FDIC Settles Claim Against Valencia Bank
A federal regulatory agency has settled one of the largest claims against the failed Valencia Bank in Santa Ana by returning most of a $5.2-million deposit the bank had withheld from a Peruvian company in an aborted sale of the bank 21 months ago.
The Federal Deposit Insurance Corp. kept $850,000 out of the deposit and returned the rest of the money, plus interest, to BCP International Holding Corp., formerly known as Credito del Peru Holding Corp.
In July, 1984, Credito del Peru agreed to buy the troubled U.S. bank for $11.7 million, and it deposited nearly $5.2 million with Valencia.
Later, Valencia officials claimed that Credito had seriously breached the agreement. The bank then refused to return the deposit in April, 1985. Credito quickly sued for the return of the deposit, and the money was put in an escrow account at Security Pacific National Bank.
Valencia, after suffering $10.4 million in losses over three years, was seized by regulators on Feb. 7, 1986, and declared insolvent.
No one at the FDIC was available to comment on the settlement, but court papers indicated that part of the reason for the settlement was to avoid the possibility of losing the case at trial “or even suffering a judgment against it.”
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