Payments to Heritage Bank Creditors Opposed

A proposal to make a $37.5-million payment to uninsured depositors and other creditors of Heritage Bank in Anaheim is being opposed by the failed bank’s surviving parent, Heritage Bancorp.

The company claims in documents filed this week in Orange County Superior Court that the Federal Deposit Insurance Corp. has failed to account for all money earned and spent in liquidating Heritage Bank’s assets since March, 1984, when it was closed by regulators.

The FDIC serves both as receiver and liquidator for most failed banks and acts in a separate capacity as insurer of most bank deposits.

Heritage Bancorp also is claiming that the agency--which is proposing the payment to creditors in its role as receiver--has a conflict of interest because, acting as the receiver, it also is suing the bank’s former officers and directors for more than $150 million. The FDIC, the company argues, can switch hats and dictate by its liquidation actions how much the bank loses and how much to seek from the defendants.

“We’ve had no accounting from the FDIC. We don’t even know how much money was in the bank to pay off depositors after they closed the bank,” said Roger A. Saevig, attorney for the company. Saevig also is one of the former bank directors being sued by the FDIC on claims of fraud, mismanagement and insider lending.

The $37.5-million payment would be the second made by the FDIC to pay general creditors and to reimburse part of the uninsured deposits--amounts in excess of $100,000--that were not paid out to depositors at the time the bank was taken over. The earlier payment totaled $53 million and was used to repay a loan from the FDIC’s insurance arm to the agency’s receivership arm.

The two payments combined would give uninsured depositors and creditors a total of 59.5% of their money. There is a total of $153 million in proven claims against the failed bank.

But Saevig claims that 90% of the money will go to the FDIC--the failed bank’s largest creditor because of money advanced to pay off insured depositors and because of the mounting costs of liquidating the bank’s assets.

Claims and liquidation managers for the FDIC said Wednesday that, if the second payment is approved, they expect to seek court authority to make at least one more--raising hopes that depositors and creditors eventually will receive all the money they were owed when the bank was closed.

So far, the FDIC has raised $98 million from loan collections and from the sale of such bank assets as foreclosed real estate. The agency said in papers filed in court that it is holding an additional $52 million worth of unliquidated assets.

Revised figures from the FDIC show that Heritage had $152.2 million in deposits--more than $2.6 million of it uninsured--when it was declared insolvent. Originally, the FDIC had said that deposits totaled $153.5 million, with $6.5 million of that figure uninsured.

“It’s too early to say if we’ll be able to pay 100 cents on the dollar,” said Charles Holm, an assistant liquidation manager at the FDIC’s Irvine office.

The FDIC, acting as the bank’s receiver, plans to ask Judge Tully H. Seymour in a hearing Monday to approve the $37.5-million payment to uninsured depositors and general creditors. The agency currently holds $45.5 million that was earned from loan collections and the sale of such bank assets as foreclosed real estate but intends to keep $7.5 million in reserve for future receivership expenses and for possible judgments in pending litigation.