20583. First National Bank (Chattanooga, TN)

View Charter #1606 on SPMC

Bank Information

Episode Type
Suspension → Closure
Bank Type
national
Bank ID
1606
Charter Number
1606
Start Date
May 17, 1933
Location
Chattanooga, Tennessee (35.046, -85.310)

Metadata

Model
gpt-5-mini
Short Digest
047b4ca1

Response Measures

None

Receivership Details

Depositor recovery rate
98.4%
Date receivership started
1934-01-03
Share of assets assessed as good
28.8%
Share of assets assessed as doubtful
68.4%
Share of assets assessed as worthless
2.8%

Description

Articles (May–Oct 1933 and into 1934) describe the First National Bank of Chattanooga as having its mortgage participation certificate pool placed in receivership, litigation over substituted collateral, receivers selling foreclosed property and paying liquidating dividends. There is repeated reference to the bank as defunct and to receiver actions and comptroller orders; no article describes depositor runs or a run prior to suspension. Thus this is a suspension/closure with receivership (permanent closure).

Events (7)
1. November 8, 1865 Chartered
Source
historical_nic
2. May 17, 1933 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Allegations of substitution of less valuable collateral, draining of cash by certificate redemptions and insolvency of the bank led to receivership for the mortgage participation certificate pool and related closure/receivership actions.
Newspaper Excerpt
The suit of Shinbaum against the First National bank, asking the appointment of receivers to the real estate participating certificates ...
Source
newspapers
3. June 15, 1933 Receivership
Newspaper Excerpt
RECEIVERS MAP FIRST NATIONAL MORTGAGE SALE ... plan to offer First National bank mortgage participation certificate holders property which the receivers have purchased ... hearing on the matter scheduled for June 24. receivers ... purchased foreclosure sales ... the receivers have recommended ... the receivers will sell foreclosed property ... and accept participation certificates in payment the purchase price ...
Source
newspapers
4. September 10, 1933 Other
Newspaper Excerpt
RECEIVER OF BANK POOL MOVES OFFICE ... H. Lawman receiver for the pool moved his office ... transfer of the office ... ordered by Garvin, being operations the mortgage pool from bank.
Source
newspapers
5. January 3, 1934 Receivership
Source
historical_nic
6. April 25, 1934 Other
Newspaper Excerpt
Unable to decide who are the stockholders defunct National ... Comptroller O'Conner ordered Receiver Kent to levy the assessment directing 100 per cent assessment against holders of the bank's capital stock. defunct National and receiver actions referenced.
Source
newspapers
7. July 5, 1934 Other
Newspaper Excerpt
Pays Out $1,000,000 ... 10 per cent liquidating dividend to holders of First National Bank participating certificates ... receiver E. H. Lawman announced ... second payment in September ...
Source
newspapers

Newspaper Articles (13)
1. May 17, 1933 The Chattanooga News Chattanooga, TN
Article from The Chattanooga News, May 17, 1933

Click image to open full size in new tab

Article Text

SHINBAUM SUIT MISLEADS, SAYS BANK ATTORNEY Frierson Asserts Bankers Will Deny Substitution of Collateral Behind Certificates. The suit of Shinbaum against the First National bank, asking the appointment of receivers to the real estate participating certificates, is "misleading and vigorously denied.' William of the law firm of Williams the bank's said "The bank is prepared to disprove all the charges misconduct in the management the participation certificates." Mr. pared The hind certificates everything else, suffered the depression: but the officers the bank are confident with return of thing like normal real estate ket. they can in time by judicious and be liquidated that certificate holders will lose little nothing They feel sure that there is no for the low estimate placed on them in Mr. Shinbaum's Charges Substitution Through Attorneys Charles Moore Alper Mr. Shinbaum filed in Tuesday noon alleging that the stituted for valuable posted to secure row the Reconstruction Finance The suit also alleged that such acts the bank "breach trust" and examples the rectors First bank the Chattanooga outgrowth the liable to depositors and the National started selling the set forth in the them blocks and kept funds segregated, but later this plan pooled money. Cash Certificates. The bank the petition declares, cash them par, plus When the started. holders tificates began to cash their certifi cates and this drained the cash assets forced to borrow money For this

2. May 17, 1933 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, May 17, 1933

Click image to open full size in new tab

Article Text

BANK OFFICIALS SHIFTED ASSETS, SAYS PETITIONER FIRST NATIONAL TARGET Shinbaum's Suit Seeks New Receivers for Organization. COLLATERAL SWITCHED, CHANCERY BILL STATES Substitution of Less Valuable Collateral for Securities of Participating Certificates Among Numerous Charges. Charges that officials of the First National bank took down valuable collateral posted secure participating certificates desirable and unmarketable securities for the purpose of money from the Reconstruction Finance corporation were contained in petition filed yesterday in chancery the petitioner who leges that he holds $5,000 participating certificate, made the charge through Attorneys Charles Moore and Alper. He requests that the order appointing the First National bank receiver for the participating certificates and as receiver set aside and new receivers be appointed. They are interested parties, he alleges. Such acts substitution. the petition charges, amount "breach trust" the part the banking and willful within the meaning of the statutes of Tennessee. making the directors the cor(First National bank and First Securities company) liable creditors. petition charges "that the right of substitution claimed and exercised by the bank under color of which dealt with mortgages its and only treated and the of hand as constituting of the trust the amount of the certificates outstanding, not legal not with the idea of pledge and hypothecation of such mortgages security wrong upon the rights of your petitionand other holders of trust certificates." Arguments will be heard next Tuesday morning o'clock by Chancellor B. Garvin. An original bill was filed some time ago by the law firms Thomas, Coffey Folts and Sizer, Chambliss Sizer. The petition recites that when the First National started selling certifito investors in mortgage trust pool them in blocks and kept the funds abanplan and pooled the money into one 1930 total of had been pooled and collateral was placed in the participating certificate property the holders of the certifiThe contract behind the certificates, the petition alleges, the may them any cent When plus per par, started holders of the certificates began to cash their tificates drained cash of the bank that forced assets borrow money. Accordingly the petithe bank took the tion posted the certificates put them up with the ration. The bank, short time prior taken the Chattanooga National bank, did heavy borrowing through this system. charged. Less desirable and unmarketable were for securities such extent that good value the has been by value of the accordthe allegations. There outstanding the certificates, further that the bank had right Admitting its ties, the petition charges that did not however, to substitute have the right, with less valuable assets. this act the board of directors By officers the First National bank and liable the face value the certificates. the petition claims. National bank was insolvent The First prior the date insolvent. tion the further charged bank Chattanooga National that the the assets took National bank except the First certificates. courts jurisdiction The the First National since under the has gone of the and the according can appoint further insisted petition. held that the federal that First National bank the liable First for acts transactions Securities since the subsidiary the bank. concern the the liable for the paybank primarily ment of who Attorney number of certificate trustee for was named co-defendant holders, the He was trustee to file the original litigation the bank he would make Asked night the the any comment on would make no statetorney said he text of the bill follows: full come and file this their petition in the above styled bill. cause nature of an original holdbehalf themselves trust certificates and National Chattathe First and respectfully unto the court: Your petitioners are the owners and holders due issued debt. trust National bank, Chattanoothe First Tenn., which certificates recite and to evidence the fact that your purport the petitioners own an amount their of trust held by the First of such certificates Tenn The petitioners are held your follows: II. would now show Your that the First National bank, of Chatand for many years tanooga, Tenn., chartered and been corporation Column One. See Page Seven,

3. June 15, 1933 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, June 15, 1933

Click image to open full size in new tab

Article Text

RECEIVERS MAP FIRST NATIONAL MORTGAGE SALE Proposal to Be Given Hearing by Garvin June 24. CERTIFICATES PROPOSED AS MEDIUM OF EXCHANGE Frierson Says Plan to Sell Property to Ones Holding Paper at Price Slightly Over Mortgage Value. plan to offer First National bank mortgage participation certificate holdproperty which the receivers have purchased foreclosure sales change participation certificates by the receivers Chancellor W. B. Garvin and hearing on the matter scheduled for June The was made through Attorney Frierson, represents Lawman and the First National bank. receivers the participation certificate mortpool. the plan of the receivers. Attorney Frierson pointed the foreclosed property to certificate holdprices higher than the face value mortgages issued. Also, said, will be necessary for the pay either in cash secured notes the expenses which been out the receivers foreclosing on the property, delinquent taxes and other necessary items. He said further the receivers believe they can realize bargain price considerably in excess of the mortgage using certificates the medium exchange Through this method the receivers will be able to many the certificates for foreclosed property and leave ratio tween the pool and the certificates in favor certificates Attorney Frierson's statement folreport has been filed but not intended ask for unall parties have had fully consider the Hence brought to the attention the chancellor the call the motion docket hoped that will then pared disapproval make any suggestions improve the plan receivers and their counsel have realized that the most impediment the speedy the fact that on account depression. many closures unavoidable and further because the lack the will compelled to buy in the closed property. this large amount of real estate acquired and probthe the original and the property Under this quire an indefinite time which volve expense in way surance caring for the property which exceed income that and their counsel have felt that imperative possome to create demand foreclosed reasonable prices. after careful the receivers have recommended court plan they promote interest holders. that the receivers sell better prices than can sold for cash and they accept participation certificates in payment the purchase price except that. cases, the purchaser shall quired cash whatever out for expenses foreclosure, delinquent taxes, certain that the property can be sold better prices for than cash and The receivers will sell prices excess the original mortgages they prices ably excess the mortgages result quicker sales better prices properties not now salable and the repayment the pense foreclosing and property At the same time, those are compelled their during period of liquidation be demand certificates with that better prices would seem that the only possible objection that certificates used purchase property would, way, full while less mately paid others. this objection than real. using his will nominally getting in full be more for property than can otherwise sold for and will be relinquishing all interest the mortgages which do not have be foreclosed and which finally paid in full full depend what the realize the property bought He, rather takes the risk the property being ultimately worth the amount of the original the amount of the certificates he turns only the amount the original ing holders changed their interest which, foreclosure has failed pay the mortgage which any other way, made to pay that much, and the carrying which may be expensive for the inter- See Page Column

4. June 27, 1933 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, June 27, 1933

Click image to open full size in new tab

Article Text

SUED; BANK'S RECEIVERS WITHHELD DECLARATION with the Another in connection LUBRICATION SERVICE bank's receivership National certificate mortgage the participation yesterfiled chancery withheld by day, although Lynch. by John Lee, The suit brought individually Mrs. John and ElizaMarket trustees for Robert Mrs. Augusta beth Mrs. Lillian Ray Stanfiel, for 24-HOUR Jean Mrs. Pat Wrecker Service Pat Howell, Mary E. Hamilton county. Phone 6-2126 of Letitia A. Ord Fassnacht Mrs. Emily & Son Howell Washington, Complete Automobile Service First First National bank, against S. CofCharles Securities corporation, Corner 13th and Fort Sts. Column Three. See Page Twelve,

5. August 27, 1933 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, August 27, 1933

Click image to open full size in new tab

Article Text

POOL FIRM IS PROPOSED Certificate Holders' Group Asks Garvin's Consent to Form Company. SAYS PLAN WOULD SAVE ON COSTS OF OPERATIONS Proposal Presented by Beck and Butterfield Would Let Those Who Wished Put Holdings in New Body for Liquidation. Organization of corporation wind up the affairs of the First National bank's $10,000,000 mortgage participation certificate pool recommended yesterday to Chancellor W. Garvin by committee of certificate holders headed by Dyer Butterfield and W. Sherman Beck, Chattanooga busimen. The corporation, however, could not be formed without the consent the chancellor, as the participation certificate pool in the hands ceivers under the jurisdiction of the Only such certificate holders would desire enroll in the corporation woud have to do the chancellor grant the request of the committee. of the sets belonging such holders would from the and set up assets the books of the corporation. The chancellor approved sale by the yesterday of piece of Signal Mountain property Read Voight Beck said the Voight sale 50 per mortthe plus the mortgage being the price Mr Voight First National certificates. Serving with Mr. Beck and Mr Butterfield Withers Howell. Walter Johnson, W. Schwartz Thompson Beck chairman Mr Butterfield Garvin took the under advisement of the report follows mission the those tificate who permitted under supervision the court withdraw their part the assets the pool and form corporation their own to minister their the formation of owned by tificate holders, we believe that such corporation able rive income and assets more economical basis than can done by receiver working under court orders. After careful survey income expenses which the present the would able to function saving with the income missions and commissions from rents collected. Under proposed plan corporation would given broad powers operation. able to the duties now perform and in trade for certificates, sell mortgage notes, to for loans and the home bank for their bonds, opinion board directors it is considered advisable to do "Each holder who subone share stock no par value for for lesser amounts. The initial expense forming corporation and the first working capital should be met loan secured income from the participation mortgage pool. cates themselves be under depository board directors be elected whose voting power based on the number shares owned the this corporation hinges upon the court's the withdrawals from the recommend the under made the survey that there be equiactive mortgage notes, mortgage notes property, etc. the participation certificate holders authorize the appointment of committee carry proposed under the supervision of the court "Inasmuch will take some time complete deposits and form the new corporation. the beneall "That court requested to grant the petition foreclosed for on the The purchaser pay in cash the cost the of the including any taxes which were due and the time the foreclosure and the cost, possession putting the property in repair, but the receiver should accept, at par, cer- See Page Nine, Column Four.

6. September 7, 1933 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, September 7, 1933

Click image to open full size in new tab

Article Text

HOLDERS FAVOR NEW POOL PLAN BY HEAVY VOTE From Page Five. the brain trust of Chattanooga. made good that had splendid to work with.' The committee's plan aroused instant objection some holders, while others defended. Chairman Guerry opened the meeting to any speak. made various certificate holdthe debating constant call for "question," Chairman Guerry refused open the voting unhe given all speakchance to sentiments Judge who opened when questioned to operation receivership. who said represents certifiholders, said he wanted to know "some facts before for client.' Particularly, did Swaney inquire money First National lecting the mortgages; he asked what costing operate the receivership. that the $10,000,000 thrown into receivership, many questions. withare voting observed. Dyer Judge Swaney with the statement that thought the bank about breaking on renewal collections and the expenses ership the has long to the pool that it administering. point

7. September 10, 1933 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, September 10, 1933

Click image to open full size in new tab

Article Text

STUDIES CASE BANK AFTER HEARING to Oust Receivers to Be Decided at Early Date. DON'T LIKE LAWMAN'S RENT SYSTEM Charges Official Using Moore Receiver's Office to Aid Bank for Removal. motion to remove the First bank E. Lawman, vice-president, receivers of bank's mortgage parcertificate taken ticipation advisement Chanwith promise of matter. think about motion to the receivers Sunday decide soon ChanGarvin asserted. The chancellor continue hearings litigation Wednesday o'clock. morning final decision until that time, promised make final ruling as possible. indicated that ready During the arguments chancellor he approve Co-Receiver Lawman negotiating with the First Securities company, subsidiary corporathe First National and which collect property holds mortgages without first getting permisfrom the court. motion remove both the bank its officer receivers of the mortgage pool vigorously pressed by Attorney Charles Moore. William Frierson. former the United States, who is representing the bank and Lawman, resisted Moore's petition. Coffey Attorney Moore. Attorneys Sizer and Charles Coffey joined Attorney Moore remove ousted from any place in with management affairs mortgage pool. But agree Mr. Moore reference the proposal Lawman. should remain the Attorand pleaded. did not middle the acts of Lawman since have receivrender unfit further service with pool. Frierson. pleaded with the the holders corporation to administer their of the assets of the pool outThe bank interested. pleaded. seeing that every dollar acquired holders, deficiency pay the face the participation certificates fixed against bank see such liability as small pos- Charges Lawman Breach Duty. Several actions which Mr Moore charged to duty the of the bank and since receivership Lawman into contract the First Securities comto collect certain property which mortits in collecting Attorney declared. himself secretary of the First Securities cent. for collection of month10 per cent. on weekly colThe First Securities company. Mr. mortgages in pool upon which the in said. rents wants and turning that might receiver Instead keeping the commissions and income this defaultproperty the First Securities Lawman allowing to make for and the settle its he charged. When Gen. Frierson answered the argument Attorney Moore this chancellor First not required for the the pool have the money which to settle. Moore Says Holders Not Consulted. Attorney Moore charged that the bank brought the petition receivercourt without the "did not of the The he has collected into written for put the own The system the bank. the attorney explained. that bank adding commission installment mortgages monthly general itself price and distributed not collecting one cent. according their Attorney Moore "They the First National what the bank taking his office using receiver the His the allegience due the bank because feeding It's which Mr himself human loyal Every act the answer the Mr sign When he testified that bank's attorney, Mr before he did He why that that on the answer since the attorney for the First National "That was done merely to 'hoodwink' the conceal that Mr. Frierson and still him. man the court and controlled all times bank charge fit dis- the this Taylor Durthe First tional Strong Strong) orders gages 1932, from take good mort- June, and these mortgages which had on foreclosed property owned in stallment the about the bank, Frierson said the not take its face notes until the said, principal This, does prejudice the interest certificate Concerning coupons, the bank bank in debts which individuals happened be debtors pool. About the criticism that could made this connection, sisted, might too keen making the coupons instead to pay on mortgage, torney want Garvin interrupted to inquire from Frierthought the bank some person the proper decide mortgagor this the that could be made on the bank's policy. Sizer Says Bank Should Ask to Get Out. Sizer opened his remarks with the time should First bank now to be removed Mr. however, should contended. criticized the bank for substituting mortgages Finance collateral for money edge" Durham, directed no justification this of Sizer said ought not that pool until the liability fixed Coffey recommended court place on able salary and notify the certificate holders the No said, should allowed except those which are Judge Lynch proposed three receivers the Sam whom holders Hoskins, would appoint and which president First would should not receiver said was settled that the and would not appointed, as would be misFrank Spurlock he represented those pect hold liable for any delinquency "evidently they expect some these magnificent speeches made closed by Attorney he sented the First represailed charging bad faith Mr. said that former be with that He pleaded for allow remain its present that the advantage the certificate holders.

8. September 20, 1933 The Chattanooga News Chattanooga, TN
Article from The Chattanooga News, September 20, 1933

Click image to open full size in new tab

Article Text

REAL ESTATE TITLE VESTED IN LAWMAN Mortgage Pool Matters Discussed With Garvin. Title to real estate now in the First National bank receiver for the mortgage pool and H. receivers was ordered in Mr. receiver deLawman cree filed Wednesday morning. order the the First against Coffey was following Chancellor Garvin's ference in receiver and attorwhich the in the case participated. General matters in connection the operation the mortgage The said were discussed. that Receiver list for his he consider up. other brought this and that defiled within the next few exchange cerLoan bank bonds tificates for under certain conditions. plan been suggested to will the basis upon which this can be done.

9. October 3, 1933 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, October 3, 1933

Click image to open full size in new tab

Article Text

RECEIVER OF BANK POOL MOVES OFFICE JAMES The receiver of the First National mortgage tion certificate moved his office Volunteer building the ground floor of the James buildtransfer of the office dered by Garvin, being operations the mortgage pool from bank. H. Lawman receiver for the pool.

10. April 25, 1934 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, April 25, 1934

Click image to open full size in new tab

Article Text

RECEIVER ASKS LAWYERS' HELP ON ASSESSMENT Kent Unable to Decide Who Are of Defunct Bank. CASE MAY END IN COURTS Coffey Looks to Comptroller to Decide to Which Bank Each Creditor Belongs. Unable to decide who are the stockholders defunct National Paul Kent terday that he is seeking gal advice to the he should take carry the order of the comptroller directing 100 per cent. assessment against the holders of the bank's capital stock. The law firms Whitaker Whitaker and Sizer, Chambliss Kefauver were requested Receiver Kent to advise him what steps he should take to make the assessment. The attorneys called into the conference Receive. Kent Sizer, Estes Kefauver and Maj. Phil Whitaker. Both Mr Sizer and Maj. Whitaker have been studying First NaNational for some time, both having appeared attorneys in Shinbaum case, which holders of mortgage participation tificates sought to recover for any loss they might sustain from the officers and directors of the bank. In this case Mr. Sizer certificate holdMr. Whitaker represented Taylor Durham, who was First National, Chattanooga National and the First Securities company. Comptroller O'Conner ordered Receiver Kent to levy the assessment before May 28. The order directs Receiver Kent to "take all necessary proceedings, suit otherwise, enforce the extent the individual liability of the said stockholders.' The holder of the stock of record the First Securities company, adjunct of the First National bank. This company, according to court pleadings, insolvent and unable to meet its obligations. assessment against therefore, could be of little avail to the depositors and other creditors of the Chattanooga bank. The the First the identical with of First bank, being considby receiver and his attorneys possible source for recovery of the assessment. likely that tlement the question be reached in the which has arisresult the National bank First National bank the question who the depositors creditors National creditors of the Chattanooga National Receiver Charles Coffey, of the First said yesterday first steps towards settling this question would have to taken by the comptroller the Until this settled no distrirency. bution the assessment First stockholders can The against the National bank stockholders levied of May There 500 individuals hold First National stock. Under from has no choice push the There yesterday assessment be the many result of rigid enforcement the order were being preyesterday Many held savings from against the First When National bank closed its doors had deposits aggredeposits cent. has Kent said yesterday little another from the assets the bank unless the receiver able realize against holders the bank's capital stock. That cannot than the find place make an but the First

11. July 5, 1934 The Chattanooga News Chattanooga, TN
Article from The Chattanooga News, July 5, 1934

Click image to open full size in new tab

Article Text

Pays Out $1,000,000 Second Payment Will Be Made in September-June Receipts Listed. Nearly 1,000,000 will be distributed here within the next few days Ap. proximately 1,700 persons will share in the disbursement of this sum which will represent 10 per cent liquidating dividend to holders of First National Bank participating certificates E. H. Lawman receiver for the First National mortgage pool, an nounced Monday morning that the dividend will amount to 10 per cent Every effort the receiver said will be made to get checks representing the dividend into the hands of the certificate holders before July 10 This enable those who plan to deposit their dividends on savings AC count to get interest for the period beginning July 1, he explained Cash in the receiver's hands and the proceeds from the sale of Home Owners' Loan Corporation bonds re celved in the refinancing of num ber of mortgages in the pool by the federal agency will be used to pay the dividend The bonds will be sold and this added to the amount of cash available for the dividend. Under the plan checks for their share of the dividend will be placed in the mails addressed to all certifi cate holders at the same time. Cer tificates total more than $9,000,000 and hence the per cent liquidating dividend will mean the distribution of nearly 000,000 Report for June Filed. The receiver filed his report for in Court Thursday morning The report showed that the receiver has in cash on hand and bank $200,632 45 The report does show the amount of the HOLC bonds in the hands of the During June total receipts while total disbursements were Service charges again in June almost offset operating ex penses of the pool. Service charges were while operating ex penses were $3,025.45 In addition to the listed cash on hand and in bank the receiver has on hand 98 representing rents on mortagors' property which will be credited to interest. etc., during suo sequent periods. the report to Chan cellor Lon Foust sets out Second Dividend Coming In addition to the 10 per cent divi dend, the receiver is planning sub sequent dividend probably in Sep tember when the refinancing of eligible mortgages in the pool by the Home Owners' Loan Corporation 18 completed.

12. September 12, 1934 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, September 12, 1934

Click image to open full size in new tab

Article Text

SURE AS POOL MOVES Foster Brown Says Frierson Not Entitled to Payment of $10,000. CALLS HIM BANK'S MAN Claims All Court Items in Case Originated in Lawman's Offices. Holders of First National bank mortgage participation certificates are dignant" over recent filed in chancery court against the certificate holders three firms here for an "advance" installment of $20,000 intend sist these claims, Foster Brown, attorney, who represents some the certificate said yesterday. William attorney for the First bank when this litigation was filed, Lon Foust allow his firm, Frierson, $10,000 as advance on his fees the case. Sizer and Charles the firms Sizer, Chambliss Thomas, Thomas Coffey, respectively, petitioned for similar amount vance" fees. The matter brought to the attention Chancellor Foust in chambers last week and no petitions were filed in the causes until publicity given to the applications. Mr. Brown, who been actively interested in pool litigasince Mr. Frierson not entitled to fee at all from the done the interest First National to Mr. Brown, being by bank the time he filed the original bill chancery court and at hear"opposed the icate Mr. Sizer all, the claim which has been filed his behalf. Brown said don't think Mr. Frierson ent!tled fee He filed the bill the First and at was being salary by the The filed enjoin against the bank and transfer the trusteeship of the certificate pool from the bank the court. the primarily interest itself never after the suit effort made Charles Noone others take the ship court in the hands They thought the trust could cheaper than by the Chancellor cheaper than could. recall that one hearings one day Garvin this say about the expenses the one where the goose Garvin's court when hearings were held. An effort to remove the National bank receiver and Mr. Frierson the bank being moved he opposed the don't what ground has for claim fees the holders' Mr. Sizer and others, have Chancellor Garvin removed the First National bank made H. Lawman He appointed B. Milligan as the ceiver's There not been filed court since item cerning certificates did originate Mr. Lawman's which has been made, other words, arose in Mr. Lawman's office Mr. Milligan has ably sented has worked helping trust Sizer titled to anything at all, is small fee certificate holders in Chattanooga are indignant these claims fees and intend resist creditable to that these claims have been Mr Frierson issued Monday attitude the contended the being by him reasonable in work responsibility which thrown the result was said, order holders He that filed saved certificate holders individually from having bear court and in establishing claims their own the mortBrown said the first information that intended asking paying of their fees when he read paper. attorney the receiver, resist the the week place the petition to the clerk and master for reference.

13. October 18, 1934 Chattanooga Daily Times Chattanooga, TN
Article from Chattanooga Daily Times, October 18, 1934

Click image to open full size in new tab

Article Text

POOL PREPARES TO RESIST PLEA FOR FIRST FEES Officers of First National Expected to Help Fight Against Lawyers. CLAIM PAYMENT ISSUED Answer Says Frierson Got His $10,000 for Defending Bank, Not Receiver. Several officers of the First National bank by the receivership the bank's mortgage certificate pool sist in resisting the application of three firms of are asking $20,000 from the pool an "advance" on fees, was yesterday Attorney B. Milligan, representing the certificate pool, filed an answer the petitions the three firms of attorneys in chancery court yesterday, but the answer was immediately withdrawn. Later Mr. Milligan, upon request, issued statement which he outlined details the defense which plans offer in resisting the application of the lawyers. Frierson Asks Advance. The three firms filing claims include Sizer, Chambliss Kefauver, Thomas, Coffey & Folts. In behalf of the firm of Williams & Frierson, William Frierson is asking an "advance" of for fees. Charles S. Coffey and J. B. Sizer filed petition for $10,000 to be divided between their two firms. Neither firm has stated how much it eventually expects to Taylor Durham, vice-president of the First National bank; Hoskins and other stockholders and officers who were present when the board voted to place the mortgage pool into receivership will testify that Mr. Frierson was hired the attorney of the bank and that the bank arranged for payment of all expenses incident to the receivership, learned. In his statement, Mr. Milligan states that the bank wrote certificate holders establishing of the receivership the pool that bear all expenses protect the certificate holders all expense for attorneys' and resolution has been placed upon the minutes First National bank which shows that board of directors Mr. fee of $10,for his in connection with the Frierson however, that the fee was paid him defend the bank and not pool, was revealed yesterday. Of the $10,000 fee, the attorney collected $8,000, according to Mr. Milligan. Two Officers to Help. Both Mr. Durham and Mr. Hoskins be by the to supthe bank Mr. Frierson of $10,000 to represent the Concerning the application by the other two Mr Milligan they should call upon their clients and not the pool for fees. Should the these attorneys are entitled to the request made by the that their services be with hereafter, they are not needed Signing the were Receiver E. Lawman and all members but one the participation certificate advisory committee authorized by chancery court. the to sign view of the that sonR. H. Williams, of Mr. firm. Mr. Milligan's statement follows: the controversy attorneys' for in the suit to First National bank answers were filed yesterday H. Lawman, receiver, and Thompson, Beck, H. Goodman, Jr., and Key. defense of the claim of Williams & Frierson, the answer alleges that all the were rendered for the bank and not for the certificate holders; the matter was brought into court the bank mailed letter to all certificate holders assuring them that the litigation was in the certificate holders of the bank. it was that the would protect the certificate from all expense for attorneys fees and otherwise. answer alleges that the bank lived up to its promise in faith, shown by resolution the board in which fee of $10,000 appropriated for the payment of the for this and that $8,000 of said fee has paid. "That said payment intended to and was, in full for all services the "The answer alleges that the greater of services were, fact, performed for the bank in defending against various petitions charging of the bank handling the certificates before the was begun. The answer alleges that said against the bank were all filed in the receivership though they were segregated after the payment the fees. "The answer further sets forth that