Foothill Financial, which shut down last year under pressure of a depositor run, has filed a suit againgt KSL-TV, charging the station's news reports caused the run.
The complaint filed in 3rd District Court seeks $11 million in damages from Bonneville International Corp., parent company of KSL, reporter David J. Thompson and news anchors Richard Nourse, Shelley Thomas and Margaret Smoot.
Foothill claims KSL acted with malice and a reckless disregard for the truth in its April 2 and April 3, 1987, reports about Foothill operation without federal deposit insurance. The plaintiffs also allege that KSL knew the broadcast was false, defamatory and misleading.
The day after KSL reported on Foothill's insurance situation, depositors stormed the thrift, withdrawing millions of dollars and forcing regulators to close the institution. Foothill was taken over by Zions First National Bank the next day, and the thrift's coowners, Richard Prows ans Robert Wood, had to walk away from their estimated $5 million investment in the operation.
Foothills claims the run by depositors was "a direct and proximate result" of the news reports.
The complaint said information in the broadcasts about Foothill operation without federal insurance was false, defamatory and misleading, while defendants had "true and correct information" before the report was aired.
In one broadcast, the coplaint said, KSL called Foothill a "failed thrift" and said deposits weren't safe until Foothill could obtain federal insurance. In another report, KSL "communicated to the public" a perception that Foothill Financial was one of three thrifts being liquidated by the state, the complaint said.
Foothill claims the defendants acted with "intent to injure and its reputation and business integrity in the community.
All four claims in the suit ask for general damages of $1 million, special damages of $5 millions and punitive damage of $5 million.
Bonneville Corp. vice president and general counsel Bruce Reese told reporters the station had no comment on the lawsuit.