Behind Scenes at California Heritage

The closure Friday by banking regulators of insolvent California Heritage Bank was a casebook study of an efficient, smooth-running bank seizure, helped, largely, by the quick purchase of the bank Saturday by La Mesa’s Grossmont Bank.

Because of the purchase, bank customers were virtually unaffected by the takeover.

The same can’t be said of California Heritage’s former executives, however.

President Terry Metrovich spent Saturday morning at his former office, cleaning out his desk. He left about noon with one box of his personal belongings.

Throughout the day, regulators were tagging the desks, machines and equipments, paintings--anything with an estimated worth of more than $10.

When Grossmont Bank President Don Clague finally arrived about 3 p.m., he met with regulators for an hour, discussing the complicated process of assuming control.

Clague, who had never taken over a failed bank before, was at times understandably concerned with the procedures. At one point, he asked regulators if his staff “will have to count (all the money) out?”

That task, regulators assured him, had already been accomplished.

By the time the bank reopened Monday morning, regulator presence was virtually nil, as federal officials scurried to back offices, away from public view. It was a “non-event, as we hoped,” said Clague.

Only one customer closed her account, although she didn’t say why.

There was anything but calm, however, early Monday morning, as staff received last-minute instructions from both regulators and Grossmont Bank executives.

Of the more interesting items passed to bank tellers: A list of depositors who, because of the large past-due balances on their loans, will not be allowed to withdraw any funds from their other accounts.

Gold Promoter Declared Bankrupt

Without fanfare, missing financier Clifford Graham has been declared officially bankrupt and the process of liquidating what little remains of his once-lucrative estate will now begin.

A group of disgruntled creditors and investors in Graham’s failed Au Magnetics gold investment firm last month filed a petition to force Graham into involuntary Chapter 7 liquidation bankruptcy. Au Magnetics attracted nearly $13 million from more than 100 investors. Graham, who hasn’t been seen since May, sold 125% interest in his venture by offering 1% shares for $100,000 each.

Former newspaper publisher Harold Taxel, who tends not to talk to the press, last week was appointed trustee of the bankruptcy case by U.S. Bankruptcy Court Judge James W. Meyers.

About the only asset, however, is Graham’s 18-acre, ranch-style house in Rancho Santa Fe. Once the home of Bing Crosby, it has an appraised value of $5 million, although attorneys close to the case contend that the market value may be closer to $4 million.

An interesting sidelight to the case is that one of the creditors who forced Graham into bankruptcy was also a creditor in another well-publicized bankruptcy case that Taxel still oversees as trustee.

Shirley Stack, who claims she is owed $400,000 by Graham, was also a creditor of American Federal Financial, the second trust deed firm that collapsed into bankruptcy in early 1982 amid allegations that it had made too many bad loans and that its executive overhead was too high.

Taxel is trustee of that firm, which is still operating despite its Chapter 7 status.

On the Block

Veteran hotelier Judd Grosvenor has quietly put his 205-unit Grosvenor Inn and an adjacent strip shopping center on Sports Arena Boulevard on the market for $22 million.

“We’ve been through fire and brimstone in the past (six) years,” said Grosvenor, describing his company’s reorganization from a forced Chapter 11 bankruptcy, filed in 1979. The firm then was called Nite Lite Inns.

He’s still bitter about the “more than $1 million” in legal and administrative fees that were paid to outsiders during the reorganization. But now, he said, “we’ve enjoyed some massive good fortune,” and he wants to pull out some of his equity.