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January 08, 1992|From Times Staff and Wire Reports

Judge Denies MCorp Bankruptcy Plan: Bankruptcy Judge Letitia Z. Clark in Houston denied the Chapter 11 reorganization plans of MCorp, dealing another blow to the once-giant Texas company that was the nation's second-largest bank failure. The decision left the company, which now owns just one bank and has annual interest and other income of about $30 million, searching for another way to restructure $505 million in debt of MCorp and two affiliates. Clark ruled MCorp did not prove that plans to restructure the debt had the necessary consent of creditors. She cited problems in the tabulation of creditors' votes. The judge also said stockholders were not set up to get a fair amount of any damages that could come from a lawsuit that MCorp is pursuing against federal regulators.

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