Advanta Files for Protection, Bank May Face Takeover”
Advanta Corp., the small-business credit-card issuer that cut off almost 1 million accounts as defaults soared, filed for bankruptcy and said its undercapitalized banking unit may be turned over to regulators. The lender sought court protection from creditors because Advanta won’t be able to meet its obligations even with almost $100 million in cash and equivalents on hand, the Spring House, Pennsylvania-based company said yesterday in a statement. While the firm’s bank isn’t covered by the filing, the unit may be put into a receivership run by the Federal Deposit Insurance Corp., the statement said. “The economic debacle over the last two years devastated Advanta’s small-business customers and Advanta itself,” Chief Executive Officer Dennis Alter said in the statement. He’s waiving his salary and bonus, the statement said. Advanta, the 15th-biggest card issuer by purchase volume last year, is the industry’s biggest to fail since the recession began. The company said in August it would
