By just one vote, state senators failed Friday night in their attempt to resolve the thrift depositors' class-action lawsuit against the state.
But that one vote will be found, and the Legislature will meet soon - probably Wednesday - to make a final decision.Friday was the third time that lawmakers have met in recent weeks to discuss the thrift problem. Wednesday, they actually may make a decision, with the odds being a settlement bill will be approved.
The settlement, agreed on at this point, would give thrift depositors $100 million of the $106 million they had in five failed thrift and loans - through a $26 million state appropriation, a $19 million contribution from former state liability carrier California Union Insurance Co. and a hoped-for $15 million from the ongoing liquidation of five failed thrifts. About 15,000 depositors already have received $40 million of their savings through the liquidation.
The frustration of not being able to reach agreement Friday - in not even coming close enough to vote on the actual settlement bill itself - could be seen in the House and Senate caucuses.
"It's time for us to quit farting around and settle this thing," said House Majority Leader Nolan Kar-ras, R-Roy, in his plea to House
embers to stop talking and take action.
But it wasn't the House that stalled Friday's session. Senators couldn't find one more "yea" vote to pass a technical bill that needed a two-thirds majority to become law immediately. The settlement bill can't even be voted on until the technical bill - which waives a 60-day requirement before lawmakers can take action on the settlement legislation - passes both houses and is signed by the governor, Senate leaders said.
The 19-2 vote - when 20 "yea" votes is required - fell one short. Senators caucused to consider where a call of the Senate should be made. That would require state Highway Patrol troopers to search out the four senators not present at the session. That would take hours, and some senators may have slipped away for the Capitol and left, so they wouldn't have had 20 votes anyway.
Sen. Omar Bunnell from Price didn't want to stay in Salt Lake City overnight. "I don't even have pajamas. Let's adjourn and return. Don't kill off the few Democrats you have left (in the Senate)," he jokingly told colleagues. Most agreed, and the Senate and House decided to adjourn.
Rep. Craig Moody, R-Sandy, said House members had the two-thirds majority votes on the technical bill and he was confident the settlement legislation would have passed. But he added that he doesn't want to reconvene until all the issues are settled.
"There is no sense in coming back until we have ironed out the questions."
Topping the list of concerns holding up the proposed settlement Friday was whether trustees of the Industrial Loan Guaranty Corp. and other defendants in the suit should be included in the settlement.
The ILGC was created by the Legislature in 1975 to insure deposits in the state's thrift and loans. The ILGC was declared insolvent in July 1986, triggering the closure and liquidation of five thrifts. The depositors' lawsuit in 3rd District Court accuses not just the state, but ILGC trustees, thrift owners, accountants and attorneys of fraud, negligence and racketeering in operating the thrifts.
Depositors hope to recover the rest of their savings by pursuing their claims against the other defendants. Under the proposed settlement, the state and Cal Union would share in the judgments against third-party defendants to recover some of their money. Gov. Norm Bangerter has said the other defendants were invited to settle, but didn't.
But ILGC trustees, other defendants and their attorneys were out in force Friday roaming the Capitol halls protesting the settlement.
"I don't think you should get greedy and guild the lily . . . by creating a new set of victims in this thing," an attorney for accounting firm Coopers & Lybrand told the House caucus, referring to the state recovering some of its money by going after the other defendants.
Lawmakers are concerned about third-party defendants filing coun-tersuits against the state, despite the depositors' agreement to indemnify the state against any countersuits.
Many legislators also want to include ILGC trustees in the settlement, particularly those who were not personally involved in the thrift industry, but appointed to the ILGC by the state.
Proposals circulated Friday to increase the state's appropriation by $2 million to include the ILGC trustees or $3 million to include all the defendants.
Depositors' attorneys said the $2 million figure for the ILGC trustees was "a fair price," but the extra $1 million for all defendants was out of the question.
"Cal Union is putting up $1 million just to litigate the other defendants," said depositor co-counsel Doug Provencher.
The insurance company hopes to recover some of its money toward the settlement by pursuing claims against the other defendants. And at least some lawmakers are aware that if too many defendants are protected by the settlement it could jeopardize Cal Union's $19 million contribution.