Judge Orders Disbursement Of U.S. National Bank Assets
SAN DIEGO (AP) _ The attorney for shareholders of the U.S. National Bank says justice finally has been served by a federal court order that his clients be reimbursed more than $12 million - 12 years after the bank was declared insolvent.
The order was issued Monday, less than three months after the bank’s owner, former San Diego Padres owner C. Arnholt Smith, was released from jail after serving eight months for grand theft and tax fraud stemming from the bank’s problems.
″Shareholders have finally been vindicated,″ said attorney Joseph Cotchett of San Mateo, chief counsel for the 4,300 shareholders. ″Justice is sometimes slow, but it is sure.″
A federal civil jury returned a $31 million judgment against Smith, his family members and some bank officers, blaming them for the bank’s collapse. Out-of-court settlements reduced the figure to $27 million.
Because Smith, 86, says he is broke, the total amount of assets expected to be collected is about $12.6 million, about $3.5 million of which will pay legal fees in the case.
The disbursement ordered by U.S. District Judge William Enright also included some former bank employees, whose only pension plan assets had been bank stock.
About $9.1 million already has been recovered, and $3.5 million more was expected to come from punitive damages assessed against Smith’s daughter, Carol Smith Shannon.
Shannon said she is selling off some of her last assets to pay the $3.5 million judgment against her.
″Frankly, this hurts me very much. I never worked in that bank, and was never an officer or director in the bank,″ she said.
Shannon also defended her father, a one-time ″Mr. San Diego,″ saying ″he never meant to hurt anyone.″
This is all a rather sad ending for a man who had such a productive business career,″ she said.