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"The bankruptcy laws are written to prevent a scenario where a lender sticks his head in the sand while the rest of the world is burning around them," Symington said last summer in the first extensive interview with New Times in eight years.
"What they have to prove in court in order not to make a debt dischargeable is real reliance, that they reasonably relied on the financial statement. That is more than just accepting the financial statement, looking at it with a cursory manner, and putting it in the file."
Nielsen's ruling supports Manning's contention that McMorgan & Company relied on the financial statement and did a review suitable to the information available at the time. While the review -- conducted by McMorgan fund manager Don Eaton -- was not to audit standards, it was a reasonable underwriting effort, Manning says.
"The reasonable reliance issue isn't supposed to be an escape hatch for clever con artists," Manning says. "This is supposed to be if you find a lender out there that is operating in bad faith and they know the financial statement is bullshit and they went with it anyway. It is not a safe harbor for someone who engages in a massive financial fraud."
Now, the pension funds will have to collect on the debt.
The pension funds will look to three sources for repayment -- inheritances and disbursements from trusts, Symington's future earnings and hidden assets.
The pension funds are closely monitoring Symington's trust funds and potential inheritances. Manning says the pension funds expect Symington to inherit about $5 million from a relative, whom he declined to name.
Manning says Symington's mother rewrote her will so that her money bypasses him and goes to his children.
"She changed her will just before she died at his request to skip him . . . and it went to the kids," Manning says. "What is going to happen, of course, is the kids are going to favor dad with the money they got from grandma."
Symington's attorney, Rob Shull, angrily dismisses Manning's contention that Symington asked his mother to change her will on her deathbed. "There is no evidence that Fife Symington asked his mother to do anything," Shull says.
Shull declined to comment on the details of the will.
Manning says there are additional trusts that can be tapped besides the four spendthrift trusts that became a focus in both the criminal and bankruptcy trials. The so-called Frick Trusts at one time had blue chip stocks worth more than $1 million.
In last summer's interview, Symington said the four trusts had been drained of all assets to pay his legal fees, which he estimates top $5 million.
"All four of the trusts are gone. All that money has been spent on my criminal and my bankruptcy cases. It's all gone," Symington said last summer.
Manning doesn't believe that claim. "That's not true and he knows it," he says.
In any case, the four Frick trusts have tight "spendthrift" provisions, making it legally impossible for the pension funds to go after whatever principal may remain.
The pension funds will also try to locate assets Symington may have diverted to other people, including friends and relatives, Manning says.
Finally, the pension funds can tap into Symington's future earnings. Symington is free to resume his real estate development business now that he's been pardoned by the president.
"He can get his license and be a real estate developer, and if he ever makes money honestly again, we want to be there to share that money with him," Manning says.
Symington, who was out of the country and could not be reached for comment on Nielsen's ruling, will likely have at least one more direct confrontation with Manning -- at a future debtor's examination that will allow the pension funds to closely examine all his personal assets.
"We want that to happen as soon as possible. It will be fun," Manning says.
It's unlikely that Symington shares the same upbeat view of yet another round on the witness stand.
Last summer, Symington looked into his future and gave a mixed vision of bleak defiance.
"If they win, and they may well win . . . they will in effect have buried me financially for the rest of my life," Symington said. "They are not going to get any money."
Read more New Times coverage of J. Fife Symington III