Warner Bankruptcy Settlement Approved
ORLANDO, Fla. (AP) _ A $16 million personal backruptcy plan for former Ohio financier Marvin L. Warner won court approval Monday after two years of wrangling, but the government may appeal.
U.S. Bankruptcy Judge George Proctor said the Internal Revenue Service would get about $13 million it is owed in yearly installments. The government argued that the Warner assets could be dissipated before the IRS gets paid.
Proctor cleared way for Warner’s many creditors to begin collecting under Chapter 11 bankruptcy rules whether or not there is a government appeal.
The judge harshly criticized Warner, 70, a former U.S. ambassador to Switzerland whose fortune crumbled after a bank he owned collapsed.
The judge noted that Warner had come before the court in a Jacksonville hearing Sunday and criticized his creditors, his lawyers and the courts.
″He places the blame on many parties,″ Proctor said. ″But I never once heard Mr. Warner place the blame where it belongs, and that’s squarely on his own shoulders.″
However, the judge said he believed it was ″important for Warner to have this plan approved.″ He said it would get him out of the courts and ″restore some of his dignity.″
″I wish him no ill will,″ the judge added.
Warner lawyer Scott Alan Orth said, ″The issues in this case weighed heavily on the judge’s mind, and he did what he could. ... I think Mr. Warner did take responsibility in this case. He made mistakes, but they were mistakes in litigation not in life.″
Warner promised Sunday to deposit $6 million with the creditors’ committee to complete the plan, then he said he would look for ″a little air and sunshine.″
Proctor on Sunday also approved $3.6 million in fees to attorneys and accountants including Price-Waterhouse, which spent thousands of hours analyzing Warner’s financial transactions since his Home State Savings Bank in Cincinnati collapsed in 1985.
The Home State failure caused a crisis for 69 other Ohio savings and loans whose deposits were insured by the Ohio Deposit Guarantee Fund.
Warner filed for protection from creditors in October 1987 under federal bankruptcy law to halt $4 billion in claims against him.
The judge said today’s hearing was needed to conclude arguments for the plan.
″We’re anxious to rid ourselves of litigation,″ Warner said, referring to the bank collapse that precipitated his bankruptcy filing. ″My wife and I have fought this thing for five years. We believe there is a little air and sunshine somewhere on this planet for us.″
Warner, 70, who lives in Ocala, criticized the treatment he has received in court and the advice he has received from lawyers. But the judge defended his actions.
″I’m satisfied that he has received fair treatment before this court. I make no apologies to Mr. Warner or anyone else in this case,″ Proctor said.
Warner had offered in November to pay creditors $17.5 million on the condition he be allowed to pursue lawsuits against the accounting firms Grant Thornton and Arthur Anderson & Co., which had audited Home State before the collapse.
He agreed to drop the proposed change and have the case converted from Chapter 11 status to a Chapter 7 liquidation after creditors refused to allow the case to be tied up in further lawsuits.
A jury in Ohio found Warner guilty in March 1987 on charges resulting from Home State’s collapse. Warner was sentenced to 3 1/2 years in prison, but a state appellate court recently rejected the convictions. Ohio prosecutors plan to ask the state Supreme Court to reinstate the convictions.
Ohio has spent $5.6 million prosecuting the case against Warner and has made provisions to recover about $135 million as reimbursement for protecting Home State’s depositors. The thrift had about $1.4 billion in assets and served about 92,000 depositors. It was sold and reopened in June 1985.