John Stucke

An accounting firm caught up in the Metropolitan Mortgage & Securities Co. bankruptcy has asked a federal judge to dismiss claims that could cost it tens of millions of dollars. The Dec. 13 court hearing sought by PriceWaterhouseCoopers LLP is the first legal test of accusations that outside auditors should shoulder blame for Metropolitan's collapse.

A new commercial district in Post Falls holds promise as a new manufacturing site for F.O. Berg Company, a firm with a 122-year history in Spokane. The tent and fabric company has been busy filling military and disaster relief orders and needs more space to expand, said part-owner Andy Barrett.

Kaiser Aluminum has signed a new supply contract with Airbus that stands to boost production at the Trentwood rolling mill in Spokane Valley. Though few details were disclosed, the deal follows Kaiser's announcement last week of a $75 million capital investment project at Trentwood. The company will install machinery including a stretcher, furnaces, an inspection system and other equipment to produce heavy-gauge aluminum sheet.

The U.S. Securities and Exchange Commission's case against former Metropolitan Mortgage executives includes allegations against a whistleblower who's now running a real estate development business in Spokane. Metropolitan executives recruited Thomas Masters from the Phoenix area in 2002 to handle large commercial loan projects as a vice president.

A proposed legal settlement involving former board members of a Metropolitan Mortgage affiliate would free millions of dollars to be returned to investors and release the directors from lawsuits and allegations that they took part in a massive financial fraud. The deal would pull $7.25 million from an insurance pool now being tapped to pay attorney fees for former Metropolitan officials. The money would be split among a trust set up to recover and repay money to creditors in the bankruptcy case, and investors who filed a class action lawsuit against the company and its officials.

The nation's Farm Service Agency shelved a plan Monday to close hundreds of offices that farmers have relied upon for decades to assist them with subsidies and other federal programs. Called "FSA Tomorrow," the measure is the equivalent of new national business plan to trim costs by consolidating offices and modernizing services.

A federal crackdown on pirated computer software ensnared a Spokane man, who could face prison time and hefty fines for allegedly downloading such things as the movie "The Butterfly Effect," and games such as The Hulk Xbox. The FBI accuses Scott J. Walls, 45, of participating in a criminal copyright conspiracy from his home on West Glass Avenue. He was indicted along with seven other men around the country for their alleged roles in what is called the "warez scene," a series of organized groups blamed for most of the illegal distribution of music, movies, games and software.

A federal bankruptcy judge ruled Friday that Catholic churches and schools are legally owned by the Diocese of Spokane and therefore can be sold to pay dozens of sex-abuse victims.
Read the judge's ruling (1.8 Mb PDF)

The Catholic Diocese of Spokane will start selling property such as its chancery in downtown Spokane and the home of Bishop William Skylstad if a bankruptcy plan filed Monday is approved.

Bankruptcy lawyers are overcharging the Catholic Diocese of Spokane, according to the U.S. Trustee, a federal official who watchdogs the bankruptcy case. Lawyers working on the case bill in six-minute increments, whether the time is spent arguing in court, setting strategy or reading case-related e-mails. Based on billings throughout the year, it appears attorneys will have accrued fees in excess of $3 million by the time the case is a year old in December.

SEATTLE – Thomas Turner, formerly the No. 2 executive at the Metropolitan Mortgage & Securities group, pleaded not guilty Thursday to seven felony counts of misleading auditors. Turner appeared in U.S. District Court in Seattle to answer to a grand jury indictment for his alleged role in the collapse of Metropolitan. The Spokane company's bankruptcy has rendered near-worthless some $460 million in unsecured bonds held by thousands of investors across the Northwest.

Top executives of Metropolitan Mortgage & Securities Inc. were accused of fraud Monday, the first federal charges since the company went bankrupt. The actions allege former Metropolitan Chairman and CEO C. Paul Sandifur Jr. and other executives falsified financial results through circular real estate deals to show profits. The manipulation maintained the company's image as a safe investment haven and allowed it to continue issuing new securities, according to charges from the U.S. Securities and Exchange Commission and the U.S. Department of Justice.The scheme unraveled in 2003 as investigators scrutinized the Spokane company's books. Within months, Metropolitan, which once employed about 700 people, influenced Spokane politics and occupied a white downtown high-rise, filed for bankruptcy protection. Few investors could act quickly enough to escape. The company's failure stripped 10,000 investors of $450 million.

The Metropolitan Mortgage & Securities Co. bankruptcy could be wrapped up by Jan. 4, nearly two years after the Spokane company filed for protection from creditors. Metropolitan's more than 16,000 investors can expect an initial payback of 7 cents to 9 cents on the dollar after the reorganization plan takes effect, if it's approved by creditors, according to documents filed in bankruptcy court. Investors bought about $470 million in unsecured bonds, called debentures, from the once-venerable firm, which hadn't missed a payment in 50 years.

A federal judge ignored evidence and centuries of religious law when she ruled that Catholic churches and schools could be sold to pay sexual abuse claims against the Catholic Diocese of Spokane, asserted an appeal filed Tuesday by Bishop William Skylstad. Through his attorneys, Skylstad pointed to 11 areas where he contends U.S. Bankruptcy Judge Patricia Williams erred in her analysis of the important legal question of whether parish assets belong to the diocese.

Triumph Composite Systems Inc. could lay off more than 200 employees as the Boeing Co. labor strike and production shutdowns cut parts deliveries. About 45 employees at the West Plains factory were scheduled for layoffs today, and more could be out of work by week's end, said Triumph president MaryLou Thomas.

Metropolitan Mortgage & Securities' large insurance affiliate is worth half what it was a year ago when state regulators seized control, a worrisome development as creditors await word on the sale of Western United Life Assurance Co. The insurance company has equity of about $49 million, down from $108 million when put into receivership 18 months ago by Washington Insurance Commissioner Mike Kreidler. As recently as last March, when Kreidler put the company up for sale, Western United's equity – also called capital and surplus – stood at $63 million.

Metropolitan Mortgage & Securities Co. sold its idyllic Hawaiian properties and netted $16.7 million, a bit of bright news for creditors of the bankrupt company. Proceeds bested the company's initial estimate by more than $4 million, making the auction a rare success in what has been a bankruptcy full of distressed sales and disappointments.

A judge ordered the Federal Deposit Insurance Corp. to pay Houston financier Charles Hurwitz $72.3 million as part of a scalding sanction accusing the banking regulator of corruption. It's the latest twist in a case rooted in the savings and loan scandals of the 1980s.