First Security Bank of Utah has announced the final dismissal of a $225 million lawsuit brought by John and Marylin Dahlstrom against the bank.
Bankruptcy Judge Glen Clark and U.S. District Judge David Sam entered successive orders Aug. 19 and Sept. 1 approving the terms of a settlement and ordering dismissal with prejudice of the Dahlstrom lawsuit. Dismissal with prejudice means the lawsuit cannot be refiled.The Dahlstroms did not dismiss their claims against First RepublicBank of Texas.
The Dahlstroms, former owners of Tracy Collins Bank, had alleged that First Security had conspired with First RepublicBank against the Dahlstroms to block the sale of Tracy Collins Bank. The Dahlstroms were indebted to First Security Bank, one of the petitioning creditors in the Dahlstrom bankruptcy proceedings, which are still pending.
The terms of the settlement disclosed that First Security retained all of the collateral pledged to it by the Dahlstroms and paid nothing to the Dahlstroms for the dismissal of the lawsuit, according to the bank's announcement.
First Security did grant the Dahlstroms additional time to redeem an interest in Marylin Dahlstrom's family ranching company, which also had been pledged to First Security. The Dahlstroms also agreed to return to First Security some fixtures removed from the former Dahlstrom residence after foreclosure.