The $2.3 billion collapse of the homegrown Spokane financial conglomerate ranks as the largest business failure in Spokane history.
The bankruptcy begun in February 2004 was marred from the outset by an accounting scandal, a major investigation by the U.S. Securities & Exchange Commission, an FBI inquiry that resulted in the conviction of a senior Metropolitan executive, receivership actions by insurance regulators in three states, numerous lawsuits including an investor class action, arbitration cases and a tangle of claims and insider business dealings.
The millions of dollars spent on high-stakes litigation and experts attempting to unravel Metropolitan’s flawed transactions and financial records unfolded against this backdrop: Most of Metropolitan’s 16,000 investors were older residents living across the Northwest. Many had invested their life’s savings in a company that once claimed its unsecured corporate bonds were as safe as certified deposits from banks.
Summary written by staff writer John Stucke
Maggie Lyons was appointed by a federal judge to be the administrator of the Metropolitan Creditors Trust during the bankruptcy and after the expulsion of the company’s executives. An accountant and manager, she continues to discover, orchestrate and pursue the financial recoveries for the bondholders and other creditors.
C. Paul Sandifur Jr.
C. Paul Sandifur Jr. is the son of the company’s founder. A colorful and controversial figure in Spokane’s political and business community, investigators determined that his overbearing management style and penchant for questionable business dealings helped spur the company’s collapse. He was forced out of his family’s company, lost his personal fortune, was forced to pay hundreds of thousands of dollars in fines. He was never charged with crimes.
Tom Turner worked as a top executive for the Metropolitan family of companies. He was convicted of federal crimes for his role in perpetrating an accounting fraud that deceived auditors and investors.
Latest updates in this topic
‘Rabbit transactions’ fueled Met’s demise
Investors burned by unscrupulous sales practices and fraudulent financial reports at Metropolitan Mortgage & Securities Inc. may find payback by reaching into the deep pockets of prestigious accounting firms and …
Bortner out as chief of state securities office
Deborah Bortner, the state’s securities chief and a tenacious critic of Metropolitan Mortgage & Securities Inc., has been demoted as part of a political shake-up. As head of the securities …
Grand jury probing Met
A federal grand jury is investigating Metropolitan Mortgage & Securities Inc., an indication that the bankruptcy case could include criminal elements. An attorney representing the company suggested the issues were …
Met examiner wants $900,000
A court-appointed examiner who’s been charged with delving into Metropolitan Mortgage & Securities Inc.’s financial dealings has asked the court to pay him $900,000 for that work, which is expected …
How Met scheme collapsed
Metropolitan Mortgage & Securities Inc. made an offshore investment six years ago that the Internal Revenue Service determined was designed to deprive the U.S. government of millions of tax dollars.
Met seeks lawsuit freeze against execs
Metropolitan Mortgage & Securities Inc. wants to freeze all lawsuits against former executives and board members, claiming that the money spent on defense lawyers could run into the millions of …
Met may pay exec $80,000 a month
Amid financial turmoil and allegations of corporate malfeasance, Metropolitan Mortgage & Securities Inc. is seeking bankruptcy court permission to hire a crisis manager for $80,000 a month.
Creditors wait for cash
Monday’s meeting of Metropolitan Mortgage & Securities Inc. creditors was reduced to one pressing question: “Will we get our money back?”
Letter warned of Met’s fall
Burned investors may have been shocked by the quick collapse of Metropolitan Mortgage & Securities Inc., but regulators have known for years that the company was on shaky financial ground.
Met focused on debt-for-equity swap plan
The success of Metropolitan Mortgage & Securities Inc.’s bankruptcy reorganization hinges on Washington Insurance Commissioner Mike Kreidler.
Met may scuttle debt plan
Metropolitan Mortgage & Securities Inc. may abandon its bankruptcy plan that envisioned creditors taking ownership of a newly reorganized company.
Met insurance arm casualty of tax fight
Metropolitan Mortgage & Securities Corp. has lost a $29 million tax fight with the Internal Revenue Service, dragging its large insurance affiliate into receivership.
Met directors offer to quit
Metropolitan Mortgage & Securities Inc. will try to chart a course through bankruptcy reorganization without a board of directors.
Executives at Met draw paychecks
Metropolitan Mortgage & Securities Inc. executives seek continued salaries and payments as the company wrestles with bankruptcy.
SEC wants Met fraud investigation
An independent investigator should look into allegations that Metropolitan Mortgage & Securities Inc. executives committed fraud, according to the U.S. Securities and Exchange Commission.
Sandifur’s hard landing
With tears and resignation, C. Paul Sandifur Jr. is losing his family’s legacy.
Met pinning hopes on plan
Beset by investigations, an auditing fiasco and unpaid, upset investors, Metropolitan Mortgage and Securities Inc. is betting on bankruptcy as its best chance at survival.
Met Mortgage to file for bankruptcy
Metropolitan Mortgage & Securities Inc. is filing for bankruptcy next week, seeking relief from mounting debts and angry investors. The company will attempt to reorganize under Chapter 11 bankruptcy law, …
Probe of ex-Met brokers focuses on sales pitches
State officials are investigating dozens of former Metropolitan Mortgage brokers who allegedly used unscrupulous sales practices to sell risky stocks and bonds.
Met Mortgage asks to be delisted
Metropolitan Mortgage & Securities Inc. announced Tuesday that it has asked to be delisted from the Pacific Exchange, a move that may put the company under the regulatory regime of …
Sandifur quits as Met CEO and chairman
C. Paul Sandifur Jr., whose father founded Metropolitan Mortgage & Securities Co. half a century ago, resigned Tuesday as chairman and chief executive of the venerable but troubled Spokane company.
Met’s books in doubt
An accounting fiasco is unfolding at Metropolitan Mortgage & Securities Inc. as independent auditor Ernst & Young LLP quit after concluding the financial books couldn’t be trusted.
Suits accuse Met Mortgage of Ponzi scheme, fraud
Investors accused Metropolitan Mortgage & Securities Inc. of fraud and filed two lawsuits Tuesday to recoup hundreds of millions of dollars from the troubled Spokane firm.
Met defers more securities payments
The financial challenges facing Metropolitan Mortgage & Securities Co. Inc. deepened Monday as payments on more company securities were suspended, state officials took control of insurance subsidiaries, and the American …
Metropolitan Mortgage shuts down brokerage
Metropolitan Mortgage & Securities Inc. shut down its brokerage firm Monday after punishing fines and restrictions rendered it a liability.