Yucaipa Invests $50 Million Into Amalgamated Bank

Munger Tolles & Olson advised Yucaipa Cos. in its $50 million investment in Amalgamated Bank, the only union-owned bank in the United States.

In the deal announced Sept. 26, private equity firms Yucaipa and WL Ross & Co. each invested $50 million for a 20 percent stake in Amalgamated. Amalgamated Bank was established by the Amalgamated Clothing Workers of America. The deal marks the first time private investors are taking a stake and board seats in the bank. 

After a net loss of $1.2 million in 2010 and a decline in assets for this year’s second quarter, the Federal Deposit Insurance Corp. (FDIC) and the New York State Banking Department ordered Amalgamated to structure a plan that would allow it to meet and maintain a leverage ratio of at least 7 percent by August 2012 and 8 percent by August 2013, according to The Deal.com.

“The investments by Yucaipa and WL Ross will enable the bank to comfortably exceed the increased required capital levels established in our agreements with the New York State Banking Department and the FDIC,” CEO and president of Amalgamated Edward Grebow said in a statement.

Jay Fujitani led the representation of Yucaipa along with Robert B. Knauss and Renée Delphin-Rodriguez.