The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-05-27
DEFUNCT BANK
DIRECTORS TO
FACE GRILLING
Meyer KiSer Heads Ordered
by Court to Testify
Under Oath.
EX-RECEIVER IS TARGET
Judge Cox Starts Inquiry of
Transactions Approved
by Brandt DOWney.
BY JAMES A. CARVIN

rOICe Oh d uScO, Out never =
theless powerful, statute was
brought to bear today on directors
of the defunct Meyer-Kiser bank as
new development in the investiga-
ton of local bank receiyerships.
Circuit Judge Earl r. Cox granted
a petition from Thomas E. Garvin
MeyerKiser receiver, to require
former directors of the bank to
testify June IA, regarding assets and
liabilities at time of the closing.
State law demands that directors
of closed banks furnish itemized
statements regarding the affairs of
their institutions and submit to
questioning under oath.
Downey Files Report
Decision to hold the hearing was
made following the filing of a re-
port showing payments of more
than $362000 by Brandt C. DoWney,
former receiver Of the Washington
Bank and Trust Company.
In diScussin the decision to hold
the hearing on the Meyer KiSer
bank, Cox said:
This is the first time that the
statute has been used recently N
bank receiversnip matters, but the
law is definite on the subject
Directors of the bank are named
as Sol Meyer, Sol KiSer, j. j. Kiser,
Ferd S. Meyer and Melville S. Cohn.
The latter three served as liquidat-
ing agents of the bank for nearly
two years until the bank was de-
clared in receivership or petition
OF the state banking examiner.
Disclosure of the payments by
Downey including 1922 800 to the
Fletcher American National bank,
without court authority was made
in a report of a special investigation
by the firm of Howard w. Painter,
certified accountant.
Three Transactions Covered
The report covers three transac-
tons during Downey'S term of re-
ownership following his appoint
ment by Harry o. Chamberlin, for
mer circuit judge. They are:
l. Payment to the Fletcher
American National Bank of all the
money owed by the Washington
Bank and Trust Company, 1922 800,
within forty-five days after Dow
neys appointment. Court records
show the payment was not author
lied until April 81, 1882, sixteen
months later.
2. Payment of $4,000 to the
Bondholders Liquidating Company,
described as IAN affiliate of the
Maryland Casualty Comp ny,
(which had guaranteed more than
$1,4O0,OOO of first mortgage certifi-
Gates issued by the Washington
Company, real estate subsidiary Of
the bank.
3. Payment of $30,11715 of cur
rent obligations of the corporation
owning the bank building, including
a $15,O525O dividend to preferred
stockholders.
Information also is contained in
the report regarding the handling
by DoWney of indemnity bonds for
former officers of the bank.
Business to Own Company
Findings in the report on the
bonds parallel the testimony of
Downey in circuit court recently re-
garding the failure to sue on the
bonds of officials after defalcations
of more than $175O,OOO were dis
closed after the receiver took office,
Receipts in the receivers files
show that the bonds, including those
of Downey for his receivership, were
written through the agency of Cool
ing, Grumme, Mumford Company
In which he held stock.
Since the court hearing, Cox has
ordered suit brought against the FL
deity and Deposit Company of
Maryland for 100000 on the Off
Gals bonds. Directors are being
sued for $1,000 900 on their personal
liability, and stockholders are being
sued to recover $4,000 in dividends.
Downey is bonded in the amount
of $150,000. represented in a $l25,-
900 bond given the court for his re-
ownership, and $4,000 bankers
blanket bond.
Painters report contains the
declaration that Downey's payment
of cash to take up S472,51117 collat-
eral, of which nearly half is alleged
to have been pledged illegally, in
CURED "a large potential loss 70
the receiverShip funds.
The securities which had been
pledged on the loan from the
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