Saturday, November 21, 2009

ONGOING COVERAGE: METROPOLITAN MORTGAGE BANKRUPTCY

Met investors to get $45 million

Third payout likely in $2.3 billion financial collapse

John Stucke
Staff writer
July 27, 2008

About $45 million is set to be distributed to investors of Metropolitan Mortgage and Securities Inc. at the end of next week.

It will be the second repayment following the bankruptcy of the $2.3 billion Spokane-based financial conglomerate 4 ½ years ago.

Maggie Lyons, administrator of the creditors trust borne out of the city's worst financial collapse, wrote in a letter to investors that those Metropolitan noteholders will receive about 10 cents on the dollar.

Investors holding notes in Metropolitan affiliate Summit Securities Inc. will receive about 6 cents on the dollar.

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If an investor's notes are held by a brokerage, in most cases the money will be sent to the account. Other investors may receive checks in the mail from Wells Fargo Bank, which is handling the distribution.

A third payout could happen later this year. Lyons has said investors may ultimately collect about 33 cents on the dollar.

She urged investors to keep their addresses and status of note ownership current.

The money was collected through court settlements with accounting firms, the sale of real estate and other assets, and the release of reserves.

Metropolitan's failure hit about 16,000 investors. They held about $470 million in unsecured corporate bonds and about $131 million in preferred stock.

After years of struggles and questionable business dealings, federal investigations and an accounting scandal doomed the firm. One executive was convicted of felonies, and several others, including Chairman and Chief Executive C. Paul Sandifur Jr., settled accusations of fraud brought by the U.S. Securities and Exchange Commission.