Topics
Metropolitan Mortgage
Summary
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
Key people
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Maggie Lyons
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.
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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.
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Thomas Turner
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
Met files plan for liquidation
The thousands of creditors holding notes from failed Metropolitan Mortgage & Securities should receive a small recovery beginning this fall, according to a reorganization plan filed in U.S. Bankruptcy Court. …
Met-owned insurance firms ordered sold
Insurance commissioners from Washington and Idaho have ordered the combined sale of three insurance companies owned by bankrupt Metropolitan Mortgage & Securities Co. Money from the sale should boost the …
Investor seeking answers
Gerry Hanson stands to lose more than $1 million in the Metropolitan Mortgage & Securities fiasco, and he wants some answers. Hanson, who lives in Sparks, Nev., was recovering from …
Deadline looms for Met bankruptcy plan
Investors battered by the failure of Metropolitan Mortgage & Securities Co. should get a look next month at a revised Bankruptcy Court plan that estimates a return to them of …
Met Mortgage deadline looms
A Bankruptcy Court judge has given Metropolitan Mortgage an April 1 deadline to file a reorganization plan — a document that’s likely to say investors will recover about 15 cents …
Met denied access to documents
A judge’s ruling Wednesday scuttled efforts by Metropolitan Mortgage to collect potentially damaging documents pointing to alleged malfeasance by its former auditor. The ruling is a small victory for that …
‘Loan to own’ part of Met’s legacy
James Colson lost everything to Metropolitan Mortgage and Securities Co. Inc. Although the Spokane company and Old Standard Life Insurance Co., a Metropolitan subsidiary, were only indirectly involved in the …
Unraveling Met’s mess
Workers have stripped the big green letters that once glowed “Metropolitan Financial Center” from the downtown Spokane highrise. At 17 floors, the white building beamed strength and prosperity.
Met plans to sell stake in GenPrime
Metropolitan Mortgage & Securities plans to sell its stake in GenPrime Inc. for $451,780 in cash to help settle its bankruptcy case. The sale is essentially a stock buyback for …
Regional growth, innovations balance Met, hospital woes
There was no lack of business news in the Inland Northwest this year, making it difficult to come up with a list of top stories. But some issues dominated our …
Met tower gains a tenant
One of downtown Spokane’s tallest buildings will soon bear the name of a company that’s growing in the region, rather than one that recently went bankrupt.
Summit plot to be auctioned
The federal bankruptcy court will auction off the 77-acre Summit property Wednesday in a transaction that could draw millions more for the Spokane River land than previously expected, benefiting creditors …
Frank seeks Summit land
Spokane developer Jim Frank went to court this week in an attempt to acquire the 77-acre Summit property overlooking the Spokane River, a move protested by the bankrupt landowner, Metropolitan …
15 Met brokers may lose licenses
Fifteen brokers who sold Metropolitan Mortgage & Securities Inc. stocks and bonds have been accused of violating the Securities Act of Washington. The charges brought by the state Department of …
County hires ex-Met manager
Longtime Spokane political strategist Erik Skaggs has taken a $55,000-a-year job as Spokane County’s new director of economic development. Until last year, he also was a key figure at Metropolitan …
Merger advised at Met
A court-ordered report suggests that bankrupt Metropolitan Mortgage & Securities’ entire family of so-called independent companies be merged. If adopted by the court, such a consolidation would drop claims the …
Met Center hotel plans shelved
Davenport Hotel owner Walt Worthy has abandoned the idea of turning the 17-story Metropolitan Financial Center into a hotel. Worthy said he’s looking instead at building a five-to-10 story hotel …
State sues Ernst & Young over Met abuses
Washington’s insurance commissioner has sued Ernst & Young LLP, accusing the auditing firm of failing to uncover, divulge and stop accounting abuses at bankrupt Metropolitan Mortgage & Securities Inc. Commissioner …
Firm hopes to develop Met parcel
A Kirkland, Wash., investment and development firm has submitted the winning bid for Metropolitan Mortgage & Securities Co.’s 77-acre Summit property on the Spokane River just north of downtown. Matt …
Met theater sale to end Thursday
The proposed sale of the Metropolitan Performing Arts Theater in downtown Spokane concludes next week with a deadline that will decide if more than one bidder is interested in the …
Small town, big loss
ODESSA, Wash. – When Metropolitan Mortgage collapsed this year, Odessa was hard hit. Of the 940 people in this tidy farm town west of Spokane, about 70 stand to lose …
Met assets may go to pay for lawyers
The legal costs of defending former Metropolitan Mortgage & Securities Inc. executives and board members are adding up. Law firms representing the bankrupt company’s former officials want to draw fees …
Met creditors pick up pieces
Thousands of Metropolitan Mortgage & Securities creditors may receive a small check next year as the failed financial firm is pulled apart and sold off piece by piece. The checks …
Met Mortgage to sell theater
Metropolitan Mortgage & Securities Co. said Thursday it has signed an agreement to sell the historic Metropolitan Performing Arts Theater to Spokane residents Mitch and Cindy Silver. The Silvers have …
Judge limits new Met investigation
A court-appointed examiner investigating Metropolitan Mortgage & Securities will now focus on business dealings between the company and its many affiliates. Federal Bankruptcy Court Judge Patricia Williams said Monday that …
Met creditors want to sue accounting firm
Creditors in the Metropolitan Mortgage & Securities Co. bankruptcy case want to hire a law firm by next month to sue the big accounting firm Ernst & Young LLP, the …
Small Met recovery possible
Investors in bankrupt Metropolitan Mortgage & Securities Co. could recover as little as 15 cents on the dollar, a devastating loss of wealth for the thousands of people who entrusted …
Investors worry as Met faces millions in legal fees
Costs in the Metropolitan Mortgage & Securities Co. Inc. bankruptcy are piling up, even as creditors worry about recovering at least some of their investments. In the first part of …
Met exec quits, says he was “misled’
The man who some describe as the internal whistle-blower at Metropolitan Mortgage & Securities Inc. has resigned to accept a job closer to home in California. Metropolitan gave him no …
Met Mortgage to abandon Pasco project
Metropolitan Mortgage & Securities Inc. will abandon a multimillion-dollar mall project in the Tri-Cities. The bankrupt Spokane firm owes more money on the factory outlet mall than what appraisers say …
City Hall won’t be in Met tower
Spokane Mayor Jim West said Thursday that the city is no longer interested in buying the Metropolitan Financial Center. Facing a budget crunch and skeptical voters, the city is just …
Examiner wants closer look at Metropolitan’s auditors
A court-appointed examiner wants to continue investigating Metropolitan Mortgage & Securities Inc.’s collapse. Specifically, examiner Samuel Maizel wants to scrutinize the work of Ernst & Young LLP, and PriceWaterhouseCoopers LLP …