Is the Big Day Near for Doral Financial Corporation (NYSE: DRL)? The Current Catalyst Shares of Doral Financial Corporation (NYSE: DRL) surged today from last Friday’s closing price at $5.54 to $7.33 or up 32%. The climb has investors excited about the recent catalyst announced at the beginning of the week that Doral and the Puerto Rico Treasury Department entered into court negotiations to settle all claims by Doral.
According to the Form 8-K, Doral filed a lawsuit against the Commonwealth of Puerto Rico in the Court of First Instance aiming to resolve the Closing Agreement dated March 26th, 2012 and collect the $229 million owed to Doral. Both parties have agreed to suspend the Hearings as of Friday August 8, 2014. Doral Financial Corporation (NYSE: DRL) and the Commonwealth of Puerto Rico have 10 business days from August 8, 2014 to finalize the terms of the settlement agreement. Although there is a proposed framework for settlement, the final agreement is still being negotiated by both parties and remains subject to approval by the Court of First Instance. The Court of First Instance also ruled that the Commonwealth of Puerto Rico will have the responsibility of indicating any misrepresentation of material fact by Doral with solid proof. If Doral Financial Corp (NYSE: DRL), is awarded the full $229 million and with only a market cap of $48.7million, will shares reach back to a high of $24.74 once again? There are also many other factors to put into place like DRL growing cash issue and is this settlement really a cure to their overall problems? Stay tune and find out here. About (NYSE: DRL): Doral Financial Corporation (Doral Financial) is a bank holding company. Doral Financial is engaged in retail banking activities in Puerto Rico and the United States through its banking subsidiary. Doral Financial has three wholly owned subsidiaries, which are Doral Bank (Doral Bank), Doral Insurance Agency, Inc. (Doral Insurance Agency) and Doral Properties, Inc. (Doral Properties). Doral Bank has three wholly owned subsidiaries in operation, Doral Mortgage, LLC (Doral Mortgage), Doral Money, Inc. (Doral Money), principally engaged in commercial lending in the New York metropolitan area, and CB, LLC, an entity incorporated to dispose of a real estate project. Effective October 1, 2011, the Company completed an internal reorganization by merging its two depository institution subsidiaries, Doral Bank, FSB and Doral Bank. In July 2014, Doral Financial Corp sold its non-performing assets.
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