Co-op Bank’s creditors have voted in favour of a £1.5bn ($2.4bn) bailout deal which will see them take control of 70% of the struggling UK lender.
The remaining 30% will stay in the hands of parent company the Co-operative Group, which said that 99.9% of investors who had voted had approved the plan to plug the gaping hole in the bank’s balance sheet.
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The deal will now need to be approved by a court on 18 December before it can be brought into effect.
The Co-op Group had originally planned to pump £500m capital into the bank, sell its £500m insurance assets and leave bondholders to take £500m of losses before floating the bank on the stock exchange, retaining a controlling 70% stake.
Bondholders rejected these plans and demanded in September that the group retain a stake of smaller than 50%, leaving bondholders in control.
Labour peer Lord Myners is currently chairing a review into the governance of the Co-op Group, after the company was discredited by a series of scandals.
Along with the bank’s financial struggle, it has fallen into disrepute after former chairman Paul Flowers was arrested, allegedly for drug offences.
During last month, UK Prime Minister David Cameron announced an independent investigation into events at the bank.
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