TO regain stability, Bank of Saipan should be free from “harassment” and should have an infusion of $10 million, according to Richard W. Pierce, counsel for the bank’s reinstated temporary receiver, Randall T. Fennell.
Pierce said the transfer of $10 million from the directors and major shareholders will help the bank recover.
The directors and major shareholders should also leave the bank alone, said Pierce in a letter last week to attorney David J. Lujan and the Calvo & Clark law firm.
“If you truly seek to minimize the costs of the receivership, you truly seek to minimize the amount of time that the bank exists in receivership, and you truly seek to benefit the depositors, you and the other directors will cease your interference in the receivership and transfer the $10 million,” Pierce told Lujan.
Lujan is one of the directors of the bank. He is representing JLH Pacific Trust, one of the bank’s major shareholders. He recently wrote a letter to the Office of the Governor asking for cooperation among the board, major shareholders and the government.
Calvo & Clark is representing Bank of Saipan, Inc. and certain major shareholders.
According to Pierce, the shareholders should pay the $3.5 million plus accrued interest to the bank without restriction. The majority shareholders, the Calvo brothers, had already paid $221,000, Pierce noted.
But if the money was deposited into accounts with restrictions, the bank’s liquidity would not be improved because the money could not be used for banking purposes, Pierce said.
He said lawsuits against perceived wrongdoers could wait with the court’s guidance, as long as they do not involve themselves in the bank’s affairs and the necessary funds are transferred to the bank.
Pierce underscored the need to have professional bankers in charge as well as the $10 million unrestricted infusion if the bank is to survive.
Before a final strategy can be adopted, the bank’s loan portfolio must be analyzed further, said Pierce, adding that the receiver is taking such steps to accomplish that task.
“For sure, a sound Federal Deposits Insurance Corp. bank remains a laudable goal, and one the receiver believes that the bank’s board should have (strove) to reach years ago,” he said.
