Ocala Funding Files for Bankruptcy Protection in Florida ...

Ocala Funding LLC, a financing
vehicle used and controlled by failed Taylor Bean & Whitaker
Mortgage Corp., filed for bankruptcy protection in Florida.

The Orlando-based company listed both assets and debt of
more than $1 billion each in Chapter 11 documents filed today in
U.S. Bankruptcy Court in Jacksonville, Florida. Taylor Bean owns
a 100 percent membership interest in Ocala Funding, according to
court papers.

Ocala Funding issued asset-backed commercial paper to
financial institutions including Deutsche Bank, Germany?s
biggest bank, and Paris-based BNP Paribas, according to court
papers.

From 2002 through August 2009, Lee Farkas, ex-chairman of
Taylor Bean, directed the sale of more than $1.5 billion in fake
mortgage assets to Colonial Bank and misappropriated more than
$1.5 billion from Ocala Funding LLC, according to a statement of
facts filed by prosecutors.

?The debtor has liabilities that exceed its assets by more
than $2 billion,? Neil Lauria, Ocala?s chief restructuring
officer, said in court papers. ?Nearly half this shortfall is
the result of transfers of the debtor?s assets to Freddie Mac
under the direction and control of the Farkas Parties.?

The Federal Deposit Insurance Corp. is listed as the
largest unsecured creditor with a claim of $898.9 million.

Taylor Bean filed for bankruptcy protection on Aug. 24,
2009. Prior to its collapse, the company was servicing more than
500,000 mortgages, including $51.2 billion of Freddie Mac loans,
court papers show.

Ocala is seeking court authority to investigate the Federal
Home Loan Corp., known as Freddie Mac, and the Federal Housing
Finance Agency to determine its chances of recovering transfers
made to Freddie Mac to allegedly conceal the fraud perpetrated
by Taylor Bean executives, according to court documents.

From September 2008 until Taylor Bean?s collapse almost a
year later, Freddie Mac received about $805 million of Ocala?s
funds.

?These Transfers of Ocala?s assets provided no benefit to
Ocala,? lawyers for the company said in court papers. They were
made ?with the intent of hindering, delaying and defrauding
Ocala?s creditors? when the company was ?insolvent or was
rendered insolvent as a result of such transfers,? the
attorneys wrote.

The case is In re Ocala Funding LLC, 3:12-bk-04524, U.S.
Bankruptcy Court, Middle District of Florida (Jacksonville).

To contact the reporters on this story:
Dawn McCarty in Wilmington, Delaware,
at dmccarty@bloomberg.net;
Michael Bathon in Wilmington, Delaware,
at mbathon@bloomberg.net.

To contact the editor responsible for this story:
John Pickering at jpickering@bloomberg.net.

Source: http://bankruptcylawyersacramento.net/ocala-funding-files-for-bankruptcy-protection-in-florida-businessweek/

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