
Debtor's estimates of the net realizable value of Estate Property, Holders of Preferred Stock will
not be entitled to receive or retain any property or Distribution under this Plan.
h. Class I (Equity Interests other than Preferred Stock)
Class I will consist of all Equity Interests other than Preferred Stock. Holders of Equity
Interests in Class I will not receive or retain any property under this Plan on account of such
Equity Interests. On the Effective Date, all Equity Interests in Class I will be deemed canceled
and will have no further legal effect. Accordingly, Class I is deemed not to have accepted the
Plan and the Debtor will not solicit ballots from the Holders of Equity Interests in Class I.


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C. Structure of the Debtor After the Effective Date
Upon the Effective Date of the Plan, all of the Estate Property (including all Estate
Causes of Action, other than Designated Causes of Action) will remain vested in the Debtor and
will be subject to such use, sale, lease and other disposition as provided for in the Plan. The
automatic stay will remain in place. The Debtor will continue to exist after the Effective Date in
accordance with the laws of the State of Delaware and will continue to have full corporate
authority to engage in all lawful activities (i) of a corporation under Delaware law and (ii)
necessary or desirable to implement the provisions of the Plan. Equity Interests in the Debtor
(other than Preferred Stock) will be canceled and will no longer represent an ownership interest
(or right to acquire an ownership interest) in the Debtor; new interests in the Debtor will be
issued solely to the Plan Trustee, who will own and hold such interests for the benefit of the
beneficiaries under the Plan; and any voting or governance rights in favor of Holders of
Preferred Stock will be ineffective. The Certificate of Incorporation and By-Laws of the Debtor
are to be amended as necessary to satisfy the provisions of the Plan and the Bankruptcy Code.
The Certificate of Incorporation of the Debtor is to be amended to, among other things, include
pursuant to Section 1123(a)(6) of the Bankruptcy Code a provision prohibiting the issuance of
non-voting equity securities and limit the activities of the Debtor to matters related to the
implementation of the Plan. The forms of the documents relating to the Amended Certificate of
Incorporation and Amended By-Laws will be filed with the Bankruptcy Court on or before the
hearing on confirmation of the Plan. As soon as practicable after the Plan Trustee exhausts the
assets of the Debtors Estate by making the Final Distribution under the Plan, the Plan Trustee (i)
may effectuate the dissolution of the Debtor in accordance with the laws of the State of Delaware
and (ii) will resign as the sole officer and sole director of the Debtor.
D. Management of the Debtor
Upon the Effective Date, the Plan Trustee will own and hold any and all voting Equity
Interests in the Debtor for the benefit of the beneficiaries under the Plan and will serve as the
sole officer and sole director of the Debtor, with the authority to execute, deliver, file or record
such documents, instruments, releases and other agreements and to take such actions as may be
necessary or appropriate to effectuate and to further evidence the terms and conditions of the
Plan. The Plan Trustee will implement, in the name and on behalf of the Debtor, the provisions
of the Plan as provided therein. No action may be taken by the Debtor after the Effective Date
which is inconsistent with the Plan.
E. Identity and Compensation of Insiders
The Debtor does not anticipate that any Persons who were insiders will receive
compensation following confirmation of the Plan. The Plan Trustee, acting on behalf of the
Debtor, will have the right to hire employees when necessary or appropriate, including former
employees of the Debtor and employees of the Debtor who may have been insiders. The terms
and conditions of employment will be as agreed upon by the Plan Trustee and the employee and
as permitted by applicable non-bankruptcy law. The terms of compensation may include such
bonuses, severance provisions and benefits as the Plan Trustee deems appropriate.

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Chapter X. IMPLEMENTATION OF THE PLAN
As discussed above, the Plan contemplates the liquidation of all of the Debtor's assets, the
resolution of Disputed Claims, the prosecution of Estate Causes of Action and the distribution of
the Cash and/or other Estate Property to the Holders of Allowed Claims and Preferred Stock in
accordance with the terms of the Plan and the priorities established under the Bankruptcy Code.
The purpose of the Plan generally is to provide a blueprint for the conduct of such a liquidation,
claims resolution process and prosecution of Causes of Action.
A. The Debtor and the Plan Trustee
On and after the Effective Date, the Plan Trustee will be authorized to exercise all of the
rights and powers, and will discharge all of the duties, conferred upon the Debtor under the Plan.
The Case Committee has requested that the Plan Trustee be Ben S. Branch of Amherst,
Massachusetts, or such other individual selected by the Debtor and consented to by the Case
Committee. The Debtor has acquiesced in the Case Committee's request (subject to the consent
of the Debtor and the Case Committee to the terms of Mr. Branch's engagement as Plan Trustee).
A copy of Mr. Branch's resume is attached hereto as Exhibit E. The Debtor understands that Mr.
Branch has requested that his compensation as Plan Trustee conform to the terms outlined below.
In the event that another individual is selected as Plan Trustee, the Debtor expects that the terms
of such individual's compensation as Plan Trustee will be no less favorable to the Debtor and the
Estate than the proposed terms of Mr. Branch's compensation outlined below. Mr. Branch's
compensation structure will not be final or binding upon the Debtor or Mr. Branch (or such other
nominee) until reduced to a written contract signed by both parties. The final proposed contract
with Mr. Branch (or such other nominee) will be filed with the Bankruptcy Court prior to the
Voting Deadline.
Mr. Branch proposes that he would be compensated as Plan Trustee at an hourly rate of
$525 and that the Plan Trustee's fees and expenses reimbursement will be paid on a monthly
basis from Available Cash. Mr. Branch also proposes that the Debtor pay to him as Plan Trustee
a contingency fee equal to (i) 5% of Distributions of Cash to the Holders of Allowed General
Unsecured Claims after the aggregate of all prior Distributions in Cash have returned to such
Holders a minimum of 25% of their respective Allowed General Unsecured Claims and (ii) 10%
of Distributions of Cash to the Holders of Allowed General Unsecured Claims after the
aggregate of all prior Distributions in Cash have returned to such Holders a minimum of 40% of
their respective Allowed General Unsecured Claims. By way of example, if the aggregate of all
Allowed General Unsecured Claims is $400 million, and if aggregate Distributions to such
Holders totaled $100 million (or 25% of the total of such Claims) on a given date, then the Plan
Trustee would be entitled to receive a contingency fee equal to 5% of future Distributions to such
Holders. Assuming subsequent Distributions, after the first $100 million of aggregate
Distributions to such Holders, aggregated $60 million, the contingency fee would be $3 million.
In addition, if the aggregate of all Distributions exceeded $160 million (net of any contingency
fee payments), then the Plan Trustee would earn an additional contingency fee equal to 10% of
the excess. The Debtor has not as yet had discussions with Mr. Branch regarding the proposed
compensation arrangement, including the contingency fee structure, and has not entered into any
commitment with respect thereto, but the Debtor understands that the Case Committee does not

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oppose such an arrangement. Nothing in the foregoing description is intended to imply that
Allowed General Unsecured Claims will be in the range of $400 million or that the
aggregate Distributions to Holders of Allowed General Unsecured Claims will be equal to,
greater than or less than $100 million. For a further discussion of the significant risks
associated with recoveries for creditors under the Plan, see Chapter XII (Risk Factors).
In the event of the death, resignation, incapacity, disqualification, removal or misconduct
of the Plan Trustee, the Plan Committee may designate an individual to serve as a successor Plan
Trustee by filing with the Bankruptcy Court a notice of such designation (in which notice the
Plan Committee shall provide a background resume of such individual), provided that such
individual may not be the Holder of a Claim or Equity Interest or an employee, agent or affiliate
of, or counsel to, any such Holder and further provided that such designation shall be ineffective
if the Bankruptcy Court determines, for cause shown and after notice and a hearing, upon any
objection to such designation filed with the Bankruptcy Court by the Holder of a Claim, within
ten (10) days after the filing by the Plan Committee of notice of such designation, that such
individual has conflicting interests or is otherwise unsuitable to serve in a fiduciary capacity as
Plan Trustee under the Plan. The Plan Trustee may be removed, with or without cause, upon
motion made by the Plan Committee and approved by the Bankruptcy Court. A successor Plan
Trustee will be the sole officer and sole director of the Debtor and the predecessor Plan Trustee
will be deemed automatically to have resigned from such positions upon the appointment of the
successor Plan Trustee.
The Debtor will retain and have all of the rights, powers and duties necessary to carry out
its responsibilities under the Plan, and all such rights, powers and duties will be exercisable on
behalf of the Debtor by the Plan Trustee pursuant to the Plan. Without limiting the generality of
the foregoing, the Plan Trustee, acting on behalf of the Debtor, has the rights, powers, and duties
of a trustee under Sections 704(a)(1), (2), (4), (5) and (7) and 1106(a)(6) and (7) of the
Bankruptcy Code, and the rights and duties set forth in the Plan, and (without duplication) the
following specific rights and powers (except as otherwise conditioned or limited by the Plan): (i)
to employ on behalf of the Debtor or the Plan Trustee and compensate the Post-Confirmation
Professionals (whether or not currently employed by the Debtor or Case Committee) pursuant to
the procedures set forth in the Plan; (ii) to liquidate and collect all Estate Property; (iii) to review,
investigate and (if appropriate) object to or seek equitable subordination of Claims against the
Debtor and/or Estate Property; (iv) to investigate, prosecute and/or settle all Estate Causes of
Action; (v) to voluntarily engage in arbitration or mediation with respect to any Estate Cause of
Action; (vi) to invest the Debtors Cash in (a) direct obligations of the United States of America
or obligations of any agency or instrumentality thereof that are guaranteed by the full faith and
credit of the United States of America, (b) money market deposit accounts, checking accounts,
savings accounts or certificates of deposit, or other time deposit accounts that are issued by a
commercial bank or savings institution organized under the laws of the United States of America
or any state thereof, or (c) or any other investments that may be permissible under Section 345 of
the Bankruptcy Code or an order of the Bankruptcy Court; (vii) to calculate and make all
Distributions to be made pursuant to the Plan; (viii) to prepare (or cause to be prepared) and file
Tax returns for the Debtor; (ix) to seek estimation of contingent or unliquidated Claims under
Section 502(c) of the Bankruptcy Code or determinations of Tax liabilities under Section 505 of
the Bankruptcy Code; (x) to obtain financing to be used in connection with the efforts of the Plan
Trustee to maximize the value of the Estate; (xi) to dissolve the Debtor in accordance with the

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terms of the Plan; and (xii) to take all other actions in furtherance of the implementation of the
Plan. The retention by the Plan Trustee of any Post-Confirmation Professionals (whether for the
Plan Trustee or the Debtor) will be done in the ordinary course of business and will not be
subject to the prior approval of the Bankruptcy Court. However, prior to or concurrently with
retention of any Post-Confirmation Professional, the Plan Trustee must file a notice of such
retention with the Bankruptcy Court, and such retention will be subject to review and objection
by any party in interest (including the Plan Committee) that is filed within fifteen (15) days after
the Plan Trustee's filing of a notice of such retention with any such objection that cannot be
resolved by agreement to be determined by the Bankruptcy Court, but the mere filing of any such
objection does not operate to preclude such retention.
The Plan Trustee must file with the Bankruptcy Court periodic reports (no less frequently
than on an annual basis) regarding the status of the Debtor's implementation of the Plan and the
discharge of his duties thereunder.
The fees and expenses of the Plan Trustee constitute Post-Confirmation Administrative
Expenses and are to be paid from available funds in the Expense Reserve. The terms of retention
and compensation of the Plan Trustee are to be set forth in a retention agreement as negotiated
by the Debtor, in consultation with the Case Committee, and filed with the Bankruptcy Court on
or before the hearing on confirmation of the Plan.
Any Post-Confirmation Professional Persons retained by the Plan Trustee are entitled to
reasonable compensation for services rendered and reimbursement of expenses incurred from
available funds of the Estate. The payment of fees and expenses of the Plan Trustee and any
Post-Confirmation Professional retained by the Debtor or the Plan Trustee are to be made in the
ordinary course of business and are not subject to the prior approval of the Bankruptcy Court.
However, both the Plan Trustee and each Post-Confirmation Professional retained by the Debtor
or the Plan Trustee must serve upon the Plan Committee their Professional Statements (no less
frequently than on a quarterly basis). If the Plan Committee objects to the fees or expenses of
any Post-Confirmation Professional, and the parties are unable to resolve the objection among
themselves, the Bankruptcy Court will determine the appropriate fee to be paid or the expenses
to be reimbursed to any such Post-Confirmation Professional.
B. The Plan Committee
On the Effective Date, the Plan Committee is to be formed and constituted, and the Case
Committee ceases to exist or function except to perform such obligations as are necessary to
wind down its role as such Case Committee, including the filing of applications for approval and
payment of fees and expenses, if any, of the Case Committee and Case Committee Professionals.
Plan Committee members' identities are to be disclosed to the Bankruptcy Court on or
before the Voting Deadline. If a Plan Committee member becomes unable or unwilling to serve
on the Plan Committee, the remaining members of the Plan Committee may appoint a successor,
who will be the Holder of an Allowed Claim that is a General Unsecured Claim or an authorized
representative of such Holder. If no one is willing to serve on the Plan Committee or there have
been no Plan Committee members for a period of thirty (30) consecutive days, then the Plan
Trustee may, during such vacancy and thereafter, ignore any reference in the Plan or the

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Confirmation Order to the Plan Committee, and all references to the Plan Committee's ongoing
duties and rights in the Plan are null and void. The Plan Committee has all of the rights, powers
and duties provided for in the Plan, including right and authority to employ and compensate
Post-Confirmation Professionals, whether currently employed by the Case Committee or such
other Post-Confirmation Professionals as the Plan Committee may select and consistent with
Section 1103(b) of the Bankruptcy Code. The Plan Committee is authorized to:
Consult with the Debtor concerning the administration of the Estate and all Estate
Property;
Investigate and pursue Designated Causes of Action (and the Plan Committee
will, upon and after the Effective Date, have standing to pursue such actions on
behalf of the Debtor's Estate);
Object to or seek equitable subordination of Claims if and to the extent the Debtor
has not filed such an objection or sought such subordinations;
Review objections to and propose settlements of Disputed Claims pursuant to the
Plan;
Review proposed settlements by the Debtor of Estate Causes of Action pursuant
to the Plan and consent or object thereto; and
Perform such other services as are specifically authorized by the Plan.
Members of the Plan Committee will serve without compensation but may be reimbursed for
their reasonable and necessary out-of-pocket expenses incurred in performing their duties under
the Plan, provided that the foregoing language from the Plan will not affect the right of any
Indenture Trustee, in its capacity as such, to receive payments as provided in Section 8.9 of the
Plan. Post-Confirmation Professionals may be retained by the Plan Committee in the ordinary
course of business and without prior approval of the Bankruptcy Court, provided that, upon
retaining any Post-Confirmation Professional, the Plan Committee must file a notice of such
retention with the Bankruptcy Court, and such retention will be subject to review and objection
by any party in interest that is filed within fifteen (15) days after the filing of such notice of
retention, with any timely filed objection which cannot be resolved by agreement of the parties to
be determined by the Bankruptcy Court, but the mere filing of any such objection does not
operate to preclude such retention. Post-Confirmation Professionals retained by the Plan
Committee are not entitled to be compensated from funds available in the Estate except for
services rendered in order to facilitate the Plan Committee's discharge of its authority described
in clauses (a) through (f) in Section 8.6 of the Plan and such other matters as are authorized by
the Bankruptcy Court after notice and a hearing. Post-Confirmation Professionals must serve
upon the Plan Trustee their Professional Statements (no less frequently than on a quarterly basis),
which Professional Statements are subject to review and objection by the Plan Committee and
Plan Trustee, with any such unresolved objection to be resolved by the Bankruptcy Court.
Neither the Plan Committee, nor any of its members or designees, nor their respective employees
or Post-Confirmation Professionals, are or will be liable for any act or omission of any other
member, designee, agent or representative of the Plan Committee, nor is any member liable for

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any act or omission taken or omitted to be taken in its capacity as a member of the Plan
Committee, other than acts or omissions resulting from such members willful misconduct or
gross negligence.

C. Claims Administration
To be entitled to receive a Distribution under the Plan, a Holder must have an Allowed
Claim or be the Holder of Preferred Stock (subject to all Allowed Claims having been Paid in
Full). The Debtor's motion seeking approval of this Disclosure Statement requests the
Bankruptcy Court to order that the Holders of impaired Claims and Equity Interests who are
entitled to vote on the Plan include (i) the Holders of Allowed Claims, (ii) the Holders of
Disputed Claims (the amount of a Disputed Claim for voting purposes would be limited to $1.00,
but if the Holder of a Disputed Claim files a motion seeking relief from the Bankruptcy Court
pursuant to Bankruptcy Rule 3018(a) for the temporary allowance of such Claim in a higher
amount for voting purposes, the Disputed Claim could be voted only as specified in the order
approving this Disclosure Statement unless such motion is granted) and (iii) the Holders of
Preferred Stock. In estimating any Claim for voting purposes under Bankruptcy Rule 3018(a),
the Bankruptcy Court would be entitled to consider, among other things, whether the Claim is
subject to subordination other than pursuant to a Contractual Subordination.
The Debtor has not yet begun the process of reviewing filed Claims for the purpose
of determining whether objections thereto are appropriate, but it is likely that the Debtor
will file objections to a number of Claims that have been filed and on various grounds,
including grounds based upon the untimeliness of the Claim, the lack of documentation for
the Claim, the existence of offsets or counterclaims to the Claim, the invalidity or illegality
of the Claim or the vulnerability of the Claim to statutory or equitable subordination.
References to "Allowed Claims" or to any particular Holder of a Claim in this Disclosure
Statement or the Plan should not be construed to mean that such Claim has been allowed
by the Bankruptcy Court or will not be objected to by the Debtor or any other party in
interest having standing to object. THE DEBTOR EXPRESSLY RESERVES ITS RIGHT
TO OBJECT TO THE ALLOWANCE, AND TO SEEK SUBORDINATION (OTHER
THAN A CONTRACTUAL SUBORDINATION) OF ALL OR ANY PART OF ANY
CLAIM OR EQUITY INTEREST, EITHER PRIOR TO OR AFTER THE VOTING
DEADLINE.
1. Allowance of Claims.
A Claim will be allowed if (i) a proof of claim has been timely filed, and no objection to
the Claim or request for estimation has been filed by the Claims Objection Deadline, (ii) the
Claim is listed in the Debtor's Schedules and is not listed as disputed, contingent or unliquidated
unless the Claim is a Disputed Claim, including a Claim for which a proof of claim was filed in
an amount different from the amount listed on the Debtor's Schedules, or (iii) the Claim is
identified as undisputed, non-contingent and liquidated on an amended Schedule filed by the
Debtor prior to confirmation of the Plan. If a proof of claim is filed and an objection to or an
estimation request for that Claim is asserted, the objection or estimation request must be resolved
before the Claim will be allowed. If a Claim listed on the Debtor's Schedules is disputed,
contingent, or unliquidated, the Claim is not allowed unless (i) a proof of claim was filed on or

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before the Bar Date, and (ii) objections to the proof of claim are resolved by Final Order. The
Debtor's Schedules have been filed with the Bankruptcy Court and may be reviewed there by
creditors.
2. Objections to Claims.
If an objection to a Claim has been filed, the allowed amount of the Claim, if any,
will be resolved through the objection procedure. The Debtor has requested the
Bankruptcy Court to order that, while an objection to a Claim is pending (or if a Claim for
which a proof of claim has been timely filed is contingent or unliquidated), the Claim will
be valued for voting purposes only at $1.00 unless the Bankruptcy Court has temporarily
allowed the Claim in a higher amount for voting purposes. See Subsection 3 below.
From and after the Effective Date, the Debtor, acting through the Plan Trustee, is
authorized (i) to object any Claims or Equity Interests, (ii) to seek statutory or equitable
subordination of the whole or any part of a Claim under Section 510(b) or (c)(i) of the
Bankruptcy Code or other applicable law, and (iii) pursuant to Bankruptcy Rule 9019(b) and
Section 105(a) of the Bankruptcy Code, to compromise and settle Disputed Claims, in
accordance with the procedures set forth in Section 6.1 of the Plan.

Parties in interest may file, on or before the Claims Objection Deadline, objections to
Claims, motions to estimate Claims pursuant to Section 502(c) of the Bankruptcy Code, or
motions to determine that a claim is subject to equitable or mandatory subordination. An
objection or motion may include an objection to the claimed classification and a request that the
Bankruptcy Court determine the appropriate class of the Claim or Equity Interest under the Plan.
Except as otherwise provided in the Plan, the Bankruptcy Court will hear and determine
objections to Claims or Equity Interests, motions to estimate Claims, and motions for equitable
or mandatory subordination of Claims or Equity Interests and will allow and classify same. Any
objections or motions may be settled pursuant to Bankruptcy Rule 9019 or, in the case of a
settlement by the Plan Trustee, pursuant to the terms of Section 6.1 of the Plan. The objection
must be filed with the Bankruptcy Court and served in accordance with Bankruptcy Rule 3007.
A copy of the objection must be served upon the attorney of record for the creditor, or upon the
creditor directly if the creditor is not represented by an attorney.
If an objection to a Claim is filed, the creditor must file a response to the objection within
the time period set by the Bankruptcy Court. Copies of such responses must be served upon the
party asserting the objection, the Plan Trustee and counsel for the Debtor. Failure to file a timely
response will be deemed a consent to the objection.
3. Temporary Allowance and Estimation of Claims.
a. Temporary Allowance of Claims for Voting Purposes

The Bankruptcy Rules provide that any creditor may request the Bankruptcy Court to
temporarily allow its Claim for purposes of voting when an objection to the Claim has been filed.
The creditor holding such a Claim may vote the Claim in the amount, if any, determined by the
Final Order resolving the request for temporary allowance.

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As previously noted, the Debtor has requested the Bankruptcy Court to order that, while
an objection to a Claim is pending (or if a Claim for which a proof of claim has been timely filed
is contingent or unliquidated), the Claim will be valued for voting purposes only at $1.00 unless
the Bankruptcy Court has temporarily allowed the Claim in a higher amount for voting purposes.
b. Estimation of Claims for Distribution Purposes
A creditor holding a Claim that is disputed, contingent or unliquidated will not receive
any Distribution until the allowance and amount of its Claim is resolved through the Claims
objection procedure. The Bankruptcy Code provides that any party in interest may request the
Bankruptcy Court to estimate for purposes of distribution the amount of any contingent or
unliquidated Claim, if liquidation of the Claim would unduly delay administration of the Case.
The creditor holding a contingent or unliquidated Claim will receive a Distribution based on the
amount, if any, determined by the Final Order resolving the request for estimation.
4. Reserve for Disputed Claims.
Under the terms of the Plan, the Holder of a Disputed Claim will not receive a
Distribution under the Plan until the dispute is resolved in whole or in part in the Holder's favor
by a Final Order.
To ensure that the Holders of Disputed Claims are not treated differently from other
persons holding Claims in the same Class, the Debtor will establish the Disputed Claims Reserve
prior to the Initial Distribution to Holders of Priority Non-Tax Claims and General Unsecured
Claims and will deposit in that account an amount equal to the share that the Holder of any
Disputed Claim would have received if the Disputed Claim had been an Allowed Claim on the
date of the Distribution. However, no amount will be deposited with respect to any Claim that is
a Secured Claim subject to dispute. Once a Disputed Claim has been allowed by a Final Order,
the Debtor will distribute to the Holder of such Claim all Estate Property which the Holder
would have been entitled to receive on account of this Claim if the Claim had been an Allowed
Claim on the Effective Date.
If a Disputed Claim is disallowed in whole or in part, the amounts deposited in the
Disputed Claims Reserve based upon the disallowed portion of the Disputed Claim will be
deposited into the Disbursement Account and re-distributed to the Holders of Allowed Claims in
accordance with the Plan.
C. Funding of the Plan
The Plan will be funded by existing Cash on hand and the Cash to be received from the
liquidation of the Debtor's assets, any financing permitted under the Plan and recoveries from the
prosecution or settlement of Estate Causes of Action.
D. Discharge of Claims
Pursuant to Section 1141(d)(3) of the Bankruptcy Code, confirmation of the Plan will not
discharge any Claims against the Debtor, including any obligation of the Debtor to indemnify
any present or former officer or director of the Debtor. However, no Holder of a Claim against

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the Debtor may, on account of such Claim, seek or receive any payment or other distribution
from, or seek recourse against, the Debtor or any Estate Property. Nothing contained herein
precludes (i) any such Holder from exercising rights pursuant to and consistent with the terms of
the Plan, including the filing of proofs of Claim or Equity Interests, (ii) any present or former
officer or director, to the extent not otherwise prohibited from doing so by order of the
Bankruptcy Court, from seeking reimbursement for legal fees and expenses under and to the
extent authorized by the D&O Policies, or (iii) any Governmental Unit from enforcing its police
or regulatory authority against the Debtor (but not against Estate Property) to the extent excepted
from the automatic stay provisions of Section 362 of the Bankruptcy Code.
E. Plan Injunction
The Plan contains an injunction against the taking of certain actions against the Debtor or
Estate Property. See Chapter XIV, Section E, infra.
F. Exculpation of the Debtor, the Case Committee and the Indenture Trustees
Under the Plan (as set forth in Section 10.3 thereof), none of the Exculpated Parties will
have or incur any liability to any Holder of any Claim or Equity Interest or any other Person
(including any Governmental Unit) for any act or omission during the period commencing on the
Petition Date and ending on the Effective Date in connection with, or arising out of or related to,
the Case, the Plan or this Disclosure Statement (or the formulation, negotiation or dissemination
of the Plan or this Disclosure Statement), the solicitation of votes for confirmation of the Plan,
the administration of the Case or the preservation or disposition of any Estate Property (including
the prosecution, settlement of or any negotiations to settle any Cause of Action or the sale or
collection of or other realization upon any Estate Property). If confirmed, the foregoing will
have no effect on the liability of any Exculpated Party that results from any act or omission that
is determined in a Final Order to be solely attributable to such Exculpated Party's (a) own gross
negligence or willful misconduct or (b) violations of state or federal criminal laws. For
avoidance of doubt, nothing in the Plan operates to release, discharge or exculpate the Debtor or
any other Person from any claim or cause of action against the Debtor or any other Person held
by a Person (including any Governmental Unit) on the Petition Date on account of any acts,
omissions, or transactions that were concluded or occurred prior to the Petition Date. As used in
the Plan, the term "Exculpated Parties" means, collectively, the Debtor; the board of directors
and individual committees of the Debtor during the Case; any officer or employee of the Debtor
during the Case, including the Debtor's chief recovery officer; the Case Committee and the
individual members thereof; the Indenture Trustees; and each of the foregoing Person's
respective officers, directors, shareholders, members, employees, advisors, investment bankers,
consultants, attorneys and accountants, including all Case Professional Persons.
G. Means of Implementing the Plan
The Plan is to be implemented primarily through the efforts of the Plan Trustee, who will
direct the affairs of the Debtor. Upon the Effective Date of the Plan, the Plan Trustee will have
the responsibility and authority to liquidate the assets of the Debtor. The Plan Trustee will have
the responsibility and authority to investigate and pursue Estate Causes of Action on behalf of
the Debtor, including the filing of litigation, and may settle these Estate Causes of Action on

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such terms and for such amounts as the Plan Trustee deems reasonable and as the Plan provides.
Any proceeds received from the efforts of the Plan Trustee in liquidating the Debtor's assets will
be deposited in the accounts established by the Plan Trustee pursuant to the Plan.
The Plan Trustee will pay all Administrative Claims and Priority Tax Claims on the later
to occur of the Effective Date or thirty (30) days after the date on which such claim becomes an
Allowed Claim. Priority Non-Tax Claims (Class A) will be paid on the Initial Distribution Date,
unless the Holder of such Claim agrees to a different treatment. Unless the Holder agrees to a
different treatment, each Holder of an Allowed Claim constituting a Secured Claim in Class B
will receive on account of such Claim either (a) abandonment of the collateral securing such
Claim or (b) Cash on the Effective Date in the allowed amount of such Claim, subject to the
Debtor's election under Section 4.2 of the Plan. The Plan Trustee will disburse to the Holders of
all other Allowed Claims, in accordance with the treatment specified for such Claims in the Plan,
all Available Cash on hand at that time (the "Initial Distribution") on the Initial Distribution
Date. After the Initial Distribution, the Plan Trustee will make Distributions in payment of
Allowed Claims at such times as the Plan Trustee deems appropriate in his discretion, after
consultation with the Plan Committee.

When the Plan Trustee determines that he has fully recovered and liquidated all of the
Debtor's assets to the extent feasible (and all Disputed Claims have been resolved by Final
Order), the Plan Trustee will distribute all Available Cash (and all amounts in the Expense
Reserve that are not required to pay Post-Confirmation Administrative Expenses), as a final
Distribution for payment to Holders of all Allowed Claims and, after they have been Paid in Full,
to Holders of Preferred Stock. All Distributions under the Plan will be made by the Plan Trustee
to the Holder of the Allowed Claim at the address of the Holder as listed in the Debtor's
bankruptcy schedules, unless this address is superseded by proofs of claim or transfers of claim
filed pursuant to Bankruptcy Rule 3001 (or at the last known address of such Holder if the Plan
Trustee has been notified in writing of a change of address) irrespective of the existence prior to
the Effective Date of any Contractual Subordination. Any distributions to Holders of Preferred
Stock may be made to such Holders at addresses supplied to the Debtor by or obtained by the
Debtor from DTCC.

H. Abandonment of Estate Property
Under Section 9.12 of the Plan, the Debtor, acting by and through the Plan Trustee and
after consultation with the Plan Committee, may abandon, destroy or contribute to a charitable
organization any item of tangible Estate Property (and, for the avoidance of doubt, Estate Causes
of Action will not be deemed to be tangible Estate Property) which he determines to be of
inconsequential value and which had an original cost value equal to or less than $5,000, without
notice to any Person.

With respect to its books and records, the Debtor may abandon or destroy any Books and
Records in the possession, custody or control of the Debtor that the Debtor believes are Non-
Essential Books and Records after providing at least thirty (30) days prior written notice (an
"Abandonment Notice") to counsel for the Plan Committee, counsel for the FDIC-Receiver,
counsel of record for the Holder of each Disputed Claim that has not been resolved as of the date
of such notice and counsel of record in each lawsuit that was pending against the Debtor as of the

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Petition Date. The Abandonment Notice must contain a reasonable description of the Non-
Essential Books and Records at issue, the location of the Non-Essential Books and Records, and
the proposed disposition of the Non-Essential Books and Records. Through and including the
thirtieth (30th)

day after the date of the Abandonment Notice, any party in interest may, during
normal business hours and by prior arrangement with the Plan Trustee, inspect the Non-Essential
Books and Records proposed to be abandoned or destroyed, subject to such reasonable terms and
conditions as the Plan Trustee may impose in order to protect information that is subject to one
or more Privileges or is otherwise confidential. If no written objection to an Abandonment
Notice is received by the Debtor within twenty (20) days after the Debtor sends an Abandonment
Notice, then the Debtor will be authorized immediately to abandon or otherwise dispose of the
Non-Essential Books and Records described in the Abandonment Notice.
If any objection to an Abandonment Notice is timely received by the Debtor and is not
subsequently withdrawn by the objecting party or resolved by mutual consent of such party and
the Debtor, then the Debtor may either (a) seek approval of the Bankruptcy Court to abandon,
destroy or otherwise dispose of the Non-Essential Books and Records in question or (b) allow
the objecting party to take possession of all of the Non-Essential Books and Records identified in
the Abandonment Notice or copies thereof) and remove such Non-Essential Books and Records
from the Debtor's premises, at the expense of the objecting party, within ten (10) days after the
Debtor's surrender of the Non-Essential Books and Records, failing which the Debtor will be
authorized to abandon, destroy or otherwise dispose of such Non-Essential Books and Records
notwithstanding the objection. The rights and authority provided to the Debtor as set forth in
Section 9.13 of the Plan are in addition to, and may not be construed to limit, any rights or
authority provided elsewhere in the Plan.
Chapter XI. CONDITIONS PRECEDENT TO CONFIRMATION CONTAINED IN
THE BANKRUPTCY CODE

A. Section 1129 of the Bankruptcy Code
Section 1129 of the Bankruptcy Code, which sets forth the requirements that must be
satisfied in order for the Plan to be confirmed, lists the following requirements for the approval
of any plan of reorganization or liquidation under Chapter 11:
A plan must comply with the applicable provisions of the Bankruptcy Code;
The proponent of a plan must comply with the applicable provisions of the
Bankruptcy Code;
A plan must be proposed in good faith and not by any means forbidden by law;
Any payment made or to be made by the proponent, by the debtor or by a person
issuing securities or acquiring property under a plan, for services or for costs and
expenses in or in connection with the case, or in connection with such plan and
incident to the case, must be approved by, or be subject to the approval of, the
Bankruptcy Court as reasonable;

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The proponent of a plan must disclose the identity and affiliations of any
individual proposed to serve, after confirmation of such plan, as a director, officer
or voting trustee of the debtor, an affiliate of the debtor participating in a joint
plan with the debtor, or a successor to the debtor under such plan;
The appointment to, or continuance in, such office of such individual, must be
consistent with the interests of creditors and equity security holders and with
public policy;
The proponent of a plan must disclose the identity of any insider (as defined in the
Bankruptcy Code) that will be employed or retained by the reorganized debtor,
and the nature of any compensation for each insider; and
Any governmental regulatory commission with jurisdiction, after confirmation of
a plan, over the rates of the debtor must approve any rate change provided for in
such plan, or such rate change is expressly conditioned on such approval.
With respect to each impaired class of claims or interests:
Each holder of a claim or interest in an impaired class of claims or interest must
have accepted the plan or must receive or retain under the plan on account of such
claim or interest property of a value, as of the effective date of the plan, that is not
less than the amount that such holder would so receive or retain if the debtor were
liquidated under Chapter 7 of the Bankruptcy Code on such date; or, if the class is
a class of secured claims that elects non-recourse treatment of the claims under
Section 1111(b) of the Bankruptcy Code, each holder of a claim in such class will
receive or retain under the plan on account of such claim property of a value, as of
the effective date of the plan, that is not less than the value of such holder's
interest in the estate's interest in the property that secures such claims.
With respect to each class of claims or interests, such class must accept the plan or not be
impaired under the plan (subject to the "cramdown" provisions discussed above and below under
"Confirmation Without Acceptance of All Impaired Classes - Cramdown").
Except to the extent that the holder of a particular claim has agreed to a different
treatment of such claim, a plan must provide that:
with respect to an administrative claim and certain claims arising in an
involuntary case, on the effective date of the plan, the holder of the claim will
receive on account of such claim cash equal to the allowed amount of the claim;
with respect to a class of priority wage, employee benefit, consumer deposit and
certain other claims described in Section 507(a)(1) and (4)-(7) of the Bankruptcy
Code, each holder of a claim of such class will receive:

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o if such class has accepted the plan, deferred cash payments of a value, as
of the effective date of the plan, equal to the allowed amount of such
claim; or
o if such class has not accepted the plan, cash on the effective date of the
plan equal to the allowed amount of such claim;
with respect to a priority tax claim of a kind specified in Section 507(a)(8) of the
Bankruptcy Code, the holder of such claim will receive on account of such claim
deferred cash payments, over a period no later than 5 years after the order for
relief, of a value as of the effective date of the plan equal to the allowed amount
of such claim.
if a class is impaired under a plan, at least one class of claims that is impaired
under such plan must have accepted the plan, determined without including any
acceptance of the plan by any insider.
confirmation of a plan must not be likely to be followed by the liquidation, or the
need for further financial reorganization, of the debtor or any successor to the
debtor under the plan, unless such liquidation or reorganization is proposed in the
plan. This is the so-called "feasibility" requirement.
all fees payable under 28 U.S.C. 1930, as determined by the court at the hearing
on confirmation of the plan, must have been paid or the plan must provide for the
payment of all such fees on the effective date of the plan.
a plan must provide for the continuation after its effective date of payment of all
retiree benefits, as that term is defined in Section 1114 of the Bankruptcy Code, at
the level established pursuant to subsection (e)(1)(B) or (g) of Section 1114 of the
Bankruptcy Code, at any time prior to confirmation of such plan, for the duration
of the period the debtor has obligated itself to provide such benefits.
This Disclosure Statement discusses three (3) of the requirements for confirmation with
respect to voting: (a) acceptance by impaired Classes; (b) that the Plan be in the best interests of
each Holder of a Claim or Equity Interest in an impaired Class that has not voted to accept the
Plan; and (c) the feasibility of the Plan. The Debtor believes that the Plan meets all the
requirements of Section 1129(a) of the Bankruptcy Code (other than as to voting, which has not
taken place) and will seek a ruling of the Bankruptcy Court to this effect at the hearing on
confirmation of the Plan. Each Holder of a Claim or Equity Interest is urged to consult such
Holder's own counsel to evaluate each of the standards for confirmation of the Plan under
the Bankruptcy Code.
B. Acceptance of the Plan
The Bankruptcy Code requires, as a condition to confirmation of the Plan, that each
impaired class of claims or interests accept the Plan, subject to the exceptions described below in
the following section. A class is deemed impaired if the legal, equitable or contractual rights

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attached to the claims or interests in the class are altered in any way by the Plan, with the
exception of alterations that cure defaults, reinstate maturities or provide full payment in cash.
The Holders of unimpaired claims are not entitled to vote on the Plan and, therefore, the Debtor
is not seeking acceptance of the Plan by the Holders of Administrative Claims, Priority Tax
Claims and Claims in Classes A, B or C. The Claims in Classes D through H, are impaired and
(with the exception of Class G, which has no members at this time) will be entitled to vote to
accept or reject the Plan. Class I is impaired but is deemed to have rejected the Plan and is not
allowed to vote.
Pursuant to Section 1126(c) of the Bankruptcy Code, each such impaired class will be
deemed to have accepted the Plan if the Holders of at least two-thirds in dollar amount and a
majority in number among the Holders of Allowed Claims in the class who actually vote on the
Plan vote to accept the Plan. A plan is accepted by an impaired class of equity interests if, of
those who vote, Holders of two-thirds of the number of shares in such class vote to accept such
plan. Creditors who fail to vote will not be counted as having voted either for or against the
Plan.
C. Confirmation Without Acceptance of All Impaired Classes - Cramdown
Section 1129(a)(8) of the Bankruptcy Code requires that the Plan be accepted by each
Class that is impaired by the Plan. Section 1129(b) of the Bankruptcy Code, however, provides
that the Bankruptcy Court may still confirm the Plan at the request of the Debtor if all the
requirements of Section 1129(a) (except Section 1129(a)(8)) are met and if, with respect to each
Class of Claims or Equity Interests that is impaired under the Plan and has not voted to accept
the Plan, the Plan "does not discriminate unfairly" and is "fair and equitable." This provision is
referred to commonly as "cram down."
In the event that all impaired Classes of Claims do not accept the Plan, the Debtor intends
to seek confirmation of the Plan under the cram down provisions of Section 1129(b) of the
Bankruptcy Code with respect to any such non-accepting Class. The Debtor believes, that, with
respect to such Classes, the Plan meets the requirements of Section 1129(b) and that the Court
should determine that the Plan is "fair and equitable" and "does not discriminate unfairly" as to
the Holders of Claims or Equity Interests.
D. "Best Interests" Test
Notwithstanding acceptance of the Plan by each impaired Class, to confirm the Plan, the
Bankruptcy Court must determine that the Plan is in the best interests of each Holder of a Claim
or Equity Interest in an impaired Class that has not voted to accept the Plan. The so-called "best
interests" test of Section 1129(a)(7) of the Bankruptcy Code requires that the Bankruptcy Court
find that the Plan provides to each Holder of a Claim or Equity Interest in such impaired Class a
recovery on account of the Holder's Claim or Equity Interest that has a value at least equal to the
value of the Distribution that such Holder would receive if the Debtor were liquidated under
Chapter 7 of the Bankruptcy Code.
To estimate what members of each impaired Class of Claims or Equity Interests would
receive if the Debtor were liquidated in a Chapter 7 case, the Court must first determine the

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aggregate dollar amount that would be available if the Case was converted to a Chapter 7
liquidation case under the Bankruptcy Code and the Debtor's property was liquidated by a
Chapter 7 trustee (the "Liquidation Value"). The Liquidation Value would consist of the net
proceeds from the disposition of the assets of the Debtor, augmented by the cash held by the
Debtor and reduced by certain increased costs, as described below, and Claims that arise in a
Chapter 7 liquidation case but do not arise in a Chapter 11 case.
The Liquidation Value available to unsecured creditors would be reduced by (a) the
Claims of secured creditors to the extent of the value of their collateral and (b) the costs and
expenses of the liquidation under Chapter 7. Those costs and expenses would include: (i) the
compensation of a Chapter 7 trustee and his or her counsel and other professionals retained; (ii)
disposition expenses; (iii) litigation costs, including costs associated with litigation that is
avoided under any compromises reached under the Plan; and (iv) Claims arising from the
operation of the Debtor's estate during the pendency of the bankruptcy case and limited
operations during the Chapter 7 liquidation case. The liquidation itself would trigger certain
priority Claims, and would accelerate other priority payments which would otherwise be payable
in the ordinary course. These priority Claims likely would be paid in full out of the
unencumbered liquidation proceeds before the balance would be made available to pay most
other Claims or to make any distribution in respect of Equity Interests.
The determination of the amount each Holder of an impaired Claim would receive under
Chapter 7 of the Bankruptcy Code is difficult, if not impossible, to determine with any degree of
accuracy. The Debtor cannot predict accurately the proceeds that will be realized from property
of the Estate, including the extent of recovery on Estate Causes of Action; the amount of
expenses that will be incurred in realizing upon such property; or the number or amount of
Claims that will be disallowed. Most, if not all, of these expenses would be necessarily incurred,
however, in collecting and liquidating the assets of the Debtor in a Chapter 7 liquidation. In fact,
the Debtor believes that all anticipated expenses would be necessary in a Chapter 7 liquidation.
Considering the effect that a Chapter 7 liquidation would have on the Debtor, including
the costs resulting from a Chapter 7 liquidation, and the delay in the distribution of liquidation
proceeds, the Debtor believes that a Chapter 7 liquidation of the Debtor would result in
substantial diminution in the value to be realized under the Plan by Holders of Claims, because
of, among other factors: (a) the failure to realize the maximum value of the Debtor's property; (b)
the substantial time which would elapse before creditors would receive any distribution in
respect of their Claims; (c) additional administrative expenses involved in the appointment of a
trustee or trustees, attorneys, accountants, and other professionals to assist the trustee in a
Chapter 7 case and for those professionals to investigate Estate Causes of Action; and (d) the
incurrence of additional expenses and Claims, some of which would be entitled to priority in
payment, which would arise by reason of a Chapter 7 liquidation.
Of particular importance is maximization of the value of the Debtor's property, which in
this Case is primarily represented by the remaining Core Assets. In that regard, it is the Debtor's
belief (which it understands to be shared by the Case Committee) that the benefits of the Plan
versus a Chapter 7 liquidation include:

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(i) the continuity to be derived from the advance selection and designation of the
Plan Trustee, who it is anticipated will be educated on the complex issues
involved in liquidating the Debtor's assets, and the enormous time constraints
imposed with respect to initiating certain claims representing potentially among
the Debtor's most valuable assets and sources for creditor recovery; and
(ii) with respect to important issues, the obligation of the Plan Trustee to seek input
from significant creditors (i.e., the Plan Committee, which will be populated in
whole or part by members who have already gained familiarity with such issues),
as well as the ability of such creditors to provide such input, is best accomplished
through the Plan, as no obligation or ability is provided for in a Chapter 7
liquidation. This should also facilitate, among other things, a more expeditious
initial distribution to creditors.
Moreover, the Debtor does not believe (and understands the Case Committee does not
believe) that the Plan will increase the professional costs associated with an appropriate
liquidation of the Debtor's assets. Both the Plan and a Chapter 7 liquidation would require
compensating a trustee, who would hire attorneys, accountants and others as deemed appropriate.
While the Plan also permits the Plan Committee (which would not exist in a Chapter 7
liquidation) to hire attorneys to be reimbursed by the Debtor, such additional fees are outweighed
by the above-cited benefits of the Plan. Additionally, it is anticipated that the Plan Trustee will
at least in part utilize the services of the Case Committee's existing professionals and thereby
avoid incurring duplicative fees for services already performed and knowledge already gained.
Consequently, the Debtor believes (and understands the Case Committee to believe) that
the Plan, which provides for the orderly liquidation of the Debtor's assets, will result in a greater
ultimate return to Holders of Allowed Claims than would a Chapter 7 liquidation.
Attached hereto as Exhibit F is a Liquidation Analysis prepared by the Debtor of the
Liquidation Value of its assets. This Liquidation Analysis is subject to a number of assumptions
as set forth therein.
E. Feasibility
Section 1129(a)(11) of the Bankruptcy Code requires that confirmation should not be
likely to be followed by the liquidation, or the need for further financial reorganization, of the
debtor or any successor to the debtor (unless such liquidation or reorganization is proposed in the
plan). The Plan calls for the liquidation of all of the assets of the Debtor's estate. For purposes
of determining whether the Plan meets this requirement, the Debtor has analyzed the Debtor's
ability to meet its obligations under the Plan.
The Debtor believes that an orderly liquidation under the Plan will meet the feasibility
requirements of Section 1129(a)(11) of the Bankruptcy Code, as the Plan is based entirely on
existing cash and property of the Debtor's Estate.

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Chapter XII. RISK FACTORS
A. Certain Bankruptcy Law Considerations
The occurrence or non-occurrence of any of the following contingencies, and others,
could significantly affect the existence, amount and timing of Distributions available to Holders
of Allowed Claims (and, after all Allowed Claims are Paid in Full, Holders of Preferred Stock),
but will not necessarily affect the validity of the vote of any impaired Class to accept or reject the
Plan or necessarily require a re-solicitation of the votes of Holders of Claims in such impaired
Class.
l. Objections to Plan's Classification of Claims and Equity Interests.
Section 1122 of the Bankruptcy Code provides that a plan may place a claim or an equity
interest in a particular class only if such claim or equity interest is substantially similar to the
other claims or equity interests in such class. The Debtor believes that the classification of
Claims and Equity Interests under the Plan complies with the requirements set forth in the
Bankruptcy Code because the Debtor created Classes of Claims and Equity Interests, each
encompassing Claims or Equity Interests, as applicable, that are substantially similar to the other
Claims and Equity Interests in each such Class. Nevertheless, there can be no assurance that the
Bankruptcy Court will reach the same conclusion and objections have been raised to the Plan's
classification of Claims.

2. Failure to Satisfy Voting Requirements.
If votes are received in number and amount sufficient to enable the Bankruptcy Court to
confirm the Plan, the Debtor intends to seek, as promptly as practicable thereafter, confirmation
of the Plan. If sufficient votes are not received, the Debtor may seek to confirm an alternative
Chapter 11 plan. However, there can be no assurance that the terms of any such alternative
Chapter 11 plan would be similar or as favorable to the Holders of Allowed Claims as those
proposed in the Plan.

3. Inability to Secure Confirmation of Plan.
Section 1129 of the Bankruptcy Code sets forth the requirements for confirmation of a
Chapter 11 plan. It requires, among other things, a finding by the bankruptcy court that: (a) such
plan "does not unfairly discriminate" and is "fair and equitable" with respect to any non-
accepting classes, (b) confirmation of such plan is not likely to be followed by a liquidation or a
need for further financial restructuring unless such liquidation or reorganization is contemplated
by the plan, and (c) the value of distributions to non-accepting holders of claims and equity
interests within a particular class under such plan will not be less than the value of distributions
such holders would receive if the Debtor were liquidated under Chapter 7 of the Bankruptcy
Code.

There can be no assurance that the requisite acceptances to confirm the Plan will be
received. Even if the requisite acceptances are received, there can be no assurance that the
Bankruptcy Court will confirm the Plan. A Holder of a Claim might challenge either the

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adequacy of this Disclosure Statement or challenge the balloting procedures and voting results as
inadequate to satisfy the requirements of the Bankruptcy Code or Bankruptcy Rules. Even if the
Bankruptcy Court determines that this Disclosure Statement, the balloting procedures, and the
voting results are appropriate, the Bankruptcy Court may nevertheless decline to confirm the
Plan if it finds that any of the statutory requirements for confirmation have not been met. The
FDIC-Receiver will likely object to confirmation of the Plan on the asserted grounds that it does
not satisfy these statutory requirements.

Confirmation of the Plan is also subject to certain conditions as described in Article II of
the Plan. If the conditions are not satisfied or waived as provided in the Plan and the Plan is not
confirmed, it is unclear what Distributions, if any, Holders of Allowed Claims would receive
with respect to their Claims.

Subject to the terms and conditions of the Plan, the Debtor reserves the right to modify
the terms of the Plan as necessary for confirmation. Any such modifications could result in a less
favorable treatment of any non-accepting Class, as well as of any Classes junior to such non-
accepting Class, than the treatment currently provided in the Plan. Such a less favorable
treatment could include a Distribution to the Class affected by the modification of a lesser value
than currently provided in the Plan, or no Distribution whatsoever under the Plan.

4. Nonconsensual Confirmation.
If any impaired class of claims or equity interests does not accept a Chapter 11 plan, a
bankruptcy court may nevertheless confirm such a plan at the proponent's request if at least one
impaired class has accepted the plan (with such acceptance being determined without including
the vote of any "insider" in such class), and, as to each impaired class that has not accepted the
plan, the bankruptcy court determines that the plan "does not discriminate unfairly" and is "fair
and equitable" with respect to the dissenting impaired classes. The Debtor believes that the Plan
satisfies these requirements and the Debtor may request such nonconsensual confirmation in
accordance with Section 1129(b) of the Bankruptcy Code. Nevertheless, there can be no
assurance that the Bankruptcy Court will agree with the Debtor's legal analysis and the FDIC-
Receiver can be expected to oppose such confirmation. The pursuit of nonconsensual
confirmation of the Plan may result in, among other things, delays and significantly increased
expenses, including legal fees.

5. Objections to Amount or Classification of a Claim.
Except as otherwise provided in the Plan, the Debtor reserves the right to object to the
amount or classification of any Claim under the Plan. The estimates set forth in this Disclosure
Statement cannot be relied on by any Holder of a Claim where such Claim is subject to an
objection. Any Holder of a Claim that is subject to an objection may not receive its expected
share of the estimated Distributions described in this Disclosure Statement. As previously
discussed in this Disclosure Statement, the Debtor will establish a Disputed Claims Reserve prior
to the Initial Distribution to Holders of Priority Non-Tax Claims and General Unsecured Claims
and will deposit in that account an amount equal to the share that the Holder of any Priority Non-
Tax Claim or General Unsecured Claim that is a Disputed Claim would have received if the

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Disputed Claim had been an Allowed Claim on the date of the Distribution or the lesser amount
of any estimation of such Disputed Claim as ordered by the Bankruptcy Court.
In addition, any Holder of a Claim that is subject to an objection may not be entitled to
vote on the Plan in an amount equal to the asserted amount of its Claim and the amount of such
Holder's Claim will be deemed to be, for voting purposes only, equal to $1. However, if such
Holder files a motion seeking relief pursuant to Bankruptcy Rule 3018(a) for the temporary
allowance of such Claim in a higher amount for voting purposes, the Disputed Claim could be
voted as specified in any order granting such motion.

6. Risk of Non-Occurrence of Effective Date.
Although the Debtor believes that the Effective Date will occur within 365 days after the
Confirmation Date, there can be no assurance as to such timing or as to whether the Effective
Date will, in fact, occur.

7. Effect of Certain Contingencies.
The Distributions available to Holders of Allowed Claims under the Plan can be affected
by a variety of contingencies, including, without limitation, whether the Bankruptcy Court orders
certain Allowed Claims to be subordinated to other Allowed Claims or Equity Interests, the
outcome of litigation with the FDIC-Receiver and others, and the Debtor's success in objecting to
certain sizeable Claims. While the occurrence of any such contingencies could affect
Distributions available to Holders of Allowed Claims under the Plan, such occurrence is not
expected to affect the validity of the vote taken by an impaired Class to accept or reject the Plan
or require a revote by an impaired Class.

B. Certain Risk Factors that May Affect Recovery
HOLDERS OF CLAIMS AND EQUITY INTERESTS SHOULD READ AND
CONSIDER CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS THE
OTHER INFORMATION SET FORTH IN THIS DISCLOSURE STATEMENT AND
RELATED DOCUMENTS, REFERRED TO OR INCORPORATED BY REFERENCE IN
THIS DISCLOSURE STATEMENT, PRIOR TO VOTING TO ACCEPT OR REJ ECT THE
PLAN. THIS SECTION PROVIDES INFORMATION REGARDING POTENTIAL RISKS IN
CONNECTION WITH THE PLAN. THESE FACTORS SHOULD NOT, HOWEVER, BE
REGARDED AS CONSTITUTING THE ONLY RISKS INVOLVED IN CONNECTION
WITH THE PLAN AND ITS IMPLEMENTATION.

1. The Debtor Cannot State with Certainty Recovery Amounts.
At least two unknown factors make forecasting creditor recoveries under the Plan with
any degree of certainty both impractical and impossible. First, the Debtor cannot predict with
any degree of certainty, at this time, how much money will be available for distribution to
Holders of Allowed Claims given substantial unresolved disputes regarding the Debtor's
ownership of the Core Assets. Second, the Debtor cannot predict with any degree of certainty, at
this time, the number or amount of Claims that will ultimately be allowed or the priority that will

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be accorded such Claims (including the FDIC-Receiver's asserted Capital Maintenance Claim
exceeding $900 million).

2. Uncertainties of Litigation.
As discussed in earlier portions of this Disclosure Statement, most of the Debtor's
significant Core Assets are subject to disputes, claims and liens asserted by various parties,
including, without limitation, the FDIC-Receiver, BB&T and the Alabama Revenue Department.
In addition, significant litigation continues with the FDIC-Receiver with respect to the nature,
extent, priority and amount of claims that it has asserted against the Debtor, including the Capital
Maintenance Claim.

a. Capital Maintenance Claim
Although the Bankruptcy Court has denied the FDIC-Receiver's 365(o) Motion and its
request for recognition of a Capital Maintenance Claim, the FDIC-Receiver has appealed that
ruling and the matter is presently pending before the District Court. If an appellate court should
reverse the ruling of the Bankruptcy Court, then the FDIC-Receiver would assert entitlement to
the Capital Maintenance Claim which would, if allowed, have priority in right of payment over
payment of any General Unsecured Claims. If the Capital Maintenance Claim is ultimately
allowed on appeal (and the FDIC-Receiver establishes a Claim under 507(a)(9) of the
Bankruptcy Code) in the amount asserted by the FDIC-Receiver, it is unlikely that the Holders of
any General Unsecured Claim would be entitled to receive any Distribution unless there was
some legal basis upon which such Claim could be offset or reduced by virtue of claims asserted
by the Debtor against Colonial Bank or the FDIC-Receiver. While the Debtor believes that the
ruling of the Bankruptcy Court on the 365(o) Motion was correct and should be affirmed on
appeal, such an outcome cannot be assumed and is not assured. Even if the Debtor prevails on
appeal at the District Court appellate level, it is possible that the FDIC-Receiver will file an
additional appeal to the Eleventh Circuit Court of Appeals. During the pendency of any appeal,
the FDIC-Receiver has taken the position that no Distributions can be made to General
Unsecured Creditors pursuant to the Plan, as the FDIC-Receiver's Disputed Claim, absent
estimation at a lower amount, will have to be reserved for under the Plan in an amount up to its
asserted Capital Maintenance Claim, which the FDIC-Receiver contends is in excess of $900
million. See Discussion in Chapter VIII, Section E, 1 of this Disclosure Statement.
b. Tax Refund Dispute with FDIC-Receiver
As previously discussed in this Disclosure Statement, the FDIC-Receiver asserts
entitlement to all of the tax refunds sought by the Debtor from the Internal Revenue Service in
the approximate amount of $252,000,000. The Debtor disputes the FDIC-Receiver's entitlement
to the tax refunds, in part based upon the Debtor's assertion of a worthless stock deduction. The
dispute is presently pending before the District Court. The Debtor can offer no assurances as to
the outcome of that litigation. Even if the Debtor prevails in the litigation, the FDIC-Receiver
will contend (as it has already in the Case) that it has an Unsecured Claim equal to all or
substantially all of the amount of the tax refunds; and, if the FDIC-Receiver were to prevail in
that position, it would be entitled to share on a pro rata basis with other General Unsecured
Creditors in Distributions made pursuant to the Plan. In addition, the FDIC-Receiver has

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asserted that, if the Tax Allocation Agreement is determined to be an enforceable executory
contract and the Debtor is determined to be the owner of the tax refunds thereunder, (i) the
Debtor's rejection of the Tax Allocation Agreement would prevent the Debtor from claiming
ownership of the tax refunds under that agreement or (ii) the Debtor's assumption of the Tax
Allocation Agreement would give rise to an Administrative Claim in favor of the FDIC-Receiver
to the extent that it is ultimately determined that the FDIC-Receiver had a lawful Claim against
the Debtor for all or some portion of the tax refunds and attributable to tax attributes for losses of
Colonial Bank and/or Colonial Bank's subsidiaries. As previously noted herein, the Debtor
disagrees with the FDIC-Receiver's legal analysis of the effect of rejecting the Tax Allocation
Agreement and contends that, to the extent the Tax Allocation Agreement constitutes an
executory contract, the rejection thereof does not adversely impact the Debtor's entitlement to
receive the requested potential refund of approximately $253,000,000.

c. Dispute Over Fidelity Policies with FDIC-Receiver
The first named assured under the Fidelity Policies is the Debtor and the Debtor believes
that, pursuant to the terms of the Fidelity Policies, it is entitled to receive all insurance payable
thereunder, including amounts payable with respect to claims for injuries to Colonial Bank. The
FDIC-Receiver takes the opposite position, asserting that all amounts due and payable under the
Fidelity Policies are on account of injuries sustained by Colonial Bank and therefore payable to it
as Colonial Bank's receiver. The outcome of the pending litigation before the District Court
regarding ownership of or entitlement to monies paid under the Fidelity Policies is by no means
assured. Even if the Debtor were to prevail in such litigation, the FDIC-Receiver will take the
position that it has an Unsecured Claim against the Debtor in an amount equal to the Fidelity
Policies' proceeds paid to the Debtor and is entitled to share on a pro rata basis with all other
Holders of General Unsecured Claims.

d. Bank Account Disputes with FDIC-Receiver
Although the Bankruptcy Court ruled in favor of the Debtor on the FDIC-Receiver's
Renewed Stay Relief Motion (pursuant to which the FDIC-Receiver sought to stay relief to assert
alleged offset rights with respect to the Debtor's $36 million in Deposits in its Bank Accounts at
BB&T), the FDIC-Receiver has appealed that ruling to the District Court. While the Debtor
believes the Bankruptcy Court correctly disposed of the Renewed Stay Relief Motion, there can
be no assurance that the District Court (or any succeeding appellate court) will concur. If the
FDIC-Receiver prevails on its Renewed Stay Relief Motion on appeal, the Debtor may lose all or
a substantial part of its Deposits. Pending appeal, however, the Debtor has been authorized to
utilize up to $7 million in its Operating Account at BB&T (or such greater amount as the
Bankruptcy Court may authorize) for the payment of administrative expenses or for such other
purposes as the Bankruptcy Court may approve after notice and a hearing.
e. Bank Account Disputes with BB&T
BB&T, as the purchaser of certain of the former assets of Colonial Bank, has contended
in a motion for stay relief filed in December of 2010 that it has a right to offset the Debtor's
Deposits at BB&T (other than Deposits in the Operating Account having an approximate balance
as of the filing of the stay relief motion of $12.5 million) and claims a security interest in the

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Bank Accounts (other than the Operating Account), in each case with respect to claims that
BB&T acquired in the sale of former assets of Colonial Bank. As of December 13, 2010, BB&T
asserted a deficiency balance (after the liquidation of other collateral securing those claims) of
approximately $5,000,000 and asserts that the Bank Accounts (other than the Operating
Account) may be offset or foreclosed upon to satisfy this deficiency amount. BB&T states in its
stay relief motion that an additional loan secured by real estate and having an aggregate balance
of $28 million is also secured by, or may be offset against, the Bank Accounts (other than the
Operating Account), but BB&T does not seek relief from stay to effectuate an offset with respect
to that loan at this time. Through its special conflicts legal counsel, the Debtor intends to oppose
the relief requested by BB&T. However, despite the Debtor's belief that there are significant
defenses to BB&T's stay relief motion, no assurances can be given that the Debtor will
ultimately prevail. If the Debtor does not prevail on BB&T's stay relief motion, BB&T would be
authorized to reduce the Deposits in the Bank Accounts by approximately $5,000,000 thereby
reducing the amount available for distribution to creditors. In addition, if BB&T were
subsequently to seek stay relief with respect to the additional loans secured by real estate and
having an aggregate balance of $28,000,000, in order to offset the balances in the Bank Accounts
(other than the Operating Account), and a court were to authorize such an offset, the total
balances in the Bank Accounts (exclusive of balances in the Operating Account) would be
further reduced by approximately $17,500,000. See Discussion in Chapter VIII, Section E.2 of
this Disclosure Statement.

f. Garland Avenue Property Dispute with FDIC-Receiver
The FDIC-Receiver claims entitlement to substantially all other assets of the Debtor,
including the Garland Avenue Property. The ownership of and entitlement to the Garland
Avenue Property is in litigation pending before the Bankruptcy Court in the Garland Adversary
Proceeding. No assurances can be given that an outcome favorable to the Debtor will result from
such litigation. See Discussion in Chapter VIII, Section E, 7 of this Disclosure Statement.
g. D&O Policies Dispute with FDIC-Receiver and Others
As previously discussed, the Debtor's D&O Policies, originally having a $35 million
aggregate limit, have been reduced to approximately $31 million as a result of defense costs
incurred by defendant officers and directors of both the Debtor and Colonial Bank. The policy
limits, even without further reduction in defense costs, may be insufficient to pay all litigation
claims asserted against the defendant officers and directors, including claims asserted against
them in the Securities Litigation, the ERISA Litigation, litigation proposed to be initiated by the
FDIC-Receiver, Shareholder Derivative Litigation assumed or to be brought by the Debtor, and
other claims that may be brought against the Debtors past or present officers and directors by the
Plan Trustee. In addition, the FDIC-Receiver disputes the Debtor's entitlement to any of the
proceeds from the D&O Policies, contending in part that claims asserted by the Debtor are based
upon actual harm occasioned by the defendant officers and directors to Colonial Bank and are
therefore subordinate to the rights of the FDIC-Receiver as receiver for Colonial Bank. See
Discussion in Chapter V, Section A.5 of this Disclosure Statement.


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3. Settlement Discussions with FDIC-Receiver.

The Debtor and the Case Committee have engaged in several telephonic and in-person
meetings and other discussions with the FDIC-Receiver regarding potential settlements of
various disputes and claims asserted by the FDIC-Receiver against the Debtor and various
disputes and claims asserted by the Debtor against the FDIC-Receiver. To date, those settlement
discussions have not resulted in an agreement to settle any of the significant issues asserted by or
against the FDIC-Receiver or the Debtor. The Case Committee has been an active participant,
directly or indirectly, in all of the settlement discussions. All settlement conferences with the
FDIC-Receiver have been conducted under a confidentiality stipulation pursuant to Rule 408 of
the Federal Rules of Evidence and other applicable privileges. In the course of those settlement
discussions, the Debtor received three proposals to settle all disputes with the FDIC-Receiver,
the last of which exceeded in dollar amount the prior two proposals.

In its objection to the Debtor's first filed disclosure statement, however, the FDIC-
Receiver stated on the public record the effect that it believed its most recent settlement proposal
would have upon Distributions available to creditors if its settlement proposal were accepted by
the Debtor and approved by the Bankruptcy Court. According to the objection filed by the
FDIC-Receiver, an acceptance and Bankruptcy Court approval of the FDIC-Receiver's most
recent settlement proposal would result in payment in full of all Secured, Administrative and
Priority Claims and would allow for a "significant" Distribution to the Holders of General
Unsecured Claims. The Debtor believes that a partial disclosure of settlement terms is
misleading and, with the consent of the FDIC-Receiver, the Debtor has set forth below its
understanding of the FDIC-Receiver's most recent settlement proposal. Before doing so,
however, it should be emphasized that the FDIC-Receiver's settlement proposal is conditioned
upon (i) execution of definitive settlement documentation by the parties, (ii) a recommendation
being made to and approved by the FDIC's board of directors following agreement on definitive
terms (none of which, the Debtor is advised, has occurred), and (iii) Bankruptcy Court approval
after notice and an opportunity for objections to the settlement. The settlement proposal may be
revoked by the FDIC-Receiver at any time prior to formal approval by the FDIC's board of
directors or approval by the Bankruptcy Court. Subject to the foregoing, the settlement proposal
now on the table from the FDIC-Receiver as of the date of this Disclosure Statement is as
follows:

(1) The FDIC-Receiver would agree to carve out from its asserted Claims, Liens and
rights of offset with respect to all of the Core Assets that are in dispute a cash
amount equal to (i) $30 million plus (ii) the balance of the Deposits in the Bank
Accounts (approximately $33 million on the date hereof) minus all amounts
utilized by the Debtor in the administration of the Case from the Operating
Account after the date of this Disclosure Statement (the "Cash Settlement
Amount"), in full settlement and satisfaction of all claims of the Debtor to any of
the Core Assets or against the FDIC-Receiver, Colonial Bank, and BB&T (other
than claims and defenses related to BB&T's asserted offset rights with respect to
certain of the Deposits);


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(2) The FDIC-Receiver would be entitled to all other Core Assets that are in dispute
and the proceeds of which have not been expended in the administration of the
Case;

(3) The Capital Maintenance Claim of the FDIC-Receiver, with priority under
Section 507(a)(9) over all General Unsecured Claims, would be granted in the
amount of $200 million, but the FDIC-Receiver would agree that it would not
receive any Distribution on account of that Claim or any other Claim, whether
asserted in its proof of claim or otherwise;

(4) The Debtor would release all claims and causes of action that it may hold against
the FDIC-Receiver, Colonial Bank and/or BB&T (other than claims and defenses
related to BB&T's asserted offset rights with respect to certain of the Deposits);

(5) From the Cash Settlement Amount, together with the proceeds (if any) of any
Core Assets that are not in dispute (and the Debtor is presently unaware of any
material Core Assets the ownership of which by the Debtor are not disputed by
the FDIC-Receiver), the Debtor would be required to settle and pay (i) an amount
necessary to settle or discharge BB&T's claim to certain of the Deposits in the
Bank Accounts (which claim is asserted by BB&T in an aggregate amount that
would exceed all of the Deposits other than those currently in the Operating
Account (approximately $10.5 million in the Operating Account on this date));
(ii) the Secured Claim of the Alabama Revenue Department (asserted to be
approximately $12 million); (iii) Priority Non-Tax Claims, which on the date
hereof (exclusive of a disputed Priority Non-Tax Claim of the PBGC) is in an
asserted aggregate amount of $123,000; and (iv) Administrative Expenses
(estimated to be in the range of $2 million), with the balance available for
Distribution to Holders of General Unsecured Claims (with aggregate dollar
amount of all proofs of General Unsecured Claims, before any objection thereto,
in an aggregate amount of approximately $2.1 billion).

The Debtor has not as yet formally accepted or rejected the FDIC-Receiver's last
settlement offer. However, the Debtor understands that both the Case Committee and the
Holders of a sizeable percentage of the Indenture Claims would vigorously oppose any effort by
the Debtor to obtain Bankruptcy Court approval of the proposed settlement. The Debtor is fully
prepared to continue to participate in settlement discussions, and is desirous of reaching a
settlement that is in the best interests of the Estate and all creditors. While the Debtor will
continue to exercise its independent judgment, the Debtor must be respectful of and take
seriously into account the opinions of the Case Committee and substantial claimants in the Case
that the current FDIC-Receiver settlement offer does not fairly represent a fair and reasonable
compromise of Disputed Claims with respect to Core Assets.

The FDIC-Receiver's statement that its settlement proposal would result in a "significant"
Distribution to Holders of General Unsecured Claims clearly must rely on a number of
assumptions regarding a resolution (all in favor of the Debtor) of a number of hotly contested
disputes regarding Secured, Priority Non-Tax and other Claims asserted against the Debtor that

- 100 - 100
are sizeable in amount. For example, if BB&T's asserted Secured Claim with respect to the
Bank Accounts (other than the Operating Account) were sustained, the amount that would be
available to the Estate would be reduced by $24 million (leaving a total amount of settlement
proceeds available for Distribution of approximately $40.5 million); if the Secured Claim of the
Alabama Revenue Department (approximately $12 million) is allowed in the amount asserted by
it, the amount available for Distribution would be further reduced from approximately $40.5
million to $28.5 million; assuming Administrative Expenses of an additional $2 million, the
adjusted amount available for Distribution would be reduced to $26.5 million; and if Priority
Non-Tax Claims are allowed in the amount asserted (approximately $123,000), exclusive of the
Claim of the PBGC of approximately $30 million (which will be vigorously contested by the
Debtor), then the net amount available for Holders of General Unsecured Claims would be
$26.377 million.
3
Assuming that General Unsecured Claims total (in a worst case scenario) in
excess of $435 million (which assumes that the Bank of America asserted proof of claim of up to
$1.75 billion is withdrawn or disallowed), the Holders of such Claims would receive
approximately 6.07 cents on the dollar on account of their Claims. Assuming that General
Unsecured Claims total (in a best case scenario) approximately $421 million (which also
assumes that the Bank of America asserted proof of claim of up to approximately $1.75 billion is
withdrawn or disallowed), the Holders of such Claims would receive approximately 6.26 cents
on the dollar on account of their Claims. If on the other hand, the Debtor were successful in
resolving by settlement the asserted Secured Claims of BB&T and the Alabama Revenue
Department for an aggregate amount of $10 million and asserted Priority Non-Tax Claims for an
aggregate amount of $50,000, the amount available for Holders of General Unsecured Claims
would be $52.55 million and the pro rata Distribution to such Holders (in a worst case scenario)
might be as low as approximately 12.09 cents on the dollar or (in a best case scenario) might be
as high approximately 12.47 cents on the dollar.
4

In light of the significant amount of litigation pending before the Bankruptcy Court and
the District Court involving claims asserted by and against the Debtor, including the Capital
Maintenance Claim on appeal, and in light of the inherent uncertainties of litigation, it is
certainly possible that one or more adverse rulings to the Debtor could result in Distributions to
creditors in amounts that would be less than the amount of Distributions under the FDIC-
Receiver's most recent settlement offer, assuming that settlement offer were (if accepted by the
Debtor) approved by the Bankruptcy Court over the objection of the Case Committee and
significant claimants in the Case.

The Debtor intends to continue efforts at settlement and, in consultation with the Case
Committee, will bring to the Bankruptcy Court (and the creditor constituency) pursuant to
Bankruptcy Rule 9019 any settlement that reasonably reflects all of the claims, defenses and
litigation risks associated with pending adversary proceedings and contested matters.

3
Of course, if the Debtor is unsuccessful in challenging the PBGC Claim as a Priority Non-Tax Claim then there
will be nothing available for Distributions to the Holders of General Unsecured Claims under the FDIC-Receiver's
settlement proposal.

4
These calculations of General Unsecured Claims assume that approximately $30 million of filed Claims arguably
arising from or related to the purchase and sale of a security are not statutorily subordinated and does not include
any estimation of substantial contingent and unliquidated Claims asserted against the Debtor.

- 101 - 101

C. Disclosure Statement Disclaimers
1. Information Contained Herein is for Soliciting Votes.
The information contained in this Disclosure Statement is for the purpose of soliciting
acceptances of the Plan and may not be relied upon for any other purposes.

2. Disclosure Statement Not Approved by the SEC; Registration Exemption.
This Disclosure Statement was not filed with the SEC under the Exchange Act and rules
promulgated thereunder or applicable state securities laws. Neither the SEC nor any state
regulatory authority has passed upon the accuracy or adequacy of this Disclosure Statement, or
the exhibits or the statements contained herein, and any representation to the contrary is
unlawful. This Disclosure Statement has been prepared pursuant to Section 1125 of the
Bankruptcy Code and Bankruptcy Rule 3016(b) and is not necessarily in accordance with federal
or state securities laws or other similar laws.

3. No Legal or Tax Advice Provided by Disclosure Statement.
This Disclosure Statement does not contain and is not intended to convey legal advice
to you. The contents of this Disclosure Statement should not be construed as legal, business, or
tax advice. Each Holder of a Claim or an Equity Interest should consult his or her own legal
counsel and accountant with regard to any legal, tax, and other matters concerning his or her
Claim or Equity Interest. This Disclosure Statement may not be relied upon for any purpose
other than to determine how to vote on the Plan, or object to confirmation of the Plan.

4. No Admissions.
The information and statements contained in this Disclosure Statement will neither (a)
constitute an admission of any fact or liability by any entity (including, without limitation, the
Debtor) nor (b) be deemed evidence of the tax or other legal effects of the Plan on the Debtor,
Holders of Allowed Claims or Equity Interests, or any other parties in interest. The failure of the
Debtor in this Disclosure Statement to set forth a detailed response to any summary of
contentions made by the FDIC-Receiver, BB&T or any other person is not an acknowledgement
or admission of the validity or accuracy of such contentions.

5. Failure to Identify Litigation Claims or Projected Objections.
No reliance should be placed on the fact that a particular litigation claim or projected
objection to a particular Claim or Equity Interest is, or is not, identified in this Disclosure
Statement. The Debtor may seek to investigate, file, and prosecute objections to Claims and
Equity Interests and may object to Claims after the Confirmation Date or Effective Date,
irrespective of whether this Disclosure Statement identifies such Claims or objections to such
Claims.


- 102 - 102
6. No Waiver of Debtor's Rights.
The vote by a Holder of a Claim for or against the Plan does not constitute a waiver or
release of, and shall not operate to preclude the assertion of, any claim or other cause of action
against such Holder; any right of the Debtor (or any other party in interest, as the case may be) to
object to that Holder's Claim; or right to recover from such Holder any preferential, fraudulent,
or other voidable transfer of assets, in each case regardless of whether any claims or causes of
action are specifically or generally identified herein or in the Plan.

7. Debtor Professionals' Reliance.
The Debtor Professionals have relied upon information provided by the Debtor and third
parties in connection with the preparation of this Disclosure Statement. Although the Debtor
Professionals have performed certain limited due diligence in connection with the preparation of
this Disclosure Statement, they have not verified independently the information contained herein.
It is important to understand that the Debtor still does not have access to all of its Books and
Records, significant portions of which remain in the possession or control of third parties,
including the FDIC-Receiver.

8. Potential for Inaccuracies; No Duty to Update.
The statements contained in this Disclosure Statement are made by the Debtor as of the
date hereof, unless otherwise specified herein, and the delivery of this Disclosure Statement after
that date does not imply that there has not been a change in the information set forth herein since
that date. While the Debtor has used its reasonable business judgment to ensure the accuracy of
all of the information provided in this Disclosure Statement and in the Plan, the Debtor
nonetheless cannot, and does not, confirm the current accuracy of all statements appearing in this
Disclosure Statement. Further, although the Debtor may subsequently update the information in
this Disclosure Statement, the Debtor has no affirmative duty to do so unless ordered to do so by
the Bankruptcy Court.

9. No Representations Outside Disclosure Statement Are Authorized.
No representations concerning or relating to the Debtor, this Chapter 11 bankruptcy case,
or the Plan are authorized by the Bankruptcy Court or the Bankruptcy Code, other than as set
forth in this Disclosure Statement. Any representations or inducements made to secure any
acceptance or rejection of the Plan that are other than as contained in, or included with, this
Disclosure Statement, should not be relied upon in arriving at a decision. Holders should
promptly report unauthorized representations or inducements to the counsel to the Debtor,
counsel to the Case Committee, and the Bankruptcy Administrator.

Chapter XIII. ALTERNATIVES TO THE PLAN
The Debtor believes that the Plan provides creditors with the greatest possible value that
can be realized on their Claims, and, therefore, is in the best interests of all creditors. The
alternatives to confirmation of the Plan are the liquidation of Estate Property in a Chapter 7 case
or confirmation of an alternative plan or plans of liquidation proposed at a later date (after all

- 103 - 103
material litigation with the FDIC-Receiver, BB&T and others has been finally adjudicated or
settled).
A. Chapter 7 Liquidation
The Debtor believes, after considering all factors relevant to this Case, that all impaired
Classes will receive under the Plan property of a value that is at least as much as (and very likely
more than) they would receive in a Chapter 7 liquidation. In a Chapter 7 case, a trustee would be
elected or appointed to liquidate the Debtor's assets. The proceeds of a liquidation would be
distributed to the respective Holders of Allowed Claims against the Debtor in accordance with
the priorities established by the Bankruptcy Code. Claims entitled to priority under the
Bankruptcy Code will be paid in full before any distribution to general unsecured creditors.
Funds remaining after payment of priority claims would be distributed pro rata to general
unsecured creditors.
The Debtor believes that liquidation under Chapter 7 would result in a substantial
diminution of the value of the Debtor's Estate, because the conversion of the Case would result in
the appointment of a trustee, which in turn would lead to (i) additional administrative expenses
associated with the appointment of a trustee and the retention of attorneys, accountants and other
professionals to assist the trustee; and (ii) additional expenses and claims, some of which may be
entitled to priority. There is little likelihood that a Chapter 7 liquidation of the Debtor would
produce any cost savings to the Debtor and likely would increase costs due to the Chapter 7
trustee's unfamiliarity with the Debtor and pending claims brought by and against the Debtor.
To react quickly and cost-effectively, a Chapter 7 trustee would have to overcome substantial
hurdles at the outset, including understanding the relationship between the Debtor and its many
affiliates.
Moreover, to assist in the liquidation process, the Chapter 7 trustee would need to
employ, subject to approval by the Bankruptcy Court, various professionals, consultants, and
other persons to assist in the liquidation process, such as attorneys, accountants, brokers and
appraisers. The Estate would incur substantial additional costs in educating the trustee and any
new professionals. Accordingly, the Debtor believes that a liquidation of the Debtor's assets
conducted by a Chapter 7 trustee would not achieve any cost savings. Rather, it is likely that
such a liquidation would result in less net proceeds available for distribution to the Holders of
Claims than would the Plan implemented under the supervision of the Plan Trustee.
It should be noted that Broadbill Investment Corp., the Holder of shares of New Preferred
Stock, believes that the asserted Capital Maintenance Claim of the FDIC-Receiver, if ultimately
sustained on the FDIC-Receiver's appeal, would not be entitled to priority status under Section
507(a)(9) of the Bankruptcy Code if the Case is converted to Chapter 7 before the Capital
Maintenance Claim is ultimately sustained. Accordingly, that Holder has contended in an
objection to the Debtor's first filed disclosure statement that disclosures should be made of the
potential benefits of conversion to Chapter 7 and the adverse impact upon the Case and potential
Distributions to creditors that would result from the Capital Maintenance Claim being allowed
on appeal at a time when the Case remained in Chapter 11. The Debtor disagrees with the legal
analysis of that Holder, but has hereby made the requested disclosure.

- 104 - 104
B. Alternative Liquidation Plans
If the Plan is not confirmed, the Debtor, or any other party in interest in the Case, could
attempt to formulate and propose a different liquidation plan. The Plan, however, has been
developed after several months of analysis to produce a design for liquidating the Debtor's assets
that is in the best interests of all creditors. There is little possibility that consensual, viable
alternative plans could be proposed and confirmed.
Some interested parties, including the FDIC-Receiver, have contended that the Plan is
premature in light of the pendency and ongoing prosecution of significant litigation and should
not be confirmed for that reason, among others. However, if the Debtor elected to defer pursuit
of a plan until all material litigation is concluded, the anticipated date for such a plan would be
far in the future, particularly in light of the likelihood of ongoing appeals from adverse rulings.
The instant Plan establishes a framework and vehicle for the settlement of claims and the prompt
distribution of Estate Property to Holders of Claims at the time when barriers to such distribution
have been eliminated, whether as the result of entry of final orders in litigation, approved
settlements or claims estimation by the Bankruptcy Court.
Chapter XIV. OTHER MATTERS
A. Tax Consequences of the Plan
The Debtor has not obtained a tax opinion and expresses no opinion as to the tax
consequences to the Holder of any Claim or Equity Interest caused by the terms of the Plan.
BECAUSE THE DEBTOR EXPRESSES NO TAX ADVICE, IN NO EVENT WILL
THE DEBTOR OR ANY PROFESSIONAL ADVISOR ENGAGED BY THE DEBTOR
BE LIABLE IF, FOR ANY REASON, THE TAX CONSEQUENCES OF THE PLAN ARE
OTHER THAN AS ANTICIPATED. THE TAX LAWS APPLICABLE TO
CORPORATIONS IN BANKRUPTCY CAN BE COMPLEX. THE FEDERAL INCOME
TAX TREATMENT OF A CREDITOR WILL DEPEND ON THE PARTICULAR
SITUATION OF THE CREDITOR. IN ADDITION TO FEDERAL INCOME TAX, THE
DEBTOR AND ITS CREDITORS MAY ALSO BE SUBJECT TO STATE OR LOCAL
INCOME TAXES AND GIFT, ESTATE, INHERITANCE, OR INTANGIBLE
PROPERTY TAXES, THAT MAY BE IMPOSED BY VARIOUS JURISDICTIONS.
EACH CREDITOR AND EQUITY INTEREST HOLDER IS URGED TO CONSULT,
AND MUST LOOK SOLELY TO AND RELY SOLELY UPON, THEIR OWN
ADVISORS AS TO ANY TAX CONSEQUENCES OF THE PLAN.
B. Disclaimers
The statements contained in this Disclosure Statement are made as of the date hereof, and
unless another time is specified in the Disclosure Statement, neither the delivery of this
Disclosure Statement nor an exchange of rights made in connection with the Disclosure
Statement will create under any circumstances an implication that there has been a change in the
facts set forth herein since the date hereof.

- 105 - 105
No representations concerning the Debtor, the value of property of the Estate (including
any Estate Causes of Action), the validity or amount of any Claim, or the value of any benefits
offered to Holders of Claims or Preferred Stock in connection with the Plan, are authorized by
the Debtor, other than as set forth in this Disclosure Statement. Any representations or
inducements made to secure acceptances to the Plan which are contrary to the information
contained in this Disclosure Statement should not be relied on by you in arriving at your
decision.
C. Confirmation Hearing
The Bankruptcy Court has scheduled a hearing on confirmation of the Plan commencing
on May 11, 2011, in Courtroom #4C, at 10:00 a.m. Central Time at the Bankruptcy Court,
United States Courthouse Annex, One Church Street, Montgomery, Alabama 36104. At
that time, the Debtor will present the results of the voting on the Plan by each impaired Class of
creditors entitled to vote for or against the Plan, and the Bankruptcy Court will consider all
conditions precedent to confirmation of the Plan under the Bankruptcy Code, as well as any
objections to the Plan that are timely filed. Any objections to confirmation of the Plan must be
in writing and must be filed with the Clerk of the Bankruptcy Court and served on the Debtor
and the Debtor's counsel at the address on the cover page to ensure receipt by them on or before
April 25, 2011 at 4:00 p.m. Central Time.
D. Conditions to Effectiveness of the Plan
The Effective Date will occur after, and only after, all of the conditions precedent set
forth below have been met, unless otherwise waived by the Debtor and the Case Committee:
(a) The Confirmation Order has been entered, is in full force and effect and has not
been stayed by order of a court of competent jurisdiction;
(b) No order of a court has been entered that remains effective that restrains the
Debtor from implementing or consummating the Plan;
(c) All authorizations, consents and regulatory approvals required, if any, in
connection with the Plan's effectiveness shall have been obtained;
(d) The Debtor has determined, in consultation with the Case Committee, that there is
sufficient Available Cash to make the payments required under the Plan to Holders of Allowed
Administrative Claims, Allowed Priority Tax Claims, Allowed Secured Claims, and Allowed
Priority Non-Tax Claims;
(e) The Plan Committee has been appointed in accordance with the terms of the Plan;
(f) The Plan Trustee has been appointed in accordance with the terms of the Plan;
and
(g) The Bankruptcy Court has entered one or more orders (which may include the
Confirmation Order) authorizing the assumption and rejection of unexpired leases and executory

- 106 - 106
contracts, if any, by the Debtor as contemplated by the Plan or as otherwise elected by the
Debtor.

E. Plan Injunction
As discussed above, under the Plan, the Debtor will not be discharged from any debt.
The Confirmation Order approving the Plan, however, will provide, among other things,
that from and after the Effective Date, all Persons who have held, hold or may hold Claims
against or Equity Interests in the Debtor are permanently enjoined from taking any of the
following actions against the Debtor or any Estate Property on account of such Claims or
Equity Interests:
(a) Commencing or continuing, in any manner or in any place, any action, suit or
other proceeding (other than actions, suits or proceedings commenced by a Governmental Unit,
including the SEC, to enforce its police or regulatory authority over the Debtor to the extent
excepted from the automatic stay provisions of Section 362 of the Bankruptcy Code, but not
against Estate Property);
(b) Enforcing, attaching, collecting or recovering in any manner any judgment,
award, decree or order;
(c) Creating, perfecting or enforcing any Lien;
(d) Asserting rights of setoff, subrogation or recoupment of any kind against any
debt, liability or obligation due the Debtor;
(e) Enforcing or attempting to enforce any Contractual Subordination; or
(f) Commencing or continuing, in any manner or in any place, any action, suit or
other proceeding that does not comply with or is inconsistent with the provisions of the Plan.
However, nothing contained in the Plan or the Confirmation Order will preclude such Persons
from exercising their rights pursuant to and consistent with the terms of the Plan.
The foregoing injunction will extend to successors of the Debtor and all Estate Property.
By voting for the Plan or accepting Distributions pursuant to the Plan, each Holder of a
Claim or Equity Interest receiving Distributions will be deemed to have specifically
consented to this injunction; provided that the injunction is effective against all Holders
irrespective of how they may vote and whether or not they receive or accept any
Distribution. With the exception of subsection (e) immediately above (which will constitute a
permanent and continuing injunction), the foregoing injunction will remain in full force and
effect until all Estate Property of the Debtor has been liquidated, collected and/or distributed, or
abandoned as provided in the Plan, and the Debtor has made a Final Distribution.
F. Retention of Jurisdiction by the Bankruptcy Court
After the Effective Date of the Plan, the Debtor and the Plan Trustee are free to perform
all functions assigned under the Plan without approval of the Bankruptcy Court, except as
specifically provided in the Plan. Nevertheless, the Bankruptcy Court will continue to retain

- 107 - 107
jurisdiction over this Case with respect to matters and for purposes specified in the Plan and with
respect to the following matters (which jurisdiction will be non-exclusive when so designated
below):
(a) To resolve and enforce any and all Estate Causes of Action (including Designated
Causes of Action) that may exist except to the extent that any such Estate Cause of Action is, on
the Confirmation Date, pending in or is thereafter lodged with another court (non-exclusive);
(b) To resolve all Disputed Claims, including all requests for estimation or objections
to the allowance of Claims, and the compromise and settlement of objections to any Claims;
(c) To adjudicate all applications, adversary proceedings, and contested matters that
may be pending on or after the Confirmation Date (non-exclusive);
(d) To adjudicate controversies, suits and disputes arising under or in connection with
this Plan and to issue orders in aid of execution of the Plan except for Disputed Claims and
Estate Causes of Action that, as of the Confirmation Date, are lodged with another court;
(e) To adjudicate adversary proceedings and contested matters pending on the
Confirmation Date or thereafter brought to recover Estate Property; to determine whether or not
any property is Estate Property; to recover or avoid preferences, fraudulent conveyances and
other Avoidance Claims except to the extent pending in another court as of the Confirmation
Date; and to determine the validity, extent and priority of Liens upon or other asserted interests
in or rights of offset or recoupment with respect to Estate Property (non-exclusive);
(f) To hear and determine all matters that are remanded to it by any appellate court;
(g) To determine any applications or motions for the rejection, assumption or
assignment of executory contracts or unexpired leases;
(h) To determine any motion to modify the Plan in accordance with Section 1127 of
the Bankruptcy Code;
(i) To resolve disputes regarding the proper classification of any Claim;
(j) To determine all questions and disputes regarding title to or Liens upon Estate
Property or regarding the Bankruptcy Court's orders, if any, affecting Cash collateral or
providing adequate protection to Holders of Secured Claims;
(k) To correct any defect, to cure any omission, or to reconcile any inconsistency in
the Plan, the Disclosure Statement or the Confirmation Order as may be necessary or desirable to
carry out the purposes and intent of the Plan;
(l) To interpret and construe the terms and conditions of the Plan and to determine all
questions arising in connection with the enforcement or implementation of the Plan;
(m) To enter any order, including restraining orders and injunctions, necessary to
enforce the title, rights, powers, and duties of the Debtor or the Plan Trustee and to impose such

- 108 - 108
limitations, restrictions, terms, and conditions on such title, rights, powers, and duties as the
Bankruptcy Court may deem necessary (non-exclusive);
(n) To resolve any objections that may be filed regarding any action taken or
proposed to be taken by the Debtor or the Plan Trustee under the Plan (provided that neither the
Debtor nor the Plan Trustee shall be obligated to obtain Bankruptcy Court approval for any
action proposed to be taken or to provide notice to interested parties of any proposed action to be
taken, except as otherwise expressly provided in the Plan);
(o) To enter any order or decree contemplated by Section 350 of the Bankruptcy
Code concluding and closing this Chapter 11 bankruptcy case; and
(p) To determine such other matters or proceedings as may be provided for under
Title 28, the Bankruptcy Code, the Bankruptcy Rules, the Plan, or the Confirmation Order.
G. Amendments to the Plan
Pursuant to the Plan, the Debtor reserves all rights to amend, modify, alter or withdraw
the Plan prior to the Confirmation Date and, after the entry of the Confirmation Order, to amend,
modify or alter the Plan in accordance with Section 1127(b) of the Bankruptcy Code or remedy
any defect or omission or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purposes and intent of the Plan.
H. Cram down
The Debtor reserves the right to seek confirmation of the Plan under Section 1129(b) of
the Bankruptcy Code, notwithstanding the failure of any impaired Class to accept the Plan.
I. No Admissions
Nothing in the Plan or in this Disclosure Statement shall constitute an admission that any
Person referred to in the Plan or in this Disclosure Statement as being the Holder of a Claim is
the Holder of an Allowed Claim, except as expressly provided in the Plan upon being confirmed
by a Final Order. Wherever in this Disclosure Statement (including the attached Liquidation
Analysis) (i) there is a summary of the assertions of a party in interest regarding a position that is
adverse to the interests of the Estate or any other party, the failure of the Debtor to state
expressly that it disputes such assertion or to provide all of the grounds for its dispute shall not
be deemed an admission by the Debtor of the validity or accuracy of such assertion or the
purported grounds therefor; and (ii) the Debtor uses numbers or makes calculations for
illustrative purposes or as part of a hypothetical, such numbers and calculations are not
admissions of the Debtor and do not necessarily represent the Debtor's views of the accuracy or
the reasonableness of such numbers or calculations or the validity of any Claims that such
numbers may represent.


- 109 - 109
Chapter XV. CONCLUSION AND RECOMMENDATION
The Debtor and the Case Committee believe that the Plan is in the best interest of all
Holders of Claims and urge all Holders of Claims entitled to vote to accept the Plan, and to
evidence such acceptance by returning their ballots, as applicable, so they will be received by the
Debtor by the Voting Deadline.

Respectfully submitted,
THE COLONIAL BANCGROUP, INC.
By: /s/ Kevin O'Halloran
Name: Kevin O'Halloran
Title: Chief Recovery Officer
- A -
EXHIBIT A

Plan of Liquidation


NORTHERN DIVISION
------------------------------------------------------x
:
In re : Chapter 11
:
:
Debtor. :
:
------------------------------------------------------x
SECOND AMENDED CHAPTER 11 PLAN
OF LIQUIDATION OF THE COLONIAL BANCGROUP, INC.
PARKER HUDSON RAINER & DOBBS LLP
C. Edward Dobbs, Esq.
Rufus T. Dorsey, IV, Esq.
J . David Freedman, Esq.
285 Peachtree Center Avenue, Suite 1500
Atlanta, GA 30303
(404) 523-5300
___________________________________
THIS PLAN IS NEITHER EFFECTIVE NOR BINDING ON ANY INTERESTED
PARTY IN THE ABOVE-REFERENCED CASE UNTIL CONFIRMED IN THE CASE,
AND IS SUBJECT TO AMENDMENT. NO ASSURANCE CAN BE GIVEN THAT ANY
DISTRIBUTION WILL BE MADE ON THE TERMS SET FORTH IN THIS PLAN. NO
SOLICITATION OF ACCEPTANCES OF THIS PLAN IS PERMITTED UNTIL A
DISCLOSURE STATEMENT IS APPROVED BY THE BANKRUPTCY COURT
PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE. REFERENCE IS
MADE TO THE DISCLOSURE STATEMENT ACCOMPANYING THIS PLAN, WHICH
PROVIDES INFORMATION ABOUT THE DEBTOR AND ITS ASSETS AND
LIABILITIES AND CONTAINS A SUMMARY OF THE PLAN.
___________________________________
1814061_1
- ii -
TABLE OF CONTENTS
Page

INTRODUCTION.......................................................................................................................... 1
ARTICLE 1. DEFINITIONS AND RULES OF CONSTRUCTION............................................ 2
ARTICLE 2. IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS
IMPAIRED AND UNIMPAIRED BY THE PLAN..................................................................... 14
2.1 Unimpaired Classes of Claims (deemed to have accepted this Plan and, therefore,
not entitled to vote on this Plan):................................................................................ 15
2.2 Impaired Classes of Claims and Equity Interests (entitled to vote on this Plan,
unless deemed to have rejected this Plan and therefore not entitled to vote):............ 15
ARTICLE 3. TREATMENT OF ADMINISTRATIVE AND PRIORITY TAX CLAIMS......... 15
3.1 Administrative Claims (Other than for Case Professional Compensation) and Bar
Date............................................................................................................................. 15
3.2 Case Professional Compensation................................................................................ 16
3.3 Payment of Bankruptcy Administrator Fees............................................................... 16
3.4 Priority Tax Claims..................................................................................................... 17
3.5 Expense Reserve for Payments................................................................................... 17
ARTICLE 4. TREATMENT OF UNIMPAIRED CLASSES...................................................... 17
4.1 Treatment of Class A (Priority Non-Tax Claims)....................................................... 17
4.2 Treatment of Class B (Certain Secured Claims)......................................................... 17
4.3 Treatment of Class C (Secured Claim of Alabama Revenue Department). ............... 17
ARTICLE 5. TREATMENT OF IMPAIRED CLASSES............................................................ 18
5.1 Treatment of Class D (Convenience Claims) ............................................................. 18
5.2 Treatment of Class E (Certain General Unsecured Claims)....................................... 18
5.3 Treatment of Class F (Indenture Claims).................................................................... 18
5.4 Treatment of Class G (Statutorily Subordinated Claims)........................................... 19
5.5 Treatment of Class H (Preferred Stock)...................................................................... 19
5.6 Treatment of Class I (Equity Interests other than Preferred Stock)............................ 19
ARTICLE 6. TREATMENT OF DISPUTED CLAIMS.............................................................. 19
6.1 Objections to and Subordination of Claims; Disputed Claims Reserve. .................... 19
6.2 Estimation of Claims................................................................................................... 21
ARTICLE 7. TREATMENT OF EXECUTORY CONTRACTS AND LEASES....................... 21
7.1 Assumption or Rejection of Executory Contracts and Unexpired Leases.................. 21
7.2 Payments Related to Assumption of Executory Contracts and Unexpired Leases..... 22
7.3 Insurance Policies....................................................................................................... 22
7.4 Rejection Damages Bar Date...................................................................................... 22
- iii -
ARTICLE 8. POST-CONFIRMATION GOVERNANCE AND MANAGEMENT................... 23
8.1 Continued Corporate Existence; Dissolution of Debtor............................................. 23
8.2 Certificate of Incorporation and By-Laws.................................................................. 23
8.3 Directors and Officers................................................................................................. 23
8.4 Plan Trustee................................................................................................................ 23
8.5 Compensation of Plan Trustee and Professionals....................................................... 24
8.6 Plan Committee........................................................................................................... 25
8.7 Indemnification........................................................................................................... 26
8.8 Cancellation and Reissuance of Certain Equity Interests........................................... 26
8.9 Indenture Trustees....................................................................................................... 27
8.10 Privileges..................................................................................................................... 27
ARTICLE 9. MEANS OF IMPLEMENTATION OF THE PLAN............................................. 27
9.1 Disbursement Account; Records................................................................................. 27
9.2 Asset Collections; Resolution of Claims and Causes of Action................................. 28
9.3 Distributions................................................................................................................ 29
9.4 Settlement of Certain Causes of Action...................................................................... 30
9.5 Settlement of Designated Causes of Action................................................................ 31
9.6 Method of Distributions; Transferred Claims............................................................. 31
9.7 Unclaimed Property. ................................................................................................... 32
9.8 Bankruptcy Court Supervision.................................................................................... 33
9.9 Cancellation of Certain Instruments and Agreements................................................ 33
9.10 Amendments to Claims............................................................................................... 34
9.11 Amended Certificate of Incorporation, By-Laws and Other Documents................... 34
9.12 Books and Records. .................................................................................................... 34
9.13 Abandonment of Estate Property................................................................................ 35
9.14 Withholding and Reporting Requirements................................................................. 35
9.15 Assets Held in Escrow................................................................................................ 36
ARTICLE 10. EFFECT OF CONFIRMATION.......................................................................... 36
10.1 Vesting of Assets........................................................................................................ 36
10.2 Discharge of Claims.................................................................................................... 36
10.3 Exculpation................................................................................................................ 36
10.4 Injunction................................................................................................................... 37
10.5 Term of Bankruptcy Stays ....................................................................................... 38
10.6 Preservation of Causes of Action................................................................................ 38
10.7 Preservation of Insurance............................................................................................ 38
10.8 Release of Liens.......................................................................................................... 39
10.9 Effect Upon Contractual Subordinations.................................................................... 39
ARTICLE 11. CONDITIONS PRECEDENT; NOTICE OF EFFECTIVE DATE ..................... 39
11.1 Conditions to Confirmation........................................................................................ 39
11.2 Conditions to Effective Date....................................................................................... 39
11.3 Waiver of Conditions to Confirmation or Consummation......................................... 40
11.4 Notice of Effective Date............................................................................................. 40

- iv -
ARTICLE 12. ACCEPTANCE OR REJ ECTION OF THE PLAN............................................. 41
12.1 Impaired Classes of Claims Entitled to Vote.............................................................. 41
12.2 Classes Deemed to Accept the Plan............................................................................ 41
12.3 Acceptance by Impaired Classes................................................................................ 41
12.4 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code.......................... 41
ARTICLE 13. RETENTION OF J URISDICTION; CLOSING CASE....................................... 41
13.1 J urisdiction of Bankruptcy Court................................................................................ 41
13.2 Closing of Case........................................................................................................... 43
ARTICLE 14. MISCELLANEOUS............................................................................................. 43
14.1 Binding Effect............................................................................................................. 43
14.2 Debtor's Performance Through Plan Trustee.............................................................. 43
14.3 Withholding and Reporting Requirements................................................................. 43
14.4 Notices........................................................................................................................ 44
14.5 Amendments to Plan................................................................................................... 44
14.6 Necessary Acts............................................................................................................ 44
14.7 Waiver of Federal Rule of Civil Procedure 62(a)....................................................... 44
14.8 Dissolution of Case Committee.................................................................................. 44
14.9 No Admissions; Objections to Claims........................................................................ 44
14.10 No Bar to Suits............................................................................................................ 45
14.11 Section 1146 Exemption............................................................................................. 45
14.12 Governing Law........................................................................................................... 45
14.13 Conflict....................................................................................................................... 45
14.14 Delayed Effective Date............................................................................................... 45
14.15 Revocation, Withdrawal or Non-Consummation....................................................... 45

- 1 -
INTRODUCTION
The Colonial BancGroup, Inc., debtor and debtor-in-possession herein (in such capacity,
together with its entity status after confirmation of this Plan, the "Debtor"), proposes this Plan of
Liquidation pursuant to Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. 101 et
seq. (this "Plan"). This Plan contemplates the collection and liquidation of all assets of the
Debtor and the distribution of the net proceeds of these assets towards payment of allowed
claims as classified in or otherwise determined pursuant to this Plan. Generally, the
classification and anticipated treatment of the claims are as follows:
(a) allowed administrative claims, priority tax claims and priority non-tax claims,
which will be paid first, in accordance with their respective statutory priorities,
and such claims are anticipated to be paid in full;
(b) allowed secured claims (other than the secured claim of the State of Alabama
Department of Revenue), if any, each of which will be satisfied in full by
abandonment of the applicable collateral to the holder of such allowed secured
claim, payment in full of such allowed secured claim with the liquidation
proceeds, or cure, reinstatement and payment of such allowed secured claim in
accordance with its terms;
(c) the secured claim of the State of Alabama Department of Revenue, to the extent
allowed, which will be paid as provided in Section 1129(a)(9)(C) of the
Bankruptcy Code;
(d) allowed general unsecured claims (with a separate class for the claims of
bondholders), which will be paid on a pro rata basis from the balance of the
liquidation proceeds, without post-petition accrued interest except as expressly
provided in this Plan; provided, however, that certain claimants holding claims
equal to or less than $5,000, or who agree in writing to reduce the allowed amount
of their claims to $5,000, will constitute a convenience class entitled to receive,
from the balance of the liquidation proceeds and on the initial distribution date, an
amount equal to 75% of the allowed principal amount of their claims;
(e) statutorily subordinated claims, to the extent allowed, which will be paid, if at all,
only if all allowed unsecured claims to which such subordinated claims are
subordinated are paid in full (and the Debtor anticipates that no payment will be
made on account of these claims);
(f) equity interests in the Debtor consisting of preferred stock, which will be paid in
an amount equal to the greatest of the allowed amount of any fixed liquidation
preference to which such holders are entitled, any fixed redemption price to which
such holders are entitled, or the value of such interests, but only after all allowed
unsecured claims and all statutorily subordinated claims are paid in full (and the
Debtor anticipates that no payment will be made on account of these equity
interests); and
- 2 -
(g) equity interests in the Debtor consisting of common stock or other equity
securities (excluding preferred stock), which will be canceled as of the effective
date of this Plan and will not be entitled to receive any distribution under this
Plan.
Under Section 1125(b) of the Bankruptcy Code, a vote to accept or reject this Plan cannot
be solicited from a holder of a claim or interest until such time as the disclosure statement has
been approved by the Bankruptcy Court and distributed to all such holders. In this case, the
Disclosure Statement was approved by the Bankruptcy Court and has been distributed
simultaneously with this Plan to all parties whose votes are being solicited. The Disclosure
Statement contains, among other things, a discussion of the Debtor's history, business, properties
and operations, a summary of this Plan, and certain other matters. ALL HOLDERS ARE
ENCOURAGED TO READ THIS PLAN AND THE DISCLOSURE STATEMENT IN
THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THIS PLAN.
ARTICLE 1.

DEFINITIONS AND RULES OF CONSTRUCTION
1.1 As used in this Plan and in the accompanying Disclosure Statement, the following
terms shall have the respective meanings assigned to them (terms defined in the singular to have
the same meaning when used in the plural and vice versa):
2003 Declaration of Trust shall mean that certain Amended and Restated Declaration of
Trust, dated as of March 26, 2003, among the Debtor, as successor in interest to P.C.B.
Bancorp, Inc., as sponsor, U.S. Bank National Association, a national banking
association, as institutional trustee, and the administrators named therein.
2003 Indenture Agreement shall mean that certain Indenture, dated as of March 26, 2003,
between the Debtor, as successor in interest to P.C.B. Bancorp, Inc., and U.S. Bank
National Association, a national banking association, as trustee.
2003 Indenture Claims shall mean Unsecured Claims that arise under the 2003 Indenture
Documents.
2003 Indenture Documents shall mean the 2003 Indenture Agreement and the 2003
Declaration of Trust, together with all instruments and agreements executed in
connection therewith.
2003 Indenture Trustee shall mean U.S. Bank National Association, a national banking
association, as trustee.
2003 Debentures shall mean the debentures issued by the Debtor pursuant to the 2003
Indenture Agreement.
2008 Indenture Agreement shall mean that certain Indenture dated as of March 1, 2008,
between the Debtor and The Bank of New York Mellon Trust Company, N.A., a national
- 3 -
banking association, as successor in interest to The Bank of New York Trust Company,
N.A., a national banking association, as trustee.
2008 Indenture Claims shall mean Unsecured Claims that arise under the 2008 Indenture
Documents.
2008 Indenture Documents shall mean the 2008 Indenture Agreement and all instruments
and agreements executed in connection therewith.
2008 Indenture Trustee shall mean The Bank of New York Mellon Trust Company, N.A.,
a national banking association, as trustee.
2008 Debentures shall mean the debentures issued by the Debtor pursuant to the 2008
Indenture Agreement.
Administrative Claim shall mean a Claim that is for any cost or expense of administration
in connection with this Case for the period of time from the Petition Date through the
Confirmation Date and that is of the kind set forth in Section 503(b) or Section 365(d)(3)
of the Bankruptcy Code, including any actual or necessary expense of preserving the
Estate, compensation or expense reimbursement for making a substantial contribution to
the Case, any compensation or reimbursement allowable under Sections 330(a) or 331 of
the Bankruptcy Code, and all fees and charges assessed against the Estate pursuant to
Chapter 123 of Title 28.
Administrative Claims Bar Date shall mean, for all Administrative Claims except Case
Professional Compensation, the date that is thirty (30) days after the Effective Date.
Affiliate shall have the meaning given to such term in Section 101(2) of the Bankruptcy
Code.
Alabama Revenue Department shall mean the State of Alabama Department of Revenue.
Allowed Claim shall mean:
(i) A Claim which has been listed by the Debtor on its Schedules as
liquidated in amount and not disputed or contingent and for which no
proof of claim has been filed by the applicable Bar Date, unless it is a
Disputed Claim; or
(ii) A Claim for which a proof of claim has been filed by the applicable Bar
Date, or otherwise has been deemed timely filed under applicable law,
unless it is a Disputed Claim; or
(iii) A Claim that is allowed (a) by a Final Order, (b) by a settlement
stipulation or (c) pursuant to express terms of this Plan; or
- 4 -
(iv) With respect to an Administrative Claim (other than a Disputed Claim), an
Administrative Claim for which a Holder thereof filed and served a
request for payment of such Administrative Claim.
No Claim shall be deemed to be an Allowed Claim for the purposes of this Plan unless
and until one of the above conditions has been satisfied. The term "Allowed Claim" shall
not, for purposes of computing Distributions, include interest on such Claim from and
after the Petition Date, unless otherwise expressly provided in this Plan.
Amended By-Laws shall mean the By-Laws as amended by the Plan Trustee in
furtherance of this Plan.
Amended Certificate of Incorporation shall mean the Certificate of Incorporation as
amended by the Plan Trustee in furtherance of this Plan.
Available Cash shall mean, on any date, the amount of Cash held by the Debtor on such
date (excluding Cash on deposit on such date in the Expense Reserve or the Disputed
Claims Reserve).
Avoidance Claim shall mean any claim, action or cause of action that the Debtor or the
Estate may have or be entitled to assert against any Person for the avoidance or
subordination of any transfer or Lien, or for the subordination of or objection to any
Claim, pursuant to Sections 510, 542, 543, 544, 545, 546, 547, 548, 549, 550, 551 or 553
of the Bankruptcy Code or pursuant to any similar or related state or federal statute or
common law (including fraudulent transfer laws), regardless of whether litigation is
commenced prior to or after the Effective Date to prosecute such claim, action or cause of
action.
Bankruptcy Administrator shall mean the Bankruptcy Administrator for the Middle
District of Alabama appointed pursuant to the U.S. Bankruptcy Administrator Program.
Bankruptcy Code shall mean Title 11 of the United States Code, 11 U.S.C. 101 et seq.
Bankruptcy Court shall mean the United States Bankruptcy Court for the Middle District
of Alabama, Northern Division or, in the event that such Court ceases to exercise
jurisdiction over the Case, the Court that exercises jurisdiction over the Case in lieu of the
United States Bankruptcy Court for the Middle District of Alabama, Northern Division.
Bankruptcy Rules shall mean the Federal Rules of Bankruptcy Procedure as promulgated
by the United States Supreme Court under Section 2075 of Title 28 of the United States
Code, and local rules of the Bankruptcy Court.
Bar Date shall mean, (i) with respect to Administrative Claims, the Administrative
Claims Bar Date, (ii) with respect to all other Claims (excluding Claims of Governmental
Units), November 30, 2009 (except as otherwise provided in Section 7.4), and (iii) with
respect to Claims of Governmental Units, February 22, 2010.
BB&T shall mean Branch Banking and Trust Company.
- 5 -
Books and Records shall mean all books and records (tangible or electronic) of the
Debtor that relate to the acts, conduct, assets, liabilities, business or transactions of the
Debtor or any of its subsidiaries or affiliates.
Business Day shall mean a day of the year other than a Saturday, Sunday or "legal
holiday" (as defined in Bankruptcy Rule 9006(a)).
By-Laws shall mean the by-laws of the Debtor as they exist on the Effective Date.
Case shall mean the case commenced by the Debtor's filing with the Bankruptcy Court of
a petition for relief under Chapter 11 of the Bankruptcy Code.
Case Committee shall mean the Official Committee of Unsecured Creditors appointed in
the Case pursuant to Section 1102 of the Bankruptcy Code.
Case Committee Professionals shall mean professionals, including attorneys, accountants
and consultants, retained by the Case Committee with Bankruptcy Court approval.
Case Professional Compensation shall mean any amounts claimed by a Case Professional
Person for services rendered or expenses incurred by such Case Professional Person in
representing the Debtor or the Case Committee.
Case Professional Persons shall mean Debtor Professionals and Case Committee
Professionals, or any of them.
Cash shall mean currency of the United States and cash equivalents, including bank
deposits.
Causes of Action shall mean all claims, choses in action and causes of action (including
those assertable derivatively), whether for a monetary recovery or other legal or equitable
remedies; whether known, unknown, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, unsecured, liquidated, unliquidated, reduced to judgment or not;
whether now owned or hereafter acquired; and whether arising under the Bankruptcy
Code or other federal, state or foreign law, including Avoidance Claims.
Certificate of Incorporation shall mean the certificate of incorporation of the Debtor as it
exists on the Effective Date.
Claim shall have the meaning ascribed to it in Section 101(5) of the Bankruptcy Code.
Claims Objection Deadline shall mean the last day for filing objections to or requests for
estimation of Claims (other than Disputed Claims as of the Effective Date for which no
objection or request for estimation shall be required), which shall be one hundred fifty
(150) days after the Effective Date or such later date as the Bankruptcy Court may order
(with or without notice or hearing).
Class shall mean a class of Claims or Equity Interests as defined in Article 2 of this Plan.
- 6 -
Common Stock shall mean the outstanding shares of common stock of the Debtor.
Confirmed Case shall mean the Case once a Confirmation Order is entered by the
Bankruptcy Court.
Confirmation Date shall mean the date of entry of the Confirmation Order.
Confirmation Order shall mean an order of the Bankruptcy Court confirming this Plan
pursuant to Section 1129 of the Bankruptcy Code.
Contractual Subordination shall mean an agreement by the Holder of a Claim to
subordinate the payment of such Claim or a Lien securing such Claim, or both, to the
payment of another Claim or a Lien securing such other Claim, or both.
Convenience Claim shall mean a Claim that is a General Unsecured Claim (other than an
Indenture Claim) and that is for an amount equal to or less than $5,000 or that exceeds
$5,000 but is reduced by written notice (in the form annexed to the order of the
Bankruptcy Court approving the Disclosure Statement) from the Holder thereof that is
delivered to the Debtor on or before the Voting Deadline to $5,000.
Cure shall mean the payment or other honor of all obligations required to be paid or
honored in connection with the assumption under this Plan of an executory contract or
unexpired lease pursuant to Section 365 of the Bankruptcy Code, including the cure of
any non-monetary defaults to the extent required, and with respect to monetary defaults,
the distribution within a reasonable period of time following the Effective Date of Cash,
or such other property as may be agreed upon by the parties or ordered by the Bankruptcy
Court, with respect to the assumption (or assumption and assignment) of an executory
contract or unexpired lease, pursuant to Section 365(b) of the Bankruptcy Code, in an
amount equal to all unpaid monetary obligations (or such other amount as may be agreed
upon by the parties) under such executory contract or unexpired lease, to the extent such
obligations are enforceable under the Bankruptcy Code and applicable non-bankruptcy
law.
Cure Claim shall have the meaning given to it in Section 7.2 of this Plan.
D&O Policies shall mean the following primary and excess policies issued in favor of the
Debtor: (i) Financial Institution Portfolio Policy (No. 7144-2614), for the policy period
of December 10, 2008 to December 10, 2009 [Chubb Group of Insurance Companies
(Federal Insurance Company)]; (ii) Excess Insurance Policy (No. 01-384-68-10), for the
policy period December 10, 2008 to December 10, 2009 [American International Group,
Inc. (National Union Fire Insurance Company of Pittsburgh, Pa.)]; and (iii) All Products
Excess Follow Form Policy (No. C010937/001), for the policy period December 10, 2008
to December 10, 2009 [Allied World Assurance Company LTD].
Debt Instruments shall mean, with respect to any Claim, all instruments and other
agreements (including notes, debentures, bonds, indentures and security documents)
evidencing or securing such Claim. For the avoidance of doubt, Debt Instruments
include the 2003 Debentures and all securities issued pursuant to the 2003 Declaration of
- 7 -
Trust; the Preferred Securities Debentures and all securities issued pursuant to the
Preferred Securities Declaration of Trust; the 2008 Debentures; and all agreements
related to any of the foregoing.
Debtor shall mean The Colonial BancGroup, Inc., a Delaware corporation.
Debtor Professionals shall mean any professionals, including attorneys, accountants and
consultants, retained by the Debtor in the Case with Bankruptcy Court approval.
Designated Causes of Action shall mean any of the following types of Estate Causes of
Action: (a) Estate Causes of Action that the Debtor elects to designate in writing, at the
request of the Plan Committee, as being the responsibility of the Plan Committee to
pursue and (b) Estate Causes of Action in respect of which the Plan Committee has made
a written request to the Debtor to pursue and which the Debtor has failed to designate or
pursue within a reasonable period of time after receipt of the request (such period of time
being deemed reasonable if such designation or pursuit occurs within 60 days after
receipt of such request, unless shortened or extended, for cause shown, by the Bankruptcy
Court).
Disbursement Account shall mean the account established by the Debtor in accordance
with Section 9.1(a) of this Plan.
Disclosure Statement shall mean the Disclosure Statement accompanying this Plan, as
approved by the Bankruptcy Court pursuant to Section 1125 of the Bankruptcy Code.
Disputed Claim shall mean a Claim (including a Priority Claim) asserted against the
Debtor that is not an Allowed Claim, and
(i) if no proof of claim or request for payment of an Administrative Claim has
been filed by the applicable Bar Date: (a) a Claim that has been or
hereafter is listed on the Schedules as disputed, contingent or unliquidated;
or (b) a Claim that has been or hereafter is listed on the Schedules as other
than disputed, contingent or unliquidated, but as to which the Debtor, the
Plan Trustee or any other party in interest has interposed a timely
objection or request for estimation in accordance with this Plan, the
Bankruptcy Code and the Bankruptcy Rules by the Claims Objection
Deadline or with respect to Administrative Claims, the deadline set forth
in Section 3.1 of this Plan, as applicable, which objection or request for
estimation has not been withdrawn or determined by a Final Order; or
(ii) if a proof of claim or request for payment of an Administrative Claim has
been filed by the applicable Bar Date: (a) a Claim for which no
corresponding Claim has been or hereafter is listed on the Schedules; (b) a
Claim for which a corresponding Claim has been or hereafter is listed on
the Schedules as other than disputed, contingent or unliquidated, but the
nature or amount of the Claim as asserted in the proof of claim varies from
the nature or amount of such Claim as listed on the Schedules; (c) a Claim
for which a corresponding Claim has been or hereafter is listed on the
- 8 -
Schedules as disputed, contingent or unliquidated; or (d) a Claim or
request for payment of an Administrative Claim for which a timely
objection or request for estimation is interposed by the Debtor or any other
party in interest in accordance with this Plan, the Bankruptcy Code and the
Bankruptcy Rules by the Claims Objection Deadline or, with respect to
Administrative Claims, the deadline set forth in Section 3.1 of this Plan, as
applicable, which objection or request for estimation has not been
withdrawn or determined by a Final Order. A Claim of the type listed in
clauses (a) through (c) of this clause (ii) shall no longer be considered a
Disputed Claim if no objection or request for estimation has been filed by
the Claims Objection Deadline.
Disputed Claims Reserve shall mean a reserve into which the Debtor shall deposit monies
on account of Disputed Claims in accordance with the provisions of Section 6.1(c) of this
Plan.
Distribution shall mean any payment or other distribution of Estate Property (including
Cash) pursuant to this Plan.
District Court shall mean the United States District Court for the Middle District of
Alabama, Northern Division.
DTCC shall have the meaning ascribed to it in Section 9.1(c) of this Plan.
Effective Date shall mean the first Business Day immediately following the date on
which the conditions specified in Section 11.2 of this Plan are satisfied.
Employee-Related Agreements shall mean those agreements in existence on the Petition
Date between the Debtor and any of its employees or any Person acting on behalf of such
employees.
Equity Interests shall mean the Common Stock, the Preferred Stock and all other equity
securities (as defined in Section 101(16) of the Bankruptcy Code) of the Debtor that were
in existence immediately prior to the Effective Date and each option, warrant or other
right to acquire any equity interests of the Debtor that was in existence immediately prior
to the Effective Date.
Estate shall mean the bankruptcy estate of the Debtor created pursuant to Section 541(a)
of the Bankruptcy Code upon the filing of the Case, which estate includes all Estate
Property and shall remain in existence for the purpose of allowing the investigation,
prosecution and/or settlement of the Estate Causes of Action pursuant to the terms of this
Plan.
Estate Causes of Action shall mean all Causes of Action that the Debtor or the Estate has
against any Person, including Avoidance Claims and any rights to recover Estate
Property or damages thereto. Without limiting the generality of the foregoing, the term
"Estate Causes of Action" shall include the following:
- 9 -
The Colonial BancGroup, Inc. v. FDIC, Case No. 2:10-cv-00198-MHT-
DHW (M.D. Ala.);
DHW (M.D. Ala.);
DHW (M.D. Ala.);
DHW (M.D. Ala.);
The Colonial BancGroup, Inc. v. FDIC, Adv. Proc. No. 10-03019-DHW
(Bankr. M.D. Ala.).
Estate Property shall mean property in existence on the Petition Date or acquired
thereafter, including Cash, securities, Estate Causes of Action (and recoveries thereon)
and all other property of the Estate within the meaning of Section 541 of the Bankruptcy
Code, and all proceeds and products of the foregoing.
Expense Reserve shall mean a reserve in amounts reasonably estimated from time to time
by the Plan Trustee as being necessary to assure payment when due of all Case
Professional Compensation, Post-Confirmation Administrative Expenses and other
expenses that the Plan Trustee anticipates will be incurred in connection with the
performance of the Debtor's duties under this Plan and applicable law, which amounts are
to be reserved from Distributions to the Holders of Claims and payment of other fees and
expenses (including the payment of any Indenture Trustee Fees pursuant to this Plan)
pending full implementation and final consummation of this Plan.
FDIC shall mean the Federal Deposit Insurance Corporation, in its capacity as receiver
for Colonial Bank, Montgomery, Alabama.
Fidelity Policies shall mean the following policies issued in favor of the Debtor by Chubb
Group of Insurance Companies (Federal Insurance Company): (i) Financial Institution
Bond: Form A and Form B (Nos. 81158390 DFI and 81910594 DFI) and (ii) Financial
Institution Electronic and Computer Crime Policy (No. 81260198 DFI).
Final Decree shall mean a Final Order entered by the Court pursuant to Section 350 of the
Bankruptcy Code closing the Case.
Final Distribution shall have the meaning given to it in Section 9.3(b) of this Plan.
Final Order shall mean an order or judgment of a court as to which (i) the time to appeal
or to seek certiorari or review has expired and no appeal or petition for certiorari or
review has been timely filed, or (ii) any timely-filed appeal or petition for certiorari or
review has been finally determined or dismissed.
- 10 -
General Unsecured Claim shall mean an Unsecured Claim other than a Priority Claim or
a Statutorily Subordinated Claim, but including any Secured Creditor Deficiency Claim
and any Indenture Claim.
Governmental Unit shall have the meaning given to such term in Section 101(27) of the
Bankruptcy Code.
Holder shall mean the Person who owns a Claim or a Equity Interest, or both.
Indenture Claims shall mean the 2003 Indenture Claims, the 2008 Indenture Claims, and
the Preferred Securities Indenture Claims.
Indenture Claims Record Date shall mean a date established by the Debtor by a filing
with the Bankruptcy Court setting forth the date on which the register of Debt
Instruments applicable to Indenture Claims shall be fixed for the purposes of establishing
the Holders of record of Indenture Claims entitled to Distributions thereon.
Indenture Documents shall mean the 2003 Indenture Documents, the 2008 Indenture
Documents, and the Preferred Securities Indenture Documents.
Indenture Trustee Fees shall mean, with respect to each Indenture Trustee, the fees and
expenses (including reasonable counsel fees and expenses) that are at any time due and
payable to such Indenture Trustee in accordance with the applicable Indenture
Documents (as in effect on the Petition Date).
Indenture Trustees shall mean the 2003 Indenture Trustee, the 2008 Indenture Trustee
and the Preferred Securities Indenture Trustee, and their respective successors in such
capacities.
Initial Distribution Date shall have the meaning given to it in Section 9.3(a) of this Plan.
Insurance Policies shall mean any and all policies of insurance of the Debtor or the
Estate and all agreements, instruments, and documents relating to these policies,
including the D&O Policies, the Fidelity Policies, and any property insurance policies.
Lien shall have the meaning given to such term in Section 101(37) of the Bankruptcy
Code.
Non-Essential Books and Records shall mean, on any date after sixty (60) days following
the Effective Date, all Books and Records on such date that the Debtor believes are not
essential to (i) sale, collection, or other disposition of Estate Property, (ii) the prosecution
of Causes of Action by the Debtor or the Plan Committee, (iii) the objection to Claims,
(iv) the implementation of the terms of this Plan, (v) the Debtor's compliance with
applicable laws, or (vi) the production of documents in response to subpoenas or other
legal process pending on such date.
Paid in Full shall mean, with respect to the payment or satisfaction of any Claim, the full
payment, in Cash or other Estate Property (to the extent that payment with Estate
- 11 -
Property other than Cash is authorized under this Plan or the Bankruptcy Code to be
made to the Holder of such Claim), of the allowed amount of such Claim, together with
post-petition interest, reasonable fees and other charges to the extent that the Holder of
such Claim is entitled thereto under this Plan and the Bankruptcy Code, including under
Sections 506(b), 511 and 1129 of the Bankruptcy Code.
Permitted Investments shall mean investments of Cash permitted by Section 8.4 of the
Plan.
Person shall mean any individual, corporation, partnership, trust, limited liability
partnership, limited liability company, venture, unincorporated organization, other
business or commercial association or a Governmental Unit.
Petition Date shall mean August 25, 2009.
Plan shall have the meaning set forth in the Introduction above.
Plan Committee shall mean a committee consisting of at least three (3) but no more than
five (5), members, each of whom is the Holder of an Allowed Claim that constitutes an
Unsecured Claim and is designated by the Debtor, in consultation with the Case
Committee, and identified pursuant to Section 8.6 of this Plan.
Plan Trustee shall mean either (a) Ben S. Branch, a resident of Amherst, Massachusetts,
subject to the consent of the Debtor and the Case Committee regarding the terms of his
engagement as Plan Trustee or (b) a person selected by the Debtor, with the consent of
the Case Committee, and identified in a filing to be made by the Debtor with the
Bankruptcy Court on or before the Voting Deadline, and any successor appointed
pursuant to this Plan.
Post-Confirmation Administrative Expenses shall mean the fees, costs and expenses
incurred after the Confirmation Date in connection with the administration and
consummation of this Plan by the Debtor, the Plan Trustee and Post-Confirmation
Professionals, including fees and expenses of the Plan Trustee, operating expenses of the
Debtors and Plan Trustee (including salaries of employees of the Debtor and Plan
Trustee) and Post-Confirmation Professional Compensation for services rendered
(including the review of Claims against the Debtor and the filing of objections thereto
and the prosecution of any litigation or enforcement of Causes of Action in connection
with this Plan, such as Estate Causes of Action).
Post-Confirmation Professional shall mean an attorney, accountant, appraiser, auctioneer,
business consultant or other professional person (whether previously employed by the
Debtor or the Case Committee in the Case or otherwise), retained by the Debtor, the Plan
Trustee or the Plan Committee to provide services to the Debtor, the Plan Trustee or the
Plan Committee after the Confirmation Date.
Post-Confirmation Professional Compensation shall mean any claim for Post-
Confirmation Administrative Expenses by Post-Confirmation Professionals.
- 12 -
Preferred Securities Debentures shall mean the debentures issued pursuant to the terms of
the Preferred Securities Indenture Agreement.
Preferred Securities Declaration of Trust shall mean that certain Amended and Restated
Declaration of Trust of Colonial Capital Trust IV, dated as of September 16, 2003,
among the Debtor, as sponsor, common securities holder and debenture issuer, The Bank
of New York Mellon Trust Company, N.A., a national banking association, as successor
in interest to The Bank of New York, as institutional trustee, The Bank of New York
(Delaware), as Delaware trustee, and the regular trustees named therein.
Preferred Securities Indenture Agreement shall mean that Indenture, dated as of March
21, 2002, between the Debtor and The Bank of New York Mellon Trust Company, N.A.,
a national banking association, as successor in interest to The Bank of New York, a New
York banking corporation, as trustee, as supplemented by a Second Supplemental
Indenture, dated as of September 16, 2003, between the Debtor and such trustee
Preferred Securities Indenture Claims shall mean Unsecured Claims that arise under the
Preferred Securities Indenture Documents.
Preferred Securities Indenture Documents shall mean the Preferred Securities Indenture
Agreement, the Preferred Securities Declaration of Trust, the Preferred Securities
Debentures, and all instruments and agreements executed in connection therewith and all
trusts created thereby.
Preferred Securities Indenture Trustee shall mean The Bank of New York Mellon Trust
Company, N.A., a national banking association, as trustee.
Preferred Stock shall mean the outstanding shares of preferred stock issued or exchanged
(or deemed issued or exchanged) by the Debtor.
Priority Claim shall mean an Unsecured Claim (or portion thereof) that is an Allowed
Claim and is entitled to priority under Section 507 of the Bankruptcy Code, including an
Administrative Claim.
Priority Non-Tax Claim shall mean a Priority Claim other than an Administrative Claim
or a Priority Tax Claim.
Priority Tax Claim shall mean a Priority Claim that is entitled to priority under Section
507(a)(8) of the Bankruptcy Code and is not a Secured Claim.
Privileges shall mean all attorney-client privileges, work product protections, and other
immunities or protections from disclosure held by the Debtor.
Pro Rata Share shall mean, with respect to a Distribution on account of an Allowed
Claim, an amount determined by multiplying such Claim by a fraction, the numerator of
which shall be the amount of such Claim and the denominator of which shall be the
aggregate amount on such date of all Claims in such Class (or, in the case of Classes E
and F, such combined Classes), including all Disputed Claims in such Class (or Classes)
- 13 -
on such date, subject to any order entered by the Bankruptcy Court estimating the
Disputed Claim on a preliminary or final basis for purposes of making the Distribution.
Professional Statement shall mean a billing statement from a Post-Confirmation
Professional, including an attorney, accountant, or consultant, describing services
rendered and expenses incurred by such professional.
Schedules shall mean the schedules of assets and liabilities, the list of Holders of Equity
Interests and the statement of financial affairs filed with the Bankruptcy Court by the
Debtor, including any amendments or supplements thereto.
SEC shall mean the Securities and Exchange Commission.
Secured Claim shall mean a Claim against the Debtor that arose before the Petition Date,
to the extent of the value of any valid and unavoidable Lien on Estate Property that
secures payment of such Claim.
Secured Creditor Deficiency Claim shall mean the Claim of a creditor against the Debtor
for the excess of such creditor's Claim over the value of the Liens securing such Claim.
Shareholder shall mean a Holder of one or more Equity Interests.
Statutorily Subordinated Claim shall mean a Claim that is subordinated by the
Bankruptcy Court, after notice and a hearing, pursuant to Section 510(b) of the
Bankruptcy Code.
Taxes shall mean all federal, state or local taxes, including all net income, alternative
minimum, net worth or gross receipts, capital, value added, franchise, profits and
estimated taxes, together with any interest, penalties, fines, additions to tax or additional
amounts imposed by any Governmental Unit or paid in connection with any item
described in the foregoing provisions of this definition.
Taxing Authority shall mean a Governmental Unit having or asserting a Claim for Taxes
against the Debtor, including the Alabama Revenue Department.
Title 28 shall mean title 28 of the United States Code, 28 U.S.C. 1 et seq.
Unclaimed Property shall mean any funds which are distributed or attempted to be
distributed pursuant to this Plan and which are unclaimed, including (a) checks (and the
funds represented thereby) that have been returned as undeliverable without a proper
forwarding address, (b) funds for checks that have not been presented and paid within
ninety (90) days of their issuance, and (c) checks (and the funds represented thereby) that
were not mailed or delivered because of the absence of a proper address to mail or deliver
such property.
Unpaid Claims Reserve shall mean an account established and maintained by the Plan
Trustee for the deposit of Unclaimed Property pursuant to Section 9.6 of this Plan.
- 14 -
Unsecured Claim shall mean a Claim against the Debtor that arose or is deemed to have
arisen before the Petition Date, to the extent the amount of such Claim (a) is not secured
by any Lien upon any Estate Property or (b) is a Secured Creditor Deficiency Claim.
Voting Deadline shall mean the deadline established by the Bankruptcy Court as the
deadline to cast ballots for or against this Plan.
1.2 The terms "herein," "hereof" and "hereunder" and other words of similar import
refer to this Plan as a whole and not to any particular section, paragraph or subdivision. Any
pronoun used shall be deemed to cover all genders. All references to any statute shall include all
related rules and implementing regulations and any amendments of same and any successor
statutes, rules and regulations; to this Plan or any other agreement, instrument or document
(including any Debt Instruments) shall include any and all amendments, modifications and
supplements thereto and any and all restatements, extensions or renewals thereof; to any Person
shall mean and include the successors and permitted assigns of such Person; or to "including"
shall be understood to mean "including, without limitation" (and, for purposes hereof, the rule of
ejusdem generis shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters to matters similar to the matters specifically
mentioned). All calculations and (unless otherwise provided in this Plan) payments are to be
made in lawful currency of the United States of America. The phrase "full satisfaction" when
used with reference to Distributions on account of a Claim shall mean the full and complete
settlement, satisfaction, release and discharge of such Claim.
1.3 All references in this Plan to monetary figures shall refer to United States of
America currency.
1.4 Bankruptcy Rule 9006 shall be used to compute any period of time prescribed or
allowed by this Plan.
ARTICLE 2.

IDENTIFICATION OF CLASSES OF CLAIMS
AND INTERESTS IMPAIRED AND UNIMPAIRED BY THE PLAN
All Claims and Equity Interests, except Administrative Claims and Priority Tax Claims,
are placed in the Classes set forth below. In accordance with Section 1123(a)(1) of the
Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been classified.
A Claim or Equity Interest is placed in a particular Class only to the extent that the Claim
or Equity Interest falls within the description of that Class, and is classified in other Classes to
the extent that any portion of the Claim or Equity Interest falls within the description of such
other Classes. A Claim is also placed in a particular Class for the purpose of receiving
Distributions pursuant to this Plan only to the extent that such Claim is an Allowed Claim in that
Class and such Claim has not been paid, released or otherwise settled prior to the Effective Date.

- 15 -
2.1 Unimpaired Classes of Claims (deemed to have accepted this Plan and, therefore,
not entitled to vote on this Plan):
(a) Class A - Priority Non-Tax Claims -- Class A shall consist of all Allowed
Claims that are Priority Claims other than Administrative Claims and Priority Tax Claims.
(b) Class B - Certain Secured Claims -- Class B shall consist of all Allowed
Claims that are Secured Claims other than Secured Claims held or asserted by the Alabama
Revenue Department.
(c) Class C - Secured Claim of Alabama Revenue Department -- Class C
consists of any Allowed Claim of the Alabama Revenue Department that is a Secured Claim.
2.2 Impaired Classes of Claims and Equity Interests (entitled to vote on this Plan,
unless deemed to have rejected this Plan and therefore not entitled to vote):
(a) Class D - Convenience Claims -- Class D consists of all Allowed Claims
that are Convenience Claims.
(b) Class E - Certain General Unsecured Claims -- Class E shall consist of all
Allowed Claims that are General Unsecured Claims, excluding Convenience Claims and
Indenture Claims.
(c) Class F - Indenture Claims -- Class F shall consist of all Allowed Claims
that are Indenture Claims.
(d) Class G - Statutorily Subordinated Claims -- Class G shall consist of all
Allowed Claims that are Statutorily Subordinated Claims.
(e) Class H - Preferred Stock -- Class H shall consist of all Preferred Stock.
(f) Class I - Equity Interests other than Preferred Stock -- Class I shall consist
of all Equity Interests other than Preferred Stock.
ARTICLE 3.

TREATMENT OF ADMINISTRATIVE
AND PRIORITY TAX CLAIMS
Administrative and Priority Tax Claims shall be treated in the following fashion:
3.1 Administrative Claims (Other than for Case Professional Compensation) and Bar
Date. Any Person who asserts an Administrative Claim that arises before the Confirmation Date,
excluding Claims of Case Professional Persons for the payment of Case Professional
Compensation and Claims described in Sections 3.3 or 3.4 of this Plan, shall, on or before the
Administrative Claims Bar Date, file an application with the Bankruptcy Court for allowance of
such Claim as an Administrative Claim (specifying the amount of and basis for such Claim) and
serve such application on counsel for the Debtor, the Case Committee and the Bankruptcy
- 16 -
Administrator; provided, however, that Persons who have filed an application with the
Bankruptcy Court before the Administrative Claims Bar Date need not file a new application.
Failure to file a timely application for allowance pursuant to this section shall bar a claimant
from seeking recovery on such Administrative Claim. The Debtor shall have sixty (60) days (or
such longer period as may be allowed by order of the Bankruptcy Court) after the Administrative
Claims Bar Date to review and object to any Administrative Claim. An Administrative Claim
that is allowed under applicable provisions of the Bankruptcy Code shall be paid, in full, in a
Cash payment on the thirtieth (30th) day following the later to occur of the Effective Date or
entry of a Final Order by the Bankruptcy Court allowing the Administrative Claim, unless the
Holder agrees in writing with the Debtor to a different and less favorable treatment of such
Administrative Claim. Notwithstanding the foregoing, the Debtor shall have the right to satisfy
any Administrative Claim that arises from obligations incurred by the Debtor in the ordinary
course of business from the Petition Date through the Confirmation Date and that the Debtor
does not dispute by payment or performance in accordance with the agreement giving rise to
such Claim or applicable law.
3.2 Case Professional Compensation. All Case Professional Persons asserting
entitlement to Case Professional Compensation for services rendered to the Debtor or the Case
Committee shall file and serve on the Debtor, the Case Committee and the Bankruptcy
Administrator an application for final allowance of such Case Professional Compensation not
later than sixty (60) days after the Effective Date. Such application may include requests for
Case Professional Compensation for services rendered or expenses incurred prior to the Effective
Date or thereafter in connection with any applications for allowance of Case Professional
Compensation pending on or filed after the Effective Date, including responding to or otherwise
addressing any objections to such Case Professional Compensation. All such Case Professional
Compensation, when and if so awarded, shall be paid, in full, in single Cash payments within
thirty (30) days following the date on which the order by the Bankruptcy Court allowing the
Case Professional Compensation becomes a Final Order, unless the party entitled to payment
thereof agrees in writing to a different and less favorable treatment thereof. Notwithstanding the
foregoing, any Case Professional Person who is entitled to receive Case Professional
Compensation pursuant to any prior order of the Bankruptcy Court establishing procedures for
the allowance of such compensation may continue to receive such Case Professional
Compensation for services rendered on or before the Effective Date, without further Bankruptcy
Court review or approval. Case Professional Persons who are required to file and serve
applications for final allowance of their Claims for Case Professional Compensation and who do
not file and serve such applications by the deadline required herein shall be forever barred from
asserting such Claims for Case Professional Compensation against the Debtor. Objections to any
Claim for Case Professional Compensation must be filed and served on the Debtor, the Case
Committee, the Bankruptcy Administrator, and the Professional Person asserting the Claim for
Case Professional Compensation, not later than thirty (30) days (or such longer period as may be
allowed by order of the Bankruptcy Court) after the date on which an application for allowance
of such Claim for Case Professional Compensation was served.
3.3 Payment of Bankruptcy Administrator Fees. All fees due the Bankruptcy
Administrator shall be paid in the ordinary course of the Debtor's business, and no proof of claim
shall be required to be filed.
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3.4 Priority Tax Claims. Except to the extent that the Holder thereof agrees to a
different treatment, each Holder of a Priority Tax Claim that is an Allowed Claim shall receive,
in full satisfaction of such Claim, Cash in the amount of such Claim on the thirtieth (30th) day
after the later to occur of the Effective Date or the date on which such Priority Tax Claim
becomes an Allowed Claim by Final Order of the Bankruptcy Court, unless the Holder of such
Priority Tax Claim agrees in writing to a different and less favorable treatment of such Priority
Tax Claim.
3.5 Expense Reserve for Payments. The Debtor shall cause to be deposited into the
Expense Reserve for the benefit of Administrative and Priority Tax Claims, prior to making any
other Distribution pursuant to this Plan, an amount in Cash sufficient to pay all Administrative
and Priority Tax Claims that are due pursuant to this Article 3, and shall pay all such
Administrative and Priority Tax Claims prior to making any other Distribution under this Plan.
ARTICLE 4.

TREATMENT OF UNIMPAIRED CLASSES
4.1 Treatment of Class A (Priority Non-Tax Claims). Unless the Holder of such
Claim agrees in writing with the Debtor to different treatment, each Holder of an Allowed Claim
in Class A shall receive, on account of such Claim and in full satisfaction thereof, Cash on the
Initial Distribution Date in the allowed amount of such Claim.
4.2 Treatment of Class B (Certain Secured Claims). Unless the Holder of such Claim
agrees in writing with the Debtor to different treatment, each Holder of an Allowed Claim in
Class B shall receive, on account of such Claim and in full satisfaction thereof, either (at the
Debtor's option) (a) abandonment from the Estate of the collateral securing such Class B Claim
or (b) Cash in the allowed amount of such Class B Claim (including any interest on such Claim
required to be paid to such Holder pursuant to Section 506(b) of the Bankruptcy Code) until such
Claim B is Paid in Full; provided, however, the Debtor may elect by notice to the Holder of any
such Class B Claim to (i) cure all defaults with respect to such Class B Claim that occurred
before or after the Petition Date (other than a default of a kind specified in Section 365(b)(2) of
the Bankruptcy Code or of a kind that Section 365(b)(2) expressly does not require to be cured),
(ii) reinstate the maturity of such Class B Claim as such maturity existed before such default, (iii)
compensate the Holder of such Class B Claim for any damages incurred as a result of any
reasonable reliance by such Holder on such contractual provision or such applicable law, (iv) if
such Class B Claim arises from any failure to perform a non-monetary obligation, compensate
the Holder of such Class B Claim for any actual pecuniary loss incurred by such Holder as a
result of such failure, and (v) otherwise comply with the legal, equitable and contractual rights to
which the Holder of such Class B Claim is entitled under the Debt Instruments evidencing such
Class B Claim. Distributions on account of a Class B Claim shall be made on the later to occur
of the Initial Distribution Date or thirty (30) days after the date on which such Class B Claim
becomes an Allowed Claim.
4.3 Treatment of Class C (Secured Claim of Alabama Revenue Department). Unless
the Holder of such Class C Claim agrees to different treatment, such Holder (the Alabama
Revenue Department) shall receive, on account of its Allowed Claim in Class C and in full
- 18 -
satisfaction thereof, regular installment payments, in Cash, of a total value, as of the Effective
Date equal to the allowed amount of such Claim over a period ending not later than five (5) years
after the Petition Date, and in a manner not less favorable than the most favored General
Unsecured Claim in Class E.
ARTICLE 5.

TREATMENT OF IMPAIRED CLASSES
Except as otherwise provided in Article 4 of this Plan, all Classes of Claims and Equity
Interests are impaired under this Plan. If a dispute arises as to whether any Class of Claims or
Equity Interests is impaired under this Plan, the Bankruptcy Court, after notice and an
opportunity for a hearing, shall resolve such controversy. All impaired Classes shall receive one
or more Distributions as set forth in this Article on account of, and in full satisfaction of, all
Claims against the Debtor and the Estate, and shall have no rights or remedies against the
Debtor, the Estate or any Estate Property, except as specifically set forth in this Plan; provided,
however, such restriction shall be without prejudice to the rights of any party in interest to pursue
Causes of Action (other than Estate Causes of Action) against Persons other than the Debtor or
the Estate or any Estate Property. If and to the extent that any Claim is equitably subordinated
pursuant to Section 510(c) of the Bankruptcy Code or otherwise prior to any Distribution under
this Plan, then in making such Distribution, the Plan Trustee shall cause Available Cash that
would otherwise be distributed to the Holder of such equitably subordinated Claim to be
distributed instead to the Holder of the Claim, or ratably to the Holders of the Claims, to which
such equitably subordinated Claim is subordinated.
The treatment of Claims in Classes D, E, F, G, H and I shall be as follows:
5.1 Treatment of Class D (Convenience Claims). On either (i) the Initial Distribution
Date, if no objection to such Claim has been timely filed by the Claims Objection Deadline, or
(ii) the first Distribution Date after the date on which any timely objection to such Convenience
Claim is settled, withdrawn or overruled pursuant to Final Order of the Bankruptcy Court, each
Holder of an Allowed Claim in Class D shall receive, in full satisfaction thereof, an amount in
Cash necessary to cause seventy-five percent (75%) of the principal amount of such Holder's
Claim to be paid.
5.2 Treatment of Class E (Certain General Unsecured Claims). To the extent there
are funds remaining after payment, or a reserve for payment, of Allowed Claims in Classes A
through D, and a reserve for payment of any Disputed Claims in such Classes, upon the Initial
Distribution Date and thereafter as provided in Section 9.3 of this Plan, each Holder of an
Allowed Claim in Class E shall be entitled to receive on account of such Holder's Claim, in full
satisfaction thereof, a Pro Rata Share of the Available Cash (calculated based on the aggregate
amount on such date of all Allowed Claims in Classes E and F) until all Allowed Claims in Class
E are Paid in Full or the Estate Property is exhausted.
5.3 Treatment of Class F (Indenture Claims). To the extent there are funds remaining
after payment, or a reserve for payment, of Allowed Claims in Classes A through D, and a
reserve for payment of any Disputed Claims in such Classes, upon the Initial Distribution Date
- 19 -
and thereafter as provided in Section 9.3 of this Plan, each Holder of an Allowed Claim in Class
F shall be entitled to receive on account of such Holder's Claim, in full satisfaction thereof, a Pro
Rata Share of the Available Cash (calculated based on the aggregate amount on such date of all
Allowed Claims in Classes E and F) until all Allowed Claims in Class F are Paid in Full or the
Estate Property is exhausted. All Distributions made with respect to Allowed Claims in Class F
shall be made to the applicable Indenture Trustee, subject to the withholding of a reserve in
accordance with this Plan.
5.4 Treatment of Class G (Statutorily Subordinated Claims). To the extent there are
funds remaining after payment, or a reserve for payment, of Allowed Claims in Classes A
through F, and a reserve for payment of any Disputed Claims in such Classes, each Holder of an
Allowed Claim in Class G, if any, shall be entitled to receive on account of such Holder's Claim,
in full satisfaction thereof, a share of the Available Cash, as determined by Final Order of the
Bankruptcy Court that subordinates such Claim and specifies the degree of subordination of such
Claim to other Allowed Claims or Equity Interests, until such Holder's Allowed Claim is Paid in
Full or the Estate Property is exhausted. Based on the Debtor's estimates of the net realizable
value of Estate Property, Statutorily Subordinated Claims will not be entitled to receive or retain
any property or Distribution under this Plan.
5.5 Treatment of Class H (Preferred Stock). To the extent that there are funds
remaining after payment, or a reserve for payment, of Allowed Claims in Classes A through G,
and a reserve for payment of any Disputed Claims in such Classes, each Holder of Preferred
Stock shall be entitled to receive on account of such Preferred Stock a pro rata share of Available
Cash calculated upon the greatest of the allowed amount of any fixed liquidation preference to
which all Holders of Preferred Stock are entitled, any fixed redemption price to which all
Holders of Preferred Stock are entitled, or the aggregate value of all such Preferred Stock. Based
on the Debtor's estimates of the net realizable value of Estate Property, Holders of Preferred
Stock will not be entitled to receive or retain any property or Distribution under this Plan.
5.6 Treatment of Class I (Equity Interests other than Preferred Stock). Holders of
Equity Interests in Class I shall not receive or retain any property under this Plan on account of
such Equity Interests. On the Effective Date, all Equity Interests in Class I shall be deemed
canceled and shall have no further legal effect. Accordingly, Class I is deemed not to have
accepted the Plan and the Debtor will not solicit ballots from the Holders of Equity Interests in
Class I.
ARTICLE 6.

TREATMENT OF DISPUTED CLAIMS
6.1 Objections to and Subordination of Claims; Disputed Claims Reserve.
(a) At any time prior to the Claims Objection Deadline, the Debtor shall be
authorized, with respect to those Claims that are not Allowed Claims hereunder or by
Bankruptcy Court order, (i) to object to any Claims or Equity Interests, (ii) to seek subordination
of the whole or any part of a Claim under Section 510(b) or (c)(1) of the Bankruptcy Code or
other applicable law, and (iii) pursuant to Bankruptcy Rule 9019(b) and Section 105(a) of the
- 20 -
Bankruptcy Code, to compromise and settle Disputed Claims, in accordance with the following
procedures, which shall constitute sufficient notice in accordance with the Bankruptcy Code and
the Bankruptcy Rules for compromises and settlement of Disputed Claims:
(i) If the resulting settlement provides for an Allowed Claim in an
amount equal to or less than $50,000, the Debtor may settle the Disputed Claim
and execute necessary documents, including a stipulation of settlement or release,
in its sole and absolute discretion without notice to or the consent of any party;
and
(ii) If the resulting settlement provides for an Allowed Claim in an
amount greater than $50,000, the Debtor shall be authorized and empowered to
settle such Disputed Claim and to execute necessary documents, including a
stipulation of settlement or release, subject to notifying the Plan Committee of the
terms of the settlement. If the Plan Committee indicates its approval or does not
provide the Debtor with a written objection to the proposed settlement agreement
within ten (10) days after it receives written notice of such settlement, then the
Debtor shall be authorized to accept and consummate the settlement agreement
and record an Allowed Claim in the settled amount. If the Plan Committee
objects to the proposed settlement not later than ten (10) days after it receives
written notice of such settlement, then the settlement may not be consummated
without approval of the Bankruptcy Court pursuant to Bankruptcy Rule 9019.
(b) From and after the Effective Date, the Debtor shall be authorized to seek
subordination of any Claim pursuant to Section 510(b) or (c)(1) of the Bankruptcy Code. If the
Bankruptcy Court, after notice and a hearing, enters an order determining that a Claim is
subordinated pursuant to Section 510(b) of the Bankruptcy Code, such Claim shall be deemed to
be included in Class G and shall be entitled to treatment within that Class in accordance with the
extent of subordination specified in the Bankruptcy Court's subordination order with respect to
such Claim. If the Bankruptcy Court, after notice and a hearing, enters an order subordinating
any such Claim pursuant to Section 510(c)(1) of the Bankruptcy Code, then such Claim shall be
entitled to treatment under this Plan in accordance with the terms of the Bankruptcy Court's
subordination order with respect to such Claim.
(c) On or before the Initial Distribution Date, the Debtor shall deposit in the
Disputed Claims Reserve from any Distributions made or to be made in accordance with this
Plan to Holders of Priority Non-Tax Claims or General Unsecured Claims, for the benefit of each
Holder of a Disputed Claim in either of such Classes, an amount equal to the Pro Rata Share that
would have been distributed to the Holder of such Disputed Claim if such Disputed Claim had
been an Allowed Claim in such Class on the date of such Distribution (or such lesser amount as
may be estimated by the Bankruptcy Court); provided, however, no amount shall be required to
be deposited into the Disputed Claims Reserve with respect to any Claim that is a Secured Claim
subject to dispute. The Debtor shall distribute to the Holder of any Disputed Claim that has been
subsequently allowed by Final Order, but only to the extent of the allowed amount of such
Claim, all Cash or other Estate Property that such Holder would have been entitled to receive on
account of the allowed amount of such Holder's Claim if such Claim had been an Allowed Claim
in such amount on the Effective Date. If any Disputed Claim is subsequently disallowed by
- 21 -
Final Order, or is allowed in an amount less than the amount claimed by the Holder of such
Disputed Claim, then any funds that have been deposited in the Disputed Claims Reserve based
upon the disallowed portion of the amount claimed by the Holder of the Disputed Claim shall be
deposited into the Disbursement Account and redistributed to the Holders of Allowed Claims in
accordance with Section 9.3 of this Plan. If a Claim is a Disputed Claim, in whole or in part,
because the Debtor asserts a right of offset against such Disputed Claim or recoupment against
the Holder of such Disputed Claim, then if and to the extent the Claim giving rise to such offset
or recoupment is sustained by a Final Order, the Disputed Claim shall be reduced or eliminated
and, to the extent such offset or recoupment exceeds in amount the Disputed Claim and unless
otherwise provided by applicable law, the Holder of such Claim shall be required to pay to the
Debtor the amount of such offset or recoupment less the amount in which such Disputed Claim
would otherwise have been allowed absent such offset or recoupment.
6.2 Estimation of Claims. From and after the Effective Date, but prior to the Claims
Objection Deadline, the Debtor may at any time request the Bankruptcy Court to estimate for
Final Distribution purposes any contingent or unliquidated Claim or any Disputed Claim
pursuant to Section 502(c) of the Bankruptcy Code regardless of whether the Debtor previously
objected to or sought to estimate such Claim; and the Bankruptcy Court shall retain jurisdiction
to consider any request to estimate any Claim at any time during litigation concerning any
objection to any Claim, including during the pendency of any appeal relating to any such
objection. Unless otherwise provided in an order of the Bankruptcy Court, if the Bankruptcy
Court estimates any contingent or unliquidated Claim or any Disputed Claim, the estimated
amount shall constitute either the allowed amount of such Claim or a maximum limitation on
such Claim, as determined by the Bankruptcy Court; provided, however, that, if the estimate
constitutes the maximum limitation on such Claim, the Debtor may elect to pursue supplemental
proceedings to object to any ultimate allowance of such Claim; and provided further, however,
that the foregoing is not intended to limit the rights granted by Section 502(j) of the Bankruptcy
Code. All of the aforementioned Claims, objection, estimation and resolution procedures are
cumulative and not necessarily exclusive of one another.
ARTICLE 7.

TREATMENT OF EXECUTORY CONTRACTS AND LEASES
7.1 Assumption or Rejection of Executory Contracts and Unexpired Leases. The
Debtor, in consultation with the Case Committee, may assume or reject any executory contract or
unexpired lease and, in the case of an assumption, assign such contract or lease, upon
Bankruptcy Court approval after giving written notice to the counterparty of the Debtor's intent
to assume or reject such contract or lease at any time prior to the Effective Date and, if such
contract or lease is in default, to effect a Cure in connection with any such assumption as
provided in Section 7.2. All executory contracts (including Employee-Related Agreements) and
unexpired leases that have not been assumed and assigned, or rejected, pursuant to an order
entered by the Bankruptcy Court on or before the Effective Date, shall be deemed to be rejected
by the Debtor on the Effective Date; provided, however, that the Debtor reserves the right to
change the election with respect to the acceptance or rejection of any executory contract or
unexpired lease at any time prior to the Effective Date. To the extent that any Insurance Policy
is deemed to be an executory contract, the Debtor shall be deemed to have assumed such
- 22 -
Insurance Policy effective as of the Effective Date unless the Debtor otherwise elects in writing
in its discretion after consultation with the Case Committee. The Debtor is not in default under
any Insurance Policy and, therefore, the Debtor need not make any cure payments in connection
with the assumption of any Insurance Policy under this Section 7.1.
7.2 Payments Related to Assumption of Executory Contracts and Unexpired Leases.
Each executory contract or unexpired lease that the Debtor elects to assume under this Plan and
that is in default may be cured solely by a Cure. Any party to an executory contract or unexpired
lease who wishes to assert that a Cure is required as a condition to the Debtor's assumption of
such contract or lease must file with the Bankruptcy Court a proposed claim (a "Cure Claim")
within twenty (20) days after the Debtor provides written notice to such party of the Debtor's
election to assume such contract or lease. After the filing of such Cure Claim. the Debtor shall
have twenty (20) days to file any objections thereto. If there is a dispute regarding (a) the nature
or amount of any Cure, (b) the ability of the Debtor to provide "adequate assurance of future
performance" (within the meaning of Section 365 of the Bankruptcy Code) under the contract or
lease to be assumed, or (c) any other matter pertaining to assumption or assignment of such
contract or lease, the matter shall be set for hearing by the Bankruptcy Court on the next
available hearing date, or such other date as may be mutually agreed upon, and the required Cure
shall occur following the entry of a Final Order of the Bankruptcy Court resolving the dispute
and approving the assumption or the assumption and assignment, as the case may be; provided,
however, the Debtor shall have the right to reject the contract or lease for a period of ten (10)
days after entry of a Final Order establishing a Cure amount in excess of the amount that the
Debtor believed was the proper amount for a Cure. If the Cure amount is not disputed, the
Debtor shall pay the Cure Claim, if any, to the claimant within fifteen (15) days after service of
the Cure Claim. Disputed Cure amounts that are resolved by agreement or Final Order shall be
paid by the Debtor within fifteen (15) days after such agreement or Final Order.
7.3 Insurance Policies. Nothing contained in this Plan shall constitute or be deemed a
waiver of any claim or Cause of Action that the Debtor may hold against any Person, including
an insurer, under any of the Insurance Policies (including the D&O Policies and the Fidelity
Policies).
7.4 Rejection Damages Bar Date. If the rejection by the Debtor (pursuant to this Plan
or otherwise) of an executory contract or unexpired lease results in a Claim, then such Claim
shall be forever barred and shall not be enforceable against the Debtor or the Estate, or with
respect to any Estate Property, unless a proof of claim is filed and served upon respective
counsel to the Debtor and the Case Committee, and, if after the Effective Date, the Plan
Committee, within thirty (30) days after service of the later of (a) notice of the Effective Date or
(b) other earlier notice from the Debtor that the executory contract or unexpired lease has been
rejected.
- 23 -
ARTICLE 8.

POST-CONFIRMATION GOVERNANCE
AND MANAGEMENT
8.1 Continued Corporate Existence; Dissolution of Debtor. The Debtor shall continue
to exist after the Effective Date in accordance with the laws of the State of Delaware and
pursuant to the Amended Certificate of Incorporation and Amended By-Laws, for the primary
purpose of collecting, liquidating and distributing on account of Allowed Claims and Preferred
Stock all of the Estate Property and conducting other activities as envisioned by this Plan. As
soon as practicable after the Plan Trustee exhausts the assets of the Estate by making the Final
Distribution under this Plan, the Plan Trustee shall be authorized (but not required) to (i)
effectuate the dissolution of the Debtor by filing a certificate of dissolution, which shall be
authorized and approved in all respects without further action under applicable law, regulation,
order or rule, including any action of former shareholders or members of the board of directors
of the Debtor and (ii) resign as the sole officer and sole director of the Debtor.
8.2 Certificate of Incorporation and By-Laws. The Certificate of Incorporation and
By-Laws of the Debtor shall be amended, as and to the extent necessary or desirable, to satisfy
the provisions of this Plan and the Bankruptcy Code. The Certificate of Incorporation of the
Debtor shall be amended to, among other things, include pursuant to Section 1123(a)(6) of the
Bankruptcy Code a provision prohibiting the issuance of non-voting equity securities and limit
the activities of the Debtor to matters related to the implementation of this Plan. The forms of
the documents relating to the Amended Certificate of Incorporation and Amended By-Laws shall
be filed with the Bankruptcy Court before the hearing on confirmation of this Plan.
8.3 Directors and Officers. From and after the Effective Date, the Plan Trustee shall
serve as the sole officer and sole director of the Debtor and, in those capacities, shall be
authorized to execute, deliver, file or record such documents, instruments, releases and other
agreements and to take such actions as may be necessary or appropriate to effectuate and to
further evidence the terms and conditions of this Plan. All officers and directors of the Debtor
shall be deemed removed from their positions effective as of 12:01 a.m. on the Effective Date.
8.4 Plan Trustee. On and after the Effective Date, the Plan Trustee shall be
authorized to exercise all of the rights and powers, and shall discharge all of the duties, conferred
upon the Plan Trustee under this Plan. In the event of the death, resignation, incapacity,
disqualification, removal or misconduct of the Plan Trustee, the Plan Committee may designate
an individual to serve as a successor Plan Trustee by filing with the Bankruptcy Court a notice of
such designation (in which notice the Plan Committee shall provide a background resume of
such individual and summary of terms of compensation), provided that such individual may not
be the Holder of a Claim or Equity Interest or an employee, agent or affiliate of, or counsel to,
any such Holder and further provided that such designation shall be ineffective if the Bankruptcy
Court determines, for cause shown and after notice and a hearing, upon any objection to such
designation filed with the Bankruptcy Court by the Holder of a Claim, within ten (10) days after
the filing by the Plan Committee of notice of such designation, that such individual has
conflicting interests or is otherwise unsuitable to serve in a fiduciary capacity as Plan Trustee
under this Plan. The Plan Trustee may be removed, for cause, upon motion made by the Plan
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Committee and approved by the Bankruptcy Court. A successor Plan Trustee shall be the sole
officer and sole director of the Debtor and the predecessor Plan Trustee shall be deemed
automatically to have resigned from such positions upon the appointment of the successor Plan
Trustee. The Debtor shall retain and have all of the rights, powers and duties necessary to carry
out its responsibilities under this Plan, and all such rights, powers and duties shall be exercisable
on behalf of the Debtor by the Plan Trustee pursuant to this Plan. Without limiting the generality
of the foregoing, the Plan Trustee, acting on behalf of the Debtor, shall have the rights, powers,
and duties of a trustee under Sections 704(a)(1), (2), (4), (5) and (7) and 1106(a)(6) and (7) of
the Bankruptcy Code, and the rights and duties set forth in this Plan, and (without duplication)
the following specific rights and powers (except as otherwise conditioned or limited by this
Plan): (i) to employ on behalf of the Debtor or the Plan Trustee and compensate Post-
Confirmation Professionals (whether or not currently employed by the Debtor or Case
Committee) pursuant to the procedures set forth in this Plan; (ii) to liquidate and collect all Estate
Property; (iii) to review, investigate and (if appropriate) object to or seek equitable subordination
of Claims against the Debtor and/or Estate Property; (iv) to investigate, prosecute and/or settle
all Estate Causes of Action; (v) to voluntarily engage in arbitration or mediation with respect to
any Estate Cause of Action; (vi) to invest the Debtors Cash in (a) direct obligations of the
United States of America or obligations of any agency or instrumentality thereof that are
guaranteed by the full faith and credit of the United States of America, (b) money market deposit
accounts, checking accounts, savings accounts or certificates of deposit, or other time deposit
accounts that are issued by a commercial bank or savings institution organized under the laws of
the United States of America or any state thereof, or (c) or any other investments that may be
permissible under Section 345 of the Bankruptcy Code or an order of the Bankruptcy Court; (vii)
to calculate and make all Distributions to be made pursuant to this Plan; (viii) to prepare (or
cause to be prepared) and file Tax returns for the Debtor; (ix) to seek estimation of contingent or
unliquidated Claims under Section 502(c) of the Bankruptcy Code or determinations of Tax
liabilities under Section 505 of the Bankruptcy Code; (x) to obtain financing for the Debtor, on
such terms as the Plan Trustee deems necessary or advisable, to be used in connection with the
efforts of the Plan Trustee to maximize the value of the estate; (xi) to dissolve the Debtor in
accordance with the terms of this Plan; and (xii) to take all other actions in furtherance of the
implementation of this Plan. The retention by the Plan Trustee of any Post-Confirmation
Professionals (whether for the Plan Trustee or the Debtor) shall be done in the ordinary course of
business and shall not be subject to the prior approval of the Bankruptcy Court; provided,
however, that prior to or concurrently with retention of any Post-Confirmation Professional, the
Plan Trustee shall file a notice of such retention with the Bankruptcy Court, and such retention
shall be subject to objection by any party in interest (including the Plan Committee) that is filed
within fifteen (15) days after the Plan Trustee's filing of a notice of such retention, with any such
objection that cannot be resolved by agreement to be determined by the Bankruptcy Court, but
the mere filing of any such objection shall not operate to preclude such retention. The Plan
Trustee, in the name and on behalf of the Debtor, shall file with the Bankruptcy Court periodic
reports (no less frequently than on an annual basis) regarding the status of the Debtor's
implementation of this Plan and the discharge of his duties hereunder.
8.5 Compensation of Plan Trustee and Professionals. The fees and expenses of the
Plan Trustee shall constitute Post-Confirmation Administrative Expenses and shall be paid from
available funds in the Expense Reserve. The terms of retention and compensation of the Plan
Trustee shall be set forth in a retention agreement as negotiated by the Debtor, in consultation
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with the Case Committee, and filed with the Bankruptcy Court on or before the hearing on
confirmation of this Plan. Any Post-Confirmation Professionals retained by the Debtor or Plan
Trustee shall be entitled to reasonable compensation for services rendered and reimbursement of
expenses incurred from available funds of the Estate. The payment of fees and expenses of the
Plan Trustee and any Post-Confirmation Professional retained by the Debtor or Plan Trustee
shall be made in the ordinary course of business and shall not be subject to the prior approval of
the Bankruptcy Court; provided, however, that both the Plan Trustee and each Post-Confirmation
Professional retained by the Debtor or Plan Trustee shall serve upon the Plan Committee their
Professional Statements (no less frequently than on a quarterly basis). If the Plan Committee
objects to the fees or expenses of any Post-Confirmation Professional, and the parties are unable
to resolve the objection among themselves, the Bankruptcy Court shall determine the appropriate
fee to be paid or the expenses to be reimbursed to any such Post-Confirmation Professional.
8.6 Plan Committee. On the Effective Date, the Plan Committee shall be formed and
constituted, and the Case Committee shall cease to exist or function except to perform such
obligations as are necessary to wind down its role as such Case Committee, including the filing
of applications for approval and payment of Case Professional Compensation, if any, of the Case
Committee and Case Committee Professionals. Plan Committee members' identities and then
current affiliations shall be disclosed by filings with the Bankruptcy Court on or before the
Voting Deadline. If a Plan Committee member becomes unable or unwilling to serve on the Plan
Committee, the remaining members of the Plan Committee may appoint a successor, who shall
be the Holder of an Allowed Claim that is a General Unsecured Claim or an authorized
representative of such Holder. If no one is willing to serve on the Plan Committee or there shall
have been no Plan Committee members for a period of thirty (30) consecutive days, then the
Plan Trustee may, during such vacancy and thereafter, ignore any reference in this Plan or the
Confirmation Order to the Plan Committee, and all references to the Plan Committee's ongoing
duties and rights in this Plan shall be null and void. The Plan Committee shall have all of the
rights, powers and duties provided for in this Plan, including the right and authority to employ
and compensate Post-Confirmation Professionals, whether currently employed by the Case
Committee or such other Post-Confirmation Professionals as the Plan Committee may select and
consistent with Section 1103(b) of the Bankruptcy Code. The Plan Committee shall be
authorized to:
(a) Consult with the Debtor concerning the administration of the Estate and
all Estate Property;
(b) Investigate and pursue Designated Causes of Action (and the Plan
Committee shall, upon and after the Effective Date, have standing to
pursue such actions on behalf of the Debtor's Estate);
(c) Object to or seek equitable subordination of Claims if and to the extent the
Debtor has not filed such an objection or sought such subordination;
(d) Review objections to and propose settlements of Disputed Claims
pursuant to this Plan;
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(e) Review proposed settlements by the Debtor of Estate Causes of Action
pursuant to this Plan and consent or object thereto; and
(f) Perform such other services as are specifically authorized by this Plan.
Members of the Plan Committee shall serve without compensation but may be reimbursed for
their reasonable and necessary out-of-pocket expenses incurred in performing their duties
hereunder, provided that the foregoing shall not affect the right of any Indenture Trustee, in its
capacity as such, to receive payments as provided in Section 8.9 of this Plan. Post-Confirmation
Professionals may be retained by the Plan Committee in the ordinary course of business and
without prior approval of the Bankruptcy Court; provided, however, that, upon retaining any
Post-Confirmation Professional, the Plan Committee shall file a notice of such retention with the
Bankruptcy Court, and such retention shall be subject to review and objection by any party in
interest that is filed within fifteen (15) days after the filing of such notice of retention, with any
timely filed objection which cannot be resolved by agreement of the parties to be determined by
the Bankruptcy Court, but the mere filing of any such objection shall not operate to preclude
such retention; provided further, however, that Post-Confirmation Professionals retained by the
Plan Committee shall not be entitled to be compensated from funds available in the Estate except
for services rendered in order to facilitate the Plan Committee's discharge of its authority
described in clauses (a) through (f) above in this Section 8.6 and such other matters as shall be
authorized by the Bankruptcy Court after notice and a hearing. Such Post-Confirmation
Professionals shall serve upon the Plan Trustee their Professional Statements (no less frequently
than on a quarterly basis), which Professional Statements shall be subject to review and objection
by the Plan Committee and Plan Trustee, with any unresolved objection to be resolved by the
Bankruptcy Court. Neither the Plan Committee, nor any of its members or designees, nor their
respective employees or Post-Confirmation Professionals, shall be liable for any act or omission
of any other member, designee, agent or representative of the Plan Committee, nor shall any
member be liable for any act or omission taken or omitted to be taken in its capacity as a member
of the Plan Committee, other than acts or omissions resulting from such members willful
misconduct or gross negligence.
8.7 Indemnification. The Debtor shall indemnify and hold harmless the Plan Trustee
(in such capacity and as an officer and director of the Debtor), the Plan Committee, the
respective employees, agents, representatives and Post-Confirmation Professionals of the Plan
Trustee and Plan Committee, and each Indenture Trustee (collectively, the "Indemnified Parties")
from and against any and all liabilities, losses, damages, claims, costs and expenses, including
reasonable attorneys fees, that any Indemnified Party may ever suffer or incur and that arise out
of such Indemnified Party's acts or omissions after the Effective Date in connection with this
Plan or implementation of the terms hereof, other than acts or omissions resulting from such
Indemnified Party's willful misconduct or gross negligence.
8.8 Cancellation and Reissuance of Certain Equity Interests. Upon the Effective
Date, all then existing Equity Interests in or issued by the Debtor (other than Preferred Stock)
will be canceled and will no longer represent an ownership interest (or right to acquire an
ownership interest) in the Debtor. Promptly after the Effective Date, a single share of common,
voting stock will be issued solely to the Plan Trustee for the benefit of all Persons entitled to
Distributions under this Plan, and with full and exclusive voting rights in the Debtor. The Plan
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Trustee shall transfer such single share of common, voting stock to any successor Plan Trustee
appointed pursuant to Section 8.4 of this Plan. Notwithstanding anything to the contrary
contained in any writing evidencing or relating to any Preferred Stock, in no event shall any
Holder of Preferred Stock be authorized to vote on any matters pertaining to governance of the
Debtor or this Plan and any and all voting rights applicable to any Preferred Stock shall be
deemed null and void.
8.9 Indenture Trustees. For so long as an Indenture Trustee continues to serve after
the Effective Date in such capacity under the relevant Indenture Documents, such Indenture
Trustee shall be entitled to payment for all Indenture Trustee Fees for its post-Effective Date
services in implementing this Plan, including distributions of payments to Holders of Indenture
Claims as provided in this Plan. Each Indenture Trustee shall be authorized after the Effective
Date, in accordance with the Indenture Documents under which such Indenture Trustee serves, to
deduct from Distributions received by it for Holders of Indenture Claims an amount necessary to
pay its accrued and unpaid Indenture Trustee Fees (whether such Indenture Trustee Fees accrued
prior to or after the Petition Date). If on any date that any Indenture Trustee Fees that accrued
after the Effective Date are due and payable to an Indenture Trustee, the Debtor shall pay such
fees from any Available Cash promptly after its receipt from such Indenture Trustees of an
invoice therefor; provided, however, that the aggregate amount of all such payments shall be
deducted from any subsequent Distribution made to or for the benefit of the Holders of Indenture
Claims for whom such Indenture Trustee serves. The Debtor shall be authorized to request
reasonable verification from any Indenture Trustee of the nature and amount of any such
Indenture Trustee Fees as a condition to payment of same. If the Debtor objects to any invoice
from an Indenture Trustee (any such objection to be limited to the reasonableness of the
Indenture Trustee fees sought or whether such fees are authorized to be recovered under the
applicable Indenture Documents), the Debtor shall notify such Indenture Trustee within fifteen
(15) days after the Debtor's receipt of such invoice. If the parties are unable to resolve such
dispute, the same may be resolved by the Bankruptcy Court upon motion of either party.
8.10 Privileges. The Debtor shall retain all Privileges, without waiver, and no
Privileges shall be waived by disclosure to the Plan Trustee or the Plan Committee of any
information of the Debtor subject to attorney-client privileges, work product protections or other
immunities or protections from disclosure. All stipulations and agreements entered into prior to
the Effective Date between the Debtor and any other Person, including the FDIC, regarding
preservation of any Privileges on behalf of the Debtor shall continue in effect after the Effective
Date.
ARTICLE 9.

MEANS OF IMPLEMENTATION OF THE PLAN
The Plan shall be implemented as follows:
9.1 Disbursement Account; Records.
(a) No later than thirty (30) days after the Effective Date, the Debtor shall
establish the Disbursement Account to be used for the purpose of making all Distributions. All
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Cash on hand as of the date of establishment of the Disbursement Account shall be deposited
into the Disbursement Account, less an amount initially determined by the Plan Trustee to be
allocated to the Expense Reserve. Thereafter, all Cash received by the Debtor shall be deposited
in the Disbursement Account, after deducting from time to time therefrom amounts determined
by the Plan Trustee to be allocated to the Expense Reserve or the Disputed Claims Reserve. If
on any date the Expense Reserve has insufficient Cash from which to pay any Post-Confirmation
Administrative Expenses then due and payable, the Debtor may transfer Cash from the
Disbursement Account to cure any such insufficiency. Cash in the Disbursement Account, the
Expense Reserve, and the Disputed Claims Reserve may be invested in Permitted Investments,
giving due regard to the Debtor's need for the availability of sufficient funds to make
Distributions authorized or required by this Plan on a timely basis.
(b) The Debtor shall maintain records of all Allowed Claims and all Disputed
Claims, including the amount and classification of each such Claim, the name and address of the
Holder thereof, and the amount of each periodic Distribution with respect to each Claim. The
Debtor shall update these records as required to reflect changes in any of the information
maintained with respect to the Claims, including the change in the status of previously Disputed
Claims that have become Allowed Claims. Promptly after a Final Order is entered recognizing a
Disputed Claim as an Allowed Claim, the Plan Trustee shall amend the records maintained in
accordance with this Plan to delete such Disputed Claim from the list of Disputed Claims and
add it, in the amount allowed, to the list of Allowed Claims.
(c) The Debtor shall be authorized to rely upon records of and information
from The Depository Trust & Clearing Corporation or any of its subsidiaries or affiliates
(collectively, "DTCC") regarding the identity and address of each Holder of Preferred Stock (or
such Holder's authorized broker or other agent) and the number of shares of Preferred Stock held
by such Holder, for purposes of making any Distributions to Holders of Preferred Stock under
this Plan.
9.2 Asset Collections; Resolution of Claims and Causes of Action. Upon the
Effective Date, the Debtor shall have the sole and exclusive responsibility and authority, in
consultation with the Plan Committee, to collect all Estate Property, including the prosecution or
settlement of all Estate Causes of Action; convert such Estate Property to Cash and deposit the
proceeds thereof in the Disbursement Account, the Expense Reserve, or the Disputed Claims
Reserve, as appropriate; transfer funds to and from any of such accounts to the extent deemed
necessary to implement the provisions of this Plan; and review all Claims, make objections
thereto and settle any and all such objections in accordance with the terms of this Plan. Without
limiting the generality of the foregoing, the Debtor shall be authorized to cause all direct and
indirect subsidiaries of the Debtor (other than Colonial Bank) to assign, dividend or otherwise
transfer to the Debtor any or all of such subsidiary's property, after making provision for the
payment of any known, lawful claims of such subsidiary, and all such property assigned or
otherwise transferred to the Debtor by any such subsidiary shall become Estate Property; and the
Debtor, in consultation with the Plan Committee, shall have the sole and exclusive responsibility
and authority to investigate and prosecute Estate Causes of Action, subject to the Plan
Committees right to prosecute Designated Causes of Action, and to settle any such Estate
Causes of Action on such terms and conditions as the Plan Trustee, after consultation with the
Plan Committee, believes to be appropriate, subject to all of the terms and conditions of this
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Plan. All net proceeds realized in connection with the collection, sale or other disposition of any
Estate Property or the prosecution or settlement of any Causes of Action (whether an Estate
Cause of Action or a Designated Cause of Action) shall be deposited in accordance with Section
9.1 of this Plan and disbursed as provided in Section 9.3 of this Plan. In no event shall the
Debtor have any liability for any claim that may be asserted against the Plan Committee on
account of the method or manner of the Plan Committee's prosecution of any Designated Cause
of Action.
9.3 Distributions.
(a) Except as otherwise provided in Sections 3.1 through 3.4 hereof or as
ordered by the Bankruptcy Court, the initial Distribution on account of any Allowed Claims shall
be made within thirty (30) days after the later to occur of (i) the Effective Date or (ii) the first
date on which the Debtor determines it has Available Cash (after required deposits to the
Expense Reserve and Disputed Claims Reserve) in an amount sufficient to make an initial
Distribution in accordance with this Plan to the Holders of Priority Non-Tax Claims (such date
being referred to as the "Initial Distribution Date"). Any Distribution required to be made on a
day other than a Business Day shall be made on the next succeeding Business Day.
(b) After the Initial Distribution Date, additional Distributions shall be made
on account of Allowed Claims (and, after all Allowed Claims are Paid in Full, on account of
Preferred Stock) at such times and in such amounts as the Debtor deems appropriate, in its
discretion, after consultation with the Plan Committee. Within thirty (30) days following the
entry of an order that becomes a Final Order allowing, in whole or in part, a Disputed Claim, the
Debtor shall distribute an amount of Cash from the Disputed Claims Reserve that represents the
Pro Rata Share that the Holder of such Claim would have been entitled to receive based upon the
amount of the Disputed Claim that is allowed by such Final Order. With regard to Post-
Confirmation Professional Compensation, the Debtor shall distribute within thirty (30) days after
the receipt of a Professional Statement, an amount from the Expense Reserve (or, if the Expense
Reserve is without sufficient funds to pay same after making provision for the payment of
Administrative Expenses and Priority Tax Claims pursuant to Article 3 hereof, from Available
Cash) necessary to pay such Professional Statement. Post-Confirmation Administrative
Expenses, other than Post-Confirmation Professional Compensation, shall be paid by the Plan
Trustee in the ordinary course of the Debtor's business. On the date that the Debtor determines
that it has fully recovered and liquidated all Estate Property to the extent feasible and all
Disputed Claims have been resolved by Final Order, the Debtor shall distribute all Available
Cash and all amounts in the Expense Reserve that are not required to pay Post-Confirmation
Administrative Expenses as a Final Distribution on account of Allowed Claims and, after all
such Allowed Claims are Paid in Full, on account of Preferred Stock (the "Final Distribution").
(c) Unless otherwise specifically provided for in this Plan or required by
applicable bankruptcy law, post-petition interest, fees (including attorneys' fees) and other
charges shall not accrue or be paid on any Claim and no Holder of a Claim shall be entitled to
interest or attorney's fees accruing on or after the Petition Date with respect to the Claim of such
Holder. Distributions made on account of any Allowed Claim in respect of which any interest or
attorneys' fees accrue after the Petition Date pursuant to this Plan or applicable bankruptcy law
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shall be deemed to be applied first in payment of the principal amount of such Claim and
thereafter to accrued and unpaid interest and attorneys' fees in respect of such Claim.
(d) Distributions shall be made by the Debtor to each Holder of an Allowed
Claim at the address for such Holder as set forth on the Schedules, unless such address is
superseded by proofs of claim or transfers of claim filed pursuant to Bankruptcy Rule 3001 (or at
the last known address of such Holder if the Debtor has been notified in writing of a change of
address), irrespective of the existence prior to the Effective Date of any Contractual
Subordination. Any Distributions that are made to Holders of Preferred Stock may be made to
such Holders at addresses supplied to the Debtor by or obtained by the Debtor from DTCC.
(e) Notwithstanding any other provision of this Plan, the Debtor shall not be
required to make any Distribution to a Holder in fractions of dollars. Whenever any payment of
a fraction of a dollar would otherwise be called for, the actual payment made shall reflect a
rounding of such fraction to the nearest whole dollar (up or down), with half dollars or less being
rounded down. The Debtor shall have no obligation to make a Distribution on account of
Allowed Claims (other than Convenience Claims) if the aggregate amount of such Distribution is
less than $25,000 or on account of a particular Allowed Claim if the amount to be distributed is
less than $100 and does not constitute a Final Distribution on account of such Claim.
(f) The Debtor shall make Distributions required to be made under Section
5.3 of this Plan with respect to 2003 Indenture Claims, to the 2003 Indenture Trustee; with
respect to 2008 Indenture Claims, to the 2008 Indenture Trustee; and with respect to Preferred
Securities Indenture Claims, to the Preferred Securities Indenture Trustee. At least fifteen (15)
days prior to making a Distribution to an Indenture Trustee, the Debtor shall file a notice with the
Bankruptcy Court establishing an Indenture Claims Record Date. Distribution to an Indenture
Trustee shall be promptly remitted by such Indenture Trustee to the Holders of the Indenture
Claims entitled thereto in accordance with Section 9.9 of this Plan, and each such Distribution by
the Debtor to an Indenture Trustee shall be deemed to have discharged the obligation of the
Debtor to make such Distribution to the Holders of Indenture Claims represented by such
Indenture Trustee.
(g) The Debtor may, pursuant to applicable bankruptcy or non-bankruptcy
law, set off against any Allowed Claim and the Distributions to be made pursuant to this Plan on
account thereof (before any Distribution is made on account of such Claim by the Debtor), the
amount of all claims, rights and Causes of Action of any nature that the Debtor may have against
the Holder of such Allowed Claim; provided, however, that neither the failure to effect such a
setoff nor the allowance of any Claim hereunder shall constitute a waiver or release by the
Debtor of any such claims, rights or Causes of Action that the Debtor may possess against such
Holder; and provided further, however, that nothing contained herein is intended to limit the
ability of any Holder of an Allowed Claim to effectuate rights of setoff or recoupment preserved
or permitted by the provisions of Sections 553, 555, 559 or 560 of the Bankruptcy Code or
pursuant to any common law right of setoff or recoupment.
9.4 Settlement of Certain Causes of Action. From and after the Effective Date, the
Debtor shall be authorized pursuant to Bankruptcy Rule 9019(b) and Section 105(a) of the
Bankruptcy Code to compromise and settle any Estate Cause of Action (other than a Designated
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Cause of Action) in accordance with the following procedures, which shall constitute sufficient
notice in accordance with the Bankruptcy Code and the Bankruptcy Rules for compromises and
settlements:
(a) If the resulting settlement provides for settlement of an Estate Cause of
Action originally asserted in an amount equal to or less than $50,000, then the Debtor may settle
the Cause of Action upon written notice to the Plan Committee and may execute necessary
settlement documents, including a stipulation of settlement or release, in its sole discretion and
without other notice to any Person.
(b) If the resulting settlement involves an Estate Cause of Action initially
asserted in an amount exceeding $50,000, then the Debtor may settle such Cause of Action and
may execute necessary settlement documents, including a stipulation of settlement or release,
subject to notifying the Plan Committee in writing of the terms of the proposed settlement. If the
Plan Committee indicates its approval of or does not provide the Debtor with a written objection
to the proposed settlement within ten (10) days after it receives written notice of such settlement,
then the Debtor shall be authorized to consummate the settlement. If a timely objection is made
by the Plan Committee to the proposed settlement, then the settlement may not be consummated
without approval of the Bankruptcy Court in accordance with Bankruptcy Rule 9019.
(c) If the resulting settlement involves an Estate Cause of Action initially
asserted in an amount exceeding $150,000, then the Debtor may, in its discretion, seek
Bankruptcy Court approval of the settlement in accordance with Bankruptcy Rule 9019, even if
the Plan Committee indicates its approval of or does not provide the Debtor with an objection to
the proposed settlement within ten (10) days after it receives notice of such settlement in writing.
9.5 Settlement of Designated Causes of Action.
From and after the Effective Date, the Plan Committee shall be authorized to settle a
Designated Cause of Action on the same terms and conditions as set forth above with respect to
settlement by the Debtor of any Estate Cause of Action; provided, however, that any reference to
the Plan Committee with regard to notice and objection rights shall mean, for purposes of this
section, the Debtor. All amounts arising out of the prosecution or settlement of any Designated
Cause of Action shall be remitted to the Debtor, promptly after receipt thereof, for use or
distribution in accordance with the terms of this Plan.
9.6 Method of Distributions; Transferred Claims.
(a) Any Distribution of Cash by the Debtor pursuant to this Plan shall be
made, at the option and in the sole discretion of the Plan Trustee, by check drawn on, or wire
transfer from, a domestic bank selected by the Plan Trustee. Checks issued by the Debtor on
account of Allowed Claims or Equity Interests shall be null and void if not negotiated within
ninety (90) days after the date of issuance thereof. Requests for reissuance of any checks shall
be made directly to the Plan Trustee by the Holder of the Allowed Claim or Preferred Stock with
respect to which such check originally was issued. Any Claim in respect of such a voided check
shall be made on or before the later of (i) the first anniversary of the Effective Date or (ii) ninety
(90) days after the date of issuance of such check, if such check represents a Final Distribution
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hereunder on account of such Claims or Preferred Stock. After such date, all Claims and
Preferred Stock in respect to voided checks shall be forever barred and the Debtor shall retain all
monies related thereto for the sole purpose re-distribution to Holders of Allowed Claims or
Preferred Stock in accordance with the terms and provisions of this Plan.
(b) Subject to Bankruptcy Rule 9010, the initial Distribution under this Plan
shall be made by the Debtor to the Holders of Allowed Claims as of the Confirmation Date.
Except as provided in Rule 3001(e) of the Bankruptcy Rules, the Debtor shall have no obligation
to recognize any transfer of a Claim occurring before or after the Confirmation Date and shall be
required instead to recognize and deal for all purposes herein only with those Holders listed on
the Schedules or on the register of proofs of claim and of assignments of claim maintained by the
Clerk of the Bankruptcy Court or the agent of the Clerk of the Bankruptcy Court appointed for
such purpose in the Case as of the close of business on the Confirmation Date. No transfer of
any Claim shall be recognized unless (a) not less than thirty (30) days prior written notice has
been provided to the Debtor and (b) such transfer fully complies with the provisions of
Bankruptcy Rule 3001.
(c) Notwithstanding anything herein to the contrary, disbursements from the
Disbursement Account may be deferred or delayed for a reasonable time if such deferral is
necessary to allow Permitted Investments to reach maturity, if additional time is needed to make
a proper Distribution or if the receipt of additional funds is necessary to make meaningful
payments.
9.7 Unclaimed Property.
(a) Unclaimed Property shall be deposited in the Unpaid Claims Reserve to be
held for the benefit of the Holders of Allowed Claims entitled thereto under the terms of this
Plan. For a period of the later of (i) one year following the Initial Distribution Date or (ii) one
hundred twenty (120) days after a Distribution is first made to a claimant on account of which
Unclaimed Property first results (said period being hereinafter referred to as the "Claiming
Period"), Unclaimed Property shall be held in the Unpaid Claims Reserve solely for the benefit
of the Holders of Allowed Claims which have failed to claim the Unclaimed Property. During
the Claiming Period, Unclaimed Property due the Holder of an Allowed Claim shall be released
from the Unpaid Claims Reserve and delivered to such Holder upon presentation of proper proof
by such Holder of its entitlement thereto. If there is Unclaimed Property in the Unpaid Claims
Reserve with regard to any Claim, then until such Unclaimed Property is claimed or the
Claiming Period with regard to the Holder of such Claim has expired, the Debtor shall make all
subsequent Distributions on account of such Claim to the Unpaid Claims Reserve. After the
Claiming Period with regard to such Holder has expired, no subsequent Distributions shall be
made on account of such Claim, and such Claim shall be treated as being disallowed, waived and
satisfied.
(b) At the end of the applicable Claiming Period for the Holder of an Allowed
Claim, such Holder shall cease to be entitled to any Unclaimed Property, and the Unclaimed
Property shall then be transferred to the Disbursement Account or the Expense Reserve;
provided, however, that if there is any Unclaimed Property in the Unpaid Claims Reserve as a
result of the Final Distribution (as set forth in Section 9.3 of this Plan) and such Unclaimed
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Property remains in the Unpaid Claims Reserve after expiration of the Claiming Period, such
Unclaimed Property shall be used first to satisfy any Post-Confirmation Administrative Expenses
and then shall be transferred to the Disbursement Account. Upon the making of such payment,
the Debtor shall file a written report with the Bankruptcy Court listing the Holders of Allowed
Claims who would have been entitled to any Unclaimed Property, each such Holder's last known
address (if any), and the principal amount of each such Holder's Claim as reflected in the records
of Allowed Claims.
(c) The Unpaid Claims Reserve may (but need not) be maintained as an
interest bearing account. Any interest earned thereon shall be paid to the Disbursement Account,
and no claimant entitled to funds from the Unpaid Claims Reserve shall be entitled to interest
with regard to the amounts due to such claimant.
9.8 Bankruptcy Court Supervision. Maintenance and distribution of Available Cash
and administration of this Plan by the Plan Trustee shall be subject to supervision of the
Bankruptcy Court on application of any interested party.
9.9 Cancellation of Certain Instruments and Agreements.
(a) Except as otherwise provided in Section 10.8 of this Plan with respect to
certain Secured Claims, on the Effective Date all Debt Instruments, share certificates (including
treasury stock with respect to Common Stock), other instruments evidencing any Claims or
Equity Interests (other than Preferred Stock), and all options, warrants, calls, rights, puts, awards,
commitments or any other agreements of any character to acquire any Equity Interests shall be
deemed canceled and of no further force or effect, without any further act or action under any
applicable agreement, law, regulation, order or rule, and the obligations of the Debtor under any
such Debt Instruments, share certificates, and other agreements and instruments governing such
Claims or Common Stock shall be discharged. The Holders of or parties to such canceled Debt
Instruments, share certificates and other agreements and instruments shall have no rights or
remedies arising from or relating thereto or the cancellation thereof, except the rights provided
pursuant to this Plan. If any Holder of an Allowed Claim evidenced by any Debt Instruments or
other documentation canceled as of the Effective Date pursuant to this Section 9.9(a) fails to
surrender any such instrument or other documentation to the Debtor within sixty (60) days after
the Effective Date, such Holder's Claim shall be deemed to be a Disputed Claim until such time
as such instrument or other documentation is surrendered to the Debtor; provided, however, that
if such surrender does not occur within one year after the Effective Date, such Holder shall be
barred from receiving any Distribution; provided further, however, that such Holder shall not be
obligated to surrender any instrument or other documentation that is lost or stolen if such Holder
promptly provides the Debtor with an affidavit of loss reasonably acceptable to the Plan Trustee.
(b) Notwithstanding anything to the contrary contained in Section 9.9(a), (i)
the Indenture Documents will continue in effect solely for purposes of (x) allowing the
applicable Indenture Trustee to receive and make the distributions to be made pursuant to this
Plan on account of Indenture Claims under this Plan, from Distributions received from the
Debtor in accordance with this Plan (including acting as Registrar (as defined in such Indenture
Documents)), and (y) permitting such Indenture Trustee to maintain any rights or Liens it may
have under the applicable Indenture Documents to receive Indenture Trustee Fees and
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indemnification, provided that the Debtor will not have any obligation to any Indenture Trustee
for payment of any such Indenture Trustee Fees or indemnifications except as otherwise
provided in this Plan, and (ii) the Debt Instruments issued under such agreements will continue
in effect solely for the purposes of permitting Holders thereof to receive Distributions from the
applicable Indenture Trustee in accordance with the Plan (including Section 9.3(f) of the Plan).
The Indenture Trustees shall not be liable or responsible to any Holder of an Indenture Claim for
any acts or omissions after the Effective Date except for willful misconduct or gross negligence
as determined by Final Order of the Bankruptcy Court. The Indenture Documents, including the
Debt Instruments issued thereunder, shall be deemed canceled and of no further force or effect,
and all trusts created thereunder shall be deemed to be terminated, without any further act or
action under any applicable agreement, law, regulation, order, or rule, on the sixtieth (60th) day
following the Final Distribution. After the performance by an Indenture Trustee of any duties
required of it under the Plan or the applicable Indenture Documents to the extent effective
hereunder after the Effective Date, such Indenture Trustee shall be relieved of and released from
all further obligations associated with such Indenture Documents and any and all liabilities
thereunder that have not been asserted against such Indenture Trustee by appropriate lawful
proceedings commenced within forty-five (45) days after such Final Distribution.
9.10 Amendments to Claims. A Claim may be amended (a) at any time prior to the
applicable Bar Date, only as agreed upon by the Debtor and the Holder of such Claim or as
otherwise permitted by the Bankruptcy Court, the Bankruptcy Code, the Bankruptcy Rules or
applicable law; or (b) after the applicable Bar Date, to decrease (but not increase) the amount of
such Claim. Any amendment to a Claim (other than amendments described in clause (b) of this
Section 9.10 and amendments to Claims pursuant to Section 7.1 of this Plan based upon the
rejection of an executory contract or unexpired lease) filed after the deadline described in
paragraph (a) hereof shall be deemed disallowed and expunged without further action by the
Debtor or the Bankruptcy Court unless the Holder of such Claim obtained prior Bankruptcy
Court approval to file such amendment.
9.11 Amended Certificate of Incorporation, By-Laws and Other Documents. On or
before the Effective Date, the Debtor will execute an Amended Certification of Incorporation,
Amended By-Laws and all other documents required or necessary to implement this Plan,
without the requirement of any further corporate action.
9.12 Books and Records.
(a) Except as otherwise provided in Section 9.13(b) of this Plan, the Debtor
shall preserve all Books and Records now or hereafter in its possession, provided that all such
Books and Records shall remain subject to any applicable Privileges.
(b) Any Person in possession of any originals or copies of Books and Records
shall, if so requested by the Debtor, promptly produce such Books and Records to the Debtor
unless such Person objects to such production, in which event such Person shall register such
objection by promptly filing for a protective order with the Bankruptcy Court and the
Bankruptcy Court shall resolve any such objection after notice and a hearing.

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9.13 Abandonment of Estate Property.
(a) The Debtor, after consultation with the Plan Committee, may abandon,
destroy or contribute to a charitable organization any item of tangible Estate Property (other than
Books and Records and, for the avoidance of doubt, Estate Causes of Action), which he
determines to be of inconsequential value and which had an original cost value equal to or less
than $5,000, without notice to any other Person.
(b) The Debtor may abandon or destroy any Books and Records in the
possession, custody or control of the Debtor that the Debtor believes are Non-Essential Books
and Records after providing at least thirty (30) days prior written notice (an "Abandonment
Notice") to counsel for the Plan Committee, counsel for the FDIC, counsel of record for the
Holder of each Disputed Claim that has not been resolved as of the date of such notice and
counsel of record in each lawsuit pending against the Debtor as of the date of such notice. The
Abandonment Notice must contain a reasonable description of the Non-Essential Books and
Records at issue, the location of the Non-Essential Books and Records, and the proposed
disposition of the Non-Essential Books and Records. Through and including the thirtieth (30th)
day after the date of the Abandonment Notice, any party in interest may, during normal business
hours and by prior arrangement with the Plan Trustee, inspect the Non-Essential Books and
Records proposed to be abandoned or destroyed, subject to such reasonable terms and conditions
as the Plan Trustee may impose in order to protect information that is subject to one or more
Privileges or is otherwise confidential. If no written objection to an Abandonment Notice is
received by the Debtor within twenty (20) days after the Debtor sends an Abandonment Notice,
then the Debtor shall be authorized immediately to abandon or otherwise dispose of the Non-
Essential Books and Records described in the Abandonment Notice. If any objection to an
Abandonment Notice is timely received by the Debtor and is not subsequently withdrawn by the
objecting party or resolved by mutual consent of such party and the Debtor, then the Debtor may
either (a) seek approval of the Bankruptcy Court to abandon, destroy or otherwise dispose of the
Non-Essential Books and Records in question or (b) allow the objecting party to take possession
of all of the Non-Essential Books and Records identified in the Abandonment Notice or copies
thereof) and remove such Non-Essential Books and Records from the Debtor's premises, at the
expense of the objecting party, within ten (10) days after the Debtor's surrender of the Non-
Essential Books and Records, failing which the Debtor shall be authorized to abandon, destroy or
otherwise dispose of such Non-Essential Books and Records notwithstanding the objection. The
rights and authority provided to the Debtor in this Section 9.13 are in addition to, and shall not be
construed to limit, any rights or authority provided elsewhere in this Plan.
9.14 Withholding and Reporting Requirements. Each Person who receives a
Distribution under this Plan shall have the sole responsibility for the satisfaction and payment of
any Taxes imposed on such Person by any Governmental Unit, including income, withholding
and other Tax obligations, on account of such Distribution. The Debtor shall have the right, but
not the obligation, to withhold a Distribution to any Holder until such Holder has made
arrangements satisfactory to the Debtor for payment of any Tax obligations and, if the Debtor
fails to withhold with respect to any Holder's Distribution, and is later liable for the amount of
such withholding, the Holder shall reimburse the Debtor. The Debtor may require, as a condition
to the receipt of a Distribution, that the Holder complete the appropriate Form W-8 or Form W-9,
as applicable, to each Holder and, if the Holder fails to comply with such a request within one
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hundred eighty (180) days, such Distribution shall be deemed Unclaimed Property and deposited
in the Unpaid Claims Reserve.
9.15 Assets Held in Escrow. If on the Effective Date the Debtor holds any Cash or
other Estate Property in an escrow account pursuant to order of the Bankruptcy Court pending
resolution of any Cause of Action, dispute or Claim, then the Debtor shall continue to hold such
Estate Property in such escrow account until further order of the Bankruptcy Court or settlement
and compromise of such Cause of Action, dispute or Claim in accordance with the provisions of
this Plan.
ARTICLE 10.

EFFECT OF CONFIRMATION
10.1 Vesting of Assets. All Estate Property (including all Estate Causes of Action,
whether or not a Designated Cause of Action) shall remain vested in the Estate on and following
the Effective Date and shall continue to be subject to the jurisdiction of the Bankruptcy Court
following confirmation of this Plan until distributed to Holders of Allowed Claims in accordance
with the provisions of this Plan and the Confirmation Order. The Debtor shall continue to hold
all rights, privileges, powers and immunities under and with respect to Estate Causes of Action
to the same extent that such rights, privileges, powers and immunities existed on or before the
Effective Date, unless and to the extent settled or compromised by the Debtor, with approval of
the Bankruptcy Court, prior to the Effective Date. From and after the Effective Date, all Estate
Property shall be distributed or otherwise dealt with in accordance with the provisions of this
Plan and the Confirmation Order.
10.2 Discharge of Claims. Pursuant to Section 1141(d)(3) of the Bankruptcy Code,
confirmation of this Plan will not discharge any Claims against the Debtor, including any
obligation of the Debtor to indemnify any present or former officer or director of the Debtor, but
no Holder of a Claim against the Debtor may, on account of such Claim, seek or receive any
payment or other distribution from, or seek recourse against, the Debtor or any Estate Property
other than Distributions pursuant to this Plan; provided, however, that nothing contained herein
shall preclude (i) any such Holder from enforcing rights pursuant to and consistent with the
terms of this Plan, including the filing of proofs of Claims or Equity Interests, (ii) any present or
former officer or director, to the extent not otherwise prohibited from doing so by order of the
Bankruptcy Court, from seeking reimbursement for legal fees and expenses under and to the
extent authorized by the D&O Policies, or (iii) any Governmental Unit from enforcing its police
or regulatory authority against the Debtor (but not against Estate Property) to the extent excepted
from the automatic stay provisions of Section 362 of the Bankruptcy Code.
10.3 Exculpation. None of the Exculpated Parties shall have or incur any liability
to any Holder of any Claim or Equity Interest or any other Person (including any
Governmental Unit) for any act or omission during the period commencing on the Petition
Date and ending on the Effective Date in connection with, or arising out of or related to, the
Case, this Plan or the Disclosure Statement (or the formulation, negotiation or
dissemination of this Plan or the Disclosure Statement), the solicitation of votes for
confirmation of this Plan, the administration of the Case or the preservation or disposition
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of any Estate Property (including the prosecution, settlement of or any negotiations to settle
any Cause of Action or the sale or collection of or other realization upon any Estate
Property); provided, however, that the foregoing provisions shall have no effect on the
liability of any Exculpated Party that results from any act or omission that is determined in
a Final Order to be solely attributable to such Exculpated Party's (a) own gross negligence
or willful misconduct or (b) violations of state or federal criminal laws. For avoidance of
doubt, nothing in this Section 10.3 or elsewhere in this Plan shall operate to release,
discharge or exculpate the Debtor or any non-Debtor Person from any Claim against the
Debtor or any non-Debtor Person held by a Person (including any Governmental Unit) on
the Petition Date on account of any acts, omissions, or transactions that were concluded or
occurred prior to the Petition Date. As used herein the term "Exculpated Parties" means,
collectively, the Debtor; the board of directors and individual committees of the Debtor
during the Case; any officer or employee of the Debtor during the Case, including the
Debtor's chief recovery officer; the Case Committee and the individual members thereof;
the Indenture Trustees; and each of the foregoing Person's respective officers, directors,
shareholders, members, employees, advisors, investment bankers, consultants, attorneys
and accountants, including all Case Professional Persons.
10.4 Injunction. Except as otherwise provided in this Plan, the Confirmation
Order shall provide, among other things, that from and after the Confirmation Date, all
Persons who have held, hold or may hold Claims against or Equity Interests in the Debtor
are permanently enjoined from taking any of the following actions against the Debtor or
any Estate Property on account of such Claims or Equity Interests:
(a) Commencing or continuing, in any manner or in any place, any
action, suit or other proceeding (other than actions, suits or proceedings commenced by a
Governmental Unit (including the SEC) to enforce its police or regulatory authority over
the Debtor to the extent excepted from the automatic stay provisions of Section 362 of the
Bankruptcy Code, but not against Estate Property);
(b) Enforcing, attaching, collecting or recovering in any manner any
judgment, award, decree or order;
(c) Creating, perfecting or enforcing any Lien;
(d) Asserting any right of setoff, subrogation or recoupment of any kind
against any debt, liability or obligation due the Debtor; or
(e) Enforcing or attempting to enforce any Contractual Subordination;
or
(f) Commencing or continuing, in any manner or in any place, any
action, suit or other proceeding that does not comply with or is inconsistent with the
provisions of this Plan; provided, however, that nothing contained herein shall preclude
such Persons from exercising their rights pursuant to and consistent with the terms of this
Plan.
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The foregoing injunction shall extend to successors of the Debtor and all Estate
Property. By voting for this Plan or accepting any Distribution pursuant to this Plan, each
Holder of a Claim so voting or receiving a Distribution shall be deemed to have specifically
consented to the foregoing injunctions. With the exception of subsection (e) (which shall
constitute a permanent and continuing injunction), the foregoing injunction shall remain in
full force and effect until all Estate Property of the Debtor has been liquidated, collected
and/or distributed, or abandoned as provided herein, and the Debtor has made a Final
Distribution.
10.5 Term of Bankruptcy Stays. Except as otherwise agreed by the Debtor in
writing after consultation with the Plan Committee, all stays provided for in the Case
under Section 105 or Section 362 of the Bankruptcy Code, or otherwise, and in existence on
the Confirmation Date shall remain in full force and effect until sixty (60) days after all
Estate Property (including all Estate Causes of Action) has been liquidated, settled,
collected and/or distributed, or abandoned as provided herein, and the Debtor has made
the Final Distribution pursuant to this Plan.
10.6 Preservation of Causes of Action. The Debtor shall retain all rights, all Causes of
Action accruing to it and its Estate (including all Estate Causes of Action), all rights of setoff and
recoupment, and all other legal and equitable claims or defenses; nothing in this Plan shall be
deemed to be a waiver, release, compromise or relinquishment of any such rights, Causes of
Action, or other legal or equitable claims or defenses to any claim; the Debtor shall have, retain,
reserve and be entitled to assert all such Causes of Action, rights of setoff and recoupment, and
other legal or equitable claims or defenses which the Debtor had either immediately prior to the
Petition Date as fully as if the Case had not been commenced or on or before the Effective Date;
and all of the Debtors legal and equitable rights respecting any such rights, Causes of Action or
other legal or equitable claims or defenses may be asserted after the Effective Date to the same
extent as they could be asserted prior to the Effective Date or if the Case had not been
commenced. Without limiting the generality of the foregoing, unless a Cause of Action is
expressly waived released or settled by Final Order, the Debtor and Plan Trustee expressly
reserve such Cause of Action for later adjudication, including Causes of Action not specifically
identified or described in the Disclosure Statement or any supplement, exhibit or addendum
thereto or of which the Debtor may presently be unaware or which may arise or exist by reason
of circumstances unknown to the Debtor at this time or new facts or circumstances that have
changed or are different from those believed to exist; and no preclusion doctrine, including the
doctrines of collateral estoppel, res judicata, waiver, estoppel, issue or claim preclusion or laches
shall apply to any such Cause of Action upon or after entry of the Confirmation Order based
upon the Disclosure Statement, this Plan or the Confirmation Order.
10.7 Preservation of Insurance. Neither this Plan nor the Debtors release from Claims
as provided herein shall diminish or impair the enforceability of any Insurance Policy that may
cover claims by or against the Debtor, including claims against the Debtors past or present
officers or directors or any other Person. Nothing in this Plan shall obligate the Debtor to
maintain or keep in force any policy of insurance, including any D&O Policy or property
insurance policy, but the Debtor may do so in its discretion.
- 39 -
10.8 Release of Liens. All mortgages, deeds of trust, security agreements, and other
consensual Liens against Estate Property in favor of the Holder of a Secured Claim shall be fully
released and discharged, and all right, title and interest of the Holder of any such Lien shall
revert to the Debtor, automatically and without further action, notice to any Person or order of
the Bankruptcy Court, upon the Holder of such Secured Claim receiving all Distributions to
which it is entitled under this Plan; provided, however, that the Debtor reserves the right to seek
the consent of such Holder or, in the absence of such consent, approval of the Bankruptcy Court
after notice and a hearing, to use, sell or otherwise dispose of any Estate Property subject to such
Holder's Lien in connection with the implementation of this Plan, including the making of
Distributions hereunder.
10.9 Effect Upon Contractual Subordinations. All Distributions under the Plan shall be
made by the Debtor to the Holder of each Allowed Claim, irrespective of (and without the
Debtor or such Holder being obligated to honor the terms of) any Contractual Subordination
given by such Holder to the Holder or Holders of any other Claim or Claims; any such
Contractual Subordination shall be deemed to be void, unenforceable and of no further force and
effect from and after the Effective Date with respect to any Distributions under this Plan; and
Distributions made to the Holder of an Allowed Claim that is or may be subordinated to another
Claim, in whole or in part, pursuant to any Contractual Subordination that was in existence prior
to the Effective Date shall not be subject to levy, garnishment, attachment, or other legal process
by any Holder of a Claim based upon an alleged Contractual Subordination in its favor. Without
limiting the foregoing, each Holder of a Claim who votes for this Plan or accepts any
Distribution under this Plan, or who is a member of a Class of Claims that consists of Holders
who are the beneficiaries of a Contractual Subordination and that accepts this Plan, shall be
deemed specifically to have agreed to the foregoing. The Confirmation Order shall constitute
an injunction as of the Effective Date restraining and permanently enjoining any Holder
from enforcing or attempting to enforce any Contractual Subordination.
ARTICLE 11.

CONDITIONS PRECEDENT; NOTICE OF EFFECTIVE DATE
11.1 Conditions to Confirmation. The following are conditions precedent to
confirmation of this Plan each of which may be satisfied or waived in accordance with Section
11.3 of this Plan:
(a) The Bankruptcy Court shall have entered an order, in form and substance
acceptable to the Debtor in its discretion, approving the Disclosure Statement with respect to this
Plan as adequate and no order of a court of competent jurisdiction shall have been entered and
remain in effect that stays such approval order of the Bankruptcy Court; and
(b) The Confirmation Order shall be in form and substance acceptable to the
Debtor in its discretion.
11.2 Conditions to Effective Date. The following are conditions precedent to the
occurrence of the Effective Date each of which may be satisfied or waived in accordance with
Section 11.3 of this Plan:
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(a) The Confirmation Order shall have been entered, shall be in full force and
effect and shall not have been stayed by order of a court of competent jurisdiction;
(b) No order of a court shall have been entered and shall remain effective that
restrains the Debtor from implementing or consummating the Plan;
(c) All authorizations, consents and regulatory approvals required, if any, in
connection with the Plan's effectiveness shall have been obtained;
(d) The Debtor has determined, in consultation with the Case Committee, that
there is sufficient Available Cash to make the payments required under this Plan to Holders of
Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Secured Claims, and
Allowed Priority Non-Tax Claims;
(e) The Plan Committee shall have been appointed in accordance with the
terms of this Plan;
(f) The Plan Trustee shall have been appointed in accordance with the terms
of this Plan; and
(g) The Bankruptcy Court shall have entered one or more orders (which may
include the Confirmation Order) authorizing the assumption and rejection of unexpired leases
and executory contracts, if any, by the Debtor as contemplated by this Plan or as otherwise
elected by the Debtor.
11.3 Waiver of Conditions to Confirmation or Consummation. The conditions set
forth in Sections 11.1 and 11.2 of this Plan may be waived, in whole or in part, by the Debtor,
after consultation with the Case Committee, without any notice to any other parties in interest or
the Bankruptcy Court and without a hearing. The failure to satisfy or waive any condition to the
Confirmation Date or the Effective Date may be asserted by the Debtor in its discretion
regardless of the circumstances giving rise to the failure of such condition to be satisfied
(including any action or inaction by the Debtor in its discretion). The failure of the Debtor to
exercise any of the foregoing rights shall not be deemed a waiver of any other rights, and each
such right shall be deemed an ongoing right, which may be asserted at any time.
11.4 Notice of Effective Date. Not later than thirty (30) days after the Effective Date,
the Debtor shall send to all known Holders of Claims (or, in the case of Holders then represented
by an agent or fiduciary, such as an Indenture Trustee, to such agent or fiduciary) and other
parties who have in writing requested notice in the Case and those non-Debtor parties whose
executory contracts and unexpired leases are deemed rejected pursuant to this Plan a notice that
informs such Holders and other parties of (a) entry of the Confirmation Order; (b) the occurrence
of the Effective Date; (c) the rejection of executory contracts and unexpired leases of the Debtor
pursuant to this Plan, and the deadline for the filing of Claims arising from such rejection; (d) the
Administrative Claims Bar Date; (e) the procedures for requesting notice of matters referenced in
this Plan, as well as any other matters occurring subsequent to the Effective Date; (f) the
procedures for changing an address of record pursuant to Section 9.3(d) of this Plan; and (g) such
other matters as the Debtor deems appropriate.
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ARTICLE 12.

ACCEPTANCE OR REJECTION OF THE PLAN
12.1 Impaired Classes of Claims Entitled to Vote. Except as provided in any order of
the Bankruptcy Court pertaining to solicitation of votes with respect to this Plan and Section 12.2
of this Plan, Holders of Claims in each impaired Class (other than Class G - Statutorily
Subordinated Claims) are entitled to vote in their respective Classes as a Class to accept or reject
this Plan. The vote of Holders of Claims in Class G will not be solicited, as such Holders have
not as yet been identified and a determination of their subordinated status adjudicated by the
Bankruptcy Court. The Debtor will solicit only the votes of those Holders of Claims in Class D
(Convenience Claims) who, based upon proofs of claim timely filed in this Case, assert Claims
for $5,000 or less (excluding any asserted Claim for interest accruing after the Petition Date), as
the Debtor will be unaware at the time of such solicitation of the identities of other Holders of
Claims who may elect to opt in to Class D by reducing the Allowed amount of their Claims to
$5,000, and only the votes of those Holders of Allowed Claims in Class D whose votes are
solicited will be counted.
12.2 Classes Deemed to Accept the Plan. Any Class consisting of Claims that are
unimpaired by this Plan are conclusively presumed, pursuant to Section 1126(f) of the
Bankruptcy Code, to have accepted this Plan, and the votes of the Holders in each such Class
therefore will not be solicited.
12.3 Acceptance by Impaired Classes. Classes D, E, F, G and H are impaired under
this Plan and, pursuant to Section 1126(c) of the Bankruptcy Code (and except as provided in
Section 1126(e) of the Bankruptcy Code) an impaired Class of Claims has accepted this Plan if
this Plan is accepted by the Holders of at least two-thirds (2/3) in dollar amount and more than
one-half (1/2) in number of the Allowed Claims of such Class that have timely and properly
voted to accept or reject this Plan.
12.4 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code. With respect
to any Class that rejects or is deemed to have rejected this Plan, the Debtor may request
confirmation of this Plan, as it may be modified from time to time, under Section 1129(b) of the
Bankruptcy Code.
ARTICLE 13.

RETENTION OF JURISDICTION; CLOSING CASE
13.1 J urisdiction of Bankruptcy Court. After the Effective Date, the Debtor shall be
free to perform all functions assigned to it under this Plan without approval of the Bankruptcy
Court, except as specifically provided herein; provided, however, that the Bankruptcy Court shall
retain jurisdiction over this Case with respect to matters and for purposes as previously specified
in this Plan and with respect to the following matters and for the following purposes (which
jurisdiction shall be non-exclusive when so designated below):
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(a) To resolve and enforce any and all Estate Causes of Action (including
Designated Causes of Action) that may exist except to the extent that any such Estate Cause of
Action is, on the Confirmation Date, pending in or is thereafter lodged with another court (non-
exclusive);
(b) To resolve all Disputed Claims, including all requests for estimation or
objections to the allowance of Claims, and the compromise and settlement of objections to any
Claims;
(c) To adjudicate all applications, adversary proceedings, and contested
matters that may be pending on or after the Confirmation Date (non-exclusive);
(d) To adjudicate controversies, suits and disputes arising under or in
connection with this Plan and to issue orders in aid of execution of this Plan except for Disputed
Claims and Estate Causes of Action that, as of the Confirmation Date, are lodged with another
court;
(e) To adjudicate adversary proceedings and contested matters pending on the
Confirmation Date or thereafter brought to recover Estate Property; to determine whether or not
any property is Estate Property; to recover or avoid preferences, fraudulent conveyances and
other Avoidance Claims except to the extent pending in another court as of the Confirmation
Date (non-exclusive); and to determine the validity, extent and priority of Liens upon or other
asserted interests in or rights of offset or recoupment with respect to Estate Property;
(f) To hear and determine all matters that are remanded to it by any appellate
court;
(g) To determine any applications or motions for the rejection, assumption or
assignment of executory contracts or unexpired leases;
(h) To determine any motion to modify this Plan in accordance with Section
1127 of the Bankruptcy Code;
(i) To resolve disputes regarding the proper classification of any Claim;
(j) To determine all questions and disputes regarding title to or Liens upon
Estate Property or regarding the Bankruptcy Court's orders, if any, affecting Cash collateral or
providing adequate protection to Holders of Secured Claims;
(k) To correct any defect, to cure any omission, or to reconcile any
inconsistency in this Plan, the Disclosure Statement or the Confirmation Order as may be
necessary or desirable to carry out the purposes and intent of this Plan;
(l) To interpret and construe the terms and conditions of this Plan and to
determine all questions arising in connection with the enforcement or implementation of this
Plan;
- 43 -
(m) To enter any order, including restraining orders and injunctions, necessary
to enforce the title, rights, powers, and duties of the Debtor or Plan Trustee and to impose such
limitations, restrictions, terms, and conditions on such title, rights, powers, and duties as the
Bankruptcy Court may deem necessary (non-exclusive);
(n) To resolve any objections that may be filed regarding any action taken or
proposed to be taken by the Debtor or Plan Trustee under this Plan (provided that neither the
Debtor nor the Plan Trustee shall be obligated to obtain Bankruptcy Court approval for any
action proposed to be taken or to provide notice to interested parties of any proposed action to be
taken, except as otherwise expressly provided in this Plan);
(o) To enter any order or decree contemplated by Section 350 of the
Bankruptcy Code concluding and closing the Case; and
(p) To determine such other matters or proceedings as may be provided for
under Title 28, the Bankruptcy Code, the Bankruptcy Rules, this Plan, or the Confirmation
Order.
13.2 Closing of Case. Provided that all Disputed Claims have been finally resolved,
the Bankruptcy Court, upon application of the Debtor and after notice and hearing, may
determine that this Plan has been substantially consummated, and enter a Final Decree,
notwithstanding the fact that additional funds or property may eventually be distributed to parties
in interest. In such event, the Bankruptcy Court may enter an order closing the Confirmed Case
pursuant to Section 350 of the Bankruptcy Code; provided, however, that (a) the Debtor shall
continue to have the rights, powers, and duties set forth in this Plan and (b) the Bankruptcy Court
from time to time may reopen the Confirmed Case, if appropriate, for the purpose of
administering assets, enforcing provisions of this Plan or supervising its implementation, or for
other cause.
ARTICLE 14.

MISCELLANEOUS
14.1 Binding Effect. Upon the Effective Date, this Plan shall be binding upon and
inure to the benefit of the Debtor and all Holders of Claims, all Holders of Equity Interests and
all other parties in interest and their respective heirs, executors, administrators, successors and
assigns.
14.2 Debtor's Performance Through Plan Trustee. Wherever in this Plan any duty is
imposed or any right, power or privilege is conferred upon the Debtor, such duty may be
discharged by acts of the Plan Trustee (or the Plan Committee in the case of Designated Causes
of Action) and such right, power or privilege may be exercised on the Debtor's behalf by the Plan
Trustee, but nothing herein shall impose upon the Plan Trustee any personal liability for the
payment or performance of any Claims or discharge of any of Debtor's duties hereunder.
14.3 Withholding and Reporting Requirements. Subject to Section 9.13 of this Plan, in
connection with all Distributions made under this Plan, the Debtor shall endeavor in good faith to
- 44 -
comply with all withholding and reporting requirements imposed by any Governmental Unit, and
all Distributions shall be subject to any such withholding and reporting requirements.
14.4 Notices. Except as otherwise expressly provided in this Plan, all notices required
or permitted in this Plan to be given may be given to the Persons designated, and in the manner
prescribed for the giving of notices generally, by prior orders entered in the Case by the
Bankruptcy Court. All notices to or demands upon the Debtor pursuant to this Plan shall be sent
to the Plan Trustee. Service on or notice to the Plan Trustee shall constitute valid service on or
notice to the Debtor.
14.5 Amendments to Plan. The Debtor reserves its right in accordance with the
Bankruptcy Code to amend or modify this Plan prior to the entry of the Confirmation Order and
further reserves its right, in accordance with the Bankruptcy Code, to amend or to modify this
Plan prior to entry of the Confirmation Order to remedy any provision of this Plan which is
found to violate Section 1129(b) of the Bankruptcy Code. After the Confirmation Date and prior
to substantial consummation of this Plan as defined in Section 1101(2) of the Bankruptcy Code,
the Debtor may, after consultation with the Plan Committee, institute proceedings in the
Bankruptcy Court pursuant to Section 1127(b) of the Bankruptcy Code to remedy any defect or
omission or reconcile any inconsistencies in this Plan, the Disclosure Statement or the
Confirmation Order, and such matters as may be necessary to carry out the intent and purposes
of this Plan.
14.6 Necessary Acts. Upon application of the Debtor, the Bankruptcy Court may issue
an order directing any necessary party to execute, to deliver, or to join in the execution or
delivery of any instrument or documents and to perform any other action necessary for the
consummation of this Plan.
14.7 Waiver of Federal Rule of Civil Procedure 62(a). The Debtor may request that
the Confirmation Order include a finding that Rule 62(a) of the Federal Rules of Civil Procedure
shall not apply to the Confirmation Order and authorization for the Debtor to consummate this
Plan immediately after entry of the Confirmation Order.
14.8 Dissolution of Case Committee. Effective on the Effective Date, the Case
Committee shall dissolve automatically, whereupon its members, professionals, and agents shall
be released from any further duties and responsibilities in the Case and under the Bankruptcy
Code, except with respect to obligations arising under confidentiality agreements, joint interest
agreements, and protective orders entered during the Case, all of which shall remain in full force
and effect according to their terms. The Case Professional Persons retained by the Case
Committee and the respective members thereof shall not be entitled to compensation or
reimbursement of expenses for services rendered after the Effective Date, except for services
rendered in connection with any applications for allowance of Case Professional Compensation
pending on the Effective Date or filed after the Effective Date, including responding to or
otherwise addressing any objections to such Case Professional Compensation.
14.9 No Admissions; Objections to Claims. Nothing in this Plan shall be deemed to
constitute an admission that any Holder of a Claim is the Holder of an Allowed Claim, except as
otherwise expressly provided in this Plan. The failure of the Debtor to object to or examine any
- 45 -
Claim for purposes of voting shall not be deemed a waiver of the Debtor's right to object to or
reexamine such Claim, in whole or in part.
14.10 No Bar to Suits. Neither this Plan nor its confirmation shall operate to bar or
estop the Debtor (or the Plan Committee, in the case of Designated Causes of Action) from
commencing any action, suit or proceeding against any Holder of a Claim or any other Person on
any Estate Cause of Action (except for Estate Causes of Action herein released), whether such
Estate Cause of Action arose prior to or after the Confirmation Date and whether or not the
existence of such Estate Cause of Action was disclosed in the Disclosure Statement.
14.11 Section 1146 Exemption. Pursuant to Section 1146(a) of the Bankruptcy Code,
the issuance, transfer or exchange of any security under this Plan or the making or delivery of
any instrument or transfer pursuant to, in implementation of or as contemplated by this Plan or
the transfer of any property pursuant to this Plan shall not be taxed under any state or local law
imposing a stamp Tax, transfer Tax or similar Tax or fee.
14.12 Governing Law. Unless a rule of law or procedure is supplied by federal law
(including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated,
the laws of the State of Alabama shall govern the construction and implementation of this Plan,
any agreements, documents and instruments executed in connection with this Plan (except as
otherwise set forth in those agreements, in which case the governing law of such agreement shall
control). Corporate governance matters shall be governed by the laws of the state of
incorporation of the Debtor.
14.13 Conflict. The terms of this Plan shall govern in the event of any inconsistency
with the summaries of this Plan set forth in the Disclosure Statement.
14.14 Delayed Effective Date. If the Effective Date does not occur on or before three
hundred sixty-five (365) days after the Confirmation Date, then the Confirmation Order may be
vacated by the Bankruptcy Court on motion made by the Case Committee or the Holder of an
Allowed Claim, and, if so vacated, (i) no Distributions under this Plan shall be made, (ii) the
Debtor and all Holders of Claims and Equity Interests shall be restored to the status quo ante as
of the day immediately preceding the Confirmation Date as though the Confirmation Date had
never occurred, and (iii) the Debtor's obligations with respect to the Claims and Equity Interests
shall remain unchanged and nothing in this Plan shall constitute or be deemed a waiver or release
of any Claims or Equity Interests by or against the Debtor or any other Person or prejudice in any
manner the rights of the Debtor or any Person in any further proceedings involving the Debtor.
14.15 Revocation, Withdrawal or Non-Consummation. The Debtor reserves the right to
revoke or withdraw this Plan at any time prior to the Effective Date. If the Debtor revokes or
withdraws this Plan prior to the Effective Date, then this Plan, any settlement or compromise
embodied in this Plan with respect to the Debtor, the assumption or rejection of executory
contracts or leases effected by this Plan, and any document or agreement executed pursuant to
this Plan shall be null and void. In such event, nothing contained herein or in the Disclosure
Statement, and no acts taken in preparation for consummation of this Plan, shall be deemed to
constitute a waiver or release of any Claims by or against the Debtor or any other Person, to
prejudice in any manner the rights of the Debtor, the holder of a Claim or Equity Interest, or any
- 46 -
Person in any further proceedings involving the Debtor or to constitute an admission of any sort
by the Debtor or any other Person.
Dated: Montgomery, Alabama
February 21, 2011
THE COLONIAL BANCGROUP, INC.
Debtor and Debtor-in-Possession
C. Edward Dobbs
edobbs@phrd.com
Rufus T. Dorsey, IV
rtd@phrd.com
J . David Freedman
jdf@phrd.com
PARKER, HUDSON, RAINER & DOBBS LLP
1500 Marquis Two Tower
285 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303
404-523-5300

- B -
EXHIBIT B

Brief Explanation of Chapter 11
Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code but
also may be used by the debtor to liquidate its business. Under Chapter 11, a debtor is
authorized to reorganize or liquidate its business for the benefit of itself and its creditors and
stockholders. Unlike cases under Chapters 7, 12 and 13 of the Bankruptcy Code, which
automatically result in the appointment of a Debtor, the debtor in a Chapter 11 case remains in
control of the estate as the "debtor-in-possession," generally with the same powers and duties as
a Debtor, unless the bankruptcy court appoints a Debtor for the Chapter 11 debtor. In addition to
permitting rehabilitation or liquidation of the debtor, another goal of Chapter 11 is to promote
equality of treatment of creditors and equity security holders of equal rank with respect to the
distribution of a Debtor's assets. In furtherance of these two goals, upon the filing of a petition
for relief under Chapter 11, Section 362 of the Bankruptcy Code generally provides for an
automatic stay of substantially all acts and proceedings against the debtor and its property,
including all attempts to collect claims or enforce liens that arose prior to the commencement of
the Debtor's case under Chapter 11, unless lifted by an Order of the Bankruptcy Court.
The formulation and consummation of a plan is the principal objective of a Chapter 11
case. A plan sets forth the means for satisfying claims against, and interests in, a debtor. After a
plan has been filed, the holders of allowed claims against or interests in a debtor are permitted to
vote to accept or reject such plan. Section 1125 of the Bankruptcy Code requires the debtor,
before soliciting acceptances of the proposed plan, to prepare a disclosure statement containing
adequate information of a kind, and in sufficient detail, to enable a hypothetical reasonable
investor to make an informed judgment about the plan. This Disclosure Statement is presented
to holders of claims or interests in impaired classes to satisfy the requirements of Section 1125 of
the Bankruptcy Code. Confirmation of a plan by the Bankruptcy Court makes the plan binding
upon the debtor, any issuer of securities under the plan, any person acquiring property under the
plan and any creditor of, or equity security holder or general partner in, the debtor. Subject to
certain limited exceptions, the confirmation order discharges the debtor from any debt that arose
prior to the date of confirmation of the plan and substitutes the obligations specified under the
confirmed plan.
The Bankruptcy Code defines acceptance of a plan by a class of claims as acceptance by
a majority in number and at least two-thirds in amount of those claims actually voting in such
class. The Bankruptcy Code defines acceptance of a plan by a class of interests as acceptance by
holders of at least two-thirds of the number of shares actually voting in such class. Holders of
claims or interests who fail to return ballots will not be counted as either accepting or rejecting
the plan for purposes of determining whether the plan is accepted or rejected.
Acceptances of a plan are solicited only from those persons who hold allowed claims or
interests in an impaired class. Classes of claims or interests that are not "impaired" under a plan
are conclusively presumed to have accepted the plan. Consequently, holders of claims or
interests in such unimpaired classes are not entitled to vote. A class of claims or equity interests
is impaired under a plan unless, as set forth in Section 1124 of the Bankruptcy Code, with

respect to each claim or equity interest of such class, the plan: (1) leaves unaltered the legal,
equitable and contractual rights of the holder of such claim or interest; or (2) notwithstanding
any contractual provisions or applicable law that entitles the holder of a claim or interest to
demand or receive accelerated payment of such claim or interest after the occurrence of a
default: (a) cures any such default that occurs before or after the commencement of the case
under the Bankruptcy Code other than a default of a kind specified in Section 365(b)(2) of the
Bankruptcy Code; (b) reinstates the maturity of such claim or interest as such maturity existed
before such default; (c) compensates the holder of such claim or interest for any damages
incurred as a result of any reasonable reliance by such holder on such contractual provision or
such applicable law; and (d) does not otherwise alter the legal, equitable or contractual rights to
which such claim or interest entitles the holder of such claim or interest.
Even if all classes of claims and interests accept a plan, the Bankruptcy Court
nevertheless might not confirm that plan. Section 1129(a) of the Bankruptcy Code sets forth the
requirements for confirmation of a plan and, among other things, requires that a plan (1) comply
with the applicable provisions of the Bankruptcy Code and other applicable law, (2) be proposed
in good faith, (3) be accepted by at least one impaired class of creditors, (4) be in the "best
interest" of creditors and interest holders and (5) be feasible. The "best interest" test generally
requires that the value of the consideration to be distributed under a plan to holders of claims or
interests who have not voted to accept the plan may not be less than those parties would receive
if the debtor were liquidated under a hypothetical liquidation occurring under Chapter 7 of the
Bankruptcy Code. Under the "feasibility" requirement, the Court generally must find that there is
a reasonable probability that the debtor will be able to perform the obligations incurred under the
plan and to continue operations without the need for further financial reorganization. If the
proponent of a plan seeks confirmation of such plan under the "cramdown" provisions of Section
1129(b) of the Bankruptcy Code, the court may confirm a plan if it meets all applicable
requirements of Section 1129(a) of the Bankruptcy Code (except Section 1129(a)(8), which
requires acceptance by all impaired classes) and if the proponent of the plan shows that the plan
(1) does not discriminate unfairly and (2) is fair and equitable with respect to each impaired class
of claims or interests that has not accepted the plan.
Under Section 1129(b) of the Bankruptcy Code, a plan is "fair and equitable" as to a class
if, among other things, the plan provides: (1) with respect to secured claims, that each holder of
such claim included in the rejecting class will receive or retain on account of such claim property
that has a value, as of the effective date of the plan, equal to the allowed amount of such claim;
and (2) with respect to unsecured claims and interests, that the holder of any claim or interest that
is junior to the claims or interests of such class will not receive or retain on account of such
junior claim or interest any property at all unless the senior class is paid in full. The Bankruptcy
Court must further find that the economic terms of the plan do not unfairly discriminate with
respect to the particular objecting class, as provided in Section 1129(b) of the Bankruptcy Code.


- C -
EXHIBIT C

Debtor's Known Subsidiaries as of June 30, 2009

- D -
EXHIBIT D

List of Individuals / Entities
ADT Security Services, Inc.
Advanced Financial Services, Inc.
Akin Gump Strauss Hauer & Feld LLP
Alabama Business Hall of Fame
Alice Koelle Photography, Inc.
Allen Mayer
Alliance Advisors, LLC
Allied World Assurance Company LTD
Alston & Bird LLP
American Express
American International Group, Inc.
American Osment
Amerisave Mortgage Corporation
Andrew L. Stidd
Andrew Wilson
Andy Pritchett
Angie S. Parker
Antonio T. Coley
Arnold & Porter LLP
Arthur Barksdale
Ashwin Kakani
Audra Laking
Augustus K. Clements, III
B.C. Ziegler and Co.
Balch & Bingham LLP
Banc of America Leasing
Banc of America Securities
Banco BCN Barclays (Bahamas) Ltd.
Banco BCN Barclays S.A.
Bank of America
Barclays
Barclays Bank PLC
Barclays Capital
BCN Barclays
Bear Stearns Companies
Bennett Rea
BHM Civil Rights Institute
Birmingham Southern College
BNP Paribas (France)
Bradley Arant Boult Cummings LLP
Branch Banking & Trust Company
Brent Sloman
Brian M. Nicholas
Broadridge
Broadridge Financial Solutions
Broadridge Investor Communications
Broadridge Securities Processing
Solutions, Inc.
Bryan Cave LLP
Buchalter Nemer
Business Council of Alabama
Business Wire, Inc.
C. M. Holland
Capell & Howard P.C.
Capitol's Rosemont Gardens
Carli Compton
Carol R. Norris

Carolyn A. Spann
Carr, Riggs & Ingram, LLC
Caryn Cope Hughes
Catherine Kissick
CDW Direct LLC
Centerbridge Credit Partners Master, LP
Chadbourne & Parke LLP
Charles Schwab & Co., Inc.
Charlotte Gaston Interiors
Chris Mills
Chris Welch
Chubb Group of Insurance Companies
CIT Group INC.
CIT Technology Financing
Citigroup Global Markets Inc.
Citigroup Inc.
Citizens for Economic Progress
City Securities Corporation,
Clark Consulting, Inc.
Clinton O. Holdbrooks
Colonial Insurance Agency, Inc.
Commerce St. Investment Advisors
Commerzbank AG
Computershare
Continental Stock Transfer & Trust
Company
Copyright Clearance Center
Cornerstone Research, Inc.
Council for Educational Change
Credit Lyonnais
Credit Suisse Securities (USA) LLC
Crowe Horwath LLP (formerly Crowe
Chizek and Company LLC)
Crowell, Weedon & Co.
Curran & Connors, Inc.
D.A. Davidson & Co.
Davenport & Company LLC
David B. Byrne, J r.
David F. Clark
David J ones
David Penley
David Reimer
Debbie Diboll
Deborah L. Linden
Delaware Secretary of State
Deutsche Bank Securities Inc.
Dewey & LeBoeuf
Diane Fleming
Doley Securities, LLC
Don Powell
Douglas Small
Duke University
E*Trade Financial
Edah B. Grover
Edward H. Ogwynn, III
Edward V. Welch
EE Forbes Piano CO Inc.
EFJ Capital
Ernst & Young
Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation, as
receiver for Colonial Bank
Federal Insurance Company
Federal Trust Bank
FedEx
Ferris, Baker Watts, Inc.
Fidelity Capital Markets

Fine Geddie & Associates, LLC
First Trust of New York, N.A.
Fitch Inc.
Fitch Ratings
Fixed Income Securities, LP
Folsom Inaugural Committee
Fortis Capital Corp.
Frances E. Roper
Frank Smythson
Franklin Bank SSB
Frazer Memorial United
Georgeson Inc.
Glenda Allred
Glenmorris LLC
Goldstein Schechter Koch
Gray-Robinson, P.A.
Gretchen Danielson / Richard Manning,
J r. (Proof of Claim #17)
Guaranty Bank
Guidance Software
H&R Block Financial Advisors, Inc.
Habif Arogetti & Wynne, LLP
Hancock Askew & Co., LLP
Harlan C. Parrish
Harland Clarke
Harold D. King
Harris N.A.
Hewlett Packard
Hoefer & Arnett, Inc. (nka Howe Barnes
Hoefer & Arnett, Inc.)
Howell P. Henderson
Hubert L. Harris, J r.
Hunton & Williams
Investor Group Services LLC
iT1 Source LLC
Ivize of Montgomery LLC
Ixis Real Estate Capital, Inc.
J .J .B. Hilliard
J ames L. Hogan
J ames W. Rane
J ane Floyd & Associates Inc.
J ane M. Barkley
J anet Hurley
J anney Montgomery Scott LLC
J ason Scruggs
J eff Cavender
J effries & Company, Inc.
J erry J . Chesser
J im Hogan
J oe D. Mussafer
J oe W. & Dorothy G. Adkins
J ohn C. H. Miller, J r. (Estate of)
J ohn Ed Mathison
J ohn R. Chesnutt
J ohnston Barton Proctor & Rose LLP
J ones, Walker, Waechter, Poitevent,
Carrre & Dengre L.L.P.
J ose Vazquez
J oseph A. Losch, J r.
J oseph Royals
J oseph W. Armaly
K&L Gates LLP
Kalorama Legal Services, PLLC
Kamal Hosein
Karen Lugen
KBC Bank NV (Belgium)
Keefe, Bruyette & Woods, Inc.

Kolesar & Leatham CHTD
KPMG
Kristin Oswalt
LaSalle Global Trust Services
Laurie Borders
LECG, LLC
Lee Farkas
Lehman Brothers
Lehman Brothers Special Financing, Inc.
Leisa Desimone
Lewis E. Beville
LexisNexis Discovery Services
Lightfoot, Franklin & White, LLC
Lisa M. Free
Locke Lord Bissell & Liddell LLP
Louis E. Essman
Mark S. Daigle
Marsh Communications LLC
Mary Lou Bathen
Matrix Bancorp Trading
Mayer Brown LLP
McGraw Hill Companies
Melissa Spata
Mercedes-Benz Credit
Merrill Lynch & Co.
Mesirow Financial, Inc.
Michael Sleaford
Michelle Condon
Midcoast Aviation Inc.
Miller Ray & Houser LLP
Miller, Hamilton, Snider & Odom LLC
(now merged with J ones Walker)
Milliman, Inc.
Milton E. McGregor
Montgomery YMCA
Moody's Investors Service
Morgan Keegan & Company, Inc.
Morgan Stanley & Co. Inc.
Nancy Lewis
National Appraisal Associates
National Field Representatives, Inc.
National Union Fire Insurance Company
of Pittsburgh, Pa.
Natixis Real Estate Capital Inc.
New York Stock Exchange
Oppenheimer & Co. Inc.
Opteum Financial Services LLC fka
Home Star Mortgage Services
Pam Chesnutt
Patrick F. Dye
Patti G. Hill
Paul Spina
Pearl Meyers & Partners
Pershing LLC
Philip E. Adams, J r.
Piper J affray & Co.
Platinum Community Bank
Pricewaterhouse Coopers LLP
Promontory Financial Group
R. Westbrook & Assoc. CRG Inc.
Raymond J ames & Associates
RBC Dain Rauscher Inc.
Republican State Leadership Comm.
Riley Inaugural Committee
Risk Management Association
RLI Corp.
RLI Insurance Company

Robert E. Lowder
Robert S. Craft
Robert W. Baird & Co. Inc.
Rodney Higgins
Sam Bryant
Samuel A. Ramirez & Co., Inc.
Sandler O'Neill & Partners, L.P.
Sandra W. J ansky
Sara Henderson
Sarah H. Moore
Scott Robicheaux
Sheila P. Moody
Simpson Thacher & Bartlett LLP
Simuel Sippial, J r.
South Towne Capital LLC
Sovereign Bank
St. Denis J . Villere & Co., LLC
St. Regis Resort / Aspen
Stacy Taylor
Stanley Sistrunk
Sterne, Agee & Leach, Inc.
Stifel, Nicolaus & Company, Inc.
Stone & Youngberg LLC
Sullivan & Cromwell LLP
SunGard Availability Services LP
SunGard Bancware
SunTrust Banks, Inc.
SunTrust Robinson Humphrey, Inc.
SunTx Capital II Management Corp. d/b/a
SunTx Capital Partners
Supreme Lending
T. Brent Hicks
Tamara A. Stidham
Taylor, Bean &Whitaker Mortgage Corp.
Teresa (Carrier) Kelly
Terry Bryant
The Bank of New York
The Depository Trust Co.
The Elegant Farmer, Inc.
The Farmers Bank
The Montgomery Country Club
The Perkins Group LLC
Thomas F. Dyas, J r.
TITAN Technology Partners, Limited
Tom Burge
Tommy Tynes
Towers Perrin (now Towers Watson)
Toyota Motor Credit Corporation
Troutman Sanders LLP
Troy King Inaugural Committee
UBS Securities LLC
UPS Supply Chain Solutions Inc.
US Bank
Vicky Maddox
Vivian McKean
W. Flake Oakley
W.L. Lyons, Inc.
Wachovia Capital Markets, LLC
Waller Lansden Dortch & Davis, LLP
Walter Hargrove
Wedbush Morgan Securities
Weingarten Nostat
Wells Fargo Securities, LLC
Willard H. Henson
William & Dorothy Powers Living
William A. McCrary

William Blair & Company, LLC
William Britton
William E. Powell, III
Wynlakes Golf & Country Club


- E -
EXHIBIT E

Resume of Ben S. Branch
CURRICULUM VITAE August 2006

Ben S. Branch, Trustee U.S. Citizen, Born 4/18/43
11 Foxglove Lane
Amherst, Massachusetts 01002
413-545-5690 (Home: 413-253-2010)

B.A., 1965, Emory University (Mathematics)
M A., 1968, University of Texas (Economics)
Ph.D., 1970, (M.A., 1969), University of Michigan (Economics)
Dissertation: "Research and Development, Profits, Sales Growth"
Chair: Frederick M. Scherer

HONORS, SCHOLARSHIPS AND FELLOWSHIPS

Rackham Fellowship, Winter 1969; Phi Kappa Phi, 1969; Brookings Fellowship, 1969
1970

OFFICES IN PROFESSIONAL ORGANIZATION

Financial Management Association, Northeast Regional Representative, 1978
1980; Chairman, Nominating Committee, 1979; Program Committee, 1980, 1995.

Eastern Finance Association, Vice President for 1981 Program; Board Member, 1979
1985, 1989, 1991; Program Committee, 1978, 1981; President, 1983, 1984; Chairman,
Board of Trustees, 1984, 1985, member, 1985 to present; Chairman, Nominating
Committee, 1985,1986.

Turnaround Management Association, member of the Academic Advisory Council, 1999-
Present

Review of Research in Banking and Finance, Associate Editor, 1989 -1992.

International Review of Financial Analysis, Associate Editor, 1989Present

Business Quest, Associate Editor, 2001-Present

Eurasian Review of Econometrics, Associate Editor, 2006-Present


TEACHING, RESEARCH AND ADMINISTRATION
INTEREST AND EXPERIENCE

Teaching Investment, Corporate Finance, Industrial Organization, Financial
Interest: Institutions

Research Investments, Bankruptcies, Strategic Planning, Futures Markets,
Interest: Corporate Finance, Industrial Organization

Teaching Bishop College, Dallas Texas, Teacher, Mathematics, Summer,
Experience: 1964, 1965, 1966

University of Texas, T.A., Economic Principles, 1965-66, 1966-67.

University of Michigan, T.F., Economic Principles, 1967
68 and Summer, 1968; Research Assistant, Michigan Econometric
Model, 1967-69; T.F., Industrial Organization, Summer, 1969.

Dartmouth College, Assistant Professor of Economics, 1970-
75.

University of Massachusetts, Assistant (1975-76), Associate
(1976-79), Professor (1979-present) of Finance.

Administrative University of Massachusetts: Acting Chairman, Department of
Experience General Business and Finance: Summer 1981; Chairman, School of
Management Personnel, Committee, 1982-83; Associate
Chairman, Department of General Business and Finance, 1982-85;
Ph.D. Director, School of Management, 1989-1991; Acting
Chairman, Department of Finance and Operations Management;
Spring 1999

First Republic Bank Corporation: Chairman, Senior Unsecured
Creditors Committee, 1989-1991: Chairman of the Board, 1991-
1994.

BankEast Corporation: Director (Ex Officio), 1991-1993.

Bank of New England Corporation: Chapter 7 Bankruptcy Trustee,
1991-present.

Proactive Technologies Corporation: Director 1997-1999

VFBLLC: Manager 2001-present

PUBLICATIONS IN PROFESSIONAL JOURNALS

"Research and Development and Sales Growth," Journal of Economics and Business,
Spring, 1973.

" Nonreturnables and the Environment," Atlanta Economic Review, September
October 1973. Reprinted by Committee of Tin Mill Product Producers, American Iron
and Steel Institute. Summary went out as press release and was carried by various
newspapers and magazines.

"Firm Objectives and Market Performance," Financial Management, Summer 1973, pp.
24-29.

"Common Stock Performance and Inflation, An International Comparison," Journal of
Business, January 1974.

"Research and Development and Profits: A Distributed Lag Analysis," Journal of Political
Economy, September-October 1974, pp. 999-1011.

" The Optimal Price to Trade," Journal of Financial and Quantitative Analysis, September
1975, pp. 497-514.

" The Use of a Stock Market Game in Teaching Investments," Journal of Financial
Education, Fall 1975, pp. 72-76.

" Pricing, Competition and Market Structure in the Radio Industry" (with Stephen
Kepes), Industrial Organization Review, Vol. 3, No. 2, pp. 77-87.

" The Predictive Power of Market Indicators," Journal of Financial and Quantitative
Analysis, June 1976, pp. 269-285. A digest appeared in the Journal of Certified Financial
Analysts, Winter 1977, Vol. 7, No. 1, pp. 3-4.

"Returnables vs. Nonreturnables: A Re-evaluation," Atlanta Economic Review, May
June 1976, pp. 28-34. Revision of paper presented to "First National Conference of
Packaging Regulation and Legislation," New York University, May 13 and 14, 1974. A
summary of this paper appeared in Brewing Industry Survey, 1974, pp. 36
39. The full paper was reprinted and distributed by the U.S. Brewers Association. It was
also reprinted in Brewers Digest, November 1976, pp. 14-4.

"Term Papers in Investments," Journal of Financial Education, Fall 1976, pp. 26-8.

"A Tax Loss Trading Rule," Journal of Business, April 1977, pp. 198-207.

"Bid Asked Spreads on the AMEX and the Big Board" (jointly with Walter Freed), Journal
of Finance, March 1977, pp. 159-64.

"The Determinants of Bid Asked Spreads on the OTC Market," Industrial Organization
Review, Vol. 4, No. 2, pp. 69-74.

"Instructing Students in Taking and Preparing for Tests," Journal of Financial Education,
Fall 1977, pp. 45-50.

"The Capital Shortage, Dividend Reinvestment and Taxes," Revista Internationale di
Scienze Economiche e Commercial, No. 10-11, 1977, pp. 909-921.

"Deregulation and Price Competition in the Securities Industry: It Takes More Than
Benign Neglect," Antitrust Law and Economics Review, Vol. 10, No. 1, 1978, pp. 67-73.

"Doing Original Research with Students," Journal of Financial Education, Fall 1978, pp.
34-36.

"The Impact of Operating Decisions and ROI Dynamics," Financial Management, Winter,
1978, pp. 54-60.

"Testing the Unbiased Expectations Model of Interest Rates, " presented to Eastern
Finance Association meeting April 1978 where it won the competitive paper
competition. Financial Review, Fall 1978, pp. 51-66. Included in G. Gay and R. Kolb,
Interest Rate Futures: A Comprehensive Anthology, Robert F. Dame, 1982.

A Multidimensional Model of Behavior for Growth and Profit Maximizing Firms,"
Review of Industrial Management and Textile Science, Spring 1979, pp. 41-58.

"The Quality of Service and the Allowed Rate of Return," Journal of Economics and
Business, Fall 1979, pp. 86-88.

"Tax Loss Trading: An Inefficiency Too Large to Ignore," Financial Review, Winter 1980,
pp. 20-29.

"The Laws of the Marketplace and ROI Dynamics," Financial Management, Summer
1980, pp. 58-64.

"The Black Scholes Model with Separated Markets" (with Alan Gleit), Financial Review,
Spring 1980, pp. 13-22.

"Business Week's Annual Earnings Forecasts" (with Bruce Berkowitz), Journal of
Accounting, Auditing and Finance, Spring 1981, pp. 215-219.

"Marketing Strategies: the Truth About High Share Business" (with Bradley Gale),
Journal of Business Strategy, Summer 1980, pp. 71-73.

"A Study of the Economic Functions of the Potato Futures Market" (with Jeffrey Sooy),
Journal of Northeast Agricultural Economics, April 1980, pp. 51-62.

"Capital Market Efficiency and Fixed Income Securities" (with Tom Schneeweis), Review
of Business and Economics Research, Winter 1981, pp. 34-42.

"Cash Flow Analysis: More Important Than Ever" (with Bradley Gale), Harvard Business
Review, July, August 1981, pp. 131-137.

"The Market Impact of Option Listing" (with Joseph Finnerty), The Financial Review,
Spring 1981, pp. 1-15.

"The Silver Futures Market: Its Structure and Economic Analysis" (with Alan Gleit, Jeffrey
Sooy and Michael Fitzgerald), Nebraska Journal of Economics and Business, Spring 1982,
pp. 67-76. We were awarded a $5,000 grant from the Columbia University Center for
the Study of Futures Market to undertake this study.

"Concentration vs. Market Share: Which Determines Performance and Why Does It
Matter?" (with Bradley Gale), The Antitrust Bulletin, Spring 1982, pp. 83-105.

"On the Instability of Alpha" (with Alan Gleit and Harry Tamule), Review of Business and
Economic Research, Winter 1983, pp. 78-81.

"Linking Corporate Stock Price Performance to Strategy Formulation" (with Bradley
Gale), Journal of Business Strategy, Summer 1983, pp. 44-50.

"Special Offerings: Is Insider Trading Involved?" The Financial Review, March 1984, pp.
26-35. Financed with a $2,000 grant from the UMass Research Council.

A Study of the Determinants of Risk and Return for Electric Utility Stocks" (with Alan
Gleit and Tom Schneeweis), Quarterly Journal of Economics and Business, Winter 1984,
pp. 16-31. I was the principal investigator on a $36,000 grant from the Northeast
Utilities whose purpose was to finance this and related research.

"Tax Loss Trading, Is the Game Over or Have the Rules Changed?" (with Kyungehun
Chang), Financial Review, Fall 1984, pp. 55-70.

"Contract Proliferation: A Study of the Silver Futures Market" (with Alan Gleit, Jeffrey
Sooy and Michael Fitzgerald), Revista Internationale die Scienze Economiche e
Commercial, October, November 1984, pp. 1058-1064.

"An Empirical Analysis of Arbitrage Opportunities in the Treasury Bill Futures Market"
(with Shantarham Hedge), Journal of Futures Markets, Fall 1985, pp. 407-421. Financed
by a $4,000 grant from the Chicago Board of Trade Foundation. Presented to April 1983
Eastern Finance Association Meeting.

"Term Papers in Investments; Alternatives and Style" (with Ruth Newman), Journal of
Financial Education, Fall 1985, pp. 47-59.

"Market Movements and Technical Market Indicators" (with Thomas Schneeweis), Mid
Atlantic Journal of Economics and Business, Summer 1986, 00.31-41.

"Allocating Capital More Effectively" (with Bradley Gale), Sloan Management Review,
Fall 1987, pp. 21-32.

"The Valuation of Stocastic Cash Flow" (with Donald Geman), Quarterly Journal of
Economics and Business, Winter 1988, pp. 148-178.

"Scale Economies in Indirect Costs: The Evidence from a Cross-Sectional Analysis" (with
Bradley Gale), Journal of Financial and Strategic Decisions, Fall 1988.

"Low Priced Stocks and the January Effect" (with Kyung Chan Chang). Quarterly Journal
of Economics and Business. Summer, 1990, pp. 90-118.

"Perceptions of Management Quality and Firm Performance: Does Management Make a
Difference?" (with Thomas Schneeweis and Jean McGuire), Journal of Management, Vol.
6, No. 2 (1990) 209-222.

The Impact of Bid Ask Spreads on Market Anomalies" (with David Echeverria), Financial
Review, May 1991, pp. 249-268. Outstanding Investment Paper Award 1990 Eastern
Finance Association Meetings.

"Tactical Asset Allocation: Can it Work?" (with Joong-soo Nam) Journal of Financial
Research, Winter 1994, pp. 465-481.

"Market Microstructure Empirical Regularities: Behavior of the Bid
Ask Spread and Closing Prices" (with David Echeverria), Presented at the October 1987
meeting of the Financial Management Association, Financial Review, August 1995.

The First Republic Case: A Mosaic of Agreements, (with Hugh Ray), Annual Survey of
Bankruptcy Law 1997-98, pp. 43-67.

A Test of the Blume Stambaugh Bid Ask Effect Hypothesis" (with David Echevarria),
Quarterly Review of Business and of Economics, Spring 1998, pp. 129-148.

First Republic and the FDIC: A Case Study" (with Hugh Ray); presented at the April,
1992 Eastern Finance Association meeting, won the competitive paper award in
Financial Institutions, International Review of Financial Analysis, November 1997, pp.
193-208.

"Streamlining Bankruptcies: Resolving Intra Creditor Disputes", presented to the 1994
meeting of the Eastern Finance Association, Financial Management, Summer 1998, pp.
57-69.

Maximizing Estate Value Through Economic Litigation Analysis with Hugh Ray and
Robin Russell, Annual Survey of Bankruptcy Law 1998-99; pp. 21-44.

"The Distressed Securities Market: The Performance of Vulture Investors" (with Philip
Russel) presented to the 1996 Financial Services Association meeting: Journal of
Alternative Investments, Fall 1998, pp. 60-65.

On Being a Bankruptcy Trustee: Ben Branch Versus the United States, Presented to
Senior Statesman Breakfast of the 1996 Financial Management Association meeting,
Financial Practice and Education. Fall/Winter 1998, pp. 7-15.

The Monday Merger Effect (with Jay Jung and Taewon Yang) International Review of
Financial Analysis, 10 (2001), 1-18.

Bankruptcy in China; Taiwan and Hong Kong, A Summary, (with Fei Ji) Annual Survey
of Bankruptcy Law, 2002, pp 341-366.

The Flat Tax: How to Fix It. Presented to the 1997 Eastern Finance Association
meetings; Business Quest; http://www.westga.edu/~bquest/202/flattax.htm

Leasing, an Emerging Market in Russia (in Russian) (with Natalia Gonchorova)

Bankruptcy Investing (with Hugh Ray) Institutional Investor, Spring 2003, 107-113.

Bankruptcy in Russia (with Natasha Goncharova), Annual Survey of Bankruptcy Law,
2003, pp 577-608.

Bankruptcy in Korea (with Hyuna Park), Annual Survey of Bankruptcy Law, 2003, pp
651-672.

Branch, B., and T, Yang., 2001, Merger Arbitrage: Evidence of Profitability, Journal of
Alternative Investments, 4, pp.17-32.

Predicting the Success of Takeovers ask Risk Arbitrage (with Taewon Yang) Presented
to the April 2002 meeting of Eastern Finance Association; Presented to International
end Business and Economic Review Conference, October 2002, Won best paper award;
Presented to Financial Management Association Conference, October 2002, Quarterly
Journal of Business and Economics, Winter/Spring 2003, pp 3-18.

Why Banks Fail presented to 2003 FMA meeting, published in The New Basel Capital
Accord, Thomas Texere, New York, 2004, pp 29-38.

Bankruptcy in Ukraine: A Back door to Privatization (with Natalya Goncharova and
Richard Roth) Annual Survey of Bankruptcy Law, 2004, pp. 539-549.

Managing a Pension Plan Shutdown in Chapter 7 with Gary Tameo, Journal of
Corporate Renewal, July 2005, Vol 18, No. 7, pp8-13

Explaining Price to Book (with Anrak Sharma, et al), Business Quest, 2005;
westga.edu/~bquest/2005/Model.pdf

How to Fix Social Security, Business Quest, 2005, westga.edu/~bquest/2005/social.pdf

A Test of The Profitability of Risk Arbitrage (with Taewon Yang), presented to April
2001 meeting of the Eastern Financial Association; presented to the October 2001
meeting of the Financial Management Association; International Review of Financial
Analysis, 2006, Number 1, pp 39-56.

Branch, B., and T, Yang., 2006, The Risk Arbitrage Performance: Failed Acquisition
Attempts, Quarterly Journal of Business and Economics, 42, pp.3-18.

Bankruptcy in Uzbekistan (with Natalia Gonchovova), Annual Survey of Bankruptcy
Law, 2005, pp 587-601

ACCEPTED MANUSCRIPTS

A Note on Takeover Success Prediction (with Taewon Yang and Jia Wang); International
Review of Financial Analysis; Presented to April 2005 Eastern Finance Association
Meeting.

SUBMITTED MANUSCRIPTS

Could Thomas Jefferson have Ended Slavery? (With Urbi Garay), Slavery and Abolition.

Usage of the Artificial Neural Network in the Estimation of Financial Failures and the
Application in Istanbul Stock Exchange (with Yasemin Benli and Jia Wang) Eurasian
Review of Econometrics .

Risk Arbitrage Performance for Stock Swap Offers with Collars, (with Jia Wang);
Presented to CISDM Conferences, September 2005; Presented to October 2005 Financial
Management Association Meeting; Presented to the April 2006 Eastern Finance
Association Meetings. Submitted to the Financial Review.

Hostile Takeovers and Arbitrage Opportunities: Estimating the Probability of
Sweetened Offers, (with Taewon Yang), International Review of Financial Analisis;
Presented to CISDM conference, September 2005; Presented to the April 2006 Eastern
Finance Association Meetings

WORK IN PROGRESS

Closed End Fund Performance on A Daily Basis: the Discovery of A New Anomaly (with
Axin Ma and Jill Sawyer)

The Overnight Return: A New Anomaly, (with Axin Ma)

Estimating the Profit Potential of Risk Arbitrage Opportunities (with Taewon Yang)

Fiduciary Duty and Social Responsibility

Merger Deal Structure and Investment Strategy: Collar Mergers (with Taewon Yang);
Presented to the April 2006 Eastern Finance Association Meetings.

Institutional Economics and Behavioral Finance

.

BOOKS

Bankruptcy Investing (with Hugh Ray), Dearborne Financial, 1992, Reissued by Beard
Books, 1999; Revised and updated, 2002; Second revision sent to publisher.

Investment Principles and Practices, I worked with the American College on a revision of
this textbook. It is published under the name Fundamentals of Investment for Financial
Planning, The American College, 2001.

If You are so Smart, Why Arent You Rich, Praeger, 2006.

BOOKS IN PROCCESS

Last Rights: Liquidating a Company, with Hugh Ray and Robin Russell, signed contract
with Oxford University Press; At Publisher.

COMMENTS AND BOOK REVIEWS IN PROFESSIONAL JOURNALS

Book Review: Kurt Borcardt, "Structure of the U.S. Communications Industry, The
Antitrust Bulletin, Fall 1972, pp. 953-1060.

"Explaining Non-Random Behavior of Stock Prices," Financial Analysts Journal, March
April 1974, p.10.

"Comment: Automatic Dividend Reinvestment Plans of Non-Financial Corporations,"
Financial Management, Spring 1974, p. 25.

Book Review Robert Croates, "Investment Strategy," Journal of Finance, December
1978, pp. 1463-1465.

"The Optimal Price to Trade: Reply," Journal of Financial and Quantitative Analysis,
September 1979, pp. 649-651.

Commentary: "Speculation in the Metals Markets," Jacob Morowitz, Review of Research
in Futures Markets, 1986, pp. 15-16.

GENERAL PUBLICATIONS-BOOKS

Successful Investing and Money Management, Coneducor Limited, Canada, 1974. This is
a book used in a correspondence course on investing and money management. I revised
the Canadian version for the U.S. market, which involved rewriting most of the book. I
completed a second revision, update and expansion in 1977.

Advanced Strategies of Successful Investing, Hume Publishing, 1985. This is a book used
in a correspondence course. I wrote some of the lessons and revised several others.


GENERAL PUBLICATIONS - ARTICLES

"Should Brokers Pay Interest, Wall Street Journal, October 21, 1971.

"The Economics of Reusable Bottles," Wall Street Journal, April 20, 1972. Reprinted in
The Pollution Control Journal, August 1972.

"Resources Depletion Energy Usage and the Non-returnable Container." Paper
presented at TIMS ORSA meeting, November 9, 1972 in Atlantic City, N.J. A summary of
this paper published in Cost Effectiveness Newsletter, Vol. 8, No. 2, Winter 1972.

"The Economic Impact of Water Pollution Abatement in Vermont" (with Milton
Nadworny), Pollution Control Journal, November 1973, pp. 2023.

"Consumer Sovereignty and Mandatory Deposit Legislation," Brewer's Digest, March
1977, pp. 2226. A summary of this paper appeared in the Massachusetts Business and
Economic Report, Vol. 4, No. 2.

"Mail Bid Auctions Offer Bargains But. . ."Coin World, October 2, 1974, pp.67-68.
"The Impact of a Non-returnable Ban in Maine." Research report prepared for Maine
Consumer's Advisory Council and widely distributed in the state, January 1975.

"Thoughts on Becoming a Coin Investor," Coin World. Published as a series (1st
installment, January 1, 1975, pp. 42-44; 2nd installment, January 15, 1975, p. 98; and
3rd installment, March 5, 1975, p.93.

"Are Brokers Ripe for Robinson Patman?" Wall Street Journal, August 18, 1976, p. 12.

Forbes Creates '67 Denver Cent," Coin World, September 21, 1977.

"The Economic Outlook for Beer Wholesalers," Brewer's Digest, January 1980, pp. 32,
33, 42.

"Gold as an Investment Medium and Inflation Hedge" (with Joseph Finnerty),
Massachusetts Business and Economic Report, Vol. 7, No. 4, Spring 1980.

"The Bottle Bill and Its Impact on Beer Wholesalers" (with Dan Keys), Brewer 's Digest,
September 1980, pp. 42-47.

Delayed Benefits Law Help Stabilize Fund. Daily Hampshire Gazette, June 22, 2000 P.
A 10 (Guest column)


- F -
EXHIBIT F

Liquidation Analysis

NORTHERN DIVISION

--------------------------------------------------------x
:
In re : Chapter 11
:
:
Debtor. :
:
--------------------------------------------------------x

LIQUIDATION ANALYSIS
Montgomery, Alabama
C. Edward Dobbs
E-mail: ced@phrd.com

Rufus T. Dorsey, IV
E-mail: rtd@phrd.com

J. David Freedman
E-mail: jdf@phrd.com

PARKER, HUDSON, RAINER & DOBBS LLP
1500 Marquis Two Tower
285 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303
Telephone No.: (404) 523-5300
Facsimile: (404) 522-8409

By: /s/ Rufus T. Dorsey, IV
Rufus T. Dorsey, IV

Attorneys for Debtor and Debtor in Possession

Exhibit F - Liquidation Analysis

Introduction

This Liquidation Analysis of the Debtor pursuant to Chapter 7 (the "Liquidation Analysis") was
prepared by the Debtor based on (a) unaudited information contained in the Statement of
Financial Affairs and the Schedules filed with the Bankruptcy Court;
5
(b) the Debtor's Monthly
Operating Report through December 31, 2010, as filed with the Bankruptcy Court; (c) the Claims
Register; and (d) information that the Debtor has received and generated since the filing of the
Debtor's December 31, 2010 monthly operating report.

This Liquidation Analysis presents the Debtors projected range of estimated net value of its
assets as of May 6, 2011, the assumed date (the "Liquidation Date") on which a liquidation of the
Debtor's assets occurs in a case under Chapter 7 of the Bankruptcy Code and the net proceeds of
such liquidation are distributed to creditors pursuant to Chapter 7 of the Bankruptcy Code.

Table 1 sets forth a detailed calculation of a high and low estimate of the liquidation proceeds
that might be produced through a Chapter 7 liquidation.

Table 2 sets forth a detailed calculation of a high and low estimate of liabilities and then depicts
creditor recoveries if the highest estimate of liquidation proceeds is matched against the highest
estimate of liabilities and if the lowest estimate of liquidation proceeds is matched against the
lowest estimate of liabilities. As a result, the calculations admittedly represent two extremes.

Table 3 sets forth what might result if the liquidation produced a high asset recovery without the
assumption of the highest aggregate liability amount. The estimate shows the potential for a
substantially higher return to unsecured creditors than reflected in Table 2. However, it also
reflects that, even under such assumptions, the recoveries would not produce a return for classes
junior to the unsecured claims.

Each of the Tables should be read in conjunction with the accompanying Notes. As discussed
herein, the estimates in the Tables represent "best case" and "worst case" scenarios,
largely reflecting assumed complete "wins" or complete "defeats" in pending or
contemplated litigation described in the Disclosure Statement and involving assets of and
liabilities asserted against the Debtor's Estate. A significant determinant of the timing and
amount of any Distribution to General Unsecured Creditors is the settlement or ultimate
judicial resolution of pending litigation with the FDIC-Receiver, including litigation
involving its asserted priority claim under Sections 365(o) and 507(a)(9) of the Bankruptcy
Code for approximately $904 million (currently on appeal) and its asserted entitlement to
all or substantially all of the Core Assets claimed by the Debtor. It should be noted that
much of the pending or contemplated litigation with third parties involves issues the

5
Capitalized terms used in this Liquidation Analysis, unless otherwise defined herein, will have the meanings given
to them in the Plan.

resolution of which (absent a settlement with those third parties) will result in a complete
recovery by the Debtor or such third party with respect to assets in dispute or the complete
denial or allowance of asserted Claims that have been objected to by the Debtor. Further,
because it is not possible to estimate the ranges of potential settlements with the FDIC-
Receiver and other parties (including BB&T and the Alabama Revenue Department), the
Debtor is unable to prepare a Table that depicts a scenario in which one or more
settlements is concluded with Bankruptcy Court approval.

All amounts contained in this Liquidation Analysis and described in the accompanying Notes
represent the Debtor's good faith estimate of the potential range of amounts the Debtor would
receive from a liquidation of its assets and the potential range of allowed claims against the
Debtor. The estimates and other information contained herein do not constitute an admission (or
denial) of the validity or amount of any claim, the ownership or existence of any interest of any
entity in any asset claimed to be owned by the Debtor, or the relative merits of any claims or
defenses in any pending adversary proceedings, contested matter or other litigation, and are not
to be used as such in any such litigation.

The information contained in this Liquidation Analysis is based on information known to the
Debtor as of February 2, 2011, and the Debtor is under no obligation, and expressly disclaims
any obligation, to update any of the information contained herein, whether as a result of new
information, future events, or otherwise.

This Liquidation Analysis, including estimates of Claims, were prepared solely to assist the
Holders of Claims and Equity Interests in making informed decisions regarding acceptance or
rejection of the Plan and the Bankruptcy Court in making the findings required under Section
1129(a)(7) of the Bankruptcy Code and may not be used or relied upon for any other purpose.

THE DEBTOR BELIEVES THAT ANY ANALYSIS OF A HYPOTHETICAL LIQUIDATION
IS NECESSARILY SPECULATIVE. THERE ARE A NUMBER OF ESTIMATES AND
ASSUMPTIONS UNDERLYING THE LIQUIDATION ANALYSIS THAT ARE
INHERENTLY SUBJ ECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES
BEYOND THE CONTROL OF THE DEBTOR OR A CHAPTER 7 TRUSTEE, INCLUDING
LITIGATION OUTCOMES. NEITHER THIS LIQUIDATION ANALYSIS, NOR THE
INFORMATION ON WHICH IT IS BASED, HAS BEEN EXAMINED OR REVIEWED BY
INDEPENDENT ACCOUNTANTS IN ACCORDANCE WITH STANDARDS
PROMULGATED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS. THERE CAN BE NO ASSURANCE THAT ACTUAL RESULTS WILL
NOT VARY MATERIALLY FROM THE HYPOTHETICAL RESULTS PRESENTED IN
THE LIQUIDATION ANALYSIS.

Table 1

The Colonial BancGroup, Inc. - Liquidation Analysis
Estimated Liquidation Proceeds
($ millions)

Estimated Liquidation Value
High Low Notes
Gross Liquidation Proceeds
Cash $ 0.500 $ 0.100 1
BB&T Bank Deposits $ 32.000 $ 31.000 2
Tax refunds $ 253.673 $ - 3
Fidelity Policies and Claims $ 25.000 $ - 4
D&O Policies & Derivative Claims $ 20.000 $ - 5
CBG Florida REIT Corp. $ 300.000 $ - 6
CBG Real Estate, LLC $ 1.818 $ - 7
Lehman Brothers Special Financing, Inc. $ 3.000 $ - 8
Garland Real Property & Condemnation $ 1.500 $ 0.500 9
Other Claims $ 50.000 $ - 10
Total Gross Proceeds $ 687.491 $ 31.600

Liquidation Expenses
Chapter 7 legal fees $ 30.000 $ 4.000 11
Chapter 7 accounting fees and other costs $ 2.000 $ 0.500 12
Chapter 7 trustee fees
$ 20.648 $ 0.971
13
Total Liquidation Costs $ 52.648 $ 5.471

Net Proceeds Available for Distribution $ 634.843 $ 26.129


Table 2

Estimated High-Low Claim Amount and Liquidation Distribution
($ millions)
Estimated Claim Amount and Recovery
High % Low % Notes
Net Proceeds Available for Distribution $ 634.843 $ 26.129

Secured Claims
Certain Secured Claims $ 38.013 $ - 14
Secured Claim of Alabama Revenue Dept. $ 12.675 $ - 15
Total Secured Claims $ 50.688 100% $ - 100%
Proceeds Available for Administrative
Claims
$ 584.155 $ 26.129

Administrative Claims
Chapter 11 Administrative Claims $ 1.385 100% $ 0.880 100% 16
Proceeds Available for Priority Claims $ 582.770 $ 25.249

Priority Claims
Priority Tax Claims $ 0.133 $ - 17
Priority Non-Tax Claims $ 904.123 $ 0.091 18
Total Priority Claims $ 904.256 64.45
%
$ 0.091 100.00
%

Proceeds Available for Unsecured Claims $ - $ 25.158

Unsecured Claims
Convenience Claims $ 0.105 $ 0.025 19
Certain General Unsecured Claims $ 625.220 $ 33.142 20
Indenture Claims $ 358.247 $ 358.247 21
Total Unsecured Claims $ 983.572 0% $ 391.414 6.43%
Proceeds Available for Statutorily
Subordinated Claims
$ - $ -

Statutorily Subordinated Claims $ 29.900 0% $ 29.900 0% 22
Proceeds Available for Preferred Equity
Interests
$ - $ -

Preferred Equity Interest $ 300.000 0% $ 300.000 0%
Proceeds Available for Other Equity
Interests
$ - $ -

Table 3

Estimated Liquidation Distribution under Scenarios 1 & 2
($ millions)

Estimated Claim Amounts and Recovery
Scenario 1 % Scenario 2 % Notes
23
Net Proceeds Available for Distribution $ 634.843 $ 634.843 24

Secured Claims
Certain Secured Claims including State of
Alabama
$ 2.000 100% $ 2.000 100%
Proceeds Available for Administrative /
Priority Claims
$ 632.843 $ 632.843
25

Administrative Claims
Chapter 11 Administrative Claims $ 1.385 $ 1.385 26
Proceeds Available for Priority Claims $ 631.458 100% $ 631.458 100%

Priority Claims
Priority Tax and Priority Non-Tax Claims $ 0.091 $ 0.091 27
Proceeds Available for Unsecured Claims $ 631.367 $ 631.367

Unsecured Claims
Convenience Claims $ 0.025 $ 0.025 28
Certain General Unsecured Claims $ 611.142 $ 333.142 29
Indenture Claims $ 358.247 $ 358.247 30
Total Unsecured Claims $ 969.414 65% $ 691.414 91%
Proceeds Available for Statutorily
Subordinated Claims
$ - $ -

Statutorily Subordinated Claims $ 29.900 0% $ 29.900 0% 31
Proceeds Available for Preferred Equity
Interests
$ - $ -

Preferred Equity Interest $ 300.000 0% $ 300.000 0%
Proceeds Available for Other Equity
Interests
$ - $ -

Notes

The following Notes are an integral part of this Liquidation Analysis. References made to the
Disclosure Statement are indicated by the initials "DS" followed by the Chapter, Section and
Subsection reference.

1. Cash

The Cash balance reflects the projected Cash balance as of May 6, 2011, the assumed
Liquidation Date, and is net of outstanding checks. The projected Cash balance is calculated
based on the Cash balance as of February 2, 2011, reduced by estimated disbursements and
increased by estimated receipts from February 2, 2011 through May 6, 2011.

2. BB&T Deposits

The deposit numbers are based on the deposit levels at BB&T as of February 2, 2011, less
projected use of cash from this source through May 6, 2011, the assumed Liquidation Date (see,
DS at V, A, 1).

3. Tax Refunds

The Debtor's books and records reflect tax refunds due from the IRS of approximately
$253,000,000. In addition, the Debtor currently has on deposit in its tax escrow account
approximately $673,000 as a result of tax refunds received, which amount is not included as a
part of the cash balances or BB&T deposits above. A dispute exists between the FDIC-Receiver
and the Debtor as to the ownership of such tax refunds, and such dispute is the subject of
pending litigation (see, DS at V, A, 3; VIII, E, 5).

4. Fidelity Policies and Claims

The high estimate assumes a recovery of $25,000,000 based on the Debtor's position that it is
entitled to the policy limits under the Fidelity Policies and the FDIC-Receiver is entitled to only
a claim in the Debtor's bankruptcy based on the FDIC-Receiver's asserted allocation under the
policy. The low estimate assumes that the FDIC-Receiver and/or the insurance carrier prevail on
arguments that the Debtor is not entitled to any return on such claims or the policy (see, DS at V,
A, 4; VIII, E, 6). Both estimates assume the carrier does not dispute the filed claim.

5. D&O Policies & Derivative Claims

The high estimate assumes a recovery of $20,000,000 through a combination of the remaining
policy limits on the insurance coverage and the personal liability of certain defendants. The low
estimate assumes either that the defendants prevail on arguments that the Debtor is not entitled to
recover on such claims and/or the policy coverage is eroded by substantial defense costs with the
passage of time and the multiple claims asserted by the FDIC-Receiver and others (see, DS at V,
A, 5).

6. CBG Florida REIT Corp.

The high estimate assumes that the issue of ownership of and/or right of recovery with regard to
the REIT Preferred Securities is determined in favor of the Chapter 7 trustee in the approximate
amount of $300,000,000. The low estimate assumes that the interested parties prevail on
arguments that the Debtor is not the owner of the REIT Preferred Securities and/or is not entitled
to recover on any claim relating thereto (see, DS at III, B, 2 and V, A, 6).

7. CBG Real Estate, LLC

The estimate assumes that the Chapter 7 trustee would receive cash on deposit at CBG Real
Estate, the Debtor's wholly owned subsidiary, in the approximate amount of $518,000, and the
liquidation proceeds of the collateral securing the remaining loan owned by the subsidiary
produces a net recovery of $1,300,000 (see, DS at V, A, 7).

8. Lehman Brothers Special Financing, Inc.

The high estimate assumes a recovery of $3,000,000 on the proof of claim filed in the LBSF
bankruptcy case in the amount of $4,053,591. The low estimate assumes that LBSF objects to
the claim and that there is no recovery (see, DS at V, A, 12).

9. Garland Real Property & Condemnation

The estimate assumes that the Chapter 7 trustee would prevail on the ownership litigation with
the FDIC-Receiver and that the net value of the property to the estate would be in this range (see,
DS at V, A, 9; VIII, E, 7).

10. Other Claims

This category relates to a range of other claims that are under investigation or the subject of
pending litigation (see, e.g., DS at V, A, 11 & 13; VI, B; and VII, A). The estimate assumes that
the Debtor's claim in the receivership of Colonial Bank will not produce any meaningful return
because the receivership lacks assets from which to pay such a claim (see, DS at VIII, E, 3). It
further assumes that the Chapter 7 trustee and counsel will pursue, on a contingency fee basis,
certain claims, such as avoidance claims and claims against professionals and consultants. For
purposes of this exercise only, the high estimate of $50,000,000 is assumed as the outside realm
of such types of recoveries.

11. Chapter 7 Legal Fees

The estimate assumes that the Chapter 7 trustee would engage new professionals and that there
would be a delay and an associated learning curve cost of at least $500,000 for the new
professionals to familiarize themselves with the complexities of this case. The assumed learning
curve cost is included in the assumed legal fees.


In the high estimate, it is assumed, based on the case history to this point, that the FDIC-Receiver
will exhaust all appeal rights with regard to any adverse decision on the issue of ownership of
certain substantial property rights, such as tax refunds and insurance proceeds. It is also assumed
that any decision in favor of the Debtor on the issue of ownership of or right to recovery with
regard to the REIT Preferred Securities would also be vigorously litigated and subject to
exhaustion of all appeal rights. Accordingly, the liquidation analysis assumes that substantial
attorneys' fees would be incurred in seeking a higher return on the assets.

In the low estimate of recoveries, a factual pattern is assumed, for the sake of discussion, that
ownership rights are determined in a manner adverse to the estate and that the Chapter 7 trustee
elects not to pursue all litigation and appeal options.

12. Chapter 7 Accounting and Other Costs

The high estimate assumes that substantial accounting and consultant services will be required to
seek recoveries in the higher range. The low estimate assumes a substantially reduced level of
activity.

13. Chapter 7 Trustee Fees

It is assumed that the Chapter 7 trustee fees are paid in accordance with limits established by
Section 326 of the Bankruptcy Code in the amount of $53,250 for the first $1 million and 3% on
all recoveries over $1 million.

14. Certain Secured Claims

The high estimate assumes that the FDIC-Receiver prevails on its appeal of the Bankruptcy
Court's ruling that the FDIC-Receiver has no secured claim against the bank accounts at BB&T
and that BB&T prevails on its assertion that it holds a secured claim against the bank accounts to
secure obligations owing under its Security Agreement (see, DS at VIII, E, 2). Through the
combination of these assumptions, the collective secured claims of BB&T and the FDIC-
Receiver may be asserted to be equal to the balances in the deposit accounts on the Petition Date
in the approximate amount of $38,000,000. The high estimate also assumes that the asserted
secured claim of Manatee County, Florida is allowed in the amount of $5,840.27 and that of
Mobile County, Alabama in the amount of $6,748.35.

The low estimate assumes that the ruling against the FDIC-Receiver is affirmed, that BB&T is
found not to have an allowed secured claim against the Debtor's bank accounts, and that the other
secured claims are successfully challenged and disallowed.

15. Secured Claim of Alabama Revenue Department

The high estimate assumes that the Alabama Revenue Department holds an allowed claim in the
face amount of its proof of claim ($12,675,110.19), while the low estimate assumes that the tax
claim is not allowed in any amount (see, DS at VIII, G). While the Debtor believes that the

claim as filed is subject to objection, it is likely that some amount of taxes will be determined to
be owing.

16. Chapter 11 Administrative Claims

These estimates assume that all Chapter 11 professional fee holdbacks and accrued fees will be
paid in full by the Chapter 7 trustee, which will include on the assumed Liquidation Date an
amount equal to 45 days of accrued and unpaid professional fees; any unpaid holdback for the
first quarter of 2011; the first quarter Bankruptcy Administrator's fees; certain unpaid amounts
owing to the CRO, chairman of the board and board members for compensable services and
expenses incurred; and an amount owing for certain asserted post-petition taxes. The high
estimate assumes a higher level of professional fees during the confirmation process than the
lower level.

17. Priority Tax Claims

The high estimate assumes fully allowed claims based on filed proofs of claim by the Texas
Comptroller in the amount of $133,000. The low estimate assumes that this assessment is
incorrect, overstated and subject to challenge under Section 505 or otherwise.

18. Priority Non-Tax Claims

The high estimate assumes that: (a) the FDIC-Receiver obtains a reversal on its appeal of the
Bankruptcy Court's decision denying the FDIC-Receiver's claim under Section 365(o) of the
Bankruptcy Code and that the FDIC-Receiver otherwise establishes a claim in the approximate
amount of $904,000,000 (see, DS at VIII, E, 1); (b) employee priority claims total $123,152.43;
and (c) thePBGC claim, which is asserted to be a priority claim, is in reality a general unsecured
claim.

The low estimate assumes that the FDIC-Receiver does not hold a priority claim as previously
determined by the Bankruptcy Court and that employee priority claims total $90,152.43.

19. Convenience Class

The low estimate assumes that approximately $34,000 of claims that fall into this category by
being equal to or less than $5,000 are allowed in the case and are paid under the Plan. The high
estimate assumes that an additional $100,000 in claims will elect to be treated in the convenience
class.

20. Certain General Unsecured Claims

With regard to General Unsecured Claims, the high estimate assumes the following (but none of
these assumptions are deemed to be admissions of any liability by the Debtor):

(a) BB&T has an allowed claim in the amount of $12,766,587, as stated in its proof of
claim.

(b) PBGC holds a claim in the liquidated approximate amount of $30,000,000, as stated in
its proof of claim.

(c) Trade creditors hold allowed claims in the amount of $1,600,000, which is the
approximate aggregate amount of their proofs of claim.

(d) BofA does not hold any allowed claim against the Debtor, despite the proof of claim
filed in an amount in excess of $1,750,000,000.

(e) D&O indemnification claimants have no claims in this class for purposes of distribution.
D&O indemnification claimants have filed unliquidated claims for indemnification in
connection with what appears to be the sale or purchase of securities. It is assumed that
such claims are subject to subordination under Section 510(b) and/or are subject to
being disallowed pursuant to Section 502(e)(1)(B).

(f) Underwriter claimants have no allowed claims in this class for purposes of distribution.
The underwriter claimants have filed unliquidated claims for indemnification in
being disallowed and expunged pursuant to Section 502(e)(1)(B).

(g) REIT Preferred Securities plaintiffs have no allowed claims in this class for purposes of
distribution. REIT Preferred Securities plaintiffs have filed unliquidated claims in
being disallowed pursuant to Section 502(e)(1)(B).

(h) Plaintiffs asserting claims for breach of fiduciary duties under ERISA or securities law
violations are assumed to have no claims in this class for purposes of distribution. Some
but not all of such plaintiffs have filed unliquidated claims in connection with what
appears to be the sale or purchase of securities. It is assumed that such claims are
subject to subordination under Section 510(b) and/or are subject to being disallowed
pursuant to Section 502(e)(1)(B).

(i) SunTx Capital II has no allowed claim in this class for purposes of distribution. SunTx
Capital II filed a claim for $4,059,874.85 in connection with what appears to be the sale
or purchase of securities. It is assumed that such claim is subject to subordination under
Section 510(b).

(j) National Union Insurance does not hold an allowable claim.

(k) Deferred compensation claimants hold claims in the approximate amount of $1,641,618.

(l) LBSF's claim, in the approximate amount of $2,900,000, is assumed to be disallowed as
a late filed claim.

(m) Montgomery Revenue Department has an allowed claim of $238,646.24.

(n) Gretchen Danielson, who asserts a claim in the amount of $189,691 based on her
mortgage provided by TB&W, has no allowed claim.

(o) In connection with any recovery based on the estate's alleged ownership of the REIT
Preferred Securities and/or claims relating thereto, that there would be a corresponding
claim against the estate in the amount of $300,000,000.

(p) The FDIC-Receiver asserts a claim in the approximate amount of $253,673,000 based
on any successful recovery by the Chapter 7 trustee on the issue of ownership of tax
refunds (see, DS at VIII, E, 4).

(q) The FDIC-Receiver asserts a claim in the approximate amount of $25,000,000 if the
Chapter 7 trustee prevails on the Fidelity Policies claim in the amount of $25,000,000
(see, DS at VIII, E, 4).

(r) Bank of Utica has no allowed claim in the amount of $7,469,626.98 as filed.

(s) IBM has no allowed claim for $871,934.20 due to such claim having been filed after the
filing deadline.

(t) The IRS has no allowed claim in the amount of $25,245.91 based on prior orders in the
case.

(u) Former employee claims are allowed in the amount of $299,622.61 as filed.

The low estimate assumes that allowed General Unsecured Claims are limited to the PBGC for
$30,000,000, trade creditor claims in the amount of $1,200,000 (thus excluding untimely filed
trade creditor claims of $377,000), deferred compensation claims of $1,641,618.90 as filed, and
former employee claims of $299,622.61.

21. Indenture Claims

Indenture Claims are assumed to be equal to the amounts stated in the proofs of claims.

22. Statutorily Subordinated Claims

The estimate assumes that certain claims will be subject to subordination under Section 510(b) as
a part of the post-confirmation adjudication by the Bankruptcy Court:

(a) Plaintiffs asserting ERISA and securities claims for damages arising out of the sale or
purchase of securities.


(b) REIT Preferred Securities plaintiffs' damage claims in an unliquidated amount, which
again appears to be for damages arising out of the sale or purchase of securities.

(c) SunTx Capital's claim in the approximate amount of $4,000,000, which again appears to
be for damages arising out of the sale or purchase of securities.

(d) The unliquidated indemnification claims of the D&O claimants and the underwriter
claimants.

23. Scenarios 1 & 2

Scenarios 1 & 2 examine hypothetical recoveries that match the most optimistic projections of
recoveries to conservative estimates of liabilities.

Scenario 1 assumes all of the highest recoveries from the first Table of estimated recoveries and
matches them on the liability side to a low estimate of secured claims and administrative
expenses. Unsecured claims are estimated at a low level with the exception of the inclusion of
potential new claims against the Debtor resulting from the recovery of certain substantial assets
(such as the REIT Preferred Securities and tax refunds). The hypothetical assumes that recovery
of the value of the REIT Preferred Securities of $300 million would cause a resulting claim
against the estate of $300 million and that recovery of tax refunds in the amount of $253,637,000
would result in the FDIC-Receiver asserting a claim for $253,637,000 for the FDIC-Receiver's
alleged share of tax refunds. Each of these assertions are the subject of pending litigation.

Scenario 2 is the same as Scenario 1, except for an assumption that the FDIC-Receiver would be
barred from obtaining recovery in the case on any claim, including a tax refund claim.

24. Net Proceeds

The two scenarios both assume the highest projected return from Table 1.

25. Secured Claims

The two scenarios both assume that Distributions to Holders of Secured Claims will not exceed
$2,000,000.

26. Administrative Claims

Assumptions are in accordance with the high estimate in Note 16.

27. Priority Claims

The two scenarios assume that the FDIC-Receiver does not hold a priority claim, as previously
determined by the Bankruptcy Court, that employee claims are limited to $90,152.43 and that the
Texas Comptroller's alleged claim in the amount of $133,000 is incorrect, overstated and subject
to challenge under Section 505 or otherwise.

28. Convenience Class

Assumptions are in accordance with the low estimate in Note 19.

29. Certain General Unsecured Claims

The Scenario 1 estimate of the unsecured claims are estimated at a low level with the exception
of the inclusion of the potential new claims against the Debtor resulting from the recovery of
certain substantial assets such as the REIT Preferred Securities and tax refunds. For purposes of
the hypothetical, the assumption is made that recovery of the REIT Preferred Securities assets of
$300 million would cause a resulting claim against the estate of $300 million and that recovery
of the tax refund assets in the amount of $253,637,000 would result in the FDIC-Receiver
asserting a claim for $253,637,000 against the Debtor for its alleged share of the tax refund and
$25,000,000 based on the estate's recovery of such amount on the Fidelity Policies. This
hypothetical does not take into account any argument that (a) the asserted obligation of
$300,000,000 may be subject to mandatory subordination under Section 510(b); and (b) any
obligation asserted by the FDIC-Receiver would be subject to arguments of setoff, recoupment,
and other defenses, including, without limitation, the defense under Section 502(d).

The Scenario 2 estimate of the unsecured claims is at the same level as Scenario 1 but excludes
the FDIC-Receiver's claim for $253,637,000 against the Debtor for its alleged share of tax
refunds and $25,000,000 based on the estate's recovery of such amount on the Fidelity Policies.

30. Indenture Claims

Assumptions are in accordance with Note 21.

31. Statutorily Subordinated Claims

Assumptions are in accordance with Note 22.


2-23-2011 - Third Amended Disclosure Statement Accompanying Second Amended Chapter 11 Plan

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