Settlement Referee Appointed for ‘Time Out’ in Silverado Case
DENVER (AP) _ A settlement master was appointed Thursday in the government’s $200 million lawsuit against Silverado Banking, Savings and Loan.
Donald E. Abram, a chief magistrate judge for the U.S. District Court, was chosen as referee by Sherman G. Finesilver, chief judge of the U.S. District Court in Denver, in hopes of settling the case before it goes to trial.
″Experience indicates that with the cooperation of counsel, litigant and decision makers, working with a settlement master and in the exercise of sound business judgment by the principals and litigants, a complex case such as this can be settled in advance of trial,″ Finesilver wrote in his order.
″This ‘time out’ approach from pretrial and discovery process will be conducive to create an effective settlement atmosphere.″
The civil suit, filed by the Federal Deposit Insurance Corp., accuses Silverado directors - including Neil Bush - of ″gross negligence″ in their duties with the now-defunct thrift.
Bush, the president’s son, served on the Silverado board from August 1985 to August 1988. It was seized by regulators on Dec. 9, 1988 at an estimated cost to taxpayers of $1 billion.
Besides Bush, the defendants are: Michael Wise, chairman and chief executive officer; Robert Lewis, chief financial officer; Richard Vandapool, chief operating officer; Russell Murray, executive vice president; W. James Metz, who owned 88 percent of Silverado’s stock; and board members Florian Barth, Richard Bunchman, Diane Ingels, Marjorie Page and Richard Vitkus.
The FDIC also named the thrift’s lawyers as defendants. They are the firm of Sherman & Howard of Denver, general counsel to Silverado from 1984 to 1988, and Ronald Jacobs, a partner in the law firm who served on the board of the S& L’s holding company.
The FDIC alleged that improper loans and investments were made by Silverado’s officers and approved by its directors. Many of the transactions violated federal regulations, the agency said.
Abram was chosen as master because he is not now in the judicial system, Finesilver wrote, and he has considerable experience in the settlement process.
Abram will have unrestricted power to meet with anyone he deems favorable in promoting the agreement, but will keep all discussions confidential, Finesilver wrote.
The FDIC and each defendant will have to file written statements to Abram by April 8 and settlement discussions will start April 15 in Denver. The court is to be notified of the settlement by April 29, Finesilver said.
″The parties are to participate in the settlement discussions with an open mind, candid appraisal of the strengths and weaknesses of their positions and refrain from filing additional motions or requests during the settlement period,″ Finesilver wrote.