Walters Trustee : OKs $1.4-Million Payment by Wife

The bankruptcy trustee in the case of Silverado Banking, Savings & Loan figure Bill L. Walters has agreed to accept about $1.4 million in payment from the estate of Walters’ wife, Jacqueline.

The amount is less than a tenth of what bankruptcy trustee R. Neil Rodgers earlier said was hidden from Bill Walters’ creditors in Jacqueline Walters’ name. The couple own two residences in Orange County.

But the amount is $1.4 million more than Jacqueline Walters had said she was willing to turn over to her husband’s creditors. She said an estimated $14 million to $20 million in her name was given to her as part of a 1986 prenuptial agreement or is money she earned through investments.

The settlement, filed in federal bankruptcy court in Santa Ana earlier this week, says that the bankruptcy trustee believed that the case was becoming too costly to continue and that Walters was spending her money too rapidly. The trustee feared that the estate would be depleted before a decision.

“The trustee has . . . concluded that even if successful at trial of this action, the estate has now reached a point of probable diminishing returns,” the settlement document reads.

Jacqueline Walters has spent up to $100,000 a month in attorneys’ fees to defend herself since the trustee sued her in November, according to the settlement, and she is using another $30,000 a month for living expenses.

The settlement gives the trustee $550,000 in cash and a half interest in 38 acres of commercial property located near Denver. The trustee is to receive $250,000 from the sale of the property, plus 10% of the receipts over $2.25 million, for an estimated value of $865,000, the settlement says.

Bill Walters, once one of Denver’s most prominent developers, recently filed for Chapter 7 bankruptcy, which means he agrees to liquidate his assets and at least partially reimburse creditors. He was questioned last year during a congressional investigation of the collapse of Silverado Savings and told Congress that he was broke. However, that claim was challenged when it became known that the Walterses were dividing their time among a $1.9-million Newport Beach estate, a $1-million desert retreat near Palm Springs and a Laguna Beach home.