The filing at the last minute before First Sound Bank, Seattle, Washington (Nasdaq: FSWA.OB) took their case to trial in June, both Louis and Richard Secord filed bankruptcy. Larasco dba Puget Sound Leasing that lead the matter to a suit of not disclosing alleged delinquencies, Evergreen clauses, or the method of accounting for past due accounts or agreements to other banks of a "zero loss" unwritten policy, had already filed bankruptcy.
It appears this is not a ploy, by the financial records filed by both the Secords, and as important, First Sound Bank is now fighting a settlement agreement with Wells Fargo Equipment Finance, Washington Mutual, and others appear named as it appears the original arrangement called for a settlement in winning their case against Larasco and the Secords, lows and highs, and written as if First Sound Bank was going to win the case. The case was "stayed" pending the bankruptcy, which if granted, wipes out any claims by First Sound Bank.
These numbers come from the court records, reproduced at the end of this article. They show that Louis Secord reports income of $5,276 per month plus $3,029 in monthly Social security Payments for he and his two sons, Stone and Grey.
He also noted the disclosure of property as noted in a court filing:
From: Larasco (now in Bankruptcy)
The delay in the case appears to have protected assets and income, but the bottom line is the list of creditors at $24.97 million ($13 million list as possible in First Sound Bank suit) and $2.4 million in personal assets, exempt from bankruptcy, primarily his house and personal assets, not business assets.)
His brother indicates a monthly income of $6,035, but $12 million owed to creditors with $1.8 million exempt.
The bank now holding the bag of the legal costs of the suit, as wells a potential settlements owed to other banks, are probably the reason additional capital nor a suitor has been found by the FDIC. Perhaps the banking authorities are waiting for things to be further settled before stepping in, although each Friday it is surprising First sound Bank has not made the list of banks closed in the State of Washington. It appears this stay may last a good year or longer. It does not appear that First Sound Bank can last that long under the present circumstances.
REPLY, filed by Intervenor Plaintiff Washington Federal Savings, TO RESPONSE to 447 MOTION to Enforce Settlement Agreement Against First Sound Bank (Dial, Neil) (Entered: 06/25/2010)
DECLARATION of Steven Shaughnessy filed by Plaintiff First Sound Bank re 447 MOTION to Enforce Settlement Agreement Against First Sound Bank (Wilkinson, C.) (Entered: 06/21/2010)
Louis Secord List of Creditors (large file)
Louis Secord Amended List of sale of assets/income
Louis Secord Social Security/Income----
Richard Secord Creditors---(large file)
Richard Secord Monthly Income
Disclosure: no position