Larry Miller, the former owner and now liquidator of Commerce Financial, won't stand in the way of a legislated settlement between his depositors and the state - if that's what depositors want, a spokesman said.
Miller has court approval to liquidate the assets of his failed thrift, under the condition that depositors receive 70 percent of the money they had in Commerce when state regulators took it over two years ago.Under the agreement in 3rd District Court, Miller, an auto dealer and owner of the Utah Jazz basketball franchise, doesn't have to distribute depositors' savings until 1992. Meantime, he can invest liquidation proceeds in his business interests to realize the 70 percent return to depositors.
But this week, lawmakers passed legislation that calls for a return of about 98 percent of depositors' savings as soon as possible. The bill settles a lawsuit filed by depositors against the state to recover savings lost in the collapse of five Utah thrifts, including Commerce.
Asked if the settlement will hurt Miller or his five year plan, John Woods, who is handling the Commerce liquidation for Miller, said it will depend on how the court and state officials want to handle the continued liquidation of Commerce's $8.75 million in assets.
Under the legislation, the state assumes responsibility for the liquidation and may continue to use Miller and the liquidator of the four other thrifts, accounting firm Grant Thornton.
Woods explained that Miller's court-ordered liquidation arrangement still stands until ruled otherwise. And, any changes in liquidating the Commerce assets will require the cooperation of Miller.
Nevertheless, Woods said, "If this is what depositors want, I can't see Mr. Miller doing anything except what's in the best interest of the depositors and following court orders."
Although a majority of Commerce depositors didn't oppose Miller's liquidation plan, those who did have protested his keeping their money for five years before distributing 70 percent back. Commerce did receive a distribution of 16 percent of their money when Miller took over liquidation last year.
At least 90 percent of the 15,000 depositors with money in all five thrifts must approve the settlement for it to take effect. When depositors' attorneys' fees are awarded, which could range from $1.5 million to $7.3 million, the return could be less than 90 percent.
The state court judge overseeing the thrift liquidations will also have to be involved in the process as it affects Miller's and Grant Thornton's previously ordered work.
Roger Brown, local managing partner of accounting firm Grant Thornton, said he supports the settlement, despite the complications that will arise in making sure all depositors and the state are getting a proportionate amount of the ongoing liquidation proceeds.
So far, the assets of each thrift have been kept separate, resulting in some depositors receiving more money than others depending on the condition of each thrift. Depositors of Interlake Thrift and Loan have received the most money so far, 49 percent of their savings, and the others trail from there.
But the legislation calls for all depositors to receive the same amounts, while sharing the first $15 million of liquidation proceeds with the state. That could require combining assets of all the thrifts together, Brown said.
"It will be rather complicated to keep it all straight," he said.