A draft of the Legislature's latest settlement proposal with thrift depositors rolled off the presses and was mailed to lawmakers Friday. Legislative leaders hope their colleagues receive the bill in enough time to review it before Monday's special session.
The third day of a special session on the thrift problem is scheduled Monday at 8 a.m. and preliminary indications are that it will be another long, frustrating day on Capitol Hill.Depositors have filed a class-action suit in 3rd District Court against the state and thrift-industry officials, to recover losses suffered when Utah's thrift industry collapsed two years ago.
Gov. Norm Bangerter had negotiated a settlement with depositors' attorneys that would have returned $100 million of the $106 million on deposit when five thrifts were shut down by state regulators. But legislators haven't been able to agree on Bangerter's settlement and have come up with several different proposals of their own.
This latest version, the third or fourth since Bangerter negotiated a settlement with depositors' attorneys, has several significant changes from the last proposal.
Instead of depositors and the state sharing in the liquidation of thrift assets as the proceeds come in, the new proposal would give depositors $29 million in exchange for all the thrift assets valued at $32.1 million. The $19 million from the state's former insurance carrier will also be included, making it a total $48-million settlement on the part of the state.
Depositors have already received $40 million of their savings from the on-going liquidation of thrift assets.
The draft also proposes that so-called "third-party" defendants in the lawsuit be included in the settlement. Some lawmakers do not want all third-party defendants to be included in the settlement without contributing money toward the settlement. Sen. Dix McMullin, R-South Jordan, said lawmakers hope the other defendants, which include thrift owners, accountants and attorneys, will disclose their contribution toward the settlement Monday.
A significant change, McMullin said, is that the new proposal allows the 15,000 thrift depositors suing the state to accept this latest offer either through their legal counsel or individually.
Depositors' attorneys could not be reached for comment late Friday.
McMullin said the draft came from discussion this week among legislative leadership and other defendants in the case.
"This is just a proposal for discussion," he said. "We tried to put in all the different ideas knowing that we will probably amend it."
THE LATEST PLAN
--$40 million already appropriated.
--$19 million from insurance carriers.
--$29 million appropriation from the state's general fund, to be r eimbursed by liquidating remaining thrift assets valued at $ 32.1 million.
--$1.5 million recommended cap on attorney's fees.
--Depositors can accept the settlement either through their legal counsel or individually.
Settlement legislation would cover third-party defendants.