6280. Franklin Trust Company (South Bend, IN)

Bank Information

Episode Type
Suspension → Closure
Bank Type
trust company
Start Date
March 1, 1929*
Location
South Bend, Indiana (41.683, -86.250)

Metadata

Model
gpt-5-mini
Short Digest
866d621c

Response Measures

None

Description

The Franklin Trust Company in South Bend was closed by the state banking department (article says closed two years ago as of Mar 1931) and placed in receivership; later articles discuss receivers (Elmer Peak, then Miss Ethel Weaver), liquidation, suits and alleged fraud by former officials. There is no description of a depositor run in the articles provided. Hence this is a suspension with permanent closure and receivership.

Events (7)
1. March 1, 1929* Suspension
Cause
Government Action
Cause Details
Closed by the state banking department (regulatory order) approximately two years prior to Mar 1931
Newspaper Excerpt
been named receiver for the Franklin Trust company closed two years ago by the state banking
Source
newspapers
2. March 11, 1931 Receivership
Newspaper Excerpt
SECOND WOMAN TO NAMED BANK RECEIVER South Bend, Ind., Mar. been named receiver for the Franklin Trust company ... She succeeded Elmer Peak ... Miss ... became receiver for the bank when Judge Peak ... was disqualified ... when he was elected judge of court. Miss ... secretary to Peak during receiver for the defunct bank.
Source
newspapers
3. September 22, 1931 Other
Newspaper Excerpt
When the Franklin Trust company nearly years ago on orders of the state banking department the county had approximately $50,000 on deposit but the receiver recently paid dividend of $6,000 ... the receiver of the Franklin Trust company has considerable cash on hand but refuses to make any pending ruling on the question before the supreme court.
Source
newspapers
4. December 21, 1931 Other
Newspaper Excerpt
Elmer Peak ... answered ... charge that fees receiver defunct Franklin Trust together with the fees drained the bank ... Judge Peak alleges many notes given former officials without the approval of the entire membership the board of directors.
Source
newspapers
5. December 27, 1931 Other
Newspaper Excerpt
BANK RECEIVER ANSWERS SUIT Charges Former South Bend Officials With Fraud. ... The suit was filed against Miss Weaver former officials and stockholders of the bank. It alleged that fees ... had drained onehalf the bank's assets.
Source
newspapers
6. April 1, 1932 Other
Newspaper Excerpt
Receivers for the Franklin Trust company of South Bend ... signified some time ago that they are ready to make distributions of considerable amounts when the supreme court rules, Miss Ethel Weaver, receiver for the Franklin bank, stated that blanket distribution of 10 per cent could be made once the supreme court rules that public funds do not hold priority over individual depositors.
Source
newspapers
7. June 26, 1932 Other
Newspaper Excerpt
Public Funds Held Up; Also Prevents Distribution of $20,000 in County. ... 'Calls Delay' Attorney Orie Parker, who represents Miss Ethel receiver for the Franklin Trust company, declared: 'pathetic' the way the court delays action ... The Franklin company has about $8,000 for the question the priority claims on public funds blocks the payment the money to depositors.'
Source
newspapers

Newspaper Articles (7)
1. March 11, 1931 Vidette-Messenger of Porter County Valparaiso, IN
Article from Vidette-Messenger of Porter County, March 11, 1931

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Article Text

SECOND WOMAN TO NAMED BANK RECEIVER South Bend, Ind., Mar. been named receiver for the Franklin Trust company closed two years ago by the state banking She the second woman in Indiana to receive distinction. such She succeeded Elmer Peak was disqualified for the place when he was elected judge of court Miss secretary to Peak during receiver for incumbency the defunct bank. The other only ever to appointed bank receiver was at one according to ther Symons, state banking commissioner in

2. September 22, 1931 The South Bend Tribune South Bend, IN
Article from The South Bend Tribune, September 22, 1931

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Article Text

COUNTY TO SUE THREE BANKS FOR $262,000 Martin Reveals Plan After Board of Finance Asks Legal Steps. DELAY ACTION IN TWO CASES American Trust, Toth State and Franklin Institutions to be Targets. County Attorney Alfred E. Martin announced to-day that suits will filed in the county courts immediately to collect $262,000 in public funds tied up in the closing of three South Bend banks. The announcement of the county attorney followed special meeting of the county board of finance late Monday at which resolution was adopted calling for force the funds, part of which have tied up for two years. The county has total of about in public tied up in five closed banks of the county but the suits for recovery will be filed against only The fourth bank has started payment of the county deposits and the board finance is awaiting word from the auditor before beginning tion against the fifth institution the fact that $60,000 in state funds is on deposit in bank Priority in Doubt. The court action to recover the county's deposits is liable to fraught with legal entanglements, however. because of matter before the state supreme court regards to claims in the stances bank The matwas carried to the high court six ago to termine public funds have priority after banking institution. No ruling has been handed down on the question and bank receivers throughout the state withholding the payments of any pending the decision. The banks against which the action will be started are the American Trust company, now in the process of reorganization. the Toth State bank and the Franklin Trust are operating for the Toth State and Franklin Trust and the county's funds in both are surety bonds signed by former officials of the the Toth State bank closed the county had $28,000 on deposit there and yesterday's meeting of the board finance several former bank officials who signed the surety bonds held by the county auditor appeared and said they were unable to make reimbursement from the liquidated Cash Reported on Hand. When the Franklin Trust company nearly years ago on orders of the state banking department the county had approximately $50,000 on deposit but the receiver recently paid dividend of $6,000 the county reducing the total $44,000. The former officials of the bank who were on Franklin Trust personal sureties have appeared before the board of finance on several stated that attempt was being made to raise county money from liquidation. It was reported to-day, however, that the receiver of the Franklin Trust company has considerable cash on hand but refuses to make any pending ruling on the question before the supreme court. The largest of the three suits will be against the American Trust company and the United States Fidelity Finance company bonders of the $190,000 in county funds on deposit there. Of the $90,000 protected by collateral bonds held by Continued on Page Two. Column Two.

3. December 21, 1931 The Times-Mail Bedford, IN
Article from The Times-Mail, December 21, 1931

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Article Text

PART OF PLOT BANK OFFICIALS DODGE JUSTICE RECEIVER Declares Many Notes Were Given Former Officials Without Directors Approval SOUTH BEND, Ind., Dec. Elmer Peak of court No. today answered perior charge that fees receiver defunct Franklin Trust together with the fees drained the bank attorney half its cash Judge Peak received of the bank until he became judge of the court. answer Judge Peak allegthe charges against plot by former officials the defunct bank to escape conof their the bank's affairs. Judge Peak, as former receiver for the bank, charged suit filed Dec. former directors depositors with having made extravagant payments to himself, attorney his Miss Ethel Weaver. Miss Weaver became receiver for the bank when Judge Peak place the superior court bench. answer Judge Peak former bank officials with criminal negligence the conduct the bank's affairs. Among those charged Adam Hunsberger, former the bank. He accused by Judge Peak being "one of those sponsible It is alleged that assessment stockholder bank. Other former officials named by Judge Peak Bert McClellan, former treascashier, who charged owing the note and stock ment; John and former director, alleged to stock assessment; Rostiser, former secretary, charged with stock sessment of $1,000; Matt well, former president, charged personal note; Davis Berger, director, charged with stock assessment, Shafer, former vice president. Judge Peak alleges many notes given former officials without the approval of the entire membership the board of direct-

4. December 27, 1931 The Star Press Muncie, IN
Article from The Star Press, December 27, 1931

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Article Text

BANK RECEIVER ANSWERS SUIT Charges Former South Bend Officials With Fraud. South Bend, Ind., Dec. 26 for the Franklin Trust in made in Circuit Court today, made fraud against officers the defunct bank. The statement made Circuit Judge Daniel Pyle in whose court pending for dismissal Miss Ethel the receiver The suit was filed against Miss Weaver former officials and stockholders of the bank. It alleged that fees Miss Parker and Elmer Peak, preceded Miss had drained onehalf the bank's assets. Suit Termed "Smoke Screen." Peak retired receiver when he took office as judge of the Superior Court and was succeeded by Miss his Parker Judge that the suit brought the officials and stockholders against the receiver "smoke thrown up to aid them in escaping prosecution alleged of the bank's affairs. Judge Pyle at the conclusion of the hearing today ordered complete audit the bank's condition and of the operations the receiver. am ready and would enjoy an to go before grand jury any body and brought about collapse of this institution. Parker said Parker declared the bank was never solvent. He said more than onehalf of the capitalization consisted watered stock for which there was no security.

5. December 29, 1931 The South Bend Tribune South Bend, IN
Article from The South Bend Tribune, December 29, 1931

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Article Text

LIABILITIES Former Bank Director, Asking Bankruptcy, Assets of $635. Listing liabilities of $403,000 and assets only $635, Gladstone Rhuebottom, St. Joseph county poultry and former director of the defunct Franklin Trust company, has filed voluntary petition federal court asking that he be bankrupt. Included the petitioner's schedliabilities alleged liability of $300,000 set forth in now pending circuit court. was June by Miss Ethel Weaver, ceiver for the institution Other listed show debt $10,000 to the First bank South Bend; $50,000 the Joseph county board finance; $30,000 to the Portage township board finance; to the Ger man board finance; $4,000 to Indianapolis Life Insurance company; and $2,000 on two depository The liabilities to the public nance boards include bonds petitioner signed to secure public funds deposit in the defunct institution. Suits for recovery these bonds are pending, the petitioner sets forth. He also points out that other officials of the closed bank had also signed the security bonds and that several were signers note given the First National by Mr. Included in the stock against Mr. Rhuebottom which was ordered by the circuit court of the bank receiver and which has not been paid, as well as bonds on private funds in bank which Mr Rhuebottom signed and which suits are pending. Of the $635 scheduled assets, Mr. Rhuebottom asks exemption on $600 in accordance with Indiana law.

6. April 1, 1932 The South Bend Tribune South Bend, IN
Article from The South Bend Tribune, April 1, 1932

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Article Text

ARGUE PRIORITY OF CLAIMS Three Closed Institutions in County are Now Awaiting Ruling. A third St. Joseph county bank was added to the list of closed banks which are awaiting an important decision by the Indiana supreme court before paying dividends to depositors whose funds have been tied up in the institutions for several months. The petition by the Citizens Trust Savings bank, receiver for the Lakeville State bank. for permission to make blanket distribution of 10 cent, was blocked by objection by Union township and the town of Lakeville, whose total municipal funds make up two-fifths of the entire amount of deposits in the bank. Attorney Roland Obenchain, representing the and town, told Circuit Judge Dan Pyle that while the need their funds as well as the individual depositors, It was their decision await the supreme court's ruling concerning the priority of claims against closed He stated that the municipal funds in the bank total about $20.000 and that the entire deposits tal about $50,000. There is more than $5,000 ready for distribution by the receiver, which would release approximately $2,000 to the LWO government units and $3,000 would divided among the several hundred Due to this state of affairs and additional moving factor in the depreciation of the bank's assets, Mr. said, the municipalities are forced to oppose the pres. ent distribution and await the highor court's ruling. Receivers for the Franklin Trust company of South Bend and the North Liberty State bank signified some time ago that they are ready to make distributions of considerable amounts when the supreme court rules, Miss Ethel Weaver, receiver for the Franklin bank. stated that blanket distribution of 10 per could be made once should the supreme court that public funds do not hold priority over individual depositors. Should the municipal funds be given priority, Miss Weaver said. 20 per cent may be paid. St. Joseph county has about $44.000 tied up in the Franklin bank, while several townships also have smaller amounts in the closed bank. John G. Schurs, receiver for the North Liberty bank, said some time ago that sizeable distribution is ready to be made to depositors. but the Liberty township funds held in the bank make necessary await the supreme court's ruling. The matter has been before the high court for more than year and despite the fact that many receivers for closed banks throughout the state are awaiting ruling before releasing funds, the court justices have failed to make a decision.

7. June 26, 1932 The South Bend Tribune South Bend, IN
Article from The South Bend Tribune, June 26, 1932

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STATE COURT'S DELAY IN BANK RULING SCORED "Pathetic," Says One Receiver; "Dilatory" Second Charges. AFFECTED Public Funds Held Up; Also Prevents Distribution of $20,000 in County. More than $20,000 is lying dormant in St. Joseph county bank vaults awaiting decision by the Indiana supreme court that will provide for the distribution of the money by receivers for three defunct banks in the county. The same decision will directly effect nearly $1,000,000 in public funds tied up in three other closed South Bend which are now in the liquidation. Definite action by the higher court has been for nearly since the test case was transferred to that court from the Indiana court, where on file nearly two years before justices of that court disagreed decision. Since the Cound its way to the supreme court, several similar appeals have been taken from every section of the state. estimated that throughout the state effected by court's delay in handing down ruling. Calls Delay Attorney Orie Parker, who represents Miss Ethel receivfor the Franklin Trust company, declared: pathetic the way the court delays action on an important issue of that kind.' Schurz, receiver for the North Liberty State bank said: supreme court has the reputation being dilatory. or years making decision and, from past experiences, another five years before the ruling is made. The Franklin company has about $8,000 for the question the priority claims on public funds blocks the payment the money to depositThis question must be setin the higher Mr. Schurz said today that he could distribute about $8,000 if the priority claim dispute was The blocking the payment $5,000 ready the hands of Citizens' Trust Savings bank. receiver for Lakeville State bank Three Banks Affected. Three other large South Bend closed and in the process liquidation, are also hampered by the dispute to priority. They are Union Trust company half million dollars being held in public funds. The bank about $100,000 public funds tied up, of which $85,000 belongs to Bend school Over $100,000 school funds being held the American Trust comSeveral townships also have pany. funds in the closed South Bend banks. was pointed out that suits against surety bond signers coverthe money these banks have ing but determination been priority claims would exonerate the bond signers in event the public funds are given priority. Only recently the Union ship the town of this county, awarded in superior court No. against bond covering in Lakeville State the amounting to bank, $20,000. Will Be Appealed. This decision to be appealed the supreme court Attorney Walter Arnold, was said Saturday. petition by the receiver of the following the judgment, distribute blocked by town and until the higher court rules on the claims. The Washington State bank has one payment of 10 per but time that sufficient addithe tional funds were available to meet claims in the event the priority court ruled their favor. higher Continued Page Six. Column