Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-07-01
Park Savings
Compromise
Orders Signed
Court Action Provides
For Distribution
Of $4,000

4AAeSA SSPASo Va Viz Va ACA 1lASA
signed by Justice Jennings Bailey
in the million dollar compro-
mise Park Savings Bank case will
be mailed out as soon as possible
to all creditors, depositors, stock
holders and assignees of any as
signed claims.
This was indicated today as Re-
ceiver John F. Moran of the bank
pushed forward plans for printing
and distributing the complicated
official papers.
Under the orders signed yester-
day by Justice Bailey he fixed the
date of 10 am. July Is when the
compromise agreement will become
fully effective unless cause to the
contrary be shown to the court"
The compromise provides for dis
tribution of s50O00O to be paid by
directors in settlement of three
court actions against them. More of
the money will 60 to preferred
group of depositors than to the re-
mainder, under court decision in the
so-called Thompson case, in which
it was decided that the bank char
ter had expired in August 30, 1929,
and the directors became liable as
liquidating trustees.
Out of the S500,0O0 settlement,
e350,000 will be distributed to depos-
itors who had funds in the bank
when the charter expired and $780,
600 will be distributed pro rata to all
creditors. The $150,OOO is in salts
faction of two suits still pending, one
for s2,0O0,0OO for alleged ''negli-
gence' on the part of the directors
and the other for $4,000 to recover
dividends alleged to have been erro-
neously paid.
Protests Doubted.
Out of the $350,00O will come nee
essary costs of litigation and distri-
button Of the dividend.
Receiver Moran estimated today
he could have copies of the orders
and the petition to the court dis
tributed by July Is.
Unless protests, which now do not
appear probable, arise, the court on
July Is will put an end to one of the
most complicated and long drawn
out legal battles in the history of
failed banks.
The Park Savings Bank went on
a restricted basis March l, 1888, re-
stricting Withdrawals to per cent.
The bank closed March 6. The
Thompson case was filed in court
July 13, 1888, starting a long series
OF court actions reaching the Su-
preme Court of the United States,
which refused to review the lower
courts action.
A special master appointed by the
court, James c. Wilkes, held hear
ings for some time attempting to
work out the details of claims due
depositors under the court decision.
These hearings were adjourned
when the directors came forward
with negotiations to compromise
Finally the directors offered $500 900,
the compromise plan was authorized
yesterday morning by the Controller
of the Currency to be submitted to
court, and it went before Justice
Bailey early yesterday afternoon.
Justice Bailey made a few changes
in the suggested orders and signed
three of them, one in each of the
three court actions against the di-
rectors. The compromise would pro-
vide full and final release and dis
charge of directors from all liability"
Financial Status.
The financial status of the Park
Bank, BRIEFLY is as follows:
Deposit liability at closing, So
100000.
Dividends OF "a per cent paid,
amounting to about 100000.
Securities now in hands of re-
eeiver. about 100000.
Cash in hand about 100000.
Prospective cash from directors,
100000
There are about 1900 unproven
claims amounting to about $4,000.
Several of the directors have died
since the closing of the bank and
their estates participated in the
offer it was pointed out.
Details of the directors offer,
however, were not disclosed, to show
how much of the S500,000 each of
the directors or their estates had
agreed to pay.
This offer also is made solely
by way of compromise" said the
directors offer land does not admit
any liability whatsoever in connec-
ton with the claims. demands and
suits affecting the directors or any
OF them of the Park Savings Bank,
and If said offer should not be
accepted or fail to be approved by
the court, the proposal shall be
considered withdrawn and all
parties free to interpose all proper
defenses to said claims, demands
and suits"