Metropolitan Mortgage

The net worth of Metropolitan Mortgage & Securities Co.'s insurance affiliate has tumbled to $41.7 million as state insurance regulators continue to rework its financial holdings and strategy. Western United Life Assurance Co. is considered the most valuable asset of Metropolitan's bankruptcy. It was seized by Washington State Insurance Commissioner Mike Kreidler two years ago as Metropolitan collapsed.

Bankrupt Metropolitan Mortgage and Securities Co. has sued members of its founding family for millions of dollars, alleging that years of stock dividends, a divorce settlement funded at least in part by the corporate treasury, and other special payouts should be refunded. Having the company – now managed by a handful of attorneys and a trustee – go after the Sandifur family and former executives is not an unusual tactic in corporate bankruptcies.

A federal judge confirmed Metropolitan Mortgage & Securities Co.’s bankruptcy plan Thursday. The action begins a series of events that should return money to thousands of regional investors. Metropolitan trustee Maggie Lyons anticipates mailing an initial repayment to creditors in April. Holders of Metropolitan notes should expect between 5 cents and 8 cents on the dollar.

Federal prosecutors and a former Metropolitan Mortgage & Securities Co. executive accused of deceiving auditors are negotiating a possible plea agreement. Such a development with Thomas Turner, who worked as the No. 2 executive at the financial conglomerate, would net the first conviction in the massive accounting fraud that wiped out the savings of thousands of regional investors. And it may offer insight into whether C. Paul Sandifur Jr., the colorful and controversial former CEO and chairman of Metropolitan, will be charged with crimes.

A federal judge denied on Wednesday an effort by accounting firm PricewaterhouseCoopers LLP to escape blame in the failure of Metropolitan Mortgage & Securities Co. The Big Four accounting firm, Metropolitan's one-time auditor, asked U.S. District Judge Fred Van Sickle last week to dismiss a lawsuit that could cost it tens of millions of dollars.

An auditing firm that signed off on Metropolitan Mortgage & Securities Co.'s financial reports years ago was duped by dishonest executives and can't be blamed for the Spokane company's financial disaster, attorneys for PricewaterhouseCoopers LLP argued Tuesday in federal court. The Big Four accounting firm on Tuesday asked U.S. District Judge Fred Van Sickle to dismiss a major lawsuit brought by Metropolitan alleging that auditors were negligent in not putting a stop to the company's questionable finances in 1999 and 2000.

Metropolitan Mortgage & Securities Co. creditors can expect a check early next year to help ease a bit of the sting out of Christmas shopping bills. Though their initial payout may be as little as a nickel to 9 cents on the dollar, at least enough progress is being made to dispense money – the first cash 16,000 investors caught in the debacle will receive since the company declared bankruptcy 22 months ago, said Metropolitan bankruptcy attorney Barry Davidson.

An insurance affiliate of Metropolitan Mortgage & Securities Inc. has leveled a $220 million claim against the bankrupt firm, an action that threatens to delay and cut the cash recovery of investors throughout the Northwest. Western United Life Assurance Co., which is being run by the Washington Insurance Commissioner's office, made good on its longstanding threat to file a claim — in essence blaming its massive losses and writedowns on the failed financial conglomerate.

Insurance regulators in Idaho and Arizona struck an agreement to sell two insurance affiliates of bankrupt Metropolitan Mortgage & Securities Co., a deal that may return up to $20 million to some creditors awaiting payouts in the wake of Spokane's largest business failure. The sales of Old West Annuity and Life Insurance Co. and Old Standard Life Insurance Co. arrive 20 months after insurance regulators in Arizona and Idaho seized control of the companies and operated them under receivership.