The Federal Deposit Insurance Corporation has awarded the assets of the failed Bank of New England to Fleet/Norstar Financial Group and its partner, the investment firm of Kohlberg Kravis Roberts & Co. The FDIC, whose decision was approved by the Federal Reserve Board, rejected the bids of two other contenders for the assets of the bank. Its parent company, Bank of New England Corporation, filed for Chapter 7 bankruptcy liquidation Jan. 7.
The two other bidders were: San Francisco-based BankAmerica Corporation, the nation's second-largest bank in terms of assets, and Bank of Boston Corporation, the largest bank holding company in the Northeast.
Fleet/Norstar Financial Group is based in Providence, R.I., and reports strong first-quarter earnings. KKR, based in New York, made history when it engineered the record $29.6 billion leveraged acquisition of RJR Nabisco in 1989.
Bank of New England's $22 billion failure was the third-largest in the history of the US banking industry.