Another chapter of the Metropolitan Mortgage & Securities Co. debacle nearly closed Thursday as the state receiver sold the defunct company's largest asset – insurance affiliate Western United Life Assurance Co. The roughly $53 million deal calls for Global Life Holdings LLC to purchase Spokane-based Western United, which the state's insurance commissioner seized in 2004 as Metropolitan sought bankruptcy protection. The sale gained court approval last month.
A $55 million deal to sell a Metropolitan Mortgage & Securities Co. insurance affiliate received court approval Friday. It remains unknown how much cash from the sale of Western United Holding Co. may ultimately flow to the thousands of investors who held notes when Metropolitan Mortgage went bankrupt.
Insurance Commissioner Mike Kreidler has struck a $52 million deal to sell the key insurance affiliate of bankrupted Metropolitan Mortgage & Securities Inc. The agreement, pending court approval, would end the challenging and controversial four-year receivership of Western United Life Assurance Co. and deliver significant cash to Metropolitan noteholders, according to Kreidler's office.
Saying the state has mismanaged a former insurance affiliate of bankrupt Metropolitan Mortgage & Securities Co., creditors have asked a judge to force Washington Insurance Commissioner Mike Kreidler to relinquish control of the valuable asset. The insurance commissioner seized Western United Life Assurance Co. four years ago in the wake of Metropolitan's financial failure. A successful sale of the insurance affiliate could mean more cash in the pockets of Metropolitan investors, who were left holding $360 million in worthless investments.
The Metropolitan Mortgage & Securities Co. investors' trust has reached a settlement agreement of about $30 million with an accounting firm accused of making mistakes that led to the company's demise. If approved, the settlement with PriceWaterhouseCoopers LLP would be the single largest sum collected since the Spokane financial conglomerate went bankrupt four years ago. And it marks the first time a big-money accounting firm has agreed to pay for its role in the Metropolitan debacle.
Helen Sandifur, the ex-wife of Metropolitan Mortgage & Securities Co.'s chief executive, will pay $325,000 into a special trust to refund investors in the bankrupted company under a settlement disclosed last week. The Metropolitan trust sued Sandifur two years ago for $2.1 million, alleging her divorce settlement from former Metropolitan Mortgage chief executive C. Paul Sandifur Jr. was improperly funded from the corporate treasury at a time when the company was technically insolvent. The trust also sought to unwind special dividend payments she earned.
Burned Metropolitan Mortgage & Securities Co. investors will have their day in court against a big auditing firm they accuse of professional negligence. They have a shot at a potential payday that could top $200 million after U.S. District Judge Fred Van Sickle on Tuesday reversed earlier tentative rulings and rejected motions by PricewaterhouseCoopers LLP to dismiss the lawsuit. He encouraged the sides to rekindle settlement talks and drop next month's trial.
Some legal efforts to win money from deep-pocketed companies that audited Metropolitan Mortgage & Securities Co. are failing, potentially dashing the hopes of thousands of investors who looked to those sources to recover some of their money. Recent rulings have cleared Ernst & Young in one major arbitration case.
A federal judge has approved settlements between the U.S. Securities and Exchange Commission and several Metropolitan Mortgage and Securities Co. figures, ending the agency's sprawling legal action. C. Paul Sandifur Jr., the former chairman and chief executive officer of the Spokane financial conglomerate, will pay $150,889, which consists of a $75,000 civil penalty, the repayment of $60,000 to the company and $15,889 of interest.
Disgraced Metropolitan Mortgage & Securities Co. figure C. Paul Sandifur Jr. will pay about $151,000 to settle allegations that he masterminded fraudulent commercial real estate deals that backfired into an accounting scandal. The collapse of Metropolitan and its group of companies was the biggest corporate failure in Spokane history. Thousands of investors were left holding $470 million in unsecured bonds. Another $131 million in preferred shares were rendered worthless by bankruptcy. Hundreds lost their jobs.