In particular, the examiners believed that United was going to have to eat at least two more of its largest loans.

The first was a loan of $10.5 million to developer Lawrence Malanfant. Malanfant was in financial trouble, trial testimony showed. Two pieces of property he had put up to secure the loans--one in San Diego County and one in Lake Havasu--were dramatically overappraised, according to expert witnesses, and not worth enough to pay the loans back.

In the second case, a Tempe-based electrical contractor was on the brink of bankruptcy and owed the bank more than $10 million. The Newbery Corporation had told United Bank in 1986 that it was in trouble, and the bank had lent it another $3.5 million so it could try to dig its way out.

Simmons, at the time, took great exception to Cook's findings and fought the FDIC's insistence that loss reserves be increased because the Malanfant and Newbery loans were headed down the tank.

He wrote to Cook's supervisor asking that the FDIC report be changed. To this day, he says Cook was wrong. "The. . .two loans were not charge-off loans," he says. He calls them "problem loans" that would have paid out if the economy had held.

But by the end of 1987, both had been written off as losses. Taken together, the Victorio, Malanfant and Newbery loans accounted for more than $30 million in write-offs in less than a year.

Standard Chartered was not enamored of the new facets of United Bank it was discovering.

"They were interested in buying a top performing bank. They weren't interested in buying a problem bank," says Richard Williams, another Standard Chartered attorney.

By the summer of 1987, Standard Chartered was having problems of its own back home that crippled its ability to carry a troubled American bank, all parties to the trial agreed. The Bank of England was requiring British banks to increase their own loan-loss reserves to offset problems with loans to developing countries.

Hungry for cash to meet the new requirements, Standard Chartered put United Bank up in a fire sale. Citicorp bought it for $207 million, attorney Williams says, as long as Standard Chartered would agree to buy back $140 million of the bank's worst loans.

james simmons retired from United Bank after it was sold to Citicorp, almost exactly a year after he signed the all-important certificate. He served as chairman of Valley National Bank for two years after that, and was briefly touted as a possible head for the Resolution Trust Corporation.

Now, Simmons has a glass-walled office on the ninth floor of the Esplanade office building, where he is running his own investment company. He and President Bush beam down from a picture hanging behind his desk.

There is no way, Simmons says, that he could have known the choppy waters ahead on the day United Bank was sold. He had started United Bank in 1960 and nurtured it for 25 years.

The "dysfunction" of his top credit officer, he says, eluded the bank's own officers. He was aware that the Newbery and Malanfant loans were problems, but was still confident they could be worked out.

"We had a structure I think was excellent," Simmons says. "I don't think any structure we might have had, however, could have given us prior warning on the real status of Victorio."
Simmons did make millions of dollars from the sale of United, he concedes. At trial, he testified that he received somewhere between $3 to $5 million from his stock and profit sharing when the bank sold.

He has not escaped the legal snarl borne of the deal. He is suing Standard Chartered trying to recover attorneys' fees he believes the company owes him, and the company is suing him back over the Victorio loan losses.

If he could not foresee the impending problems at United, Simmons says, there was no reason to expect Price Waterhouse to. Certainly, he says, there was no reason to expect a junior accountant to.

"I never really depended on the auditors, except in a general way, to keep me informed of loan problems," he says. "We had people in the bank to do that, and I considered them much more able to keep me informed of loan problems than an outside auditor."
The fact remains, however, that United's loans did start exploding. Presumably, the task of outside auditors is to find out if bank officials like Simmons are myopic about their own institutions.

But to Simmons, and other Price Waterhouse defenders, it is the height of absurdity to argue that, in the end, a multimillion-dollar bank deal went bad because of Laurie Pollitt.

Standard Chartered, Simmons says, has made Pollitt and Price Waterhouse the scapegoats for its own bad business decision. Raymond Eagan, one of the jurors who voted against the verdict, reached that conclusion himself.

"It was their own damn dumb business decisions. They didn't check the bank out," Eagan says. "Who's horseshitting who? They took ol' deep money pockets Price Waterhouse to the cleaners. . . it's all just a great big corporation money game."
John Binkly, the expert witness hired by Price Waterhouse, points out that Standard Chartered had more than a year from the time it agreed to buy United until the deal closed. That was ample time for the company to send in its own auditors and scour the bank's loan files to look for problems, he says. If the problems were as obvious as Standard Chartered claimed, Binkly says, they could have easily found them before cutting the $335 million check.

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