Trusting in Family Values

When Manning pressed the issue, the governor maintained that all of his lenders knew the real truth.

How did they know the truth if the paperwork was a lie?
Symington said the pension funds should have inferred that Ann wasn't bound by the legal precept of community property because she had a lawyer of her own.

Symington also said he told the lenders the real story orally.
I'm trying to picture this.
Administrators of the union pension funds are sitting around, and the governor says, "Here's a bunch of misleading and false paperwork for your files, which we all know are subject to federal scrutiny. When you've got a second, I'd like to tell you the real scoop."

By the way, in an interview after the bankruptcy hearing, Manning said none of his clients were told anything by Symington that contradicted the paperwork.

Here is the bottom line.
If Symington lied so easily about such simple and fundamental data, what did he do when it came to the critical, and much more complex, real estate schedule he submitted with his loan application?

Symington gave the unions a list of 17 developments that he had pieces of. He claimed they had a market equity value in excess of $128 million, of which his share was more than $15 million.

How wild and overblown were those numbers?
After deducting his liabilities, Symington wrote on his financial statement that his net worth was $12 million.

What should the unions have inferred from that number?
In the end, the unions asked Ann and Fife Symington to personally guarantee the $10 million loan for the Mercado. The scions did so readily.

And why not?
Ann and Fife's personal guarantees weren't worth the paper they were written on. They pledged their community assets, and, as the governor said during his bankruptcy hearing, he didn't believe he'd ever had any community assets.

Ann has made the same damning admission under oath.
The RTC tried to recover money from the Symingtons over Fife's role in the billion-dollar collapse of Southwest Savings and Loan. On January 2, 1992, Ann gave the RTC a signed, notarized statement that said: "Prior to my marriage to J.Fife Symington III, Fife and I executed an antenuptial agreement. ... On February 7, 1976, Imarried J. Fife Symington III. Since the date of my marriage to Fife Symington, Fife and I have maintained our separate assets in accordance with the terms of our antenuptial agreement and have acquired no community property."

In 1990, believing that she had no community assets--that she had never had any community assets--Ann nonetheless personally co-guaranteed the $10 million pension fund loan with her community assets.

The unions thought two millionaires had signed on the dotted line to back up the loan.

Ann and Fife knew better.
And here's a charming detail buried in the case file.
Ann pulled the same stunt--guaranteeing her husband's loans with her nonexistent community assets--all over town. Ann the heiress stuck Citicorp, First Interstate Bank, Jerome Hirsch and Valley National Bank with more than $10 million of worthless guarantees.

Why wasn't Fife Symington represented bySnell & Wilmer at the bankruptcy hearing? He'd been with that law firm for a quarter of a century. He'd taken work to the Valley's premier Republican powerhouse long before he'd married Ann. As governor, he'dappointed two of the firm's partners torunstate agencies.

And yet, on the worst day of Fife's life, his wife had the Snell & Wilmer lawyer and Fife had two new guys.

I said earlier that this is a tale of the Symingtons' family values, how they view debt and obligations. But there is more to the telling.

This is also the story of big money. The gravity of big money is like a force of nature, creating rules of its own. And when you understand the irresistible pull of the large dollar, there are very few mysteries in the Symington bankruptcy.

For example, bankruptcy attorneys say a law firm cannot represent a debtor (e.g., Fife) if the law firm is also a creditor. Because the governor owes Snell & Wilmer $230,000 in legal fees, the law firm would have had to forgive the debt in order to represent Fife.

We can only speculate that this was not a close call for Snell & Wilmer.
The governor is now ably represented by William Novotny and Robert Schull of Mariscal Weeks McIntyre & Friedlander.

Ann, who can still pay her bills, is having her interests protected by Snell & Wilmer.

That firm's job is to build a moat around Ann Symington.
This has set up a classic confrontation.
Michael Manning, who has been lionized in books and the press for his role in putting Charles Keating behind bars, wants to grill Ann.

Donald Gaffney, unknown to the public, is in Manning's way.
Does Snell & Wilmer's anonymous bankruptcy lawyer have the grit to frustrate the bulldog Manning?

Let me tell you a little something about Mr. Gaffney and grit.
Though he is a distinguished member of the bar today, in 1978 he was just another law-school graduate employed at Streich Lang in Phoenix.

As he waited to take the bar exam, it was apparent to the young attorney that he was not ready.

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