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Bank Announces Management Shakeup

February 1, 1990

BOSTON (AP) _ Bank of New England Corp. has cleaned out more of its senior management as the troubled institution tries to recover from massive losses in real estate loans.

The bank said Wednesday that four senior executives had left the company, including the head of the its Boston operation.

The announcement came less than a week after the bank’s board of directors forced out Walter Connolly as chairman, naming H. Ridgely Bullock as an interim replacement.

″These changes represent a major step in the achievement of our recovery plan for the company,″ Bullock said in a statement. ″I expect they’ll have an immediate impact on our goal of strengthening credit policies, procedures and administration.″

The bank said Richard Driscoll, vice chairman of the corporation and chairman of Bank of New England’s Boston operation, had retired at the request of the board of directors.

Other executives to leave are M. Thomas Wilson, president of the Boston operation; Hugh M. Taylor, senior credit policy officer; and James Sweeney, executive vice president of real estate lending.

Under the new organization, Bullock will also serve as chairman and chief executive of the Boston division.

Leo Breitman, who was president of Connecticut Bank and Trust Co., a subsidiary, will be president and chief operating officer of the Boston operation.

Earlier in the day, Bank of New England said it had completed the sale of a vehicle leasing business for $350 million, a move that would give the company an infusion of cash.

The bank said it had sold the U.S. portion of its McCullagh Leasing to GE Capital, a subsidiary of General Electric Co.

The business leases car and truck fleets in the United States and Canada, and Bank of New England said it expected to complete the sale of the Canadian portion next week for around $100 million.

Bank of New England announced earlier this month it expected to post a loss of more than $1 billion for 1989 because of bad real estate loans, and the company has been trying to sell about $6 billion worth of assets.

Earlier this week, the bank said it had agreed to sell its credit card business to Citicorp for $828 million.

Bullock said completing the sale of the leasing business ″represents continued momentum in our asset sales plan as we aggressively pursue other options to downsize the company and improve our capital ratios.″

The bank last week was forced to borrow money from the Federal Reserve Bank of Boston, as depositors have withdrawn millions of dollars.

Tom Lavelle, a bank spokesman, said the money from GE Capital could help Bank of New England avoid returning to the Federal Reserve in the immediate future.

″It is a possibility that we would not resort to the Fed, but we will be monitoring it over the next day or two,″ he said.

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