Less than three years after suing over a mysterious “red envelope,” Michael Carrazza has maneuvered Patriot National Bank to the banquet hall where the envelopes are being handed out.
In January, Patriot National Bancorp Inc. and the Michael Carrazza-led Solaia Capital Advisors L.L.C. were named finalists for an annual award given by the Turnaround Management Association, among middle-market companies.
TMA recognized the Stamford-based company”™s return to profitability in less than a year under new ownership, in a process that has left it with 15 branches in Fairfield County, New York City and Westchester County, N.Y. Patriot National earned $250,000 in the third quarter after three straight years of losses.
“Patriot was a troubled bank, its portfolio was stressed,” said Eric Dale, an attorney with Robinson & Cole, which worked with Patriot National during its turnaround. “I think there was a real risk that the bank could have gone away.”
Also winning TMA recognition in Patriot National Bank”™s turnaround were:
Skadden, Arps, Slate, Meagher & Flom L.L.P.; Hinckley, Allen & Snyder L.L.P.; KPMG L.L.P.; McGladrey & Pullen, L.L.P. and Sandler O”™Neill & Partners.
Beset with bad construction loans under former CEO Angelo De Caro, Patriot National was teetering on the brink of collapse when Solaia CEO Carrazza put together a deal to buy control of the bank for some $50 million, with the two men having previously known each other in their days working for Goldman Sachs.
With $15 million at stake in structuring a deal, Carrazza was forced to resort to litigation after an unsolicited offer arrived at midnight on De Caro”™s desk in the form of a “red envelope” described in Carrazza”™s lawsuit. That suitor has never been publicly revealed; according to Carrazza, De Caro had previously approached TD Bank about a deal but was rebuffed, with De Caro denying any contact with TD Bank in court documents but confirming the existence of the unsolicited “red envelope” offer.
Carrazza has since relocated Solaia”™s headquarters to Stamford from New York City. Solaia lists just one other active investment in its portfolio at present: AmQuip Holdings L.L.C., a crane-rental company based in Trevose, Pa., whose former CEO left last fall to join Terex Corp., leading the Westport-based company”™s U.S. crane division.
At Patriot National, Carrazza brought in his Solaia colleague Christopher Maher as CEO, and in November the bank hired as chief credit officer Mark Foley who held the same title at Herald National Bank, a private client services bank in New York City. Before that, Foley spent 10 years in Istanbul, Turkey where he spun off a BankBoston branch as an independent bank. Foley replaces Martin Noble, who left to join Yonkers, N.Y.-based Hudson Valley Bank, which has branches in Fairfield County.
“Although the bankruptcies of MF Global, American Airlines, and Borders highlight today”™s difficult environment, there were thousands of successful turnarounds in 2011,” said Roger Aguinaldo, CEO of award sponsor The M&A Advisor, in a written statement. “The deal teams represented in our award finalists have demonstrated creativity and perseverance in today”™s challenging climate.”
