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# Park Savings
# Compromise
# Orders Signed
Court Action Provides
For Distribution
Of $500,000
Printed copies of the orders nisi signed by Justice Jennings Bailey in the half-million-dollar compromise Park Savings Bank case will be mailed out as soon as possible to all creditors, depositors, stockholders and assignees of any assigned claims.
This was indicated today as Receiver John F. Moran of the bank pushed forward plans for printing and distributing the complicated official papers.
Under the orders signed yesterday by Justice Bailey he fixed the date of 10 a.m. July 25 when the compromise agreement will become fully effective "unless cause to the contrary be shown to the court."
The compromise provides for distribution of $500,000 to be paid by directors in settlement of three court actions against them. More of the money will go to a preferred group of depositors than to the remainder, under court decision in the so-called Thompson case, in which it was decided that the bank charter had expired in August 30, 1929, and the directors became liable as liquidating trustees.
Out of the $500,000 settlement, $350,000 will be distributed to depositors who had funds in the bank when the charter expired and $150,000 will be distributed pro rata to all creditors. The $150,000 is in satisfaction of two suits still pending, one for $2,000,000 for alleged "negligence" on the part of the directors and the other for $50,000 to recover dividends alleged to have been erroneously paid.
# Protests Doubted.
Out of the $350.000 will come necessary costs of litigation and distribution of the dividend.
Receiver Moran estimated today he could have copies of the orders and the petition to the court distributed by July 15.
Unless protests, which now do not appear probable, arise, the court on July 25 will put an end to one of the most complicated and long drawn out legal battles in the history of failed banks.
The Park Savings Bank went on a restricted basis March 1, 1933, restricting withdrawals to 5 per cent. The bank closed March 6. The Thompson case was filed in court July 13, 1933, starting a long series of court actions reaching the Supreme Court of the United States, which refused to review the lower court's action.
A special master appointed by the court, James C. Wilkes, held hearings for some time attempting to work out the details of claims due depositors under the court decision. These hearings were adjourned when the directors came forward with negotiations to compromise. Finally the directors offered $500,000, the compromise plan was authorized yesterday morning by the Controller of the Currency to be submitted to court, and it went before Justice Bailey early yesterday afternoon. Justice Bailey made a few changes in the suggested orders and signed three of them, one in each of the three court actions against the directors. The compromise would provide "full and final release and discharge of directors from all liability."
Financial Status.
The financial status of the Park Bank, briefly is as follows:
Deposit liability at closing, $3,300,000.
Dividends of 24 per cent paid, amounting to about $800,000.
Securities now in hands of receiver, about $100.000.
Cash in hand, about $300.000.
Prospective cash from directors, $500.000.
There are about 7.500 unproven claims amounting to about $110.000.
Several of the directors have died since the closing of the bank and their estates participated in the offer, it was pointed out.
Details of the directors' offer, however, were not disclosed, to show how much of the $500,000 each of the directors or their estates had agreed to pay.
"This offer also is made solely by way of compromise," said the directors' offer, "and does not admit any liability whatsoever in connection with the claims, demands and suits affecting the directors or any of them of the Park Savings Bank, and if said offer should not be accepted or fail to be approved by the court, the proposal shall be considered withdrawn and all parties free to interpose all proper defenses to said claims, demands and suits."
