East St. Louis Cut off from Bank Accounts
Mar. 24, 1988
EAST ST. LOUIS, Ill. (AP) _ The holders of a $3.4 million judgment against East St. Louis obtained a freeze on its bank accounts Wednesday in a move that could force this desperately poor Mississippi River city into bankruptcy.
East St. Louis apparently cannot now pay its employees or creditors without declaring bankruptcy, said Clyde Kuehn, the attorney who obtained the freeze.
The judgment, about $4 million with interest, was awarded in 1985 to Walter DeBow of Granite City, who suffered brain damage in a beating in the city jail in 1984.
DeBow was arrested for driving with an open bottle of malt liquor. He was placed in a cell with a man who was being held on misdemeanor charges but had a history of violent crime. Kuehn said the man beat DeBow so severely that he suffered permanent brain damage and will require constant medical care for the rest of his life.
In November, the Illinois Supreme Court ordered the city to pay the judgment, clearing the way for Kuehn and the DeBow family to seize the city's bank accounts by filing garnishment documents.
City Treasurer Charlotte Moore said there was about $800,000 in city accounts Wednesday, and about $85,000 in payroll and vendor checks are outstanding and apparently cannot be cashed now.
''That kind of puts us in a destitute situation,'' said Alderman Melvin Frierson. ''My real interest right now is payroll. That's critical. It's bad that it happened, but it was a bad situation that caused the lawsuit, too.''
The next pay day is March 30.
''My understanding of the city's options at this point is that they can seek protection from our judgment in bankruptcy,'' Kuehn said. ''They can file a petition for bankruptcy with the federal court, and a trustee can be appointed.''
Garnishment papers were served on banks in East St. Louis. The banks must report within 30 days on the amount of East St. Louis money they hold and subsequently turn it over to DeBow and his guardians.