Final Arguments Today on Walters’ Bankruptcy Plea

A federal bankruptcy judge will hear final arguments today before deciding whether an associate in failed Silverado Banking, Savings & Loan should be allowed to declare bankruptcy or whether he has hidden assets and is liable for his debts.

Bill L. Walters, formerly a Denver real estate developer, says he owes creditors $279 million and has asked Judge John J. Wilson to approve his application to liquidate his assets under Chapter 7 of the U.S. Bankruptcy Code. Federal regulatory officials are seeking to block the liquidation, however, arguing that Walters hid millions of dollars in assets before filing for bankruptcy in November, 1990.

Walters, who defaulted on $100 million in loans from Silverado, was one of the key figures in the failure of the Denver thrift, which was seized by the government in 1988. Its collapse could cost taxpayers as much as $1 billion. President Bush’s son, Neil Bush, was also connected with Silverado.

In June, an attorney for the Resolution Trust Corp. and the Federal Deposit Insurance Corp. argued during a three-week trial in U.S. Bankruptcy Court in Santa Ana that, although Walters said he was broke, he continued to maintain a $1.9-million Newport Beach estate, a $1.8-million Indian Wells house and a $250,000 Laguna Beach mobile home.

The government agencies also argued that Walters transferred property to his business partners and his wife, Jacqueline Walters, in an effort to conceal assets from creditors.

Walters denied the allegations

and at one point during the trial described the intense scrutiny he was under, saying, “I believed everybody knew my business. It never occurred to me to hide anything.”

Judge Wilson has not said when he will rule. Closing arguments were delayed until now to allow Walters’ attorneys time to review transcripts of the proceedings and to give the judge time to read the two sides’ closing briefs, each of which ran more than 100 pages.