logo  
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Doral Financial Scores Big Supreme Court Win

  +Follow June 9, 2014 2:27PM
Share:
Tickers Mentioned:

It’s been a dramatic couple of weeks for Puerto Rican lender Doral Financial (DRL) , who have experienced extreme whipsaw action as the company’s immediate future at any given point, be it insolvency or full financial recovery, changes by the day.

The fortunes took a turn for the better when the Puerto Rican Supreme Court made a crucial decision in Doral’s favor, opening the doors fort a major payout that could reverse the bank’s slide towards insolvency.  

Doral Seeks to Shore Up Capital

In early 2014 Doral had been discovered to be using improper assets to satisfy their Tier 1 capital requirements.  After this discovery, the bank scrambled to find a capital injection to stabilize the bank’s assets, as Moody’s, Fitch, and the S&P all downgraded the bank in response.

This put Doral in a very problematic situation. In the aftermath of the 2008 financial meltdown, banks were forced to have the capital required to pass more stringent stress tests to assure they could withstand financial catastrophe. In short, Doral needed money.

 It appeared Doral had found their savior in their own home government, who they claimed owed Doral a whopping $230 million in prior tax overpayments.

Imagine Doral’s surprise when the Puerto Rican government said, in no uncertain terms, “no.” Lacking any recourse, Doral filed a lawsuit in Puerto Rico’s home government, seeking to recover the money which they believed they were owed and so desperately needed.

Enter the Puerto Rican Supreme Court

Just four days later, the Supreme Court rendered their decision in Doral’s favor, and further forced the government to expedite a review of the repayment process, with a judgment set to be rendered by June 26.

While this far from guarantees that Doral will receive the desperately needed funds they seek to recover, the quick turnaround from the Supreme Court does give Doral a shot.

Although this development only means that Doral’s chances of receiving repayment from the government has changed from “no” to “maybe,” the company was ecstatic at the development. In a press release responding to the Supreme Court’s decision, Doral CEO Glen Wakeman said “We welcome the Puerto Rico Supreme Court's decisive action today. Doral is committed to pursuing its legal rights in this matter, and we invite the government of Puerto Rico to join us at the negotiating table so that we can resolve this issue and move forward."

What this Means for Doral and Their Stockholders

While it’s impossible to assign an exact dollar amount to hope, the market tried its best to do so on Monday trading action, with shares of Doral spiking on a prayer that the bank could receive a windfall.  

The Supreme Court’s decision clearly gives Doral some bargaining power, opening up the possibility that while they might not, and most likely will not, receive the full $230 million they seek, they can likely extract some capital from the government to shore up their reserves.

To be sure, Doral’s not out of hot water just yet. The San Juan-based lender still faces a class-action lawsuit from stockholders concerning alleged securities violations.

But if they are able to extract the money they believe they are owed from the Puerto Rican government, their fortunes, and in turn their stockholder’s fortunes, will undoubtedly change for the better.

By 1:30 EST shares of Doral had climbed 26.74 percent to hit $4.40 a share.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Signup for our daily newsletter and get our best articles emailed right to you!

Results for DRL
InvestProfits
21 Dec 14 06:15:59
Doral Financial Corporation (DRL) Down -19% from its 50 Day Moving Average http://t.co/WYuPnRUspq $DRL #investor #stocks #investing
Large Void Bot
19 Dec 14 16:00:08
Popular: $UWTI, $DRL
Media Sentiment
19 Dec 14 15:09:52
$DRL received a new alert. Find out why at http://t.co/5lwmDm2SCs #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 423
Cate Long
19 Dec 14 15:07:00
RT @greavespg: Love those Friday afternoon news dumps. Nobody releases good news at this time #Doral $DRL #PuertoRico #muniland
Paul Greaves
19 Dec 14 15:03:29
Love those Friday afternoon news dumps. Nobody releases good news at this time #Doral $DRL #PuertoRico #muniland
Pete Vrettakos
19 Dec 14 14:38:58
$VRNG and $DRL both just filed 8-Ks regarding issues with their exchange listing statuses
Instaya
19 Dec 14 14:18:44
Doral Financial sell assets for approximately $204.5 million. http://t.co/vncVGgeaX4 $DRL
Pzaa...Guy
19 Dec 14 14:10:53
$DRL - Current Report Filing (8-k) http://t.co/DUgF32g6Io
Don Marcoux
19 Dec 14 14:10:47
$DRL - Current Report Filing (8-k) http://t.co/7cqiYUuLBO
Stocks News&Markets
19 Dec 14 14:10:37
$DRL - Current Report Filing (8-k) http://t.co/RSdMMAcaT4
BV Financials
19 Dec 14 14:10:22
$DRL Doral Financial Corp files Form 8-K (Events or Changes Between Quarterly Reports) SEC Filing.. http://t.co/TaHRUlRf1O
$Stocknewsalerts
19 Dec 14 14:10:09
$DRL Doral Financial Corporation Document: 8-K From our Stock News Alerts App
Instrumental Data
19 Dec 14 14:08:55
DORAL FINANCIAL CORP $DRL 8-K now available
equities.com
19 Dec 14 14:05:35
Jacksonville Bancorp Inc (fl) (JAXB) Tops Small-Cap Stars Financials on December 19 $DRL $HMPR $MNRK $SFST $JAXB http://t.co/IT2ldGvuWf
$Stocknewsalerts
19 Dec 14 13:59:59
$DRL Doral Financial Corporation Daily Stock Price Summary From our Stock News Alerts App
Instaya
19 Dec 14 13:46:13
Doral Bank Launches Classroom Grant Program in Bay Schools http://t.co/4LrE9yeWCC $DRL #liveinstyle #Florida http://t.co/A6qmA8ZalT
ProVesting
19 Dec 14 13:38:10
$DRL: Doral Bank Launches Classroom Grant Program in Bay Schools http://t.co/FjomZ823JU http://t.co/UpLkLIz8l1
$Stocknewsalerts
19 Dec 14 13:34:39
$DRL Doral Financial Corporation Press Release: Doral Bank Launches Classroom Grant Program in Bay Schools From our Stock News Alerts App
Breaking News
19 Dec 14 13:33:02
$DRL Doral Bank Launches Classroom Grant Program in Bay Schools http://t.co/SHIlsxThWW
valuefund
19 Dec 14 12:25:05
" @finance_agent : Doral Financial has the Lowest Price to Book Ratio in the Thrifts & Mortgage Finance Industry $DRL, BBX, $FNFG, FBC, ESSA
valuefund
19 Dec 14 12:21:15
$DRL Doral Financial can triple once FDIC clears the way for the bank to receive brokered deposits again
valuefund
19 Dec 14 12:19:07
$DRL Doral Financial poised to soar
Daily Contracts
19 Dec 14 09:05:01
Real-Time feed of company contracts, original agreements and executive updates from Doral Financial Corporation $DRL http://t.co/CJzYVEQLCC
Instaya
19 Dec 14 08:47:40
RT @attivacapital: Our group just added 10,000 more shares of $NUGT real bargain like $SNE $DRL $COSI big upside for a great #2015 #sony #…
$Stocknewsalerts
18 Dec 14 14:00:33
$DRL Doral Financial Corporation Daily Stock Price Summary From our Stock News Alerts App
Instaya
18 Dec 14 07:32:22
These companies could benefit from new #USA #CubaPolicy #relaxation #treaty $SBSA $NMGC $DRL $SNE
StockTalk
18 Dec 14 06:59:17
$DRL 415....387 idea
equities.com
17 Dec 14 15:44:53
Ehealth Inc. (EHTH) Tops Small-Cap Stars Financials on December 17 $BSRR $DRL $TTS $COB $ehth http://t.co/ZMsF0uc6ck
RickyMartinPortugal
17 Dec 14 14:59:17
RT @attivacapital: Come On! #DoralBank Investors Invoke #PuertoRico Pop Star Ricky Martin in Tax Fight http://t.co/g4G8sloTVX $DRL $TD http…
Americanbulls
17 Dec 14 14:53:09
$DRL the bull pattern is confirmed & a BUY signal is issued @ http://t.co/hIxLwgQMW3. Buy Level: 3.7800 Target: 4.4604
Márcia Fortes
17 Dec 14 14:22:07
RT @attivacapital: Come On! #DoralBank Investors Invoke #PuertoRico Pop Star Ricky Martin in Tax Fight http://t.co/g4G8sloTVX $DRL $TD http…
$Stocknewsalerts
17 Dec 14 14:03:31
$DRL Doral Financial Corporation Daily Stock Price Summary From our Stock News Alerts App
rmeliteUSA
17 Dec 14 13:56:06
RT @attivacapital: Come On! #DoralBank Investors Invoke #PuertoRico Pop Star Ricky Martin in Tax Fight http://t.co/g4G8sloTVX $DRL $TD http…
Christian Kat
17 Dec 14 12:10:32
$DRL quietly fasten your seat belts... :-)
Attiva Capital
17 Dec 14 11:46:14
Our group just added 10,000 more shares of $NUGT real bargain like $SNE $DRL $COSI big upside for a great #2015 #sony #doralbank #goldmine
Instaya
17 Dec 14 11:39:34
RT @attivacapital: "@nytimes: U.S. and #Cuba to Start Talks on Normalizing Relations http://t.co/BkiYM4MalP" $SBSA $DRL $SNE should benefit…
StockTalk
17 Dec 14 07:57:10
$DRL on watch for vol
Josh Kaj
17 Dec 14 07:52:19
$DRL spiking with volume
MercadoMagico.com
17 Dec 14 07:31:15
RT @attivacapital: "@nytimes: U.S. and #Cuba to Start Talks on Normalizing Relations http://t.co/BkiYM4MalP" $SBSA $DRL $SNE should benefit…
Attiva Capital
17 Dec 14 07:29:18
"@nytimes: U.S. and #Cuba to Start Talks on Normalizing Relations http://t.co/BkiYM4MalP" $SBSA $DRL $SNE should benefit #gadgets #movies
i_like_bb_stock
17 Dec 14 07:04:29
$DRL not even 1K traded today amazing given how it was a few months ago
Americanbulls
16 Dec 14 15:14:58
$DRL may go up 18% if the bull pattern is confirmed. Chk confirmation [54%] @ http://t.co/hIxLwgQMW3. Buy level:3.7400.
Americanbulls
16 Dec 14 15:13:17
$DRL the bull pattern is not confirmed. A new bull pattern is detected. http://t.co/hIxLwgQMW3
$Stocknewsalerts
16 Dec 14 14:02:14
$DRL Doral Financial Corporation Daily Stock Price Summary From our Stock News Alerts App
Instaya
16 Dec 14 07:34:59
RT @attivacapital: Come On! #DoralBank Investors Invoke #PuertoRico Pop Star Ricky Martin in Tax Fight http://t.co/g4G8sloTVX $DRL $TD http…
Instaya
16 Dec 14 07:34:07
RT @attivacapital: Lower #oil prices mean good #news for #Japan and #PuertoRico $SNE $DRL #SONY #DORALBANK http://t.co/xt65MyR88W
David Razor
16 Dec 14 07:25:03
RT @tweewinn: $DRL don't forget this 3.83 now
MercadoMagico.com
16 Dec 14 07:23:43
RT @attivacapital: Lower #oil prices mean good #news for #Japan and #PuertoRico $SNE $DRL #SONY #DORALBANK http://t.co/xt65MyR88W
TNgCapital
16 Dec 14 07:17:42
$DRL don't forget this 3.83 now
EYLAF
16 Dec 14 06:12:11
>> http://t.co/MkYU3sHxPv ✳ Lower #oil prices mean good #news for #Japan and #PuertoRico $SNE $DRL #SONY #DORALBANK http://t.co/fnFDZnC7v4
				
				
  +Follow June 9, 2014 2:27PM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.