Orrstown Bank, Shippensburg, Pa., has recovered $2.5 million it had been owed by the bankrupt Yorktown Financial, a company which had provided residential home construction financing. The information was on an 8-K filing made by parent company Orrstown Financial Services Inc. obtained via DisclosureNet.com.
Orrstown provided Yorktown with financing to fund its operations. Yorktown filed for Chapter 11 protection in 2010. At the end of 2Q11 Orrstown charged off $8.6 million it said was the outstanding balance on the loans made to Yorktown.
The 8-K states, “Correspondence from the Bankruptcy Court has indicated that future distributions will be made, however the amount, timing and whether or not there will be any future distributions is not known as of this time.
“As the loan balances have not been paid in full, the bank will continue to aggressively pursue recovery of amounts through the Bankruptcy Court proceedings, guarantors and other potential claims against certain third parties.”