Bayshore Bank of Florida

Bayshore Bank of Florida was a bank in Miami that the Florida State Comptroller, Gerald Lewis, closed on August 7, 1987. Its president, Louis Petrillo, had resigned by June 1987, according to the Miami Herald.³

Charter and officers

The Florida Department of State has a profit-corporation filing for Bayshore Bank of Florida, document number F64039, filed January 21, 1982, with its principal address at 10800 Biscayne Boulevard, Miami. Annual reports are on file for 1985, 1986 and 1987, and the corporation was involuntarily dissolved on November 4, 1988. The record lists Louis F. Petrillo under title code PD, Anthony S. Caserta of 12000 North Bayshore Drive, Miami, under code C, Matthew H. Bradley of Miami Beach under code D, and Gary B. Cole of Pembroke Pines, Kenneth L. Harris of Miami Shores and Robert Tankersley of Miami under code V.¹

The Federal Deposit Insurance Corporation institution record gives the bank's FDIC certificate number as 23670, insured from January 27, 1982, state-chartered with the Federal Reserve Board as its primary federal regulator, and ended on August 7, 1987. The FDIC's history file records the October 4, 1985 acquisition of three branches of Tower Bank: 8200 N.W. 103rd Street in Hialeah Gardens, 5241 N.W. 79th Avenue (West Dade Banking Center) and 8311 Bird Road (Southwest Banking Center).²

Deposits from Tower Bank, October 1985

The FDIC announced on October 3, 1985 that Bayshore Bank of Florida would assume the deposit liabilities of Tower Bank, N.A., of Hialeah Gardens, Florida, which had been closed that day by Michael Patriarca, deputy comptroller of the Office of the Comptroller of the Currency. Bayshore agreed to take about $14.7 million in 2,600 deposit accounts. These included $1.2 million in 12 accounts placed by deposit brokers and $1.9 million in 15 accounts established by investors using INNERLINE, a rate information database for certificates of deposit. Bayshore agreed to pay the FDIC a purchase premium of $829,000 and to buy certain loans and other assets for $10.4 million, and the FDIC advanced $3.4 million to the assuming bank. The FDIC said the brokered funds in Tower Bank had originated through First Atlantic Investment Corporation of Miami. The three Tower offices reopened as Bayshore branches on October 4, 1985.⁴

Leases with Bayshore Executive Plaza, 1986 to 1991

On or about August 31, 1986, Bayshore Executive Plaza Partnership entered two lease agreements of about seven years with Bayshore Bank. The Florida comptroller declared the bank insolvent on August 7, 1987 and named the FDIC as liquidator. The FDIC accepted the appointment and, within a month, terminated both leases. The partnership sued the FDIC for a year's rent. The district court granted summary judgment for the FDIC, and the Eleventh Circuit affirmed on October 4, 1991, holding that federal law governed the FDIC's authority as liquidator to repudiate the leases and that the contract clause did not apply.⁵ The Middle District of Florida described the same dispute in 1991, saying the leases had been entered into approximately eleven months before the bank was declared insolvent in August 1987.⁶

The GeoMiliTech transfers, 1986 and 1987

The Herald reported in June 1987 that Bayshore's president, Petrillo, had resigned, that the bank was being sold, and that he had paid out $2 million of bank funds on behalf of GeoMiliTech Consultants Corp. during 1986. The unsecured debts remained outstanding, and the sum was nearly all of the bank's net worth that year. The Herald said that Petrillo left just as federal authorities, including Lawrence Walsh, began investigating the transactions. The bank's director Matthew Bradley said that the board had been told of the transfers about three weeks earlier.³

Closure and receivership, August 1987

On August 7, 1987, Florida State Comptroller Gerald Lewis closed the bank, and the FDIC was named receiver. The FDIC's news release that day gave total assets of $40.4 million at closing. Deposits totaled about $35.9 million in 5,100 deposit accounts, including $1.5 million in 27 accounts above the $100,000 federal insurance limit. The FDIC's board arranged an insured deposit transfer "because of an inability to determine losses in contingent liabilities of the failed bank."⁷

The insured deposits, and fully secured or preferred deposits, went to Eagle National Bank of Miami, which paid the FDIC a premium of $625,000 for the right to receive them. Eagle would immediately purchase the failed bank's assets for $10.8 million and had a 60-day option to purchase its other assets. The bank's offices reopened as Eagle branches on Monday, August 10, 1987. Insured depositors could continue banking with the acquirer for 18 months, and uninsured depositors and nondepositor creditors would share with the FDIC in the proceeds of liquidation.⁷ American Banker later reported that state regulators shut Bayshore shortly after Petrillo stepped down in 1987.⁸

Eagle National Bank of Miami

The Federal Reserve Board issued a cease and desist order against Eagle National Holding Company of Doral, Florida, a registered bank holding company that owns and controls Eagle National Bank of Miami. The order recites commitments that the holding company, the bank and certain individuals had made in connection with a 1999 action of the Federal Reserve Bank of Atlanta not to disapprove a change-in-control notice filed by GNB Holdings Trust. It says the deficiencies it addresses included those "particularly with regard to certain transactions with affiliated entities and individuals."⁹ The Federal Reserve terminated the order on March 24, 2009, and its termination notice lists the holding company as currently named JGB Financial Holding Company.¹⁰

Shareholders and related lawsuits

Gerald J. Tobin, a Miami lawyer, told American Banker that he lost $100,000 when the bank failed. He said that if the claims made by Petrillo in court were true, the government should compensate the 235 holders of Bayshore stock.⁸

In June 1988 the FDIC, as liquidator, sued several parties on a note under which Bayshore Bank had financed a restaurant project. The defendants counterclaimed that the bank had released them from their obligations, had issued a letter of credit in connection with a sale and refinancing arrangement, and had breached financing commitments. The FDIC answered that the documents relied on were not in the bank's files and asserted immunity under D'Oench, Duhme & Co. v. Federal Deposit Insurance Corp.. The defendants sought the bank's minutes, letter of credit files and release files for the period. On July 24, 1990 the Florida Third District Court of Appeal granted the FDIC's petition and quashed the discovery order, which the court said would allow a fishing expedition into loan records unrelated to the case. The caption names Caron J. Balkany as respondent.¹¹