Imperial Thrift Says It Could Lose $4 Million

Imperial Savings said Friday that it could lose as much as $4.1 million if it cannot recover $25.1 million of securities pledged as collateral for a loan from Bevill, Bresler & Schulman Asset Management, a government securities dealer that was placed in Chapter 11 bankruptcy proceedings earlier this week.

Under terms of a repurchase agreement, New Jersey-based Bevill, Bresler is supposed to return the securities to Imperial on Monday, but Imperial officials said Friday that they have had “no indication” that that will happen.

If the securities aren’t returned, “we would (take) whatever appropriate legal action we could,” said Earyle D. Woodard, Imperial’s chief financial officer and executive vice president.

Woodard said the securities may be in the possession of Security Pacific Clearing & Securities in New York, but Security Pacific has “declined to respond to Imperial’s inquiries.”

Bevill, Bresler officials would not comment on the status of Imperial’s securities.

According to Woodard, Imperial’s involvement with Bevill, Bresler began last October, when the thrift, a subsidiary of Imperial Corp. of America, borrowed $18 million from the company.

Accrued interest brought the total encumbrance to $18.98 million.

As collateral, Imperial pledged securities with a book value of about $25.1 million. Current market value of those securities is $21 million. The loan is due to be repaid and the securities repurchased on April 15.

“We would pay it (the loan) back if we get our securities back,” said Woodard, who added that “we aren’t legally obligated to pay it back unless the securities are returned.”

It seems obvious, said Woodward, that the trustee in charge of Bevill, Bresler, which was forced into Chapter 11 on April 8, could use the $19 million that Imperial is prepared to repay. But that raises the question that the collateral “may not be available to return.”

A court-appointed trustee and receiver took control of Bevill, Bresler on Tuesday.

If the securities aren’t returned, Imperial’s indebtedness would be canceled, Woodard said.