Dispute surfaces over nixed Amalgamated deal

Amalgamated Financial in New York said Amalgamated Bank of Chicago could pursue compensatory damager after their proposed merger fell through. 

The $6.9 billion-asset Amalgamated Financial announced in February that it had pulled its application to buy the $1 billion-asset Amalgamated Bank for $98.1 million in cash. The New York bank said it withdrew the application “due to an inability to obtain” regulatory approval. 

Amalgamated in Chicago had a different take when the application was withdrawn. 

“The terms of our agreement ... are clear on what triggers termination of this sale,” the Chicago bank said. Amalgamated Financial has “not met that threshold as the door on addressing issues raised by the FDIC to obtain regulatory approval is still open."  

Amalgamated Financial said in a Friday regulatory filing that it received a letter on March 15 stating that Amalgamated in Chicago had terminated the deal and could "seek compensatory damages for an alleged breach of the merger agreement.” 

Amalgamated Financial denied that it breached the agreement, adding that it “would intend to vigorously defend any such claims” by Amalgamated Bank.