Making Accuracy "Irrelevant"

The governor's lawyer explains when it's okay to tell a lender you're worth millions when you're actually broke

If they had known of the governor's true net worth, the pension funds could have opted out, Manning says.

"If the conditions were not satisfied, including [Symington's] obligation to provide updated, true and accurate financial statements to the Pension Funds showing all material changes, then the Pension Funds had the absolute right to terminate the Commitment and not fund the loan," Manning's pleading states.

The more documentation Manning can gather that supports his contention that Symington filed a false financial statement, the greater the likelihood that the pension funds can successfully challenge Symington's attempt to erase his debts.

The pension funds have not yet filed aclaim seeking to prevent the governor's $11.5 million debt to them from being discharged, but all indications are they will do so.

The veracity of Symington's 1990 financial statement is just one area of concern for the pension funds. A review of Symington's financial records from that time period, and earlier, is expected to provide a wealth of information concerning other questionable activities by Symington.

Manning has informed Symington that thepension funds "have serious concern" that Symington did much more improperly than submitting a false financial statement, which is a federal felony. (A federal grand jury already is investigating Symington's finances.)

Manning wants to examine Symington's financial records to explore "suspicions" that Symington's "fraud" also included: fraudulent transfers of money from Symington to others, including his spouse, relatives and friends; unlawful manipulation of trust-fund assets; and the commingling of Symington's sole and separate property with his wife's and his mother's assets.

Bankruptcy Court Chief Judge George Nielsen has set a February 27 hearing on Symington's motion to prevent the pension funds from reviewing his financial records related to the 1990 financial statement.

During that hearing, Nielsen also will consider efforts by Ann Symington to keep the pension funds from reviewing her financial records. Ann Symington has objected to releasing any of her financial records prior to 1991. The Symingtons say they have maintained "sole and separate" estates since they were married. Ann Symington, an heir to the Olin Chemical fortune, has not filed for bankruptcy.

The governor lost a round before Nielsen when he unsuccessfully sought to prevent the pension funds from subpoenaing bank records related to several trust funds in which the governor is a beneficiary. The pension funds want to determine whether Symington's trust funds could be used to repay at least a portion of his $11.5 million debt. The governor claims the trust funds are exempt from the bankruptcy proceedings.

Nielsen not only ruled against the governor, he ordered Symington to pay the pension funds' legal costs, a clear signal that Nielsen considered Symington's attempt to block the subpoena improper.

Manning issued a subpoena to Mellon National Bank in Pittsburgh last month, seeking extensive records concerning four trust funds managed by the bank on Symington's behalf.

The bank is ignoring the subpoena, Manning says, setting up yet another costly courtroom showdown.

While the pension funds have taken the lead in seeking Symington's financial records, the trustee overseeing Symington's estate is also seeking records. Among those records are income-tax returns, which Symington has yet to produce.

Terry Dake, the attorney representing the trustee, says he supports the pension funds' efforts to gather additional Symington financial records.

"If you want the benefits of a bankruptcy discharge, then there are certain burdens that go along with that," Dake says of Symington's obligations. "Those burdens are to supply certain financial information."

Dake says Symington's financial records dating back to 1990 and earlier should be available for creditors to review.

"I think you are very hard-pressed to draw a line in the sand saying you can't go back more than four years," he says.

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