By Sarah Fenske
For anyone who's been watching the collapse of Jack Rose's West Valley empire, here's an interesting piece of news: The notorious entrepreneur has resigned from the bank he helped to charter.
Candace Wiest, the president/CEO of West Valley National Bank, confirmed in a phone call today that Rose resigned on September 30. Then, Rose's longtime attorney, Mark Dioguardi, resigned at a board meeting yesterday, Wiest said.
Earlier this month, I wrote about the giant scandal Rose caused at the Arizona Corporation Commission, which led to Commissioner Jim Irvin, Rose's onetime mentor, resigning under threat of impeachment from the Legislature. I also wrote about Rose's recent problems -- which include a suit from a prominent Goodyear family, accusing Rose of lining his pockets as he developed their family farm into a spring training home for the Cleveland Indians.
Since my story was published, Rose has been sued 11 different times for defaulting on a collective $36 million in loans, meant to finance his construction projects around the West Valley. Dioguardi, a close associate of Rose's who was also linked to the corporation commission scandal, worked on a great deal of Rose's business and is also named in one of the lawsuits.
Obviously, no bank would want to be associated with $36 million in defaults at a time when investor confidence is so low.
But Wiest says Rose and Dioguardi were not forced out. Rose, she says, wanted to concentrate on his real estate projects. And Dioguardi had to sell, because he had sold his bank stock, Wiest says. (Dioguardi, court records show, recently reached a settlement with a former law partner who'd accused him of ripping off their business. It's unclear whether the settlement and his resignation are related.)
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Despite the increasingly bad news that's swirling around Rose, Wiest says that the bank he helped to start is in "great shape."
"We didn't start lending until the third quarter of 2007, so our asset quality is still very strong compared to our peers," she says. "We're in very strong shape and we've very liquid."
The question remains, of course, as to why the feds would agree to charter a bank being started, in part, by a guy with a reputation like Rose's. This guy, after all, should have been considered untouchable long before his recent travails. (See Terry Greene Sterling's story from 2000 to see what I mean.)
There are a lot of unanswered questions on this one. And while bank shareholders may be assured by Rose's resignation, I suspect we haven't heard the last word on this one.